#54 Serbia Agriculture Bulletin, BFC

03/2020

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54 S e r b i a Agriculture Bulletin COVID-19 policies will not inhibit agricultural activities Serbia, Israel sign agreement on agricultural cooperation April frosts expected to damage fruit crops

Agricultural works continue despite state of emergency

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Agriculture Finance Bulletin Edition #54, March 2020

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

COVID-19 policies will not inhibit agricultural activities ................................................................. 2 Crop production incentives to be paid out without applications.................................................... 2 Rulebook published for organic livestock production incentives ................................................... 2 Field electrification incentives available to farmers........................................................................ 2 Serbia, Israel sign agreement on agricultural cooperation ............................................................. 2 Ministry of Agriculture offering subsidized loans through commercial banks ............................... 3

Private Sector.............................................................................................................. 3 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19)

April frosts expected to damage fruit crops .................................................................................... 3 New app to help orchard producers through unprecedented period ............................................ 3 Agricultural works continue despite state of emergency ............................................................... 4 Serbia to export flour to help Western Balkan countries amid COVID-19 outbreak ...................... 4 Raspberry and blackberry association urges cultivation to continue ............................................. 4 Serbian domestic flour and wheat supplies ample ......................................................................... 4 Export requirements eased for fruits and vegetables bound for Russia ......................................... 4 2020 price forecasts released for ten agricultural products ........................................................... 5 First International Banat Wine Festival held in Zrenjanin ............................................................... 5 Second Contemporary Cooperative Society in Serbia conference held.......................................... 5 Wheat exports down five times due to poor quality ...................................................................... 6 Komercijalna Banka to become most important partner for agribusinesses ................................. 6 Price of Serbian agricultural land growing 5-7% per year ............................................................... 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)

COVID-19 policies will not inhibit agricultural activities

March 24th, 2020, https://www.kamatica.com/vest/poljoprivrednicima

Although Serbia has initiated a policy to restrict movement as part of a concerted effort to contain the spread of COVID-19, Agriculture Minister Branislav Nedimovic has announced that farmers working to cultivate their fields can obtain special permission to continue their important works after the curfew.

This is important as spring sowing in the country is entering its most active phase. The Minister also stated that agricultural works should not be negatively impacted by the new measures, especially as most farmers have already stored the necessary seeds, fuel and fertilizer to complete their spring sowing.

2)

Crop production incentives to be paid out without applications

March 16th, 2020, https://www.danas.rs/ekonomija/isplata-podsticaja-ministarstva

As a response to the COVID-19 outbreak and the measures taken to contain it, the Agrarian Payments Administration has announced that it will execute basic crop production incentive payments to eligible farmers in 2020 without them having to apply for it.

3)

Rulebook published for organic livestock production incentives

March 13th, 2020, http://uap.gov.rs/objavljen-novi-pravilnik-za-organsku-stocarsku-proizvodnju/

The Ministry of Agriculture has published a rulebook on the use of incentives for organic livestock production. The rulebook stipulates the types of incentives available, the qualification criteria to be eligible for available incentives, maximum incentive amounts and how to apply. Incentives are available for a wide variety of organic production, including organic milk production and organic livestock fattening and breeding.

4)

Field electrification incentives available to farmers

March 13th, 2020, https://agrosmart.net/2020/03/13/poljoprivrednicima-od-ove-godine-podsticaji-za-elektrifikaciju-polja/

The Ministry of Agriculture has adopted an ordinance regarding field electrification incentives. Specifically, the ordinance states that persons who are registered in the Register of Agricultural Holdings and are active in status are eligible to receive incentive funding for field electrification, including for partially covering costs related to the procurement of cables and other related equipment, site preparation and connection to the electrical network. Incentive amounts are determined as a percentage of the value of eligible investment, up to RSD 800,000.

