Croatia has experienced a strong recovery after a long economic recession in the early 2010s and the disruptions from the COVID-19 pandemic. Nonetheless, it still faces challenges as it converges with the European Union. The agro-food sector represents a relatively small share of the economy and has undergone structural changes in the last decades. This chapter outlines the sector’s context and characteristics, assessing the factors that enable or constrain its future productivity growth and development. It describes the general economic and policy context and the role of agriculture in the economy. It addresses key trends and structural changes and examines aspects related to gender balance and the role of migration and minorities. It also analyses trends in foreign trade and the sector’s participation in global value chains.
Policies for the Future of Farming and Food in Croatia
Abstract
Croatia’s post-independence and post-war path of integration into the multilateral trading system and stronger ties with the European Union have shaped its economic and agricultural policy context.
It has made significant economic and social progress since independence in 1991. However, it faces a population decline and a significant rural-urban gap.
The economy is mainly services-based, with agriculture representing just 3% of GDP and 6% of employment. Despite a structural transformation evidenced by fewer farms and an increase in their average size, Croatian farms continue to be smaller than the EU average.
Small, family-run farms remain the backbone of Croatia’s rural areas. The farm structure is divided, with over 70% of small farms holding only 15% of agricultural land, and larger farms showing better economic outcomes.
Emigration, particularly from rural areas, has intensified since EU accession. This has created a labour market gap that is increasingly filled by workers from non-EU countries. In 2022, immigration exceeded emigration flows for the first time in 15 years.
Most farm managers are 55 years old or older, but a recent increase in the number of young farmers is a welcome development given Croatia’s demographic challenge.
Croatia’s geography and climate favour diverse farming activities, with agriculture covering 27% of land area. About a third of agricultural land is state-owned and efforts are underway to increase land consolidation.
The value of agricultural production is recovering after several years of decline. Crops, particularly cereals and oilseeds, make up almost two-thirds of the sector’s production. Organic farming is gaining in importance.
Croatia is a net agro-food importer, particularly of animal products and foodstuffs. Export patterns have changed in the last two decades: cereals and oilseeds gained in importance, while sugar declined. Intra-EU trade dominates and is more dynamic than trade with third countries. In general, the sector has deepened its integration in global value chains.
The Republic of Croatia (hereafter “Croatia”) declared its independence in 1991 and was admitted to membership in the United Nations in May 1992. It had previously been one of the constituent republics of the Socialist Federal Republic of Yugoslavia.1
Croatia’s declaration of independence was followed by five years of armed conflict. After the war, the government set integration in the multilateral trading system and EU membership as strategic goals (Franić and Ljubaj, 2015[1]). This led to accession to the World Trade Organization (WTO) in 2000 and to the 2005 start of EU accession negotiations. Croatia joined the North Atlantic Treaty Organization (NATO) in 2009 and the European Union in 2013. In 2023, it joined Europe’s Schengen area and adopted the euro.
With a land area of 55 960 km2 and a population of 3.8 million, Croatia is among the ten smallest countries in the European Union (European Union, 2023[2]). Despite its size, the country is geographically diverse, with extensive plains to the east, mountainous areas in the centre, and a long Adriatic coastline with numerous islands. This geographic diversity has shaped the development of its agro-food sector.
1.1.1. General features of the Croatian economy
Croatia has made significant development progress in a challenging demographic context
Croatia has made significant economic and human development progress in the last decades. Since 1992, it advanced from the lower-middle income to the high-income category (World Bank, n.d.[3]). Its Human Development Index increased from High (0.712) to Very High (0.858) between 1995 and 2021 (United Nations Development Programme, 2022[4]). Between 2000 and 2021, Gross Domestic Product (GDP) measured in purchasing power parity terms increased from USD 48 billion to USD 135 billion, and GDP per capita more than tripled, albeit in a context of population shrinkage (Table 1.1).
Rapid population decline has affected Croatia’s labour market and economy. The country has lost over 900 000 people in 30 years; in 2021, the census revealed a population below 4 million for the first time since the 1960s. This trend is expected to continue, with a projected population of 3.1 million and a shrinkage of the working-age population from 63% to 57% by 2060. A major driver has been emigration, which accelerated following accession to the European Union (OECD, 2025[5]). This trend is now contributing to labour shortages that have motivated increased inward migration flows (Section 1.4.3).
Croatia experienced economic recessions in the first half of the 2010s and during the COVID-19 crisis. More recently, the country has had a strong recovery, with output growth returning to the average rates of the late 2010s. Employment increased and poverty declined over the past decade, and improvements in environmental quality, public services, and laws and regulations make Croatia compare well with OECD countries on many dimensions (OECD, 2023[6]).
Evolution of contextual indicators between 2000 and 2021
Note: *Or closest available year.
Source: OECD statistical databases; UN Comtrade; World Bank, WDI and national data.
Services, particularly tourism, are key for the economy
Croatia has a service-based economy. Services contribute 64% of employment and their value added represents 61% of Croatia’s GDP (World Bank, 2023[7]). Tourism is the most important service activity and a key sector of the economy. Prior to the COVID-19 pandemic, the direct contribution of tourism to GDP was estimated to be 11.8% and it provided 91 608 direct jobs or 6.8% of total employment. Following a two-year decline, preliminary data point to a full recovery of tourism activities in 2022 (OECD, 2022[8]). Croatian authorities highlight associated opportunities for the agro-food sector, particularly the potential for developing more diversified activities such as rural tourism and for promoting high value-added agro-food products in tourism and hospitality (Ministry of Agriculture, 2022[9]).
1.1.2. Political and institutional features
Regional and local governments have many responsibilities, but their capacities differ
Croatia is a unitary republic subdivided into four regions, 21 counties (županije) and 555 local governments that include 428 municipalities and 127 towns (OECD/UCLG, 2022[10]). The regional and local governments have autonomy in decision making and management over a widely defined range of policies (OECD, 2023[11]). However, the assignment of responsibilities has been complex and asymmetric, with most responsibilities transferred to municipalities with the strongest fiscal capacity (OECD/UCLG, 2022[10]). The current distribution of responsibilities appears to create barriers to delivering public goods and services by subnational governments with differing financial resources and service quality (OECD, 2023[6]).
1.1.3. Demographic and social features
A pronounced urban-rural gap marks many socio-economic dimensions
Thirteen of Croatia’s 21 counties have been classified as predominantly rural.2 Predominantly rural areas3 cover 63% of Croatia’s territory and 43% of its population, generating 33% of the economy’s gross value added (Figure 1.1), against averages of 45%, 21% and 16% respectively at the EU-27 level.
Distribution of territory, population, value added and employment by urban-rural typology
Source: Eurostat (2023), Labour market statistics by other typologies [URT_D3AREA, URT_PJANAGGR3, URT_10R_3GVA, URT_LFE3EMP], consulted October 2023.
Croatia has a pronounced urban-rural divide: as of 2020, the GDP per inhabitant in rural regions was EUR 9 600, less than half that of urban regions (Eurostat, 2023[12]). At 7.8% in 2021, the unemployment rate in rural areas is higher than in cities (6.7%) and above the EU rural unemployment rate of 5.9% (Eurostat, 2022[13]). The share of the Croatian rural population at risk of poverty (25.3%) is also considerably higher than the rate in cities (13.6%) (Eurostat, 2022[14]).
