#46 Serbia Agriculture Bulletin, BFC

07/2019

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46 S e r b i a Agriculture Bulletin RSD 3 million in rural tourism development

First seed bank opens in Serbia Promoting the production of alternative plant species New export markets open for Serbian meat

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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7)

RSD 3 million in rural tourism development ................................................................................... 2 RSD 2.3 billion paid out for 2018 agricultural incentives ................................................................ 2 First seed bank opens in Serbia ....................................................................................................... 2 Data on state-owned agricultural land available via web-based app ............................................. 2 Grant competition for agricultural cooperatives announced ......................................................... 3 Serbia to scrutinize use of agricultural land, increase subsidies ..................................................... 3 Free use of state-owned agricultural land in 2020.......................................................................... 3

Foreign Aid ................................................................................................................. 3 8) New call for IPARD funds expected in August 2019 ........................................................................ 3 9) Promoting the production of alternative plant species .................................................................. 4 10) Support competition for small fruit and vegetable processors ...................................................... 4

Private Sector.............................................................................................................. 5 11) 12) 13) 14) 15)

New export markets open for Serbian meat ................................................................................... 5 Design Taste Center selects 9 companies for innovative training program .................................... 5 Raspberry producers, processor reach minimum purchase price agreement ................................ 5 Hungarians investing in Arilje fruit processing plant ....................................................................... 5 Revolutionary irrigation system developed in Serbia ..................................................................... 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.

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BFC. Agriculture Bulletin

State Initiatives 1)

RSD 3 million in rural tourism development

July 29th, 2019, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:809049-Za-razvoj-seoskog-turizma-do-trimiliona-dinara

The Ministry of Agriculture has set out the conditions for RSD 3 million in incentives for the development of rural tourism and old artistic crafts. Individuals, registered commercial family farms, entrepreneurs, businesses and agricultural cooperatives are all eligible for the incentives. Incentives will be awarded based on an annual competition to those active in rural areas (i.e. areas with a population of less than 150 inhabitants per square kilometer). Investments in the development of rural tourism include the construction, upgrading, adaptation, investment and ongoing maintenance of facilities as well as the procurement of equipment.

2)

RSD 2.3 billion paid out for 2018 agricultural incentives

July 25th, 2019, https://www.dnevnik.rs/politika/brnabic-u-2018-isplaceno-982-ukupnih-podsticaja-za-agrar-25-07-2019

To date, 98.2% (RSD 2.3 billion) of promised incentives for Serbian agriculture have been paid out.

Although there was a delay in payments, a newly-introduced e-agrarian administration system has made the application to receive payments easier, faster and more accurate.

2018 incentives helped Serbian farmers procure 1,682 tractors in 2018. Of this amount, 150 were procured using IPARD funding.

3)

First seed bank opens in Serbia

July 23rd, 2019, https://beta.rs/ekonomija/ekonomija-srbija/114348-biznis-i-finansije-prva-banka-semena-u-srbiji-otvorena-umionickom-selu-pastric

The first seed bank in Serbia has opened in the village of Pastric with the aim of promoting the cultivation of old varieties of fruits, vegetables and cereals. It is hoped that this will help ensure the preservation of local biodiversity as well as boost profits for Serbian farmers. The bank differs from similar banks in that it is not focused only on collection but rather wishes to disseminate varieties to local farmers. The bank will also serve as a place where farmers can obtain knowledge as well as exchange it with others regarding the cultivation of old varieties. In the future, other such seed banks are expected to be established in every region in Serbia, each focused on the cultivation of specific varieties indigenous to that region.

4)

Data on state-owned agricultural land available via web-based app

July 19th, 2019, http://www.stips.minpolj.gov.rs/srl/vest/podaci-o-drzavnom-zemljistu-dostupni-putem-web-aplikacije

The Agricultural Land Administration has developed a new web-based app that allows for the inspection of state-owned agricultural land. The app is based on data obtained from the annual programs for the protection, arrangement and use of agricultural land. Data on agricultural land is presented in different layers, including: plots in public bidding, plots on multi-annual contracts, plots on contracts that are expiring, unrealized public tenders, parcels excluded from the program and parcels in co-ownership. The service has been available since July 15, 2019.

