10/2015
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1 Serbia Agriculture Finance Bulletin Agricultural Land Act Amendments Considered Serbia’s Viktoria Group Contributes to Increase in IFC Loans First Gluten-Free Factory Opens in Serbia Wheat Harvest Estimated at 550,000 ha – Farmers Experiencing Difficulties
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Agriculture Finance Bulletin Edition #1, October
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
Agricultural Land Act Amendments Considered ............................................................................. 2 Forestry Law Amendments Set to Deter Illegal Logging ................................................................. 2 Macedonia Flour Export Issues Resolved ........................................................................................ 2 Agriculture Budget Grossly Miscalculated....................................................................................... 2 State Assistance for Young Farmer Start-Ups Proposed ................................................................. 3 Talks Held Before 4th Serbia-Russia Agriculture Forum.................................................................. 3
Foreign Aid ................................................................................................................. 3 7) 8)
Serbia’s Viktoria Group Contributes to Increase in IFC Loans ......................................................... 3 Czechs to Invest in Serbian Agriculture – Assist with EU Accession Talks ....................................... 4
Private Sector.............................................................................................................. 4 9) 10) 11) 12) 13) 14) 15) 16) 17) 18)
French-Designed Apple Processing Plant Opened in Celarevo ....................................................... 4 First Gluten-Free Factory Opens in Serbia....................................................................................... 4 Wheat Sowing Delayed Due to Heavy Rainfall ................................................................................ 5 Beekeeping Seminar Held in Apatin ................................................................................................ 5 Tobacco Growers Request State Aid ............................................................................................... 5 PSS Sombor Holds Organic Agriculture Start-up Seminar ............................................................... 6 1,000 tons of Honey to be Exported – 6,000 m2 Processing Facility to be Built ............................. 6 Wheat Harvest Estimated at 550,000 ha – Farmers Experiencing Difficulties ................................ 6 AP Vojvodina Development Fund to Issue Preferential Agro-Loans ............................................... 7 Corn Yields Drop by up to 50% Due to Drought .............................................................................. 7
Note: The Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows 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.
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State Initiatives 1)
Agricultural Land Act Amendments Considered
October 23th, 2015, http://www.mpzzs.gov.rs/ministar-bogosavljevic-boskovic-odrzala-sastanak-sa-pancevackim-ratarima/
Minister of Agriculture Snezana Boskovic Bogosavljević agreed to consider proposed amendments to the Agricultural Land Act put forward by the Pancevo Farmers’ Association. With regards to the continued requests for subsidy payments, the Minister called for understanding that, as in previous years, the demand for subsidies exceeds available funds. Further discussions are planned.
2)
Forestry Law Amendments Set to Deter Illegal Logging
October 21st, 2015, http://www.mpzzs.gov.rs/izmenama-i-dopunama-zakona-do-unapredjenja-stanja-u-sektoru-sumarstva/
Recent amendments to forestry laws should significantly help tackle illegal logging, said Minister of Agriculture Snezana Bogosavljević Boskovic. The amendments strengthen inspection, control and prosecution protocols. Tracing measures will be introduced, including shipping documentation and the labeling of timber. Failure to satisfy certification requirements may lead to the seizure of timber, said the Minister. Additionally, rangers will be recognized as official authorities, and forestry inspectors will have the right to intercept and control timber traffic, said Boskovic. With fires, floods, landslides and frost more prevalent due to climate change, the bill also details amendments to disaster relief procedures. Private land-owners will no longer be required to pay logging tax, added Boskovic.
3)
Macedonia Flour Export Issues Resolved
October 21st, 2015, http://inserbia.info/today/2015/10/azeski-problem-with-flour-exports-to-macedonia-is-solved/
President of the Macedonian Chamber of Commerce Branko Azeski announced that obstructions to Serbian flour imports were due to a technical error on behalf of the Macedonian Ministry of Agriculture and have now been resolved. Serbian flour producers reported difficulties exporting as early as July, with some suspecting an embargo. However, communications between the Serbian and Macedonian Chambers of Commerce quickly resolved the matter, said Azeski.
