The natural features of the area have considerably influenced the development of the economy as a whole. The geographical location of Umag, in particular, has ensured an intensive and dynamic growth of the tourist industry after World War II, which has been expanding rapidly ever since. The closeness of big west European markets and the rise in standard of East European countries have both accounted for the expansion of this economic branch which is tightly linked to other economic resources in the region the most significant being agriculture. The best fertile soil and the vast arable land in the area have fostered the production of traditional Mediterranean crops present in the region for thousands of years, with particular emphasis on olive growing and wine growing.
The latter accounts for a successful wine making industry and the emerging in recent years of a number of highly renowned local wine makers that can be traced in the wine chart of Istria. Linked with agriculture is the rapidly expanding tourist branch agro-tourism which has not only enriched the tourist offer but is also committed to preserving the old-world values of the region. Apart from that, mention must be made of the "Podravka" food factory in Umag where huge quantities of tomatoes are processed. In fact, the food industry started in Umag in the early 20th century with the opening of the "Arrigoni" plant for packing fish and tomatoes and the building of a flour mill, the predecessor of today's bakery and biscuit factory.
Today new factories have grown up in two industrial zones (Ungarija and Kravlji rt), which are provided with the necessary infrastructure continuously rebuilt and enlarged. The economic growth of Umag is based on the stimulation and support of small and medium- sized firms and the establishment of business zones. For this purpose, the town authorities have set apart 355,200.00 kuna for the program aimed at stimulating the growth of agriculture and businesses for
