The purpose of this diagnostic report isto establish an analytical basis for defining strategicpriorities in agriculture and rural development in Croatia,as the country prepares its National Agriculture and RuralDevelopment Strategy and formulates its Strategic Plan forthe European Union’s (EU) Common Agricultural Policy (CAP)for the next programming period (2021-2027). The diagnosticreport assesses country-specific strengths, weaknesses,opportunities and threats (challenges) in the context of themacro-trends and issues affecting Croatian agriculturetoday, the ongoing EU CAP reform process, and broadernational development directions. This diagnostic report isbased on a series of background documents prepared by theWorld Bank as key inputs. Both advanced economic analysisand qualitative assessments were carried out as part of anevidence-based process for sector strategy development andpolicy guidance. Specifically, the analysis focuses on arange of strategic themes related to agriculture and ruraldevelopment in Croatia, including (i) Croatian agriculturalpolicy and the current CAP; (ii) the efficiency,effectiveness, and equity of current public spending onagriculture and rural development; (iii) the subsidyintensity of income for different farm types, (iv) backwardand forward economic linkages of the agriculture and foodprocessing sectors; (v) economy-wide impacts of agricultureand rural development support measures; (vi) agriculturefinance and risk management solutions; (vii) theagricultural knowledge and innovation system (AKIS); (viii)food safety, sanitary and phytosanitary (FS&SPS)policies; (ix) trade and strategic market segmentation; (x)agroecological and climate aspects; and (xi) the developmentof sustainable and circular bio-economies in Croatia. Inaddition, this report brings forward some key elements of anin-depth sectoral review and policy analysis carried out asan input to the ongoing formulation of Croatia’s broaderNational Development Strategy (NDS).