Friday, 25 October 2019

Croatia's Lack of Agricultural Development Strategy Repels Investors

As Poslovni Dnevnik/Marta Duic writes on the 24th of October, 2019, the very first results of an in-depth analysis conducted by the World Bank showed that the structural transformation of Croatia's agriculture is going in the right direction and should stimulate economic growth and create jobs. However, there's always a but.

The World Bank experts who authored the analysis conclude that Croatian agriculture and rural areas, as well as aquaculture and mariculture, have great potential for development. The structural transformation of these sectors is progressing, in particular, due to the fact that Croatia is an EU member state, and the agri-food sector contributes to the economy and income, and consequently to life in the rural parts of our country.

The analysis also showed that investments in agriculture are economically justified. It is estimated that an investment of 1 million US dollars in agricultural production generates an increase of 5.19 million dollars in the value of the total volume of production in the economy, including the effects of consumption by individual consumers. Public spending on agriculture in Croatia stands at around 1.3 percent of GDP, which is double the EU average.

According to the Smarter consulting company specialising in the agri-food sector, the biggest obstacle to investing in agricultural production, ie attracting investment in that sector, is the status of state agricultural land.

"State land that has not been settled by a long-term concession cannot be the basis for attracting and increasing investment in agriculture, this isn't long-term in its nature and, due to the long and slow turnover in agriculture, the return on investment is generally long and uncertain.

However, agriculture still depends on weather factors, ie, circumstances that the investor cannot influence, so this is one of the key risk factors that doesn't exist in a number of other activities. Additionally, it isn't realistic to expect to invest significantly in a sector where the basic business conditions change drastically with each government term,'' they explained from Smarter.

Croatia doesn't have a long-term and clear agricultural development strategy from which a potential investor would be able to understand what awaits him in the future, what will be and what is a priority in development, that is, where the state will be ready to accompany the investor in case of business difficulties.

Like any other investment, investing in agriculture requires stability of business conditions, predictability of sector policies and a long-term vision. Namely, all EU countries aim to produce their own food and accordingly encourage a range of investment measures, while in Croatia the potential investor is left to himself, there is no clear criteria for benchmarks, and raising productivity and competitiveness, for which investments are a prerequisite, is not a priority. In addition, the role of knowledge, new technologies and the need for continuous investment in agriculture is not adequately understood,'' they said from Smarter.

To briefly recall, Smarter is a company responsible for the strategy of agricultural production development in which the profession highlighted the challenges facing Croatia's agricultural production, as well as solutions to increase it. The team that worked on it held 150 meetings in a year and a half that resulted in 2,000 pages of material.

"The expert team has made an analysis of the state of Croatian agriculture, and our goal is to put it where should be, because alongside tourism, that is the main branch of the Croatian economy.

The value of Croatian agricultural production from 2008 to 2018 decreased from 22.5 billion to 16 billion kuna, it has fallen by around 3.5 billion kuna and has stagnated since Croatia's accession to the EU. The second pillar is raising production of a competitive export product, such as mandarins. We need the consensus of key stakeholders, intensive and extensive production, regionalisation... We also need integrators of agricultural production and research and development. This alone will lead to long-term sustainable agricultural production, and linking producers is crucial, only it can enable a change in the state of agriculture.

We lack R&D and EU funds are available for this, and we must not neglect that,'' said Denis Matijević of Smarter.

Smarter also points out that, so far, the promotion of investments in agriculture through the distribution of EU funds has been indiscriminate, insufficient, without adequate control and assistance and therefore without proper effects. Two Croatian companies, Belje and Osatina, are currently good examples of successful investments, but there is a lot to be desired for when it comes to Croatian agriculture on the whole.

Despite the aforementioned issues, investors are coming...

Croatia is an EU member state with the highest growth in organic production areas across the EU, and the withdrawal of EU funds for rural development has improved significantly in the last two years. In relation to the EU average, Croatia is still ahead of a number of new and old EU member states and is achieving some encouraging results.

One other positive story of how investors are investing in Croatian agricultural production comes from the island of Korčula.

Namely, ten years after the Smokvica winery ceased to exist, the doors of the new Black Island Winery were opened. With this, the Korčula winery, known for many years as the Smokvica Winery, began a new phase. The winery is experiencing a resurgence with the help of Swedish investors from the Zhoda investments financial fund, led by Robert Karlsson, who, in collaboration with oenologists Igor Radovanović and Nikola Mirošević, has opened a modern tasting room and a promising new wine destination from a neglected building.

