Both government entities and food producers fear they have insufficient time to prepare for the new trade regime.
By Anes Alic for Southeast European Times in Sarajevo -- 15/10/12
BiH-produced food exports to Croatia, like the dairy products pictured above, will virtually cease by year's end when the new EU trade regime commences. [Bedrana Kaletovic/SETimes]
Bosnia and Herzegovina's (BiH) must enact reforms in the food industry so it may export to its primary foreign market, Croatia, when that country enters the EU next July, experts said.
The new export regime will begin by year's end, six months prior to Croatia's EU membership, and will affect nearly 200,000 BiH food producers at a price tag of 200 million euro annually.
"BiH should seek a longer deadline. It must open direct talks with Croatia and negotiate a new trade agreement," Duljko Hasic, economic expert at the BiH Chamber of Commerce, told SETimes.
Hasic acknowledged, however, even if Croatia shows good will, the EU is unlikely to soften its strict rules.
The EU requires BiH to create accreditation bodies and certification laboratories that would check the origin of foods to enable their entry on the EU market.
BiH must also harmonise its laws and hygiene standards pertaining to food products with those of the EU regulating food imports.
The BiH authorities, however, face several institutional hurdles that necessitate more political will than demonstrated so far by the ruling parties to meet the deadline.
One is the EU requirement that BiH create a state-level agriculture ministry that would take over the responsibilities of the two existing ministries.
Republika Srpska politicians have strongly opposed a state-level ministry, fearing the strengthening of the central government at the expense of their entity.
In 2010, the BiH government adopted a plan to push through the necessary reforms, making little progress because of the year-and-a-half-long political paralysis.
Even if the authorities manage to fulfill all obligations in time, farmers would still have a hard time adapting, experts said.
"That will be tough for many small producers as the extra transport costs may kill their business," Hasic said.
BiH’s biggest agricultural exporters are dairy companies, and more than 60 percent of milk produced in Bosnia is exported to Croatia.
One of the potentially most adversely affected companies is the Milkos dairy plant in Sarajevo, which exports 5,000 tonnes of dairy products to Croatia annually.
"In some informal talks with politicians they told us that we should seek a different export market, outside of the EU, so it is clear that they are not planning to fulfill the necessary conditions by the end of this year," Fahrudin Kurtagic, export manager at Miklos, told SETimes.