Expectations, strategies and prospects of farmers in view of Croatia's pending EU accession.

Abstract In Croatia, farmers prepare themselves for the impending EU accession and consider their future economic opportunities in and outside agriculture. This study on farmer's strategies reviews empirical evidence of a unique household survey conducted in early 2007 in Croatia. The main objective of this paper is to present new insights on the transition dynamics in one of the EU candidate states with good prospects to accede within the coming years. Based on empirical data we present a multinomial regression model on drivers of farm household's livelihood strategies. Farm exit, farm expansion and the combination of farm and non-farm incomes are the main strategies which are tested against socio-economic variables with a potential influence on them.

Keywords Croatia * EU Accession * Agriculture

JEL Q12 * Q18

Introduction

Structural change in the farming sector is forceful in Europe's transition economies. For policy makers it is a challenging task to promote necessary adaptations and, at the same time, to avoid excessive out-migration, social exclusion, and poverty in rural areas (OECD 2006). The changes of farm structures, rural livelihoods, and labor markets often cause fear and economic stress for farmers during the adaptation phase.

In Croatia, farmers are in a process to prepare for the impending EU accession. While the negotiations on the agricultural chapter are ongoing, farmers are considering their future economic opportunities in and outside agriculture.

This study on farmer's expectations, prospects, and strategies in view of Croatia's EU accession, review recent empirical evidence; the household survey on which we base our analysis was conducted in spring of 2007. The case study includes 138 farm households from two Croatian regions: The peri-urban Zagreb county and the typically rural region of Bjelovar and Bilogora. It looks at the hitherto widely disregarded socio-economic situation of Croatia's farm sector, including employment opportunities on and off farm. Our analysis focuses on driving forces of farm household strategies. The main objective of this paper is to present new insights on the transition dynamics in one of the EU candidate states with good prospects to accede within the next years. Questions with regard to rural development policies and farmer's expectations and livelihood strategies were thus explicitly included in the survey. Based on this data we present descriptive statistics and a multinomial regression model on drivers of farm household strategies in Croatia.