eu standards on agriculture

8/12/2019 EU Standards on Agriculture

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EUROPEAN UNION STANDARDS FOR

STATE REGULATION OF AGRICULTURE

Legal Memorandum

December 2012


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EUROPEAN UNION STANDARDS FOR STATE REGULATION OF AGRICULTURE

Executive Summary

The purpose of this memorandum is to provide an overview of the

agricultural standards and institutions that states are required to implement to

accede to the European Union and to present policy options for their

implementation in Bosnia and Herzegovina (BiH).

To proceed with EU accession, Bosnia and Herzegovina will be required to

implement the EUs Common Agricultural Policy (CAP), which sets standards for

participation in the common agricultural market. In implementing the CAP, the

EU has placed particular emphasis on: (1) the development of a unified

administrative structure; (2) data collection; (3) subsidy administration; (4) foodsafety; (5) veterinary and phytosanitary (plant health) policies; and (6) rural

development. Despite modest progress, the EU has assessed that BiHs efforts to

implement the CAP are impaired by weak coordination and enforcement

mechanisms.

This memorandum presents three policy options that could facilitate BiHs

progress towards achieving these standards. First, BiH could constitutionally

transfer control over agriculture to the state. Constitutional reform would ensure

stable and permanent change, but may be politically difficult to achieve. Second,

BiH could create a state-level Ministry of Agriculture without constitutional

reform, by obtaining the consent of the Entities. This solution would facilitate

uniformity and efficiency of agricultural policies, but also face political hurdles.

Third, BiH could expand the existing coordination mechanisms of the Ministry of

Foreign Trade and Economic Relations (MoFTER). This approach may prove

more politically viable than the alternatives, but may also be less effective in

ensuring CAP compliance. All three policies would require a political consensus

in BiH that EU accession justifies transferring certain powers to the state.


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EU Standards for Regulation of Agriculture, December 2012

TABLE OF CONTENTS

Statement of Purpose 1

Introduction 1

The Common Agricultural Policy (CAP) 2

CAP Standards and Implementation in BiH 4

Unified Administrative Structure 4

Data Collection 6

Steps to implement EU data collection standards 8

Subsidies 8

Steps to implement EU standards on agricultural subsidies 10

Food Safety 10Steps to implement EU standards on food safety 12

Veterinary and Phytosanitary Policies 12

Steps to implement EU veterinary and phytosanitary policies 13

Rural Development 13

Steps to implement EU standards for rural development 14

Policy Options to Achieve CAP Compliance 15

Constitutional Reform 15

Establishment of a Ministry of Agriculture 16

Expansion of Existing Coordination Structures 17

Conclusion 18

Annexes 19


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INDEX OF ABBREVIATIONS

APA Accredited Paying Agency

BiH Bosnia and Herzegovina

CAP Common Agricultural Policy of the European UnionCMEF Common Monitoring and Evaluation Framework

EAFRD European Agricultural Fund for Rural Development

EU European Union

FADN Farm Accountancy Data Network

FBiH Federation of Bosnia and Herzegovina

FSA Food Safety Agency

GMO Genetically Modified Organisms

IACS Integrated Administration and Control SystemMoA Ministry of Agriculture

MoFTER Ministry of Foreign Trade and Economic Relations

RS Republika Srpska


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Srpska (RS) and the Federation of Bosnia and Herzegovina (FBiH).4 Currently,

inter-Entity coordination is limited.5 In addition, the EU noted that the states

political elites lack a shared vision on the overall direction and future of BiH.6 For

EU accession, BiH needs political will and functional institutions at all levels with

an effective coordination mechanisms on EU matters.7

This memorandum provides an overview of the agricultural standards and

institutions that Bosnia and Herzegovina (BiH) will be required to implement to

accede to the European Union. It begins with a discussion of the EUs CAP and

goes on to elaborate on CAP standards and their implementation in BiH. It

concludes with policy options to achieve CAP compliance.

The Common Agricultural Policy (CAP)

The Common Agricultural Policy (CAP) regulates the market foragricultural products in the EU.

8 Since its adoption, the single market and

reduction of technical barriers to trade have significantly increased European trade

in food products.9

The goals of the CAP shift over time in accordance with regional needs.10

Since the late 1990s, the CAP has promoted the competitiveness of European

agriculture by assisting farmers in tailoring their production to market demand,

diversifying, and improving product marketing.11

4BOSNIA AND HERZEGOVINA CONST. art.3(3)(a)(1995),available at

http://www.ohr.int/dpa/default.asp?content_id=372.5European Commission, Commission Staff Working Paper,Bosnia and Herzegovina 2012 Progress Report, 43(Oct. 10, 2012).6European Commission, Commission Staff Working Paper,Bosnia and Herzegovina 2012 Progress Report, 4 (Oct.

10, 2012).7European Commission, Commission Staff Working Paper,Bosnia and Herzegovina 2011 Progress Report, 4 (Oct.

