08/2018
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35 S e r b i a Agriculture Bulletin Belgrade doubles its investments in agriculture
266 cooperatives formed last year ENECA competition to help strengthen agricultural SMEs Serbia: the world’s third largest plum producer
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Belgrade doubles its investments in agriculture ............................................................................. 2 Organic agriculture research center established ............................................................................ 2 595 contracts awarded by Vojvodina provincial government ........................................................ 2 266 cooperatives formed last year .................................................................................................. 3
Foreign Aid ................................................................................................................. 3 5) 6)
ENECA competition to help strengthen agricultural SMEs.............................................................. 3 393 applications for IPARD tractor funding received ...................................................................... 3
Private Sector.............................................................................................................. 4 7) 8) 9) 10) 11) 12) 13)
Sunflower price dispute................................................................................................................... 4 Cattle breeding vital for agricultural development ......................................................................... 4 Russia considering temporary ban of Serbian fruit imports ........................................................... 4 Serbia: the world’s third largest plum producer ............................................................................. 4 Corn harvest projected to be near record level .............................................................................. 5 Local farmers becoming endangered .............................................................................................. 5 Blackberry producers face another difficult year ............................................................................ 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
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BFC Agriculture Bulletin
State Initiatives 1)
Belgrade doubles its investments in agriculture
August 29th, 2018, http://www.stips.minpolj.gov.rs/srl/vest/beograd-udvostucio-ulaganja-u-poljoprivredu
According to the official website for the City of Belgrade, Belgrade’s investment in agriculture has doubled in recent years, mostly due to city-funded subsidies designed to modernize the agricultural sector. Following an agreement with state authorities that saw the state take over obligations regarding the allocation of tractors, city officials began directing funding for co-financing efforts for smaller machine purchases as well as for educational trainings. More specifically, Belgrade farmers have taken advantage of city-run subsidy programs to purchase drip irrigation systems, anti-hail grids and beekeeping equipment.
2)
Organic agriculture research center established
August 15th, 2018, https://www.ekapija.com/en/news/2224959/serbia-gets-first-research
The first organic agriculture research center in Serbia has been established. The Center for Coordination and Transfer of Applied Research in Environmental Agriculture (Eco Agri Center) will focus on the provision of services that contribute to: the development of micro-, small- and medium-sized organic producers, the development of organic production and markets and the establishment of cooperation with European Union (EU) institutions. To this end, the Eco Agri Center will work to prepare strategically important, long-term strategy documents such as the Strategy for Development 2018-2023. These documents will help Serbia and surrounding countries develop organic production. The Eco Agri Center was established as part of the ‘Organic Bridge’ project by the Selenca Center for Organic Production, the Novi Sad Creative Education Center and Arhus Centar Novi Sad. The center is currently reliant on EU funding.
3)
595 contracts awarded by Vojvodina provincial government
August 9th, 2018, http://www.psp.vojvodina.gov.rs/VestiCyr.aspx?Id=21779
The Provincial Secretariat for Agriculture, Water Management and Forestry of Vojvodina awarded 595 contracts to farmers. The total value of investments made under the contracts amounts to about RSD 614 million, RSD 380.6 million of which will be provided from the provincial budget. In total for 2018, the provincial government of Vojvodina has allocated RSD 8.3 billion for investments to help small agricultural producers become more empowered and competitive. Measures include supporting young farmers (up to 40 years of age) in startup endeavors and helping farmers procure new equipment and install new irrigation systems. Of the 595 contract, 165 were signed with young farmers. The value of these investments is RSD 241 million, with RSD 200 million being provided by the provincial government. 430 contracts were signed for co-financing the purchase of equipment and irrigation systems. The value of these investments is RSD 373 million, with RSD 180 million being provided by the provincial government. These investments will help provide irrigation on 1,798.27 hectares of arable land.
