#55 Serbia Agriculture Bulletin, BFC

04/2020

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55 S e r b i a Agriculture Bulletin Berry producers upset with government decision regarding EUR 100 million in aid RSD 2.6 billion in state aid to help farmers during COVID-19 pandemic FAO, EBRD launch research on the use of technology in agriculture 47,458 permits granted to farmers, easing their restrictions on movements

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Agriculture Finance Bulletin Edition #55, April 2020

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)

Berry producers upset with government decision regarding EUR 100 million in aid ..................... 2 Farmers need not be registered in VAT system to qualify for state aid package ........................... 2 RSD 2.6 billion in state aid to help farmers during COVID-19 pandemic ........................................ 2 Package of state support for farmers under development ............................................................. 2 Digital platform launches to connect food producers with consumers .......................................... 3 State support for farmers to increase ............................................................................................. 3 Ministry of Agriculture offers subsidized loans to farmers through banks ..................................... 3 State planning to impose duties on fruit and vegetable imports.................................................... 3 Cooperative assistance program to launch in post-COVID-19 Serbia ............................................. 3 Serbia becomes full member of the International Cereal Council .................................................. 4

Foreign Aid ................................................................................................................. 4 11) 12) 13) 14) 15)

FAO study provides recommendations for strengthening family farms ......................................... 4 FAO, EBRD launch research on the use of technology in agriculture.............................................. 4 Free online trainings offered to farmers and SMEs ........................................................................ 4 USAID online panel informs of key agricultural issues amid COVID-19 pandemic ......................... 5 FAO, EBRD to help Serbian food producers meet new hygiene bylaws.......................................... 5

Private Sector.............................................................................................................. 5 16) 17) 18) 19) 20) 21)

Drought conditions threaten corn, soybean and sunflower harvests............................................. 5 GDP predicted to decline 3% this year ............................................................................................ 5 47,458 permits granted to farmers, easing their restrictions on movements ................................ 6 Novi Sad International Agricultural Fair scheduled for September ................................................ 6 How COVID-19 has changed and is changing the agricultural sector ............................................. 6 Serbian food security not at risk, but food prices may 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

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BFC. Agriculture Finance Bulletin.

State Initiatives 1)

Berry producers upset with government decision regarding EUR 100 million in aid

April 25th, 2020, http://rs.n1info.com/Biznis/a592920/Proizvodjaci-malina

Serbian berry producers are outraged by a government decision to delay EUR 100 million in state aid as part of relief from the COVID-19 pandemic. The aid, which is meant to support businesses and citizens, was initially planned to be delivered by May 15, 2020; however, the new decision requires interested parties to phone or email their request for aid by June 5, 2020. Berry producers expected this aid around May 15 and need it to complete spring sowing activities. Moreover, many berry producers are inconvenienced in that many do not have computers and fear that telephone lines will be at capacity with tens of thousands of calls, meaning their aid may be further delayed.

2)

Farmers need not be registered in VAT system to qualify for state aid package

April 24th, 2020, https://www.danas.rs/ekonomija/nedimovic-poljoprivrednici

The Minister of Agriculture has confirmed that farmers requesting aid under the state’s RSD 2.6 billion farmer assistance package are not required to be registered in the VAT system in order to qualify for the aid. It is enough that they are a registered agricultural holding with an active status. This aid is being provided to farmers in two ways: (1) as direct financial support and (2) as a way of facilitating access to credit. It should be noted that this assistance is not connected with other subsidies offered by the state.

3)

RSD 2.6 billion in state aid to help farmers during COVID-19 pandemic

April 21st, 2020, https://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239

The state has made RSD 2.6 billion available to assist farmers amid the COVID-19 pandemic. The financial assistance is available via two means: (1) direct payments that will be made to registered agricultural holdings and (2) state-facilitated access to credit. It should be noted that this amount is not related to and is completely separate from other state subsidies available to farmers. Although many farmers welcomed the aid, many were also skeptical that the state-facilitated access to credit would be of benefit to most small- and medium-sized producers, who typically are not interested in credit due to poor prior experiences and a fear of not being able to fulfill their obligations under credit agreements.

