02/2016
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5 S er b i a Agriculture Finance Bulletin Boskovic: The Future of Serbian Agriculture is Bright FAO Delivers EUR 9.5 Million to Flood Stricken Agricultural Households Agricultural Exports Reached USD 2.85 Billion in 2015 Spring Sowing Plan for 1.6 Million Hectares
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Agriculture Finance Bulletin Edition #5, February 2016
Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
Boskovic: The Future of Serbian Agriculture is Bright ..................................................................... 2 RSD 3.37 Billion Paid in Second Tranche of Agriculture Subsidies .................................................. 2 Preferential Agro-Credit Worth RSD 525.4 Million Announced ...................................................... 2 Environment, Waste Management and Animal Husbandry Laws Amended .................................. 3 Protective Measures Introduced Following RSD 2 Billion Agro-Trade Deficit................................. 3 Total Agricultural Budget Decreases - Subsidies Increase RSD 1 Billion ......................................... 3
Foreign Aid ................................................................................................................. 4 7) 8) 9) 10) 11)
FAO Completes 3 Year Organic Agriculture Project ........................................................................ 4 FAO Delivers EUR 9.5 Million to Flood Stricken Agricultural Households ....................................... 4 FAO: Serbia Should Focus on "Free" Products, Cooperatives, and EU Harmonization ................... 5 EU Allocates EUR 175 Million to Rural Development in Serbia ....................................................... 5 EBRD and Ministry of Agriculture Discuss Projects ......................................................................... 5
Private Sector.............................................................................................................. 6 12) 13) 14) 15) 16) 17) 18) 19) 20) 21) 22) 23) 24)
Agricultural Exports Reached USD 2.85 Billion in 2015 ................................................................... 6 Spring Sowing Plan for 1.6 Million Hectares ................................................................................... 6 Smederevo to Become Processing Center for Fish Export .............................................................. 6 Serbia's Farming Heritage Trying to Find Its Niche.......................................................................... 7 Serbian Agri-businesses Agree Export Deals Worth EUR 27 Million at Moscow Prodexpo ............ 7 Bank Intensa and KfW Launch Single Agro-Credit and Insurance Product ..................................... 8 German Company to Invest EUR 300 Million in Pork Production ................................................... 8 EU Sanctions and Subsidization Flood Domestic Market with Cheap Pork..................................... 8 Prijepolje Oversees RSD 600 Million Raspberry Windfall ................................................................ 9 Agronews: Farm Size Doesn’t Matter, Serbia Should Invest in Organic Agriculture ....................... 9 Crop Conference Held in Vrbas ....................................................................................................... 9 Slavic Union Promotes Organic Produce and Cooperatives in Eastern Serbia .............................. 10 Serbia Receives US Privileged Trade Partner Status...................................................................... 10
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. BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC. Agriculture Finance Bulletin.
State Initiatives 1)
Boskovic: The Future of Serbian Agriculture is Bright
February 29th, 2016, http://www.tanjug.rs/full-view.aspx?izb=232244
Speaking at “The Future of Serbian Agriculture” conference, Agriculture Minister Snezana Bogosavljevic Boskovic recognized the work being done and yet to be done: “The transitional period in agriculture takes a long time and is not easy, but Serbia is on the right path, and in the coming years, we can compete with farmers in Europe.” The Minister added that there is a lot of work to be done and that it is important that a responsible approach be adopted to implement all rules and procedures within the standards of the EU. Boskovic also emphasized the government’s support for furthering their agricultural goals by emphasizing a commitment to helping small farmers strengthen the economy. He pointed to a budget of RSD 28 billion (on par with last year’s budget) and commented that this year’s reduced subsidies will encourage investment in the sector.
2)
RSD 3.37 Billion Paid in Second Tranche of Agriculture Subsidies
February 26th, 2016, http://www.agronews.rs/isplata-druge-transe-subvencija-poljoprivrednicima/
The Ministry of Agriculture and Environmental Protection announced that Serbian farmers can expect to be paid a second tranche of subsidies amounting to RSD 3.37 billion (RSD 2.27 billion of which is for 2015 crop production subsidies). The first tranche of subsidies was paid at the end of January and amounted to RDS 3.38 billion; the last tranche for agricultural production is expected to be paid out in late March.
