02/2021
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65 S e r b i a Agriculture Bulletin Ministry of Agriculture Supports Request to Start Frost Insurance Coverage Sooner RSD 500 Million Allocated for Cooperative Development Egyptian Interest in Serbia’s Agricultural Sector
Biofach Fair Showcases Serbian Organic Producers
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Agriculture Finance Bulletin Edition #65, February 2021
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8) 9)
Direct Incentive Subsidies Reduced to RSD 4,000 per Hectare ....................................................... 2 Ministry of Agriculture Supports Request to Start Frost Insurance Coverage Sooner .................... 2 RSD 500 Million Allocated for Cooperative Development .............................................................. 2 Subsidy Payments to Agricultural Producers to Begin at the End of March ................................... 2 CERES Project Focuses on Bringing AI Solutions to Serbia’s Agricultural Sector ............................. 3 EU Organic Production Project Completed ..................................................................................... 3 RSD 200 Million in Grants to Support Young Entrepreneurs in Rural Areas ................................... 3 Applications for Livestock Production Subsidies Now Being Accepted........................................... 3 More Than 73,000 Hectares of Confiscated Land Returned ........................................................... 4
Foreign Aid ................................................................................................................. 4 10) Egyptian Interest in Serbia’s Agricultural Sector ............................................................................. 4 11) Modern Weather Stations Set Up to Support Farmer Production .................................................. 4
Private Sector.............................................................................................................. 4 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23)
Biofach Fair Showcases Serbian Organic Producers ........................................................................ 4 Stagnant Prices, Increased Production Costs Frustrate Farmers .................................................... 5 Organic Food Plantations Increasing in Popularity.......................................................................... 5 Serbia to Apply for EU Geographical Origin Indication for 3 Products............................................ 5 Nine Plum Varieties to Be Frozen for Posterity ............................................................................... 5 Less Livestock Imports to Result in Increased Reliance on Domestic Production........................... 6 Increased Raspberry Prices Needed to Boost Yields ....................................................................... 6 Agro Belgrade 2021 to Be Replaced by 3 Thematic Events............................................................. 6 Agricultural Exports of RSD 4.1 Billion in 2020 ................................................................................ 6 Agreement Signed for Maize Exports to China ............................................................................... 7 Report Highlights Aging Farmer Population, Aging Machinery ....................................................... 7 New Genetic Varieties to Be Created in Response to Climate Change ........................................... 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 »
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BFC. Agriculture Finance Bulletin.
State Initiatives 1)
Direct Incentive Subsidies Reduced to RSD 4,000 per Hectare
February 23rd, 2021, http://www.agronews.rs/subvencije-smanjene-sa-5-200-na-4-000-dinara-po-hektaru/
The government of Serbia has passed amendments to the Decree on Incentives in Agricultural and Rural Development that will reduce incentives per hectare from RSD 5,200 to RSD 4,000. This will reduce the overall amount available for direct incentive payments from RSD 24.80 billion to RSD 22.54 billion. The amendments also mean a reduction in funds available for rural development measures from RSD 1.71 billion to RSD 1.40 billion. At the same time, RSD 4.73 billion will be made available for requests based on direct payments from previous years and planned for payment in the current year. This is up from RSD 2.47 billion. It should be noted that, at the same session these amendments were approved, the government also passed the Decree on the Allocation and Use of Funds for Subsidizing Protected Natural Assets of National Interest. This decree allocates RSD 264.8 million in subsidies to finance works and other costs related to protecting natural areas in Serbia.
2)
Ministry of Agriculture Supports Request to Start Frost Insurance Coverage Sooner
February 19th, 2021, https://beta.rs/ekonomija/ekonomija-srbija/141865
The president of the Association of Raspberry and Blackberry Producers in Serbia has met with representatives of the Ministry of Agriculture, resulting in an agreement that frost insurance coverage for fruit producers should start on March 1 (instead of April 4) of this year. The request for the date change came from the Association after insurance companies changed their regulations and moved the validity period into April. This upset many fruit growers in Serbia, who stated that frost insurance was, essentially, meaningless so late in the season. For their part, the Ministry will strongly recommend insurance companies move the date of frost insurance to March 1. For his part, the president of the Association stated that he will call of producers to suspend all insurance with companies that fail to adopt the Ministry’s recommendation.