4)

Package of state support for farmers under development

April 14th, 2020, https://beta.rs/ekonomija/ekonomija-srbija/125908

The state is in the process of developing a special package of measures to mitigate the impact of the COVID-19 pandemic on the agricultural sector. The exact types and methods of support have yet to be finalized as the state is still working with experts and producers to determine the measures most likely to have the greatest impact. Experts believe that measures could include assistance in procuring planting material, relief for the procurement and necessary fuel and/or partial delays or cancelations of liabilities.

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BFC. Agriculture Finance Bulletin.

5)

Digital platform launches to connect food producers with consumers

April 11th, 2020, http://www.psp.vojvodina.gov.rs/VestiCyr.aspx?Id=22356

With markets temporarily closed due to the COVID-19 pandemic, the digital platform https://pijaca.minpolj.gov.rs has launched to help producers of quality food directly connect with consumers in urban areas throughout Serbia.

6)

State support for farmers to increase

April 8th, 2020, http://www.rtv.rs/sr_ci/ekonomija/program-mera

The state is in the process of adopting special measures to support farmers during the COVID-19 pandemic. Specifically, the state is planning two types of general measures: one aimed at providing direct financial support to the agricultural sector as a whole (via subsidized loans) and another, more targeted effort aimed at supporting specific industries (e.g. small dairy farms, early vegetable producers). In addition, the state has loosened the curfew for farmers to allow them greater flexibility to complete necessary field work.

7)

Ministry of Agriculture offers subsidized loans to farmers through banks

April 6th, 2020, http://subvencije.rs/krediti/subvencionisani-kredit

The Ministry of Agriculture is preparing a program of support for farmers in cooperation with commercial banks. Specifically, the Ministry, through commercial banks, will offer farmers subsidized loans for the purposes of developing animal husbandry, developing arable farming, investing in agricultural machinery and procuring animal feed. All subsidized loans are approved and paid out in the local currency. There is a fixed interest rate of 3% per annum (1% for naturalized persons working in areas determined as difficult for agriculture, persons aged 40 years or older and women), and loans are available up to RSD 6 million (RSD 18 million for legal entities).

8)

State planning to impose duties on fruit and vegetable imports

April 3rd, 2020, https://agrosmart.net/2020/04/03/pomoc-domacim

Many Serbian farmers, especially vegetable producers, are facing difficulties in marketing their seasonal vegetables. Much of this difficulty is being caused by states around the world closing their markets.

Although these closing are, by and large, temporary, some experts predict that this could cause 50% or more of Serbian production to be wasted. To help farmers, the state is planning to impose duties on the import of fruits and vegetables, with the idea that domestic markets will open more for domestic producers. Such a move is not without precedent. In 2015, Serbia imposed additional duties on the import of dairy products and pork to prevent market disturbances. These measures lasted until the end of 2016.

9)

Cooperative assistance program to launch in post-COVID-19 Serbia

April 2nd, 2020, https://agrosmart.net/2020/04/02/krkobabic-zadrugama-nakon-korone-600-miliona-dinara-pomoci/

The government has announced a new RSD 600 million program will launch the day after the COVID-19 pandemic has ended. The program will help cooperatives reestablish their work and the work of their members and return to a state of normalcy. The program is part of a concerted government effort to mitigate the impact of the COVID-19 pandemic.

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BFC. Agriculture Finance Bulletin.

10) Serbia becomes full member of the International Cereal Council April 1st, 2020, https://www.021.rs/story/Info/Biznis-i-ekonomija/238688

The Ministry of Agriculture announced today that Serbia has become a full member of the International Grains Council (IGC), an organization that brings together the world's largest grain producers. Serbia’s admission to the IGC comes as the country becomes the world’s eighth-largest exporter of grains.

