Diversification of rural economy by strengthening rural tourism in the municipality of Pale in Bosnia and Herzegovina

Sustainable tourism in rural areas such as agritourism, eco, adventure, hunting and pescatourism is an important driver of socio-economic growth that can reduce inequalities, increase resilience of rural communities and boost rural incomes. The Food and Agriculture Organization of the United Nations (FAO) in cooperation with local communities around the world works on strengthening rural livelihoods through income diversification (both on-farm and off-farm) of farmers and creation of employment opportunities, where tourism plays a pivotal role in supporting rural economies.

‘Rural tourism’ is the tourism activity performed in a rural environment and is oriented towards the use of local tourism resources. Local communities play the fundamental role in performing the role of the custodians of the natural and cultural heritage and environmental resources in rural areas. The concept of ‘rural tourism’ entails stays in a rural household, consumption of traditional food and drinks and full immersion into authentic activities of a rural family. Rural tourism can offer complementary value-added to the on-farm agricultural production activities through adding value to agricultural products, creating new markets and shortening value chains. Diversification of the rural economy towards the development of non-agricultural activities, such as the production of authentic arts and crafts, or the collection and direct marketing of raw and processed forest fruits, has the potential to accelerate the rural development. It can be also assumed that rural tourists often endorse the responsible lifestyle values, hence leaving a significantly better socio-economic footprint than mass tourists.

Almost all destinations in BiH have a combination of key tourism products that are highly or less related to rural tourism: accommodation and catering on agricultural, wine, culinary and gastronomic routes, eco and ethno-farms and villages, mountain tourism and water sports tourism, cultural thematic routes, cycling, hiking.

As a part of the ongoing project entitled “Strengthening of the private and public sector capacities in priority value chains” FAO is currently developing the pilot rural tourism plan for the municipality of Pale in Bosnia and Herzegovina (BiH). FAO applies the value chain approach to structuring this technical assistance for the development of the rural economy of the municipality of Pale. According to the conducted analysis, the municipality-specific rural tourism value chain consists of the following elements: (1) accommodation (rural households and weekend houses, (2) food (rural households, farms, restaurants, etc.), (3) activities (rural families, CSOs, cultural centres, religious institutions, etc.), (4) information and services to tourists, and (5) promotion, booking and sales (social networks, booking platforms, guest recommendations). Such value chain-based approach should help the local rural economy to diversify and fully utilise available resources, while providing options for adding value to smallholder farming. In the municipality of Pale traditional farming has been scaling down which leads to the possible degradation of rural economy, as much as to the negative environmental impact on landscapes which are largely shaped through traditional farming practices. Local markets in rural tourism provided through short supply chains seem to provide the ‘win-win’ solution for rural society welfare: enhancing the vitality of smallholder farming sector and overall attractiveness of the destination itself for further diversification and development of the rural economy.

Home to the world-famous winter holiday destinations of Jahorina and Ravna Planina, mountainous municipality of Pale also has several famous caves: Orlovača, a cave at the spring of the Mokranjska Miljacka, Popova Cave, Novak’s Cave and others on its territory. 65% of the territory of the municipality is covered with mostly coniferous forests. The municipality of Pale is already highly exposed to all the advantages and disadvantages of the mass tourism, while the segment of rural tourism is still underdeveloped. Because of the municipality’s factor endowment of natural and cultural attractions, experienced-in-tourism human resources, rural tourism is considered to be a promising option for the development of those parts of the municipal territory which are not the grounds for the winter (ski) tourism at the moment. In Pale there is already a successful track record of connecting smallholder agriculture with the ski tourism. For example, the local farm "Alpino" already supplies its cheese to the large hotels of the ski resort Jahorina. Moreover, the ethno-hut "Lane" in Vrhprača and the rural household "Pavlović" in Sumbulovac are among a few rural households in Pale, which offer niche package of accommodation, catering and activities to rural tourists.

“According to the statistical estimates, the inflow of tourists to the municipality of Pale has decreased by 25% because of the unprecedented COVID 19 pandemic – such reduction in numbers is relatively smaller than the respective figures for some other tourist destinations in BiH and globally, where the number of incoming tourists has decreased by 85% in some locations. We are expecting for the recovery of the national and regional tourism sectors to start in 2022. Thanks to the FAO assistance, the rural tourism plan for the municipality of Pale has been developed in consultation with the key stakeholders. The formulated recommendations will be highly instrumental for the development of the local tourism industry during the post-COVID recovery”.                                                                                           Dragan Jakić, Director of the Tourism Organization of the Municipality of Pale

FAO International Expert on Rural Tourism - Professor Suzana Đorđević-Milošević from the Singidunum University in Serbia has identified possible drivers, which can strengthen the rural tourism value chain in the municipality of Pale. The suggested list of rural tourism attractors for Pale municipality has been validated by the value chain stakeholders (including representatives of the local rural communities, service providers, academia and tourist organizations, natural and cultural heritage conservation institutions and civil sector, as well as organizations managing forests, hunting and fishery resources) during the workshop held on 21 and 22 June 2021 in Jahorina.

The workshop participants have been presented with the integrated approach to development of rural tourism in municipality of Pale which places a special emphasis on developing the agrotourism. The municipal rural tourism value chain and local attractors in the municipality of Pale include rural accommodation and catering in combination with the adjacent activities in rural environment, namely adventure/mountain tourism (caving, hiking, mountain biking, horseback riding, nature and special interest-tourism (hunting, fishing, ecotourism, and excursions), cultural tourism (rural ways of life, spirituality, events), hedonism/ gastronomy and wellness and history/ reenactment.

The rural tourism plan is based on the multisectoral and area-based development approach which includes such critical actions, as strengthening the small family farming, empowerment of local leaders and public-private partnerships. One of the key targets of this plan entails the development of rural tourism short supply chains from local food production in agriculture, forestry, fishing and hunting. Building a well-functioning interaction between urban and rural areas is identified as a possible measure for mitigating the risks related to rural depopulation – this would potentially ensure full engagement of local human and spatial resources, as well as empowerment of the high-quality civil sector, youth, women and other marginalized groups.

Taking into account the factor endowment of the municipality of Pale, the rural tourism plan is being prepared by FAO experts in fully participatory and evidence-based manner, focusing on the advancement and diversification of the locally provided services and products. Considerations for better environmental awareness and environmental rehabilitation are also taken into account for the territorial development through the rural tourism value chain lens.

FAO is committed to providing an all-encompassing technical assistance to the municipality of Pale through different avenues. On 1 July 2021 FAO experts delivered the final presentation of the Local Agriculture and Rural Development Plan for the municipality of Pale which included the foreseen actions.