The agreement was signed by Croatian Agriculture Minister Petar Cobankovic and Swedish Ambassador Sture Theolin.
The project will be implemented by the Croatian Agriculture Ministry in cooperation with the Swedish International Development Agency and the UN Food and Agriculture Organisation.
The project is aimed at expanding farmland plots on five locations as a precondition to improve agricultural production and its competitiveness in the single EU market.
The project's budget is 23.78 million kuna, with 13.37 million being covered with a Swedish donation.
The project is expected to be completed by September 2009.
Cobankovic said that the average size of a Croatian family farm was 2.4 hectares, with land partitioned into several plots. The average size of a family farm in Sweden is 40 hectares.