As Zvjezdana Blazic/Poslovni Dnevnik writes on the 29th of May, 2020, agriculture and the food industry among the key sectors in times of crisis, especially crises on the scale this one is.
When we talk about agriculture and the accompanying agri-food industry in this day and age, the first thing that we need to clear up is that despite Slavonia once being the bread basket of the region, is that now - Croatia is a country dependent on food imports.
We all have to ask ourselves why a country with so much natural potential, quality agricultural land, plenty of water and a very diverse climate and landscape can't grow and produce enough food for its own needs, despite the fact that it has all of the necessary resources to do so? Why does Croatia import food worth 3.5 billion euros?
Every year, Croatia spends more and more money from European Union funds and the state budget, which is allocated for various types of payments, so-called incentives for agricultural production that is either falling or stagnant. There is a large disproportion between the aid invested and the actual output that is achieved.
In the period from 2005 to 2017, 44 billion kuna was invested in agriculture, an average of 3.2 billion kuna annually, and the value of Croatia's agricultural output has been falling or stagnating for years. It is now close to 17 billion kuna, and before joining the EU it stood at 21 billion kuna. Croatia is burdened with problems when it comes to its agriculture sector that have remained unsolved for years:
Croatia doesn't have a clear vision of what it wants to get out of its own agricultural production, nor what the future of the country's many rural areas is
As a result of the demographic crisis, there has been huge depopulation in Croatia's rural areas
There is inadequate management of land as the main resource for agricultural production, so Croatian estates remain small and fragmented. For the structure of Croatia's agricultural production in which cereals predominate, the average size of agricultural holdings of 11.6 hectares is inadequate
The land is undeveloped and the plots are small and fragmented
The vertical value chain between farmers, the processing industry and retail is broken (except in the case of large integrated systems), and the food processing industry relies heavily on imported raw materials
There is low productivity, and in some sectors Croatia remains the worst in the EU, but there are still relatively high labour costs
Croatia has outdated technology, and there are high costs that come with introducing food quality and safety standards
The resistance of agricultural producers to associations that are too small to enter the market, they are poorly technologically equipped, and the situation is plagued by unfavourable age and qualification structures
Poor public infrastructure, eg irrigation, storage capacity, cold storage, logistics
There is a low level of cooperation with scientific research institutions and the academic community
Poor credit availability remains problematic, as do high tax burdens
There is weak, slow and ineffective administrative support in solving problems in agriculture
Croatia's agriculture sector, much like an array of other sectors, is overwhelmed by draconian bureaucratic regulations, laws, ordinances and instructions on how farmers should produce. The state has burdened them so much with various administrative obligations that they do not have enough time to invest in their actual production.
Owing to the coronavirus pandemic, Croatia is now at a pivotal moment in terms of determining the further development of its agricultural policy. We're waiting for the revision of the payment system for agriculture from EU funds in the new programming period and changes to the Common Agricultural Policy.
European Union member states have not yet agreed on a new programming period, primarily being stuck on on financial envelopes and on new rules.
Given the significant changes that have taken place globally in agriculture, as a result of the outbreak of the new coronavirus, we believe that green payments and the protection of rural areas, among an array of other factors, will be more seriously reconsidered.
Experts believe that Croatia must start from production, provide food for its own population, ensure food security in case of any threats like the one we have experienced and is still ongoing, as this is an issue of self-sufficiency and national security. Croatia has the conditions for production and we should be obliged to properly use them.
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