06/2018
#
33 S e r b i a Agriculture Bulletin RSD 825 million for agricultural cooperative support
State funding for young farmers
New green innovation vouchers awarded in Serbia
Meat prices on the rise
All materials are published “as is� and are the property of their respective owners.
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8)
RSD 1.5 million in subsidy incentives for agricultural equipment ................................................... 2 RSD 825 million for agricultural cooperative support ..................................................................... 2 State considering agricultural insurance subsidy increase.............................................................. 2 RSD 10 million for agricultural and rural development projects ..................................................... 3 State funding for young farmers ..................................................................................................... 3 Several complex cooperatives to be established ............................................................................ 3 Guide to new rules on food labeling published............................................................................... 3 First session of National Raspberry Council held ............................................................................ 4
Foreign Aid ................................................................................................................. 4 9) 10) 11) 12)
Construction of Macva irrigation system begins ............................................................................. 4 Organic agriculture twinning project in progress ............................................................................ 4 New green innovation vouchers awarded in Serbia ....................................................................... 5 Third session of IPARD monitoring committee held ....................................................................... 5
Private Sector.............................................................................................................. 5 13) 14) 15) 16)
The potential of organics ................................................................................................................. 5 Rain hinders wheat harvest ............................................................................................................. 6 Price of raspberries on the world market down ............................................................................. 6 Meat prices on the rise .................................................................................................................... 6
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)
RSD 1.5 million in subsidy incentives for agricultural equipment
June 27th, 2018, http://www.agronews.rs/za-nove-masine-i-opremu-1-500-000-dinara/
The Ministry of Agriculture has published a rulebook on subsidy incentives for the purchase of new machines and equipment. Under the subsidy program, RSD 1.5 million dinars are available to be used per beneficiary per year. The subsidies cover 50% of the cost of the equipment and 65% for those in marginal settlements (excluding VAT). Subsidy incentives are available for farmers who work up to 50 hectares of cereals, oil seeds or other crops; farmers who grow more than 2 hectares of berries or more than 5 hectares of other fruits or vegetables; farmers who work 0.5 hectares of greenhouses; or farmers having up to 100 hectares of grapes. Beneficiaries must also be registered in the Register of Agricultural Holdings. Subsidy requests must also amount to at least RSD 100,000 for agricultural holdings and RSD 50,000 for individuals. Other rules for beneficiaries can be found in the aforementioned rulebook.
2)
RSD 825 million for agricultural cooperative support
June 26th, 2018, https://beta.rs/ekonomija/ekonomija-srbija/92432-krkobabic-od
Minister of Regional Development Milan Krkobabic has announced that approximately AMD 825 million has been made available in the form of grants within the ‘500 Cooperatives in 500 Villages’ project, four times the amount for the project in 2017. Since mid-2017, when the project was launched, more than 240 new cooperatives have been established in Serbia. Interested parties can apply within the next 45 days, with funds being disbursed in autumn. The grants will be used to support a total of 60-70 cooperatives in activities such as the purchase of basic herbs, equipment and/or technology. Newly-formed cooperatives will be eligible for RSD 7.5 million, while existing cooperatives will be eligible for up to RSD 15 million in grant support.
3)
State considering agricultural insurance subsidy increase
June 22nd, 2018, http://www.politika.rs/scc/clanak/406016/Vece-ucesce-drzave-u-osiguranju-useva
The government of Serbia is considering increasing state aid for agricultural insurance subsidies from 40% to 60-70% for those engaged in agricultural activities in the most vulnerable areas, specifically Western Serbia. Current levels of agricultural insurance in the country are at 10%, far below the European average of 50%. The low levels of uptake in agricultural insurance are due to three main factors: (1) a lack of awareness, (2) the low value of production in a number of sectors and (3) a view that the insurance sector is overly tight, causing disputes over compensation when claims are made. In order to increase the level of agricultural insurance in Serbia, some are arguing that the purchase of insurance be made compulsory, or at least partially compulsory (compulsory for those that receive some sort of state support).
Page 2
BFC Agriculture Bulletin
4)
RSD 10 million for agricultural and rural development projects
June 21st, 2018, http://www.agronews.rs/za-projekte-agrarnih-udruzenja-10-miliona-iz-budzeta/
The Ministry of Agriculture has announced a call for co-financing projects in the field of agriculture and rural development. The aim of the funding is to promote and improve the quality of life in rural areas. A total of RSD 10 million has been made available for the co-financing projects, with a maximum amount of RSD 1 million for each approved project. Priority thematic areas are: the stabilization of income for those employed in agriculture, models of financial support for agriculture and rural areas, efficient land management, improved physical resources, improved knowledge transfer and human resource development, environmental protection in the field of agriculture, the modernization of agricultural production and processing, market and placement testing, the development of value chains, the diversification of rural economies, the preservation of the cultural and natural heritage, improved social structure, the strengthening of social capital, improved quality and safety in products and animal protection measures.
