Agriculture

Responsibility for the management of agricultural policy in Montenegro lies with the Ministry of Agriculture and Rural Development. Biotechnical Faculty of the University of Montenegro is also involved in the implementation of the policy (Department of Livestock Breeding, Department of Animal Husbandry, Dairy Laboratory and Counseling service in crop production). Montenegro has 516 000 hectares of agricultural land, which makes up 38% of its total territory. The largest share of agricultural land resources are under permanent pasture (62 %, 325 436 hectares) and meadows (25%, 128 621 hectares). Agriculture is by far the most common activity of the rural population; it is a major or partial source of income for 48 870 households. The sector represents 8.3% of Gross Domestic Product (GDP) and employment in agriculture was 1.2% of total employment in 2012. Montenegrin agriculture is characterized by traditional manufacturing and small subsistence farming with an average farm size of 5 hectares. Montenegro imports food.

The coastal area is dominated by fruit and olive trees. Cereal production is very limited. Production in the central part of the country includes vegetables, potatoes, tobacco and grapes and wine production. Wine is the biggest export product in the food sector. Households in the north, which is mainly mountain region, predominantly take care of livestock, mainly cattle, sheep and goats. Agricultural policy in Montenegro is based on the Law on Agriculture and Rural Development from 2009. This law lays down the objectives of agricultural policy and provides a general framework for development and support of agriculture and rural areas.

The agricultural budget in 2012. was 21 million euro. It remains focused on the direct support measures linked to production. Also, the agricultural sector receives support from the World Bank, within the framework of the project “Institutional development and strengthening of agriculture in Montenegro” (MIDAS) . About 12 million euro has been allocated for this sector for the period 2009-2014. Scheme of direct support to agriculture is based on the Law on Agriculture and Rural Development in 2009. and agricultural budget made on annual basis. Direct support payments are awarded for animal husbandry and farming, as well as the development of the dairy.

Wine production is an important sector in Montenegro, with a share of 0.87 % of GDP. Montenegro is a net exporter of wine. Wine is also the largest export product of the food industry. There exists a double structure: on one hand, there is a company “Plantaže“ with a capacity of 140,000 hl of wine, the highest in the country; on the other hand, there is a number of small wineries with a capacity of up to 100 000 bottles a year, and a small percentage of producers who produce for their own purposes. According to the data from 2011, 2001 farms were raising vines on a total area of 2535 hectares. Grapes are also used for production of used for the production of rakija. According to various studies (Ernst Grenzebach, 2008), around 210 400 litres of wine and 609 000 litres of rakija are produced annually in small, private, registered and unregistered wineries.