12, 2011), available athttp://ec.europa.eu/enlargement/pdf/key_documents/2011/package/ba_rapport_2011_en.pdf.8European Union, Common Agricultural Policy, available athttp://www.eurunion.org/eu/Agriculture/Common-

Agricultural-Policy.html.9

Bruno Henry de Frahan and Mark Vancauteren,Harmonisation of food regulations and trade in the Single Market:evidence from disaggregated data,33 EUROPEAN REVIEW OF AGRICULTURAL ECONOMICS,337, 337-360 (2006).10Originally the goals of the CAP were laid out in Article 33 of the Treaty of the European Union (TEU) and

included: increasing agricultural productivity, ensuring a fair standard of living for the agricultural community,

stabilizing markets, assuring the availability of supplies, and ensuring that supplies reach consumers at reasonableprices. These goals have widely been achieved in the last decades, which has led the EU to focus on new goals. See

Gerritt Meester,Future development and policies, in EU POLICY FOR AGRICULTURE,FOOD AND RURAL AREAS403,

403 (Arie Oskam, Gerrit Meester and Huib Silvis, eds., 2010).11European Commission, The Common Agricultural Policy Explained, 7, available at

http://ec.europa.eu/agriculture/publi/capexplained/cap_en.pdf.


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jointly finance the second pillar. Most funds go to direct income support for

farmers, conditioned on their compliance with environmental and product quality

rules.21

CAP Standards and Implementation in BiH

In 2004, the European Commission issued a Functional Review of the

Agricultural Sector in BiH. This comprehensive report analyzed the structure,

competencies, and resources of BiHs agricultural institutions and provided

recommendations to increase sector efficiency.22 Since 2004, the European

Commission has published annual progress reports that discuss the current status of

BiHs agricultural institutions and regulatory framework.23

The EUs Progress Reports have recently focused on six areas of CAP

implementation: (1) the development of a unified administrative structure; (2) datacollection; (3) subsidies; (4) food safety; (5) veterinary and phytosanitary (plant

health) policies; and (6) rural development. The standards and recommendations

relating to these areas are explored below.

Unified Administrative Structure

Implementation of the CAP requires states to create and maintain an

appropriate statewide administrative structure. States have discretion to designate

any agency as the competent authority to administer CAP requirements.24

In

practice, most states designate the Ministry of Agriculture or a similar state entityas the competent authority.

21CAPs budget is spent in 3 different ways: income support for farmers (70%), rural development (20%), and

market support (less than 10%). European Commission, The Common Agricultural Policy and Agriculture inEurope Frequently Asked Questions (June 11, 2012).22European Commission,Functional Review of the Agricultural Sector in BiH(Oct. 2004), available at

http://www.esiweb.org/enlargement/wp-content/uploads/2010/03/agriculture-functional-review_bih_2004.pdf.23European Commission, Citizen's Summary: Potential New EU countries Progress Towards Membership,(2010), available at:

http://ec.europa.eu/enlargement/pdf/key_documents/2011/package/citizens_summary_2011_en.pdf.24European Commission, Screening Report: Turkey,Chapter 11 Agriculture and Rural Development, 2 (Sept. 7,

2006), available

athttp://ec.europa.eu/enlargement/pdf/turkey/screening_reports/screening_report_11_tr_internet_en.pdf.


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The necessity of functioning administrative structures:

Author Jerzy Wilkin argues that efficient and quick absorption of

EU support requires adequate institutional capacity. Moreover, he

claims that further institution building is necessary for a complete

implementation of CAP, which has in some instances been delayed.

The lack of necessary institutional capacity may have direct

negative consequences for farmers. For instance, due to institutional

problems, EU payments to farmers in Hungary were delayed.

Dissatisfaction with the implementation of the CAP led to massivedemonstrations by farmers on the streets of Budapest.

25

In BiH, agricultural policy is largely set by the Entities, though someprogress has been made towards unifying the administrative structure. In 2001, the

Entities signed a Memorandum of Understanding that pledged to harmonize

policies, guard against unfair competition, establish a trade information center, and

cooperate in establishing authorized laboratories.26

BiH also expanded the role of the Ministry of Foreign Trade and Economic

Relations (MoFTER) in the 2008 Law on Agriculture, Food and Rural

Development (2008 Law).27

This legislation was expressly drafted to address the

CAP directives,28

and instructs MoFTER to ensure the harmonization of Entity

agricultural policies.29 The 2008 Law also established several state institutions

necessary for the implementation of the CAP, such as the BiH Veterinary Office

and Office for Harmonization and Coordination of Payment Systems.30

25Jerzy Wilkin, Agriculture in new Member States expectations and lessons learned, 10, 7 (Sept. 2007),availableathttp://ageconsearch.umn.edu/bitstream/8529/1/sp07wi01.pdf.26European Commission,Functional Review of the Agricultural Sector in BiH, 17 (Oct. 2004).27Law on Agriculture, Food and Rural Development (May 15, 2008), available at

http://www.agrowebcee.net/fileadmin/content/agroweb_ba/files/Country_profile/M/BH_Law_on_Agriculture_Food

