#68 Serbia Agriculture Bulletin, BFC

05/2021

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68 S e r b i a Agriculture Bulletin RSD 123.3 Million in Co-Financing for Greenhouses in Vojvodina Easier Access to National Budgetary and IPARD Support for Women EBRD, FAO Assisting in Development and Implementation of Irrigation Strategy Union of Agricultural Producers Believes State Is Working to Destroy Serbian Livestock Farms

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Agriculture Finance Bulletin Edition #68, May 2021

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

RSD 123.3 Million in Co-Financing for Greenhouses in Vojvodina .................................................. 2 New Digital Reporting Service for the Illegal Use of Agricultural Land ........................................... 2 Updated Law on Agricultural Land Being Prepared ........................................................................ 2 First Subsidized Loans Approved Under State Program .................................................................. 2 Easier Access to National Budgetary and IPARD Support for Women ............................................ 3 Vojvodina to Support Development of Organic Production ........................................................... 3 Agricultural Investment Assistance Available ................................................................................. 3 Serbia, Russia Sign Agreement to Ease Serbian Exports to Russia .................................................. 3

Foreign Aid ................................................................................................................. 3 9) EBRD, FAO Assisting in Development and Implementation of Irrigation Strategy ......................... 3 10) Measure 4 of IPARD III Launching ................................................................................................... 4 11) Growing Interest in the IPARD Program .......................................................................................... 4

Private Sector.............................................................................................................. 4 12) 13) 14) 15) 16) 17) 18) 19) 20)

Credit Agricole Serbia Processing Applications for Subsidized Agricultural Loans ......................... 4 Union of Agricultural Producers Believes State Is Working to Destroy Serbian Livestock Farms ... 4 2020 Fruit Exports Grew Despite COVID-19 Challenges.................................................................. 5 Winemaking the Fastest Growing Sector of Serbia’s Economy ...................................................... 5 Novi Sad International Agriculture Fair to Be Held in September................................................... 5 Serbian Raspberry Yield Forecast at Half of Normal Volumes ........................................................ 5 Half of Serbian Wine Exports Reach Russian Markets .................................................................... 5 Competition for Best Organic Production Announced .................................................................... 6 Livestock Development Crucial for Sustainable Rural Development .............................................. 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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State Initiatives 1)

RSD 123.3 Million in Co-Financing for Greenhouses in Vojvodina

May 25th, 2021, https://agrosmart.net/2021/05/25/pokrajina-bespovratno-dala-80-miliona-dinara-za-podizanje-plastenika/

The Provincial Secretary for Agriculture of Vojvodina distributed RSD 132.3 million worth of contract agreements to representatives of 130 farms that are to receive co-financing support for the procurement of greenhouses and related equipment. The funding is expected to result in 125,000 new square meters of greenhouses within the province. Each applicant was eligible to receive up to RSD 2.1 million in funding support, although women applicants were eligible for 10% more.

2)

New Digital Reporting Service for the Illegal Use of Agricultural Land

May 24th, 2021, https://www.danas.rs/ekonomija/prijavljivanje-uzurpacije-njiva-i-divljih-deponija-i-preko-mobilnog/

The Agricultural Land Administration of the Ministry of Agriculture has launched a new digital service for reporting the usurpation of state agricultural land and illegal landfills. The service is available on the website of the Agricultural Land Administration and allows reporters to easily notify authorities of violations and remain anonymous.

Under current legislation, a person found to be using state-owned land illegally will be fined three times the highest average price per hectare in the area. Failure to pay this fine will result in all crops on the land being removed.

3)

Updated Law on Agricultural Land Being Prepared

May 22nd, 2021, http://www.rtv.rs/sr_ci/vojvodina/backa/nedimovic

A new version of the Law on Agricultural Land is being prepared and aims to address a number of issues that have not been appropriately resolved. This includes sanctions and criminal charges related to the abuse of state incentives. The update Law will also support young farmers, especially by making it easier for them to purchase state-owned land.

4)

First Subsidized Loans Approved Under State Program

May 18th, 2021, https://rs.n1info.com/biznis/komercijalna-i-nlb-banka-odobreni-prvi-subvencionisani-poljoprivredni-krediti/

Komercijalna Bank and NLB Bank, members of the NLB Group in Serbia, have approved the first loans for farmers under a subsidy program of the Ministry of Agriculture. The first loan, approved by NLB Bank, was a 12-month loan for the procurement of raw materials. It has a nominal interest rate of 1% and an effective interest rate of 2.05%. The first loan from Komercijalna Bank was for an amount of RSD 1.8 million and for the purpose of increase livestock numbers.

Under the program, natural persons are eligible for subsidized loans of up to RSD 6 million, and agricultural cooperatives or companies are eligible for subsidized loans of up to RSD 18 million. The maximum loan term is 60 months, and there are varying repayment models. All eligible beneficiaries must be registered agricultural enterprises.