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5)

Grant competition for agricultural cooperatives announced

July 17th, 2019, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:806741-Bespovratna-sredstvazemljoradnickim-i-poljoprivrednim-zadrugama

The Cabinet of the Minister without Portfolio has announced a grant competition for agricultural cooperatives in Serbia. A focus for the grants will be placed on projects that work to establish new cooperatives as well as those that work to improve the production of raw materials, specifically in the milk, meat and fruit sectors. Newly-formed cooperatives are eligible for grants of up to RSD 7.5 million; established cooperatives are eligible for grants of up to RSD 15 million; and complex cooperative are eligible for grants of up to RSD 60 million.

6)

Serbia to scrutinize use of agricultural land, increase subsidies

July 14th, 2019, https://agrosmart.net/2019/07/14/veci-podsticaji-ali-samo-za-parcele-gde-se-stvarno-obavlja-poljoprivrednaproizvodnja/

The government of Serbia is undertaking a project to determine which agricultural parcels are actively being used in agricultural production. By 2023, the government plans on using this information to reform its agricultural subsidy programs so that only actively-used agricultural parcels will be eligible for subsidies. Currently, subsidies are awarded based on land being registered in the state cadaster; however, there have been some cases where subsidies are received for land that is not being utilized or is only being partially-utilized for agricultural production. Along with increased scrutiny over whether or not agricultural land is actually being used for agricultural production, increased subsidies and other incentives are also expected. Overall, this should result in more investments into the agricultural sector and greater agricultural production.

The establishment a land parcel identification system (a project recently begun with help from the European Union (EU)) is considered as key to this process as it will give the state greater control over available data and increase monitoring. The system is currently being tested in a number of municipalities and is expected to be finalized and go live nationwide in 2023.

7)

Free use of state-owned agricultural land in 2020

July 1st, 2019, https://www.danas.rs/ekonomija/krkobabic-2020-godine-besplatno-koriscenje-drzavnog-poljoprivrednogzemljista/

The government of Serbia has announced that, beginning next year, the free-of-charge use of unused state-owned agricultural land will be awarded to select farmers. Under the new measure, up to 50 hectares of land will be awarded to farmers under the age of 40 under strictly-established rules for use.

There are currently more than 200,000 hectares of unused state-owned agricultural land in Serbia.

Foreign Aid 8)

New call for IPARD funds expected in August 2019

July 25th, 2019, http://www.agronews.rs/novi-ipard-poziv-za-mesec-dana/

The Ministry of Agriculture has announced that a public call of IPARD funds will be made in the second half of August 2019 and last for three months. This will be the fourth call from Measure 1 (investments in the physical assets of agricultural holdings). This call also envisages the construction of facilities Page 3

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(farms, storage capacities, refrigerators, raising irrigation systems, greenhouses, orchards, etc.). The total available for investments under this call will be RSD 4.75 billion. New tractor procurement is expected to be the most popular request under this call, especially as tractors are no longer financed from national or provincial measures.

In order to qualify for IPARD funding under this call, natural persons, enterprises and other legal entities (e.g. agricultural cooperatives) must be registered with the Register of Agricultural Holdings and be in an active status.

9)

Promoting the production of alternative plant species

July 8th, 2019, http://www.agronews.rs/promocija-proizvodnje-alternativnih-biljnih-vrsta/

The ‘Competitive Sustainability of Agricultural Enterprises Through the Development of New Products with Added Value Based on Alternative Plant Species – Cornucopia’ project promotes the production of so-called “forgotten” alternative plant species as well as research to improve the development of smalland medium-sized enterprises engaged in the agricultural and food industry sectors. Specifically, it promotes the application of new technologies, the development of new products and the sustainable use of natural resources. The production of alternative plant species is becoming increasingly popular in Serbia. Plants such as wheat, buckwheat, sorghum, cannabis, butter and many others are proving to be very lucrative as they can be used for human and animal nutrition as well as in the processing industry.

The ‘Competitive Sustainability of Agricultural Enterprises Through the Development of New Products with Added Value Based on Alternative Plant Species – Cornucopia’ project began in April 2018 and will run through March 2020. Its EUR 353,000 budget, which is mostly financed by the European Union (EU), includes components for scientific research as well as for motivating agricultural producers to produce healthier, economically-viable and organic alternative plant species.

