Although at different stages of development, the countries of the Western Balkans—Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Montenegro, and Serbia—face similar challenges in transforming and modernizing their agri-food sectors to become competitive in regional and EU markets. Their rural sectors have lagged behind the rest of the economy in growth and poverty reduction, their agri-food sector is undercapitalized and highly fragmented, and their agro-processing capacities are limited. Agricultural trade defi cits are widening, climate change is posing increasing risks to farm incomes, and low-cost imports and changing consumer preferences are further eroding competitiveness. Added to this scenario are the challenges and opportunities of adopting the EU acquis communautaire, which relates mostly to agriculture: preparing the agri-food sector, including public institutions, to meet EU standards such as those in food safety, and exploiting comparative advantages in agriculture, particularly in the light of the unfolding food and financial crises. This report comes at a critical time for the region. Government policy and assistance in agriculture have traditionally been accorded little importance, as the weak public institutions and human resource capacity in agriculture show. While the Western Balkan countries are seeing healthy growth overall, agriculture and rural areas are falling behind, trade defi cits are expanding, climate change is putting pressure on agricultural resources, and many young rural workers are being pushed to urban areas. The need to meet EU standards in agriculture while addressing the food and fi nancial crises are powerful external forces for improving agricultural policy. Agriculture and rural development as sources of growth, employment, and food security now need to be taken seriously.