The demographic trends of population ageing, low birth rates, and emigration particularly affect rural areas. These trends were observed in many Croatian villages in the mid-twentieth century and have worsened in recent decades (Nejašmić and Toskić, 2016[15]). Property abandonment in small towns and rural areas was also accelerated by the war in the 1990s (Lončar and Pavić, 2020[16]). Additional concerns relate to the low level of development of rural infrastructure.
Croatia is a small player in EU farming, with 0.6% of the European Union’s agricultural output and 0.7% of the European Union’s agriculture, fisheries and forestry value added. The sector’s contribution to GDP and employment is also decreasing, in line with global trends and reflecting the country’s economic development and integration into the European Union (World Bank, 2019[17]).
1.2.1. Agriculture in production and employment
The sector is undergoing a structural transformation that is not unique to Croatia
Between 2000 and 2020, the share of agriculture in Croatia’s GDP decreased from 5% to 3%. The sector’s contribution to employment experienced an even stronger decrease: in 2020 it represented 6%, almost a third of its share in 2000 (17%). This structural transformation occurs to a lesser or greater extent in Croatia’s peer countries,4 both inside and outside of the European Union (Figure 1.2).
Evolution of shares of agriculture in GDP and employment
Source: World Bank (2022), World Development Indicators, Eurostat (2022) [LFSA_EGAN22D] & [NAMA_10_A10], OECD (2022), National Accounts of OECD Countries, Volume 2022 Issue 1, OECD Publishing, Paris, https://doi.org/10.1787/de01f0c1-en.
1.2.2. Farm size, labour and income
Most farms are family-run and their economic size is small
The majority of Croatian agricultural holdings are family farms5 (Box 1.1). They made up 97% of the 144 000 holdings recorded in the 2020 Agricultural Census (Croatian Bureau of Statistics, 2021[18]). This puts Croatia in sixth place in the European Union in terms of the share of family farms, after Greece, Romania, Poland, Malta, and Italy. As in most EU Member States, family farms in Croatia are much smaller than non-family farms, with a mean size of 7 hectares against 63 hectares (Eurostat, 2023[19]).
The 2020 Agricultural Census reported a regular agricultural labour force of 331 473 persons, 92% of which were family labour (including farm holders and their family members). Over half (53%) of farms had only family workers, which puts Croatia in fourth place in the European Union in terms of the share of farms with exclusively family labour, after Romania, Poland, and Hungary.
There are large differences in the economic size of family and non-family farms. The former had an average economic output of EUR 9 775 in 2020, the second lowest in the European Union (after Romania). The average output of non-family farms was EUR 139 381, also the second lowest among EU Members but fourteen times that of family farms (Eurostat, 2023[19]).
The Law on Agriculture defines “farmer” as a natural or legal person or group that performs an agricultural activity on Croatian territory. Agricultural activities may be performed under four main legal forms recorded in the Farm Register maintained by the Paying Agency for Agriculture, Fisheries and Rural Development (APPRRR). As of end-2022, it recorded 166 430 legal entities. Most were family farms (77%) and self-sufficient family farms (19%). There were 3 400 commercial companies (2%), 2 466 trades or crafts (1.6%), and 346 co-operatives (0.2%) (APPRRR, 2023[20]).
Family farms (OPG)
The Law on Family Agriculture declares family farming a strategically important organisational form of agriculture. A family farm, commonly known as OPG (obiteljsko poljoprivredno gospodarstvo), is defined as an economic entity of a natural person that independently and permanently carries out agriculture and related activities with own and/or hired production resources and the work, knowledge and skills of family members. The Law defines the conditions of the agricultural activity, covering aspects such as the work of family members and the obligation to keep records of both agriculture and supplementary activities (such as catering and tourism services). OPG holders are liable with all of their assets for the obligations arising in the performance of agriculture.
OPGs with an economic size of more than EUR 3 000 or that are liable for income or profit tax must be entered into the Family Farm Register, also managed by the Paying Agency. Entry into the Family Farm Register implies mandatory membership in the Croatian Chamber of Agriculture. Farms below the EUR 3 000 threshold are classified as self-sufficient agricultural holdings (SOPG), which produce mainly for their personal needs and need not be entered into the Family Farm Register.
Crafts
The Crafts Act states that any economic activity that is not prohibited by law can be performed as a craft business. A trade or craft business (obrt) is an economic activity performed independently by a natural person (Ministry of Economy and Sustainable Development, n.d.[21]). Owners are personally liable for their business obligations. A craft performing agricultural activities must be entered in the Farm Register. Crafts must also register with the Croatian Chamber of Trades and Crafts.
Co-operatives
The Law on Cooperatives governs the establishment of these voluntary associations. An agricultural co-operative is a voluntary, open and independent association with at least seven members (natural or legal persons) that carries out crop production, animal husbandry, forestry, hunting, or related service activities.
Companies
Companies performing agricultural activities can take different legal forms. These are governed by the Company Law. The most common type is the private limited company (društvo s ograničenom odgovornošću or d.o.o.), which can be owned by one or more persons without limitation on the number of owners or board members. It has a minimum start-up capital requirement of EUR 2 650 (HRK 20 000). Other legal forms include the simple limited liability company (j.d.o.o.) with a minimum start-up capital of EUR 1 (HRK 10) and a maximum of five owners and one board member (Court Register of the Republic of Croatia, n.d.[22]), or the joint stock company (dioničko društvo, or d.d.). All companies must become members of the Croatian Chamber of Economy, but smaller companies are exempted from mandatory payment (HGK - Croatian Chamber of Commerce, 2023[23]).
Farm income has increased following accession to the European Union, but is still below the EU average
Agricultural labour, measured in Annual Working Units (AWU),6 decreased by 25% between 2005 and 2022 (Figure 1.3). The share of salaried labour experienced a slight increase from 6% in 2005 and has remained constant at 9% since 2017. The annual average farm income – defined by Eurostat as average farm net value added (FNVA) per AWU7 – experienced a significant increase after Croatia’s EU accession and up to 2020; however, in 2021 it declined to EUR 9 994, considerably below the EU average of EUR 28 786.
There are divergences in farm income depending on the activity of the farm, with the highest 2021 value (EUR 17 853) for horticulture. Income from field crops, wine, and grazing livestock farms was above the average of EUR 10 119, while mixed farms and farms with other permanent crops had the lowest incomes (below EUR 6 300) (FADN, 2023[24]).
Evolution of agricultural labour and income
Source: Eurostat (2023), Agricultural labour input statistics [AACT_ALI01], accessed July 2023; FADN (2023), (FNVA) Farm Net Value Added (EUR/AWU)], accessed August 2023.
1.2.3. Land use
Croatia’s geography and climate support a diverse agricultural production
Agricultural land covers 27% of Croatia’s land area. A further 36% is covered by forests (Box 1.2). As of 2021, Croatia’s Utilised Agricultural Area (UAA) was approximately 1.5 million hectares. Land use statistics registered an increase in agricultural land over the last two decades, in particular of permanent meadows and pastures (Figure 1.4), in contrast with the EU-wide trend of a consistent reduction (OECD, 2023[25]). However, this may be explained by a change in the methodology to estimate this land area since 2013. The area of common land (under a tenure mode of shared farming) was recalculated with a new source of administrative data. This change resulted in an increase of the grassland area and of the total UAA, but data before 2013 could not be adjusted.8
BAŠIĆ et al. (2007[26]) divided Croatia’s territory into three agricultural regions based on climactic conditions and land resource potential.
