#49 Serbia Agriculture Bulletin, BFC

10/2019

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49 S e r b i a Agriculture Bulletin Winemaking Development Strategy 2020-2030 expected to be adopted Japanese investors interested in Serbian food industry and agriculture Serbian land degradation will take 30 years to recover Farmers satisfied with wheat sowing

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Agriculture Finance Bulletin Edition #49, October 2019

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8) 9)

Swine flu vaccinations to cease ....................................................................................................... 2 Field fire detection platform under development .......................................................................... 2 Winemaking Development Strategy 2020-2030 expected to be adopted...................................... 2 Free trade agreement with EEU will boost trade with Russia ......................................................... 2 500 Cooperatives in 500 Villages campaign to continue................................................................. 3 Ministry of Agriculture announces grant competition for young farmers ...................................... 3 Russia, Serbia agree to new fruit and vegetable export agreement ............................................... 3 Documents on agricultural project published for public comment ................................................ 3 Land used for organic production has tripled since 2012 ............................................................... 4

Foreign Aid ................................................................................................................. 4 10) 11) 12) 13)

Japanese investors interested in Serbian food industry and agriculture ........................................ 4 Coca-Cola HBC Serbia supports program to empower women in tomato production ................... 4 Survey finds young Croatian and Serbian farmers want to keep farming ...................................... 4 Greater cooperation needed among agribusinesses in Southeastern Europe ............................... 5

Private Sector.............................................................................................................. 5 14) 15) 16) 17) 18) 19) 20)

Serbian land degradation will take 30 years to recover .................................................................. 5 Fresh fruit and vegetable networking forum to be held in Belgrade .............................................. 5 Farmers satisfied with wheat sowing .............................................................................................. 6 Number of agricultural workers in decline ...................................................................................... 6 Beef exports to Turkey set to resume ............................................................................................. 6 Number of farmers producing sugar beet declining ....................................................................... 6 Agriculture shows growth of 15.2% in value-added GDP................................................................ 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 »

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BFC. Agriculture Finance Bulletin.

State Initiatives 1)

Swine flu vaccinations to cease

October 29th, 2019, https://biznis.telegraf.rs/agro-biz/3116730-ukida-se-vakcinacija-svinja-protiv-klasicne-kuge

Agriculture Minister Branislav Nedimovic announced that swine flu vaccinations, in the near future, will cease as this is a precondition for exporting meat to European Union (EU) markets. The Minister also announced a state measure to provide long-term (ten-year) leases of state agricultural land to pig farmers starting next year. The Minister hopes that the efforts made to open EU markets will also help Serbian meat exporters gain a strong foothold in Chinese markets next year.

2)

Field fire detection platform under development

October 27th, 2019, http://www.rtv.rs/sr_ci/drustvo/razvija-se-platforma-za-otkrivanje-pozara-na-njivama_1061108.html

The Ministry of Agriculture and the Biosens Institute, in cooperation with the European Space Agency, are developing and testing a platform to detect fires on agricultural land across Serbia. Once operational, the platform will be capable of detecting every fire on every parcel of land in real time. Eventually, the system will be paired with an automatic alert system and help authorities reduce the impact of field fires and catch arsonists. Currently, the system is being testing in Vojvodina.

3)

Winemaking Development Strategy 2020-2030 expected to be adopted

October 24th, 2019, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.htm

Finance Minister Sinisa Mali has announced that Serbia's Wine Sector Development Strategy 2020-2030 is expected to be adopted by the end of the year. The Minister stated that the government is focusing on creating an actionable strategy that is practical for implementation and not just a wish list. It will also focus on providing state financial resources for improving production as well as for promoting Serbian winemaking and wines, especially through the creation of a nation winemaking brand. The Minister added that these measures should help contribute to not only the growth of the wine industry as a whole but also to the development of tourism in the country and the general “Made in Serbia� brand.

For his part, Agriculture Minister Branislav Nedimovic noted that much work needs to be done to help support the development of the wine industry, including increasing the number of vineyards growing domestic varieties of grapes and helping ensure that Serbian wines do well at international competitions. The strategy, he hopes, will bring a clear focus to what needs to be done and the best way to do it.

4)

Free trade agreement with EEU will boost trade with Russia

October 23rd, 2019, https://naslovi.net/2019-10-23/beta/ministar-sporazum-srbije

Serbia’s free trade agreement with the Eurasian Economic Union (EEU) is expected to increase the exchange of agricultural and food products between Serbia and Russia from its current level of USD 350 million per year to USD 500 million per year. This is a particularly good deal for Serbian agriculture as exports to Russia currently amount to USD 280 million per year, with imports only accounting for USD 70 million per year.

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Russia mainly imports Serbian apples, nectarines, frozen vegetables, cheeses and brandy. Russian exporters have expressed interest in exporting livestock, feed additives, poultry meat and artificial fertilizers to Serbia. Both sides are hopefully that increased trade will contribute to job creation and a strengthening of market positions.