5)
State funding for young farmers
June 17th, 2018, http://www.agronews.rs/obezbeden-novac-za-pocetnike-u-poljoprivredi/
The Ministry of Agriculture is providing funds of up to RSD 1.5 million for young people who want to start a business in the agricultural sector. This represents a huge increase over the RSD 10,000 made available last year. To qualify for the funding, farmers must be between 18 and 40 years of age, have a registered agricultural holding or entrepreneurial activity that has yet to receive investments to get started, not obtain other investment sources and have settled all taxes with the state. Other conditions may also apply, depending on the agricultural activity for which the young farmer is requesting funding. Funding is provided for the purchase of new machinery, investments in the development and expansion of plant production, the preparation of agricultural products, the development and improvement of primary livestock production and for investments in the development and improvement of milk, vegetable and fruit processing. Because funding is given in advance, recipients must provide proof of how funds are used and are subject to inspections from the Ministry of Agriculture.
6)
Several complex cooperatives to be established
June 13th, 2018, https://beta.rs/ekonomija/ekonomija-srbija/91602-krkobabic
Minister of Regional Development Milan Krkobabic has announced that several complex cooperatives will be established this year in Serbia. These complex cooperatives will be established using up to EUR 500,000 from the state budget and will have the goal of connecting other cooperatives so that they can unite in their efforts and become important commodity producers and exporters.
7)
Guide to new rules on food labeling published
June 12th, 2018, http://www.agrosmart.net/vesti/vodic_za_upotrebu_nova_pravila_za_deklarisanje_hrane.html
The Ministry of Agriculture and the National Alliance for Local Economic Development (NALED) has published the ‘Guide to the Use of Rules on the Declarations, Marking and Advertising of Food’ as part of their effort to support the economy in understanding and adopting the new rules, which came into force on June 15, 2018. The new rules will mean greater safety for both producers and consumers as they provide more precise designation regarding the composition and quality of food products. More specifically, the new rules require products to be labeled with information regarding ingredients as well Page 3
BFC Agriculture Bulletin
as all relevant nutritional information. The guide also emphasizes that producers should take care not to mislead consumers with terms such as “fresh”, “natural”, “clean” and “traditional”, even if those terms have yet to be officially defined.
8)
First session of National Raspberry Council held
June 11th, 2018, http://www.minpolj.gov.rs/odrzana-prva-sednica-nacionalnog-saveta-za-malinu/
Representatives of the Ministry of Agriculture, the Ministry of Trade, the Serbian Chamber of Commerce, the Agricultural Faculties in Belgrade and Novi Sad, the Fruit Institute of Cacak and raspberry producers and processors met for the first session of the National Raspberry Council, a working group for the development of a strategy for the improvement of the raspberry industry in Serbia. The Council concluded that the quality of this year’s raspberry harvest will be good, despite adverse weather conditions. The Council also discussed production price expectations and processing and exporting costs. Representatives of the producers also suggested that the Ministry of Trade take part in the export and import of raspberries, including by controlling purchase sites. It was agreed that the Council would reconvene after the raspberry harvest has been completed to begin developing a strategic document.
Foreign Aid 9)
Construction of Macva irrigation system begins
June 15th, 2018, http://www.minpolj.gov.rs/pocela-gradnja-regionalnog-sistema-za-navodnjavanje-i-odvodnjavanje-macva/
The construction of the Macva irrigation and drainage system has started near Bogatic with the construction of the ‘CS N6’ subsystem. The new system will include a 62 kilometer channel that will enable irrigation waters to reach 26,000 hectares, with the ‘CS N6’ subsystem able to provide irrigation waters for 10,900 hectares. The ‘CS N6’ subsystem project is being funded with EUR 4.1 million from the Abu Dhabi Development Fund and is expected to be completed in two years. Irrigation systems are being constructed and rehabilitated across the country. In total, 12 irrigation projects have been launched and will cover 48,000 hectares. In the next phase (2019-2020), it is planned that irrigation efforts will cover another 55,000 hectares.
10) Organic agriculture twinning project in progress June 14th, 2018, http://www.agrosmart.net/vesti/toku-tvining-projekat-razvoj-organske.html
The ‘Strengthening Capacity for the Implementation and Further Development of Legislation in the Field of Organic Production and Quality Policies for Agricultural and Food Products’ twinning project began earlier this year and will run for a total of 24 months. The project, being funded by the European Union (EU), aims to build capacity, improve knowledge and raise awareness regarding organic production and agricultural quality policies. By developing organic production in Serbia and protecting the geographical origin of EU-compliant agricultural and food products, manufacturers can get the best market price for their products on both EU and international markets. In this regard, at least three Serbian agricultural and food products with a geographical indication will be ready for registration at the EU level. Moreover, an informational campaign will be conducted about Serbian organic production and food products with designations of geographical origin. Page 4
BFC Agriculture Bulletin
11) New green innovation vouchers awarded in Serbia June 11th, 2018, https://www.ebrd.com/news/2018/new-green-innovation-vouchers-awarded-in-serbia-.html
11 Serbian companies will receive a total of EUR 150,000 under the Green Innovation Vouchers program. The program aims to increase the innovation capacity of small and medium-sized enterprises (SMEs) in the field of green technologies and resource efficiency. Such innovations will not only help Serbia better prepare for changing climate but will also support its long-term economic competitiveness. The awarded projects cover various fields, including precision agriculture, waste management, energy conservation, renewables and eco-friendly products. The Green Innovation Vouchers program was started by the European Bank for Reconstruction and Development (EBRD), is funded by Austria’s DRIVE (Delivering Resource Efficiency Investments) program and is further supported by Italy through the Central European Initiative.
