05/2020
#
56 S e r b i a Agriculture Bulletin Directorate of Agrarian Payments adopts new incentive rulebook Free online trainings to support local businesses Experts discuss how consumer communication is a key success factor Ninth NLB Organic Competition announced
All materials are published “as is� and are the property of their respective owners.
Agriculture Finance Bulletin Contents
Edition #56, May 2020
State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7)
Call for government to set minimum prices on some agricultural products .................................. 2 Directorate of Agrarian Payments adopts new incentive rulebook ................................................ 2 Call for applications for investment fund announced ..................................................................... 2 Novi Sad International Agricultural Fair set for mid-September ..................................................... 2 Credit Agricole Serbia issuing subsidized loans ............................................................................... 3 RSD 410 million in emergency state support paid out to farmers .................................................. 3 Working group established to improve raspberry production and marketing ............................... 3
Foreign Aid ................................................................................................................. 3 8) 9) 10) 11) 12)
Free online trainings to support local businesses ........................................................................... 3 Experts discuss how consumer communication is a key success factor ......................................... 4 Panel discussion on the importance of online food sales ............................................................... 4 Free online trainings organized under SRFP II program .................................................................. 4 FAO, EBRD launch project to improve use of technology in agriculture ......................................... 4
Private Sector.............................................................................................................. 5 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24)
Ninth NLB Organic Competition announced ................................................................................... 5 The rise of “patriotic agriculture” likely to reduce Serbian exports ................................................ 5 Repatriates encouraged to invest in poultry farming ..................................................................... 5 Only 12% of cultivated land is insured ............................................................................................ 5 Raspberry producers hopeful for increased purchase price this year ............................................ 6 More investment needed in viticulture and wine production ........................................................ 6 40 tons of honey imported from Moldova ...................................................................................... 6 Agriculture least affected by the state of emergency ..................................................................... 6 Wheat yield forecast revised downward......................................................................................... 7 Crisis not significantly impacting prices of fruits and vegetables.................................................... 7 Serbia ripe for cultivation of medicinal, aromatic and spicy herbs ................................................. 7 Agricultural and food product trade surplus of EUR 362 million .................................................... 7
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
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC. Agriculture Finance Bulletin.
State Initiatives 1)
Call for government to set minimum prices on some agricultural products
May 25th, 2020, https://agrosmart.net/2020/05/25/krkobabic-drzava
Minister without Portfolio Milan Krkobabic has stated that the government should take measures to ensure that farmers are able to sell their products at a profitable price. The Minister spoke mostly in relation to raspberry prices, which producers have said have been too low to be profitable in recent years, but also mentioned that that several other agricultural products might need to be protected in similar ways. The Minister also spoke to the importance of farmers organizing into cooperatives as a way of gaining more bargaining power and protecting their own interests.
2)
Directorate of Agrarian Payments adopts new incentive rulebook
May 24th, 2020, https://www.ekapija.com/financing/2887822
The Directorate for Agrarian Payments has adopted the Rulebook on Incentives for Improving the System of the Creation and Transfer of Knowledge through the Development of Technical, Applied, Developmental and Innovative Projects in Agriculture and Rural Development. According to the Rulebook, incentive measures include those related to: (1) the implementation innovative projects in agriculture and rural development, (2) the development of forecasting and reporting activities in the field of plant protection and (3) the improvement of milk quality.
3)
Call for applications for investment fund announced
May 20th, 2020, http://rs.n1info.com/Biznis/a601516/Poljoprivrednicima-Srbije-700
The Directorate for Agrarian Payments has announced a call for applications for incentive funding for the procurement of agricultural machinery for primary crop production. A total of RSD 700 million is available under this call. Eligible applicants are those that have fully realized their investments since the beginning of the year. Funds will be awarded in amounts of no more than 50% of the total cost of the investment and no more than RSD 1.5 million. Applications will be accepted between June 1 and June 15.
4)
Novi Sad International Agricultural Fair set for mid-September
May 18th, 2020, https://agrosmart.net/2020/05/18/poljoprivreda-pokazala-vitalnost-tokom
The Novi Sad International Agricultural Fair, originally scheduled for May, is set to take place in midSeptember, albeit on a much smaller scale than originally planned. Organizers are hopeful that, despite the crisis and its impact on businesses around the world, the Fair will still attract foreign exhibitors and be as important for supporting Serbian agricultural businesses as it has been in years past. At the same time, representatives of the Business Association of Importers and Exporters of Agricultural Machinery, whose stands typically occupy the largest part of the open space at the Fair, are pushing for the Fair to be further postponed, at least until mid-October, as current conditions make it unlikely that they will be able to procure imported machinery in time.
Page 2
BFC. Agriculture Finance Bulletin.
