This article is part of our special report Generational renewal in agriculture.
Generational renewal of Croatian agriculture is a slow process burdened with negative demographic trends, constant migration and a non-competitive market. EURACTIV Croatia reports.
Despite the popularisation of European funds, which boost positive development, many other policies which can encourage young people to remain in rural areas are still lagging behind.
In Croatia, young farmers are considered to be holders of family farms until they reach the age of 40. Year by year, young farmers are increasing in numbers, although growth is still slow. According to the farmers register’s figures, there were a total of 22,351 young farmers in 2018, which is 13% of the total number of farmers enrolled.
Figures from the country’s farmers register show a 4.3% increase, compared to 2017, which also saw a 3.8% compared to 2016.
The generational gap is obvious, since more than 50% of agricultural holders are over 60 years old. However, the share of young farmers puts Croatia high at the EU level, averaging at 6 percent.
According to the World Bank report on the state of Croatian agriculture, access to the EU labour market and the ongoing structural transformation of the agri-food sector have led to significant migration from rural areas, especially among young people, which has in turn reduced the availability of labour.
Croatia’s Ministry of Agriculture introduced a series of measures to encourage young people to remain in rural areas and engage in agriculture.
Total allocation for the 2014-2020 Rural Development Programme amounts to €2.3 billion, of which €2 billion comes from the European Fund for Rural Development (EAFRD).
Although a large number of tenders have been launched in recent years to take advantage of the 16 measures envisaged by the programme, the funds are still underused.
So far, 97% of the funds (€2.5 billion) have been made available through tenders, 71% (€1.73 billion) contracted and 41% (€1 billion) have been disbursed.
Various measures have also attracted young people, with measures 4 and 6 being the most interesting ones.
Young people in measure 6 have access to the sub-measure 6.1.1 which is intended exclusively for farmers under 40 years of age and co-finances 50% of their activities.
Through sub-measure 4.1. young people receive 20% more support – co-financing their project by 70%. So far, 1,489 projects of young farmers worth HRK 512 million have been contracted under measure 6.
Complexity of the problem
At first glance, funds may be a good incentive for young people to engage in agriculture and remain in rural areas, but the problem of generational renewal is much more complex.
The process of generational renewal is slow and is, for the most part, the result of the closure of smaller, non-competitive holdings, which were mainly run by older farmers, Dr Ornella Mikuš from the Faculty of Agriculture in Zagreb told Euractiv.hr.
According to her, the main obstacles stopping more young people from entering the sector is the fact that the “funds cannot solve the issue. It is the task of domestic agricultural and other policies (demographic, educational, social).”
Market uncertainty and the non-competitiveness of products is a concern for most farmers.
Following a request by Euractiv.hr, Josip Vrbanek, member of the Croatian Chamber of Agriculture and a consultant, highlighted the problem of poor organisation and poor connectivity of young producers, as well as the small number of associations, cooperatives and producer organisations.
“Given the great changes in the market economy in Croatia in the last few decades [the breakup of Yugoslavia and the entry into the EU market], our manufacturers need to react quickly and one of the models of success is certainly association.
One of the main obstacles is weak producer activity in this area, as well as a lack of mutual trust,” he added.
Fear of budget cuts
Currently, Croatia is nearing the end of the Rural Development Programme’s seven-year period (2014-2020), so the funds in these measures have been largely utilised. And questions about budget cuts raise many concerns and disagreements.
On Sunday (3 November), representatives of several agricultural associations warned that the reduction of the agricultural budget, as foreseen in the draft budget of the Republic of Croatia for 2020, will contribute to the further decline of the sector.
President of the Croatian Independent Farmers Association, Mato Mlinarić, warned that Croatian farmers are being asked to be competitive, while they receive 20% less support than European farmers.
Also, the Croatian Chamber of Agriculture expressed its concerns on budget on Monday (4 November).
Agriculture Minister Marija Vučković responded to the complaints, saying that information on reducing direct payments to farmers was not correct, adding that farmer subsidies had never been higher and highlighting the positive results of measure 6 as an example.
European rural development funds are currently the main contributors to Croatia’s agriculture sector. Deficiencies in implementing the structural policy of generational renewal in rural areas, which would ensure future agricultural production and food supply in Croatia, will surely affect development inequalities in the European Union.
Specifically, in the case of budget cuts in the 2021-2027 programming period, support for all Croatian agriculture would be reduced and limited, making Croatia even less competitive and profitable on the market, since the country was last to join the EU and withdrew the least amount of funds accordingly.
[Edited by Zoran Radosavljevic, Daniel Eck]