12) Third session of IPARD monitoring committee held June 6th, 2018, http://uap.gov.rs/vesti/vesti-2018/odrzano-trece-zasedanje-odbora-za-pracenje-ipard-programa/
The third session for the Committee for Monitoring the Implementation of the Pre-Accession Program for Rural Development (IPARD II) was held in Belgrade. The main topic of discussion was the implementation of the first public call for applications for IPARD II incentive projects. The structure of submitted requests was analyzed and issues related to the possible modification of the IPARD II program have been considered, with the aim of improving the procedure for submitting requests and the utilization of funds. It was also emphasized that the Agency for Agrarian Payments received a significant number of requests for IPARD II incentives based on the public calls. Serbian Agriculture Minister Nedimovic pointed out that the Agrarian Payments Administration now needs to process the applications as soon as possible and that, if necessary, new people will be employed to complete the task. In accordance with the signed agreement between Serbia and the European Union (EU), Serbia has EUR 175 million available for the development of agriculture.
Private Sector 13) The potential of organics June 27th, 2018, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239
Organic production is a major development opportunity for Serbia; however, only 0.4% of land is devoted to it (as compared to 5-6% in Europe). Because of this low level of land dedicated to organic production, organic exports amount only to EUR 20 million each year, the same value achieved as just one frozen fruit company. This low level has also forced domestic processors of organic goods to import organic raw materials. Although there have been positive trends in recent years regarding organic production in the country (such as the land used to produce organics more than doubling in the past eight years) and the country has great reason to be optimistic about the future of Serbian organics (such as 7% of land being ideal for organic production), there are still significant obstacles to be overcome. Organic production is widely viewed as not profitable by many farmers since domestic demand is low for the more expensive products. Still, there is reason to be optimistic as international organizations (such as German Corporation for International Cooperation (GIZ)) are working to link Serbian producers with Page 5
BFC Agriculture Bulletin
international buyers. If more fully developed, organics could become an important piece of the agricultural sector as the organic food market is one of the fastest developing markets in the world. For example, its value in Germany amounts to EUR 9 billion.
14) Rain hinders wheat harvest June 22nd, 2018, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:734301-Bice-zita-i-za-izvoz
The wheat harvest has been hampered on about 670,000 hectares due to rain creating conditions that are making it difficult for farmers to work the land with combines. The slowdown in the harvest could mean a reduction in the quality and total yield of the harvest; however, it is expected that there will be enough grains harvested for domestic consumption as well as for export into foreign markets. Overall quality this year was also affected by a month-long drought in Northern Serbia. Current wheat prices stand at RSD 16.5 per kilogram without VAT; however, this price will begin to change once U.S. and Russian harvests enter markets. Most farmers need an average price of RSD 20 per kilogram for this year’s harvest to be profitable.
15) Price of raspberries on the world market down June 21st, 2018, http://www.rtv.rs/sr_ci/ekonomija/nedimovic-niza-cena-malina-na-svetskom-trzistu_928862.html
Raspberry producers are finding themselves in a difficult situation as world prices have dropped. Additionally, it is difficult to open more markets for Serbian raspberries as most markets are already saturated. Moreover, consumers worldwide are increasingly demanding, requiring more information about where the products they buy come from and how they are made. With many producers concerned about the future of raspberries and their livelihoods, Agriculture Minister Branislav Nedimovic noted that the state is active in a number of ways to help the industry, including such measures as: production subsidies, education about insurance (especially in certain areas prone to weather events), improving infrastructure to reduce transportation and storage costs and ensuring that the industry is well-regulated and monitored. The Minister also noted that the National Raspberry Council has been established with the goal of setting expectations based on world market trends as well as developing a strategy for the industry. The Minister added that, moving forward, it will be necessary to make wise, well-informed decisions that will not worsen the situation through misguided efforts.
16) Meat prices on the rise June 15th, 2018, http://rs.n1info.com/a396656/Biznis/Neprijatno-iznenadjenje-za-kupce-meso-sve-skuplje.html
The price of meat (specifically pork and beef) has risen by up to 15% in many retail chains. This has been caused by a shortage of pigs as well as increased meat imports. At the same time, the Serbian cattle production industry has long been in crisis and has fallen further. Experts worry that these recent trends may become a permanent risk for market stability if corrective measures are not taken soon.
Page 6
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.