08/2017
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23 S e r b i a Agriculture Bulletin Serbia-Turkey agricultural trade agreement signed
UNDP launches agribusiness export program ProCredit disburses half of subsidized loan volume Concerns regarding agricultural land law
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
Foreign purchase of agricultural land restricted ............................................................................. 2 Drought alleviation measures announced ...................................................................................... 2 Serbia-Turkey agricultural trade agreement signed ........................................................................ 2 Krkobabic: small-holdings must form cooperatives ........................................................................ 2 Classical swine fever vaccination program continues ..................................................................... 3
Foreign Aid ................................................................................................................. 3 6) 7) 8) 9)
IPARD audit underway ..................................................................................................................... 3 Abu Dhabi fund irrigation works underway .................................................................................... 3 “Final” IPARD access conditions met ............................................................................................... 4 UNDP launches agribusiness export program ................................................................................. 4
Private Sector.............................................................................................................. 4 10) 11) 12) 13)
ProCredit disburses half of subsidized loan volume........................................................................ 4 Drought damage at USD 1 billion .................................................................................................... 5 Concerns regarding agricultural land law ........................................................................................ 5 “Increased” aflatoxin risk ................................................................................................................ 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 »
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BFC Agriculture Bulletin
State Initiatives 1)
Foreign purchase of agricultural land restricted
August 29th, 2017, http://www.b92.net/eng/news/business.php?yyyy=2017&mm=08&dd=29&nav_id=102183
The Serbian National Assembly has passed an amendment to the law on agricultural land that prevents full liberalization of the market as foreseen by the Serbia-EU Stabilization Association Agreement (SSA). While EU citizens will be allowed to buy up to two hectares of land, they must: have lived in the municipality where the land is located for 10 years; have an agricultural household registered to their name; and own the agricultural equipment necessary to cultivate the land. Purchase of land within 10 kilometers of the Serbian border remains prohibited. The amendment comes into force on September 1, the same day as the SAA provisions.
2)
Drought alleviation measures announced
August 24th, 2017, http://www.rtv.rs/sr_ci/politika/nedimovic-o-merama-za-pomoc-poljoprivrednicima_849809.html
The Ministry of Agriculture has put forward several measures following the recent drought. An additional five irrigation projects will be launched, along with the four currently underway, said Minister of Agriculture Branislav Nedimovic. Some are two-way systems used for drainage and irrigation whilst others will be regional systems similar to the Tisa-Palic canal. There will redoubled efforts to increase insurance coverage, with only 10.5% of agricultural land insured to-date, added Nedimovic. Meanwhile, digital monitoring and prevention systems will be added to the 1,300 manned stations currently in operation according to the Minister. Farmers will have access to EUR 175 million from the Instrument for Pre-accession Assistance in Rural Development (IPARD) fund come December.
3)
Serbia-Turkey agricultural trade agreement signed
August 22nd, 2017, http://aa.com.tr/en/economy/turkey-signs-trade-agreement-on-agriculture-with-serbia/891070
Turkey and Serbia agreed to increase bilateral agricultural trade to USD 1 billion. In their first agricultural trade agreement since 2011, the countries’ agriculture ministers discussed upgrading the 2009 Free Trade Agreement; investing in the livestock and fruit sectors; and updating trade quotas, according to Serbian Minister of Agriculture Branislav Nedimovic. Serbia will increase sunflower oil and beef exports to Turkey. Should trade agreements progress sufficiently, Turkey may benefit from Serbia’s free trade agreements with Russia and the EU, said Turkey’s Minister of Agriculture Ahmet Esref Fakibaba – in return, Serbia will receive greater access to the Turkish market. Around 75 Turkish private entities have invested a total of USD 110 million in Serbia.