_and_Rural_Development.pdf. For additional information on how the BiH Law on Agriculture, Food and RuralDevelopment implements the CAP,see Annex A.28It aims specifically at defin[ing] the framework and mechanisms required to prepare for association with, and

accession to, the European Union, and the law makes multiple references to compliance with EU standards and

policies. The objectives of the BiH agricultural policy are set forth in Article 4 and include ensuring harmonization& integration of the sector within the EU & global market place. The policy measures in the agricultural sector are

divided into two categories, in clear reference to the two pillars of the CAP: agricultural market support and rural

development (Article 5). See Law on Agriculture, Food and Rural Development, arts. 1, 4, 5 (May 15, 2008).29Law on Agriculture, Food and Rural Development, arts. 6(2), 7 (May 15, 2008).30Law on Agriculture, Food and Rural Development, art. 10 (May 15, 2008).


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In order to accelerate implementation, the 2008 Law set deadlines for the

enactment of regulations and the establishment of institutions.31

Although most of

these deadlines occurred one year after the 2008 Laws entry into force, only

modest progress has been made.32

While the Office for Payment Harmonization

was established, as of October 2012, it lacked the necessary staff to carry out its

functions.33

In addition, the BiH Veterinary Office does not have sufficient powers

to act as the central competent authority, and implementing legislation and a state-

strategy for rural development are still pending.34

Data Collection

The CAP also requires states to provide detailed agricultural and farm

income data. States must establish agencies to coordinate statistics, including a

liaison agency and a national committee for the EU-wide Farm Accountancy Data

Network (FADN).35 In light of these requirements, the EU has urged BiH toimprove its collection of reliable and standardized agricultural data.

First, the EU has emphasized the need for greater accuracy in BiHs

agricultural reports. After the EU questioned the reliability of BiHs agricultural

reports in 2007 and 2008,36

BiH conducted farm structure surveys in 2009 and

2010 in an effort to enhance data accuracy.37

The EU has also recommended that

BiH conduct a comprehensive agricultural census to provide reliable data on land

holdings.38

While the 2012 Law on Census of Population, Households and

Dwellings in BiH allows for the collection of data on agricultural holdings in order

31Law on Agriculture, Food and Rural Development, art. 25 (May 15, 2008).32European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43-44(Oct. 10, 2012).33European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).34European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43-44

(Oct. 10, 2012).35European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 37

(2005),available at

http://ec.europa.eu/enlargement/pdf/enlargement_process/accession_process/how_does_a_country_join_the_eu/negotiations_croatia_turkey/adminstructures_version_may05_35_ch_public_en.pdf.36European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2009 Progress Report, 46

(Oct. 14, 2009), available at http://ec.europa.eu/enlargement/pdf/key_documents/2009/ba_rapport_2009_en.pdf.37European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2010 Progress Report, 53(Nov. 9, 2010), available at

http://ec.europa.eu/enlargement/pdf/key_documents/2010/package/ba_rapport_2010_en.pdf; European Commission,

Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 51 (Oct. 12, 2011).38European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2010 Progress Report, 46

(Nov. 9, 2010).


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to establish an address list for the agricultural census,39

BiH has yet to adopt the

Law on the Agricultural Census.40

Moreover, while the Census on Population,

Households and Dwellings is slated for April 2013, experts suspect that it may be

delayed.41

Second, the EU has urged BiH to standardize agricultural data throughout

the state. Specifically, the EU has called for the adoption of an Integrated

Administration and Control System (IACS) that will harmonize farm registration

data.42

An IACS assigns an alphanumeric ID to each land parcel and tracks the

status of aid applications.43

A major challenge in the standardization of agricultural data is the lack of

cooperation between the Entities, which have separate statistical agencies. The EU

has called for the adoption of an Agricultural Information Strategy to harmonize

Entity data collection methods and calculations. Although a committee for thecoordination of agricultural information was established in 2008,

44it has made

little progress. Some municipalities have agreed to an action plan that would

develop an FADN, but this is not universal across BiH, and therefore would not

satisfy the EUs requirement.45

As of October 2012, no Agricultural Information

Strategy had been adopted.46

39Law on Census of Population, Households and Dwellings in Bosnia and Herzegovina in 2013, art. 9 (Feb. 3,

2012), available athttp://www.fzs.ba/Dem/Popis/Zakon%20o%20popisu-en.pdf.40European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).41Balkan Insight,Bosnia Census Might Be Postponed, Experts Predict(Nov. 20, 2012), available at

http://www.balkaninsight.com/en/article/bosnian-2013-census-might-be-postponed.42

European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 36(2005).43European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis,

(2005).44European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2009 Progress Report, 45(Oct. 14, 2009).45European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2010 Progress Report, 46

(Nov. 9, 2010).46European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).


