04/2018
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31 S e r b i a Agriculture Bulletin RSD 145 million in Vojvodina co-financing grants announced EUR 230 million for rural and agricultural development Organic production project begins in Serbia
First digital farm opens in Serbia
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7)
Change to law on PIO expected by the end of the year .................................................................. 2 ‘Agrarian Policy in 2018’ conference held ....................................................................................... 2 RSD 145 million in Vojvodina co-financing grants announced ........................................................ 2 Serbia passes decree on land restitution ........................................................................................ 2 Additional subsidies for domestic grape cultivation ....................................................................... 3 Changes to agricultural subsidy program requested ...................................................................... 3 Fruit growing map of Serbia to be produced .................................................................................. 3
Foreign Aid ................................................................................................................. 4 8) Training program on agricultural land management underway ..................................................... 4 9) EUR 230 million for rural and agricultural development ................................................................ 4 10) New irrigation systems being constructed across Serbia ................................................................ 4
Private Sector.............................................................................................................. 5 11) 12) 13) 14)
Organic production project begins in Serbia ................................................................................... 5 Raspberry yield expected to be down this year .............................................................................. 5 First digital farm opens in Serbia ..................................................................................................... 5 Indian company buys Serbian tractor manufacturer ...................................................................... 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)
Change to law on PIO expected by the end of the year
April 25th, 2018, http://www.agrosmart.net/vesti/nedimovic-bice-izmena-zakona-pio-korist.html
Agriculture Minister Branislav Nedimovic has announced a plan to, by the end of the year, have ready a new proposal to change the Law on Pension and Disability Insurance for Farmers (PIO) that has been in existence since 1986. The problem under the current system is that farmers have a total debt of RSD 184 billion (approximately EUR 1.5 billion) that has not been paid into the farmer pension and disability plan. This stems from the fact that only between 50,000 and 70,000 farms have enough economic viability to be able to afford the RSD 80,000-90,000 per year that they are required to pay into the system. The new proposal, being developed in cooperation with the World Bank, seeks to reform the system and make it more sustainable for the future.
2)
‘Agrarian Policy in 2018’ conference held
April 25th, 2018, http://www.rtv.rs/sr_ci/ekonomija/subvencije-i-osiguranje-vazni-za-razvoj-poljoprivrede_912879.html
‘Agrarian Policy in 2018’, a national conference on Serbian agribusiness, was recently held at the Serbian Chamber of Commerce. Participants at the conference discussed a number of issues related to modernizing agriculture in Serbia and increasing its share of GDP. The most significant issue identified by participants, however, was the lack of agricultural insurance currently being utilized in the country. According to expert estimates, only about 13% of the total planted agricultural land in Serbia is covered by insurance (far short of the 50-70% in developed countries). To start increasing the uptake of agricultural insurance and providing greater protection for the sector, the Ministry of Agriculture will continue working with banks and insurance companies through the state agricultural insurance subsidy program.
3)
RSD 145 million in Vojvodina co-financing grants announced
April 24th, 2018, http://www.rtv.rs/sr_ci/vojvodina/za-podsticaj-intenzivne
Vuk Radojevic, Provincial Secretary for Agriculture, Water Management and Forestry in Vojvodina, has presented 103 contracts to registered agricultural holdings for co-financing grants worth RSD 145 million. The total investment value of all the contracts is RSD 282 million. 51 contracts (with a total investment value of RSD 187 million) have been awarded for the procurement of equipment and systems that will provide irrigation on 710 hectares of arable land; 35 contracts (with a total investment value of RSD 76 million) have been awarded for the procurement of equipment to protect against weather events and to raise the production of fruit plantations; 10 contracts (with a total investment value of RSD 11.5 million) have been awarded for production in protected areas; and 7 contracts (with a total investment value of RSD 8 million) have been awarded for equipping livestock, cattle breeding and pig farms.
