#58 Serbia Agriculture Bulletin, BFC

07/2020

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58 S e r b i a Agriculture Bulletin Russia ratifies free trade agreement between Serbia and the EEU RSD 250 million in state co-financing available for wine production investments EUR 10 million in financing for 4,000 Serbian micro-enterprises Fruit prices reach 15-year high

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Agriculture Finance Bulletin Edition #58, July 2020

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

Russia ratifies free trade agreement between Serbia and the EEU ................................................ 2 New law on geographical indications for agri-food products expected ......................................... 2 Unecoop project promotes sustainable, green agriculture ............................................................ 2 RSD 250 million in state co-financing available for wine production investments ......................... 2 Assessments to help settle cherry purchase price dispute ............................................................. 2

Foreign Aid ................................................................................................................. 3 6) 7) 8) 9) 10) 11)

Drafting of National Irrigation Strategy to begin ............................................................................ 3 EUR 10 million in financing for 4,000 Serbian micro-enterprises ................................................... 3 Serbian farms well on their way toward digitization ...................................................................... 3 Serbia hosts state-level Innovation Prize competition .................................................................... 3 Decisions on applications for the use IPARD funds made ............................................................... 4 EUR 20 million in financing for green economy transition.............................................................. 4

Private Sector.............................................................................................................. 4 12) 13) 14) 15) 16)

EU withdraws additional control measures on Serbian raspberry exports..................................... 4 Fruit prices reach 15-year high ........................................................................................................ 4 Market for fattened cattle dries up ................................................................................................. 5 Wheat harvest nearly completed .................................................................................................... 5 Raspberry prices remain consistent despite halved production ..................................................... 5

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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State Initiatives 1)

Russia ratifies free trade agreement between Serbia and the EEU

July 27th, 2020, http://www.agronews.rs/rusija-odobrila-slobodnu-trgovinu-izmedu-eaeu-i-srbije/

The government of Russia has ratified a free trade agreement between Serbia and the Eurasian Economic Union (EEU). The agreement, once ratified by all EEUR member states, will replace the existing bilateral agreements with Belarus, Kazakhstan and Russia as well as extend to Armenia and Kyrgyzstan.

This will give Serbia duty-free access for most of its exports to a market of 183 million people. It should be noted that Serbia, as part of their signing of this free trade agreement, also signed a phytosanitary agreement with the EEU.

2)

New law on geographical indications for agri-food products expected

July 22nd, 2020, http://www.politika.rs/scc/clanak/458935/Neki-srpski-proizvodi-izgubice-oznaku-geografskog-porekla

Serbia is expected to adopt a new law on geographical indications for agri-food products. According to the language of the proposed draft, products that have not been produced within the last seven years would lose their geographical indication status. The rationale for the inclusion of this measure in the draft law is that there are a number of such products that are no longer being produced for one reason or another. At the same time, the Ministry of Agriculture has promised to work to revitalize each of these products if possible.

3)

Unecoop project promotes sustainable, green agriculture

July 21st, 2020, https://www.danas.rs/ekonomija/kako-pripremiti-poljoprivrednike

Unecoop began work last year implementing the GEAR – Green Economy for Regional Development project in Serbia. The goal of the project is to promote sustainable agricultural development at the local, regional and national level. To this end, Unecoop has been working to demonstrate practical examples of sustainable agricultural practices as well as working with local public figures to develop and implement green policies.

4)

RSD 250 million in state co-financing available for wine production investments

July 7th, 2020, https://www.danas.rs/ekonomija/za-proizvodjace-vina-u-srbiji-250-miliona-dinara-drzavnog-podsticaja/

The Directorate for Agrarian Payments has announced a public call for applications to receive state cofinancing for investments in the wine sector. Qualifying investments include those made for the construction of a winery and/or the purchase of new equipment. Co-financing is available up to 60% of the total cost of the investment up to RSD 30 million. A total of RSD 250 million is available under this call.

5)

Assessments to help settle cherry purchase price dispute

July 2nd, 2020, http://www.agronews.rs/uz-pomoc-mup-a-krece-kontrola-otkupa-visnje/

Agricultural and market inspectors, with assistance from the Ministries of Interior and Agriculture, have been tasked with performing a detailed control of all cherry purchase points in Southern Serbia to help Page 2

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resolve a complaint from cherry growers regarding the assessment of the cherry classes at the time of purchase. Similar assessments will also be performed in Merosina and Blace.

Foreign Aid 6)

Drafting of National Irrigation Strategy to begin

July 24th, 2020, http://www.agronews.rs/zapoceta-izrada-nacionalne-strategije-navodnjavanja/

The Ministry of Agriculture, in cooperation with the European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO), has launched a joint project to develop the National Irrigation Strategy and an accompanying five-year Action and Investment Plan. The main goal of the project is to improve agricultural production by increasing irrigation capacity and identifying and mapping priority investments for the next ten years.

The project is being financed through the EBRD by the government of Israel and the Central European Initiative.

7)

EUR 10 million in financing for 4,000 Serbian micro-enterprises

July 22nd, 2020, http://www.agronews.rs/eif-obezbeduje-10-miliona-evra-za-4-000-mikro-preduzeca/

The European Investment Fund (EIF) has provided EUR 10 million to approximately 4,000 Serbian microenterprises, including small Serbian farmers, having difficulty accessing financing. The financing is being provided as part of the European Union (EU)’s Employment and Social Innovation Support Program and is provided to beneficiaries on better-than-market conditions. It is expected that this will significantly contribute to the faster development of local economies as well as strengthen the creditworthiness of beneficiaries.