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Steps to implement EU data collection standards:

(1)Adopt an Integrated Administration and Control System for farmregistration data.

(2)Conduct an Agricultural Census.(3)Adopt an Agricultural Information Strategy to harmonize data

collection between the Entities.

Subsidies

The EU has emphasized two areas of reform for BiHs subsidy system: (1)

the basis for determining subsidies, and (2) the administration of payments.

First, the CAP has recently shifted its emphasis from production-based

subsidies to the single payment scheme, and single area payment scheme.47

The new system calculates subsidies based on the amount of land owned by each

farmer, and adjusts this figure based on the farmers compliance with EU standards

on environmental protection, animal welfare, and product quality.48

Because

production levels currently determine BiHs agricultural subsidy payments,49

BiH

will need to alter the basis of its subsidy calculations in order to comply with the

CAP.

Pre-accession investment of candidate states:

The EU Functional Review of the Agricultural Sector in BiH

pointed out that Slovenia, which acceded in 2004, spent annual

subsidies of some 300 !per hectare in the pre-accession period in the

agricultural sector. According to the report, this spending reflects not

only the importance Slovenia gives to the agricultural sector, but also

Slovenias ability to acquire and administer EU pre-accession funds. In

contrast, Latvia, which also acceded in 2004, still had problems in

2002/2003 with regard to supporting the agricultural sector, resulting inonly some 21 ! per ha per year. Compared with these benchmarking

47European Commission, Single Farm Payment(May 6, 2011), available at

http://europa.eu/legislation_summaries/agriculture/general_framework/ag0003_en.htm.48European Commission, Single Farm Payment(May 6, 2011).49European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).


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countries, BiH ranks lowest with only 16,4 !per year per ha.

The EU Commission concluded that, in the pre-accession phase,

Candidate Countries have to first invest considerable sums from their

national budgets in order to become institutionally prepared for EUaccession.50

Second, the CAP requires states to process subsidies through a single

payment system.51

This system can either consist of a single Accredited Paying

Agency (APA), or multiple APAs that liaise with the EU through a single

coordinating body.52

To become accredited, each APA must fulfill criteria set

forth in Regulation (EC) No. 885/2006, relating to internal environment, control

activities, information and communication, and monitoring.53

The role of an APA is to process CAP subsidy transfers through an IACS.54

This involves maintaining a computerized database that tracks aid applications and

verifies farmer identification and holdings.55

The APA also conducts on-the-spot

inspections to verify farmers compliance with the requirement that they keep their

land in good agricultural and environmental condition.56

States are required to

designate public or private entities as certification bodies, to monitor each

APAs accounting, management and control systems.57

The EU has indicated that BiH will need to substantially harmonize itssubsidy payment system in order to comply with the CAP.58

FBiHs Ministry of

Agriculture coordinates subsidy distribution with cantonal and municipal

agriculture agencies.59

Subsidies are administered chiefly through the cantons,

with levels of support varying greatly between cantons based on the priority

50European Commission,Functional Review of the Agricultural Sector in BiH, 104, 107 (Oct. 2004).51European Commission,Integrated Administration and Control System (IACS)(Jul. 10, 2011), available at

http://ec.europa.eu/agriculture/direct-support/iacs/index_en.htm.52European Commission,Fact Sheet: Managing the Agriculture Budget Wisely , 5 (2007), available at

http://ec.europa.eu/agriculture/publi/fact/clear/2007_en.pdf.53

European Commission,Fact Sheet: Managing the Agriculture Budget Wisely , 5 (2007).54

European Commission,Integrated Administration and Control System (IACS)(Jul. 10, 2011).55Council Regulation 73/2009, 2009 O.J. (L 211) 7 (EC), available athttp://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:030:0016:0016:EN:PDF.56Council Regulation 73/2009, 2009 O.J. (L 211) 7 (EC).57Europa,Financing the Common Agricultural Policy(October 9, 2009), available at

http://europa.eu/legislation_summaries/agriculture/general_framework/l11096_en.htm.58See European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report

(Oct. 12, 2011).59European Commission,Functional Review of the Agricultural Sector in BiH, 53 (Oct. 2004),.


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accorded to agriculture and each cantons financial situation.60

In the RS, the

Ministry of Agriculture receives subsidy applications and collaborates with

municipal agencies.61

The EU has described both systems as inefficient, despite

recent attempts to increase personnel.62

In June 2009, the parliament adopted a decision to create the Office for

Payment Harmonization, which would set the stage for development of a state-

level institution for the harmonization of the Entity-level support measures and

allow for gradual alignment with the acquis.63

As previously mentioned, while the

Office for Payment Harmonization was established, it lacks the necessary staff to

carry out its functions.64

As of October 2012, a state-level harmonization plan has

yet to be implemented.65

Steps to implement EU standards on agricultural subsidies:

(1)Adopt a Single Payment Scheme to calculate subsidies.(2)Designate one or more Accredited Payment Agencies.(3)Implement an Integrated Administration and Control System to track

and process payments.