Foreign Aid 11) FAO study provides recommendations for strengthening family farms April 27th, 2020, http://www.agronews.rs/fao-preporucuje-jacanje-porodicnih-farmi-u-srbiji/

The Food and Agriculture Organization of the United Nations (FAO) has published a study on small and family farms in Serbia. The study concludes that, although family farms are the backbone of Serbian agriculture, they face several challenges and constraints to their further development. Some of the key constraints, the study found, are related to a lack of attention from the scientific community and policy makers. To resolve this, the study recommends that policy makers provide an official, legal definition of small and family farms. The study also found that new mechanisms need to be put into place to help transfer agricultural resources to younger generations, which are more inclined to invest in new and innovative solutions. This is also expected to result in the creation of new job opportunities, which would further increase the competitiveness and development of rural areas.

12) FAO, EBRD launch research on the use of technology in agriculture April 22nd, 2020, http://www.stips.minpolj.gov.rs/srl/vest/pocelo-istrazivanje-o-primeni-digitalne-tehnologije-u-poljoprivredi

The Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD), in collaboration with Professor Vesna Bengin of the Biosens Institute of the University of Novi Sad, have launched research into the application of digital technologies in fruit and vegetable production in Serbia. The research is part of a broader project that aims to develop new mechanisms to meet the realities and needs of agricultural producers.

According to Professor Bengin, modern digital technologies can bring great progress to farmers regardless of the size of their holdings, especially in producing greater yields and yields of greater quality.

13) Free online trainings offered to farmers and SMEs April 14th, 2020, https://agrosmart.net/2020/04/14/besplatne-online-obuke-za-poljoprivrednike-mala-i-srednja-preduzeca/

A series of free online trainings was organized for Serbian farmers and small- and medium-sized enterprises (SMEs) as part of the Development of Financial System in Rural Areas in Serbia (SRFP) project. These online trainings were designed to assist farmers and SMEs interested in maintaining and improving their business during the current pandemic period. The trainings featured a number of experts in agriculture, finance, marketing and business development, with a particular focus given to overcoming challenges in crisis periods.

The SRFP project is funded by German development bank KfW and is being implemented by Swiss consulting firm Business \u0026 Finance Consulting and its partners Eduka Plus and Smart IPARD.

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BFC. Agriculture Finance Bulletin.

14) USAID online panel informs of key agricultural issues amid COVID-19 pandemic April 14th, 2020, https://agrosmart.net/2020/04/14/proizvodjaci-voca-i-povrca-na-gubitku-nuzno-povecanje-plasmana/

The Competitive Economy Project of the United States Agency for International Development (USAID) held a third online panel as part of its World Wants Home initiative. The panel, which featured discussions on obstacles and opportunities for fruit and vegetable producers in times of crisis, informed food producers about key issues and ways to better manage their business during the COVID-19 pandemic. In particular, the panel discussed how it was important for production works to continue and for new market outlets, especially domestic ones, to be found and taken advantage of until normalcy resumes.

15) FAO, EBRD to help Serbian food producers meet new hygiene bylaws April 12th, 2020, https://www.foodsafetynews.com/2020/04/serbian-food-producers-get-help-to-meet-new-hygiene-rules/

The Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD) are preparing guidelines and promotional materials to help producers comply with new hygiene bylaws on food products of plant origin that were recently passed by the Serbian government. Under this new legislation, producers can continue following traditional methods for making and selling products such as fruits, vegetables and fresh herbs, as long as they are safe. There is some flexibility in the new rules in that some requirements are not compulsory for smallscale operators or can be adapted to their conditions. This will help preserve the diversity of Serbian products without sacrificing food safety and hygiene.

The new bylaws were adopted to help bring Serbian legislation in line with European standards as Serbia works toward full membership in the European Union (EU).