4)
Serbia passes decree on land restitution
April 24th, 2018, https://www.danas.rs/ekonomija/u-ponudi-i-parcele-u-susednoj-opstini/
The government of Serbia has adopted a decree for determining the area of agricultural and forest land that had been previously appropriated without compensation, which should resolve issues related to the previous process of land consolidation. The new measure, which entered into force on April 21, Page 2
BFC Agriculture Bulletin
regulates the restitution procedure in the consolidated areas. Under it, a fund of state agricultural land will be formed, from which land will be returned to former owners. This will also free the state to more efficiently manage agricultural land that will not be returned by restitution and will be leased to farmers, especially milk producers. Opponents of the measure state that it will, in effective, not correct many past injustices, especially as cooperatives that were created from private land are excluded from this measure since they have already been privatized to new owners instead of to the previous ones. Supporters, on the other hand, believe that it is important for land to be given back to citizens in order to raise domestic production competitiveness. The land, however, should be restored within a clearly-defined deadline and with the condition that the cultivation of the land is compulsory.
5)
Additional subsidies for domestic grape cultivation
April 13th, 2018, http://www.stips.minpolj.gov.rs/sadrzajv/dodatne-subvencije
According to incentive rules for investments in the physical property of agricultural holdings, additional subsidy support in the amount of RSD 100,000 per hectare is available for those growing specific varieties of grapes, particularly domestic varieties that are registered in the Register of Agricultural Plant Varieties. The share of local grape varieties being grown in Serbian vineyards is considerably low as vineyards, by and large, still cultivate mostly international varieties.
6)
Changes to agricultural subsidy program requested
April 13th, 2018, https://www.danas.rs/ekonomija/subvencije-za-registrovana-gazdinstva/
This year, the subsidy support program for agriculture being run by the Ministry of Agriculture does not allow for local governments to grant subsidies to agricultural associations, but only to registered agricultural holdings. To address this, the Municipal Council of Paracin has drafted changes to the program implementation policy for 2018 and has submitted them to the Ministry for approval. RSD 19.1 million is available for the program this year. The program supports the purchase of agricultural machinery and equipment, irrigation systems, seedlings, and certain livestock. A portion of the available funding has also been allocated for educational efforts via visits to international fairs.
7)
Fruit growing map of Serbia to be produced
April 11th, 2018, http://www.stips.minpolj.gov.rs/sadrzajv/mapa-vo%C4%87arstva-
Tours are being made around the country in order to compile data on climates, altitudes and quality and types of soil. Based on this data, a map of the country will be created that will show which fruits are best-suited to be grown in each area of the country. It is expected that such a map will allow fruit growers to produce better quality products and government officials to better target resources such as subsidies that are designed to encourage maximized efficiency of land and other resources. The fruit-growing map is expected to be completed and put into use by 2020.
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Foreign Aid 8)
Training program on agricultural land management underway
April 20th, 2018, http://www.rtv.rs/sr_ci/vojvodina/banat/kako-do-efikasnije
The city of Vrsac, in cooperation with the German organization GIZ, organized a training on improved land evaluation in the process of land consolidation, with a particular emphasis on environmental protection. The training aims to help state and local self-governments manage agricultural land more efficiently. After training was conducted in southeastern Serbia, GIZ, in agreement with the Provincial Secretariat for Agriculture, started training on advanced models of commensurate assessments as well as in Vojvodina, where land consolidation is already being carried out. It was also announced that trainings will be extended into May, June and September. The training project is being funded by the European Union (EU), the German Federal Ministry for Economic Cooperation and the Serbian Ministry of Agriculture.
9)
EUR 230 million for rural and agricultural development
April 13th, 2018, https://www.danas.rs/ekonomija/joksimovic-za-agrar-od-ipard-fonda-200-miliona-evra-godisnje/
Jadranka Joksimovic, Minister of European Integration, has announced that, for the first time, Serbia has approached the European Commission about utilizing Instrument for Pre-accession Assistance in Rural Development (IPARD) funds for rural and agricultural development in the country. A financial agreement for EUR 230 million is expected to be signed soon. Funding will be provided in the form of EUR 175 million in the form of grants and EUR 55 million as a reallocation of some of previously available Instrument for Pre-accession Assistance funds. As a candidate country to ascend to membership in the European Union (EU), Serbia has access to approximately EUR 1.5 billion in total grant assistance for the period of 2014-2020.