4)
Agriculture Budget Grossly Miscalculated
October 17th, 2015, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:572233-Cate-lose-izracunalesubvencije
The Ministry of Agriculture grossly miscalculated this year’s budget, leading to an RSD 10 billion subsidy deficit. Page 2
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Of the total, RSD 6 billion in crop subsidies are yet to be paid, with only 49,052 of 275,869 applicants receiving funds. About RSD 2 billion in fertilizer subsidies, RSD 700 million in breeding stock subsidies, and RSD 500 million in dairy subsidies are outstanding, according to reports. Marijan Rističević, Chairman of the Parliamentary Committee on Agriculture, says it had warned the budget was insufficient. The Ministry of Agriculture said it had limited human resources to deal with the 350,000 applications for subsidies, and said further payments would be made during the remaining two months of the year. To receive the RSD 25,000 per head subsidy for breeding stock, farmers must submit an individual application for each animal. Yet regional services request RSD 12,500 per application, leaving farmers even worse off, according to Sanja Bugarski, President of the Association of Milk Producers of Vojvodina.
5)
State Assistance for Young Farmer Start-Ups Proposed
October 14th, 2015, http://www.stips.minpolj.gov.rs/sadrzajv/mladim-poljoprivrednicima-treba-dati-povlastice
The state should provide young farmers with various forms of start-up assistance, said Minister of Agriculture Snezana Boskovic Bogosavljević during a visit to Banatsko Novo Selo. In a meeting held with local producers and the Banatski Association, the Minister also discussed the status of state-owned agricultural land, rural development and the improvement of opportunities for rural women and youth.
6)
Talks Held Before 4th Serbia-Russia Agriculture Forum
October 14th, 2015, http://www.mpzzs.gov.rs/odrzan-sastanak-ministra-bogosavljevic-boskovic-i-nj-e-ambasadora-cepurina/
Minister of Agriculture Snezhana Bogosavljević Boskovic and Russian Ambassador Alexander Chepurin held preparatory talks in anticipation of the 4th Serbian-Russia Agriculture Cooperation forum and the 14th Serbian-Russian Committee for Trade, Economic, Scientific and Technical Cooperation. Boskovic noted the size of the Russian market combined with Serbia’s production capacity bodes well for increased trade. Boskovic’s impending visit to the Russian Federation – including his visit with counterpart Aleksandr Nikolayevich Tkacova – was also discussed.
Foreign Aid 7)
Serbia’s Viktoria Group Contributes to Increase in IFC Loans
October 19th, 2015, http://www.finchannel.com/index.php/business/item/50592-ifc-s-europe-and-central-asia-clients-doublefinancing-to-farmers
The number of European and Central Asian (ECA) farmers receiving International Finance Corporation (IFC) loans has greatly increased due to the contributions of IFC clients Viktoria Group of Serbia, Agricover Credit of Romania and DenizBank and Seker Bank of Turkey. Last year, IFC backed loans reached nearly 470,000 farmers, compared to 225,000 in 2013 – a 110% increase. The vast majority of farms in the ECA qualify as small and medium enterprises (SMEs), which Page 3
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are the primary engines for job creation in developing countries, according to a 2011 World Bank Policy Research paper. The IFC is a member of the World Bank Group.
8)
Czechs to Invest in Serbian Agriculture – Assist with EU Accession Talks
October 15th, 2015, http://www.mpzzs.gov.rs/srbija-medju-pet-zemalja-sa-kojima-ceska-posebno-unapredjuje-poljoprivrednusaradnju/
Serbia counts amongst the Czech Republic’s top five partners in agriculture, said Czech Minister of Agriculture Marian Jurečka. A special agricultural attaché will be sent to Serbia, with only China, Russia, Ukraine and Saudi Arabia also hosting such a diplomat. In a meeting with counterpart Snežana Bogosavljević Boskovic, the Ministers discussed cooperation in the livestock sector, technology transfer, and investments in processing and herb cold storage facilities. The Czech Republic has comparable technologies to the Netherlands and Germany, while offering advantageous prices, said Jurečka, adding the country is interested providing funds and expertise for cereal production, milling and brewing projects. Jurečka is also keen on importing Serbian fruit and vegetable products. The Czech Republic is ready to expend political capital to accelerate accession talks between Serbia and the European Union (EU), added the Minister.