It is a major investment of more than 5 million kuna, and they plan to further brand the location as an oenological destination and open a museum and presentation centre to educate tourists about these specific indigenous varieties.

Otherwise, it is a winery that produced almost a million bottles of wine a year during its golden period, but in the face of the crisis, it ceased operations and went bankrupt. In addition to renovating the premises and starting production, a wine tasting room and a gastronomic complex with local specialties were opened. With the exception of Croatia, the ultimate goal is to position itself on the European market, and the first packages of wine have already found buyers in Northern Europe, more specifically in Sweden and the United Kingdom.

Make sure to follow our dedicated business page for much more.

Monday, 9 September 2019

Young Farmers to Receive Millions in Support

ZAGREB, September 9, 2019 - The Paying Agency for Agriculture, Fisheries and Rural Development on Monday signed 146 new agreements worth a total of 45.7 million kuna intended for young farmers.

The agreements were concluded within the EU-funded scheme for young farmers.

Attending the ceremony, Agriculture Minister Marija Vučković underscored the ministry's priority in the generational renewal of farms and rural areas.

Without that support, without young people, without renewing the agriculture sector, there is no future, she said.

To date there have been three rounds of calls for applications for support for young farmers and 1,343 projects have been approved and after today that number will be 1,489. In the first two calls for applications 644 projects were approved and an additional 699 were approved in the third round of applications.

The total amount of support to date amounts to 512 million kuna, Minister Vučković underlined.

She informed of the results of these measures over the past two years - the number of family farms run by young people has grown from 20,000 to 22,300.

Young farmers account for 13% of the total agricultural businesses which is twice as much as in the EU, she said and added that the objective is to increase that share to 20%.

More agriculture news can be found in the Business section.

Monday, 9 September 2019

Ecological Agricultural Production Rising in Croatia

ZAGREB, September 9, 2019 - Croatia is near the top of EU rankings in ecological agricultural production growth but still lags behind in ecological food consumption, which is three times higher in the EU, the Croatian Chamber of Commerce (HGK) said on Monday.

Because of the fast-growing market, ecological production is increasingly attractive to domestic farmers, as farmland with such production has grown ten times in the past ten years, said Žaklina Jurišić, an assistant director at the HGK.

In 2017, Croatia had 7,577 hectares of land under ecological production, or 0.63% of all farmland, and 103,166 hectares last year (about 7%), she said.

Last year, the number of ecological agricultural producers rose by almost 9% from 2017, from 4,023 to 4,374.

Fresh vegetable and strawberry growing jumped by 51% from 2017 (+724 tons), grape production by 40% (+1,616 tons) and olive production by 33.6% (+328 tons).

Ecological animal breeding is also on the rise in Croatia, with that of cattle in 2018 jumping by 14% from 2017, from 17,226 head to 19,613, that of sheep by 14.2% (from 54,583 to 62,315), that of goats by 24.2% (from 3,381 to 4,199) and that of pigs by 28.5% (from 1,468 to 1,887).

On the other hand, ecological egg production dropped 12%.

The potential of ecological production is reflected in the European market for such products, which is estimated at 30 billion euro, or 60 euro per capita. In Croatia, the market is worth 100 million euro, or 23.6 euro per capita.

The share of ecological farm products in retail is 2.5% in Croatia and 5% in the EU.

More agriculture news can be found in the Business section.

Sunday, 18 August 2019

Croatia Producing Less Vegetables for Winter Food Storage

ZAGREB, August 18,, 2019 - Traditional winter food storage vegetables - peppers and cucumbers - are grown less and less in Croatia, the Croatian Chamber of Commerce (HGK) has reported.

In 2018, pepper growers produced 18,106 tonnes of that vegetable, 6% less than in 2017, when 19,303 tonnes of peppers were grown.

The situation with cucumbers is even less favourable, with only 6,442 tonnes produced in 2018, almost 40% less than in 2017, when the yield was 10,662 tonnes.

In the same period cucumber imports grew by more than five percent while pepper imports increased by close to 15%.

An interesting fact is that despite the decline in production, cucumber exports have been on the rise as well, with 5,139 tonnes having been exported in 2018, which accounted for 80% of the yield and was 22% higher than in 2017.

More than 75% of cucumber exports ended up in the Czech Republic and Germany while most imports came from Spain, Italy and Serbia, the HGK said.

More news about agriculture can be found in the Business section.