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BFC Agriculture Bulletin
4)
266 cooperatives formed last year
July 31st, 2018, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html
Last year, the Serbian government allocated RSD 196 million for grants to cooperatives as part of the ‘500 Cooperatives in 500 Villages’ project. This enabled 266 cooperatives to be formed, an increase of 17% in the total number of cooperatives in the country. The government is expected to continue its support for cooperatives by allocating a total of EUR 50-100 million for assistance to cooperative creation and development over the next few years. Cooperatives and farmer associations are widely considered to be the best way to solve economic issues, particularly for those living and working in villages. They have been credited for revitalizing numerous villages and giving countless families a way to earn a sustainable income.
Foreign Aid 5)
ENECA competition to help strengthen agricultural SMEs
August 2nd, 2018, http://www.agrosmart.net/vesti/eneca-pomaze-malim-firmama-jacaju-vise.html
ENECA has announced a competition for small- and medium-sized enterprises (SMEs) engaged in agricultural processing within the ‘Aid for Trade - Support to Strengthening the Production Capacity of the Agro-Industrial Sector in the Republic of Serbia’ project. Ten SMEs engaged in agricultural processing will be selected to receive assistance in improving production and exports as well as in strengthening positions in domestic and foreign markets. Specifically, the selected beneficiaries will be supported with business training, mentoring support and promotional and sales activities (including participation at selected regional food and beverage fairs). Additionally, at least five will have the opportunity to participate in activities aimed at promoting exports and access to new markets, including business meetings with Russian companies. The ‘Aid for Trade - Support to Strengthening the Production Capacity of the Agro-Industrial Sector in the Republic of Serbia’ project aims to strengthen businesses by improving competitiveness and market positioning, the creation of added value, certification, export promotion and access to new markets. The program is supported by the United Nations Development Program (UNDP), with financial assistance provided by the Russian Federation.
6)
393 applications for IPARD tractor funding received
July 31st, 2018, http://www.stips.minpolj.gov.rs/srl/vest/ipard-sredstva-za-traktore-do-kraja-godine
Implementation of the Pre-Accession Program for Rural Development (IPARD) funds intended to help the development of villages in Serbia with the purchase of tractors have yet to be distributed as more requests for the funds have been made than there are funds available. According to the Ministry of Agriculture, more than 393 requests were received for the EUR 4.65 million available for the purchase of tractors. Agriculture Minister Branislav Nedimovic has stated that the Ministry will discuss reallocating other available IPARD funds with European Union (EU) representatives. Failing redistribution approval however, the Ministry plans to rank the applications and distribute the funds as soon as possible.
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BFC Agriculture Bulletin
Private Sector 7)
Sunflower price dispute
August 23rd, 2018, http://www.politika.rs/scc/clanak/409890/Spor-oko-cene-suncokreta
While the first results of the sunflower harvest are encouraging, producers are concerned over the disparity between the increased costs of production versus the price offered by processors. Victoria Group, the largest sunflower processor in the country, traditionally sets the price for other processors. This year, they have made an offer of RSD 28.5 per kilogram, down from last year’s final price of RSD 35.5. Because of this, sunflower producers are planning to protest for better prices, citing that modern processing technologies mean lower processing costs and should give processors the ability to offer higher purchasing prices. On the other hand, Victoria Group says its offering is in line with the world's leading stock exchanges as well as market trends in the country and in the region. Sunflower production in Serbia has grown in recent years, both in terms of yield and sown area. Last year, the area used for sunflower production grew by 9.1% to 230,000 hectares. Moreover, sunflower exports have tripled in the last three years, reaching more than 150,000 tons in the 2016/2017 agricultural year.
8)
Cattle breeding vital for agricultural development
August 17th, 2018, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:
Restoring cattle breeding is seen as an important step for the development of Serbian agriculture. Where Serbia once exported 30,000 tons of high-quality beef annually, it now only exports about 500 tons. Moreover, cattle production only makes up 30% of agricultural production in the country, compared to up to 60% in other parts of the world. To revitalize the sector, it is estimated that Serbia would need to increase the current level of 12,000 heads of cattle in the country to approximately 100,000.