(4)Designate certification bodies to monitor the APA(s).

Food Safety

Food safety is a CAP priority due to its role in public health and

international trade. As set forth in the CAP, states must have appropriate

administrative structures to implement EU laws on food hygiene, inspection and

control requirements.66

Second, the CAP requires states to establish a Rapid Alert

System for Food and Feed, which consists of an official contact point and

computer network system that enables fast exchange of information on food and

60European Commission,Functional Review of the Agricultural Sector in BiH, 53 (Oct. 2004).61

European Commission,Functional Review of the Agricultural Sector in BiH, 31-32 (Oct. 2004).62

European Commission,Functional Review of the Agricultural Sector in BiH(Oct. 2004); European Commission,Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 43(Oct. 12, 2011).63European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2009 Progress Report, 45

(Oct. 14, 2009).64European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43(Oct. 10, 2012).65European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).66European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 42

(2005).


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feed emergencies (e.g., when a product must be urgently removed from the

market).67

Third, states must enforce the EUs traceability and labeling

requirements for genetically modified organisms (GMOs), in particular the

designation of a competent authority to regulate marketing of food that contains

GMOs.68

Fourth, states must approve and regulate facilities that irradiate

foodstuffs, including the methods used to detect radiation.69

BiH has made modest progress in implementing this aspect of the CAP. The

state parliament adopted the State Food Safety Law in 2004 and established the

Food Safety Agency (FSA) in 2006.70

Despite these steps, however, the 2012

Progress Report identified gaps in BiHs implementation. For instance, a

laboratory capacity strategy to cover analysis of samples in line with the official

controls on food and feed chains still needs to be drawn up.71

In addition, while

BiH did adopt implementing legislation on residues of pesticides and radioactive

contamination, reference laboratories for monitoring residue remain to bedesignated.

72

Another obstacle to implementing the CAP food safety standards is that the

responsibilities for food safety remain disjointed at the state and Entity levels.73

BiHs decentralized structure and weak FSA have led to inconsistent standards

with respect to safety measures, including ionizing radiation requirements, quick-

frozen foodstuffs regulation, and food contamination monitoring.74

As the

European Commission has previously noted, these different standards impede

67European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 43(2005).68European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 43-44

(2005).69European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 44

(2005).70USDA Foreign Agricultural Service,Bosnia and Herzegovina Food and Agricultural Import Regulations and

Standards Narrative, 3 (July 29, 2009), available at

http://gain.fas.usda.gov/recent%20gain%20publications/food%20and%20agricultural%20import%20regulations%20and%20standards%20-%20narrative_sarajevo_bosnia%20and%20herzegovina_7-29-2009.pdf.71European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).72European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43-44(Oct. 10, 2012).73European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).74European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 44

(Oct. 12, 2011).


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coherent nation-wide infrastructure and have a negative impact on agricultural

trade.75

Steps to implement EU standards on food safety:

(1)Create a Rapid Alert System for food safety emergencies.(2)Establish a labeling regime for GMOs.(3)Adopt a regulatory regime for facilities that irradiate food.

Veterinary and Phytosanitary Policies

The acquisrequires states to carefully monitor animal and plant health.

Specifically, the state must designate competent authorities to enforce (1) on-site

inspections of farming facilities, (2) non-discriminatory inspections duringtransport, at borders, and at destination points, and (3) laboratory testing systems.

76

Competent authorities must also maintain emergency funds for disease control and

oversee official veterinarians and inspectors.77

BiH has already designated competent authorities: the Veterinary Office of

BiH78

and the Administration of BiH for Plant Health Protection.79

EU Progress

Reports have praised these developments, but noted continuing problems in both

veterinary and phytosanitary policy, particularly with regard to the alignment of

legislation with the acquis.80

In the veterinary sector, the European Commission has urged more controls

on the distribution and use of veterinary medicine,81

accreditation of veterinary

75European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2009 Progress Report, 46

(Oct. 14, 2009); See alsoEuropean Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011

Progress Report, 43 (Oct. 12, 2011).76European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 45

(2005).77

European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 45-46(2005).78Ministry of Foreign Trade and Economic Relations, Veterinary Office of Bosnia and Herzegovina Basic

Information, available athttp://www.vet.gov.ba/?q=en/node/133.79European Union,Administration of Bosnia and Herzegovina for Plant Health Protection Brochure , available at

http://eufitobh.com/sites/default/files/FITO-brosura-eng.pdf. 80European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 43-44


(Oct. 12, 2011).


