09/2021
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72 S e r b i a Agriculture Bulletin Government to Increase Milk Premiums
Organic Exports Reach EUR 37 Million in 2020
Long-Term Investment Loans for Agriculture Agricultural Exports to EU Have Doubled in the Last 10 Years
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Agriculture Finance Bulletin Edition #72, September 2021
Contents State Initiatives ........................................................................................................... 2 1) 2)
Government to Increase Milk Premiums ........................................................................................ 2 Organic Distribution Center Opens in Cenej ................................................................................... 2
Foreign Aid ................................................................................................................. 2 3) 4) 5) 6) 7)
EU to Donate Equipment for Better Managing Pesticide Residues ................................................ 2 Panel Discussion Highlights Importance of Young Farmers ............................................................ 2 Organic Exports Reach EUR 37 Million in 2020 ............................................................................... 2 EUR 47.4 Million in IPARD Funds Approved for Serbian Farmers ................................................... 3 Long-Term Investment Loans for Agriculture.................................................................................. 3
Private Sector.............................................................................................................. 3 8) 9) 10) 11) 12) 13) 14) 15)
Agricultural Exports to EU Have Doubled in the Last 10 Years ....................................................... 3 Livestock Producers Find Themselves in a Difficult Situation ......................................................... 3 Milk Producers Want a Real Market Price....................................................................................... 4 Meat Prices Have Helped Boost Inflation Figures ........................................................................... 4 Agricultural and Fishery Prices Up 30.7% ........................................................................................ 4 Forecasts Predict Reduced Agricultural Yields Across Serbia .......................................................... 4 EUR 626 Million in Agricultural Land Blocked from Usage .............................................................. 4 Agricultural and Food Industry Exports Reach EUR 1.98 Billion...................................................... 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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BFC. Agriculture Finance Bulletin.
State Initiatives 1)
Government to Increase Milk Premiums
September 17th, 2021, https://www.politika.rs/scc/clanak/487957/Drzava-povecala-premije-za-mleko
The government of Serbia has allocated EUR 25 million to raise milk premiums from RSD 7 to RSD 10 per liter starting October 15, 2021. While dairy farmers welcome the increased amount, they note that they also expect support from milk producers, who have not raised their purchase price in six years. Currently, most dairy farmers are operating with production costs far outpacing sales prices.
2)
Organic Distribution Center Opens in Cenej
September 16th, 2021, http://www.tanjug.rs/full-view_en.aspx?izb=683276
Serbia’s first-ever distribution center for organic products has been set up in Cenej, which is near Novi Sad. The center, which features a range of organic products, is supported by Novi Sad city authorities and is based on best European practices for supporting locally-grown organic products.
Foreign Aid 3)
EU to Donate Equipment for Better Managing Pesticide Residues
September 22nd, 2021, https://www.danas.rs/ekonomija/ziofre-eu-ce
The European Union (EU) plans to provide the Directorate for National Reference Laboratories with the most modern analytical equipment to allow the country to better manage pesticide residues. Not only will the equipment help increase food safety in the country, it will also help the country increase its agricultural exports to EU markets. Since 2000, the EU has donated EUR 230 million for agriculture and food safety in Serbia, with the main areas of assistance being environmental protection, human health, food safety, animal welfare and soil in maintenance.
4)
Panel Discussion Highlights Importance of Young Farmers
September 20th, 2021, https://agrosmart.net/2021/09/20/pokrajina-pruza-punu-porsku-mladim-poljoprivrednicima/
As part of the 88th International Agricultural Fair, the Provincial Secretariat for Agriculture and the Serbian Association of Young Farmers organized the Young Farmers in Serbia and the EU panel discussion. The discussion highlighted the importance of promoting youth entrepreneurship in agriculture as well as measures that could be taken to create better business environments, strengthen the culture of associations of young farmers and enhance the products of young farmers in domestic and foreign markets.
5)
Organic Exports Reach EUR 37 Million in 2020
September 14th, 2021, https://www.danas.rs/ekonomija/izvoz-organskih-proizvoda-dostigao-37-miliona-evra/
Despite difficulties due to the COVID-19 pandemic, last year was a record year for the production and export of organic agricultural products, especially organic fruit products. In total, exports of organic products reached EUR 37 million last year, EUR 7 million more than in 2019. Furthermore, it is expected that organic exports will continue to increase this year and beyond as organic products become more in demand across the world.
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Currently, organic production is only about 1% of all food production in Serbia. Projects such as the United States Agency for International Development (USAID)’s Project for a Competitive Economy are trying to change this and unlock the potential of Serbian organics. In particular, the project is working with leading exporters of frozen organic fruits and berries to develop business models that enhance farmer (especially younger farmer) capacities for organic production.
6)
EUR 47.4 Million in IPARD Funds Approved for Serbian Farmers
September 12th, 2021, https://beta.rs/ekonomija/ekonomija-srbija/152155
Of the EUR 175 million in aid for agriculture from the European Union (EU)’s IPARD pre-accession fund, EUR 47.4 million has been approved so far. This amount covers 725 projects. Some issues have been noted in farmers accessing these funds. The most important are finding adequate co-financing sources (e.g. loans from financial institutions, self-funds) and complexities in completing the application process. To help with the latter, there are a number of consultants to help farmers prepare project applications successfully. Government officials also routinely organize workshops for farmers on the benefits of IPARD funds, how to access them and where to look for application assistance.
