11 Agriculture and rural development Government of Montenegro Ministry of Agriculture, Forestry and Water Management Questionnaire Information requested by the European Commission to the Government of Montenegro for the preparation of the Opinion on the application of Montenegro for membership of the European Union 11 Agriculture and rural development Minister: Milutin Simovic Podgorica, December 2009 1 11 Agriculture and rural development 2 11 Agriculture and rural development TABLE OF CONTENTS CHAPTERS OF THE ACQUIS – ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP . 5 Chapter 11: Agriculture and rural development ............................................................................... 6 I. HORIZONTAL ......................................................................................................................... 7 II. PRODUCT-SPECIFIC AGRICULTURAL POLICY FRAMEWORK ........................................ 59 III. RURAL DEVELOPMENT .................................................................................................. 128 IV. QUALITY POLICY.............................................................................................................. 160 V. ORGANIC FARMING ......................................................................................................... 163 VI. AGRICULTURAL STATISTICS ......................................................................................... 174 A. General and product specific statistics ............................................................................ 174 B. Rural development statistics ........................................................................................... 233 3 11 Agriculture and rural development 4 11 Agriculture and rural development CHAPTERS OF THE ACQUIS – ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 5 11 Agriculture and rural development Chapter 11: Agriculture and rural development 6 11 Agriculture and rural development I. HORIZONTAL 1. Please provide, with an indication of recent and expected future developments, a general description of: - the national and regional farm income policy, production and structural policy (in particular rural development policy) Introduction Primary agriculture‟s contribution in Montenegro‟s Gross Domestic Product totals 11.3%, and with processing sector added to it, more than one-fifth of GDP is drawn from the food and beverages production sector. Agricultural land accounts for 38% (518,067 ha) of the total territory of Montenegro. The greatest share in the agricultural land resources consists of pastures and grassland (88%), which are used extensively. Covering a relatively small area, Montenegro‟s agriculture is quite diversified – from growing olive and citrus fruits in the coastal region, through early season vegetables and tobacco in the central parts to extensive livestock breeding in the northern area. On the other hand, commercial production of wheat, maize, sugar beet and oil crops is practically non-existent, which essentially differentiates the Montenegrin agriculture even from countries in its closest surrounding. The structural characteristics are rather unfavourable: small family holdings prevail, fragmentized and plotted holdings with low productivity, resulting in relatively low competitiveness of the majority of agricultural products. Montenegro‟s agriculture has its advantages, which are reflected in unexhausted land resources, low use of chemical agents – giving opportunity for organic production of the majority of products, specific and traditional products that may be marketed through consumption in tourism. As regards production and consumption balance, Montenegro is import-dependent, with annual deficit totalling approximately EUR 150 million and import-export coverage of up to 30%. Agriculture is still by far the most important activity of the rural population. It is very production- intense and plays a role of an important social buffer – more than 60 000 households in Montenegro provide their income partly or entirely in agriculture. This is particularly important in the less developed northern region of Montenegro, where the multiple role of agriculture is fully expressed and where it plays an important role in poverty reduction in rural areas. National agricultural policy and rural development policy Reforms in agriculture so far The transition process that Montenegro‟s economy has undergone in the past two decades included the sector of agriculture, as well. The most important changes took the following several directions: Introduction of market principles, abolishing state interventionism and abandoning the former concept of agricultural policy that had been dominantly focused on social sector development; Re-direction of support to agriculture development towards family holdings and improvement of living conditions in rural areas; 7 11 Agriculture and rural development Adjusting the policy of foreign trade protection to the developmental needs of agriculture and the processing industry with gradual harmonization with the World Trade Organization principles (WTO); Introduction of technological innovations into production, increasing the level of qualification and education of producers and technical services in agriculture; Strengthening of institutional support to the sector of agriculture through: setting-up of professional services, modernization of existing and establishing of new laboratories, reforms of the veterinary service and human resource development in general. Concurrently with the reform processes stated above, agriculture has lately been characterised also by intensive international integration processes (EU integrations, WTO, regional agreement – CEFTA, etc.) General agricultural policy framework Agricultural reform in Montenegro was practically intensified in 2006. Namely, in July 2006, the Ministry of Agriculture, Forestry and Water Management (MAFWM) presented its Agriculture and Rural Development Strategy for the period 2007 – 2013, which is in accordance with and builds upon the previously adopted national strategic documents such as the Economic Reforms Agenda from 2003 and 2005 and the Poverty Reduction Strategy from 2003. The Agricultural Strategy promotes the “sustainable agriculture concept”, which lays emphasis on the multifunctional role of agriculture in its economic, environmental, spatial and social dimension, placing agriculture into a significantly wider context than its significance in terms of its contribution to the total GDP. The Strategy sets out the following developmental objectives: a) sustainable resource management; b) a stable and acceptable offer of safe food; c) ensuring appropriate standard of living for the rural population; and d) enhancing the competitiveness of food producers. The strategy provides frameworks for further restructuring and building of a modern role of the state, which should enable, in the near future, the approximation to the European Union in this field. The Strategy provides for preparation of a number of documents, as its follow-up. The most important is the National Program of Food Production and Rural Development. It was finished in autumn 2008 and adopted by the Government in November 2008. The National Program for Food Production and Rural Development is the document of the Ministry of Agriculture, Forestry and Water Management, prepared based on the technical assistance of an EAR project Programming and Development of Rural Areas in Montenegro. The document consists of four chapters: I) Starting points; II) Measure description; III) Financial plan and IV) Program implementation. In chapter Starting Points, the objectives of the Program are presented, together with the strategic and legal framework and conceptual starting points for agricultural policy, as well as its adjustment to the requirements of the EU model of support to agriculture. In the second chapter, the measures of agricultural policy categorized by main components are presented in detail and rural development policy by key axes, as well. Each of the measures includes the elements necessary for the implementation. In the third chapter, the financial plan for the period of five years is presented by groups of measures and by each measure separately, with financial support sources indicated. The last chapter provides an overview of ensuring the conditions necessary for implementation of the agricultural policy proposed, starting from setting up of new and strengthening of the existing administrative capacities to establishing of infrastructural preconditions in the field. Significant support to implementation of the National Program will be implementation of the ongoing twinning project “Support to Establish an IPA Rural Development Programming and Implementation System”, which will result in development of an IPARD plan, to be finished by the 8 11 Agriculture and rural development end of 2011, as well as in full training of the service for its implementation – Rural Development Unit and setting up of a Paying Agency. Principles observed through the reform documents include: Clear vision; Phased approach, step by step towards the objective; Legal framework – laws as a stimulation framework for development, applicable and harmonized with the EU Acquis; Respecting specific characteristics of Montenegro, Continuance of a consistent policy, In essence, the National Program adopted represents, first and foremost, the following: An operational document for Strategy implementation A framework for harmonization