Wednesday, 14 August 2019

Croatia Taking Precautionary Measures Due to African Swine Fever in Serbia

ZAGREB, August 14, 2019 - Following the confirmation made by Serbia of the occurrence of African swine fever in some of pig farms in that country, Croatia's Agriculture Ministry on Wednesday called on pig farmers to strictly comply with preventive measures against this viral disease of pigs and wild boars.

The purpose of preventive measures is to detect at early stages any transmission of the virus so as to fend off the outbreak of this disease in Croatia.

The ministry cites a list of measures which pig farmers are supposed to take. Members of the general public in Croatia are urged to buy pork in registered shops.

The virus causes a haemorrhagic fever with high mortality rates in domestic pigs; some isolates can cause death of animals as quickly as a week after infection. It does not cause disease in humans.

Serbia's agriculture ministry on Tuesday confirmed that African swine fever had been detected in three villages in the Mladenovac area.

In the meantime, Bosnia and Herzegovina imposed a ban on the import of pigs and pork from Serbia.

More agriculture news can be found in the Business section.

Thursday, 1 August 2019

Millions for Young Farmers and Non-Agricultural Activities

ZAGREB, August 1, 2019 - The Paying Agency for Agriculture, Fisheries and Rural Development on Wednesday signed 400 new agreements worth a total of 94 million kuna from the Rural Development Programme, intended for young and small farmers and the development of non-agricultural activities.

The agreements include 90 agreements to support young agrarians, 271 agreements to support the development of small farm and 39 agreements to support the development of non-agricultural activities in rural areas.

Newly-appointed Agriculture Minister Marija Vučković attended the signing ceremony and said that these measures were important because they would contribute to the survival of Croatian agriculture, the development of small farms, generational revival and would provide support for non-agricultural activities such as rural tourism, hospitality industry, and preserving and developing traditional skills.

She added that so far contracts had been agreed for 70% of available funds from the Rural Development Programme and more than 40% had been paid out. She called on farmers to merge, to use innovations and EU funds.

Vučković said that Croatian farmers were still faced with numerous challenges, but that it was worth noting that certain progress was evident at the end of 2018 - in the volume of European funds being absorbed and faster growth of exports compared to imports. "It is too early to talk about trends but we in the ministry will do everything for that not to be a coincidence," she said.

With today's agreements included, 1,367 agreements granting 473.3 million kuna have been signed to date, the ministry said in a press release.

The ministry added that with regard to absorption from the Rural Development Programme, 97% or 17.5 billion kuna has been put at the disposal of agrarians and other beneficiaries, 70% or 12.6 billion kuna has been contracted and 40% or 7.3 billion kuna has been paid out of the funds available.

More news about EU funds can be found in the Business section.

Thursday, 11 July 2019

Croatia to Ask for 3-Year-Extension of Moratorium on Selling Farmland to Aliens

ZAGREB, July 11, 2019 - The Croatian government on Thursday dismissed allegations from the interpellation submitted by the Croatian Peasants' Party (HSS) and Democrats parliamentary group over the government's failure to extend a moratorium on the sale of farmland to aliens.

The government states that it will submit the request in a timely manner to the European Commission for an extension of an additional three years to the 7-year moratorium on the sale of farmland to aliens.

The deadline for submitting the request expires on 1 July 2020, seven years after Croatia's admission to the EU.

Agriculture Minister Tomislav Tolušić said today that the request would be most probably sent to Brussels this September.

Tolušić said that for that purpose, the government had already held talks with officials of the Directorate-General for Financial Stability, Financial Services and Capital Markets Union to discuss technical aspects of the lodging of the application.

He also informed the government about long-term leases of state-owned farmland in local municipalities and towns.

By this move, we have practically enabled several generations of Croatian farmers to use state-owned agricultural land, he said adding that the government enabled the sale of that land to local farmers.

More agriculture news can be found in the Business section.

Monday, 8 July 2019

Investment in Croatian Agriculture Justified, Says World Bank

ZAGREB, July 8, 2019 - The initial results of an in-depth analysis of Croatian agriculture show that investment in agriculture is economically justified, and that 1 million dollars invested in agricultural production generates an increase of 5.19 million dollars in the value of the total volume of economic output.

The analysis was carried out by World Bank experts, who say that the Croatian agricultural sector has many comparative advantages that can be used to increase growth and development, such as unrestricted access to the EU market, access to funding under the Common Agricultural Policy, diverse agricultural and environmental conditions, good land and rich water resources, relatively low labour costs, good road infrastructure, and growing tourism.

