The EU was forced to suspend funding of EUR 5mn for two agriculture and rural development projects in Bosnia because of the failure of local authorities to complete the needed preparations, the EU delegation to Bosnia said in a statement on June 5.

“This persistent lack of progress in these areas and in aligning legislation in this area with the EU 'acquis' not only means the potential loss of 5 million EUR of EU funds. Inaction could later result in losses of tens of millions of EUR intended for the agriculture sector in 2014 – 20,” the statement said.

It urged for a clear political agreement on the structures needed for employing the EU funds for rural development (known as 'IPARD') and developing a nation-wide plan for rural development.

The two suspended projects are designed to provide grants to farmers in the country and help authorities build up capacities to implement IPARD and develop the rural development plan.

Bosnia already lost in the past EUR 3mn of EU funds because of its failure to consolidate agricultural registries on a country wide basis. It is furthermore risking to lose another EUR 1mn under IPA 2012 budget, which are planned to support the agriculture census in the country, as it has not yet adopted the relevant legislation

The head of the EU delegation in Bosnia, Peter Sorensen, said in the statement that the lack of progress in the agriculture sector is only one example of the risk Bosnia faces – to fall behind of its neighbours in EU integration.

"It is imperative that the authorities of Bosnia and Herzegovina at all levels find practical and sustainable agreements so that citizens can benefit from EU funds. In this case, lack of preparation and co-ordination means that farmers also may not have the possibility to benefit from future EU funds."

Sorensen underlined that this latest failure stresses once more the urgent need for Bosnia to agree on an EU co-ordination mechanism that will enable it to speak with one voice.

He added that since the country showed no progress, the spending of EU funding - which is in fact the money collected from member states’ taxpayers, is no longer justified.

“Only if there is verifiable evidence on progress in addressing top priorities in this sector can the funds be mobilised again. This would require clear and formal political commitments and agreements, both as regards IPARD structures and as regards the development of a strategic plan for rural development."

A joint monitoring committee of the EU and Bosnia will debate on June 24 whether to terminate the projects. The statement pointed to the responsibility of the Bosnian authorities to resume the EU support especially in the view of the country’s economic and political challenges linked to the July EU entry of its bigger neighbour and main trading partner Croatia.