5)

500 Cooperatives in 500 Villages campaign to continue

October 23rd, 2019, https://beta.rs/ekonomija/ekonomija-srbija/118321

Minister for Regional Development Milan Krkobabic announced that the 500 Cooperatives in 500 Villages campaign will continue. Through the first three years of the campaign, 580 cooperatives have been established. The Minister stressed the importance of the campaign for developing villages, reducing the migration of young people away from villages and increasing the quality of life in rural areas. The campaign is seen by many as the government’s strong support for developing cooperatives and improving lives in villages through concrete, attainable measures.

6)

Ministry of Agriculture announces grant competition for young farmers

October 17th, 2019, http://subvencije.rs/vesti/konkurs-za-dodelu-bespovratnih-sredstava-mladim

The Ministry of Agriculture is accepting applications for grants to support young farmers. Grants will be awarded to (1) develop/improve crop production, (2) develop/improve livestock production or (3) procure quality breeding livestock animals. To qualify for the grant program, applicants must be registered as an agricultural holding, 40 years of age or younger and be considered a small-sized or family farm.

Applications will be accepted through the end of this year.

7)

Russia, Serbia agree to new fruit and vegetable export agreement

October 16th, 2019, http://www.stips.minpolj.gov.rs/srl/vest/sa-rusijom-novi-sporazum-o-izvozu-voca-i-povrca

An agreement on phytosanitary protection, which should make it easier for domestic producers to export fruits and vegetables to the Russian market, was signed during Russian Prime Minister Dmitry Medvedev's visit to Serbia. The main benefit of the agreement is the liberalization of the conditions for cold storage points. The agreement also reduces the capacity that manufacturers need to meet for export and will introduce a digitized consignment monitoring system that will reduce food quality risks.

Officials are hopeful that the new agreement will help boost fruit and vegetables exports to Russia, which decreased last year.

8)

Documents on agricultural project published for public comment

October 14th, 2019, http://www.agronews.rs/dokumenta-za-projekat-razvoja-konkurentnosti-poljoprivrede/

The Ministry of Agriculture published a series of documents for public comment regarding the Agricultural Competitiveness Development Project. Specifically, the Ministry has published the Framework for Environmental Management and Social Issues, the Summary of the Framework for Environmental and Social Management and the Stakeholder Engagement Plan on its website.

The Agricultural Competitiveness Development Project is the result of cooperation between the Ministry of Agriculture and the World Bank.

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9)

Land used for organic production has tripled since 2012

October 9th, 2019, http://www.tanjug.rs/full-view_en.aspx?izb=512534

According to Agriculture Minister Branislav Nedimovic, the amount of agricultural land used for organic production has tripled since Serbia passed legislation regarding organic production in 2012. The Minister added that the government realizes that the transition to organic production is difficult for farmers, taking up to three years to complete. However, he reiterated that the government understands that this is an important sector to support and that the government will continue to provide subsidies to those engaged in organic production.

Foreign Aid 10) Japanese investors interested in Serbian food industry and agriculture October 22nd, 2019, https://www.ekapija.com/en/news/2665633/japanese

During a three-day visit to Japan, Serbian Prime Minister Ana Brnabic met with Japanese Prime Minister Shinzo Abe and was introduced to several Japanese investors interested in making investments into Serbia’s food industry and agricultural sector. Japan and Serbia have strengthened their economic relations in recent years, as evidenced by several Japanese investors recently beginning operations in Serbia (e.g.

Japan Tobacco International, which has decided to expand production; Toyo Tires, which has announced plans in Indjija; and Yazaki, which is expected to employ 1,700 Serbians).

11) Coca-Cola HBC Serbia supports program to empower women in tomato production October 15th, 2019, http://rs.n1info.com/Biznis/a534830/Coca-Cola-HBC

Coca-Cola HBC Serbia has made a donation of RSD 327,600 to the Let’s Help Women from Stanisic Live Their Work project. The project was established to empower women through the production and processing of tomatoes grown on organic principles. The funds are intended for the specific purpose of purchasing a professional dryer that will allow for more efficient production and processing. The funds will also hopefully help involve more women from Stanisic and the surrounding areas in the project, ultimately allowing more women to earn extra money and have a better quality of life.

12) Survey finds young Croatian and Serbian farmers want to keep farming October 9th, 2019, https://agrosmart.net/2019/10/09/mladi-u-srbiji-i-hrvatskoj-zele-da-se-bave-poljoprivredom/

The results of a project funded by the European Commission (EC) and implemented via the Erasmus + KA2 Strategic Youth Partnership were presented at the Belgrade Food Show International Conference.

As part of the project, a survey was conducted of young farmers in both Croatia and Serbia. The survey found that 55.55% of Croatian respondents and 65.78% of Serbian respondents are small producers (producing on five hectares or less). At the same time, the majority (76% for Croatian respondents and 64.9% for Serbian respondents) see themselves likely to be engaged in agriculture in five years as they enjoy the business. Respondents from both countries also tend to receive the most help from family,

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while Serbian respondents expressed strong dissatisfaction with the role and policy of the state in the food production sector.

