Subsidies in Croatian agriculture and adjustment to the EU

After the Croatian independence and re-adoption of the free trade principles, in political debates agriculture got the role of one of the basic pillar in economic development. There is intention to protect domestic agriculture against much more developed western European agriculture and to support its competitiveness, respecting at the same time the requirements of the international trade agreements asking for decreasing domestic protection. The reform of agricultural price policy started in 1988, due to the trade policy reform within the requirements imposed by the membership in the World Trade Organization. Recent changes from 2003 tend to simplify the system of agricultural support and to equalize the level of incentives. Together with existing production subsidies, new models of income support, capital investments and rural development are introduced. The reform predicts harmonization of domestic agricultural policy measures with those conducted or should be conducted in the EU. It means the shift from the old way of supporting European agricultural markets, toward incentives for European farmer, in the way that in total support prevails income, and not production support.