Bosnia and Herzegovina, abbreviated BiH, is a country in Southeastern Europe located on the Balkan Peninsula. Sarajevo is the capital and largest city. Bordered by Croatia to the north, west, and south; Serbia to the east; Montenegro to the southeast; and the Adriatic Sea to the south, with a coastline about 20 km long.
Bosnia and Herzegovina (BiH) is a decentralised State, consisting of two entities – the Federation of Bosnia and Herzegovina (FBiH) and the Republic of Srpska (RS) – and the Brčko District. The population is estimated at 4 million.
Bosnia and Herzegovina participates in the Stabilisation and Association Process (SAP) and is committed to engage in necessary political, economic and social reforms leading progressively to a closer relationship with the EU and to a potential future accession. The negotiations on a Stabilisation and Association Agreement (SAA) were launched in November 2005. On 16 June 2008, the SAA was signed, but only entered into force in June 2015. Additionally, the country has been a member of the Council of Europe since April 2002 and a founding member of the Mediterranean Union upon its establishment in July 2008.
Agricultural sector occupies an important tradition place in the economy of BiH in view of the geographical position of the country and the availability of natural resources. Agriculture contributes to 8%
of the country’s GDP and employs about 18% of the available labor force. Although the agricultural land in BiH takes 50% of its total area, about 45% of arable land is unused. The structure of the agricultural sector is characterised by small sized family farms, which to large extent are produced for home consumption – over 50% of agriculture holdings are estimated to be less than 2 ha; the state firms, generally much larger, are mostly not operating or in difficulties often due to the fact that the process of privatisation has not been completed. The varying climatic conditions offer wide possibilities for land farming, agricultural production and cultivation of different crops: fruit, vegetables and vine growing, forage crops growing and livestock production. The largest part of arable land is under cereals. Forage production holds second and vegetables third place. Roughly, forage is produced on 30% of arable area (clovers, alfalfa, grass-legume mixtures and maize for silage) and on 1,400,000 ha of permanent grasslands which are mostly in hilly and mountainous areas. High availability of grassland and mountainous pastures suggests a potential advantage for production of livestock and dairy products. Orchards and vineyards cover approximately 100 000 hectares. Currently, there are an estimated 24 million trees of plums, pears, apples, cherries, peaches, walnuts and other fruit, and 13.5 million of grape vines for processing, sale at a local market, and export. Due to favorable climatic and economic conditions for berry fruit production (raspberries, strawberries etc.), the area of more than 2,500 ha planted with berries is increasing every year.
Bosnia and Herzegovina has 100 dairies with total production capacity of 2 million liters/day. Approximately 45 dairies exceed capacity of 1,000 liters/day and 10 dairies exceed capacity of 100,000 liters/day. The dairies produce mainly high-volume, fast-turnover, low margin products like fluid milk. BiH currently processes far less than one quarter of its total milk production and with demand for dairy products such as cheese, yoghurt and other milk probiotic products expected to rise by 20% over the next 5 years in the region, the country offers an excellent opportunity for added processing. Also, BiH has long tradition in collecting and cultivating of medicinal and aromatic herbs, wild berries and mushrooms. It is assessed that BiH has over 700 species of medicinal and aromatic plants of which around 200 are exploited (balm, immortelle, juniper, chamomile, lavender, etc.). The annual harvesting of medicinal and aromatic plants in BiH varies from 1,500 to 9,000 tons. Diversity of climate and vegetation, clean environment and tradition in beekeeping are good preconditions for the production of high quality honey in BiH. The main beekeeping products are honey, beeswax, royal jelly, pollen, and bee venom.
Livestock production has a great signifi chance for BiH agriculture considering the available natural resources and the number of people engaged in the production. Bosnia and Herzegovina has long tradition in collecting and cultivating lamb meat and baby beef production and meat processing (in particular dried and smoked meat). There are more than 30 meat processing companies in BiH, most are small-scale size. Only a half of the installed production capacity of the 11 largest meat processing companies is utilized. Abundance of the clear, unpolluted rivers and streams that cross the country presents huge potential for both family owned and industrial size fish farming production. Fish farming is already developed, especially trout and carp rising. Fish farms are generally distributed in three main regions: Northern BiH there are 5 cyprinid fish farms with a total area of 3,276 ha, the River Neretva and the River Vrbas there are 40 concrete salmonid fi sh farms of 8.5 ha and 14 floating cage fish farms of 8.1 ha and marine aquaculture in 2 cage farms, with a total area of 3.6 ha, is located in Neum, a town on the Adriatic coast.
Bosnia and Herzegovina imports approximately two-thirds or 65% of its overall food needs. BiH has a large foreign trade deficit with imports almost two times greater than exports. Agricultural products only represent about 7 percent of exports, but they represent 18.5 percent of total imports. BiH has a liberal trade regime signed with the Central European Free Trade Agreement (CEFTA), Turkey and EFTA.
Bosnia and Herzegovina has many advantages for the development of agriculture production and rural areas such as: natural resources, relatively cheap labor costs forces, close to the EU and Mediterranean markets; tradition of agricultural production, unpollutedland, good conditions for the development of eco-food and agritourism as well as the existence of a certain level physical and social infrastructure in rural areas. While BiH’s fertile soils, abundant fresh water resources and unpolluted land are the guarantee for the quality of all agricultural, aquaculture and livestock products of the country; fruit, vegetables, milk and dairy today are BiH’s most direct competitive agribusiness segments. National treatment of foreign investors, VAT rate of 17% and corporate income tax rate of 10% amongst the lowest in the region and in Europe, and a liberal foreign trade regime, render BiH attractive and price competitive location for your future investment in the sector of agriculture and food processing.