Private Sector 9)
French-Designed Apple Processing Plant Opened in Celarevo
October 27th, 2015, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:573922-Srpska-jabuka-u-francuskompakovanju
A EUR 2 million apple processing and packaging plant - designed by French Company Maf Roda – was opened in Celarevo, announced Miroslav Miskovic, President of Delta Holdings – which owns the plant. The production line has a capacity of 2,500 tons and uses state-of-the-art technology to determine diameter, color, weight and quality of the apples, carefully sorting the fruit in bulk packaging, boxes, wooden or plastic trays, and other forms of packaging. The plant comes as part of a EUR 4 million investment in the orchard, which was also used to increase cultivated area, production capacity and modernize machinery. More than 80% of the crop has already been collected, with the harvest expected at 20,000 tons – yield is estimated at 70 tons per hectare.
10) First Gluten-Free Factory Opens in Serbia October 26th, 2015, http://www.balkans.com/open-news.php?uniquenumber=208095
Aleksandrija Fruska Gora LLC is to open Serbia’s first plant producing gluten-free products in Curug, Vojvodina. The production technology – created in-house – ensures a high retention of nutrients.
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11) Wheat Sowing Delayed Due to Heavy Rainfall October 26th, 2015, http://gdeinvestirati.com/pod-psenicom-samo-10-odsto-planiranih-povrsina/ http://www.rtrs.tv/vijesti/vijest.php?id=173605
Poor weather conditions coupled with an uncompleted corn harvest have resulted in wheat having been sown on only 10% of the planned 50,000 hectares in Central Banat, with a similar situation witnessed in Prologodišnjoj, according to consultancy Zrenjanin. The region recently witnessed rainfall of 40 liters per square meter. This has left fields sodden and experts have warned that – in these conditions – the machinery used to sow wheat could destroy the composition of the soil. However, many farmers feel obliged to proceed regardless – the 25th of October being the recommended deadline for sowing wheat and barley. Farmers in the South Banat have also experienced rainfall related problems, with sowing only 45% complete – 18,000 hectares are to be sown across Alibunarska, Kovačičkova, Opovačka Pancevo, according to Radio Pancevo. The situation has been aggravated by the late payment of government subsidies. However, the Ministry of Agriculture assured the funds would be distributed by the end of the year. To improve yields, Zrenjanin recommends farmers pay close attention to seed and fertilizer selection, adding that, since farmers who have yet to harvest corn are experiencing the greatest difficulties, the introduction of a third rotation crop should be considered to mitigate risks.
12) Beekeeping Seminar Held in Apatin October 20th, 2015, http://www.polj.savetodavstvo.vojvodina.gov.rs/node/7594
A lecture on beekeeping technologies and best-practice was organized by Dunav Beekeepers Association in Apatin. Serbian Beekeeping Association member Milan Matic spoke on the implementation of Langstroth hive innovations – particularly switching from tin to slatted flooring. Beekeeper Ljubisa Jeverica of Obrenovac also lectured at the seminar.
13) Tobacco Growers Request State Aid October 20th, 2015, http://www.novosti.rs/vesti/srbija.73.html:572681-Duvandzije-bi-subvencije
Tobacco producers in Macva and Pocerina - which have more than 1,000 hectares of tobacco plantations – have requested the state provided assistance in the form of subsidies and other preferential regulations. Farmers were unable to meet last year’s debt obligations and are seeking ways to improve the business outlook. Tobacco can earn a farmer EUR 2,000 net per hectare – unrivalled by any other domestic crop – and should therefore be protected said Sabac City Council member Petar Loncar. Since the removal of the requirement that 70% of a cigarette consist of domestic tobacco, local growers have run into difficulties, said Rade Stanojčić, President of the Tobacco Producers’ Association. The President is currently renegotiating tobacco growers’ debt obligations and has requested at least RSD 1 per pack of cigarettes is returned to Serbian tobacco growers.
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14) PSS Sombor Holds Organic Agriculture Start-up Seminar October 19th, 2015, http://www.polj.savetodavstvo.vojvodina.gov.rs/node/7591
A 3-day seminar on organic agriculture start-ups was held at the PSS Sombor Educational Center in collaboration with the municipality of Sombor and the Green Network of Vojvodina. On the first day, participants were introduced to basic entrepreneurial tools such as brainstorming, SWOT analysis, the funnel model, and micro and macro selection. During the second and third days, participants learned about quality control, distribution channels, pricing, market analysis, competition, marketing and sales, client interaction and networking, and web marketing. A second training session is planned for later in the month.