4)
Krkobabic: small-holdings must form cooperatives
August 16th, 2017, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:681078-Krkobabic-Zadruge-su-spas-zasrpsko-selo
There are currently 630,000 family farms comprising 1.4 million people across Serbia, according to Minister Milan Krkobabic, in charge of regional development. With many having difficulty accessing markets, the formation of cooperatives is paramount, added the Minister. Serbia’s small-scale dairy farms have difficulties distributing milk. In the European Union, for example, 60% of milk and dairy products are managed through cooperatives. Serbia has a EUR 50,000 incentive for the establishment of new cooperatives, reminded Krkobabic. Several have been successfully established, with the 42-member Page 2
BFC Agriculture Bulletin
Slankamen cooperative owning a EUR 2.4 million refrigerated storage facility and placing 80% of its products on foreign markets. In a bid to boost agriculture, the government is considering allocating up to 50 hectares of state-owned land to young farmers free of charge for an unlimited period, concluded Krkobabic.
5)
Classical swine fever vaccination program continues
August 4th, 2017, http://www.stips.minpolj.gov.rs/sadrzajv/vakcinacija-svinja-i-dalje-aktuelna
Last February, Minister of Agriculture Branislav Nedimovic announced the classical swine fever (CSF) vaccination program would end in June. To date, however, the program continues. The European Union forbids the import of live pigs and pork from countries that have not been CSF-free for a period of 12 months following the cessation of vaccinations, leaving Russia, Macedonia and Montenegro the main importers of Serbian pork. Over the last two years Serbian exports have totaled USD 27.7 million, while imports were roughly double, coming mainly from Spain, Hungary and Germany. The Veterinary Directorate has insisted that the program will only end once all necessary preventive measures are in place. While vaccination and pig registration continues, other control, surveillance and diagnostic measures are still being strengthened, including the implementation of best practice amongst pig farmers. The CSF virus outbreak first occurred in November 2010.
Foreign Aid 6)
IPARD audit underway
August 29th, 2017, http://www.stips.minpolj.gov.rs/sadrzajv/cep-obu%C4%8Diti-poljoprivrednike-za-ipard-konkurse
Serbia must ensure its domestic institutions receive accreditation for the administration of the Instrument for Pre-accession Assistance in Rural Development (IPARD) or risk losing out on funding, according to Stefan Sipka, a researcher at the European Policy Centre. Whilst the fund earmarks EUR 175 million for 2014-2020, the EUR 15 million intended for 2015 may only be used until 2018. To date, the European Union has not been satisfied that the human resources, professional skills, and technical capabilities at the Serbian Administration for Agricultural Payments (AAP) are sufficient to administer IPARD. A second external audit began on August 14, however, which will determine if the necessary changes have been made. The institutional upgrades will prepare Serbia for the administration of much larger funds once it joins the EU, added Sipka. It should also increase the state’s capacity to assist farmers with IPARD applications. Small farms are unlikely to meet the financial and technical conditions to obtain funding, said Sipka – the focus should be on helping large-scale farms and cooperatives obtain IPARD funding, while incentivizing further cooperative formation and subsidizing small-scale farms.
7)
Abu Dhabi fund irrigation works underway
August 16th, 2017, http://www.agronews.rs/pocela-izgradnja-sistema-za-navodnjavanje/
In the coming years, Serbia will have roughly USD 100 million available for irrigation works through the Abu Dhabi Fund, according to Minister of Agriculture Branislav Nedimovic, adding that, this year, RSD 1.5 billion will be invested. The number of hectares irrigated within the next two years could reach six
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figures, according to Nedimovic. The USD 80 million Macva irrigation system, which is currently under tender, will irrigate at least 11,000 hectares, said the Minister. The announcements came following a visit to the Abu Dhabi Fund backed EUR 142,000 Meda irrigation system in Vojvodina. The system is the first of 11 irrigation projects in the region, all to be launched this year.
8)
“Final” IPARD access conditions met
August 14th, 2017, http://www.srbija.gov.rs/vesti/vest.php?id=123674
The last of the four conditions required for access to the EU’s Instrument for Pre-accession Assistance in Rural Development (IPARD) fund has been met, according to Minister of Agriculture Branislav Nedimovic. In talks with Deputy Head of the EU Delegation to Serbia Oscar Benedict, the Minister said the requested adaptations to the Administration for Agricultural Payments department have been made – the final hurdle to accessing IPARD. As such, Nedimovic expects the first call for funding by the end of the year. The European Commission has begun an external audit. Benedict expressed satisfaction with the Ministry of Agriculture’s cooperation and results.
