strategic transformation of agriculture and rural …€¦ · aquaculture presentation entitled...

STRATEGIC TRANSFORMATION OF AGRICULTURE AND RURAL SPACE

(STARS)

REIMBURSABLE ADVISORY SERVICES (RAS)

Output 2:

Summary report of stakeholder consultations

SUFINANCIRANO SREDSTVIMA EUROPSKE UNIJE

EUROPSKI POLJOPRIVREDNI FOND ZA RURALNI RAZVOJ:

EUROPA ULAŽE U RURALNA PODRUČJA

MJERA TEHNIČKA POMOĆ

EUROPSKI FOND ZA POMORSTVO I RIBARSTVO

MJERA VII.1. TEHNIČKA POMOĆ

Table of Contents

Stakeholder Consultations .................................................................................................................. 1

Process ....................................................................................................................................................... 1

Approach ................................................................................................................................................... 3

Presentations and Priority Setting Exercises ............................................................................................. 3

Notes from Agriculture Stakeholder Consultations .............................................................................. 4

Common Agricultural Policy: Policy Objectives ..................................................................................... 5

Challenge 1: Improve access to credit & finance, and improve business environment in agri-food

sector ..................................................................................................................................................... 5

Challenge 2: Connect producers and agri-food businesses to markets ................................................ 6

Challenge 3: Raise productivity levels ................................................................................................... 6

Challenge 4: Transfer knowledge, information, and technologies to producers and agribusiness ...... 7

Challenge 5: Improve natural resource management ........................................................................... 8

Challenge 6: Manage climate risks and promote low emissions production ........................................ 8

Challenge 7: Attract investment, jobs, and youth to rural areas .......................................................... 9

Challenge 8: Enhance the development impacts of public agricultural expenditures under the CAP .. 9

Challenge 9: Productively mobilize state-owned and private agricultural land resources ................. 10

Stakeholders preliminary results ......................................................................................................... 10

Notes from Fisheries and Aquaculture Stakeholder Consultations ...................................................... 11

EMFF/NDS objectives .......................................................................................................................... 11

Challenges ............................................................................................................................................ 11

Fisheries: Main points of discussion .................................................................................................... 12

Marine aquaculture: Main points of discussion .................................................................................. 14

Freshwater aquaculture: Main points of discussion............................................................................ 16

Stakeholder preliminary results........................................................................................................... 16

ANNEX 1: List of Participants in the Agriculture Stakeholder Consultations ........................................ 17

ANNEX 2: List of Participants in the Fisheries and Aquaculture Stakeholder Consultations .................. 27

ANNEX 3: Multi-criteria priority-setting exercises .............................................................................. 40

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Stakeholder Consultations

Process

The World Bank Team responsible for the Strategic Transformation of Agriculture and Rural Space (STARS)

Reimbursable Advisory Services (RAS) project in cooperation with the Ministry of Agriculture of Croatia

held two sets of stakeholder consultations.

The first set comprised agriculture consultations in Zagreb April 3rd, and Osijek April 4th, 2019.

The second set comprised fisheries and aquaculture in Split May 27th (marine fisheries and aquaculture),

and Zagreb May 29th (freshwater aquaculture).

The stakeholder consultations were delivered as part of formulation of agriculture and

fisheries/aquaculture sector strategies under component 2 of the STARS RAS and this report is an integral

part of Output 2.

The objective of the stakeholder consultations was twofold: (i) to present the priority setting

methodology, and (ii) gather participants input with respect to the strategic priorities in respective sectors.

The preliminary results of the online stakeholder consultations for agriculture, fisheries and aquaculture

were also presented at respective workshops. The attendance sheets for agriculture are provided in Annex

1 and for fisheries/aquaculture in Annex 2, respectively.

In agreement with the Ministry of Agriculture, the stakeholders invited for the first round of consultations

held in February 2019, were invited to this round and included, but not limited to: i) central and regional

governments and local self-governments bodies (ministries, agencies); ii) academia (universities and

institutes); iii) chambers (economy, trades and crafts, agriculture); iv) private companies; v) financial

institutions (banks, HAMAG BICRO); vi) associations and groups (Croatian Employers’ Association,

different professional associations and groups covering all aspects of agriculture and fisheries and

aquaculture); vii) networks (Croatian Network for Rural Development).

For this round, based on the experience from the first round of consultations, the invitations were not

distributed through chambers and/or associations but directly to the invitees. Each invited person was

asked to share the information on the invitation with other relevant colleagues, which in some cases

increased the number of participants.

In total, 62 agriculture stakeholders (45 in Zagreb and 27 in Osijek) and 60 fisheries/aquaculture

stakeholders (35 in Split and 25 in Zagreb) participated in the consultations. Detailed information on

participation is provided in tables below:

Zagreb: Agriculture

External participants No of participants Attendance in %

Counties 4 10

Universities / institutes 5 13

LEADER CRO Network, LAGs 2 5

HBOR / Banks 2 5

Chambers (agriculture, economy) 3 8

Associations (livestock breeders, fruits growers) 10 26

Private sector 6 15

Media 1 3

2

Agency for Agriculture and Food 1 3

Consultancy in agri-food business 5 13

Total 39 100

Osijek: Agriculture


LEADER CRO Network, LAGs 2 9

HBOR / Banks 1 4

Private sector 3 13

Counties 6 26

Chambers (agriculture, economy) 6 26

Associations / cooperatives 1 4

Agency for Agriculture and Food 4 17

Total 23 100

Split: Fisheries and Aquaculture


FLAG 3 9


Counties 3 9

Regional Development Agency 3 9

Private sector 9 26

Associations 7 20

Total 35 100

Zagreb: Aquaculture



Ministries (Tourism, Environment) 1 4

LAG 6 24

Counties 2 8

Regional Development Agency 2 8

Private sector 8 32

Associations 1 4

Total 25 100

Open conversation time was also provided during coffee breaks and lunches.