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diagnostic laboratories,82

and more funding for the state residue control plan.83

In

the phytosanitary sector, the 2011 Report urged more regulation of plant product

facilities, plant passports, organisms harmful to plants, and GMOs.84

Of note,

progress was made between 2011 and 2012 with regard to phytosanitary checks at

boarder crossings due to the introduction of uniform lists of plants and plant

products subject to health inspections.85

Steps to implement EU veterinary and phytosanitary policies:

(1)Designate a competent authority to oversee implementation.(2)Establish operational inspections, laboratory testing, and regulatory

regimes.

Rural Development

The EU Progress Reports have increasingly focused on rural development.

While BiH has taken some steps toward meeting EU expectations for rural

development, as previously mentioned, it has not yet adopted a statewide rural

development strategy.86

In order to receive investments from the European Agriculture Fund for

Rural Development (EAFRD), which composes 20% of CAP allocations, states

must first designate competent authorities that can design, implement, manage andevaluate rural development programs, and control financial flows.

87 The

competent authorities must develop a National Strategy Plan to improve


(Nov. 9, 2010); See alsoEuropean Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012

Progress Report, 43 (Oct. 10, 2012).83European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 44

(Oct. 12, 2011).84

European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 44

(Oct. 12, 2011).85

European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2011 Progress Report, 44


(Oct. 12, 2011).87Europa,European Agricultural Fund for Rural Development (EAFRD) (May 1, 2012), available at

http://europa.eu/legislation_summaries/agriculture/general_framework/l60032_en.htm; Council Regulation

1698/2005, art. 74, 75, 2005 O.J. (L 277) 1 (EC), available athttp://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF; European Commission,Guide to

the Main Administrative Structures Required for Implementing theAcquis, 40 (2005).


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agricultural competitiveness, the environment, and general welfare in rural areas.88

States must also develop an effective rural credit scheme.89

In addition, states must

establish monitoring committees to assess the effectiveness of rural development

projects.90

The monitoring committee(s) may develop its own rules of procedure,

but must evaluate programs in accordance with the Common Monitoring and

Evaluation Framework (CMEF).91

In BiH, a state-level strategic plan was put in place in 2009, but it has not

been implemented.92

While MoFTER appointed working groups on the payment

agent and managing authority for rural credit programs, little progress has been

made.93

Although the Office on Payment Harmonization was established, it lacks

the staff to carry out its tasks.94

As of October 2012, no other progress has been

reported.95

Steps to implement EU standards for rural development:

(1)Designate a competent authority or authorities.(2)Develop a National Strategy Plan.(3)Establish a rural credit scheme.(4)Designate monitoring committees to assess policy effectiveness.

88Council Regulation 1698/2005, art. 11, 2005 O.J. (L 277) 1 (EC).


(Oct. 14, 2009); European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2010

Progress Report, 45 (Nov. 9, 2010).90European Commission,Guide to the Main Administrative Structures Required for Implementing theAcquis, 40

(2005); Council Regulation 1698/2005, art. 78, 2005 O.J. (L 277) 1 (EC).91European Commission, Directorate General for Agriculture and Rural Development, Rural Development 2007-

2013 Handbook On Common Monitoring and Evaluation Framework, 40 (2006), available

athttp://ec.europa.eu/agriculture/rurdev/eval/index_en.htm; Council Regulation 1698/2005, art. 78,80, 2005 O.J. (L277) 1 (EC).92European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43

(Oct. 10, 2012).93European Commission, Commission Staff Working Document, Bosnia and Herzegovina 2010 Progress Report, 45(Nov. 9, 2010).94European Commission, Commission Staff Working Paper, Bosnia and Herzegovina 2012 Progress Report, 43


(Oct. 10, 2012).


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Establishment of a State Ministry of Agriculture

The constitution of BiH grants control over agriculture to the Entities, but

stipulates that they may agree to transfer this competence to the state and establish

a statewide Ministry of Agriculture.99

The EU assessed and endorsed this step in

its 2004 Functional Review of the Agricultural Sector in BiH.100

Administrative structure in federally organized member states:

The 2004 EU Functional Review of the Agricultural Sector in

BiH noted that even federally organized EU Member States have a state

level Ministry of Agriculture. According to the report, Austria, as a

highly federalized country, implements EU regulations and other norms

exclusively through federal institutions the Government and the

Parliament while the administration of rural support programs andother support measures are primarily managed by lower level executivelayers.

Both Austria and Germany apply the overruling principle,

which ensures that State laws overrule Lnder laws; additionally, for

certain areas (including agriculture) competitive legislation reserves

competencies for State level execution if needed and agreed upon by theinferior Lnder level.

101

This approach may offer many of the same benefits as constitutional reform,

namely uniformity and efficiency. The EU has repeatedly advocated for this

reform, which several existing member states successfully used to implement the

CAP regime.102

However, this approach may provide less stability than a constitutional

reform, as the Entities may attempt to reassert their authority or revoke their

consent. This option may also present practical challenges. The establishment of a

state-level Ministry would weaken the current political power of the Entities.Under BiH law, the success of this option depends on Entity consent to the

99BOSNIA AND HERZEGOVINA CONST. art.3(5)(1995).100European Commission,Functional Review of the Agricultural Sector in BiH, p. 8 (Oct. 2004). For a possible

structure and staffing of a Ministry of Agriculture for BiH, see Annex B.101European Commission,Functional Review of the Agricultural Sector in BiH, 106 (Oct. 2004).102European Commission,Functional Review of the Agricultural Sector in BiH, 8 (Oct. 2004).