9)
UNDP launches agribusiness export program
August 8th, 2017, http://www.agronews.rs/konkurs-za-obuku-200-poljoprivrednika/
The United Nations Development Programme (UNDP) will launch an agribusiness export development course running from September to November. There are 200 places available with agribusinesses, cooperatives and associations listed with the Business Registers Agency eligible to apply. The program will consist of 10 two-day seminars with 20 participants each. Following the course, the top 10 performers will act as export certification and quality standard consultants. The program is financed by the Russian Federation and implemented by UNDP.
Private Sector 10) ProCredit disburses half of subsidized loan volume August 24th, 2017, http://www.agrosmart.net/vesti/procredit-banka-sama-odobrila-polovinu.html
At EUR 10.5 million, ProCredit Bank has accounted for almost half of the subsidized agricultural loans disbursed since the current funding round began three months ago. According to ProCredit’s Ana Milic, the largest number of loans (418) were used for livestock purchases, while the largest investment was in new machinery (RSD 763 million) followed by used machinery (RSD 640 million). ProCredit will continue processing applications for subsidized agri-loans for the next two months, said Milic. According to the Ministry of Agriculture, domestic banks have disbursed 1,321 subsidized agri-loans worth EUR 22.5 million.
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11) Drought damage at USD 1 billion August 14th, 2017, https://inserbia.info/today/2017/08/serbia-damage-to-crops-from-drought-to-exceed-usd-1bn/
This year’s drought has reduced the harvest by about 20% compared to average annual yields and by about 30% compared to last year’s record yield. The damage is estimated at USD 1 billion, with average annual yields at USD 5-6 billion according to agro-economic expert Milan Prostran. The high temperatures mostly affected corn, which makes up 20-25% of total agricultural production and covers 1.1 million hectares, said Prostran. Due to climate change and the state’s inability to finance large-scale irrigation, autumn sowing should be doubled to about 500,000-600,000 hectares, while spring sowing should start a month earlier, helping avoid the driest periods, argued the expert.
12) Concerns regarding agricultural land law August 14th, 2017, http://www.balkaninsight.com/en/article/new-serbian-agriculture-law-raises-eyebrows-08-11-2017
The Association of Farmers (AoF) has bemoaned the lack of consultation regarding the new amendment restricting the sale of agricultural land to foreigners. While pleased about the restrictions, the draft amendment was never submitted for review by the Association, said the AoF’s Miroslav Kis. In 2015, large-scale protests followed the adoption of a law facilitating large companies’ ability to purchase land. The law was seen as an open door for multi-nationals to snap up Serbian land. While the 2008 EU Stabilization and Association Agreement allows foreigners to purchase agricultural land, the current amendment imposes strict conditions, such as a lengthy residency requirement. However, the AoF is worried that there may remain unsatisfactory elements to the law. Minister of Agriculture Branislav Nedimovic said most stakeholders were consulted and satisfied with the law, including large associations. However, Kis insisted no such discussions occurred.
13) “Increased” aflatoxin risk August 7th, 2017, http://rtv.rs/sr_lat/ekonomija/aktuelno/farmeri-strepe-od-pojave-aflatoksina_845977.html
This year’s drought may decrease the quantity and quality of milk while increasing aflatoxin levels, argues milk producer Vasilije Ivkovic. The drought is worse than those of 2003 and 2012, according to Ivkovic, and will result in lower fodder quality and volumes leading, in turn, to lower volumes of milk. Consequently, the Association of Milk Producers has requested payment of milk subsidies and premiums by August 10. Moreover, as seen in 2012, Serbia may experience problems with aflatoxin – a poisonous chemical produced by certain fungi that thrive in high temperatures, said Ivkovic. State Secretary of Agriculture Velimir Stanojevic says the Ministry is closely monitoring the situation and is planning further subsidies and loans as well as improved irrigation systems. Ivkovic’s farm comprises 300 livestock, including 160 dairy cows.
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