The Pannonian region, located in the east, has good natural conditions for agricultural production. It is considered the “breadbasket” of the country, with production of arable and industrial crops, livestock, wine, fruits, and vegetables. This region was severely affected by the war, however, which damaged its production capacity.
The mountainous region, in the centre, is rich in natural resources and has heterogeneous soil conditions. Agricultural production includes livestock and crops adapted to the climate, such as early types of corn, potatoes, rye and vegetables. Due to its high density of forests, wood processing is an important activity, as is tourism around the Plitvice Lakes National Park.
The Adriatic region, along the coast, is characterised by a Mediterranean climate and by the production of citrus and other Mediterranean fruits, olives, wine, sheep, and goats.9 This is a predominantly touristic region, with agricultural activities having a lower weight in the local economy. The central and southern part suffered in particular from the effects of the war.
Land use and evolution of agricultural land
Note: The significant increase in the area of permanent meadows and pastures is explained by methodological changes.
Source: FAOSTAT (2023), [Land use indicators], accessed July 2023.
Croatia has a longstanding forestry and forest management sector
Croatia has an estimated 2.7 million hectares of forests and forest land (Croatian Forests, 2023[27]). Forest and other wooded areas1 covered around 48% of the territory in 2018, according to the EU Land Use and Cover Area (LUCAS) survey (see also Section 3.6). Seventy-six per cent of this forest land is state-owned, most of it managed by the state-owned company Croatian Forests (Hrvatske šume). The remaining area (about 661 000 hectares) is privately owned. Private forests are characterised by a large number of properties with a size smaller than 1 hectare (Croatian Forest Research Institute, 2015[28]).
Forestry and forest management have a long tradition in Croatia. The first forest mapping and Forest Law date back to the 18th century (Anic, Mestrovic and Matic, 2012[29]). Today, the country places emphasis on sustainable management and protection: almost half of the forest area is in the Natura 2000 network of European protected areas and all state-owned forests are certified by the Forest Stewardship Council (FSC).2
The current Forest Law defines three types of forest: economic (or productive), protective, and special purpose forests. Economic forests cover 52% of Croatia’s land area and are used to produce forest products. Protective forests cover 30% and have the purpose of protecting resources such as land (e.g. areas at risk of erosion), water or biological diversity. The remaining 18% are forests with a special purpose, such as protected areas or scientific research (FSC Adria-Balkan Region, n.d.[30])
Production of wood and other forestry products
The estimated wood stock in Croatia is 418.6 million cubic metres (m3): 315.8 million m3 is in state-owned forests managed by Croatian Forests; 83.7 million m3 in privately-owned forests; and 19.1 million m3 in state forests used by other legal entities (FSC Adria-Balkan Region, n.d.[30]). In 2022, 6.1 million m3 of gross wood were obtained from the forests managed by Croatian Forests, generating a revenue of about EUR 340 million (Croatian Forests, 2023[31]). The private sector points out recent positive trends in the wood processing industry, reflected in an increase in production and exports (Croatian Chamber of Economy, 2023[32]). Other products from forests include forest fruit, mushrooms, herbs, resin, and humus (Croatian Forests, 2021[33]). As of 2016, Croatia was one of the five countries in Europe with the highest share of forest sector workers relative to the total workforce, along with Latvia, Estonia, Bulgaria and Lithuania (UNECE, 2019[34]).
Forest management challenges
The presence of landmines from the armed conflict of the 1990s poses an important challenge to forest management and conservation. Forests constitute almost 98% of Croatia’s mine-suspected area, which is estimated at 233.9 km2 as of January 2022 and is distributed over seven counties. Demining efforts are expected to continue in the coming years, with the goal of removing mine hazards from the entire country by 2026 (Croatian Parliament, 2023[35]).
Other challenges relate to the management of the privately-owned forest area, which is characterised by its fragmentation and dispersion (Bakarić et al., 2021[36]). There is often unclear ownership, lack of forest management plans and illegal logging (Croatian Forest Research Institute, 2015[28]). Private forest owners also indicate that restrictive regulations and administrative obstacles prevent them from taking advantage of the economic potential of their forests (Croatian Federation of Associations of Private Forest Owners, n.d.[37]).
1. The FAO defines “forest” as the land spanning more than 0.5 hectares with trees higher than 5 meters and a canopy cover of more than 10%, or trees able to reach these thresholds in situ. “Other wooded land” is defined as land not classified as “forest”, spanning more than 0.5 hectares; with trees higher than 5 meters and a canopy cover of 5-10% (FAO, 2018[299]).
2. The Forest Stewardship Council (FSC) certification is a voluntary certification system for verifying responsible management practices.
1.2.4. Land ownership
About one-third of agricultural land is state owned, and plots under private ownership are very fragmented
Approximately one-third of agricultural land in Croatia is publicly owned. However, the exact size and share of public agricultural land are unclear due to a lack of unambiguous data from a single source (Mičević, 2016[38]). Estimates for 2013-18 indicated that 33% of all agricultural land was state-owned (Vranken et al., 2021[39]).
This pattern of land ownership has its roots in the previous socialist system. Unlike other socialist countries, Yugoslavia never fully collectivised agriculture, and by the 1980s private producers were farming about three-quarters of the arable land. There was a sharp distinction between socialised enterprises, which practised large-scale agriculture and had processing facilities, and private peasant holdings, which were mostly farmed with primitive means and subject to a constitutional limit of 10 hectares per holding (OECD, 1973[40]). Large socially-owned enterprises (agro-kombinats) were often horizontally and vertically integrated (ARCOTRASS Consortium, 2006[41]), and the registration of their land in the cadastre was often neglected (Obradović, 2016[42]). Following independence, the land under social ownership fell under state ownership, with its disposal governed by the Agricultural Land Act (Josipović, 2021[43]).
The disposal of privately-owned land is subject to general property law, and private owners can freely sell and lease their agricultural land with some restrictions applicable to the acquisition by foreigners (Section 2.4.5). The high fragmentation of plots of privately-owned land is an issue, as is the ownership by persons who cannot be reached or have an unknown place of residence (Vranken et al., 2021[39]).
The government has made efforts to increase land consolidation in the last two decades, including through a legal reform in 2015 and projects supported by the governments of Sweden and the Netherlands that aimed to develop the required legal and institutional framework and conducted pilot projects in selected regions (Hartvigsen, 2015[44]). While this work resulted in improvements in the registration of plots and a higher accuracy of land registry and cadastre records (Obradović, 2016[42]), actual land consolidation has been limited (Staničić, 2022[45]). Recently, efforts have been launched in this area, including a 2022 legal reform and projects supported by EU funding (Section 2.4.5).
1.2.5. Financial gaps and needs
Farmers’ access to finance is a concern, but is improving
Between 2017 and 2022, there was an important decline in the financing gaps,10 of the agriculture and food sectors. In the case of agricultural production, the gap shrunk from EUR 1 423 million to EUR 658 million (-54%), against an increase of 33% observed for the 24 EU Member States that are monitored.11 Still, the gap relative to gross value added (GVA) was 39% in 2022, the fifth highest (fi-compass, 2023[46]).
According to surveys carried out in 2018 and 2019, barriers contributing to the financing gap include a perception of agriculture by commercial banks as a high-risk and unattractive lending sector; their lack of knowledge of the sector’s needs and dynamics; difficulties by farmers to meet the banks’ collateral requirements; a lack of credit history or accountancy records of loan applicants (in particular new entrants); and a lack of financial literacy, particularly in small family farms (fi-compass, 2020[47]).