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5)

Easier Access to National Budgetary and IPARD Support for Women

May 11th, 2021, https://www.novosti.rs/vesti/ekonomija/996029/uprava-agrarna-placanja-zene-lakse-kredita

According to the Agricultural Payments Administration, women have an easier time accessing investment measures from the national budget and IPARD program as they have an advantage in the scoring matrix.

This is a specifically-designed feature to motivate and encourage women entrepreneurs, especially as data shows that women appear as the holder of an agricultural farm in only 15% of cases, with many of these being older (65+ years of age) women.

6)

Vojvodina to Support Development of Organic Production

May 7th, 2021, http://www.rtv.rs/sr_ci/vojvodina/za-razvoj-organske-proizvodnje-devet-miliona-dinara_1236855.html

The Provincial Secretary for Agriculture of Vojvodina distributed more than 17 contracts related to cofinancing investments in organic food production. In total, the contracts are worth approximately RSD 9 million. Under the terms of the contracts, beneficiaries will be able to use the funds to procure specialized machinery and other equipment necessary for organic production.

7)

Agricultural Investment Assistance Available

May 6th, 2021, https://www.novosti.rs/vesti/ekonomija/994416/drzava-daje-25-000

The state, in cooperation with the World Bank, is providing eligible owners of farms and agricultural companies with non-refundable investment assistance in amounts up to EUR 25,000 per farm and up to EUR 200,000 per agricultural company. Grants will cover 50% of the total cost of investment; credit support will cover 40%; and the remaining 10% must be covered by the farmer/company. Under the current invitation, those engaged in producing fruits, wine, vegetables and flowers are eligible. Future invitations are expected to extend to cattle breeders and other farmers.

8)

Serbia, Russia Sign Agreement to Ease Serbian Exports to Russia

May 5th, 2021, http://www.agronews.rs/sporazum-za-laksi-izvoz-na-rusko-trziste/

An agreement between the governments of Serbia and Russia related to plant quarantine and plant protection is expected to ease procedures and reduce barriers for Serbian fruit, vegetable, seeds and other plant product exports bound for Russian markets. The agreement will replace an agreement signed

by Russia and Yugoslavia in 1996.

Foreign Aid 9)

EBRD, FAO Assisting in Development and Implementation of Irrigation Strategy

May 27th, 2021, http://www.agronews.rs/strategija-navodnavanja-za-produktivniju-poljoprivredu/

Serbia is developing an irrigation strategy to raise the overall level of irrigation and, as a result, the productivity of agricultural production in the country. More specifically, the strategy will identify special preconditions and investment options related to irrigation in a way that is sustainable, boosts Serbian agriculture’s resistance to climate change and fuels job creation.

Within the context of the strategy, Serbia will borrow funds from the European Bank for Reconstruction and Development (EBRD) under the Strengthening Irrigation Infrastructure in Serbia project. The United

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Nations Food and Agriculture Organization (FAO) will also assist in the development of the strategy within the project.

10) Measure 4 of IPARD III Launching May 7th, 2021, http://www.agronews.rs/ipard-agro-ekolosko-klimatske-i-mere-organske-proizvodnje/

IPARD III’s Measure 4, which refers to agro-ecological-climatic measures and measures of organic production, is being launched in Serbia. Under the Measure, potential beneficiaries (who must be registered agricultural holdings) agree to apply appropriate practices and methods of agricultural production for a period of five years. Financial support in the regard will be provided in the form of an annual payment per unit area or per head of endangered breed as compensation for loss of income and/or additional costs incurred from adhering to the special conditions.

11) Growing Interest in the IPARD Program May 6th, 2021, http://www.stips.minpolj.gov.rs/srl/vest/sve-vece-interesovanje-za-sredstva-iz-ipard-programa

Last year, significantly more requests for funding from the IPARD II program were approved as compared to previous years. The largest volume of requests (66% of all requests) were submitted from Vojvodina.

The greatest interest was under Measure 1 and for the procurement of tractors. Under Measure 3, the most interest was in modernizing processing and packaging equipment.

Private Sector 12) Credit Agricole Serbia Processing Applications for Subsidized Agricultural Loans May 27th, 2021, https://bif.rs/2021/05/subvencionisani-krediti-za-poljoprivredu-credit-agricole-banke/

Credit Agricole Serbia, in cooperation with the Ministry of Agriculture, is processing applications for subsidized loans for agriculture. The loans are local-currency loans with fixed interest rates of between 1% and 3% per annum. The loans are intended for the purchase of machinery, equipment, quality livestock and fodder as well as for investments in the development of livestock, farming, fruit growing, viticulture, vegetables and floriculture. For privileged categories, including women farmers, young farmers (up to 40 years of age) and farm holders registered in areas with difficult working conditions, the interest rate is set at 1%. The maximum loan amount for individuals and entrepreneurs is RSD 6 million; for legal entities, the maximum amount is RSD 18 million. Repayment terms depend on the purpose of the loan and range from 3 to 5 years.

