BiH attempts to avert export crisis

15/03/2013

Exporters propose entering alternative markets or placing their products in domestic markets at higher prices to avoid loses in Croatia.

By Anes Alic for Southeast European times in Sarajevo -- 15/03/13

More than 75 percent of BiH's exports to Croatia will be affected by the new EU export rules. [Anes Alic/SETimes]

Croatia's entry to the EU in July will close the doors for meat, poultry and dairy exports from Bosnia and Herzegovina (BiH) because they do not meet EU standards. Experts warn that unless the government implements legislative and other measures, BiH firms will have to find alternative markets or offer more expensive products at home to survive.

Cash-strapped BiH stands to lose 22 million euros annually if it loses its primary export market in Croatia.

"Even if everything is lined up, BiH's dairy producers cannot compete in the EU market outside of Croatia in terms of pricing. It would be best if farmers could turn to other non-EU markets, like Montenegro, Kosovo, Macedonia and Turkey," Sead Jelec, secretary of the Sarajevo canton's association of farmers, told SETimes.

The EU requires BiH to establish accreditation bodies and certification laboratories to verify the origin of food products and harmonise its laws and hygiene standards.

Moreover, BiH must create a state-level agriculture ministry that would take over the responsibility of the existing 10 lower-level ministries, according to Union policy.

The new export regime was scheduled to begin in January, but Zagreb agreed to give BiH time to adopt quality-control legislation that meets EU standards.

The BiH government adopted a plan in 2010 to push through the necessary legislation, but 18 months of political paralysis following the general election that year sidelined the reform efforts.

"In order to export to Croatia, companies will have to go there to analyse the products in their laboratories and obtain a license from the Croatian government. This will be a major expense and loss of time [that only a handful of companies will be able to meet]," Mehmed Niksic, president of the Bosnian Dairy Producers Association, told SETimes.

The BiH government passed several regulations last month, but Jelec said they constitute only a preliminary legislative step and a number of hurdles remain before exports can proceed.

"The most frustrating thing is that many of the BiH companies that will be hit hardest are already in line with European production and hygiene standards, and are waiting for the government to follow suit," Jago Lasic, chairman of the FBiH Chamber of Commerce, told SETimes.

Most producers said they believe the government will not undertake the EU-required changes in time and it will be difficult and time-consuming to compete in alternative markets. Instead, they proposed the government launch an aggressive campaign to make citizens aware of the importance of buying local goods.

Small-scale farmers held informal talks with the government, but said no concrete initiative has emerged.

"We have just over four months left. The only viable idea is to increase our placement on the domestic market with the expensive line of dairy products, such as butter and cheeses. More than 80 percent of these products in BiH stores are imported," Vahid Skrobo, director of the dairy producer Poljorad Travnik, told SETimes.

This content was commissioned for SETimes.com.