The project will be implemented in a selected group of cantons and municipalities in the Federation of Bosnia and Herzegovina and the Republika Srpska. The areas are considered the poorest in the country in terms of income and living standards. The project will support poor rural households engaged in dairy production, fruit growing and other small-scale enterprises. Its main objective is to increase the incomes of farmers and people who are landless by stimulating the growth of rural enterprises and helping existing businesses improve the quality of their products and obtain higher prices at the market. Investment in the rural economy will in turn improve employment opportunities in the area.

To help farmers start and expand a wide range of rural enterprises, the project will improve access to credit for small businesses, and it will provide technical, business and marketing advisory services. Since small-scale farmers are not well positioned individually to access markets, the project will encourage the development of producer groups and associations to increase bargaining power in the marketplace. The project will also undertake to:

• strengthen links between producers and the processing industry to reinforce the supply chain
• improve market linkages
• support the establishment of an institutional and policy framework conducive to rural enterprise development

Project costs will be shared between the Federation of Bosnia and Herzegovina (59.4%) and the Republika Srpska (40.6%).