15) 1,000 tons of Honey to be Exported – 6,000 m2 Processing Facility to be Built October 19th, 2015, http://www.novosti.rs/vesti/srbija.73.html:572528-Zrenjanin-Podela-kosnica-i-pcela
Next year, in a bid to increase the competitiveness of Serbian honey, city funds for the purchase of bees and beehives will be made available to beekeepers in middle Banat, said Deputy Mayor of Zrenjanin Sasa Santovac. The announcement was made at the 11th Festival of Honey, organized by beekeepers associations “Bulgarian Milivoj”, based in Zrenjanin and “Acacia”, based in Muzlja. Thirty companies participated. Beekeepers discussed the issue of bee poisoning in sunflower fields as well as the price of acacia honey, which ranged from RSD 800-1000 this year. Meanwhile, Novi Sad LLC will build a 6,000 m2 honey processing and distribution center in Zrenjanin – the third of its kind in Serbia. Serbian company “Triumph of Encores” announced the production of 1,000 tons of honey, mainly destined for export.
16) Wheat Harvest Estimated at 550,000 ha – Farmers Experiencing Difficulties October 14th, 2015, http://www.stips.minpolj.gov.rs/sadrzajv/%E2%80%9Cposna%E2%80%9D-setva-%C5%BEita
Wheat cultivation is estimated at 550,000 hectares this year, with the harvest expected to meet domestic demand. However due to drought, the increased cost of fertilizers and pesticides, delays in the payment of state subsidies, as well as low prices, some farmers are experiencing difficulties. The price of mineral fertilizers have increased from EUR 440 per ton in 2014 to EUR 530 per ton this year, noted Professor Srbislav Denčić of the Novi Sad Institute of Field and Vegetable Crops, adding that corn yields have dropped from 12 tons per hectare to 8 tons per hectare year-on-year. Farmers are set to sow more wheat, primarily due to crop rotation but also due their realization of its resilience to drought compared to corn and soy, according to Denčić.
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17) AP Vojvodina Development Fund to Issue Preferential Agro-Loans October 13th, 2015, http://subvencije.rs/krediti/razvojni-fond-vojvodine/konkurs-za-dodelu-dugorocnih-kredita-zapoljoprivredu-namenjen-fizickim-licima/
The AP Vojvodina Development Fund will provide agricultural loans between RSD 200,000 and 10,000,000 at 0.5-3% interest per annum. Candidates must have active registered farms in Vojvodina and hold a bank account registered with the Directorate of Agrarian Payments. Loans will be disbursed for reducing environmental impact, international standard upgrades, the construction and renovation of storage facilities, and the procurement of agricultural equipment, breeding livestock, perennial plants, irrigation systems, anti-hail nets and other protective equipment. Interest rates will be 2% per annum for loans secured by bank guarantee and 3% for loans secured against mortgages. A discretionary 1% reduction in interest may be granted to operations with lower levels of development. A 0.5% reduction will be incurred for the purchase of agricultural machinery. Loan maturity is 5 years, except for breeding stock (3 years).
18) Corn Yields Drop by up to 50% Due to Drought October 6th, 2015, http://www.novosti.rs/vesti/srbija.73.html:570495-Susa-kukuruza-ispraznila-obore
Due to extended drought, corn and soybean yields have fallen dramatically. In Jadar and Drina valley, corn yields fell by up to 40%. In Šumadija, corn yields fell by 50%, with 30% of cultivated land unprofitable, according to Dobrivoje Popovic of the Associate Agriculture Station in Kragujevac. About 25% of the total 45,000 ha of corn have been harvested, with yields of 3.5 tons per hectare, added Popovic. The problem was compounded by a long winter and humid spring, delaying sowing, and also reducing the soybean yield by 50%, according Popovic. While the price of a kilo of corn remains at RSD 22,000, some farmers think this will soon increase due to shortages, while decreased fodder stocks will reduce livestock numbers. Meanwhile there were reports that the price of a kilogram of pig fat has surpassed that of a piglet.
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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content. The articles do not necessarily reflect the opinions of BFC, its staff, its associates or its partners. Copyright of articles is retained by their authors.