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Prior to the consultations, and by conduit of the invitation for participation, the stakeholders were invited

to take part in online stakeholder survey for the sector of their interest. The surveys were posted at the

project website www.poljoprivreda2020.hr and were anonymous.

Approach

The approach to the stakeholder consultations was identical for agriculture and fisheries/aquaculture and

included six steps:

1) Identify Critical Challenges that incorporate the situation appraisal (SWOT), stakeholder visions,

needs and priorities, and capacities for influencing change

2) Identify and Score Evaluation Criteria that guide the prioritization of proposed response options

3) Identify and Discuss Alternative Response Options that address the Critical Challenges identified (in

Step 1), that tackle the root causes of development challenges outlined in the situation appraisal

(SWOT), and that contribute to long-term goals and objectives

4) Prioritize Proposed Response Options in line with the evaluation criteria established (in Step 2)

5) Articulate Impact Pathways, Assumptions, and Risks that represent the theory of how prioritized

solutions contribute to long-term goals and objectives and what factors may influence future

success

6) Establish National Priorities, incorporating input from stakeholder consultation outcomes.

Presentations and Priority Setting Exercises

At each stakeholder consultation the World Bank team gave a sector specific presentation as the basis for

discussion and gathering of stakeholder inputs.

The content of the presentations is summarized below. All presentations are provided in a separate file.

Agriculture presentation entitled Critical challenges and response options for Croatian agriculture

comprised nine main headings:

1. Improve access to credit & finance, and improve business environment in agri-food sector

2. Connect producers and agri-food businesses to markets

3. Raise productivity levels

4. Transfer knowledge, information, and technologies to producers and agribusiness

5. Improve natural resource management

6. Manage climate risks and promote low emissions production

7. Attract investment, jobs, and youth to rural areas

8. Enhance the development impacts of public agricultural expenditures under the cap

9. Productively mobilize state-owned and private agricultural land resources.

Each heading comprised the challenge, challenge drivers, possible response options and addressing of the

CAP strategic objectives.

Fisheries presentation entitled Critical challenges and response options for Croatian fisheries

http://www.poljoprivreda2020.hr/

4

(given only in Split) comprised eight main headings:

1. To optimize local revenues and jobs generated by existing capture fishery activities

2. To strengthen producer organizations and associations of small producers

3. To strength coordination between marine- and land-based activities (tourism) and infrastructure

investments within “blue economy” approach

4. To raise overall productivity levels in the fisheries sector, within established constraints of

sustainability

5. To streamline the regulatory framework and improve support for producer compliance with regional

and national species management plans and regulations

6. To strengthen the adaptation of the fisheries sector to increasing impacts of climate change

7. To attract more youth and skilled labor to the fisheries sector

8. To strengthen institutional, technical and analytical capacity for enabling participatory and evidence-

based fisheries resource management, policy design, and implementation at the regional and national

level, including for small-scale fishing operations.

Aquaculture presentation entitled Critical challenges and response options for Croatian aquaculture (in

Split and Zagreb) comprised 10 main headings:

1. To raise overall productivity levels in the aquaculture sector

2. To improve linkages between small producers and processors to domestic and international markets

3. To develop new market opportunities in high value product segments

4. To better coordinate marine- and land-based activities and infrastructure investments, INCLUDING

within the EU’s “Blue Economy” strategy

5. To improve the system of disease control

6. To better support producer compliance with the regulation of aquaculture in Croatian waters: environ-

mental issues, predation, feed, antibiotics

7. To help the aquaculture sector adapt to increasing climate change impacts

8. To attract more youth and skilled labor to the aquaculture sector

9. To provide better institutional support for innovation in the freshwater aquaculture sector

10. To achieve greater sustainability in aquaculture sector.

Each heading comprised the challenge, challenge drivers, possible response options and addressing of the

European Maritime and Fisheries Fund (EMFF) and National Development Strategy (NDS) objectives.

At each workshop, the participants were also given 2 multi-criteria priority-setting exercises with the

evaluation criteria to guide the prioritization of the proposed response options related to the challenges

(an example is provided in Annex 3).

Notes from Agriculture Stakeholder Consultations

Overall, the participants in Zagreb and Osijek agreed with the identified challenges, the drivers behind

them and possible responses to the challenges. They were of the opinion that the presented content

provides realistic picture of the situation in the agriculture sector and that the proposed options might

lead to the needed changes and are in line with the EU Common Agriculture Policy (CAP).

This report summarizes main discussion points for each challenge.

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Common Agricultural Policy: Policy Objectives

The EU is trying to improve both the economic, social and environmental performance of the agriculture

sector. To achieve this, the EU has formulated 9 specific objectives for the new programing period 2021-

2027. Broadly speaking, the objectives 1 to 3 represent the economic performance improvement; 4 to 6

the environmental performance of the agriculture sector and 7 to 9 the social inclusion agenda of the EU.