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curtailment of their powers, and continued cooperation as the Ministry implements

reforms.

Expansion of Existing Coordination Structures

A third possible option is to expand and strengthen the existing Ministry ofForeign Trade and Economic Relations (MoFTER). The EU has suggested that

this approach may suffice to comply with the CAP. The 2011 Progress Report

acknowledged the difficulty of creating a Ministry of Agriculture in BiH, and

advocates for, strengthening the state-level administrative capacity and co-

ordination structures.103

This language suggests that BiH may be able to fulfill

the CAP requirements by strengthening existing institutions rather than creating a

new agency.

Because this approach allows the Entities to retain substantial authority overagricultural policy, it may not produce as much uniformity and efficiency as the

alternatives. However, this approach may prove more politically viable. The

Entities demonstrated a basic commitment to cooperation in the 2001

Memorandum of Understanding.104

In addition, in enacting the 2008 Law on

Agriculture, Food and Rural Development, the state demonstrated its willingness

to expand MoFTERs mandate in order to fulfill the CAP.105

However, the

effective implementation and any expansion of this law will require sustained

efforts and strong political will by all parties.

These policy options to achieve CAP compliance all involve thestrengthening of state powers. While constitutional reform or the creation of a

Ministry of Agriculture would likely provide the most stable and permanent

change, they may also be difficult to achieve politically. The third option, an

expansion of the MoFTERs competencies, may be more politically feasible than

the alternatives, but may also prove less effective in facilitating CAP compliance.

103Interview with the EU Commission with a specific query as to why the 2011 report makes no mention of a state-

level Ministry of Agriculture, see Annex C.104In the 2001 Memorandum of Understanding, the two Entity Ministries of Agriculture agreed to contribute to the

BiH market of agricultural products, harmonize taxes for the trade of agricultural products, work on protection ofagricultural products from unfair competition, start with the establishment of a trade information center, harmonize

laws on the BiH level with EU regulations, harmonize the legislation of the two Entities, contribute to the

strengthening of the BiH administrations, and cooperate on the establishment of authorized laboratories. See

European Commission,Functional Review of the Agricultural Sector in BiH, 17 (Oct. 2004).105Law on Agriculture, Food and Rural Development (May 15, 2008).


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Conclusion

Implementation of the CAP is an important and challenging part of the EU

accession process. EU standards for agricultural products will likely remain high

and possibly become stricter as the focus shifts to environmental and social goals.

Although the EU does not demand a specific institutional framework,

successful implementation requires strong coordination and enforcement

mechanisms. This memorandum has outline three possible policy approaches that

could facilitate BiHs attainment of the CAP standards: (1) constitutional reform to

permanently shift control over agriculture to the state; (2) the creation of a Ministry

of Agriculture through non-constitutional means; and (3) the strengthening of the

MoFTERs mandate and enforcement capacity. Regardless of the option that BiH

pursues, effective implementation of the CAP requires popular and political

consensus that EU accession justifies transferring certain powers to the state.


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Annex A EU requirements addressed by the BiH Law on Agriculture, Food

and Rural Development

a. Unification

It should be noted that the law does not establish a typical federal centralized

agency. It mainly establishes mechanisms for coordination and makes all state,

entities, canton and municipal authorities responsible for ensuring harmonization

of their policies, programs, and regulations.

According to Article 6, MoFTERs responsibilities include ensuring that all

sector policies, legislation, programs, and measures undertaken at all levels of

administration in BiH conform with the laws objectives. The competences of

MoFTER are set forth in Article 7. They include defining the framework for agro-economic policies in cooperation with the competent bodies of the Entities,

ensuring the effective harmonization, coordination, implementation and monitoring

of the BiH strategies and action plans, ensuring the establishment and coordination

of all necessary institutions and other bodies, and producing annual reports on the

state of the sector. Of note, the Law does not provide for enforcement mechanisms

to ensure compliance.

The competences of the Entities are laid out in Article 8, and include

defining, managing and implementing specific sector strategies, agro-economic

policies, programs, and measures within the territories of entities, as well as

ensuring alignment of their strategies, action plans, policies, programs, laws, and

other legislation in accordance with BiH defined frameworks. The wording used

in the description of the competences of the entities, when compared to that used

for the competences of the MoFTER, suggests that the locusfor decision making

in regards to the policies will remain at the entity level. The entities primarily

define the policies while MoFTER defines the policy framework.

