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This paper utilizes available data sets and a single translog profit function to examine the performance of dairy farms operating in mountain and lowland areas, respectively. A translog profit model estimates reveal an apparent trend going toward explaining the better economic performance of highland dairy farms stemming from their capability to adjust accurately to underlying changes in the milk market. The empirical analysis finds mostly inelastic price elasticity trends. Translog profit model alleviates the path of understanding in explaining the better economic situation of these high-land dairy farms stemming from their capability to adjust adequately and promptly to ongoing changes in the milk market. Finally, the results of the study could at the same time deliver a new dimension in further debate about CAP post-2020 developments.

Milk in terms of production value has the second biggest share in Croatian agricultural sector in 2013 (CBS, 2014). It could be speculated that after the abolition of quotas in the European Union, the declining trend in domestic production will continue and that exposure to free European market will significantly affect the competitiveness of domestic production. The aim of this paper is to analyse the prospects of Croatian dairy industry (sector) under certain conditions of the EU Common Agricultural Policy (CAP) and to present projections simulated with the help of partial equilibrium model AGMEMOD. The main model inputs are policy and macroeconomic variables, supply-use balances of agro-food products and producer prices. The Baseline projections has shown that in 2025 in line with the CAP implementation there might be a decrease of dairy cows number by 33 %, the raw milk price by 14 % and the collected cow's milk amount by 13 % compared to the five-year average of 2008-2012. The positive effect was noted in productivity, according to the simulation, with an increase by 25 %, which consequently may lead to increased deliveries to dairies for about 17 %. Therefore preliminary results show that accounting for milk processing the dairy sector in Croatia might obtain a favourable situation by 2025. Taking into account the EU market situation, there is an opportunity to increase milk processing given the current level of prices in the EU market and global markets, and taking into account the abolition of milk quotas. Also, the results suggest, according to the experience of other states, that the utilization of funds of 1 st and 2 nd pillar of the CAP (utilization measures across projects) in order to improve the production structure and efficiency will play an important role.

The aim of the paper is: 1) to determine the key changes in the evolution process of the EU Common Fisheries Policy (CFP) and the Croatia’s fisheries policy and 2) to describe the structure and dynamics of macroeconomic and budget performance related to Croatian fisheries in the period 2007-2016. Two methods were used: the historical method and the descriptive analysis of macroeconomic performance and budget structure. The CFP was officially introduced in 1983, bringing the management of fisheries in all EU member states under one system. Its aims were: to resolve sea conflicts between member states, to provide stability to the fisheries sector, to prevent a total collapse of fish stocks and to provide higher quality of life to the fishermen. However, the CFP has constantly been criticized for poor enforcement of environmental measures and scientific recommendations, and for the lack of a common language between the EU institutions and local stakeholders. Both the European and Croatian fisheries sector faced many problems, especially during the transition period in the 1990s. Some of them included a serious decrease of catches, outdated technology and fisheries fleet, depletion of demersal species, lack of developmental trends in mariculture, absence of measures of rational exploitation and protection of economically significant species. The negotiation period was an opportunity for the fisheries sector in Croatia to adapt its goals, measures and stakeholders in order to achieve a more sustainable and internationally competitive fisheries sector in the future. The membership facilitates trade in the EU area, along with providing significant funding and technical assistance. The budget support structure and the existing policy framework point out an increase in the implementation of structural measures which should assist in an overall improvement of social, economic and environmental aspects of fisheries.