The objectives have been formulated as follows:

1. Support viable farm income and resilience across the Union to enhance food security

2. Enhance market orientation and increase competitiveness, including greater focus on research,

technology and digitalization

3. Improve farmers’ position in value chain

4. Contribute to climate change mitigation and adaption, as well as sustainable energy

5. Foster sustainable development and efficient management of natural resources such as water, soil and air

6. Contribute to the protection of biodiversity, enhance ecosystem services and preserve habitats and

landscapes

7. Attract and sustain young farmers and facilitate business development in rural areas

8. Promote employment, growth, social inclusion, and local development in rural areas, including

bioeconomy and sustainable forestry

9. Improve the response to EU agriculture to societal demands on food and health, including safe and

nutritious food produced in a sustainable way, food waste, as well as animal welfare.

Challenge 1: Improve access to credit & finance, and improve business environment in agri-food

sector

There was consensus that the business environment for farmers and agri businesses in Croatia has to be

improved in particular for small producers and MSMEs who are more affected by this challenge than the

larger ones. Small producers and MSMEs are characterized by poor financial literacy, weak business

planning and management capacities and entrepreneurial skills. They are also faced with insufficient

linkages to modern agri-food value chains. For these reasons and lack of equity capital small producers and

MSMEs have difficulties in accessing financing. They are perceived as high-risk, low return investment

opportunities by commercial lending institutions. As a result, agricultural loans and guarantees tend to

concentrate on larger producers and agribusinesses, especially field crops such as cereals and oil seeds and

livestock such as poultry and pig farming. Another problem is related to lack of collateral. Usually there are

issues around land titles and building permits.

However, there is potential for small and MSMEs with HAMAG-BICRO. Recently, HAMAG-BICRO started a

program focused on smaller farmers. The program was well accepted, and demand exceeded the available

funds.

Additional issues emerged during the discussions relate to (i) non-functioning inspection system (many re-

sellers re-sell the products as their produce); (ii) lack of qualified labor, that in particular is present in

Slavonia and (iii) huge taxes and different charges (they speak about 500 of hidden taxes or charges and

levies) and for that reason there is no room for maneuver for any substantial change in price of labor.

In Osijek, it was emphasized that the current regulatory set up hinders differentiated rural income (e.g. if

you work in some other segments, and in addition would like to carry out agriculture activities on your own

agriculture land you must have a permanently employed person to be eligible for support).

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Challenge 2: Connect producers and agri-food businesses to markets

During the discussion it became clear that the stakeholders are too much focused on production side, in

particular in livestock sub-sector. There is belief that boosting of production (e.g. to bring it to the pre-war

level) will resolve the problem. But, boosting of production will not resolve the problem of linkages to

market. Current low production can be seen as a problem or as a big opportunity. First step is not to boost

the production but to carry out a good market analysis to understand potential differentiated markets for

livestock and other agriculture products. The market analysis should be done before positioning the

production at the market. The analysis will enable to understand how short or long the value chain should

be, where optimal price can be achieved, etc. If we take milk for an example, the producer should know

where this milk is going to go before even start producing it, because the producer must know what quality

to produce, how much to produce, when is high consumption season, etc.

Another question is how producers can connect to markets. For better connection of producers to markets,

producers must organize into some kind of associations/organizations/structures. Regardless how the

structures are called (a producer organization, a brand that connects people, an economic cluster) it is

necessary to figure out the optimal structure for each value chain and then work with that.

The participants in Osijek emphasized the role of advisory service. There is no advisory service that would

provide support in entrepreneurial knowledge and know-how entrepreneurial and business skills. Example

of a very good soybean without genetically modified seeds was mentioned. That is excellent product for

the European market but is not bringing good results because only primary products are exported. Or for

example how to link the agriculture production from Slavonia with the Adriatic coast.

One participant informed the workshop that there was market research covering the entire length of the

Adriatic coast and unfortunately a large majority of huge hotel complexes are in foreign ownership and

most of agriculture products were of foreign origin. The participants agree that they know how to produce

quality products but are lacking the selling skills.

To successfully deal with this challenge a change of mindset is needed.

Challenge 3: Raise productivity levels

As a basis for discussion, the main findings on labour and land productivity in Croatia were introduced to

the participants. Both, labour and land productivity in Croatia are relatively low. The analysis of efficiency

and effectiveness of public spending in agriculture in Croatia has shown that public spending in agriculture

in Croatia is high but not always efficient in terms of return. In general, it can be said that the effects of

income support in agriculture in Croatia are mixed, very much depending on the type of support and size of

a farm. Farms receiving subsidies have comparatively lower technical efficiency scores than non-subsidized

farms for most types of subsidies examined (decoupled subsidies; rural development support – excluding

investment). Farms receiving decoupled subsidies suffer significant losses compared to those that do not

receive this kind of support. Farms receiving non-investment rural development support are considerably

less efficient compared to those that do not receive this kind of support. Losses are also evident for farms

receiving coupled support compared to those that do not receive this support. The only categories for which

subsidized farms outperform non-subsidized ones are those of rural development support on investments.

The workshop participants were not surprised with the findings presented and agree that many subsidies

actually kill the agriculture production.

In fairness, other EU Member States faced similar problems in the first years of the membership to the EU.

In recent times, positive changes have been observed in Croatia. For example, cropping patterns are

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changing following the EU accession shifting away from low-value production. The impacts of the shift are

not yet evident, and more needs to be done to translate income support into higher on-farm productivity.

There are four options to consider:

- improve and increase the targeting of capital investment support (investment to improve technical efficiency, total factor productivity and technical change); a combination of decoupled support plus rural development investment support has positive impact to both productivity and efficiency

- provision of high-quality education/training knowledge (those who are doing well in terms of

productivity and efficiency - this performance is not explained by structural characteristics of farms,

but is explained by the personal characteristics such as entrepreneurial skills, networks and other

characteristics)

- the diversification of production systems at the farm level in the promotion of value-added products

- the promotion and adoption of technology including digital solutions; it is very evident from the findings that any support provided for technical changes has a positive impact on factor productivity and technical efficiency in Croatian agriculture.