5)
Credit Agricole Serbia issuing subsidized loans
May 15th, 2020, http://subvencije.rs/vesti/subvencionisani-krediti-za-poljoprivredu-credit-agricole-srbija/
Credit Agricole Serbia, in cooperation with a Ministry of Agriculture program, is disbursing subsidized agricultural loans with fixed interest rates of 1-3% per annum. The loans are intended to encourage the procurement of agricultural machinery and raw materials for plant or livestock production. Due to the COVID-19 crisis, loans of up to RSD 3 million for maintaining liquidity are also being issued under the program this year at a fixed rate of 1% per annum and for a period of up to 36 months. The loans are available to agricultural holdings, agricultural households, entrepreneurs, legal entities and cooperatives. The maximum loan amount for individual farmers is RSD 6 million; for legal entities, the maximum loan amount is RSD 18 million.
6)
RSD 410 million in emergency state support paid out to farmers
May 9th, 2020, https://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239
A total of RSD 410 million has been paid out from the state to vegetable producers as a one-time emergency financial aid measure to support farmers amid the COVID-19 crisis, with similar aid expected to also be given to small dairies and apiarists older than 70 years of age. Agriculture Minister Branislav Nedimovic has also indicated that florists are likely to be included in the special measure. The state has allocated RSD 1.15 billion for this special measure. It is available to any farmer registered in the Register of Agricultural Holdings, even if they are not in the state’s VAT system.
7)
Working group established to improve raspberry production and marketing
May 1st, 2020, https://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239
The government has formed a working group to improve the production and marketing of raspberries. The working group will examine and provide recommendations for all critical points along the value chain and will also consider possible measures to improve climatic and soil conditions as well as transport and storage conditions. The working group includes representatives of the Ministry of Agriculture, the Customs Administration, the Ministry of Trade, the Serbian Chamber of Commerce and various faculties, institutes, manufacturers and associations.
Foreign Aid 8)
Free online trainings to support local businesses
May 27th, 2020, https://agrosmart.net/2020/05/27/onlajn-obuke-kako-do-kredita-i-pomoci-u-postkovid-periodu/
Experts in the fields of agriculture, finance, marketing and business are lending their expertise to Serbian small- and medium-sized enterprises within the Development of Financial Systems in Rural Areas in Serbia (SRFP II) program. Specifically, the SRFP II program has organized two free online training events this June on the topics of Preparing Loan Applications, which will emphasize applying for government and other post-COVID-19 programs, and Financial Planning and Cost Optimization. The SFRP II program is being funded by German development bank KfW and is being implemented by Swiss consulting company Business & Finance Consulting (BFC). Eduka Plus (from Nis) and Smart IPARD (from Novi Sad) will be conducting the training events.
Page 3
BFC. Agriculture Finance Bulletin.
9)
Experts discuss how consumer communication is a key success factor
May 22nd, 2020, http://www.stips.minpolj.gov.rs/srl/vest/usaid-komunikacija-sa-potrosacima-je-kljuc-uspeha
A panel discussion entitled Brand Communication and Loyalty: What Has the Crisis Taught Us? was held under the Competitive Economy Project of the United States Agency for International Development (USAID). During the panel, experts discussed the ways food producers are communicating with consumers during the crisis, how well producers are at adapting to meet consumer needs and how consumer expectations are changing as a result. They also discussed the importance of investing in strengthening relations with consumers as well as predicting changes that are likely to follow the crisis period.
10) Panel discussion on the importance of online food sales May 6th, 2020, https://agrosmart.net/2020/05/06/onlajn-prodaja-hrane-sve-zanacajnija-za-male-proizvodjace/
The United States Agency for International Development (USAID), under its Competitive Economy Project, organized the Small Food Producers: Markets and New Sales Horizons online panel to discuss the importance of online markets for small producers, especially in light of COVID-19 crisis measures. Of particular note during the panel discussion was the launch of the online platform ePijaca, which directly connects producers and consumers. The platform has seen initial success and now has over 2,000 registered users and 1,300 mapped producers. Perhaps more importantly, several retail chains have also joined the platform. While ePijaca has proved successful during the crisis period, it remains to be seen if it will be successful once traditional markets resume normal operations.
11) Free online trainings organized under SRFP II program May 1st, 2020, https://agrosmart.net/2020/05/01/besplatne-obuke-o-digitalnoj-transformaciji/
Free online trainings for Serbian small- and medium-sized enterprises (including agricultural enterprises) were organized earlier this month under the Development of Financial Systems in Rural Areas in Serbia (SRFP II) program as part of a concerted effort to transfer knowledge related to developing digital marketing strategies. The SFRP II program is being funded by German development bank KfW and is being implemented by Swiss consulting company Business & Finance Consulting (BFC). Eduka Plus (from Nis) conducted the training events.