5)

Serbia, Israel sign agreement on agricultural cooperation

March 12th, 2020, http://www.tanjug.rs/full-view_en.aspx?izb=541921

Agriculture Minister Branislav Nedimovic has met with Israeli Ambassador to Serbia Alona Fisher-Kamm to discuss cooperation in the agricultural sector. The meeting ended with the two sides signing an agreement on cooperation regarding the application of new technologies and solutions in agriculture.

The agreement is expected to open up Israeli investments in Serbia as well as lead to further cooperation and stronger bilateral ties.

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6)

Ministry of Agriculture offering subsidized loans through commercial banks

March 11th, 2020, http://subvencije.rs/krediti/subvencionisani-krediti

The Ministry of Agriculture is working with commercial banks to offer farmers subsidized loans for agricultural production. Specifically, subsidized loans are available for: • Developing animal husbandry, including the procurement of animals and the purchase of animal insurance premiums • Developing arable farming, fruit growing, viticulture, vegetable growing and floriculture • Investing in agricultural machinery and equipment • Procuring animal feed Subsidized loans have a fixed interest rate of 3% per year (1% under certain conditions), a repayment period of 3-6 years and a grace period of 1-3 years. Those eligible for subsidized loans include individual holders of commercial family farms, legal entities and agricultural cooperatives with at least five members registered in the Register of Agricultural Holdings.

Private Sector 7)

April frosts expected to damage fruit crops

March 26th, 2020, http://www.stips.minpolj.gov.rs/srl/vest/struka-steta-zbog-mraza-na-vocu-od-40-do-50-miliona-evra

A professor of agriculture in Novi Sad has calculated that the estimated damage to fruit crops by frost this year will be between EUR 40 million and EUR 50 million. This estimate assumes some level of damage to approximately 95% of apricots and 60-70% of peaches and plums. Additionally, the professor estimates that some types of cherries will also experience significant frost damage, while apples and other types of cherries will be more resilient. Late frosts are expected to hit the country at some point within the first 10 days of April.

8)

New app to help orchard producers through unprecedented period

March 26th, 2020, http://www.agronews.rs/digitalni-agronom-podrska-uzgajivacima-usled-pandemije/

A combination of the recently-imposed movement restrictions (to contain the COVID-19 outbreak) and the early vegetation of orchards (due to higher-than-normal temperatures in February and early March) has put many Serbian orchards in a difficult place. A new tool, however, has become available to help them through this unprecedented period.

MapMyApple is a mobile phone app that helps control orchard conditions and plan measures. Moreover, the app is tailored to each orchard’s unique conditions. The app works by blending scientific knowledge with the practical experiences of orchards from around the world. It can tell producers when and in what quantities to irrigate, how and when to best protect fruits and how to maintain growing conditions for optimal nutritional value. The main benefit of the app is that it provides recommendations in time for producers to effectively plan their days around the new movement restrictions. The app is available for free on Android and iPhone devices.

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9)

Agricultural works continue despite state of emergency

March 22nd, 2020, https://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html

Farmers across Serbia are continuing their important work despite the recent COVID-19 measures taken.

In fact, it was recently announced that Serbian farmers are currently sowing approximately 2 million hectares.

Agricultural work is considered essential as it provides basic sustenance for the country, and any significant delay in spring planting could be detrimental to the stability of the country’s food safety. That being said, it is important to note that government officials and agricultural cooperatives are working closely with farmers to ensure that work can continue in a safe way. This includes ensuring that areas in which farmers could potentially come into contact the virus are disinfected and kept in a hygienic state. Additionally, farmers are asked to assist farmers aged 70 years or older in order to reduce their potential for exposure.

10) Serbia to export flour to help Western Balkan countries amid COVID-19 outbreak March 20th, 2020, https://bbj.hu/region/serbia-plans-food-exports-to-w-balkan-countries_180049

Serbia plans to launch exports of flour to Western Balkan countries to help them avoid food shortages amidst the COVID-19 pandemic. Serbia currently has an enormous reserve of wheat, corn and vegetable oil. For example, Serbia currently has enough flour to supply its domestic market for two years.