13) Union of Agricultural Producers Believes State Is Working to Destroy Serbian Livestock Farms May 27th, 2021, https://rs.n1info.com/biznis/unija-poljoprivrednika-stocni-fond-unistavaju-i-pojedine-politicke-strukture/

The President of the Union of Agricultural Producers is criticizing authorities for their lack of response to the requests of cattle breeders regarding the placement of fattening pigs, claiming that the political structures are vested in the destruction of livestock farming in the country. As evidence, he numerous government decisions that hurt Serbian livestock producers, including the continued import of pork at high rates from the European Union (EU). He also points to President Vucic’s remarks that the state “cannot regulate the market or buy market surpluses” when referring to livestock.

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14) 2020 Fruit Exports Grew Despite COVID-19 Challenges May 26th, 2021, http://www.stips.minpolj.gov.rs/srl/vest/u-godini-korone-izvoz-voca-zabelezio-rast-za-oko-19-odsto

Despite complications with the COVID-19 pandemic, Serbia agricultural exports recorded strong growth in 2020. In total, agricultural exports grew approximately 6% last year, with the most notable exports being raspberries, apples, blackberries, cherries and plums. Raspberry exports grew 19% and generated EUR 259 million in export revenue. Apple exports generated EUR 110 million in export revenue; blackberries generated EUR 41 million; cherries generated EUR 40 million; and plums generated EUR 21 million.

15) Winemaking the Fastest Growing Sector of Serbia’s Economy May 22nd, 2021, https://www.danas.rs/ekonomija/brnabic-vinarstvo-najbrze-rastuci-sektor-citave-ekonomije/

Speaking at the Great Evaluation of Serbian Wine event, Prime Minister Ana Brnabic stated that winemaking is the fastest growing sector of the Serbian economy and, as such, has one of the greatest potentials for growth. She also noted that the state is invested in developing winemaking and viticulture and has a strategy to increase rape and vineyard plantations by 400 to 600 hectares every year. She also pointed out that the new Law on Wine is being prepared and called on winemakers and winegrowers to get involved in this “serious task”.

16) Novi Sad International Agriculture Fair to Be Held in September May 19th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=654874

The Novi Sad International Agriculture Fair will be held September 18–24, 2021 at the city's fair grounds.

In preparation for the fair, a virtual agriculture show was launched on the ExpoOnline.rs platform. The show was designed to complement the full fair this September.

17) Serbian Raspberry Yield Forecast at Half of Normal Volumes May 18th, 2021, https://www.danas.rs/ekonomija/radovic-rod-malina-u-srbiji-bice-upola-manji-od-prosecnog/

According to current projections, this year’s yield of raspberries will be half of its average due to lower prices in recent years leading to neglected production. In total, experts estimate this year’s yield to be 40,000 tons. Global demand for raspberries is expected to grow this year as worldwide production has fallen, especially in leading producers Chile and Poland. Moreover, the quality of Serbian raspberries this year is expected to be reduced due to a combination of uncertified planting materials, disease and poor choices made by incompetent bodies in the past.

18) Half of Serbian Wine Exports Reach Russian Markets May 18th, 2021, http://www.agronews.rs/srbija-polovinu-vina-izvezla-u-rusiju/

Last year, Serbia exported approximately 11.17 million liters of wine, valued at EUR 16 million. The majority (6.3 million liters or 56.6%) was exported to Russian markets, with the rest exported to CEFTA markets and European Union (EU) markets. Winemaking is considered a strategically important and growing sector by the Serbian government, which is implementing various programs of state support to bolster the sector’s growth, including grant funding and subsidized co-financing for investments made in the sector. The state also hopes that a constantly improved winemaking sector will also lead to increased tourism for those interested in wine and rural tourism.

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19) Competition for Best Organic Production Announced May 13th, 2021, https://beta.rs/ekonomija/ekonomija-srbija/146098

Komercijalna Bank and NLB Bank have announced a competition intended for organic producers in which ten projects in the field of organic production and food processing will be awarded a total of RSD 5 million.

The competition is aimed at individual farmers with registered farms who are certified or in the process of certification for organic production, including producers who have a group certificate or contract with a production organizer. The ultimate goal of the competition is to promote organic practices as they preserve land for future generations and also protect the health of entire ecosystems. This will be the tenth year in a row that the competition has been held.

20) Livestock Development Crucial for Sustainable Rural Development May 12th, 2021, https://beta.rs/ekonomija/ekonomija-srbija/146047

The share of livestock production in developed countries is 60% of agricultural production. In Serbia, that figure is just 30%. Despite the relatively low figure for Serbia, there is much potential for the development of livestock production in the country. Moreover, animal husbandry is important for food production and sustainable rural development. To create a better livestock sector however, there needs to be significant attention given to livestock cooperatives and their development. To this end, the Ministry of Village Care plans to assist livestock cooperatives with a minimum of RSD 500 million this year. It is hoped that this investment will provide Serbian livestock producers with modern European solutions, techniques and outlooks.

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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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