BUDGETARY SUPPORT TO AGRICULTURE IN BOSNIA AND HERZEGOVINA, AND EURO -AND WTO INTEGRATION PROCESSESS

Bosnia and Herzegovina (BiH) and its agriculture are facing big challenges -from gradual approximation to full adoption of the EU Common Agricultural Policy (CAP), and full membership in the World Trade Organization (WTO). The budgetary support to agriculture in BiH is still far from the above integration processes both in qualitative (types of measures, criteria for support, ways of implementation) and in quantitative terms (budgetary t ransfer amounts both in total and per unit). Although these integration processes are a strategic determination for BiH, they can also contribute to the continuation of numerous negative trends in a larger number of agricultural subsectors in BiH. In order to avoid possible negative consequences and in order for BiH to best prepare for needed integrations, it is necessary to initiate certain reforms of budgetary support to agriculture in BiH. The comparative analysis of agricultural policy of BiH and EU CAP indicate a still large gap between them and a significant difference both in the range and structure of measures. In both BiH entities, direct payments based on output make a larger part of direct support to producers; whereas, they almost do not exist in the EU countries. Regarding the WTO integration, the support policy in BiH is mostly based on the measures that are subject to limits in WTO (Amber Box measures) and as well that several key agricultural products considerably exceed the de minimisthreshold of 5%. This can be a big problem, particularly from the angle of continuation of implementing some agricultural support measures after the BiH membership in WTO.