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Rural areas are an important part of Bosnia and Herzegovina, due to the fact that they cover 85.1% of the territory of Federation of Bosnia and Herzegovina and 95% of Republic of Srpska, where lives 49.5% of the total population of Federation of B-H and 83% in Republic of Srpska. The economic situation in rural areas is not satisfactory, most have poorly developed transport, social and economic infrastructure. The quality of life in rural areas is lower, with limited employment opportunities. Such situation is a consequence of the war, but also of the economic crisis in the country. In some rural areas we can talk about serious economic and social degradation, as well as poverty.

Agriculture, which is one of the major activities in rural areas, generally occupies an important place in the economic structure of Bosnia and Herzegovina. Looking at the share of agriculture sector in the total GDP of the entities and the District, it is evident that in the Republic of Srpska share of agriculture in GDP about 10%, while in the Federation of B-H share of agriculture in total GDP is 5.1%. When it comes to District of Brcko, agriculture has a significant share in the overall economy, with the share of of 7.5% in the total GDP.

Bosnia and Herzegovina has developed the register of agricultural holdings and clients register. According to the latest data for 2014, state of family farming in B-H looked like this:

In Federation of B-H there are 57,943 registered clients. Status of agricultural farm have 55,939 registered entities, of which 1,279 have different forms of legal entities and 54,660 are family farms. The total area of arable land reported on farms is 93 095 ha.

In the Republic of Srpska there are registered 25,005 agricultural farms which cover 129 137 ha of agricultural land.  Out of total, 501 are legal entities and rest are family farms. 

Brcko District covers an area of 493.3 km2 which makes 1% of the territory of Bosnia and Herzegovina and in District there are registered 3107 agricultural farms.

The average size of about 50% of family farm households in B-H is 2 ha, while the size of more than 80% of farms is less than 5 ha. Agricultural land of small and medium-sized farms are divided on average on 7-9 parcels, that are often distant from each other, sometimes even few kilometers. Such small areas are causing a number of problems in the development of production of fruit and vegetables. Bearing in mind that farmers on their property, and even on one parcel produce several kinds of fruit and vegetables, more serious development of agricultural production can not be expected.

The paradox of B-H is that although more than half of rural households are engaged in some form of agricultural production, less than 10% of them generate revenue from this source. Most deal with agriculture for their own needs, and therefore agriculture often contributes to sources of livelihood in the rural areas but not to rural income and rural development.

In B-H prevails the production of natural type, as well as small mixed farms with no clear signs of specialization. This significantly affects the level of ability of the sector to improve efficiency and modernize the mode of production and business. Inadequate access to the market reduces the motivation of farmers to specialize production and to improve its performance, but also to the wider manufacturing.

The importance of the stability of family farms is identified in the strategic plans of the entity institutions.

Federation of B-H has specified in its Medium-term Strategy of Development of The Agricultural Sector in the Federation for period 2015-2019 as one of the priority goals, the development of rural areas through the creation and implementation of rural development policy measures that will improve the competitiveness of production, and create opportunities for additional income within agriculture and related activities. These measures will provide support for the reconstruction of the villages, their social and physical infrastructure, and support the protection of natural and cultural heritage in relation to agriculture and related activities. An important focus of these measures is to stop the negative demographic trends, by supporting the creation of new jobs for young people.

Republic of Srpska, in the Strategic Plan of Development of Agriculture and Rural Areas in the Republic of Srpska for period 2015-2020, planned support for  starting, expansion and modernization of the business of family farms. The strategic commitment is to increase the amount of incentives for an additional 10% of agricultural households whose head is under 40 years old and 5% if the holder of the farm is a women.

This text is kindly provided by the authorities of this country.