The technical potential of straw production is limited by competing uses (e. g. animal feed and bedding), the need to leave material on the ground for nutrient replenishment etc, and is estimated to be 6,63 PJ. Moreover, this resource is highly dispersed. Modern, straw-fire power stations require a considerable scale to be financially viable. Hence, it is assumed that one third of this resource could be exploited via local small scale straw fired baled fired boilers or straw pellet boilers supplying residential properties with heat. This would account for 491 GWh of heat annually [5].

Based upon livestock data (pigs, chickens, cattle), the amount of slurries and manures produced has been estimated. This could be exploited via anaerobic digestion (AD). The Theoretical Potential is 6,50 PJ biogas production. However, it is assumed that much of this resource could not be aggregated between farming units to provide sufficient feedstock that a typical AD unit may require. It is assumed that 20% of theoretical potential could be realized, or 1,30PJ. The installed capacity would be 18 MWe and annual output would be 126 GWh of electricity. Given both the remote, rural location of AD units, it is assumed that the amount of heat used would be negligible [5].

3.2.1. Agricultural sector overview

Out of the total Bosnia and Herzegovina territory, amounting to 5,112,879 ha, FBiH takes up 2,607,579 ha, while RS takes up 2,505,300 ha. Farmland covers approximately 2,600,000 ha (around 52%) of that territory, and the remaining 2,400,000 ha are woodlands (around 48%).

Fragmentation of farmland in BiH constitutes an additional problem, 54% of property is under 2 ha in size, 13.5% is between 2 and 3 ha, 16% of property is between 3 and 5 ha, 10% of property is between 5 and 8 ha, about 3% of property is between 8 and 10 ha in size, and only 2.9% or property is over 10 ha in size [7].

The crops structure of cultivated plants and their share in the total sowing structure constitute an important segment of the BiH plant production. According to statistics, in the RS, harvest areas amounted to 443,300 ha in 1990, to 285,731 ha in 1996, and to 356,548 ha in 1997. In the period between 2000 and 2006, about 67.17% of total area in crops was sowed with cereals, and 26.66% with fodder crops. The situation in Federation of BiH is not much different as the total sowing area is considerably smaller and it amounted to about 206,000 ha in 2001, and 197,000 ha in 2006. [1,2].

It is clear that the sowing structure is not favourable as it is not satisfactory in terms of the size of areas in crops and in terms of the yield per unit area, which are very small and low, respectively [1,2].

The crop structure is very unfavorable. The production of cereals in areas of 1-3 ha cannot be economically justified and a commercial livestock production cannot be built on it.

Another issue that brings us to the analysis of the technological level of agricultural production in BiH are average yields of the most common crops (over 80% of arable land in BiH). The comparison of yields with the same yields in the neighboring countries gives a clear picture of average yields of main agricultural crops, and it clearly shows that the agricultural production in BiH is completely behind—between 1.1 and 4.4 times less productive.

Thus, in addition to the unfavorable structure of agricultural crops, average yields in BiH are very low, which fully qualifies this production as extensive, unproductive and therefore barely sustainable. However, the natural conditions for agricultural production are favourable, and for some crops they are even optimal in comparison with some of the neighboring countries.

The analysis of production of main types of livestock in BiH clearly reflects the habits of autarchic village farms orientated towards satisfying their own needs and keeping their own livestock numbers at the biological minimum on one hand and the tardiness of the state and its institutions, i. e. agricultural experts, to launch development process on the other.

Based on the data from the RS Statistical Institute, in 1999, over 17% of total land in the RS — BiH were pastures. If we add 10% of natural meadows to this, we arrive at the fact that almost one third of the total land can be used for livestock production.

There are great possibilities for a quality livestock production on the territory of BiH, but the number of heads of cattle must be increased, the structure must be changed and the stock composition must be improved.