3)
Preferential Agro-Credit Worth RSD 525.4 Million Announced
February 20th, 2016, http://www.agronews.rs/pola-milijarde-dinara-za-poljoprivredne-kredite/
Over the coming spring, Serbia’s Regional Fund for Agricultural Development will provide preferential agricultural loans worth RSD 525.4 million to Vojvodina-based applicants. The funds may be used for greenhouses, irrigation systems, bee swarms and related equipment, as well as vineyard and fruit orchard anti-hail nets. Interest rates will be 1% per annum for irrigation systems and irrigation equipment and 2% per annum otherwise. According to Director Jozef Sabo, agricultural machinery will receive credit worth RSD 332.4 million with a maximum loan amount of EUR 20,000, and maturity and grace periods of 60 months and 6 months respectively. Irrigation systems and equipment will receive RSD 120 million with the following terms: 24 month maturity and 9 month grace period for loans up to EUR 5,000; and 30 month maturity and 12 month grace period for loans between EUR 5,000-15,000. Anti-hail nets will receive RSD 40 million, with loans not exceeding EUR 15,000 and a maturity and grace period of 24 months and 12 months, respectively. Greenhouses and related equipment will receive RSD 25 million for loans not exceeding EUR 15,000, and maturity and grace periods of 36 months and 12 months, respectively. Beekeeping will receive RSD 8 million. Applications will be received as of March 14. So far, 3,340 loans worth EUR 25 million have been disbursed, according to Deputy Director Stojan Marinkovic.
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4)
Environment, Waste Management and Animal Husbandry Laws Amended
February 17th, 2016, http://www.mpzzs.gov.rs/u-skupstinskoj-proceduri-cetiri-zakona-iz-oblasti-poljoprivrede-i-zastite-zivotnesredine/
Parliament is considering amendments to the Law on Environmental Protection (LEP), the Law on Waste Management (LWM), the Law on the Protection of Nature (LNP), and the Law on Livestock herders (LLH). Whilst expanding compliance with EU regulations, the amendments to (LEP) increase internal regulatory cohesion, thus facilitating application, specifically in environmental financing, said Minister of Agriculture Snezana Bogosavljevic Boskovic. A Green Fund will finance the rehabilitation of contaminated sites, waste removal from insolvent or restructured companies, waste and wastewater management improvements, recycling initiatives, and the green economy, added the Minister. An environmental meta-registry will also be created. The LEW will receive new directives on the termination of waste and byproducts, which will simplify business operations, reduce costs, and create a circular economy, creating new jobs, said Boskovic. The LEW has been rendered more transparent, reducing potential for abuse, while elements on waste transport and quantification have been introduced. Related VAT and other tax liabilities have been introduced, said the Minister. Amendments to the LPN introduce a cross-border wildlife trade, and zoo licensing and inspection police. The new draft also foresees the harmonization of social and economic development with the preservation of nature, said Boskovic. Amendments to the LLH introduce a breeding program determines area-specific breed suitability, reducing production costs and increasing productivity. Beef and pork quality grading systems and international artificial insemination standards have also been introduced. Bee breeding regulation has been tweaked and the Beekeepers association will administer a beehive and phenology register. Finally, fishery legislation will be harmonized with the EU and certificates of origin will be introduced, said Boskovic.
5)
Protective Measures Introduced Following RSD 2 Billion Agro-Trade Deficit
February 8th, 2016, http://www.novosti.rs/vesti/naslovna/republika_srpska/aktuelno.655.html:589933-Uvoz-unistava-agrar-RS
In response to a RSD 2 billion agricultural trade deficit, Serbia has adopted a law on domestic production protection, according to the Ministry of Agriculture’s Steve Mirjanić. The law aims to increase food security. The Serbian authorities have requested that Bosnia and Herzegovina (BIH) undertake measures to improve trade conditions. Moreover, agricultural trade with the EU and Croatia – one of Serbia’s traditional partners – is detrimental in its current state, according to the government. In response, it will introduce mandatory inspection of import volumes and ensure customs duties for sensitive products remain in place until accession to the EU. Serbia echoed BIH’s EU-duty free quota requests: 17,830 tons of milk and dairy; 10,940 tons of yoghurt and sour milk; 2,190 tons of live cattle; 2,540 tons of live pig; 1,470 tons of chicken; 1,230 tons of potatoes; 520 tons of fresh cheese; 360 tons of butter; and 170 tons of honey.
