The paper presents results of experimental and numerical investigation addressing combustion of baled agricultural biomass in a 50 kW experimental furnace equipped with cigar burners. Experiments performed included measurements of all parameters deemed important for mass and energy balance, as well as parameters defining quality of the combustion process. Experimental results were compared with results of numerical simulations performed with previously developed CFD model. The model takes into account complex thermo mechanical combustion processes occurring in a porous layer of biomass bales and the surrounding fluid. The combustion process and the corresponding model were deemed stationary. Comparison of experimental and numerical results obtained through research presented in this paper showed satisfactory correspondence, leading to the conclusion that the model developed could be used for analysis of different effects associated with variations in process parameters and/or structural modifications in industrial biomass facilities. Mathematical model developed was also utilized to examine the impact of flue gas recirculation on maximum temperatures in the combustion chamber. Gas recirculation was found to have positive effect on the reduction of maximum temperature in the combustion chamber, as well as on the reduction of maximum temperature zone in the chamber. The conclusions made provided valuable inputs towards prevention of biomass ash sintering, which occurs at higher temperatures and negatively affects biomass combustion process. [Projekat Ministarstva nauke Republike Srbije, br. III 42011: Development and improvement of technologies for energy efficient and environmentally sound use of several types of agricultural and forest biomass and possible utilization for cogeneration i br. TR33042: Fluidized bed combustion facility improvements as a step forward in developing energy efficient and environmentally sound waste combustion technology in fluidized bed combustors]