10) Support competition for small fruit and vegetable processors July 1st, 2019, http://www.agronews.rs/podrska-preradivacima-voca-i-povrca/

The ‘Strengthening the Capacities of Fruit and Vegetable Processors’ competition has been announced within the ‘Competitive Economy’ project. At least ten micro-, small- and medium-sized enterprises and entrepreneurs will be selected (primarily in the fields of fruit and vegetable processing) to receive a set of business and technology trainings and mentorships as well as networking opportunities through the Association of Domestic Producers of Private Brands, all with the ultimate goal of contracting sales with domestic and international retail chains.

The ‘Competitive Economy’ project was established to strengthen the competitiveness of the Serbian fruit and vegetable processing sector through systematic support to production and branding as well as to increased access to domestic and international markets. Support is provided only to micro-, smalland medium-sized enterprises and entrepreneurs lacking experience in branded production.

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Private Sector 11) New export markets open for Serbian meat July 23rd, 2019, http://www.agronews.rs/nova-trzista-za-izvoz-mesa/

Serbia’s meat producers will soon see more opportunities as two new markets will be opening up this year due to increased state interventions (including vaccinations and monitoring) that ensure the safety of meat products coming from the country. Specifically, Turkey will begin to allow the import of Serbian beef products (up to 7,000 tons) in August, and the European Union (EU) will begin to allow the import of Serbian pork products in October.

12) Design Taste Center selects 9 companies for innovative training program July 22nd, 2019, https://www.ekapija.com/en/start-up/2577642/innovative-juices-spreads-jams-cheeses-pies-desing-tastecenter-gathering-startups-and

The Desing company’s Design Taste Center has selected nine startup and small- and medium-sized food enterprises (of 17 that applied) to participate in a specially-created training program designed to increase their development capacity and competitiveness in domestic and foreign markets. The training program will include nine months of group and individual activities as well as three months of an intensive development camp. The training program will cover important topics for growth and development within the food sector, including food technologies, industrial and web design, promotional activities and events, access to markets and access to sources of finance.

13) Raspberry producers, processor reach minimum purchase price agreement July 15th, 2019, https://beta.rs/ekonomija/ekonomija-srbija/113998-proizvodjaci-malina-od-sutra-strajkuju-gladju-zbog-niskecene-tog-voca-neki-prete-da-ce-seci-prste

Representatives of Serbia’s Association of Raspberry and Blackberry producers have reached an agreement with the company Stanic for the purchase price of raspberries and called for an end to protests of the company. The two sides reached an agreement for a minimum purchase price of RSD 160-165 per kilogram, with the potential for greater prices should market prices rise. The two sides also agreed that all raspberries would be purchased as if they were first-class fruits as compensation for lower prices given for earlier harvests.

14) Hungarians investing in Arilje fruit processing plant July 5th, 2019, https://www.ekapija.com/en/news/2562019/hungarians-recognize-potential-of-arilje-and-serbian-raspberryfruit-processing-plant-to

Hungary’s Prosperitati Foundation has invested more than EUR 250 million in various projects in Serbia in the last three years. Among the largest of these projects is the construction of a 3,000-square-meter food processing plant in Arilje. The plant, which is a joint project with local company Stanic and Kecskemet’s Horizon Food, is expected to begin operations in 2020 and will process second- and thirdclass raspberries, blackberries, blueberries, plums and sour cherries not meant for retail.

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15) Revolutionary irrigation system developed in Serbia July 2nd, 2019, https://www.ekapija.com/en/news/2555166/agrokapilaris-revolutionary-irrigation-system-from-boljevcisupport-from-banks-and-ministry-of

The effects of climate change are becoming increasingly evident in each of our lives. But its impact is perhaps felt the greatest in the agricultural sector, where farmers are routinely battling against evermore extreme weather events. To combat this, graphic designer and agricultural engineer Zdenko Zloh has created a unique concept – AgroKapilaris. AgroKapilaris is a concept of subsoil-based irrigation (using specially-placed devices) that provides plants with optimal moisture directly at their roots throughout the vegetation season. Testing in Boljevci (the Belgrade municipality of Surcin) revealed that the system performs well, even in years characterized by extreme droughts (e.g. 2012), as yields increased 25-50%. Moreover, AgroKapilaris also saves on energy and water consumption and can reasonably be expected to work normally for more than 50 years.

With impressive pilot results, Zloh is now in discussions with a financial institution for the financing necessary to bring the product to market. Zloh also hopes to get the support of the Ministry of Agriculture in order to help farmers be able to purchase the system once it is available commercially.

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