Farming experts say Bosnia and Herzegovina is letting slip a vital chance to become one of the Europe’s bread-baskets. According to a World Bank study published this week, the good climactic conditions and low land and labour prices are more favourable for farming than anywhere elsewhere in southern Europe.

Combined with relatively low shipping costs, they should make Bosnia’s agriculture “well positioned to compete on the export markets,” the study found.

But domestic experts say the sector is languishing as a result of a broad range of constraints, including fragmented supply chains, costly logistics and limited access to affordable finance.

The country is also failing to capitalize on its preferential trade agreements with EU member countries because a range of its products are banned from foreign markets owing to the absence of proper food safety institutions, they say.

“Development strategies recognise agriculture as a key economic sector but the authorities are failing to take action to assist this development,” an agronomy expert from the Banja Luka Faculty of Agriculture, Zeljko Vasko, told Balkan Insight.

Public spending in Bosnian agriculture remains low, at around 2 per cent of total public spending, and funds are not targeted toward areas that generate most growth.

“Everyone says that agriculture can solve many of our economic problems but the authorities do not do anything to make it happen,” Aleksandra Nikolic, from the Sarajevo agriculture faculty, said.

“It would take a sociologist to explain this,” she added. “Maybe they believe it can happen on its own without investment and without any effort on the part of the government.”

Nikolic said the proper development of the farming sector was also being prevented by unclear distribution of authority in the country coupled with the influence of “centres of power outside the government.”

As an example of the current muddle, she said the Food Safety Agency, which among other things monitors the work of the government, is having to write farming by-laws because the country does not have an agriculture ministry to do it.

Agriculture in Bosnia falls under jurisdiction of the country’s two highly autonomous parts, the Serb-dominated Republika Srpska and the Federation, predominantly comprised of Bosniaks [Muslims] and Croats. The central government, linking the two, does not even have an agriculture ministry.

Farms provide employment for about 20 per cent of all those working in the country. But Vasko warned that most were rural and poor, producing for their own consumption and lacking the capital, the ambition and the institutional support to switch to commercial farming.

At the moment, the average Bosnian farm is two hectares is size, subdivided into between six and eight plots, and this fragmentation hampers productivity and investment in irrigation and equipment.

“Radical change is urgently needed in this sector, including concentration of land and other resources in the hands of the people who will make it their core business,” Vasko said.

Until that happens, “We will continue to eat vegetables imported from neighbouring countries and meat from who knows where while the local produce is left to rot,” he added.

According to World Bank data, the participation of the agri-food sector in Bosnia’s Gross Domestic Product dropped to 9.8 per cent in 2007 from 15.1 per cent in 1999.

Food imports are growing faster than food exports and as a result the agriculture-food trade deficit increased by over 10 per cent between 2003 and 2007.

“A lot of our problems are also due to a lack of knowledge, because the people who are now in control were educated in the old [Yugoslav Socialist] system and do not understand what kind of regulation modern commercial farming requires,” Nikolic said.