Background

Bosnia and Herzegovina (BIH) is an upper middle-income country with 3.5 million population, which is gradually declining and aging. Around 60% of the population lives in rural areas (villages and scarcely populated municipalities). The country has a high level of human development but is still below the average for the Europe and Central Asia region.

Poverty remains a concern, particularly in rural areas that are generally characterized by fewer job opportunities, weak physical infrastructure and public services, as well as limited access to markets, business development and financial services. Unemployment rates in rural areas are considerable and can be 40% higher than in the main urban centres. Wages are also 25% lower, while the estimated GDP per capita is less than half the level reported in urban environments.

Agriculture is one of the most important economic sectors in the country employing around 130,000 people. There are over 125,000 registered farms in the country, with the average farm size around 2.6 hectares.

Agricultural productivity, value added, and competitiveness generally remain low. In addition to the fragmentation of land use patterns, topographic characteristics, land-ownership challenges and the quality of soil limit agricultural production. Other challenges include land degradation and loss of productive agricultural land. Constraints on growth include a high share of small and inefficient farms, inadequate or outdated technology and skills, the unfavourable age structure of producers, limited access to finance and integration into European value chains, and poor market access.

What we do?

UNDP, together with CzDA, is responsible for the implementation of the Project activities. Total value of the Project is EUR 20.2 million, while EUR 14.8 million will be allocated for investment support targeting agri-food sector competitiveness in three areas: 1) investment in primary production and processing capacities to strengthen market efficiency; 2) strengthening advisory and extension services to increase knowledge sharing and skills development and 3) strengthening and diversifying the rural economy.

The investment support will serve as Project financing mechanism to effectively support beneficiaries and achieve the set targets. The investment support will be distributed through public Calls for proposals.

Project will also offer technical assistance to enable investment support implementation, while engaging institutional partners and ensuring anchoring of relevant knowledge, skills and practices for result-oriented public policy delivery.

Expected Results

It is expected that the project will contribute to an environment of improved competitiveness through following results:

1)      Higher levels of production of safe and quality food based on introduced innovative practices, while preserving the natural resources and the countryside, are sustained; and

2)      Policy actions are implemented in EU aligned manner, based on sector services and systems improved.

Main Beneficiaries

Agri-food business operators

Agricultural cooperatives

Advisory and extension services providers

Local communities and rural farmers

Prospective entrepreneurs

Governmental institutions

Status

Ongoing

Project start date

March 2020

Estimated end date

February 2024

Geographic coverage

Bosnia and Herzegovina

Project value

EUR 20.200.000 

Donor

European Union 

Focus area

Rural and Regional Development

Partners

• Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina
• Food Safety Agency of Bosnia and Herzegovina
• Ministry of Agriculture, Water Management and Forestry of Federation BiH
• Ministry of Agriculture, Forestry and Water Management of Republika Srpska
• Office for Harmonization and Coordination of Payment Systems in Agriculture, Food and Rural Development of Bosnia and Herzegovina
• Office of EU Integrations of Federation BiH