The main drivers of farmers’ demand for finance include renewing machinery and equipment following years of declining investments in physical assets; modernising outdated equipment and facilities; and meeting working capital needs (fi-compass, 2020[47]). Increasing capital investments could help build the sector’s capital stock and bridge the productivity gap with the rest of the EU (World Bank, 2019[17]).
The financing gap for agro-food companies is smaller
Enterprises in the agro-food processing sector experienced an even stronger reduction of the financing gap from EUR 105 million in 2017 to EUR 15 million (-86%) in 2022 (fi-compass, 2023[46]).
The main factors generating financing gaps for food processing are similar to those for farmers, including the perception of high risk by banks particularly for small and medium enterprises (SMEs) and the lack of collateral. Other drivers are the low competitiveness of the companies, and low entrepreneurial skills and financial literacy (fi-compass, 2020[47]).
The most important drivers contributing to the demand for finance in the processing sector include investments in capacity expansion and technology modernisation, meeting working capital needs, developing new products and refinancing previous loans.
1.3.1. Evolution of farm holdings
Over 70% of farms are small, but they hold only 15% of the agricultural area
The process of structural transformation in the Croatian agricultural sector is reflected in a reduced number of farm holdings, particularly among the smallest ones. Between 2010 and 2020, the number of farms fell by 38%, from 233 270 to 143 930. The average (mean) farm size increased from 5.8 to 8.6 hectares over the same period, almost half the EU average farm size of 17.4 hectares in 2020 (Eurostat, 2022[48]).
The farm structure in Croatia is characterised by large extremes: most farms are small, but the largest share of the land belongs to big holdings. Small units with less than 5 hectares make up 70.6% of the total number of holdings (Figure 1.5, panel a). Nevertheless, they hold only 15% of the utilised agricultural area (UAA), a lower share than in 2010 (Figure 1.5, panel b). At the other end of the scale, the largest commercial farms with 100 hectares or more represent only 1% of holdings, but cover 30% of the UAA (against 19% in 2010). At the same time, the share of holdings in the middle (between 5 and 49.9 hectares) increased from 23% to 26.5%, and they held 40% of the UAA 2020.
Distribution of Croatia’s number of farms and UAA by farm size (ha), 2010 and 2020
Source: Eurostat (2023), Farm indicators by agricultural area, type of farm, standard output, legal form and NUTS 2 regions [EF_M_FARMLEG], accessed July 2023.
In the last decade, output has increased only among larger holdings
Indicators of farm output by size show that the larger holdings of over 50 hectares were the only group that grew in numbers and had a higher output in 2020 compared with 2010. All smaller farm categories experienced a decrease in numbers and a decline in output during the decade (Figure 1.6).
Percentage change in the number of farms and output by farm size, 2010-20
Source: Eurostat (2023), Farm indicators by agricultural area, type of farm, standard output, legal form and NUTS 2 regions [EF_M_FARMLEG] Accessed July 2023.
1.3.2. Trends in production and yields
After a few years of low or no growth, agricultural production has increased, supported by improved yields
Following decreases in 2013 and 2014 (in the context of a general recession) and very moderate growth up to 2017, the value of agricultural production has since recovered, with production in 2021 approaching its 2012 and estimates for 2022 and 2023 exceeding it (Eurostat, 2023[49]). Crops represent the largest share in production, with cereals (maize, wheat and barley) at the top, followed by oilseeds (soybeans and to a lesser extent sunflower and rapeseed), forage plants, and vegetables (mainly fresh vegetables, plants and flowers). The main livestock activities are cattle and pigs, followed by milk production (Table 1.2).
Both cereals and oilseeds have experienced important increases in the most recent years, with the strongest growth observed in the value of production of sunflower seed, wheat, soybeans and maize. With the exception of milk, livestock products, in particular cattle and pigs, have also recovered following significant decreases during the recession years (Figure 1.7).
Changes in the composition of agricultural production
Notes: Production values at current prices. “Maize” includes fodder maize.
Source: Eurostat (2023). Economic accounts for agriculture - values at current prices [aact_eaa01], accessed October 2023.
Evolution of the value of crop and animal output, 2005-2021
Note: “Maize” includes fodder maize.
Source: Eurostat (2023). Economic accounts for agriculture - values at current prices [aact_eaa01], accessed October 2023.
The yields of Croatia’s three most important crops (corn, wheat and soybeans) have improved in the last two decades (Figure 1.8). These yields are not far from the EU average and in the case of wheat, they are above and higher than in several peer countries.
Evolution of the soybean, wheat and corn yields in Croatia and selected countries
Note: The EU average includes only the Member States that reported data.
Source: FAOSTAT (2023). Crops and livestock products. Accessed August 2023.
1.3.3. Trends in organic farming
Organic production and processing are growing, as is the size of the domestic market
Between 2011 and 2021, the organic area (including land in transition) grew from 32 035 to 121 924 hectares. Its share in total farmland increased from 2% in 2011 to 8% in 2021. In 2021, Croatia was fifteenth among the 27 EU Member States in terms of the share of organic area, above Hungary, Ireland, the Netherlands, Bulgaria, and Romania. Data from the Croatian Bureau of Statistics show a further increase in 2022, to 129 374 hectares, or 8.95% of the UAA.
Permanent grasslands make up 48% of the organic area as of 2022. The remaining area is distributed between arable (38%) and permanent crops (14%). Green fodder is the most important product, accounting for 46% of the arable organic crop production. Although covering a relatively small share of production (2% in 2022), the sector of aromatic and medicinal herbs has experienced remarkable growth: between 2013 and 2022, the volume produced duplicated and the area triplicated.
Production of organic livestock and animal products has also grown, although with a mixed picture for some sectors. The overall number of organically raised livestock increased from 34 430 in 2013 to 144 852 in 2022, with sheep making up 58% of the heads in 2022. Beef and veal made up three-quarters of the production of organic animal products, followed by lamb meat (21%). The production of organic eggs increased considerably, from 12 000 units in 2013 to 2.5 million in 2022. Organic cow milk production, however, has contracted since peaking in 2017 with a particularly dramatic decrease between 2021 and 2022 (Ministry of Agriculture, 2023[50]).
In 2022, there were 6 132 organic producers in Croatia. This represents a more than five-fold increase since 2010 and a considerable development of the sector since the first producers were certified in 2001-02 (Zrakić, Jež Rogelj and Grgić, 2017[51]). By 2021, Croatia was tenth in the European Union in the number of organic producers (FiBL, 2023[52]). While still small, the number of processors of organic products more than doubled between 2013 and 2022, from 143 to 380. Although the domestic organic market is small relative to larger EU players,12 the volume of retail sales grew from EUR 69 million to EUR 99 million between 2010 and 2021 (FiBL, 2023[52]).
1.4.1. Generational renewal
The number of young farmers is increasing despite the challenging context
The age distribution of farm managers skews older. In 2020, 62% of farm managers were 55 or older. However, the number of young farmers (less than 35 years of age) is increasing. Both the number of holdings managed by young farmers and their share in all farm holdings have increased in the last decade. In 2020, young managers were in charge of 7% of holdings (Figure 1.9).13
Evolution of holdings by the age of their managers and the ratio of young farmers
Notes: The percentages refer to the share of the corresponding age group in the total number of farm managers. The ratio of young farmers is calculated as: Number of farmers less than 35 years / Number of farmers 55 years or older.