12) FAO, EBRD launch project to improve use of technology in agriculture May 1st, 2020, http://www.rtv.rs/sr_ci/vojvodina/novi-sad/primena-digitalnih-tehnologija
The application of information technologies in agriculture is inevitable. For that reason, the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD) are implementing a large-scale project in Serbia, Ukraine and Turkey to introduce digital technologies into the vegetable and fruit sectors. The project is likely to explore how digital platforms can be leveraged to sell produce as well as how other technologies can be used to improve production activities and product quality.
Page 4
BFC. Agriculture Finance Bulletin.
Private Sector 13) Ninth NLB Organic Competition announced May 27th, 2020, http://www.agronews.rs/deveti-konkurs-nlb-banke-milion-i-po-dinara-za-zdrave-ideje/
NLB Bank Belgrade has announced the Ninth NBL Organic Competition, under which it will award the top three projects with a total of RSD 1.5 million. The competition is open to registered farms that are certified organic producers or in the process gaining organic certification. Project applications will be accepted through July 31.
14) The rise of “patriotic agriculture” likely to reduce Serbian exports May 27th, 2020, http://www.agronews.rs/jacanje-patriotske-poljoprivrede-smanjuje-izvoz-iz-srbije/
The COVID-19 crisis has caused a dramatic shift in the way countries think about their agricultural production, causing a rise in the idea of “patriotic agriculture”. In other words, the closure of borders has caused many countries to start to examine how to produce for their own and drastically reduce their reliance on imports. For example, Russia is investing huge amounts into creating its own orchards so that it can substitute many imports with domestic products. While the impact of this might not be immediately felt as it takes time for such investments to come to full fruition, Serbian producers and exports should work now to boost the quality of their products to ensure they still have a place in future markets.
15) Repatriates encouraged to invest in poultry farming May 26th, 2020, http://www.rtv.rs/sr_ci/ekonomija/aktuelno/nacionalni-tim-za
The National Team for the Revival of Serbian Villages has called on repatriates and other interested citizens to invest in poultry farming as it has tremendous promise in Serbia. The main advantage of poultry production is that it can be established relatively quickly and can be easily organized. Moreover, there is tremendous room for the growth of the poultry industry within the country, especially as poultry imports exceed those of exports. In fact, Serbia imported over 11,800 tons of poultry worth EUR 13.8 million in 2019. To support investments in poultry farming, the state has expressed its willingness to organize visits to successful poultry farms for interested parties. Additionally, incentive funds are available under the 500 Cooperatives in 500 Villages program.
16) Only 12% of cultivated land is insured May 22nd, 2020, http://www.politika.rs/scc/clanak/454662/Poljoprivrednici-i-dalje-izbegavaju-da-placaju-osiguranje
According to the latest data, only 12% of the total agricultural land in Serbia that is cultivated is covered by insurance, far lower than the European Union (EU) average of 50%. Although there have been increased state incentives to encourage farmers to purchase agricultural insurance, this has had little effect in overcoming farmers’ resistance to invest 1.5-3.0% of the total cost of production to protect their harvests. The reasons for the reluctance of farmers are many, but the most predominate include poor prior experiences with insurers, ignorance about what insurance really offers and state incentives being only available to those with registered farms. It is clear that much work needs to be done in bridging the gap between farmers and insurers and that solutions need to be evaluated toward this end, be it making insurance a requirement for receiving other state subsidies or making insurance compulsory for all farmers.
Page 5
BFC. Agriculture Finance Bulletin.
17) Raspberry producers hopeful for increased purchase price this year May 21st, 2020, http://www.agronews.rs/vocari-se-nadaju-ceni-od-175-evra-za-kilogram-maline/
Decreased raspberry production worldwide, especially in Chile, Poland and Bosnia and Herzegovina, are giving Serbian raspberry producers hope for a better purchase price this year. With exporters expected to earn a price of at least EUR 1.75 per kilogram, domestic producers are looking for much more than the RSD 160-165 per kilogram they received last year. In fact, many are hoping to see prices higher than RSD 300 per kilogram. It should be noted that Serbia’s raspberry production this year is expected to be 40% less than last year’s 60,000 tons. This decrease is due to a combination of some producers switching production away from raspberries, unfavorable weather conditions in some areas and non-cultivation due to measures imposed to combat the spread of COVID-19. There also remains some concern as to whether or not producers will be able to find enough labor for harvesting as fears of COVID-19 infection continue.
