* EU cancels key agriculture projects, long-term funding lost
* Warns Bosnia must coordinate funds at national level
* EU pre-accession funds at risk without political deal
SARAJEVO, Sept 10 (Reuters) - Bosnia lost an opportunity to secure a long-term funding for agriculture on Tuesday after the European Commission cancelled two projects it said were key for its future support of the sector in the Balkan country.
The ethnically divided country risks however to lose more EU funds unless its rival Serb, Croat and Muslim politicians agree by October 1 deadline on how to manage the money from the EU pre-accession funds (IPA).
Without a breakthrough, Bosnia will see hundreds of millions of euros in IPA funds over the next cycle of 2014-2020 redirected to neighbouring countries also hoping to join the EU. [ID: nL6N0GH1QB]
"The cancellation of these projects underlines the urgency to set up a functional coordination mechanism to ensure that the country and its population are able to receive EU pre-accession funds in the future," the EU delegation in Bosnia said in a statement.
Bosnia is marred by the crisis of governance, and its leaders who have conflicting visions of their joint state have been unable to agree on the creation of an efficient mechanism to manage IPA funds.
The EU Commission also warned that other projects, designed to boost tourism and help small enterprises, may also be cancelled unless there was a political agreement on their distribution by October.
The EU, which allocated around 660 million euros to Bosnia from 2007-2013, wants to see a more streamlined mechanism for distributing the funds between the country's two autonomous regions - the Serb Republic and the Federation of mainly Bosnian Muslims and Croats.
But the Serb Republic, which is fiercely protective of its autonomy, rejects to agree on a single national strategy and says each region should handle the funds independently.
Bosnia's further progress is blocked by the failure of politicians to agree on how to amend the constitution to address restrictions on ethnic minorities running for office.
While neighbouring Croatia joined the EU on July 1, Bosnia has yet to even qualify to apply for membership. It trails fellow ex-Yugoslav republics Serbia, Montenegro and Macedonia. (Reporting by Daria Sito-Sucic; Editing by)