Source: Eurostat (2023). Farm indicators [EF_M_FARMANG], accessed in July 2023.
The increase in the number of young farmers is a positive development, particularly in light of the overall demographic trend of a shrinking population. The government has encouraged this trend by supporting young farmers (of 40 years of age or less) through different interventions under the EU Common Agricultural Policy (see also Sections 2.2 and 2.3).
Beyond generational renewal, a higher involvement of young farmers is expected to improve the economic performance of the sector. Farms with younger managers have been found to be more competitive and efficient. According to recent research, the average young farmer in 2016 used a larger area of agricultural land, raised more livestock, and earned on average EUR 18 288 more than the average Croatian farmer (Ministry of Agriculture, 2022[9]). In addition, although most Croatian farmers have only practical experience and no formal training, a larger share of young farmers has professional training (see also Section 4.3.5). According to the 2020 Agricultural Census, 23% of young farm managers had some agricultural training, against only 5% of those over 55 years old (Croatian Bureau of Statistics, 2021[18]).
Young farmers, however, face numerous barriers, including difficulties in access to land and financing. As of 2022, young farmers owned only 36% of the land they used (Ministry of Agriculture, 2022[9]). This can limit their access to finance due to insufficient collateral. In addition, a survey on the financial gaps in the sector found that a higher share of rejected or discouraged loan applications came from young farmers (fi-compass, 2020[47]). The low levels of participation in producer organisations and other forms of associations such as co-operatives (Section 5.1.3) also limits the possibilities for young farmers to connect and collaborate. Overall, the process of generational renewal is slow and most often driven by the closure of less competitive holdings managed by older farmers (Juničić, 2019[53]).
1.4.2. Gender
Women make up one-fourth of farm managers, but represent 54% of family labour
Seventy-four per cent of farm holders in Croatia were male in 2020 (Figure 1.10). This is above the European Union average (68%) (Eurostat, 2022[54]). While women made up 26% of farm managers, they constituted 54% of the farm’s family workforce different from the holder. The regular non-family farm workforce, on the other hand, was almost two-thirds male (Croatian Bureau of Statistics, 2021[18]).
The age composition of female farm managers skews even more towards the older, with 67% being 55 years or older (against 60% in the case of males) and a lower share of female managers less than 35 years old (4% against 8% for males). This higher share of older female managers and lower share of younger women is also observed at the EU level.
More recent data point to positive trends in farm ownership by women. According to the Paying Agency for Agriculture, Fisheries and Rural Development (APPRRR), the share of female farm holders had increased to 29% at the end of 2023, and the average area of agricultural land used by female farmers grew by 5% between 2017 and 2023.14
Distribution of farm managers by age and gender, 2020
Source: Eurostat (2023). Farm indicators [EF_M_FARMANG], accessed in July 2023.
The overall gender gap in employment in Croatia is relatively narrow: in 2024 it was at around 6 percentage points against the OECD average of 14 percentage points (OECD, 2025[5]).The share of agriculture in total female employment has decreased, reflecting the overall reduction of employment in the sector discussed above. In 2021, about 5% of Croatian women were working in agriculture, compared with 15% a decade earlier. This decrease was compensated by the larger share of women employed in services. Still, agriculture is relatively more important in female employment in Croatia compared to several peer countries and the European Union (Figure 1.11).
Evolution in the composition of female employment by sector, 2010 and 2021
Source: World Bank (2023), World Development Indicators [database], accessed November 2023.
The gender gap in Croatia is relatively narrow, but women working in agriculture and from rural areas face employment barriers and disadvantages linked to traditional roles
Data for the whole economy shows that Croatia has a narrower gender gap in paid work compared with the OECD average: women earn on average around 8% less than men in Croatia, against 13% in OECD Member countries (OECD, 2023[11]). Nevertheless, differences in job quality remain a concern, including a greater share of women working on temporary contracts, as well as a higher burden from unpaid work (OECD, 2025[5]). Although data for comparing the gender gap in agriculture is not available, a 2019 government communication indicated that women employed in agriculture earn about 14% less than their male counterparts (Government of the Republic of Croatia - Office for Gender Equality, 2019[55]).
A 2017 study of segments of the population facing employment barriers in Croatia found that the group facing the highest number of obstacles was made up of women living primarily in rural areas (Ovadiya et al., 2017[56]). Given that women in Croatia spend nearly 20 hours more per week than men on unpaid work (OECD, 2025[5]), the regional disparities in access to services such as childcare and care for the elderly also disproportionately affect rural women. Sections 2.4.6 and 4.4.2 present examples of initiatives to support women in rural areas and those working in the farming sector.
1.4.3. Migration
Emigration has been a significant phenomenon throughout Croatia’s history, with successive waves in the late 19th century, after World War II, during Croatia’s War of Independence, and most recently following EU accession. Inward migration flows, however, have also been rising and in 2022 exceeded emigration flows for the first time in 15 years (Croatian Bureau of Statistics, 2023[57]).
A large number of Croatians, especially from rural areas, left after EU accession
Outward migration following EU accession has been a main driver of population decline. OECD destination countries reported almost 547 000 inflows of Croatian nationals to their territories between 2013 and 2021.15 Peak annual values were reached in 2015 and 2016, after several EU countries lifted the remaining restrictions for Croatian workers (OECD, 2023[58]). According to the Croatian Bureau of Statistics (CBS), emigrants are getting younger on average. Although reliable statistics on their level of education are unavailable, exploratory estimates suggest that many are highly educated. Data on return migration is scarce, making it difficult to determine the extent to which the latest emigration wave has been temporary or permanent, but there is some evidence of accelerated returns, particularly after the COVID‑19 pandemic (OECD, 2025[5]).
The situation of rural areas also motivates emigration, which in turn contributes to abandonment and depopulation that further aggravates their socioeconomic situation (Box 1.3). In 2022, 20 872 people emigrated abroad from the thirteen predominantly rural counties, representing 45% of the total. In 2012, the numbers were significantly lower, with 4 917 people leaving from rural counties (Croatian Bureau of Statistics, 2013[59]). Up to 2021, more people left rural areas than arrived, although this trend was reversed in 2022, in line with the trend at the national level (Croatian Bureau of Statistics, 2023[60]).
Large numbers have opted to leave Croatia’s rural areas, which in turn aggravates rural problems
The depopulation of Croatian agricultural and rural areas has been continuous over the last three decades. Numerous factors motivate residents, particularly the younger generations, to seek better opportunities in other parts of Croatia or abroad.
Drivers of rural emigration include the bad quality or lack of infrastructure and public services or of support for the development of entrepreneurship. Young people often move to urban areas to finish their education and opt to stay due to the better employment opportunities and access to services (Mustać, 2020[61]). Negative perceptions about agriculture among young people also act as deterrents to return to the countryside and engage in farming.
Access to the EU labour market following accession in 2013 and the ongoing structural transformation of the agricultural sector have led to significant emigration from rural areas, in turn reducing the availability of agricultural labour and creating the need to hire immigrant workers.
One of the regions most impacted is eastern Croatia, which is traditionally focused on agriculture. This region was most affected by the war in the 1990s, suffering almost half of the direct demographic losses and the estimated damages in the country. In the years following the war, unemployment and other factors, including deindustrialisation and inappropriate models of ownership and privatisation, have structurally weakened the region and accelerated its depopulation (Majstorić, 2020[62]).