6)
Total Agricultural Budget Decreases - Subsidies Increase RSD 1 Billion
February 4th, 2016, http://www.agronews.rs/glamocic-akcenat-na-investicijama-u-agrar/ http://www.agronews.rs/manje-subvencije-za-ratarsku-proizvodnju/
This year, agricultural subsidies have been geared towards investment and development, said to Agriculture Advisor to the Prime Minister Dragan Glamocic. While the agriculture budget has been reduced, subsidies have increased by RSD 1 billion. In 2016, crop subsidies will be RSD 4,000 per hectare, Page 3
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of which RSD 2,000 is to be used for fertilizer. In 2015, subsidies for farms up to 20 hectares were RSD 12,000 per hectare, of which RSD 6,000 was earmarked for fertilizer and fuel. While this is bad news for crop producers, according to Glamocic, livestock subsides remain the same and investment incentives have increased. The milk subsidy will total RSD 7 per liter; breeding cows and poultry will receive RSD 25,000 and RSD 60 per head respectively; breeding carp and trout will receive RSD 500 and RSD 300 per head respectively, whilst production incentives will reach RSD 10 per kilogram of fish; each beehive will receive RSD 600. Agricultural insurance subsidies will total RSD 450 million, said Glamocic. Direct incentive payments will be RSD 16.9 billion. The milk subsidy is set at RSD 3.4 billion, the crop and fertilizer subsidy at RSD 3.5 billion, while RSD 500,000 will be allocated to storage costs. Organic production will receive RSD 92 million, while breed conservation and genetic engineering will receive RSD 58 million. This year’s reductions are due to fraudulent duplicate applications in 2015, said Glamocic. Due to the census of December 31, 2015, such abuse will not be possible this year, he added.
Foreign Aid 7)
FAO Completes 3 Year Organic Agriculture Project
February 25th, 2016, http://www.rtv.rs/sr_lat/ekonomija/aktuelno/kroz-organske-skole-proslo-899-proizvodjaca_693014.html http://www.agronews.rs/konferencija-u-centru-za-organsku-proizvodnju/
The Food and Agriculture Organization (FAO) presented results of its 2013-2016 Serbian Organic Agriculture Capacity and Service Building Assistance project at the Centre for Organic Production Selenca (COPS) conference. Organic agro-training and networking centers were introduced in agriculture and business schools in Sombor, Ljutovo, Curug, Torku, Kisac, Rumi and Selenca – 899 producers, sector experts and secondary school students participated in the program. All received a certificate upon completion of the course. The project also introduced an internet portal uniting training materials, organic production research, a producer database, and promotional material. Along with training, secondary school teachers and students received an updated curriculum on organic agriculture, which should significantly boost organic production in the future. The project’s awareness campaign has contributed to the creation of Serbia Organica: the National Association for the Development of Organic Production. The conference concluded that, going forward, research and development must be increased and modern educational methods introduced. The project received financial support from the Hungarian Ministry of Agriculture.
8)
FAO Delivers EUR 9.5 Million to Flood Stricken Agricultural Households
February 17th, 2016, http://www.agronews.rs/pomoc-dobilo-33-000-poljoprivrednih-domacinstava-u-srbiji/ http://www.agronews.rs/pomoc-eu-i-fao-srpskom-agraru-u-semenu-dubrivu/
As of January, 2016, the Food and Agriculture Organization (FAO) assisted 33,000 agricultural households across 41 flood-stricken municipalities via two projects, according to Minister of Agriculture Snezana Bogosavljevic Boskovic. The projects received EUR 8 million through the European Union’s (EU) 2012 Instrument for Pre-accession Assistance (IPA) flood relief fund. In November, 2015, the FAO began implementing a third, EUR 1.5 million, flood relief project financed through the 2014 EU IPA fund, with focus on eastern Serbia, including Majdanpek, Negotin, Svrljig, Zajecar, Boljevac, Kladovo and Knjaževac. Later in the year, Vladimirci, Mionica, Despotovac, Bogatić, Zrenjanin, Gornji Milanovac, Lucani, Smederevo, Petrovac and Cuprija will also receive aid. The program will have 8,000 beneficiaries.
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Farmers will receive seeds and seedlings, fertilizers, animal feed, greenhouses, fruit trees, livestock, beehives and agricultural equipment, according to Boskovic. With the assistance of international partners and donors, most of the effects have now been mitigated, said the Minister. Of the total EUR 150 million EU flood relief grant, nearly EUR 10 million has been disbursed, according to Head of the EU Delegation in Serbia Michael Davenport, with beneficiaries totaling 108,000.