Article 18 establishes an advisory council in order to ensure an effective

consultative mechanism, representation, coordination and legitimacy of decision-making within the agriculture, food and rural development sector, with a mandate

to provide opinions, recommendations and advice that should be considered by

MoFTER. The Council shall be composed of fifteen experts proposed by

MoFTER, with the consent of the entities.


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Under the law, MoFTER will also be responsible for guidance and

supervision of the administrative organizations created by the law within the

Ministry, described below (Article 18).

b. Data collection and reporting to the EU

MoFTERs obligations include coordinating the establishment and

development of unified registers (Farm, Client, Animal Identification and Land

Parcel Identification registers Article 14), establishing an integrated database

system to link registry data and other relevant information systems (Article 15), an

Agriculture Information Coordination Board (Article 16), an Agriculture Market

Information Service (Article 17) and a BiH Monitoring and Evaluation system for

the sector (Article 22).

c. Subsidies

The law creates the BiH Office for Harmonization and Coordination of

Payment Systems (Article 10) and charges MoFTER with the responsibility for the

consistency, transparency, and coordination of the payment system (Article13).

d. Food safety

The BiH Law on Food, enacted in 2004, had already established a Food

Safety Agency. According to the BiH Law on Agriculture, Food and Rural

Development, the MoFTER will interact with the Food Safety Agency in the

development of food safety legislation and regulation, risk management, and crisis

management. The MoFTER, the Food Safety Agency and other responsible

Ministries (not specified by the law) shall be responsible for jointly developing and

submitting proposals to ensure the gradual separation of competencies for risk

management and risk assessment of food safety at state level. (Article 11)

The law also creates the BiH Plant Health Protection Administration and

focuses on the development, by the MoFTER, of a cost effective and efficient

laboratory systems for reference laboratories and other testing bodies. TheMoFTER shall also coordinate the accreditation of relevant laboratories and define

minimum requirements for quality of services provided by Laboratories. (Articles

10 and 20)


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e. Veterinary/Phytosanitary measures

The law creates the BiH Veterinary Office within the MoFTER (Article 10).

The law, however, does not expressly set out its competences. As mentioned

above, the MoFTER will be responsible for developing the laboratory system

(Article 20).

f. Rural development

Article 12 provides that the BiH Strategic Plan shall define the rural

development policy for BiH. It shall establish mechanisms for monitoring and

evaluation, and will set out a framework for financial requirements and procedures

for usage of funds. The BiH Strategic Plan for Rural Development shall be drafted

by an Inter-Ministerial Commission (the composition of which shall be decided by

the Ministry and relevant bodies of Entities and Brcko District) and adopted by theBiH parliament.

The MoFTER shall establish an organizational Unit for rural development

coordination to ensure effective harmonization and coordination in implementation

of the BiH Strategic Plan and prepare progress reports on rural development

policies (Article 12).


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Annex B Recommended Structure & Staffing of a State Ministry of

Agriculture for BiH developed by the European Commission

Source: European Commission,Functional Review of the Agricultural Sector in BiH(Oct. 2004),

available at http://www.esiweb.org/enlargement/wp-content/uploads/2010/03/agriculture-functional-review_bih_2004.pdf.


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Annex C - Inquiry addressed to the European Commission regarding the

missing reference to a Ministry of Agriculture in the 2011 BiH Progress

Report

Question posed:

The 2011 Progress Report on Bosnia and Herzegovina does not call for the

creation of a state-level Ministry of Agriculture for BiH. The previous Progress

Reports included such a call.

What is the reason for this change in language?

Thank you very much,

[Omitted]

This question was submitted on 12 October 2011 using the official online form

through which questions can be submitted to the European Commission

concerning agriculture and enlargement:

http://ec.europa.eu/agriculture/contact/infoform_en.htm.

(See the answer on the following page)


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Answer received:

From: [EC staff member]

To: [Omitted]

Subject: FW: Reply to agri-info - Progress Report on Bosnia and

Herzegovina 2011 - State-level Ministry of Agriculture for BiH

Date: 28.10.2011, 17:07

Please find below the reply to your email dated 12 October 2011

Ares(2011)1085750_ concerning the above mentioned subject.

Dear [Omitted],

Whereas the existence of a strong State-level co-ordination entity in

agricultural sector in Bosnia and Herzegovina remains a priority for

the Commission, 2011 Progress report does not in the current political

situation call explicitly for the establishment of a State-level Ministry

of Agriculture for BiH. Instead the 2011 Progress report underlines

the importance of strengthening the State-level administrative

capacity and co-ordination structures and the implementation of the

State-level strategic plan and the harmonisation programme foragriculture, food and rural development.

Furthermore, the European Commission will continue encouraging

authorities in BiH to build up necessary State-level administrative

structures in order to have better co-ordination of agricultural policies.

Best regards,

[EC staff member]

European Commission

DG AGRI B.2. - Enlargement

[Address details omitted]

eu standards on agriculture

Documents