The participants agree that there is knowledge in the country but transfer of knowledge from

scientific/education institutions to farmers is missing.

There is myth that the money resolves everything. It is not an issue how much money is available, the issue

is how the money is used (is it targeted to create economic, social, environmental benefits). Currently,

there is enough money available.

It was emphasized in Osijek, that due to the size of the country, smaller farms could be comparative

advantage, but due to unfavorable conditions the number of smaller family farms in Vukovar-Srijem county

was reduced by one and a half thousand last year.

Challenge 4: Transfer knowledge, information, and technologies to producers and agribusiness

Agriculture Knowledge and Innovation Systems (AKIS) describes the exchange of knowledge and support

services between diverse actors in agriculture. Today, a relatively diverse set of public and private actors

make up Croatia's AKIS. In general, publicly funded entities dominate Croatia's AKIS. The Croatian

Agriculture and Forestry Advisory Service (CAFAS) – that used to be specialized public agency responsible

for advisory activities in agriculture, rural development, and fisheries has been one of the most influential

actors. CAFAS recently was merged with the Ministry of Agriculture and yet to see how it will perform under

the new set up. Other key public actors include newly formed Croatian Agency for Agriculture and Food

(CAAF), educational entities and research institutes, technology centres, and laboratories, as well as food

industry and input providers. Civil society (such as NGOs and farmer associations) and private advisors are

the least developed components of Croatia's AKIS. One of the main characteristics of the AKIS in Croatia is

fragmentation and poor connection among its actors.

The farmers should be the centre of the AKIS, as the AKIS should be built around their needs. In regard to

the applied research, which should be the main “engine” of an AKIS system, there is a relatively new

initiative in EU - the European Innovation Partnership (EIP). This is main future support for a functional AKIS

and it was proposed to the Member States to merge the gap between science and farmers, and to promote

synergy between different AKIS actors. The EIP is very popular and it has already been greatly applied in

many countries. It supports simple applied researches, short ones that provide quick answers to some

specific problems that are currently faced by farmers. Unfortunately, the EIP is not used in Croatia at

sufficient level yet but is promising.

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When talking about the Advisory service (it was also emphasized under challenge 2) the service is

insufficient in some parts (e.g. business skills and highly specialised technical advice). At the same time,

private advisory sector is not sufficiently developed yet. There is relatively developed advisory sector

specialized in the RD schemes but experts in specific production areas are few.

The EU is planning to facilitate development and efficiency of the AKIS through its inclusion in the CAP

strategic plan. The proper and functional setting of AKIS comes as one of the new obligations in the next

programming period and the basic component of the strategic plan of every Member State, according to

the latest developments, should be the description of this system with the regulated relations between the

actors. It is expected that the mechanisms and the budgets for certain entities or actors should be

sufficiently explained, with defined goals and expected results.

To conclude this challenge, Croatia is still to find the mechanisms and establish a functional system with all

stakeholders and capacities in the system well connected.

Challenge 5: Improve natural resource management

Under challenge 3, there was a discussion about the low land productivity in Croatia. So, the question is

how to improve land productivity while at the same time improve natural resource management. There is

a tool developed by FAO that can be used to guide planning decisions on what to grow and where in the

country - agro-ecological zonification (AEZ).

As already mentioned, the planning of agriculture using tools that would guide a better planning for

agriculture starting at the national level will enable better focus and target investments on the ground, in

particular under the rural development program. The tool can also help generate information at the field

level that can support the farmers directly on what to do on farm, what practices to apply.

Irrigation of agriculture soil appeared to be the top priority to improve both, the productivity and natural

resources management. Irrigation combined with mild winters will allow for two cropping cycles in a year.

Secondly, within the agri food production system there is a huge opportunity to integrate energy efficiency.

Energy efficiency has positive environmental impacts by reducing greenhouse gases, economic impacts

reducing use of or replacing the fossil fuels.

In Osijek, the participants emphasized the importance of healthy agriculture soil and sustainable irrigation

(how the soil will look like after a long period of irrigation).

The Center for Soil established within the Croatian Agency for Agriculture and Food is the right place to

organize and manage the soil data. These data can be very helpful in land use planning.

Challenge 6: Manage climate risks and promote low emissions production

All the challenges presented are interconnected. It is particularly true for challenge 5 and 6. When you

apply certain land use planning tools taking into consideration e.g. soil properties, terrain slope, etc. you

get one picture. Then you apply climate change model you get different picture.

All present agree that Croatia is already experiencing some of those changes (e.g. increase in droughts and

days without rain, events of hail and precipitation at times that were not expected). So, different situations

require different approaches and solutions. One of the approaches is climate smart agriculture (CSA).

According to FAO the CSA is an approach that helps to guide actions needed to transform and reorient

agricultural systems to effectively support development and ensure food security in a changing climate.

The CSA aims to tackle three main objectives: sustainably increasing agricultural productivity and incomes;

adapting and building resilience to climate change; and reducing and/or removing greenhouse gas

http://www.fao.org/climate-change/en/

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emissions, where possible. The CSA is an approach for developing agricultural strategies to secure

sustainable food security under climate change.