The decrease in labour availability has in turn promoted inward migration, particularly from new countries of origin
Immigration flows have been rising, in particular over the last five years. In 2022, for the first time since 2008, recorded immigration flows − almost 58 000 people − exceeded emigration flows (Croatian Bureau of Statistics, 2023[57]). The number of immigrants nearly quadrupled between 2017 and 2022, a trend responding to demand and attributable to policy changes to facilitate the immigration and employment of third-country nationals (OECD, 2025[5]) (see also Section 2.4.6). Up to 2018, over half of immigrants came from neighbouring countries. This has recently changed, with an increase of work-related immigration from Asia and a strong inflow from Ukraine following Russia’s war of aggression.
Only a small percentage of the work permits issued for foreigners were for agricultural workers. In 2022, Croatia issued 2 957 permits for the agriculture and fisheries sector, or 2.4% of all permits. Although no data on work permits granted in the food processing industry is available, the Croatian Employment Service (CES) reported issuing a positive opinion for 4 015 work permit applications in the sector in the first eight months of 2023.16 Seasonal immigration is particularly noticeable in the summer period, with tourism a major driver of demand. The CES recorded a demand for 29 832 seasonal workers in 2022, although only 17 907 of these positions were filled. Sixty per cent of the positions were in the accommodation and food sectors, while only 2% were employed in agriculture, forestry and fisheries (Croatian Employment Service, 2023[63]).
1.4.4. Minorities
Minorities make up 8% of the population, with the Roma facing the most difficulties
According to the 2021 Population Census, Croatia is largely ethnically homogenous, with 3.5 million inhabitants, or 91.6% of the population, identifying as ethnic Croat. The most numerous national minorities residing in the country are Serbs (3.2%), Bosniaks (0.6%), and Roma (0.5%) (Croatian Bureau of Statistics, 2023[64]). They are part of the 22 national minorities explicitly recognised in the Constitution (Office for Human Rights and Rights of National Minorities, 2023[65]). However, census figures, which are based on self-identification, may be underestimated (OECD, 2025[5]). Policy initiatives aimed at supporting national minorities are discussed in Section 2.4.6.
Most members of the Serbian national minority live in the counties of Vukovar-Srijem, Sisak-Moslavina, Karlovac, Bjelovar-Bilogora, Primorje-Gorski Kotar and Osijek-Baranja, all of which are predominantly rural. The majority of the Bosniak population lives in the City of Zagreb and in the counties of Primorje-Gorski Kotar, Sisak-Moslavina and Istria (Office for Human Rights and Rights of National Minorities, 2023[66]). The latter two counties are predominantly rural.
The Roma population in Croatia faces higher poverty and unemployment rates, poor housing conditions, poor healthcare, and low education levels (World Bank, 2019[67]). Over 92% are poor, with 70% living in extreme poverty. Roma men and women from rural areas are more often affected by unemployment. Around 7% of the Roma population is employed in agriculture, forestry, fishery, and hunting. This share is higher for younger people: 10% of men and 5% of women of 18-29 years of age work in these sectors (Office for Human Rights and Rights of National Minorities, 2021[68]).
1.5.1. Evolution of agro-food trade
Agro-food trade growth slowed down and the deficit grew in the last decade
Croatia has traditionally been a net agro-food importer (Figure 1.12, panel A). In 2022, agro-food products made up 13% of the total goods exports and 11% of imports. These shares have remained relatively stable in the last decade, and are slightly higher than in 2000, when the sector represented around 9% of both exports and imports. Processed goods for consumption and industry make up 57% of agro-food exports and 70% of imports (Figure 1.12, panel B).
Since EU accession in 2013 to 2022, agro-food exports grew at an average annual rate of 8.9%, slightly higher than the average annual growth of imports (7.8%). This represents a deceleration from the previous decade: in 2003-12, exports grew at an average of 12% and imports at 10.6%. In the three most recent years, exports have experienced stronger annual growth up to 21% in 2020-21. After a decline of 3% in 2019-20, imports also accelerated after 2020.
Notwithstanding the higher annual growth of exports, Croatia has maintained an agro-food trade deficit over the last decades. As of 2022, the value of agro-food imports was 1.5 times the value exported, which represents a decrease from a ratio of 1.8 in 2000. The deficit has grown mainly due to a negative intra-EU agro-food trade balance − which increased from USD 1.5 billion in 2013 to USD 1.9 billion in 2022 – while the balance with non-EU countries remained positive in the same period.
Note: Agro-food definition does not include fish and fish products. Agro-food codes in H0: 01, 02, 04 to 24 (excluding 1504, 1603, 1604 and 1605), 3301, 3501 to 3505, 4101 to 4103, 4301, 5001 to 5003, 5101 to 5103, 5201 to 5203, 5301, 5302, 290543/44, 380910, 382360.
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
Grains and oilseeds are the strongest export sectors
An examination of 2022 agro-food trade by product groups shows that Croatia had a small trade surplus in vegetables (Chapters 06 to 15 of the Harmonised System), whereas trade of animal products (Chapters 01-05) and of foodstuffs (Chapters 16-24) had a negative balance (Figure 1.13).
Trade balance by product group, 2022
Note: Animal and animal products do not include fish and its products.
Source: Authors’ calculations based on UN (2022), UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
The top ten export headings in 2022 represented 45% of agro-food exports (Table 1.3). They include maize, chocolate and cocoa, wheat, prepared foods such as bread and sauces, live bovine animals, and soybeans. The top import product was fresh swine meat. Other important import headings include bread and pastries, preparations for animal feeding, chocolate, milk, cheese, beef, and beverages.
Top 10 agro-food products exported and imported, 2022
Note: The HS descriptions have been simplified and are provided only as a reference.
Source: Authors’ calculations based on UN (2022), UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
Export patterns changed over the last two decades, with sugar in particular, losing importance
The composition of Croatian agro-food exports has changed over the last decades (Figure 1.14). Cereals and their preparations have gained in importance, with their share increasing from 16% to 25% between 2000 and 2022. The export share of live animals grew from 0.4% to 6% in the same period, and oilseeds also gained in importance. Two products, sugar and tobacco, lost important shares. Sugar experienced a boost early in the period, becoming one of the top five export products in all but one year over the 2001-16 period. Its share in agro-food exports peaked at 20% in 2006, but declined to 3% in 2022 along with the value exported, particularly after 2016 and driven by the abolition of the EU sugar quota system (Box 1.4). In the case of tobacco, the value exported has increased but as other products gained importance, its share in exports shrunk from 20% in 2000 to 7% in 2022 (UN Comtrade, 2023[69]).
The composition of imports, however, has remained relatively stable. The products that stand out as having increased their shares in agro-food imports between 2000 and 2022 include meat (from 6.5% to 12%) and cereal preparations (from 5% to 9%). Imports of live animals and of coffee and tea lost shares, from 7% to 3% and from 6% to 2%, respectively.
Composition of agro-food exports, 2000, 2010 and 2022
Note: Export sectors defined at the HS chapter level: live animals (01), cereals and cereal preparations (10 and 19), oilseeds (12), sugar (17), cocoa and chocolate (18), food preparations (21), tobacco (24).
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
Sugar beet production and sugar exports have collapsed in recent years
For a long time, sugar production was a profitable and successful activity and one of Croatia’s leading export industries. However, fluctuations in world prices and changes in EU policy have contributed to its collapse: between 2012 and 2022, the production of sugar beet in Croatia was more than halved (Eurostat, 2023[49]), leading to the closure of processing facilities.