3)
RSD 500 Million Allocated for Cooperative Development
February 10th, 2021, https://beta.rs/ekonomija/ekonomija-srbija/141423-krkobabic
The Minister for Rural Welfare, Milan Krkobabic, recently announced that the allocation of RSD 500 million in non-refundable funds to cooperatives will soon begin. The funds will be distributed under a competition scheme aimed at helping cooperatives develop and, thereby, support rural development and the improvement of livelihoods for those living in rural areas. Under the state program, new cooperatives are eligible to receive up to RSD 7.5 million, and existing cooperatives are eligible for up to RSD 15 million. A priority will be given to cooperatives in Southern Serbia and other underdeveloped or devastated areas.
4)
Subsidy Payments to Agricultural Producers to Begin at the End of March
February 7th, 2021, http://www.rtv.rs/sr_ci/ekonomija/aktuelno/nedimovic-isplata-subvencija-od-marta_1206358.html
Minister of Agriculture Branislav Nedimovic has announced that subsidy payments to agricultural producers will begin at the end of March 2021. The Minister also requested that qualifying agricultural producers submit their subsidy applications on time so that the distribution of the RSD 53 billion in subsidies can commence promptly. It should be noted that the amount allocated for subsides this year Page 2
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has increased as compared to last year. Additionally, a new support measure is being introduced this year that will help farmers by providing them financing in the “50/40/10” format (50% grant, 40% loan and 10% own contribution).
5)
CERES Project Focuses on Bringing AI Solutions to Serbia’s Agricultural Sector
February 3rd, 2021, http://subvencije.rs/vesti/ceres-projekat-vestacka-inteligencija-stigla
The CERES project has launched with the goal of developing a series of artificial intelligence (AI)-based tools that will enhance Serbia’s agricultural sector, especially has related to improving soil conditions and reducing the impact of climate change. Specifically, the project will develop models based on comprehensive data from a variety of sources and then use this to feed AI-powered algorithms that provide the most accurate solutions to ongoing issues in agriculture. Currently, the project is focused on developing models related to the early identification of changes in plant growth, automated inferences about the causes of changes, yield estimates, soil conditions and appropriate tilling activities. The application of AI in agriculture is important for Serbia as agriculture represents a key branch of the country’s economy. As such, the CERES project represents an important step forward in this direction.
6)
EU Organic Production Project Completed
February 3rd, 2021, https://www.novosti.rs/vesti/ekonomija/961242/uskoro-registracija
The Ministry of Agriculture has completed a European Union (EU) project on organic production and organic product quality. The project includes the development of two specific geographical indications – Authentic Serbia and Wine Treasure of Serbia. Brochures on quality schemes for agricultural and food products and on organic production were also developed under the project. The project also resulted in the draft Law on Organic Production as well as the draft Law on Quality Schemes for Agricultural and Food Products.
7)
RSD 200 Million in Grants to Support Young Entrepreneurs in Rural Areas
February 2nd, 2021, https://www.novosti.rs/vesti/ekonomija/960762/bespovratna-pomoc
Government funds are being allocated to support young people in rural areas as well as encourage young people to return to rural areas. Specifically, RSD 200 million in non-refundable grant funds has been made available to young entrepreneurs in rural areas in the form of co-financing for the procurement of machinery and equipment for organic production. The grants cover up to 90% of the total cost of investments up to RSD 1.5 million.
8)
Applications for Livestock Production Subsidies Now Being Accepted
February 1st, 2021, https://www.novosti.rs/vesti/ekonomija/960348/uprava-agrarna-placanja-pocela-prijava-subvencije
Applications for livestock production subsidies are now being accepting by the Directorate for Agrarian Payments. A total of RSD 24.8 billion in subsidies are available for breeding and fattening activities as well as for dairy production activities. Applications will be accepted through June 30, 2021. All farm owners and agricultural enterprises are eligible to apply.
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9)
More Than 73,000 Hectares of Confiscated Land Returned
January 23rd, 2021, https://biznis.rs/?cli_action=1612303984.268
According to the Agency for Restitution, 73,993 hectares of agricultural land and 5,922 hectares of forests and forest land that had been confiscated has been returned to the former owners and legal heirs. The Agency is also working to compensate those for whom it is no longer possible to return property. A total of EUR 2 billion has been allocated for such compensation, although the government is still calculating an appropriate compensation coefficient.
Foreign Aid 10) Egyptian Interest in Serbia’s Agricultural Sector February 19th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=631891
Egypt’s Cairo 3A Group has expressed interest in building a regional fruit and grain collection center as well as a fruit processing factory in Serbia. To this end, the Group met with representatives of Serbia’s Ministry of Agriculture to discuss concrete cooperation possibilities. This represents an important opportunity for Serbia as the Cairo 3A Group is the largest food producer and grain importer in Egypt as well as the country's largest fruit and vegetable producer.