11) Raspberry and blackberry association urges cultivation to continue March 18th, 2020, https://beta.rs/ekonomija/ekonomija-srbija/124646

The Association of Raspberry and Blackberry Producers of Serbia has called on producers to continue production works while also respecting the measures in place to contain the spread of COVID-19. Amid the uncertainty of the current situation with the COVID-19 pandemic, many producers are uncertain how to proceed, prompting concerns that many raspberry and blackberry plantations may not be cultivated this year. Some experts believe it extremely important for cultivation to continue as normally as possible, especially given that the industry supports the livelihood of an estimated 100,000 Serbians.

12) Serbian domestic flour and wheat supplies ample March 13th, 2020, https://agrosmart.net/2020/03/13/brasna-dovoljno-u-radnjama-cene-zita-padaju-izvoz-stoji/

Although prices for flour have increased and there are sporadically shortages on store shelves, Serbia is not experiencing a flour or wheat shortage. In fact, experts indicate that domestic flour needs are fully satisfied and that the country currently has a large surplus (500,000 tons) of wheat. As such, there should be no effective shortage of the essential product on market shelves or for grain producers. Although the supply is ample, experts believe that the price of flour will remain at approximately RSD 28 per kilogram or possibly increase. The price of wheat is currently approximately RSD 19 per kilogram.

13) Export requirements eased for fruits and vegetables bound for Russia March 13th, 2020, http://www.agronews.rs/laksi-izvoz-voca-i-povrca-iz-srbije-u-rusiju/

New rules have been introduced to ease the export of fruits and vegetables from Serbia to Russia. Specifically, the minimum refrigerated capacity of exports bound for Russia have been reduced from 500 tons to 200 tons. This will make it easier for many Serbian farmers to export to Russian markets, especially those engaged in the export of plums, cherries, strawberries, raspberries, blueberries, blackberPage 4

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ries, currants, cranberries and similar small fruits. The new rules will not apply to the export of apples, peaches or nectarines.

14) 2020 price forecasts released for ten agricultural products March 10th, 2020, https://agrosmart.net/2020/03/10/cene-u-2020-oko-proseka-znacajan-pad-samo-kod-maline/

The Ministry of Agriculture, working in collaboration with the United State Agency for International Development (USAID), has released a 2020price forecast for ten agriculture products: • Wheat – the average price is expected to average approximately EUR 160 per ton, with lower prices in the spring and higher prices in the autumn.

• Corn – higher demand globally is expected to push corn prices to approximately EUR 140 per ton.

• Soy beans – there is a slight increase in price expected for soy beans this year, amounting to an estimated EUR 330.

• Cattle – the average annual price of live cattle scales is expected to be between EUR 1.86 and EUR 1.90.

• Pigs – the average annual price of live pigs is expected to range between EUR 139 and EUR 145.

• Potatoes – global prices for potatoes are nearly impossible to predict as there is tremendous variation between different points of sale. Domestic prices, however, are expected to range between RSD 47 and RSD 58.

• Peppers – similar to potatoes, an average global price is not practical to predict; however, the domestic price is expected to be approximately EUR 1.8 per kilogram.

• Raspberries – demand for raspberries has been declining, leading to an average purchase price of between EUR 0.80 and EUR 1.00.

• Blueberries – blueberry prices are expected to remain consistent, with prices at the quantum market ranging from RSD 400 to RSD 1,000.

• Plums – there has been no indication that demand for fresh plums will change from previous years; as such, the average purchase price of plums is expected to remain between USD 0.50 and USD 0.60.

These price forecasts were made on the basis of global and stock market reports, analyses of trends and possible risks, impact events on product prices and the expectations of all participants in the various market chains.