In this regard there are some questions that we would like to be able to start answering at different levels

(e.g. policy level, farmer and producer level). Questions like (i) what is the key information needed to make

production more sustainable; (ii) what crops can be produced in different land and different suitable

ecosystems, (iii) how can we manage different seasons, (iv) what is the balance between for example the

population, the water demand and different other constraints; (v) what are the other risks and threats to

overall productivity and where.

A lot of data to answer the above questions exist. They come from European Space agencies, FAO and are

accessible to all European countries. The question in Croatia is how to bring them at the national level and

at the farm level.

To conclude, in terms of climate variability and suitability now is possible to see and track different impacts

and also to use these tools to get a sense on how different crops perform depending on different factors

and implications.

Current tools enable modelling of crops performance under current conditions and under climate change

scenarios.

The smart planning presented and discussed under challenge 5 and 6 is not yet in use in Croatia but is very

much needed.

Challenge 7: Attract investment, jobs, and youth to rural areas

Negative demographic trend is present in the whole of Croatia but is more evident in rural areas and young

people. Due to an uneven distribution of income, employment and investments, rural areas are

characterized by higher levels of poverty. Primary agriculture remains the main activity in the rural areas

and dominance of lower value commodity production. There is a close link between areas where primary

agriculture is the main economic activity and poverty.

So, in terms of generating more income, more value in agriculture can be generated by diversifying farm

production systems moving towards higher value crops and invest in more value addition on farm and off

farm both but within the agri-food chain. Another issue is that agriculture is not seen as an attractive sector

for young people. The perception needs to be changed, e.g. changing curricula at schools and technical

training centers to talk about health issues and nutrition sustainability, agriculture ecology, organic

agriculture, etc. Good public campaigns to show that agriculture can provide an interesting, honorable way

of life and an economic activity. And lastly the Digital Agenda. Digital tools integrating those within

agriculture production systems may change the perception.

As also discussed under challenge 1, the availability of funds for smaller producers, the tax and the

administrative burden on businesses in particular in rural areas are big issues that need to be resolved.

All agree that these negative demographic changes constitute a limiting factor in the development of rural

areas and contribute to a deepening of inequality between rural and urban areas.

Challenge 8: Enhance the development impacts of public agricultural expenditures under the CAP

An important topic in Croatian agriculture is agricultural land and the management of agricultural land, not

from natural aspects but political. This is because significant areas of agriculture land are state-owned. The

agricultural land is regulated by the Act on Agriculture Land, which has been amended 18 times in about 2

10

decades. Each time the amendments and the changes were guided by the same reasons that are a more

efficient, more effective, more transparent management of agricultural land to result with higher

productivity. However, these changes are not happening.

As discussed under challenge 3, three quarters of European support are based on area (68% of all CAP

payments are area-based). Why is this the case? One of the controversies that we have identified, and

which is only the question of political decision is equal/linear distribution of direct payments. More fair

distribution is needed and direct payments in Croatia are above the EU average (40% vs 27%).

Under this challenge the main conclusion is that agriculture policy is about the money: who will get the

money. If there is dissatisfaction, then it means that we haven't responded properly to this challenge.

Challenge 9: Productively mobilize state-owned and private agricultural land resources

Size of the agriculture land is not known yet in Croatia. There are three numbers officially: 2,695,000 ha

according to the Act on Agriculture Land (880,000 ha of agriculture land and 398,000 of hectares of the so-

called marginal agricultural land which is actually forest land owned by the state and 1,417,000 ha in private

ownership). According to farm structure service for 2016 the size of agriculture land, regardless the

ownership is 1,562,000. In ARKOD as potential agricultural land there is a figure of 1,120,000 ha of which

1,000,900 ha are eligible for payments. So, there is a huge difference between these figures.

As generic issues, the participants identified lack of coordination in particular across sectors that is critical

for exploiting opportunities for diversification for value addition and chronic lack of exchange of

information between public bodies and agriculture sector.

Stakeholders preliminary results

Very preliminary results were presented, as the survey was still ongoing. Based on the responses received,

the following four challenges have been indicated as a top priority:

• To improve the business environment for producers and agribusiness SMEs

• To strengthen the links of small producers and agribusiness SMEs (small- and medium-sized

enterprises) with domestic and international markets

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• To raise productivity levels in the agri-food sector

• To promote growth and employment in lagging rural areas.

In terms of the profile of the survey respondents, people were mostly from the production side with more

than 10 years of experience participated.

Notes from Fisheries and Aquaculture Stakeholder Consultations

The post-2020 European Maritime and Fisheries Fund (EMFF) will be the only financial instrument

specifically dedicated to support the implementation of the Common Fisheries Policy (CFP). As such, its

purpose should be to support the implementation of the CFP and the achievement of the CFP objectives.

EMFF/NDS objectives

For these consultations, the draft EMFF and National Development Strategy (NDS) objectives were

grouped into 9 thematic groups:

1) Strengthens market orientation and competitiveness

2) Promotes viable incomes in the sector

3) Helps achieve food security

4) Promotes sustainable natural resource management and conservation

5) Addresses climate change, energy efficiency, and renewable energy needs 6) Fosters good governance and efficient public administration 7) Promotes local/territorial development 8) Supports youth and labor development 9) Develops “smart” technology.

