Extremely Low Prices for Bosnian Raspberries

Bosnia and Herzegovina (hereafter: Bosnia) is one of largest sites for raspberry production in Europe. However, farmers there are facing a crisis. Production costs for raspberries are rising while market prices for the crop are decreasing. Last year, Bosnian growers received an average of 0.80 EUR/kg for their raspberries, an amount that does not even cover production costs.

The rise in production costs has occurred rapidly over the last few years. According to Dragan Mačinković from Malina S.P., several factors have contributed to the trend:

Firstly, there is a shortage of labor. Many Bosnian seasonal workers have migrated to western European countries in pursuit of higher wages, causing labor costs to rise at home.

Secondly, outdoor agriculture has been heavily affected by erratic weather conditions and climate change. Severe weather has lowered outputs and increased production costs. Many farmers are unable to invest in greenhouses, which are often beneficial for production, as raspberry plants are highly susceptible to frost damage. Due to a cold snap late this past spring, the total harvest in the Balkan area, including in Serbia and Croatia, decreased to 16K tons, following a trend of lower outputs that has continued steadily for the past three years.  

Thirdly, the cost of pesticides and energy has risen. As most raspberry production takes place outdoors in Bosnia, pesticides are widely used. Finally, the development of more efficient production methods has occurred very slowly, following low investment in R&D in Bosnia’s agricultural sector. For both commercial banks and private investors, agriculture is seen as a high-risk investment. Loans are not readily issued in the sector, and investment in the area is limited. Government subsidies for agricultural exist, but budgets for such expenditures are generally low.

Malina S.P. stated that farmers expected the price for their raspberries to rise by 100% between 2018 and 2019, to 1.60 EUR/kg, as demand for raspberries is growing year-to-year. However, this did not materialize. Currently, the price of raspberries hovers around 1.30 EUR/kg, which just barely covers production costs.

Mačinković from Malina S.P. explains the basis for this price in detail. “The reasons for the low price are not really related to real supply-demand parameters. Firstly, farmers have a low ability to adapt to price pressure generated from buyers, which is enabled by conditions on the domestic market—low demand for fresh produce and thus most of the production is meant for export. Furthermore, technological requirements, in the form of cooling the picked fruit quickly, are hard to meet. Thus, farmers are in a dire situation in which they have no alternative, except to accept the offered low prices.”

“Secondly, there has been some information that indicates the low prices are a result of artificial manipulation by local buyers’ lobbies, to keep control over farmers and keep a large piece of the profit for themselves, but this is unverified information. Nevertheless, there is a small range for price movements [that allow] both for farmers and traders/buyers [to be] be satisfied and [that allow] production [to] be secured.”

Companies like Malina S.P. are staying afloat by using their own private savings. Raspberries from Bosnia are of high quality and as demand is ever-increasing, there may still be a way forward. As Mačinković states, “The local [producers] (farmers) show a high level of flexibility and adaptability despite unfavorable conditions and pressure from big buyers to keep the prices low. The farming community is very resilient but it shows signs of fatigue.” The low prices make it difficult for Bosnian farmers to keep adapting to market dynamics. However, the low prices have contributed to increasing exports. The low prices make the raspberries highly sought by importers. The total exported quantity has been increasing steadily increasing since 2014, a period in which it increased in quantity by 492.7%. As the demand for fresh and frozen raspberries continues to increase globally, the resolution of the raspberry pricing conundrum in Bosnia would allow producers there to benefit from this expanding market.