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Abstract
The sugar sector is small in agricultural sector, occupying 1.5% of the cultivable land area
and accounting for approximately 1.2% of agricultural GDP (excluding processing which probably
accounts for a further 1%). It does, however, account for 6.5% of all budgetary payments to
agriculture, showing its disproportionate dependence on taxpayers' money. Sugar production in
Croatia is characterized by high production costs, struggling with a strong competition at the world
market. Despite the results of the competitiveness study, in which the DRC calculation showed that
sugar production is not internationally competitive, one of the basic characteristics of our foreign
trade in sugar till 2003 was high exports. Sharp shift in the EU sugar policy will result in sugar price
decrease due to the WTO rules, which will affect the Croatian sugar industry. Therefore, Croatia will
have to apply measures for decreasing production costs and increasing production, with the final
goal of price decrease for about 20%. For these reasons, it will be necessary to strive for the quota at
the level of average production of three Croatian sugar - plants.