9)
FAO: Serbia Should Focus on "Free" Products, Cooperatives, and EU Harmonization
February 15th, 2016, http://www.danas.rs/danasrs/ekonomija/podrska_fao_i_ebrd_razvoju_poljoprivrede_srbije.4.html?news_id=316021
In a wide ranging interview, Milos Milovanovic, International Consultant at the Food and Agriculture Organization (FAO), discussed the Serbian agro-sector. Mr. Milovanovic sees lack of funding, effective regulation and low productivity as major problems affecting the sector, arguing that modern agriculture is predominantly about know-how. He regards the high-growth of "free" products sector (products devoid of a sugar, gluten, or additives, etc.) as having great potential in Serbia. Since the country cannot compete with mass, low-cost production, it should concentrate at the high end of the market, introducing protected designations of origin and focus on quality. This requires investment, regulation and above all know-how, said the consultant. With small, fragmented farms and per hectare crop subsidies reduced by RSD 8,000 this year, cooperative formation should be a priority. The recent law on cooperatives implemented with assistance of the FAO and the European Bank for Reconstruction and Development (EBRD) should facilitate this process, said Milovanovic. Serbia’s institutions should ensure also effective distribution of the European Union (EU) Instrument for Pre-accession Assistance for Rural Development (IPARD) funds. However, since the funds are distributed only once an investment is made, this tends to favor large farms and agro-businesses, said Milovanovic. Considering Serbia is on a path to EU accession, the state’s priority should be harmonizing with EU regulations. The government should also focus on opening foreign markets to Serbian products. Otherwise, the state should not be a player in the agro-sector, avoiding the manipulation of prices, and sales and purchases of agro-products, said Milovanovic.
10) EU Allocates EUR 175 Million to Rural Development in Serbia February 11th, 2016, http://inserbia.info/today/2016/02/eu-to-give-serbia-eur-175-million-for-agriculture/
Serbian farmers are to receive EUR 175 million through the European Union’s Instrument for Preaccession Assistance for Rural Development II (IPARD II) fund, according to Minister of Agriculture Snezana Bogosavljevic Boskovic. The first meeting of the committee overseeing the implementation of the program was held this February. The program lasts until 2020. In 2016, EUR 35 million will be available through the fund. Boskovic predicts that, with efficient implementation of IPARD II, Serbia could see up to EUR 400 million invested in rural development over the coming years.
11) EBRD and Ministry of Agriculture Discuss Projects February 5th, 2016, http://www.mpzzs.gov.rs/unapredjenje-saradnje-ministarstva-sa-ebrd-i-fao/
Minister of Agriculture Snezana Bogosavljevic Boskovic met with the Director for Serbia of the European Bank for Reconstruction and Development (EBRD) Daniela Berg to discuss ongoing and future projects. Page 5
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The parties agreed to undertake additional measures within the Meat and Milk Sector Public-Private Mediation project and to intensify educational and promotional activities. Representatives of the Food and Agriculture Organization (FAO) also attended the meeting.
Private Sector 12) Agricultural Exports Reached USD 2.85 Billion in 2015 February 29th, 2016, http://www.agronews.rs/izvoz-poljoprivrede-u-2015-dostigao-285-milijardi/
The Vice President of the Serbian Chamber of Commerce, Miroslav Miletic, announced that the total exports of Serbian agricultural products last year reached USD 2.85 billion while imports were half that at approximately USD 1.4 billion. According to Miletic, the estimated value of agricultural production in Serbia is about USD 6.6 billion, with a potential of USD 10 billion. For years, agriculture has been an average of 10 percent of GDP and 20 percent of the labor force. “That's very interesting, bearing in mind that unemployment is still high in Serbia, especially among young people who have not yet reached the decision of working in the field as one in which you can live well and even have a family company. [This is especially true when there is] a large part of the land not in use.”
13) Spring Sowing Plan for 1.6 Million Hectares February 27th, 2016, http://www.tanjug.rs/full-view.aspx?izb=231994
Spring sowing is expected to begin in a few weeks and the plan is to plant about 1, 6 million hectares according to Nenad Budimović, the Secretary of the Association for Agriculture of Serbian Chamber: “Plans are to begin the spring sowing of one million hectares of corn, 250,00 hectares of sugar beet, 180,000 hectares of sunflowers and 200,000 hectares of soybean.” He added that all these plans depend on contractual obligations between farmers and the companies which will buy the produce. As for autumn, wheat was sown on more than 750,000 hectares of land, which is about 0.7 percent more than in 2014. “Wheat is in good condition, and if these conditions continue, wheat will produce a rather good harvest,” Budimović added. Speaking on the reduction of subsidies for crop production, he said that the smaller budget in terms of direct payments per hectare would require different ways of subsidizing, not just financially. He believes that a proactive attitude towards higher stages of processing, animal husbandry, and small farms will further promote production: “This is a crucial year which should spawn a new way of funding, but also to influence the very consciousness of our farmers that they must reinvest the money in agriculture.”