The World Bank, however, notes that Croatia is still dependent on agricultural and food imports, while Croatian farmers use obsolete and ineffective machinery, slowly adjust to technological changes and innovations, and rarely form associations, which makes them less competitive and less adaptable to change.

The document shows that in order for the agricultural and food sector to achieve its full potential, it is necessary to make improvements in agricultural productivity and in creating added value by connecting primary production and processing.

"Agriculture and rural areas, as well as aquaculture, have huge potential for growth and development, and the structural transformation of these sectors, which in particular has been encouraged since Croatia's entry into the European Union, is going in a good direction," Agriculture Minister Tomislav Tolušić said.

He said that a strategic vision for the development of agriculture and rural areas would be finalised by the end of the year, and that a national strategic plan for the EU's Common Agricultural Policy 2021-20127 would also be prepared.

The analysis shows that Croatia is currently competitive in low-value primary agricultural products, such as cereals and oil crops (sunflower and soybean), while its competitiveness in high-value products is limited to a relatively small number of horticultural and livestock products.

The document also shows that Croatia should seize the opportunities offered by organic production because compared with other EU countries Croatia has recorded the largest increase in areas under organic production.

More news about Croatian agriculture can be found in the Business section.

Monday, 1 July 2019

Croatian Meat Products to Be Exported Freely to Ukraine as of July 1

ZAGREB, July 1, 2019 - The free export of Croatian meat products to Ukraine is possible as of July 1, the Agriculture Ministry has reported.

"After several rounds of talks and in light of the fact that Ukraine underwent a long process of adjusting its import rules with international standards, during a general assembly of the World Organisation for Animal Health (OIE) in Paris this year, we finally managed to complete the adjustment of criteria contained in the international veterinary certificate. As of today, there are no more veterinary sanitary obstacles to the export of Croatian meat products to Ukraine," the ministry said in a statement.

Agriculture Minister Tomislav Tolušić said that this was a result of the long-standing work of ministry staff who had proven that Croatia had a well-developed system of food safety and that it was a safe country in terms of food exports.

A few years ago, Croatian food companies expressed interest in exporting their products to Ukraine, but Ukrainian import rules were not in line with international standards set by the OIE.

The Agriculture Ministry therefore launched negotiations on veterinary sanitary conditions, basing its position on international standards and equivalence whereby the system of control in force in the EU and Croatia provides the same level of safety to Ukraine as well, the ministry said.

It underlined the good will on the part of Ukraine, which despite the fact that it has been negotiating the harmonisation of all veterinary sanitary certificates for exports to Ukraine from EU member-countries with the European Commission, agreed to simultaneously conduct bilateral negotiations with Croatia to expedite the process and enable Croatian producers to access the Ukrainian market.

More news about Croatian agriculture can be found in the Business section.

Tuesday, 18 June 2019

China Soon to Grant Permits for Croatian Dairy Products

ZAGREB, June 18, 2019 - Chinese permits for Croatian dairy products  should be finalised by the end of the year, which will open the Chinese market to Croatian exporters, Deputy Prime Minister and Minister of Agriculture Tomislav Tolušić said on Tuesday.

The procedure is in its final stage and we hope exports could begin by the year's end, Tolušić told the press after a meeting at government headquarters with Chinese Minister of Agriculture and Rural Affairs Han Changfu. The meeting was also attended by Prime Minister Andrej Plenković.

Tolušić said that the procedure to issue permits was initiated five years ago and that Croatia wished to avoid such a long procedure in the future because it was also interested in exporting poultry, pork, fresh and frozen tuna and other products to China.

"We want a much bigger commodity exchange in agriculture and the food industry and that's why we need Chinese permits," Tolušić said. "We are glad that the Chinese agriculture ministry sees this and is willing to help us," he added.

Tolušić said that by the end of this year the Chinese would make a promo film about Croatian food products and would broadcast it on Chinese TV channels to help promote Croatian products on the Chinese market.

Minister Han said that the Croatian-Chinese cooperation in the agriculture sector was very good and that China wants to intensify it.

"The Chinese market needs quality products and this could help Croatian agriculture, while on the other hand Chinese citizens can enjoy quality Croatian products," Han said.

He added that he expected Croatian dairy products to be placed on the Chinese market soon and announced the media promotion of these and other food products from Croatia.

More news about Croatian agriculture can be found in the Business section.

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