Challenges

The following challenges were discussed in the fisheries sector:

1. To optimize local revenues and jobs generated by existing capture fishery activities

2. To strengthen producer organizations and associations of small producers

3. To strength coordination between marine- and land-based activities (tourism) and infrastructure

investments within “blue economy” approach

4. To raise overall productivity levels in the fisheries sector, within established constraints of

sustainability

5. To streamline the regulatory framework and improve support for producer compliance with regional

and national species management plans and regulations

6. To strengthen the adaptation of the fisheries sector to increasing impacts of climate change

7. To attract more youth and skilled labor to the fisheries sector

8. To strengthen institutional, technical and analytical capacity for enabling participatory and evidence-

based fisheries resource management, policy design, and implementation at the regional and national

level, including for small-scale fishing operations;

and aquaculture:

1. To raise overall productivity levels in the aquaculture sector

2. To improve linkages between small producers and processors to domestic and international markets

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3. To develop new market opportunities in high value product segments

4. To better coordinate marine- and land-based activities and infrastructure investments, including

within the EU’s “Blue Economy” strategy

5. To improve the system of disease control

6. To better support producer compliance with the regulation of aquaculture in Croatian waters: environ-

mental issues, predation, feed, antibiotics

7. To help the aquaculture sector adapt to increasing climate change impacts

8. To attract more youth and skilled labor to the aquaculture sector

9. To provide better institutional support for innovation in the freshwater aquaculture sector

10. To achieve greater sustainability in aquaculture sector.

Fisheries: Main points of discussion

It is estimated that approximately 14,000 people (fishermen, employees in companies involved in capture

fisheries, farming and processing) are directly employed in the sector, and 11,000 people are indirectly

involved (e.g. seasonal workers, especially in the segment of employees on fishing vessels).

Due to the nature of discussions, these notes provide information in aggregated format.

• There was remark made by one of the representatives of professional fishermen that unfortunately, fishermen that are the true stakeholders have not engaged sufficiently in this process that will determine the future of Croatian fisheries by providing a platform for sector policies and plans;

• Legal framework; is aligned with the EU legislation but fishermen feel that the EU legislation discriminate new member states and that the Croatian legislation in some respects is stricter than the EU legislation. The thing about fisheries is not supposed to be stakeholders versus government. Government is not supposed to stop fishermen from fishing and fishermen are not supposed to be hindered.

• Communication and coordination; There is insufficient communication and coordination of activities between institutions at national and county level on one side and insufficient communication with fishermen and fishermen companies on the other side. The fishermen feel that they are not sufficiently engaged in regulatory and legal processes relevant to the sector. Part of the blame goes also to fishermen that are not proactive enough. At present, communication with the competent authorities is through the Chamber of Economy and Chamber of Trades and Crafts. There is sense that these two institutions act as semi-political bodies, sometimes not acting in the best interest of fishermen. One of the ways to improve communication would be to involve as many fishermens’ associations as possible into direct communication with the competent authorities at national and regional level.

• Fishing fleet; Croatia did not have possibility to renew the fishing fleet before the accession to the EU and now is faced with the problems of the size and fishing capacity. The EU sees the fishing fleet as big (7,500 vessels). But 43% of vessels are smaller than 12 meters and not using active fishing gears and do not represent an effective fleet. The fleet is on average over 35 years old and needs renewal/replacement, but due to fishing capacity restrictions the policy is to pay for reduction in capacity and buyback (to scrap vessels). Due to poor status of the fleet, fishermen can be out on the sea around 100 days out of 365;

• Access to funds; The financing conditions are not favorable; it is very difficult to get a loan from a commercial bank. Equally, it is very difficult to get any financial support from the EMFF. EMFF calls do not include renewal of fishing vessels (e.g. improvement of fisherman safety at the sea, upgrading of technology to increase efficiency). HBOR is the only bank that financially supports fishermen under reasonable conditions;

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• Development of infrastructure; The coastal infrastructure, the ports and landing sites is poorly developed. The lending sites are a heated issue, both at the local and the national level. The Ministry of Agriculture, together with the Ministry of the Sea, Transport and Infrastructure, that is in charge of ports and landing sites, have been working on the final solution for the landing sites for the last two years, but it is not easy to resolve, especially in terms of conflicting interest with tourism. Direct sale to end consumers and restaurants by small fishermen does not work in practice due to paper work (e.g. transport form and the sales form) and fishermen feel the situation is quite chaotic in terms of rights on how fishermen can directly sell their fish. Another problem is that concessions are decided at the national level by the Ministry of the Sea, Transport and Infrastructure. The government proved not be able to regulate who is going to manage and maintain such ports;

• Improvement of the market; Domestic market is underdeveloped, and consumption of fish is very poor. Due to the lack of registration of fish, fish is often sold under the counter. Improvement of the market would provoke better pricing by unit price or by catch that could reduce fishing efforts within the current fleet capacity. Unit price for the same type of fish, caught in the same sea is two and a half times lower than the price achieved by Italian fishermen. Majority of fish is exported by three to four privileged companies and fish channeled through just one wholesaler in Italy that has monopoly of fish wholesale. This type of relationship has been built for years with huge support from the Croatian policies. So, the government does not invest enough in fish promotion and consumption in Croatia. There is a need for marketing campaigns to promote fish and raise awareness of our citizens. Also, proposals how to strengthen local sale of fish will stop the dependence on Italy. In developing the market, the following issues should be looked at: possibility to diversify fish products, eco-certification, introduction of new species, direct sale, etc. The wholesale system should be reintroduced in Croatia;

• Blue economy; There is no sufficient link between the fisheries activities and tourism and currently,

tourism does not complement the fisheries. Some of the reasons for this situation are fragmented

production structures not offering sufficient quantities of the required quality (e.g. compliance with

international quality standards, IMSC support, organic, eco market research);

• Organization of fisherman into cooperatives or associations; Due to the legacy from former times and lack of facilities (e.g. access roads to lending sites or ports, electricity, coolers, ice machines, waste containers, etc) fishermen do not see in their interest to establish such kind of structures. Several cooperatives/associations were established by initial funds from the Government, but as soon as the Government stopped financing them, they got bankrupt or not operational. Fishermen are still not fully aware that they could be more efficient in fighting for their rights if they were organized. However, there are some good examples like Adria from Tribunj or Omega 3. The Adria Tribunj is a successful story and is successful because they received facilities and infrastructure for work (e.g. refrigerators, tracks, harbor). Financing of associations and cooperatives is one of the key issues.

