He said the main reasons for a deficit rise in the trade of agricultural and food products were a strong tourism recovery, climate change and its consequences, notably drought, and a chronic deficit in the production of meat, milk, fruits and vegetables.
The insufficient physical volume in agricultural production was especially problematic in times of crisis because we could not mitigate the price hikes and imported inflation, Kovačević said.
That affected poorer households in particular, which set aside more than 30% of their budget for food, so they bought more imported, lower-quality and less nutritive products, he added.
We must carry out structural changes in agriculture, increase productivity and the physical volume of agricultural production, primarily by targetting the subsidy policy, and boost processing and the food industry, Kovačević said.
The agricultural industry employs the largest number of people in processing and it has the biggest turnover and share in gross added value as well as a multiplier effect on other activities, which makes it a strategic industry, he said.
In the last ten years, food production has gone up by 24% and beverage production by 6%, Kovačević said, adding that the best domestic brands are equal competitors in the EU.
The food industry is exposed to many challenges, including competition, the energy crisis and increasingly rigorous food safety standards, he said.
On the other hand, he added, there is the ambitious Green Deal and the Farm to Fork Strategy, which are changing many food safety rules, including marketing standards, market organisation, plant health, animal wellness and health, and environmental protection, notably regarding packaging.
Those changes require adjustments and investments, and we must invest more in research, development, innovation and digitisation, Kovačević said.
Agriculture Ministry state secretary Mladen Pavić said a recent survey showed that the level of information of Croatian consumers was above average in comparison with other EU countries.