05/2017
#
20 S e r b i a Agriculture Bulletin Financial incentives to support young rural farmers Issues accessing IPARD funds Special loans available for agricultural development Food and agriculture exports reach 3.2bn USD in 2016
All materials are published “as is� and are the property of their respective owners.
Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
Government to subsidize loans for farmers .................................................................................... 2 State aid announced for cooperatives ............................................................................................ 2 Financial incentives to support young rural farmers....................................................................... 2
Foreign Aid ................................................................................................................. 3 4) 5)
Issues accessing IPARD funds .......................................................................................................... 3 EU-FAO flood relief program comes to an end ............................................................................... 3
Private Sector.............................................................................................................. 4 6) 7) 8) 9) 10) 11)
Special loans available for agricultural development...................................................................... 4 Novi Sad hosts organic farming conference .................................................................................... 4 Raspberry yield 50% worse than last year....................................................................................... 4 Food and agriculture exports reach 3.2bn USD in 2016.................................................................. 4 Organic farming on the increase in Serbia ...................................................................................... 5 Beekeepers should export honey to increase profits...................................................................... 5
Note: The Agriculture Bulletin presents a monthly roundup of headlines and news stories related to Serbia’s agricultural sector. This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company. Currently, BFC is implementing “Development of Financial System in Rural Areas in Serbia” programme for KfW. Read more »
BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC Agriculture Bulletin
State Initiatives 1)
Government to subsidize loans for farmers
May 23rd, 2017, http://www.agrosmart.net/subvencije/miliona-kamatu-jedan-odsto-zajam-junice.html
The Ministry of Agriculture has announced it will work in conjunction with commercial banks to offer subsidized loans to farmers across Serbia. The subsidies will apply to loans with a term of one to three years (with a one-year grace period, to be repaid in monthly, quarterly, six-monthly or annual installments) and three to five years (to be repaid in six-monthly installments). The government will subsidize part of the interest on these loans, which will comprise 3% for everyone except for women, the under 40s and those working in difficult rural conditions. For those persons, the interest rate will be fixed at 1%. No foreign currency clause is included in the loans. To qualify for the subsidy, the applicant must be holders of a commercial family farm, entrepreneurs or cooperatives with at least five members enrolled in the Register of Agricultural Holdings. The value of the loan must not exceed 18 million RSD.
2)
State aid announced for cooperatives
May 22nd, 2017, http://www.agronews.rs/za-nove-zadruge-50-000-starim-100-000-evra/
Milan Krkobabić has announced state aid for existing and newly-established cooperatives across Serbia. Krkobabić, who currently serves as the minister without portfolio responsible for regional development, said that new cooperatives will be eligible to receive grants of up to 50,000 EUR, while established cooperatives can expect to benefit from 100,000 EUR of aid. Though open to applications all over the country, the initiative is especially aimed at increasing production and creating opportunities for growth in the districts of Jablanica, Nisava, PÄ?inja, Pirot and Toplica. The funds must be used to purchase livestock, equipment for dairy farms or meat production farms, perennial plants for crop production or agricultural machinery. The deadline for submissions is October 1st 2017 and applications will continue to be approved until the entire fund of 12.5 million RSD has been exhausted.
3)
Financial incentives to support young rural farmers
May 6th, 2017, http://www.mpzzs.gov.rs/raspisan-konkurs-za-podrsku-mladim-poljoprivrednicima/
The Ministry of Agriculture and Environmental Protection has announced a series of programs aimed at supporting young farmers in rural parts of Serbia. Aimed at diversifying the income and improving the quality of life of the successful applicants, the series is comprised of four different programs promising financial aid for development and improvement in the following sectors: 1) Primary plant production and preparation of agricultural products 2) Primary animal production 3) Milk processing 4) Fruit and vegetable processing All incentives will consist of 75% of the total value of eligible investments minus value added tax (VAT) and the maximum amount of aid earmarked for the project is 1.2 million RSD per calendar year.
