1st December 2014
Help BiH farmers sell their products in the EU
Since I took up my post in Bosnia and Herzegovina this summer I have taken every opportunity to travel around the country. The beauty and diversity of the rural landscape is the first thing that strikes the newcomer, and from every highway one can see the distinctive, beehive-shaped haystacks and crops and livestock tended by hard-working farmers.
It’s often pointed out that agriculture accounts for only a little over 8 percent of Bosnia and Herzegovina’s economy – but that doesn’t give a true picture of how important farming is, because half the BiH population still live in the countryside and the vast majority of those people depend, directly or indirectly, on the agricultural sector for their livelihood.
If things are not going well for BiH’s farmers, things are not going well for Bosnia and Herzegovina.
Currently, things are not going well.
In recent days, we have seen milk farmers blockading customs terminals, calling for the government to put in place new, protectionist economic policies. Rumour has it that Bosnia and Herzegovina is being flooded with cheap products from EU countries which cannot now be exported to Russia due to sanctions.
The evidence does not back this up. According to the BiH’s own statistics, there has not been an increase in milk imports from the EU. In fact, import of some products has decreased. But the farmers are certainly suffering. So what is the problem, and where does responsibility really lie?
The root of the issue is that, despite more than a decade of assistance and encouragement from EU partners, the BiH authorities have been unable to put in place the basic health and hygiene procedures that are required to export food products to the EU.
This has been a lost opportunity. From potatoes to beef and from mushrooms to milk, BiH agricultural and agro-industrial products can compete with the best. But until the necessary standards and checks are in place, the EU market of half a billion consumers will remain closed.
Things went from bad to worse when Croatia joined the EU last year. It’s estimated that BiH farmers will lose up to 50 million KM in export earnings every year, until their products can be certified for sale in Croatia. This year’s floods have just added to the pressure.
The steps that must be taken to meet health and hygiene requirements are fairly straightforward, and the EU has always been willing to help with expertise and funding.
The real stumbling block has been the failure of the BiH political parties to reach agreement. The problem is that what should be a simple, technical issue has got caught up in the wider political arguments about the balance of competences between the State and Entity levels. Politicians here have put other priorities over those of the rural communities and, as so often, have been unwilling to compromise.
There is no scope for negotiation on the side of the EU. These are the same safety standards that all countries must meet if they want to export to the EU. So the solution lies in the hands of BiH’s politicians.
The impasse over safety standards is all that stands between BiH’s farmers and exceptional, unlimited duty-free access for nearly all agricultural products to the huge EU market. With these measures in place, I can see no reason why farmers from Prijedor or Bihac shouldn’t be able to sell cevapi to the Czech Republic and burek to Berlin.
BiH’s farmers are right to be angry. But they shouldn’t allow their attention to be diverted from the real source of their problems. Establishing a system to certify BiH agricultural exports according to a single, verifiable set of standards is one of the quickest and easiest ways the incoming government can give a boost to the struggling economy. It’s time for politicians to show that people’s livelihoods are more important to them than uncompromising political principles.
One of the goals could be to help Bh farmers to export their product on the EU market, and thus the UK as well. There are many ways to do this, but one has to allow it for enabling international fairs of agriculture and food in the UK. Another way is to support promotion on third markets (e.g. The Arab countries).
It might be a last-minute to enable performance of BiH traditional food on the EXPO 2015 Milan such as Livno’s and Travnik’s cheeses, wine, ecotourism, handicrafts …. and this is a real opportunity for youth employment because EXPO takes 6 months, and for food products and it is a very good position for overtaking the EU market.
Thank you Amir. It would be great to see BiH food products exhibiting at major exhibitions in the future, including in the UK. This is the sort of thing that the UK Government facilitates for British exporters through our UK Trade & Industry organisation, and I’d love to see the BiH authorities being similarly proactive. But again, the first step is to implement the necessary system required to meet EU levels of assurance about the phytosanitary standards of milk and meat products. Without that, producers will not be able to export these sorts of products to the EU. That is the door that needs to be opened.
“Most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor.” (Theodore Schultz, 1979, On the Economics of Being Poor); (http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1979/schultz-lecture.html)
No country in the world developed its agriculture without deliberate, continuous, well thought through government support. And I don’t mean here subsidies (only) but extension services and long term infrastructural development plans – in short, having a number of strategic support services aimed at changing the institutional context as well as aiding the transformation of farmers’ mind set from supply-oriented to demand-oriented could contribute to creating a new dynamic in agricultural sector. Not only did we fail to establish such services within the existing structures, but we continue to undermine the potential of current institutions – regardless of their level (state/entity/municipality) and associated competencies.
As a consequence of that, what is happening to farmers and agricultural sector right now, and especially to those farmers that have export capacities, is just a symptom of a much deeper problem that has to do not only with how competencies are delegated in the current institutional set up but with attitudes both political elites and citizens of this country have towards our farmers. We all have our own share of blame in this.
As regards political elites and international organizations: there is a general awareness and knowledge about what factors stifle development of BiH agriculture, some of which are unresolved property rights in agricultural sector, fragmented market especially in land, lack of capacities in terms of marketing and branding local produce, lack of specialization in production, underdeveloped processing capacities, etc. – however, despite knowing all this, the responses from both local politicians and development oriented organizations/projects (save for a few noble exceptions) have been sporadic and inefficient, mainly focused on a specific locality and without a broader vision of agricultural development trajectory. Having said this, I think it is important to acknowledge the limitations of international organizations in fostering a long term development of the sector as a whole. We cannot expect international or local development organizations to do the job that should be done by the government. The reason is to be sought in the way these organizations/projects function – they organize their work around projects and project aims. And projects last for two, three, or five years at best. And sometimes donors change their priorities, and projects get cancelled…So, the greater share of responsibility resides with our political elites. It baffles me that in the country with over 50% of people residing in rural areas no political party offers a clear policy focus on development of rural parts of BiH. This speaks much of political maturity of our society.
As regards farmers: Farmers allowed themselves to be divided over petty issues and failed to comprehend the strength of numbers – their interests and needs have never been coherently verbalized in a list of simple demands that go beyond just requesting the payment of last year’s subsidies. And I have never seen an evidence based policy paper put forward by farmers’ associations (or whoever speaks on their behalf) – sometimes, even without knowing, they themselves degrade their negotiating position.
And somebody ought to explain to both farmers and politicians that EU market is not just some happy place but a place of fierce competition – even if farmers manage to get their products to the EU market sustaining them there will require a lot of hard work. Just comparing the CAP institutional framework of support to what our farmers have here is enough to paint the picture. And it does not look good.
But why not use your capacities as British Ambassador to lobby for wider institutional changes in agriculture? Some two years ago a number of countries in Europe started creating Rural Parliaments – why not use this concept to change the approach to agriculture, to introduce interactive democracy to our much troubled system?
Lots of great points here Samira. Thank you! I totally agree that the authorities really need to come up with a strategic plan for agriculture in order to focus investment and to enable BiH to compete in a highly competitive industry. And the disparate farmers’ organisations don’t help to focus government attention on agriculture. Although farming represents a much smaller percentage of the economy in the UK, the National Farmers Union gives farmers a very powerful and coherent voice. As you say though, we outsiders can’t fix it. I hope that the new governments – when they finally form! – will want to include some agricultural initiatives as part of the initial Agenda for Reform under the next stage of the EU strategy.