BERRY ECONOMICAL IMPACT IN BALCAN AGRICULTURAL SYSTEMS

Mario Njavro, PhDFaculty of Agriculture University of Zagreb

Department of Farm Management

COST 863 EuroberrySocio-economic seminar

Bordeaux, France, 01.-04 April 2007

Overview• Berry fruits production statistics

• Strategy issues- the case of Croatia– Strengths Internal (Farm level)– Weakness

– Opportunities External– Threats

Fruit and vegetables production

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1999-2001 2003 2004

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Bosnia and Herzegovina Croatia Macedonia, The former Yugoslav Republic of Serbia and Montenegro

Share in World, % 1999-2001 2003 2004 Bosnia and Herzegovina 0,06 0,07 0,07 Croatia 0,08 0,07 0,07 Macedonia, The former Yugoslav Republic of 0,07 0,06 0,07 Serbia and Montenegro 0,19 0,21 0,22

Source: FAO stat

Production and yields

Country Raspberries Strawberries quantity yield

(kg/ha) quantity yield

(kg/ha) Bosnia and Herzegovina

1,70 3,981,30 3,70 4,111,10

Croatia 1,20 2,510,50 4,40 4,400,00 Macedonia 2,60 4,333,30 Serbia and Montenegro

112,03 5,438,70 32,30 3,866,30

Source: FAO stat

BERRY ECONOMICAL IMPACT AND RURAL DEVELOPMENT-THE CASE OF CROATIA

Economic indicators- Croatia

2003 2004 2005 Area (square km) 56,538 56,538 56,538 Population (million) 4,442 4,439 4,439 GDP (million EUR, current prices) a 26,234 28,395 30,949 GDP per capita (in EUR) 5,906 6,397 6,972 GDP - year-on-year rate of growth (in %, constant prices)

5,3 3,8 4,3

Average year-on-year inflation rate b

1,8 2,1 3,3

Exports of goods and services (as of % GDP) c

50,1 50,1 49,4

Imports of goods and services (as of % GDP) c

57,9 57 56,4

External debt (million EUR, end of year) d

19,811 22,781 25,541

Unemployment rate (ILO, persons above 15 years of age) e

14,3 13,8 12,7

Employment rate (ILO, persons above 15 years of age) e

43,1 43,5 43,3

Situation in the agricultural sector or how berry production could make an difference?• Facts and consequences

– Transition and privatization– War– High level of import of agricultural products– Low self sufficiency level– Unfavorable farm structure (land size, age, education and

diversification)– Undeveloped market infrastructure and distribution

channels, – Unorganized agricultural production– Quality standards? – Undeveloped land market, – Undeveloped rural financial market – Low level of competitiveness

Could berry production make difference?

Opportunities (1)

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Wheat Corn Blackberry Strawberry

Gross margin, €/ha

Income, €/ha

Croatian Extension Service

Opportunities (2)• Climate and soil conditions• Trends in consumption• Market chains? Quality standards• Processing industry• Tourisms

– Rural tourisms?• Governmental programs

– Operational programs – Incentives

• Pre-accession funds– SAPARD– IPARD

Opportunities (3)

• “Brand” names

• Traditional products

• Village markets

Opportunities (4)• Technology

– Out-of-season production

– Hydroponics production

Cooperation?Vertical integration

Break-even analysis- strawberry production

0100020003000400050006000700080009000

100001100012000130001400015000

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C1 R1 C2 R2

Threats• Trade liberalization and competition• EU Accession?

2001 2002 2003 t USD t USD t USD Import Strawberry, raspberry and other berries

857,00 628355,00 699,00 528606,00 309,00 451815,00

Total 141.515,00 61.124.231,00 159.063,00 80.328.057,00 153.405,00 87.421.735,00 % 0,61 1,03 0,44 0,66 0,20 0,52

Export Strawberry, raspberry and other berries

0,00 296,00 0,00 0,00 0,00 102,00

Total 7.144,00 3.833.657,00 4.333,00 2.195.118,00 6.160,00 2.938.510,00 % 0,00 0,01 0,00 0,00 0,00 0,00

•Negative demographic trends in rural areas

Weakness (1)1. competitiveness

DRC Croatia- 2 year 1,01 Germany-1 year 0,64

Source: Čačić, J. 2003

Weakness (2)2a. Farm structure

EU-9* Croatia** Farm type 1975 1990 1997 2003 2001 Specialized farms 68 90 83 86 53

Arable crops 18 23 23 19 8 Horticulture 2 3 2 3 4

Permanent crops 19 27 30 10 9 Grazing animals 27 27 26 50 26 Pigs and poultry 1 1 1 3 6

Mixed farms 32 20 17 14 48 Mixed crop 11 8 8 3 5

Mixed livestock 8 3 2 3 23 Mixed crop-

livestock 14 8 7 8 20

* Eurostat ** Farm Survey

Weakness (3)2b. Farm structure- % of off-farm income

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CROATIA Mediterranean Mountainous Pannonian A Pannonian B

Weakness (3)• Management capacities

Mean St. deviation Experience 4,37 0,76 Family members 3,90 1,49 Business analysis 3,78 1,01 Extension agents 3,62 1,29 Buyers 3,60 1,14 Paper media 3,16 1,20 fairs, city markets and similar 3,10 1,20

Field trips 3,08 1,26 Electronic media 2,74 1,24 Scientists 2,64 1,45 Colleagues 2,38 1,38 Input suppliers 2,24 1,20 Internets 2,16 1,40 Bankers 1,72 1,16 Accountant 1,50 1,09

Strengths

• Awareness!

• Young, educated farmers

• Development of agribusiness sector

Final remarks• Adequate and appropriate training on

management and advisory services

• Technical assistance in production, post harvest operations and introduction of quality standards

• Effective and efficient market information or intelligence

• Research

Thank you!