13) Greater cooperation needed among agribusinesses in Southeastern Europe October 1st, 2019, https://www.ebrd.com/news/2019/agribusiness-firms

Participants at the EBRD-organized Consumer Rules Summit discussed how the agribusiness sector in Southeastern Europe would benefit greatly and be able to successfully address the challenges of the future through increased cooperation within the sector and through greater regional integration. They also discussed consumer demands, digital transformation, climate change and the importance of new business models for increasing competitiveness.

Participants included representatives from companies active in agriculture from the European Union (EU), Southeastern Europe, the Middle East, Africa and Turkey.

Private Sector 14) Serbian land degradation will take 30 years to recover October 29th, 2019, http://www.politika.rs/sr/clanak/440473/Pogledi/Trideset-godina-za-obnovu-plodnosti-zemlje

Agriculture is one of the most complex and important industries of any country, and the highest-valued asset within the industry is land. Serbia (as a part of Yugoslavia) was known for being the granary of Europe thanks to soil rich with humus content. Since the fall of the former state however, land value has been on the decline thanks to soil degradation, leading to a sharp decline in exports. Making the situation worse is that experts believe that, if efforts are taken now to rehabilitate the land, it will take at least 30 years for the land to return to its former state. Compounding this issue is the fact that the state of Serbia has not had any realistic development program that would help boost land fertility in the last ten years, meaning that a relatively uneducated public continues agricultural practices that further degrade the land. If land in Serbia is to recover to its former state, efforts need to be undertaken now; even then, it is likely to be a long wait until Serbian land regains its status as the granary of Europe.

15) Fresh fruit and vegetable networking forum to be held in Belgrade October 25th, 2019, http://www.agronews.rs/fruitnet-forum-umrezavanje-vocara-i-povrtara/

Leading international producers of fresh fruits and vegetables will gather in Belgrade next month for the Fruitnet Forum for Southeastern Europe to identify new opportunities for the region in the fields of investment, agricultural varieties, technologies, markets and cooperation. One of the main goals of the forum is to deepen the understanding of existing challenges and come up with solutions for how they might be overcome. This year, the forum will focus on the berry sector as well as new strategies to attract investment, promote collaboration, improve quality and break into new markets. This year’s forum will also include B2B Cafe, which will give delegates the opportunity to meet and discuss opportunities with international customers.

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16) Farmers satisfied with wheat sowing October 24th, 2019, http://www.agronews.rs/26526-2/

Farmers who have sown wheat this year have been satisfied thus far. So far, preliminary testing indicates that wheat seeds that have been sown are germinating well and should sprout as expected. Even those farmers who are later in sowing wheat due to corn harvesting operations are expected to have a normal wheat production cycle.

It should be noted that farmers tend to grow wheat not for profit but for livestock feed as well as for rotating crops to ensure that land is not overly worked by one crop.

17) Number of agricultural workers in decline October 22nd, 2019, http://www.agronews.rs/ogroman-pad-u-broju-zaposlenih-u-poljoprivredi/

Employment in agriculture, forestry and fisheries in Serbia is in serious decline. While 506,100 people worked in this sector in 2016 (accounting for 18.6% percent of total employees), only 372,800 people were employed in this sector in 2018 (accounting for 15.9% of total employment). Employment in this sector is slightly higher for men than for women (17.7% versus 13.6% of total employment). The highest share of employment in this sector is in the Sumadija and Western Serbia regions (27.4%), and the lowest share is in the Belgrade region (3.2%).

18) Beef exports to Turkey set to resume October 10th, 2019, http://rs.n1info.com/Biznis/a533326/Novosti-Dogovoren-izvoz-jos-2.000-tona-junetine-u-Tursku.html

Beef exports from Serbia to Turkey are set to resume following an agreement reached during a recent visit to Serbia by Turkish President Recep Erdogan. It is expected that around 2,000 tons of beef will be exported to the Turkish market by the end of the year. Starting next year, 5,000 tons of Serbian beef is expected to be exported to Turkey annually.

19) Number of farmers producing sugar beet declining October 3rd, 2019, http://www.agronews.rs/sve-manje-proizvodaca-secerne-repe/

There are fewer and fewer sugar beet producers in Serbia. One of the main reasons for this is that sugar beet producers feel that they cannot make adequate profits from the production of this crop due to the low price of sugar on the world market and the unequal ratio of sugar to beet producers. There has also been an issue with rot in recent years, which has made production more difficult. To combat this trend, some sugar mills are engaging with scientists and other experts to help sugar beet producers solve the issue with rot and expand sugar beet production areas.

20) Agriculture shows growth of 15.2% in value-added GDP October 2nd, 2019, https://agrosmart.net/2019/10/02/bdp-47-milijardi-dolara-poljoprivreda-zabelezila-rast/

Serbia’s GDP amounted to USD 47.04 billion in 2018, up 4.4% in terms of real GDP growth. In terms of activities, the most significant share in GDP formation was manufacturing (14.5%), followed by wholesale, retail trade and motor vehicle repairs (11.5%), real estate (7.0%), agriculture, forestry and fisheries (6.3%) and the information and communication sector (4.8%). The largest real growth in gross value added in 2018 was recorded in agriculture, forestry and fisheries (15.2%) and in construction (12.8%).

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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.

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