Off-Farm and Non-Farm Activities Development in Rural South-Eastern Bosnia

Abstract

Agriculture represents about 9% of the Bosnian gross domestic product and employs almost a fifth of the labor force. Agriculture is no more sufficient to ensure the development of Bosnian rural areas; where lives around 61% of the population. Diversification issue can be considered in terms of resources (land, labor or capital), location (on-farm or off-farm) and output (farm or non-farm). The paper aims at analyzing income-generating activities diversification in rural south-eastern Bosnia with a focus on motivations and barriers. It discusses the main factors affecting off-farm and non-farm activities development, including policies, and provides some recommendations. The paper is based on an extended secondary data analysis and semi-structured interviews, conducted in March-April 2012, with 104 households’ heads from Foca, Rogatica, Han Pijesak, Vlasenica, Sekovici, Milici and Bratunac municipalities. Almost a half of the surveyed households characterized themselves as mixed (46.1%), 41.3% as farm, and 12.6% as non-farm. Income is generated mainly from agricultural products sale (76%), off-farm activities (52.9%) and pensions (44.2%). Motivations for engaging in off- and non-farm activities are not always purely financial and also reflect societal changes. In the last five years, 21.6% of the households started new income-generating activities - mainly related to services provision and on-farm processing - but gave up while 22.6% of them still deal with new activities. The main barrier is the lack of financial resources (39.7%) and time (12.1%). Weak business skills are also a limiting factor. Development of new activities raises farmers’ income and contributes to a healthy, diversified and viable rural economy. Public institutions need to make sure that policies in place, whether sectoral or broader, do not put obstacles in the way of diversification and improve rural planning and services delivery. Creating an enabling environment for diversification requires the efforts of many public and civil society actors.