18) More investment needed in viticulture and wine production May 21st, 2020, https://beta.rs/ekonomija/ekonomija-srbija/127688-krkobabic
Serbia has been proactive in developing viticulture and wine production in recent years; however, the Minister of Regional Development has called for even more production and a concentration on improving overall wine quality. He noted the strong work already made in this direction, especially the fact that Serbian winemakers are increasingly joining regional associations that are working to help winemakers improve production and protect national branding. The Minister also noted the importance of the development of wine tourism in the country. The Minister believes that, with greater investments in technology and modern techniques, the country’s viticulture and wine production can be boosted even more. To this end, he announced the state’s plan to invest EUR 300 million in improvement measures over the next ten years. This includes providing funding for increasing incentives for new vineyards, compensating laboratory costs and subsidizing the purchase of new machinery.
19) 40 tons of honey imported from Moldova May 21st, 2020, http://www.politika.rs/scc/clanak/454587/U-Srbiju-uvezeno-40-tona-meda-iz-Moldavije
Approximately 40 tons of honey have been imported into Serbia from Moldova recently. The Moldovan honey, which was imported at a price of EUR 2.20 per kilogram, represents a threat to domestic production as it is significantly cheaper. According to the Association of Beekeeping Organizations of Serbia, this marks the first time that foreign honey has been imported into Serbia in such a quantity. They also note that there are concerns regarding the origin of the honey, with some stating that it could, in fact, be low-quality honey originating from China. Domestic producers are concerned that continued imports in such high volumes and at such cheap prices will ultimately lead to consumer confusion and drive out domestic competition.
20) Agriculture least affected by the state of emergency May 18th, 2020, http://www.rtv.rs/sr_ci/ekonomija/aktuelno/poljoprivreda-bila
Agriculture Minister Branislav Nedimovic noted that agriculture was the least impacted sector by measures to stop the spread of COVID-19. In particular, he pointed out that no policies concerning rural development were or will be ceased and that additional measures have been adopted to support producers of early vegetables, greenhouse and apiarists over the age of 70. The Minister also Page 6
BFC. Agriculture Finance Bulletin.
announced the launch of a new funding competition for the procurement of tractors as well as another one, under IPARD, for investments in rural tourism. It should also be noted that, during the state of emergency, Serbia obtained a permit to export apples to India, beef to Arab markets and strawberries to Russia. At the same time, the export of Serbian corn was limited in order to ensure domestic food security.
21) Wheat yield forecast revised downward May 14th, 2020, https://beta.rs/ekonomija/ekonomija-srbija/127327-udruzenje-zita-srbije-psenici-treba-jos-kise
Vukosav Sakovic, director of the Business Association for the Improvement of the Production and Export of Grain and Oilseeds, is expecting smaller wheat yields this year due to less rainfall. If should be noted that this is relative to February predictions, which were forecasting near-record yields. Sakovic’s revised expectation is that wheat yields will be average this year.
22) Crisis not significantly impacting prices of fruits and vegetables May 12th, 2020, http://rs.n1info.com/Biznis/a598621/Prostran-Sezonsko
Agricultural economist Milan Prostran has concluded that the COVID-19 crisis has not had a significant impact on the overall price of fruits and vegetables in Serbia, with most seen increases being the result seasonality. Prostran did note that the crisis did impact some prices as there was an absence of competition from imports for some products. He expects prices to drop once normal import regimes resume and once the economy adjusts to the lower overall purchasing power of citizens.
23) Serbia ripe for cultivation of medicinal, aromatic and spicy herbs May 6th, 2020, https://beta.rs/ekonomija/ekonomija-srbija/126949-nacionalni-tim-za
The National Team for Rural Revival in Serbia believes that Serbia’s geography, geology and biological diversity are perfect for the production of medicinal, aromatic and spicy herbs. Currently, there are approximately 50,000 Serbians engaged in such production, utilizing approximately 2,000-3,000 hectares. The National Team, however, believes that the production area in Serbia could be 2-3 times more for these products. Increasing such production would be an important step for Serbia, both in terms of increasing export volume and overall export value as well as in terms of substituting domestically-produced products for imported ones. In order to stimulate production in this direction, the National Team noted that more associations, a higher degree of domestic processing capacity and more investments in advanced technologies are needed.
24) Agricultural and food product trade surplus of EUR 362 million May 6th, 2020, https://beta.rs/ekonomija/ekonomija-srbija/126946-spoljnotrgovinski
In the first quarter of this year, Serbia exported EUR 867 million worth of agricultural and food products and imported EUR 505 million worth of them, resulting in a foreign trade surplus of EUR 362 million. Compared to the first quarter of last year, this represents an increase in exports of 16.9% and an increase in imports of 11.9%. The majority of Serbia’s agricultural and food product trade was conducted with the European Union (EU), Central European Free Trade Agreement (CEFTA) countries and Russia.
Page 7
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.
