AGRI-FOOD SECTOR IN CROATIA:

CHALLENGES OF EU ACCESSIONEASTAGRI annual meeting

Berlin, 4- 5 May 2006

M.Sc. Miroslav Božić, Assistant Minister

REPUBLIC OF CROATIAMinistry of Agriculture, Forestry and Water Management

CContent:ontent:

Agri-food sector in CroatiaAgri-food sector in Croatia• Key facts & figuresKey facts & figures• Recent developments in agricultural policiesRecent developments in agricultural policies• CAP: challenges for EU membershipCAP: challenges for EU membership

Agriculture in Croatia at glanceAgriculture in Croatia at glance

• GVA in GDP: 6.5%GVA in GDP: 6.5%• employment: 7.3% in totalemployment: 7.3% in total• average farm size: 2.4 haaverage farm size: 2.4 ha• number of farms: number of farms: a) a) 448.532448.532 (51% up to 1 ha) – Agr. Census 2003 (51% up to 1 ha) – Agr. Census 2003.. b) b) 165.750165.750 – Farm Register 2006. – Farm Register 2006.

• UUA in total area: 19%UUA in total area: 19%• agricultural output: 0.6% in relation to EU-25agricultural output: 0.6% in relation to EU-25• rural population: 36.3%rural population: 36.3%

Agriculture and food industry in the Agriculture and food industry in the national economynational economy

0

2

4

6

8

10

1999 2000 2001 2002 2003 2004

%

Share of Food Industry in GDP Share of Agriculture in GDP

Agricultural trade: Croatia & selected european countries

10336-48-1.085Romania

Source: Source: analysisanalysis basedbased on FAO and OECD on FAO and OECD datadata

121598-13-4.788EU-15193133+27+215Bulgaria

68749-232-461Slovenia36260-89-483Slovakia

35988-23-1.753EU-104074075454--122122--541541CroatiaCroatia

USDper capita

Total(mil. USD)

Agr. Trade

per capita(USD)

exports/imports(%)

Trade balance

Average agricultural trade in period 2002.-2004.

10336-48-1.085Romania

Source: Source: analysisanalysis basedbased on FAO and OECD on FAO and OECD datadata

121598-13-4.788EU-15193133+27+215Bulgaria

68749-232-461Slovenia36260-89-483Slovakia

35988-23-1.753EU-104074075454--122122--541541CroatiaCroatia

USDper capita

Total(mil. USD)

Agr. Trade

per capita(USD)

exports/imports(%)

Trade balance

Average agricultural trade in period 2002.-2004.

EU-15 and Croatia: number of holdings EU-15 and Croatia: number of holdings and average direct paymentsand average direct payments

6.771.000 91.989158.865448.532

5.945

507

1.431

2.472

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

8.000.000

EU-15 RH - Census RH - F Register RH - beneficiaries

Num

ber o

f hol

ding

s

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

EUR

Number of holdings

Average direct payments inEUR/holding

Main agri-food export productsMain agri-food export products ( (ØØ 2003. – 2005.) 2003. – 2005.)

9,9

10,1

10,9

12,1

13,2

13,4

14,5

15,7

16,9

17,3

27,2

37,9

45,2

118,1

98,4

0 20 40 60 80 100 120 140

Wine

Raw bovine skins

Chocolate, filled

Cocoa powder

Preserved sardines and sardinella

Fish, fresh or chilled

Chocolate, not filled

Waffles and wafers

Beer

Soups and broths

Food preparations

Tuna fish, fresh or chilled

Sauces

Refined sugar

Cigarettes

mil. USD

Main agricultural reformsMain agricultural reforms< 1998 PRODUCTION SUPPORT (quantitative payments)< 1998 PRODUCTION SUPPORT (quantitative payments)

PRODUCTION SUPPORTReform1998

Reform2002

INCOME SUPPORT

CAPITAL INVESTMENT

RURAL DEVELOPMENT

OTHERS

CO

MM

ERC

IAL

NO

NC

OM

MER

CIA

L

+

What is awaiting Croatia What is awaiting Croatia upon accession to the EU?upon accession to the EU?

• Open borders for trade with all EU MSOpen borders for trade with all EU MS• Production quottas for milk & sugarProduction quottas for milk & sugar• Decrease of production support with increased budget Decrease of production support with increased budget

for structural measuresfor structural measures• No support for planting permanent crops; no No support for planting permanent crops; no

incentives for fisheryincentives for fishery• Set quality standards & marketing conditionsSet quality standards & marketing conditions• Better administration and controlBetter administration and control• Export subsidies privilegeExport subsidies privilege

CAP: Challenges for EU membershipCAP: Challenges for EU membership

• Harmonisation of support systemHarmonisation of support system• Establishment and accreditation of Paying Establishment and accreditation of Paying

Agency (IACS/LPIS)Agency (IACS/LPIS)• Implementation of rural policy measuresImplementation of rural policy measures• Establishment of FADNEstablishment of FADN• Strengthening of advisory serviceStrengthening of advisory service• Food safety & market organizationsFood safety & market organizations• Strengthening of inspection servicesStrengthening of inspection services

Thank you for your attention