7)
Long-Term Investment Loans for Agriculture
September 6th, 2021, https://beta.rs/ekonomija/ekonomija-srbija/151861
The European Investment Fund is partnering with Opportunity Bank to offer investment loans to registered agricultural producers in Serbia. The loans, which are part of the Employment and Social Innovation (EaSI) Program, feature loan amounts of up to EUR 20,000 and a repayment term of up to eight years. Loan funds can be used to finance various needs, including purchasing machinery, building greenhouses and constructing/renovating facilities. The loans are secured by a bill of exchange with each borrower.
Private Sector 8)
Agricultural Exports to EU Have Doubled in the Last 10 Years
September 22nd, 2021, http://www.rtv.rs/sr_ci/vojvodina/novi-sad/nedimovic-do-kraja-godine
The head of the European Union (EU) delegation in Belgrade met with Agriculture Minister Branislav Nedimovic to discuss the impact of ongoing partnerships in agriculture between Serbia and the EU. During the meeting, it was noted that the export of Serbian agricultural products to EU markets has doubled in the last ten years, reaching EUR 1.9 billion in revenue. While this is a positive indicator, Minister Nedimovic believes much more work can be done in this regard and hopes to reach EUR 5 billion in the near future. He believes this is possible thanks to EU support in equipping Serbian laboratories with modern food safety testing equipment and controlling animal diseases. It should be noted that the EU has donated more than EUR 20 million to Serbia for disease control, animal vaccination, equipment and capacity building.
9)
Livestock Producers Find Themselves in a Difficult Situation
September 22nd, 2021, https://nova.rs/vesti/biznis/stocari-u-srbiji-ne-mogu-da-izdrze-pocinju-da-se-bave-vocarstvom/
Serbian livestock producers find themselves in a challenging situation in which production prices are constantly on the rise (nearly doubling in many instances) while sales prices for meat and milk remain unchanged. Moreover, the lack of adequate state support, especially in troubling times, has many Page 3
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livestock producers questioning the government’s dedication to supporting the livestock sector as well as whether or not it will be a viable sector in the future. This stark reality has led many to give up on livestock production and start looking at other agricultural sectors that can provide them with a sustainable livelihood.
10) Milk Producers Want a Real Market Price September 21st, 2021, https://rs.n1info.com/biznis/proizvodjaci-mleka-ne-treba-nam-veca-premija-nego-realna-cena/
With the government’s recent decision to increase milk premiums to RSD 10 per liter, many dairy producers are instead calling on milk processors to start paying a real price for raw milk. They note that the purchase price for raw milk has remained unchanged for six years, standing at RSD 30–36 per liter. Meanwhile, production costs per liter have risen to RSD 55–60 per liter. Obviously, this has place milk producers in a difficult situation. From their point of view, processors and retail outlets are all making a profit on the backs of producers. Now, they are calling for their fair share.
11) Meat Prices Have Helped Boost Inflation Figures September 15th, 2021, https://www.021.rs/story/Info/Biznis-i-ekonomija/284867/Poskupljenje-mesa-uticalo-na-inflaciju.html
According to the National Bank of Serbia, inflation in the country has been greatly impacted by the price of meat. In particular, the bank notes that increased meat prices – the result of reduced supply and increased demand – help push inflation to over 4.3% for the year and 0.9% for the past month. It is expected that inflation will continue to rise until markets return to normal at a global level.
12) Agricultural and Fishery Prices Up 30.7% September 14th, 2021, https://www.danas.rs/ekonomija/cene-poljoprivrednih-i-ribarskih-proizvoda-povecane-za-307-odsto/
The prices of agricultural and fishing products in Serbia increased 30.7% year-on-year in July 2021. The largest increases were for fruit (+84.2%), industrial plants (+55.2%) and grains (+16.9%). Compared to the previous month (i.e. June 2021), prices increased by 0.9%, with the highest increases for potatoes (+51.2%) and fruit (+15.6%).
13) Forecasts Predict Reduced Agricultural Yields Across Serbia September 13th, 2021, https://www.021.rs/story/Info/Biznis-i-ekonomija/284755/Susa-umanjila
Agricultural production across the country is expected to fall 4%. The main reason for this is drought conditions over two summer months, in which temperatures exceeded 40 degrees Celsius with little rainfall. In total, drought conditions are estimated to have caused at least RSD 500 million in damage. The greatest impact is expected to be on soybean production (estimated to fall 50%), corn production (estimated to fall 30–50%) and sunflower production (estimated to fall 10–15%). Experts believe such conditions could become the norm as an effect of climate change. Preparing Serbia’s agricultural sector to resist such conditions will require significant investments.
14) EUR 626 Million in Agricultural Land Blocked from Usage September 6th, 2021, https://rs.n1info.com/biznis/imovina-zadruga-pod-blokadom-zemljiste-vredno-626-miliona-evra/
The slow resolution of the status of cooperative property in Serbia has resulted in about 1% of the country’s agricultural land being effectively blocked from usage. While this may seem like a relatively small amount, the cumulative value of this land is estimated at more than EUR 626 million. Most of this land is Page 4
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in Vojvodina. Although numerous applications have been made for the use of this land, as much as 93% of it is currently unavailable for use.
15) Agricultural and Food Industry Exports Reach EUR 1.98 Billion September 2nd, 2021, https://www.ekapija.com/en/news/3401789/agricultural-and-food-industry
Over the past six months, Serbia has exported agricultural and food industry products worth EUR 1.98 billion. This represents a 13.9% year-on-year increase. It is also a record amount and a positive trend for the country, which exported only RSD 1.08 billion worth of agricultural and food industry products just ten years ago.
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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.