The abolition of sugar production quotas in the European Union was an important driver of this collapse. These quotas, in place for almost 50 years, were terminated in September 2017; their abolition led to a decrease in domestic prices (OECD/FAO, 2019[70]) that motivated structural changes and a consolidation of the European sector. This was also the case in Croatia, where the three large sugar mills merged into a single company at the end of 2018 (Felić, 2022[71]). While EU sugar producers had access to a mechanism that provided EUR 5.4 billion to support the industry’s restructuring and help it to prepare for the quota abolition, it operated between 2006 and 2010, prior to Croatia’s accession to the European Union, so the Croatian industry did not benefit from these funds. Croatian sugar mills also faced increased competition from the largest European players such as Südzucker group from Germany, Cristalco from France, and Agrana from Austria, as well as from non-EU countries such as Brazil (Repecki, 2021[72]). Other issues affecting production in Croatia include sugar beet rot due to weather conditions and fluctuations in world prices (Kuskunović, 2023[73]). Considering these circumstances, Croatia provides coupled support to the production of sugar beet using EU and state funds (see Sections 2.3.3 and 2.4.2).
Croatia mainly trades agro-food products with EU partners, from which 85% of its imports originate
Two-thirds of Croatia’s agro-food exports and 85% of imports in 2022 were intra-EU (Figure 1.15). The top destinations for exports within the European Union were Italy (21%), Slovenia (15%), and Germany (8%). The most important non-EU partners were Bosnia and Herzegovina (11%) and Serbia (10%). Exports to countries outside of Europe are relatively low, with the United States as the top export destination outside the continent (1%).
The largest share of agro-food imports originated from Germany (14%), followed by Italy, Hungary (11% each), and Slovenia (10%). The main non-EU import sources were Serbia (6%), Bosnia and Herzegovina (2%), North Macedonia (1%) and Türkiye (1%) (Figure 1.16).
Main export destinations for agricultural and food products, 2022
Source: Authors’ calculations based on UN (2023), UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
Main import sources for agricultural and food products, 2022
Source: Authors’ calculations based on UN (2023), UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
Trade with EU partners is more dynamic than with third countries, particularly following EU accession
Agro-food trade with EU partners showed an increasing trend over the last two decades, and the gap between intra-EU and extra-EU trade widened following EU accession (Figure 1.17). Between 2000 and 2013, exports to and imports from EU Member States grew at higher average annual rates than for non-EU partners: 14% against 11% for exports and 13% against 10% for imports respectively. After accession, this gap increased and, between 2014 and 2022, exports to EU partners grew at an average annual rate of 15% against 6% for non-EU partners. During the same period, imports from EU partners grew 8% against 4% for non-EU partners.
Bosnia and Herzegovina, which had traditionally been the top destination of Croatia’s exports, moved to the second place in 2017 and to the third in 2019. Its share in exports fell from 33% in 2010 to 11% in 2022. On the import side, Brazil was the most affected partner: in 2010, it was the sixth most important import source, with a share of 7%, but by 2022 its share in imports had declined to 0.4%.
Evolution of agro-food trade with EU and non-EU trading partners, 2000-22
Note: EU data refers to the EU-28 (including the United Kingdom) up to 2019 and the EU-27 thereafter.
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ [accessed November 2023].
1.5.2. Integration of the agro-food sector in international markets
Both agriculture and food have deepened their participation in global value chains
The OECD Trade in Value Added (TiVA) database considers the value added by each country in the production of goods and services that are traded and consumed worldwide, providing a broad view of where value is created at each stage of global value chains (GVCs). An examination of international value-added flows related to the agro-food sector (Box 1.5) gives a perspective of countries’ integration into GVCs that goes beyond conventional trade data.17
TiVA data reveal international flows of value added that are not captured by traditional trade statistics. In some cases, the top destinations of value-added exports and sources of value-added in domestic demand differ from the top trading partners in terms of gross exports and imports. For example, higher shares of Croatia’s agro-food value added go to Germany, the United States, France, and the United Kingdom than the gross export data indicates. On the import side, while the People’s Republic of China represents less than 1% of agro-food imports, it is among the top 10 sources18 of agro-food value added in Croatia’s domestic demand.
Exploring trade in value added provides insight into the different types of value creation for the agricultural sector. Direct exports of agricultural value added occur from the sector itself through primary product exports. Indirect exports of agricultural value added embodied in other exports represent the agricultural value added that is exported by other domestic industries, for example in processed or transformed products. At the same time, there are important shares of value addition from services and industrial sectors in the export value of agricultural products. Services represent a wide range of activities including business services (such as agricultural consultants and contractors), transport and trade services, which, in the same way as food processing, can increase domestic value creation.
OECD research has identified two value adding pathways related to trade and GVC engagement. The first is a processing pathway, where domestic value addition to agriculture and links to trade and GVCs occur through downstream processing sectors. The second is a primary pathway, where domestic value addition is made to the primary product, and the sector’s engagement in trade and GVCs is via direct exports for foreign processing or foreign final demand. The research found that countries participating in trade and GVCs via the primary pathway generated equivalent overall trade-related domestic value-added returns as those participating via the processing pathway. A key difference was the share of services value-added, which was higher in countries that followed the primary pathway.
These two pathways are captured in two key indicators that measure a country’s degree of engagement in GVCs: i) backward participation, which measures the share of imported intermediates embedded in the country’s exports and represents the processing pathway; and ii) forward participation, which measures the share of exports that form an intermediate into other countries’ exports and represents the primary pathway.
Source: Greenville, Kawasaki and Jouanjean (2019[74]); OECD (2020[75]).
Croatia’s agriculture and food industry have deepened their forward and backward linkages with global production networks over the last two decades (Table 1.4). The foreign value-added content of agriculture and food exports from Croatia to the world increased across the period, as did the share of Croatian value added embodied in other countries’ exports of these sectors. In general, 2020 indicators of backward and forward linkages in both industries are below the EU average.
While agriculture increased its reliance on foreign final demand between 2000 and 2020, the food, beverages and tobacco industry reduced it, as the share of its domestic value-added meeting foreign final demand declined from 28% to 24%.
The foreign value-added (FVA) content of agriculture (27%) and food exports (32%) are above the FVA share observed in 2020 for the Croatian economy (24.5%). The highest FVA shares in the economy are found in industries such as basic metals (47%) and transport equipment (46%).
Croatia is roughly in the middle of the peer group in terms of the FVA content of exports for both agriculture and food. Austria, Lithuania and Hungary all showed higher FVA shares in both sectors. Like Croatia, most peer countries increased the FVA content of their agriculture and food exports between 2000 and 2020 (Figure 1.18).
Evolution of indicators of participation in global value chains
Notes: The value for the European Union is a simple average of the values for its members in the corresponding year. The table refers to the TiVA indicators EXGR_FVASH (foreign value added embodied in the industry's exports as a percentage of industry's total exports); EXGR_DVAFXSH (domestic value added content embodied in the exports of the industry in foreign countries, as a percentage of country's gross exports), and VALU_FFDDVA (share of the industry's value added that ultimately meets foreign final demand ˗ whether as a direct or an indirect export).
Source: OECD (2023), Trade in Value Added (TiVA) [database], oe.cd/tiva (consulted November 2023).
Evolution of foreign value added in exports between 2000 and 2020
Source: OECD (2023), Trade in Value Added (TiVA) [database], oe.cd/tiva (consulted November 2023).
