11/2017
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26 S e r b i a Agriculture Bulletin IT sector key to agricultural development
Serbia can learn from Poland with IPARD program
Banks support Serbian farmers and MSEs Turkish company to invest EUR 3 million in fruit production
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Grants awarded to eight Serbian co-operatives.............................................................................. 2 Loans for small- and medium-sized enterprises.............................................................................. 2 IT sector key to agricultural development ...................................................................................... 2 AKPPS registered at Serbian Business Registers Agency ................................................................. 3
Foreign Aid ................................................................................................................. 3 5) 6) 7)
Inclusion of young farmers in IPARD ............................................................................................... 3 Serbia can learn from Poland with IPARD program ........................................................................ 3 Banks support Serbian farmers and MSEs....................................................................................... 4
Private Sector.............................................................................................................. 4 8) 9) 10) 11) 12)
Future of Serbian sugar ................................................................................................................... 4 Imports on the rise in 2018, says Sestović ...................................................................................... 4 Meat industry cannot compete with CEFTA countries.................................................................... 5 Turkish company to invest EUR 3 million in fruit production.......................................................... 5 Raspberry producers meet with Ministry of Agriculture ................................................................ 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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State Initiatives 1)
Grants awarded to eight Serbian co-operatives
November 23rd, 2017, https://beta.rs/ekonomija/ekonomija-srbija/78377-urucena-
The Minister without portfolio in charge of Regional Development Milan Krkobabić has awarded eight grants to four new and four existing co-operatives across Serbia this month. Located in Svrljig, Babusnica, Vranje, Dimitrovgrad, Vladičin Han, Blace, Leskovac and Vlasotince respectively, the cooperatives will use the funds to connect with others throughout the country and increase the commercial value of their produce. Krkobabić said that government investment in co-operatives would be even higher next year, but stressed that beneficiaries would be required to adopt a responsible position and work with the Ministry to achieve success. Meanwhile, the President of the Serbian Academy of Sciences and Arts Committee Dragan Skorić said that educating the younger generation to become competitive in the international market was key to Serbia’s advancement, since “without knowledge there is no progress”.
2)
Loans for small- and medium-sized enterprises
November 21st, 2017, http://www.agronews.rs/bespovratna-sredstva-malim-i-srednjim-preduzecima/
For the second time this year, the Ministry of Economy has invited small- and medium-sized enterprises to apply for loans from the Development Fund. RSD 600 million have been allocated for the fund (20% of which is non-repayable), but to date around RSD 250 million remain. The deadline for allocation of the loans is December 1st, meaning applicants have little time to take advantage of the scheme. However, authorities say that it’s no coincidence that much of the funds from this credit line remain untouched, since the criteria for approval are very strict. The loan repayment period is variable up to 10 years, with an initial 12-month grace period. The interest rates on the loans vary from one to three percent per year depending on the individual agreement, and the Ministry has indicated that next year will see an increase in investment from the government. While the cumulative effects of the program are still being calculated, it’s understood that 17,000 small- and medium-sized enterprises have completed over 30,000 new jobs this year. One of the 130 beneficiaries of the loan incentive, Bibli, claim it has helped them to increase production by 50% and expand into new overseas markets, such as Australia.
3)
IT sector key to agricultural development
November 18th, 2017, http://agrovizija.rs/Index.php?id=3465
The domestic agrarian sector must place more of a priority in using information technology to improve and modernize agricultural production if it is to stay competitive with international markets, according to the Provincial Secretary for Agriculture Vuk Radojević. Speaking at the Food for Europe forum in Vrdnik, Radojević highlighted the BioSens Institute’s Antares project as a good example of synergizing the IT sector and agriculture as a means to improving the national economy. Antares won first place at the European Commission’s Horizon 2020 – Timing event in 2016 and has a total budget of EUR 28 million, half of which is funded by the EU and half by the Serbian government. Radojević announced the signing of a digital control contract aimed at gaining an overview of the agricultural situation in the Vojvodina fields, as well as the creation of a digital platform geared towards facilitating the work of the Secretariat and planning production activities for individual farmers. Page 2
BFC Agriculture Bulletin
Meanwhile the Director of Belgrade’s City Market Ivan Sočo underlined the need to “change awareness and attitude towards markets as places of mere trade in agricultural products”, citing the decline in sales over recent years. The traditional marketplace has seen its share of the market fall from 32.4% in 2008 to just 18.3% in 2016, largely due to the proliferation of supermarkets and hypermarkets across Serbia and the subsequent decline in popularity of renting stalls during that time.