Page 2
BFC Agriculture Bulletin
Foreign Aid 4)
Issues accessing IPARD funds
May 25th, 2017, http://www.agronews.rs/zasto-region-nije-bolje-iskoristio-ipard-sredstva/
Farmers and local governments have not been able to fully benefit from IPARD funds for a multitude of reasons. For farmers, a lack of promotion of IPARD led many believing that the use of funds was complicated and unattainable for them. Of the farmers which did apply, many received refusals due to incomplete documentation, incorrectly listing eligible costs, a lack of a proper business plan, conflicts of interest and unrealistic plans. Even among approved applications, farmers still faced issues in accessing IPARD funds such as not submitting additional documentation, a lack of required investment funds for their part and high costs associated with consultations, certificates and permits. This led to any investment of less than EUR 100,000 not being cost-effective for farmers. There was also a conflict between different approaches used by banks and IPARD. A number of farmers received approval from IPARD but were rejected for investment funds from banks. Additionally, some did not have the requisite legal framework to participate. Local governments also faced problems in accessing IPARD funds. Many local governments faced application issues such as failure to comply with public procurement regulations, failure to submit documents in English, disregarding the format of documentation, incomplete documentation and unacceptable investments. As with farmers, local governments also had problems with the provision of the necessary resources to carry out investments, especially small municipalities which have already modest budgets.
5)
EU-FAO flood relief program comes to an end
May 10th, 2017, http://www.fao.org/europe/news/detail-news/en/c/885133/
At the end of last month, the flood relief program providing assistance to small-scale farms hit by the floods of 2014 came to its conclusion. The program was a joint venture between the European Union (EU) and the United Nation’s Food and Agriculture Organization (FAO) and in total, donated an estimated 172 million EUR to Serbia. The money is being used to build new houses, rehabilitate public buildings and infrastructure and generally help to revitalize the economy in areas most affected by the floods. The program was brought to a close with a final conference on April 25th 2017 in Nis, attended by around 80 delegates from the Ministry of Agriculture and Environmental Protection, the EU Delegation to Serbia, the Public Investment Management Office and other interested parties. It was an opportunity for attendees to exchange experiences and formulate best practices for increasing Serbian resilience in the face of future natural disasters. Over almost three years, the program has delivered an estimated 9.5 million EUR to small farmers, with support going to 36,000 rural households (or 140,000 people in 1,000 communities) in 41 different municipalities. The program distributed 2,915 tons of seeds, 7,848 tons of mineral fertilizer, 3,152 tons of animal feed, 2.4 million fruit seedlings, 952 greenhouses, 1,190 beehives, 1,456 farm animals and 542 pieces of farming machines and equipment. As well as working to alleviate the effects of the 2014 floods, the EU-FAO scheme also helped to educate over 1,000 farmers on how best to resist future natural disasters and the worst effects of climate change. The EU is now shifting its attention to preventing future floods and reconstructing damaged river basins.
Page 3
BFC Agriculture Bulletin
Private Sector 6)
Special loans available for agricultural development
May 30th, 2017, http://bif.rs/2017/05/specijalni-uslovi-u-komercijalnoj-banci-za-poljoprivrednike-kraja-julaponuda-povoljnihkredita-komercijalne-banke-namenjenih-poljoprivrednicima-kreirana-je-za-sajam-poljoprivrede-ali-trajace-kra/
A special commercial bank loan was created for this year’s Agricultural Fair and will last through the end of July. The loan, created as the result of an agreement signed between Komercijalna Banka and the Guarantee Fund of Vojvodina, will allow enterprises, entrepreneurs, agricultural cooperatives and registered farms in Vojvodina to obtain favorable long-term loans and increase long-term production. The loan, which offers a grace period of up to 12 months and has flexible repayment options, is available for the purchase of agricultural machinery, land, livestock or crops as well as for the refinancing of earlier loans.
7)
Novi Sad hosts organic farming conference
May 25th, 2017, http://www.stips.minpolj.gov.rs/sadrzajv/novi-sad-doma%C4%87-konferencije-o-organskoj-proizvodnji
The Novi Sad Faculty of Agriculture will play host to an international scientific conference this June, aimed at connecting researchers from around Serbia and allowing them to share information on agrobiodiversity and organic production. Entitled “Organic Farming for the Conservation of Agrobiodiversity”, the conference will run from the 1st to the 3rd June 2017 and will consist of a series of plenary lectures, presentations, workshops and local farm visits. It is being organized by the Faculty of Agriculture in conjunction with the Slovak Agricultural University, the M. M. Hryshko National Botanical Garden in Ukraine and the Center for Organic Production in Selenča.
8)
Raspberry yield 50% worse than last year
May 23rd, 2017, http://glaszapadnesrbije.rs/939465/malinjaci-u-ocajnom-stanju/
Serbian raspberries are in a 50% worse condition than they were last year, according to Professor Aleksandar Leposavić of the Fruit Research Institute. Furthermore, Leposavić predicts that as the transition from wet to dry season continues, more problems will arise, including new pests and diseases as a result of intensive drying processes. Leposavić also says that Polish raspberries have suffered similar (if not worse) damage this year, meaning there will be a significant impact on the availability of raspberries on the world market in 2017.