15) First International Banat Wine Festival held in Zrenjanin March 6th, 2020, http://www.psp.vojvodina.gov.rs/VestiCyr.aspx?Id=22350

The first International Banat Wine Festival was held this month as part of an effort to support the development of viticulture and wine production in Central Banat. The festival gathered approximately 80 exhibitors and featured 170 competing wines. The festival also marked the first gathering of winemakers from Vojvodina and the surrounding regions in Zrenjanin (Central Banat). In addition to the wine competition, the festival also featured expert lectures in the field of winemaking, viticulture and tourism. The Provincial Secretary of Agriculture for Vojvodina hopes that this event will become an annual one that continues to grow and bring awareness to the region’s capacity to produce quality wines.

16) Second Contemporary Cooperative Society in Serbia conference held March 6th, 2020, http://www.rtv.rs/sr_ci/ekonomija/savremeno-zadrugarstvo-u-srbiji_1100395.html

The second Contemporary Cooperative Society in Serbia conference was held as part of an effort to strengthen the development of the cooperative society in the country by highlighting practical examples, offering expert advice and encouraging farmers to form and/or join associations/cooperatives, with the ultimate goal of making Serbian farmers more competitive in domestic and international marPage 5

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kets. This second iteration of the conference brought together farmers in Knic (Sumadija region) who are interested in joint activities that will help them increase production capacities and obtain a better market position. Specifically, this iteration of the conference focused on providing farmers with an international perspective, especially the marketing of products through cooperatives. The conference also highlighted that three new cooperatives are expected to be establishing in the Knic municipality in the near future, joining the two existing (vegetable and beekeeping) cooperatives that are active in the area.

17) Wheat exports down five times due to poor quality March 5th, 2020, https://www.danas.rs/ekonomija/psenica-loseg-kvaliteta-izvoz-pao-pet-puta/

Although there is still some uncertainty (especially as spring weather can still change the situation), the lack of snow cover this winter is expected to negatively impact the production levels of spring crops. As a response, most market estimates forecast that the prices for most Serbian spring crops will rise this year. One important exception to this is the price for Serbian wheat. Serbian wheat, in general, suffers from a lack of quality, largely due to the country’s wheat producers using poorer-quality seeds and/or failing to apply the most appropriate agricultural technology to wheat production. In fact, the quality of Serbian wheat is so low that Serbian wheat exports are down five times compared to the previous year.

If Serbian wheat is to rebound and gain traction in export markets, it is important that wheat producers begin using quality seeds and implementing appropriate agricultural practices.

18) Komercijalna Banka to become most important partner for agribusinesses March 4th, 2020, https://www.ekapija.com/en/news/2808016/nlb-plans-for-komercijalna

Nova Ljubljanska Banka recently bought an 83.23% share of Komercijalna Banka and plans to help it become the most important partner to agribusinesses in Serbia. Both banks are currently active in supporting the agricultural sector, but the board of Nova Ljubljanska Banka believes that more work can be done in this direction. Specifically, the board hopes to leverage existing Komercijalna Banka relationships as well as include Komercijalna Banka in a larger regional platform that will help agribusinesses more easily penetrate regional markets outside of Serbia.

19) Price of Serbian agricultural land growing 5-7% per year March 2nd, 2020, https://www.ekapija.com/en/news/2804325/price-of-agricultural-land

In the past three years, the price of agricultural land in Serbia has grown by 5-7% per year. The highest average prices for agricultural land are currently in South Banat (EUR 10,300 per hectare), North Backa (EUR 9,650 per hectare), Srem (EUR 8,500 per hectare) and West Backa (EUR 8,250 per hectare). The lowest average prices for agricultural land are in Southern Serbia and Eastern Serbia (EUR 2,750 per hectare). Average prices for agricultural land in Sumadija and Western Serbia amount to EUR 3,350 per hectare, and average prices for agricultural land in Belgrade are EUR 4,200 per hectare.

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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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