9)
Russia considering temporary ban of Serbian fruit imports
August 13th, 2018, https://www.ekapija.com/en/news/2221457/export-to-russia-temporarily-halted-due-to-peach-fungus
Russia is considering a temporary ban on the import of certain fruits from Serbia following the appearance of a fungus in a shipment of peaches bound for Russia. Agriculture Minister Branislav Nedimovic has been in constant communication with Russian authorities regarding this matter and expects that Russian imports of all fruit will continue as normal once the analyses of these shipments have been completed and the situation resolved. Minister Nedimovic also noted that Serbia has already exported around 90% of this type of fruit without issue. The Russian phytosanitary supervision authority Rosselkhoznadzor announced its plans for a temporary ban on Serbian fruit of this type, primarily apricots and peaches.
10) Serbia: the world’s third largest plum producer August 8th, 2018, https://www.b92.net/biz/vesti/agro-biz.php?yyyy=2018&mm=08&dd=08&nav_id=1428546
Serbia is the world’s third largest plum producer, producing more than 500,000 tons per year. Only China (6 million tons) and India (700,000 tons) produce more plums annually. Despite this, plum processing in the country is very low, and a large portion of annual production is used for producing Page 4
BFC Agriculture Bulletin
brandy. Recently, however, the Serbian government has begun working with local governments and existing cooperatives to create complex cooperatives that will help increase plum processing and create value-added plum products. For example, the government allocated RSD 825 million in 2018 for a program to help cooperatives increase value-added production in the country.
11) Corn harvest projected to be near record level August 6th, 2018, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239
The yield of corn in this year’s harvest could exceed seven million tons and come close to or possibly exceed the record eight million tons achieved in 2016. This year, corn was sown on 900,000 hectares (70,000 hectares less than in 2016), and yields could reach as much as 12 tons per hectare in some areas. Additionally, there is expected to be no shortage of markets for the harvest this year as Northern Europe was affected by a drought and will be looking for other sources. This has given preliminary price estimates of RSD 16 per kilogram once the harvest is complete, although this figure is expected to grow slightly as the harvest is completed.
12) Local farmers becoming endangered August 5th, 2018, https://www.danas.rs/ekonomija/ratari-ostaju-bez-zemlje/
Local farmers in many areas of Serbia feel endangered and worry that they are being pushed out of making a livelihood by state-supported monopolies. Specifically, they point to long-term (i.e. 30-year) leases of large areas of state-owned land being offered to large companies instead of to local farmers. Moreover, many farmers are frustrated that they see large tracts of land leased to companies that have no experience in agriculture and fail to develop the land properly if at all. Farmers are also concerned by the high rental prices for land that is offered to them. For example, 150 hectares (of 1,350) of stateowned land in Botos was made available to local farmers at a rate of RSD 85,000 per hectare. Some local farmers are taking efforts to fight back, voicing problems on various forums and initiating administrative disputes; however, the feeling remains among many that the state wants to push small local farmers out of the sector.
13) Blackberry producers face another difficult year August 4th, 2018, http://www.agrosmart.net/vesti/propao-najveci-deo-roda-kupine-zbog-niske.html
Serbian blackberry producers are preparing for another difficult year this year. For the past three years, the purchase price of blackberries has been so low that many producers in the country find it hard to recuperate production costs, let alone make a profit. It is estimated that only a few producers, those which produce blackberry varieties that can withstand the long transport period to Russia (approximately 10% of production in the country), will find this year’s harvest profitable. The low prices are frustrating blackberry producers across the country, with many also angered by purchasers failing to live up to contractual agreements they signed earlier in the year. Moreover, producers feel abandoned by the state, which, in their view, has failed to provide support and will not schedule timely meetings with them to address their concerns.
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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.