11) Modern Weather Stations Set Up to Support Farmer Production February 12th, 2021, http://www.rtv.rs/sr_ci/vojvodina/backa/nove-meteo-stanice
More than 18,000 farmers in Sombor, Vrbas, Indjija, Backa Topola and Subotica will now have access to up-to-date weather, disease and pest information that could impact their production thanks to modern meteorological stations that are now connected to the AgroLIFE platform. This will help farmers more efficiently plan production activities, leading to increased yields, reduced operating costs and increased incomes. The meteorological stations were set up as part of the Digitization of Municipal Land Management project, which is supported by the develoPPP.de program of the German Federal Ministry for Economic Cooperation and Development (BMZ), the German Development Cooperation (GIZ), NALED and TeleGroup.
Private Sector 12) Biofach Fair Showcases Serbian Organic Producers February 18th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=631616
This year, nine Serbian companies participated and showcased their organic products at this Biofach Organic Food Trade Fair, which was held in a digital format between February 17 and February 19. The companies presented to potential buyers and distributors from around the world under the national slogan We Speak Organic. Their participation in the fair was made possible with support from the Swiss Import Promotion Program, the Chamber of Commerce and Industry of Serbia (PKS), Serbia Organica and the Development Agency of Serbia.
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13) Stagnant Prices, Increased Production Costs Frustrate Farmers February 17th, 2021, https://www.danas.rs/ekonomija/poljoprivrednici-nezadovoljni-stagnira
Serbian farmers are frustrated with the small increase in corn prices, especially in light of increased production costs related to diesel fuel, mineral fertilizers and seeds. Speaking on the subject, the president of the Pancevo Farmers Association noted that corn prices have been largely stagnant in recent years, even as costs for production continue to rise. This has left many farmers in an untenable position, leading many to give up and sell their land. He added that the situation is serious and that corn prices for producers need to be higher for it to be sustainable.
14) Organic Food Plantations Increasing in Popularity February 16th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=630975
Organic food plantations in Serbia accounted for 3,000 hectares in 2020, 800 hectares more than in the previous year. Organic production represents a good export potential for Serbia, and the country is moving to strengthen its organic capacity. In total, Serbia now supports approximately 7,000 organic producers, with the Ministry of Agriculture taking notice of the growing significance of organic production in Serbia’s food sector. In order to become an organic producer with the right to market organic food, producers must meet and sign a contract with one of six authorized controlling organizations.
15) Serbia to Apply for EU Geographical Origin Indication for 3 Products February 15th, 2021, http://www.politika.rs/scc/clanak/473026/Evropski-zig-geografskog-porekla-i-za-proizvode-iz-Srbije
The European Union (EU) continues to register products with geographical origin indications to the common European database, with more than 30 such products added so far this year. Although Serbia has yet to register a product within that database, it plans on applying to register three in the third quarter of this year, once Serbia’s Law on Quality Schemes for Agricultural and Food Products has been adopted. The adoption of this Law will fully harmonize relevant Serbian legislation with that of the EU, making it possible for organic products to be more easily registered. According to an analysis by the Center for European Policies (CEP), a number of economic indicators suggest that registering quality symbols such as protected designations of origin, geographical indications and guaranteed traditional specialties usually lead to increased capacities to compete in EU markets. However, there can be a lot of uncertainty for manufacturers who are waiting for the outcome of registration, especially during the 3-5 month period of opposition when other countries can object to the registration of a specific product. If such objections are well-founded and no compromise can be found, the request will be rejected.
16) Nine Plum Varieties to Be Frozen for Posterity February 14th, 2021, https://www.novosti.rs/vesti/ekonomija/964792/stare-sorte
Serbia is one of the largest plum producers in the world. However, the negative consequences of climate change and long-term exposure to numerous pathogens are increasingly threatening indigenous varieties. Because of this, the CryoPlum Project, with the support of the Science Fund, is working to preserve nine CryoPlum project through cryopreservation techniques. Specifically, the nine varieties will have cells, tissues and organs stored at extremely low temperatures in liquid nitrogen. This will ensure the varieties’ survival indefinitely, even if they succumb to existing threats (e.g. the hinge virus) in the short term.
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The varieties to be protected are: Belosljiva, Crvena Ranka, Crnosljiva, Cerovacki piskavac, Dragacevka, Moravka, Pozegaca, Sitnica and Trnovaca.
