ZAGREB, 27 March (Hina) – Croatia’s reliance on food imports, amid stagnating domestic agricultural production, exposes it to rising food prices and inflation risks, the Croatian Employers’ Association (HUP) warned on Friday.

HUP said domestic output has stagnated in recent years while consumption increasingly depends on imports, making external shocks quickly spill over into the domestic market. Even minor disruptions in logistics or trade, such as border delays or transport strikes, can affect supply, it added.

Structural issues include fragmented farmland “with an average holding of 7.5 hectares compared with the EU average of 17.4“ low irrigation levels (1% versus 6.3% in the EU), limited use of modern technology and insufficient investment. Around 20% of producers account for 80% of output, while many receive support but produce little.

Food imports have surged 120% since 2019, with the trade deficit in food and beverages exceeding 2% of GDP, and over 3% without livestock. Meat self-sufficiency stands at 65% (58% for pork), while the fruit and vegetable trade deficit is close to €500 million.

HUP warned that rising input costs, including energy, fertilisers and feed, along with global disruptions, could trigger a new food price shock and push Croatiaв’s inflation rate to around 5% in 2026, above earlier forecasts. Food and non-alcoholic beverages account for 21.8% of the consumer basket, meaning a one percentage point rise in food prices increases overall inflation by about 0.3 points.

To reduce import dependence, HUP called for reforms in agricultural land management, faster administrative procedures, targeted fiscal and social measures instead of price controls, and lower VAT on food. It also urged a clear strategic decision on key products Croatia should produce domestically to ensure food security and economic resilience.