The foreign services content of agro-food exports is increasing
TiVA indicators highlight the trend of “servicification” of global value chains,19 reflected in an increase in exports of services value-added, both direct and indirect (in particular services embodied as inputs in the exports of goods). For Croatia, the total services content (domestic and foreign) is higher for the food industry than for agriculture (31% vs. 23% in 2020) and has been increasing since 2000, although it remains lower than the EU average (Table 1.5). The content of foreign services has increased in both sectors, pointing to deeper integration in global value chains. In both cases the foreign services content as of 2020 was below the EU average.
Evolution of the services value-added content of exports
Notes: The value for the EU is a simple average of the values for its members in the corresponding year. Share of value-added originating from all domestic and foreign service industries in total gross exports by industry. Service industries include construction, wholesale and retail, hotels and restaurants, transport and communications, finance, real estate and business services as well as public services.
Source: OECD (2023), Trade in Value Added (TiVA) 2022 edition (database), oe.cd/tiva (consulted November 2023).
Croatia has made significant economic and human development progress since its independence. The loss of a large share of its population driven by emigration nevertheless poses a considerable challenge. Rural areas are also at a disadvantage, with a deep urban-rural gap across many economic and social dimensions.
The economy is highly concentrated on services, especially tourism. Agriculture has a relatively small − and shrinking − share of GDP and employment. The sector is experiencing a structural transformation that is also observed in other EU and non-EU countries. The number of farms is decreasing, with larger holdings increasing in number and output in the last decade.
Despite these changes, small, family-run farms continue to be the backbone of Croatia’s rural areas and land consolidation remains a challenge. Most farms are family-run, and over 70% are small, even if they hold only 15% of the agricultural area. Farm income increased following EU accession but still has a long way to go to converge with the EU average.
Croatia has a high diversity of agricultural activities and agricultural production has picked up recently after several years of low growth or decline in the context of a severe economic recession. The sector’s share in total exports and imports has increased since 2000. Organic farming and related processing activities are also growing,
There are some pending tasks related to the management of state-owned land and to land consolidation, which have historical roots in the previous socialist system. An estimated one-third of agricultural land in Croatia is publicly owned, but there is no definitive data on the total area under public ownership. In addition, plots in private hands are generally small and highly fragmented, and past land consolidation efforts have yielded limited results, although efforts in this area have been stepped up in recent years.
Although farmers’ access to credit is improving, some continue to face constraints, particularly the younger ones. This can be linked to land access and difficulties to meet collateral requirements. Nevertheless, an increase in the number of young farmers is an encouraging development in light of the challenging context.
Women make up about one-fourth of farm managers, but represent over half of farm family labour. While rural women remain affected by employment barriers and face obstacles linked to traditional gender roles and regional disparities in access to services, recent data points to a positive evolution in female farm ownership.
Emigration has been an integral part of Croatia’s history and there was an important wave following EU accession in 2013 when many people, especially from rural areas, left the country. This has created a labour market gap that is increasingly being filled by workers from non-EU countries. In 2022, inward migration flows exceeded emigration flows for the first time in 15 years.
Total agro-food trade growth has slowed and the trade deficit grew in the last decade. However, Croatia increasingly trades agro-food products with EU partners, particularly after accession. Exports are dominated by cereals and oilseeds, with the collapse of the sugar sector marking a notable change in the composition of exports. In general, the agriculture and food sectors have deepened their linkages with global value chains and there is an increase in the services content of agro-food trade.
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← 1. Unless other references are specified, the main sources of this report are Croatia’s responses to a questionnaire of the OECD Committee for Agriculture and subsequent follow-up, information collected in connection with the OECD Secretariat’s fact-finding mission, and information provided by Croatia to the OECD in the context of the annual agricultural policy monitoring.
← 2. The EU territory is subdivided into regions at three levels, from larger to smaller units (NUTS 1, 2 and 3). The urban-rural typology is applied to NUTS 3 regions. “Predominantly rural” regions are those where at least 50% of the population live in rural grid cells, or 1 km² cells with a population density of less than 300 inhabitants per km² and/or fewer than 5 000 inhabitants (Eurostat, 2020[77]).
← 3. The predominantly rural counties are Bjelovar-Bilogora, Istria, Karlovac, Koprivnica-Križevci, Krapina-Zagorje, Lika-Senj, Međimurje, Požega-Slavonia, Sisak-Moslavina, Virovitica-Podravina, Vukovar-Sirmium, Zadar, and Zagreb County.
← 4. The choice of illustrative peer countries for Croatia includes a mix of significant EU trading partners, small non-EU OECD Members and fellow OECD accession candidates: Austria, Bulgaria, Costa Rica, Hungary, Italy, Israel, Romania, and Slovenia.
← 5. The United Nations' Food and Agriculture Organization (FAO) defines a family farm as “a means of organizing agricultural, forestry, fisheries, pastoral and aquaculture production which is managed and operated by a family and predominantly reliant on family labour (...)”.
← 6. Annual Working Unit (AWU) is the measure used to describe the work carried out by one person who is working full-time on a farm. It is equivalent to the total hours worked divided by the average hours worked in full-time jobs in the country.
← 7. Average farm net value added (FNVA) per AWU is equal to gross farm income minus the depreciation costs. It considers agricultural support and income taxes. Measuring farm income per AWU allows to account for the different farm scales and provides a better measurement of agricultural labour productivity.
← 8. Information from the Croatian Bureau of Statistics, provided to the OECD by the Ministry of Agriculture.
← 9. Information on the regions’ main activities provided by the Ministry of Agriculture in the context of the OECD fact-finding mission and complemented by (Franić and Mikuš, 2013[76]).
← 10. Fi-compass, the platform for advisory services on financial instruments under EU shared management, defines this gap as the unmet financing demand from economically viable farms and agri-food SMEs. It includes loans applied for but not obtained, financing refused by the potential borrower, and loans not applied for due to fear of rejection.
← 11. Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
← 12. Germany is the EU country with the largest market for organic products, with 2021 retail sales of EUR 15.9 billion. Among the Member States that joined the European Union after 2004, the largest market is Poland, with EUR 314 million.
← 13. In the context of the EU Common Agricultural Policy, the definition of “young farmer” sets a maximum age of 40 years. If this threshold is considered, 14% of farm managers in Croatia at the end of 2023 were young farmers (information provided to the OECD by the Croatian Ministry of Agriculture).
← 14. Information provided to the OECD by the Ministry of Agriculture in March 2024.
← 15. The Croatian Bureau of Statistics (CBS) records lower emigration figures (a total of 350 000 between 2013-21). However, CBS numbers are based on de-registrations and are thus likely to substantially underestimate emigration figures: in practice, people often do not de-register before leaving the country (OECD, 2025[5]).
← 16. Note that a positive opinion from the CES does not mean that a work permit will be granted, as additional tests by the Ministry of the Interior must be conducted as a next step.
← 17. Conventional measures of international trade not always reflect the flows of goods and services within global production chains. The TiVA approach better reflects the significantly higher contribution made by services in GVCs, the role of imports in export performance, and the true nature of economic interdependencies.
← 18. Note that foreign value added of the agriculture or food sectors may be embodied in imports of other industries.
← 19. This phenomenon describes the trend of manufacturing sectors increasingly relying on services, whether as inputs, as activities within firms or as output sold bundled with goods. It relates to GVCs, as services are often deployed through international production networks (Miroudot and Cadestin, 2017[78]).