• To attract more youth and skilled labor to work in fisheries; Fisheries is not seen as an attractive profession by young people. Young people do not see incentive to start working in fisheries. For young starters it is almost impossible to invest in new vessels due to the limit on fishing capacity. Another problem is that there are no high schools that provide such kind of knowledge. This requires systematic approach and regulation – from education that is missing at the moment, to financial support through favorable loans and incentives to subsidized pension system.

• Climate change; Everyone is aware that climate change is happening, that the sea level is arising and temperature increasing. These changes impact fish stock. There is need to adapt and respond to climate change (e.g. preserve and not over catch, ensure safety fishermen on the sea).

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Marine aquaculture: Main points of discussion

In 2017, the total number of aquaculture production centers, including both marine (158 farms) and

freshwater (46 farms), was 204.1 Most of these farms are microscale enterprises, particularly family-owned

farms.2

• Institutional set up; Aquaculture by its nature is very complex and interdisciplinary sector. In

Croatia, the Ministry of Agriculture (legislation, permitting), the Ministry of the Sea, Transport and

Infrastructure (concessions), the Ministry of Finance (approval of concession fee), the Ministry of

Environment and Energy Efficiency (environmental assessment, NATURA 2000, energy efficiency),

the Ministry of Science and Education (research), county offices for spatial planning are in charge

for aquaculture. Often, there is no sufficient communication and coordination of activities. They act

independently of each other. Procedures are complex and very lengthy. Several examples were

provided where the procedure to get the concession granted takes up to 7 years.

• Legislation and regulations; Sectoral legislation is aligned with the EU legislation, but in some cases

is more rigid and there is no understanding why. If you approach responsible national body they

defend that it is EU requirement, but if you look to, for example Greece, you will find less strict

solution. Also, legislation is not harmonized. For example, a permit for fish farming issued by the

Ministry of Agriculture allows tourism activities at fish farms, but the concession issued by the

Ministry of the Sea, Transport and Infrastructure forbids them; Concessions are a challenge in terms

of legislation (e.g. the Ministry of Finance can stop the concession agreement issued by the Ministry

of the Sea, Transport and Infrastructure on the ground of concession fees);

• Improvement of the market; All participants agree that one of the most critical aquaculture challenges is how to link producers to the market; Producers need to learn how to respond to the market demand. Aquaculture, unlike the fisheries, can create the product, can offer the product throughout the year and can also offer the identical products by price, which should be and could be agreed in advance. Aquaculture produces in controlled environment and can create a good quality product, healthy and free of antibiotics. In approaching the markets, producers should also think about traceability, eco- and organic certification and branding. A project designed by the Croatian Chamber of Economy is a good example. This project enabled the Croatian producers to register and stamp their products showing to the end buyer where the products are coming from. The participants agree that this is one of the ways to go, especially in the Croatian market. This system allows end buyers to distinguish Croatian from imported fish. Another part that is missing is branding. Branding should be done for domestic and international market; The western market is coming to our country for their vacation and we must make better use of it;

On the demand side, consumers must be made aware of the advantages of aquaculture products; need to find out what the consumer demands are, what consumers we can, and we want to target. A comparison with the industry of poultry production is good. When you come to the supermarket, you know exactly that that day you can buy a whole chicken, you can buy wings, you can buy breasts. So, whoever comes to the supermarket knows exactly which range of products they want. Aquaculture could do the same, there already are good examples with salmon and shrimp production. Aquaculture should differentiate and develop different products and be able to supply the market throughout the year;

1 Eurofish (2019): Overview of the Croatian Fisheries and Aquaculture Sector, available at https://www.eurofish.dk/croatia 2 Ibid.

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• Value chains; More and more the producers themselves are also becoming the processors. In a way they follow the process mentioned for the salmon industry. This is now increasingly happening in Spain, in Greece and is a good direction;

• Productivity; Productivity should target the markets which offer higher prices for the fish. Often

restaurants sell farmed fish as wild fish because its quality can compete. This is also related with the

labelling. Wild and farmed fish are not clearly labeled in the market. Productivity is very much

interconnected with legislation. For example, productivity can be increased without allowing bigger

concession rate and increasing the number of farms. By increase of productivity you increase the

quantity that you can sell and then you face a new problem. Two months ago, the Ministry of the

Sea, Transport and Infrastructure adopted the secondary legislation that does allow trucks to use

the motorway only, that increases costs. Or the decision of the Government of Slovenia to open

only the Bregana border crossings for trucks, that will increase the length of travel for several hours,

and cause problems to producers. So, the national administration is putting more barriers which are

costly and affect our competitive advantage. As Croatian export goes through Italy if the Slovenian

decision is enforced it will be disaster for all the companies that export to Italy, not only for

aquaculture;

• Vaccination; from 2021 because of some administrative definitions in the current legislation it will

not be possible to fund vaccination from the EMFF though it has proven to be the best way to reduce

the use of antibiotics and to reduce disease;