4)
AKPPS registered at Serbian Business Registers Agency
November 10th, 2017, http://www.agronews.rs/registrovana-agrarna-komora-poljoprivrednih-proizvodaca/
The Agrarian Chamber of Agricultural Producers of Serbia (AKPPS) was officially registered at the Serbian Business Registers Agency on November 7th 2017. The AKPPS will facilitate and develop cooperation not only between ministries within the country, but also with agricultural and forestry systems in the European Union (EU) and beyond. With a view to raising awareness about the importance of public participation and the proper allocation of governmental funds, the AKPPS plans to hold a number of consultations in different administrative districts around the country. The first of these took place on November 12th in Mosorina, but more are expected to follow in other destinations throughout Serbia in 2018.
Foreign Aid 5)
Inclusion of young farmers in IPARD
November 24th, 2017, http://www.stips.minpolj.gov.rs/sadrzajv/inkluzija-mladih-poljoprivrednika-u-ipard-0
The Network of Young Farmers of Serbia has launched a training project named "Inclusion of young farmers in IPARD" with the support of the Ministry of Agriculture. Aimed at educating young farmers on what the IPARD funds are, how they can apply for them and how they can be used to grow their own business, the event took place on Monday 27th November at the Faculty of Agriculture in Zemun.
6)
Serbia can learn from Poland with IPARD program
November 22nd, 2017, http://agrovizija.rs/Index.php?id=3479
Serbian farmers are expected to be able to apply for their share of the EUR 175 million from the EU IPARD funds before the end of the year, with the first payments arriving at the beginning of 2018. In order to make the best use of the funds available, the government has signaled its intention to follow the example of Poland, currently the largest beneficiary of financial aid from the EU. Having received over EUR 35 billion in just 10 years, the Polish authorities have stressed that establishing a good infrastructure of education and planning during the accession stage (in which Serbia now finds itself) is the most important part of optimizing IPARD aid. With that in mind, training in Serbia has been accelerated over the last few weeks before the European Commission makes its final decision on the release of the funds in December. Already two years behind schedule, the Ministry of Agriculture expects to receive EUR 15 million from 2015 designated for investments in the meat, milk, fruit and vegetable sectors. Individual farms will be able to receive a subsidy of up to 60% of their outlay (up to a maximum of EUR 700,000), while processors can recoup up to half of their investment. However, all applicants must first invest the money themselves and then apply for a refund afterwards.
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BFC Agriculture Bulletin
7)
Banks support Serbian farmers and MSEs
November 6th, 2017, http://www.finchannel.com/business/69337-ifc-and-opportunity
IFC, a member of the World Bank Group, has announced a loan of RSD 775 million (approximately EUR 6.5 million) to the Opportunity Bank Serbia (OBS) with the intention of allowing rural farmers and micro and small enterprises (MSEs) to grow and develop. Furthermore, IFC plans to provide advisory services to OBS with the regards to digitizing its operations to improve efficiency, reach new clients and keep up with international best practices. Even though MSEs account for more half of employment in Serbia and the agricultural sector is the second largest contributor the country’s GDP, many young farmers are unable to obtain bank loans in order to expand their operations. This is because they have no credit history or collateral, or because they are deemed too small to be worthy of investment. With the help of IFC, OBS aims to change that by increasing the opportunities for young, rural farmers and thus augmenting sustainable economic growth in the country.