8)

Serbian farms well on their way toward digitization

July 15th, 2020, http://www.agronews.rs/digitalizacija-vec-usla-u-svako-trece-gazdinstvo/

The latest research indicates that 30-40% of domestic farmers already rely on some kind of digital technology for production. This indicates that it is not just large-sized farms that understand the importance of using new technologies to get higher returns with less investment. It is important to note that every segment of agricultural production can benefit from digital technology, from land preparation, planting and irrigation to harvest, transportation and storage. At the same time, not everything needs to be digitized. The key is to understand the true value digitization can bring and utilize it to boost output and profits.

9)

Serbia hosts state-level Innovation Prize competition

July 13th, 2020, https://agrosmart.net/2020/07/13/inovativni-poljoprivredni-startapi-iz-srbije-na-evropskom-takmicenju/

For the first time, a state final for the Innovation Prizes competition was held in Serbia. The competitions, organized by the European Institute for Innovation and Technology in the Field of Food (EIT Food) and Startit in 17 Southeastern European countries, are some of the largest agri-food startup competitions in Southeast Europe. They have the goal of supporting startups and entrepreneurs in transforming national food systems into healthier, more sustainable and more reliable ones. Winners Page 3

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from each state final will compete in the Grand Final Innovation Prize competition for a chance at winning up to EUR 25,000.

10) Decisions on applications for the use IPARD funds made July 10th, 2020, http://www.stips.minpolj.gov.rs/index.php/srl/vest/krenula-resenja-za-ipard-traktore

The Directorate for Agrarian Payments has started informing beneficiaries of accepted applications for the use of IPARD funds to procure new tractors. This relates to the second public call for the procurement of tractors under Measure 1 of IPARD and the third call in a row for the use of IPARD funds to procure mechanized agricultural machinery. It is important to note that applications under this call are still being processed.

11) EUR 20 million in financing for green economy transition July 6th, 2020, https://www.ekapija.com/en/news/2936416/ebrd

The European Bank for Reconstruction and Development (EBRD), the Green Climate Fund (GCF) and the government of Luxembourg are teaming up with UniCredit Leasing Serbia to offer a total of EUR 20 million to small- and medium-sized enterprises (SMEs) for financing investments in climate and green economy projects. Financing is available for privately-owned enterprises in the manufacturing, agricultural, services, construction, commerce and transport sectors. Leases will also be offered for electricity generation in photovoltaic solar power plants.

Eligible investments include those made into improved energy efficiency, the more efficient management of water, land and natural resources and renewable energy sources It is important that investments boost the profitability and competitiveness of enterprises as well as mitigate negative impacts on the environment and the effects of global warming and climate change.

Private Sector 12) EU withdraws additional control measures on Serbian raspberry exports July 28th, 2020, http://www.agronews.rs/eu-povlaci-dodatne-mere-kontrole-izvoza-malina-iz-srbije/

The Standing Committee on Animals, Plants, Food and Animal Feed of the European Union has decided to withdraw an additional control measure for the export of frozen raspberries from Serbia, specifically the additional inspection of every tenth raspberry shipment for norovirus. This is expected to result in less costs for exporters and great incomes for producers. The decision comes following the success of education campaigns as well as the additional training of inspectors.

13) Fruit prices reach 15-year high July 25th, 2020, https://www.danas.rs/ekonomija/keserovic-voce-u-srbiji-najskuplje-za-poslednjih-15-godina/

The price of most fruits this year reached a 15-year high due to a combination of unexpected freezing in Eastern Europe and measure taken to combat the spread of COVID-19. Producers that have invested in modern technologies in recent years have been the biggest beneficiaries of this year’s higher prices as their increased yields have brought them even more profits, helping improve their standards of living.

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14) Market for fattened cattle dries up July 22nd, 2020, https://www.novosti.rs/vesti/ekonomija/903902/

The market for fattened cattle has virtually closed due to an excess of supply. In fact, there are currently an estimated 250,000 head of cattle on the market, with a demand for only approximately 86,000 annually. The excess in available cattle is due to reduced exports to China, Italy, Turkey and the United Arab Emirates. In fact, exports to China and Turkey have almost completely stopped. This has put many cattle producers in a difficult place, unsure of how to maintain their business. As such, it will be important for new export avenues to be quickly identified.

15) Wheat harvest nearly completed July 14th, 2020, https://beta.rs/ekonomija/ekonomija-srbija/13033

This year’s wheat harvest is nearing its end, with a total yield expected of approximately 2.6 million tons, 5-6% more than last year’s harvest. The increase in total amount harvested is largely due to an increased average yield per hectare, which reached 4.5 tons this year (as opposed to 4.2 tons per hectare last year). Moreover, the quality of this year’s harvest is expected to be higher overall than last year.

16) Raspberry prices remain consistent despite halved production July 8th, 2020, https://www.danas.rs/ekonomija/udruzenje-proizvodjaca-malina-rod-prepolovljen-cena-ne-raste/

Dobrivoje Radovic, president of the Association of Raspberry Producers in Serbia, is expecting a 50% lower yield in this year’s raspberry harvest. At the same time, prices are expected to be between RSD 190 and RSD 200 per kilogram, an increase of RSD 10-15 over last year. He also noted that wholesalers and resellers charge much higher prices, arguing that it is unfair for them to take profits of up to 150% and not share them with producers. He further contends that producers should receive a price of between RSD 230 and RSD 240 from wholesalers and resellers.

It is important to note that raspberries production was decimated in many parts of the country this year by storms.

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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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