• Reduce the pressure on the coastal area; one of the ways to go is that the first stage of farming is

situated on the coastal area and then the second stage is moved to semi offshore. In this way the

pressure will be reduced and disease management improved;

• Innovation and research; there is no sufficient and adequate infrastructure that could support

innovation in the aquaculture sector and there is lack of applied research which can be directly

applied in the production of aquaculture. There is no link between scientific institutions and the

producers. Scientific institutions do not value applied research sufficiently and do not support

initiatives in applied research. The research is mostly conducted at institutions which are registered

for research work and/or producing institutions. Solution for this challenge is the advisory service,

provided that the young people who are in the advisory service are well trained;

• Climate change; Proven fact and aquaculture will have to adapt to new conditions to be less

vulnerable. Marine aquaculture will probably be less affected by climate change than freshwater

aquaculture. There are examples from Italy and France, where farms were lost due to weather

conditions. In any case, the strategy should take into account climate change and suggest what could

be done to bring negative impacts to the minimum;

• Sustainability; Talking about sustainability, we talk about financial sustainability, environmental and

social sustainability, and since more recently, energy sustainability. In Croatia, there is no legislation

on sustainability, but sustainability is implemented into ordinances and into other bylaws but

unfortunately it does not really work in practice. This is also linked to innovation and climate change;

• Youth; Unlike in fisheries, young people are interested in aquaculture. Two aspects have been

discussed: staff and entrepreneurs, both have to be motivated to work in aquaculture. Workers in

fish farms must be paid enough to prevent fluctuation. Entrepreneurs and how to motivate

entrepreneurs? The experiences are quite good. There are at least four projects that people want

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to invest money into aquaculture. Motivation by simplifying and shortening procedures, removing

some costs from them (e.g. environmental impact assessment could be paid for the concession fee),

certainty (future producer should know where they can farm, what they can farm and how much

they can farm, connecting with spatial planning is the key), lack of communication or links between

the industry and public bodies.

Freshwater aquaculture: Main points of discussion

In addition to the challenges addressed under the marine aquaculture following was pointed out:

• All carp ponds are in Natura 2000 area that imposes management restrictions (e.g. birds of prey)

and the compensation by the State does not cover the damage incurred, there is no monitoring

of birds and losses are not evaluated;

• The management should be upgraded in terms of management practices, technologies and

disease management systems, which is also the EU priority;

• Climate change, the inland waters will be much more exposed to climate change then the sea

water. So, all of the experience that we have now is slowly going to change and we have to adapt

to. We can adapt in different ways, e.g. farming of species which can tolerate warmer water or

to dislocate fish farms? Some fish ponds are already facing the challenge of sufficient quantities

of water;

• Creation of FLAGs should be legally enabled;

• Ecological production and species that do not have a negative impact on the environment

should be promoted;

• Sale of live fish should be regulated at the national level;

• Educational system has not recognized that we should have the profession of qualified

freshwater experts.

Stakeholder preliminary results

Very preliminary results were presented, as the survey was still ongoing. Based on the responses received,

the following four challenges have been indicated as a top priority:

- increase overall productivity levels

- better support for producer compliance with regulation

- develop new market opportunities in high value product

- better coordinate marine and land-based activities in this context of the blue economy approach.

In terms of the profile of the survey respondents, people were mostly from the production side with

more than 10 years of experience.

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ANNEX 1: List of Participants in the Agriculture Stakeholder

Consultations

Zagreb

23

Osijek

27

ANNEX 2: List of Participants in the Fisheries and Aquaculture

Stakeholder Consultations

Split - Fisheries

31

Split - Aquaculture

35

Zagreb Aquaculture

40

ANNEX 3: Multi-criteria priority-setting exercises

Stakeholder Consultations: Evaluating Priority-setting Criteria Following are the latest three (3) policy objectives and nine (9) specific objectives proposed for the EU’s Common Agricultural Policy (CAP) for 2021-2027. In addition, a cross-cutting CAP objective is “modernising the sector by fostering and sharing of knowledge, innovation and digitalization in agriculture and rural areas, and encouraging their uptake.”

We would like you to assess the importance of the nine specific objectives in terms of their

relative contributions to accelerating the future structural transformation of Croatia’s agri-

food sector. We will subsequently use these nine objectives as evaluation criteria in

prioritizing the challenges and associated response options facing Croatia’s agriculture.

Please score (weight) the nine specific objectives by assigning points to each objective

such that the total points = 100.

Common Agricultural Policy: Policy Objectives

CAP Specific Objectives, 2021-2027

Assign

points

to sum

to 100

Foster a smart, resilient, and

diversified agricultural sector ensuring food

security

1. Support viable farm income and resilience across the Union to enhance food security

2. Enhance market orientation and increase competitiveness, including greater focus on research, technology and digitalization

3. Improve farmers’ position in value chains

Bolster environmental care and climate

action and contribute to the environmental- and climate-related

objectives of the Union

4. Contribute to climate change mitigation and adaption, as well as sustainable energy

5. Foster sustainable development and efficient management of natural resources such as water, soil and air

6. Contribute to the protection of biodiversity, enhance ecosystem services and preserve habitats and landscapes

Strengthen the socio-economic fabric

of rural areas

7. Attract and sustain young farmers and facilitate business development in rural areas

8. Promote employment, growth, social inclusion, and local development in rural areas, including bioeconomy and sustainable forestry

9. Improve the response to EU agriculture to societal demands on food and health, including safe and nutritious food produced in a sustainable way, food waste, as well as animal welfare

TOTAL = 100

strategic transformation of agriculture and rural …€¦ · aquaculture presentation entitled...

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