Private Sector 8)
Future of Serbian sugar
November 27th, 2017, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:
The European Union (EU) has cut sugar quotas, leading to fears that this may harm Serbia’s sugar producers. However, many experts are encouraging Serbian sugar producers to find other markets in countries that do not produce their own sugar or have a minimal number of sugar-producing factories. The largest sugar beet producer in Serbia (and in the region at large), Sunok, does not believe that this will lead to problems for Serbians, but may cause some intensification of competition. The key to survival, according to Sunok, is to improve agricultural production in terms of increasing the quality and yield of sugar beet as well as to increase efficiency in refinement.
9)
Imports on the rise in 2018, says Sestović
November 20th, 2017, http://www.politika.rs/scc/clanak/392938/Srpski-izvoz-krece-nizbrdo
Serbia has traditionally been an import-oriented country; last year, imports amounted to EUR 17.38 billion, while total exports were only EUR 13.42 billion. However, it’s also ranked as one of the top ten exporters of cereals and corn in the world and over recent years, exports have been growing more quickly than imports. In the last 10 years, the foreign trade deficit between imports has fallen from 26% to just 11.6% in 2016. This year, exports once again increased by 5.2% in comparison to last year, which would have been good news except for the fact that during the same period, imports have grown by twice as much (11.1%). Furthermore, it has been predicted that imports will continue to increase substantially in 2018. According to the chief economist of the World Bank in Serbia Lazar Sestović, the reasons for this are fivefold. An increase in private consumption (brought about higher salaries and pensions), rising energy prices, a poor domestic yield, the proliferation of foreign investment in the country and the depreciation of the dinar could all contribute to the growth of imports and the decline of exports in the coming year. The Statistical Office of the Republic of Serbia believes that these rises will affect the meat and milk industries most keenly, especially now that levies on meat and milk imports in the country have been abolished. Page 4
BFC Agriculture Bulletin
10) Meat industry cannot compete with CEFTA countries November 20th, 2017, http://www.agronews.rs/srbija-poljoprivredna-zemlja-a-uvozi-hranu/
The abolishment of levies on the import of milk and meat came into effect at the beginning of 2017, and by July of this year it had already become clear that the new laws would have a devastating impact on the domestic market. Imports of meat have risen by 69.4% this year (compared to the same period in 2016) and experts speculate that the growth is down to the cheaper raw materials available in neighboring CEFTA countries which liberalized the importation of meat long before Serbia. Between 2010 and 2014, imports of meat products in surrounding countries have increased from USD 4 million to USD 30 million, and the Food and Agriculture Organization (FAO) has warned that similar growth is expected in Serbia in the coming years.
11) Turkish company to invest EUR 3 million in fruit production November 10th, 2017, http://www.ansamed.info/ansamed/en/news/nations/serbia
A subsidiary of a Turkish-German company is to invest EUR 3 million in the production of apple chips in Sremska Mitrovica municipality over the next three years. According to the company’s business plan, the investment could create 100 seasonal jobs in the orchards, while a further 16 to 20 people could be hired to work in the chip production facility.
12) Raspberry producers meet with Ministry of Agriculture November 2nd, 2017, http://www.021.rs/story/Info/Biznis-i-ekonomija/175034
Representatives of the Association of Raspberry and Buckwheaters of Serbia met with the Ministry of Agriculture this month to discuss pricing of the fruit in 2018, among other concerns. Another item high on the agenda was the help afforded to producers in the case of damage resulting from inclement weather, after a cold spring and a hot summer wreaked havoc on yields this year. Producers also asked for foreign purchasers to be able to purchase raspberries and blackberries directly (without domestic intermediaries) in 2018, and indicated they would prefer the average price next year to remain the same as in 2017. Finally, they also asked for the establishment of a National Council for determining the geographical origin of produce in order to assure its provenance in 2018.
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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.