Private Sector 16) Drought conditions threaten corn, soybean and sunflower harvests April 21st, 2020, http://rs.n1info.com/Biznis/a591473/Susa-ugrozava-nicanje

Droughts throughout Serbia are threatening corn, soybean and sunflower harvests this year as soil in sown areas is not demonstrating the necessary moisture levels for such crops to sprout and grow. A similar situation occurred last year during the sowing period, although later rains eventually saved spring crops. To counter the current drought conditions, experts are recommending that producers feed crops until the first rains comes and that corn producers who have yet to plant corn seeds plant them more deeply, where soil moisture levels and more acceptable.

17) GDP predicted to decline 3% this year April 17th, 2020, https://www.danas.rs/ekonomija/poljoprivreda-i-prehrambena-industrija-cuvaju-pad-bdp-a-u-srbiji/

The International Monetary Fund (IMF) is predicting that Serbia’s GDP will decline by 3.0% this year due to the impact of the COVID-19 pandemic. The main reason for this decline is that the share of agriculture and food industry producers in Serbia’s economy is 7.5%. This is much higher than the average in Central and Eastern Europe (3.5%) and Western Europe (2.0%). Despite the predicted fall in GDP this year, the IMF is predicting growth of 7.1% next year. Such optimistic forecasts for the future are likely to help increase investments and large-scale (i.e. on a government level) borrowing and reduce the long-term negative impact of the pandemic.

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BFC. Agriculture Finance Bulletin.

18) 47,458 permits granted to farmers, easing their restrictions on movements April 16th, 2020, https://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239

Although there are restrictions on the movement of persons imposed by the government to combat the spread of COVID-19, there is a system of exceptions for those with legitimate needs. For farmers, this need is evident as they must complete field works in a timely fashion. To this end, the Ministry of Agriculture has announced that 47,458 applications for permits have been approved for farmers. The permits allow farmers to complete necessary activities outside of curfew hours. Permit applications can be submitted online.

19) Novi Sad International Agricultural Fair scheduled for September April 16th, 2020, https://www.ekapija.com/en/news/2852930/agricultural-fair-in-novi-sad-slated-for-september

The Novi Sad International Agricultural Fair has been tentatively rescheduled for September 19-25, 2020. These dates are contingent on the situation regarding the COVID-19 pandemic allowing for the fair to take place. Other agricultural fairs, both in Serbia and throughout Europe, scheduled for spring and summer are also expected to be rescheduled for autumn.

20) How COVID-19 has changed and is changing the agricultural sector April 15th, 2020, http://www.rtv.rs/sr_ci/ekonomija/kako-je-kovid-promenio

Participants at an online conference organized by the Franco-Serbian Chamber of Commerce discussed the current state of the agricultural sector. In discussing the topic of the COVID-19 pandemic, participants agreed that the sector, once it was able to effectively reorganize supply chains, has been strong in production and ensuring food safety in the country. At the same time, participants did express concern about how border closures are impacting and would continue to impact (even after reopening) the sector in the medium term. Participants also highlighted that the pandemic may lead to new ways for producers and consumers to connect in the future, pointing out that increased online purchases of agricultural products during the pandemic period may become a trend as consumers become comfortable with and even used to this way of purchasing agricultural products.

21) Serbian food security not at risk, but food prices may rise April 15th, 2020, https://www.danas.rs/ekonomija/hrane-ce-biti-dovoljno-cene-malo-vece/

With spring sowing beginning on two million hectares across the country, experts have analyzed the current status of Serbia’s agricultural sector and come to the understanding that the state of the country’s food security is not at issue. At the same time, experts are predicting that some hard times could be ahead. They particularly note that it will likely be a difficult period for small- and medium-sized producers in the short term as many markets are temporarily closed. In the long term, they predict prices for many agricultural products will rise slightly once the COVID-19 pandemic has ended but will gradually return to normal in future seasons.

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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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