9)
Food and agriculture exports reach 3.2bn USD in 2016
May 20th, 2017, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:666160-Od-agrara-stize-32-milijarde-
According to official data, Serbian food and agriculture exports reached 3.2 billion USD in 2016. That figure accounts for just over 21% of the total export market, with corn, tobacco, wheat and fruits leading the way. Corn accounted for the biggest share of the market, garnering 314 million EUR, while cigarettes, raspberries and wheat were not far behind on 250 million, 223 million and 120 million respectively. Apples (113 million), sugar (112 million), edible sunflower oil (56 million) and crude soybean oil (46 million) were other notable exports. Despite this impressive performance, some experts believe that Serbia is far from reaching her full capacity in terms of export potential. The EU comprised Serbia’s main foreign trade partner, with more than 50% of exports going to the bloc. Exports to the EU totaled 1.4 billion USD, with imports at just 846 million USD. Exports to Central European Free Trade Agreement (CEFTA) countries amounted to approximately 1.2 billion USD. Overall, Page 4
BFC Agriculture Bulletin
the agricultural exports surplus reached 1.8 billion EUR, serving to reducing the overall deficit to slightly more than 4 billion EUR, said Vukosav Saković, head of Serbia Grains. Saković also hit back at criticisms that Serbia was exporting too much unprocessed corn and wheat (as opposed to processed products) and pointed to the 45 million tons of raw corn exported by the USA every year as support for the venture.
10) Organic farming on the increase in Serbia May 13th, 2017, http://www.novosti.rs/%D0%B2%
Government subsidies of organic farming rose by 40% in 2017, making the incentives 70% higher than those given to conventional methods of farming in the same year. The subsidies include financial assistance for per-acre payments of fertilizer and soil conditioner, as well as tax relief for the additional cost of control and certification which organic farms require. These reliefs took the form of 50% for all organic farms and 65% in areas with difficult agricultural working conditions. As a result of these incentives, organic farming is on the increase in Serbia (in 2015 alone, the industry grew by 62%) but experts say the country is far from reaching her full potential. According to Jelena Milić, who is senior advisor for the promotion of organic farming, Serbia is one of the few European countries in which the practice can truly flourish. This is because of the high natural protein content of its favorable soil and relative dearth of heavy metals and pollutants in protected natural areas, which comprise roughly 7% of the total territory of the country. At present, the southern and eastern regions of Serbia are most dedicated to organic farming, but Milić wants to expand this across the nation through the implementation of a five-year plan of incentives. At a time when the transport of genetically modified goods throughout Serbia is being discussed, it makes perfect sense to rebrand Serbia as an organic country, says Milić.
11) Beekeepers should export honey to increase profits May 8th, 2017, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:664098-Brendiranje-meda-za-veci-izvoz
The high quality of Serbian honey means that it is a lucrative exportation opportunity for Serbian beekeepers, according to Rodoljub Živadinović, President of the Serbian Beekeeping Assocation. At present, the Association counts 9,633 beekeepers as members, with 520,587 colonies under their stewardship. However, Živadinović estimates that there are more than 800,000 hives in the country in total, owned by approximately 15,000 beekeepers. Živadinović has called for these independent beekeepers to join forces with the Association in order to more effectively achieve their collective aim of marketing honey to a global marketplace. A project concentrating on honey production as a sustainable method of development of the Danube micro-region recently won a European Commission (EC) competition for entrepreneurialism, fending off 343 other projects from all over Europe to scoop the prize. Despite this success, Živadinović says the project was an isolated one and has called on beekeepers to work together to surpass the highest exports on record, which came in 2015. In that year, 3,371 tons of honey products were exported at an estimated market value of 15 million USD. If the climate is favorable, Živadinović believes that total production can reach as much as 9,000 tons, with as much as half of that made up by acacia honey. Regardless of the variety, Živadinović believes that a more lucrative price can be fetched for Serbian honey in the foreign market (beekeepers currently charge an average of 800 dinars per kilogram to domestic buyers). In order to set Serbian honey apart from the competition and signal its high quality, the Association has already manufactured 160,000 speciallyshaped jars, into which only Association-affiliated honey can be poured and which Živadinović hopes will become recognizable as a mark of quality. Page 5
Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com Articles are taken directly from local sources without any fact-checking; they are provided as a convenience and for informational purposes only. Business & Finance Consulting (BFC)’s editing is limited to providing a short summary in English of the texts, highlighting the main points of the original articles. All rights reserved by the authors. BFC takes no responsibility and does not make any representation or warranty, express or implied, or assume any responsibility whatsoever for the content, accuracy, and reliability, or completeness of any of the articles.