10) New irrigation systems being constructed across Serbia April 11th, 2018, https://www.danas.rs/ekonomija/sistemi-za-navodnjavanje-nece-biti-spremni-za-ovu-sezonu/
Following last year’s drought, authorities planned for the construction of eight irrigation systems through Serbia. To date however, none of these systems has been completed. Work began in August 2017 but had to be suspended between December and April due to bad weather conditions for construction. Work has now resumed on all planned sites, and all appropriate conditions have been created that will allow for the future construction of regional subsystems. Only 100,000 hectares are currently being irrigated in Serbia. In total, the state plans to increase irrigation capacity to between 300,000 and 400,000 hectares, including having 150,000 hectares covered by irrigation systems this year. While it remains to be seen if the target for this year will be reached, it is worth noting that experts are not expecting a dry year this year. In fact, rains so far in 2018 have been two to three times more than last year, and there have been some minor issues in planting crops due to too much moisture. The construction of the new irrigation systems is being funding with USD 100 million from the Abu Dhabi Fund. Approximately one third of this amount has been allocated for the first phase of the project, which began in August 2017. This first phase is expected to be completed by no later than August 2018, with the next phase set to begin upon its conclusion.
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Private Sector 11) Organic production project begins in Serbia April 27th, 2018, http://www.stips.minpolj.gov.rs/sadrzajv/srpski-prehrambeni
The two-year ‘Development of Organic Production and Food Quality Policy in Serbia’ project has kicked off in Serbia and will be supported by Austria, France and Italy. The EUR 1.1 million project, which seeks to take advantage of the fact that Serbia has 7% of its territory located in protected ecological zones, consists of two components: (1) strengthening the capacity of Serbian organic production and (2) defining measure to ensure the quality of such production. By the end of the project, it is expected that at least three Serbian organic products will have the proper certification and registration to be protected by a special mark of quality and origin at the European Union (EU) level. This will help enhance the competitiveness of these products and mean higher incomes for Serbian farmers.
12) Raspberry yield expected to be down this year April 24th, 2018, http://www.stips.minpolj.gov.rs/sadrzajv/o%C4%8Dekuje-se-manji-rod-malina-nego-prethodnih-godina
Raspberries were the most important Serbian fruit export last year, amounting to USD 233 million in total export value. This year, however, that figure is expected to be substantially lower. Dragan Bogdanovic of the Vilamet Spas Association from Arilje has stated that production from his association could be up to 40% less than last year. This is due to unfavorable weather conditions creating late snows and a small period of drought. Serbian raspberry producers are facing uncertain times in general. While there are efforts underway to support minimum purchase prices of RSD 120 per kilogram and raspberries are becoming a staple in European markets, Serbian raspberry producers are also having to deal with increased competition and must look to new large markets in order to sustain success in the long term.
13) First digital farm opens in Serbia April 16th, 2018, http://www.agrosmart.net/vesti/digitalna-farma-otvara-vrata-posetioce.html
The first Digital Farm in Serbia was recently opened in the town of Krivaja. The farm, which was designed and implemented by the BioSens Institute in cooperation with the agricultural producer Krivaja Doo, uses modern technology to: continuously monitor weather conditions, make the most efficient use of variable fertilizers, utilize satellite imagery to monitor crop conditions, provide the right amount of irrigation at all times, map for variable fertilization and yield assessments by using drones, combine yield monitoring and grain moisture sensor data to improve performance and yields and measure electromagnetic conductivity of soil. The farm is hosting several days when visitors are welcome to come and see how the technology works in person.
14) Indian company buys Serbian tractor manufacturer April 11th, 2018, https://www.b92.net/eng/news/business.php?yyyy=2018&mm=04&dd=11&nav_id=103916
Indian company TAFE has signed a contract to purchase the bankrupt Serbian company Industry of Machinery and Tractors Belgrade (IMT). TAFE purchased the legal entity, its trademark, a plant in
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Jarkovac and technological drawings for RSD 66 million. Other assets belonging with IMT will enter into the bankruptcy estate. After the purchase contract was signed, TAFE announced that it would make a multimillion dollar investment in production Serbian facilities. TAFE plans to produce at least 5,000 tractors per year in Serbia in the next five years, with the aim of eventually reaching a production level of 10,000 tractors per year.
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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.