17) Less Livestock Imports to Result in Increased Reliance on Domestic Production February 13th, 2021, https://www.novosti.rs/vesti/ekonomija/964459
At a meeting with the Minister of Agriculture, slaughterhouses and local breeders agreed to reduced livestock imports in the coming period, resulting in increased purchases of domestically-raised livestock. To support this, the Veterinary Administration will tighten import measures regarding health standards. Stakeholders in Serbia’s livestock sector believe this is the best way to protect the domestic livestock market. The Minister expects that there will be an increase in demand for domestic raw materials within the next few weeks as a result of this agreement.
18) Increased Raspberry Prices Needed to Boost Yields February 8th, 2021, http://www.rtv.rs/sr_ci/ekonomija/stav/nizak-prinos
Despite a great demand for raspberries on the world market, Serbian producers have struggled to honor their previously-concluded contracts due to a drop of 60% in overall yields. According to the president of the Association of Raspberry and Blackberry Producers, the reason for this drop in yields is a combination of climate change and, mostly, financial exhaustion in obtaining certified seedlings. As producers look toward cheaper seedlings, their average yield per hectares are dropped from 20 tons to just 3-4 tons per hectare. To boost yields, the president of the Association has called for a minimum purchase price of RSD 250 per kilogram. Such a price, he states, would allow producers to obtain high-quality seedlings that result in yields of 20-25 tons per kilogram.
19) Agro Belgrade 2021 to Be Replaced by 3 Thematic Events February 8th, 2021, https://www.ekapija.com/en/news/3167448/agro-belgrade-2021
The Agro Belgrade 2021 fair, originally scheduled for March 4–6, 2021 has been cancelled due to the situation surrounding the COVID-19 pandemic. Instead, three thematic events will replace the fair: • Agro Belgrade Conference – a conference dealing with agribusiness financing, the export of products to regional and world markets and agricultural technologies will be organized for March 4–5, 2021. • Agro Belgrade Online B2B Event – planned for March 4, 2021, this event will connect the leading producers of fruit and vegetables from the country and the region with professional buyers and traders from around the world. • Agro Belgrade Berry Business Forum – this two-day event should be held in late April to discuss issues related to blueberry, raspberry and strawberry markets and production.
20) Agricultural Exports of RSD 4.1 Billion in 2020 February 8th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=628782
Serbia recorded RSD 4.1 billion in agricultural exports in 2020, a new record for the country. The European Union (EU) and Russia represented the largest export markets, with China and India representing the newest markets with large-scale potential. Speaking on this subject, Minister of Agriculture Branislav Nedimovic noted that Serbia needs to take advantage of this situation and further develop its market relationships.
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21) Agreement Signed for Maize Exports to China February 4th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=627819
Agriculture Minister Branislav Nedimovic has signed an agreement on phytosanitary requirements for Serbian maize exports to China. This means that Serbia, one of the world’s top ten maize exporters, will soon also be able to export the commodity to China, the largest maize importer in the world. The Ministry of Agriculture will oversee maize cultivation processes and supervise companies exporting the crop to China. Moreover, all warehouses storing maize for the Chinese market will have to be registered.
22) Report Highlights Aging Farmer Population, Aging Machinery February 2nd, 2021, https://rs.n1info.com/biznis/dri-nosioci-gazdinstava-stariji-od-60-a-poljoprivredne-masine-od-20-godina/
According to the State Audit Institution's Audit Report on Rural Development Incentives, Serbia’s agricultural sector faces a number of problems for continued development. The two most pressing of these issues are: (1) average farmer age and (2) average machinery age. The Report indicates that the average Serbian farmer is 61 years old, an increase of two years since 2012. The Report also indicates that more than 80% of tractors and combines in use in the country are older than 20 years. Given the state’s desire to bring more youth and more modern equipment into the agricultural sector, these are not positive numbers. If the state’s efforts toward this ends are to pay off, the state needs to better monitor the effects of its rural development strategy and incentives, especially as related to the real-world needs on the ground.
23) New Genetic Varieties to Be Created in Response to Climate Change February 1st, 2021, http://www.rtv.rs/sr_ci/ekonomija/aktuelno/savetovanje
At the 55th Conference of Farmers and Agronomists of Serbia, it was announced breeding work at the Institute of Field and Vegetable Crops for the coming period will be focused on creating varieties and hybrids that are adapted to both climate change and the tendency to reduce the use of pesticides in production. Speaking at the Conference, Assistant Minister of Agriculture Aleksandar Bogicevic noted the importance of reintroducing subsidies for the use of quality seeds at the level of the Ministry to support this important work and ensure the long-term sustainability of Serbia’s agricultural sector. Participants to the Conference also discussed biodynamic agriculture, the diversification of agricultural systems, modern approaches to improving nutritional quality, sustainable legumes and other important issues for agriculture.
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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. 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.