14) Smederevo to Become Processing Center for Fish Export February 26th, 2016, http://www.balkans.com/open-news.php?uniquenumber=211071
Serbian Prime Minister Aleksandar Vucic handed over keys to a new production plant built by the city of Smederevo that will process fish for export around the world. Vucic urged investors to open a fish farm as soon as possible and hire as many workers as possible, adding that the government will help as much as it can.
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The factory is in the process of obtaining the necessary permits for the production and export and, in April, should start working at full capacity. 100 workers will be employed this year, and another 200 workers will find employment once the factory reaches full production. The capacity of fish processing is 30,000 tons per year, which is expected to be achieved in three years.
15) Serbia's Farming Heritage Trying to Find Its Niche February 26th, 2016, http://www.bbc.com/news/business-35631289
"[It’s] the best quality land and soil in Europe," says Goran Matic, a farmer in Serbia's Vojvodina province. The Matic family farm is typical of the traditional Serbian model, and the fields are cultivated without the use of chemical fertilizers — although not certified as organic “by paper.” His is a way of life that has changed little over the centuries. But now it is coming under threat. The need for larger domestic farms represents just one of the challenges to Serbia's agricultural traditions. The prospect of European Union membership has also raised concerns about the readiness of the country's farmers for increased competition. It will be many years before the EU welcomes Serbia as a member, but it is not too early for the country to feel the force of agricultural competition. "It's the biggest problem now in Serbia - very cheap products from the EU," says Dragan Glamocic, a former Agriculture Minister and current adviser to Serbia's Prime Minister." Serbian farmers are very small - they have few hectares, few animals - and they cannot be competitive with the EU farmers.” But there is another, more optimistic school of thought. It holds that Serbia can take advantage of its "naturally organic" heritage and more recent ban on genetically-modified (GMO) crops. The country is already a leader in the production of GMO-free soy and could exploit its reputation to find markets in the EU where people are becoming more concerned about food-sourcing. "Serbia has a lot to offer to the EU. We're famous for our food. I think the way forward is to work together and find the best solutions,” says Srdjan Stankovic, the founder of the Belgrade-based environmental organization, Supernatural. Mr Stankovic agrees that, at this stage, Serbia's farmers are not prepared for the challenges of EU membership, but he says the country is still in tune with the seasons and the produce each one brings. Shopping at farmers' markets is second-nature, and there is a strong links to rural roots. This could all, perhaps, be harnessed to make Serbia into a European brand for quality produce.
16) Serbian Agri-businesses Agree Export Deals Worth EUR 27 Million at Moscow Prodexpo February 25th, 2016, http://www.naslovi.net/2016-02-25/beta/na-sajmu-u-moskvi-dogovoreni-poslovi-vredni-27-6-milionaevra/18111595
At this year’s Prodexpo international food fair in Moscow, 15 Serbian companies took part and concluded export deals worth EUR 27.6 million, including meat, dairy, fruit and vegetables, baked goods, confectionary, gluten-free products and alcoholic beverages, according to President of the Serbian Chamber of Commerce Marko Cadez. The fair was attended by 2,309 exhibitors from 65 countries. A meeting between Serbian suppliers and 15 Russian retail chains will be held in Belgrade, Serbia, on March 11, said Cadez. Serbian agro-producer Carnex was the only non-Commonwealth of Independent States (CIS) company to receive multiple awards at the expo. While trade with Russia declined 13.3% Page 7
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due to the devaluation of the Russian ruble, nectarine exports increased by 122%, raspberry by 90%, peach by 93%, apple by 35%, and cherry by 27%. Exports of agricultural products in 2015 totaled USD 270 million.
17) Bank Intensa and KfW Launch Single Agro-Credit and Insurance Product February 24th, 2016, http://www.agronews.rs/kredit-i-osiguranje-poljoprivredne-proizvodnje-u-jednom-proizvodu/
Banca Intesa, in cooperation with Generali Insurance Serbia and the German Development Bank (KfW) have launched “Agroprotekt”, a combined agricultural credit and insurance product intended for crop production, including wheat, barley, corn, sugar beet, sunflower and soya. Eligible farms and agrobusinesses must be registered in Vojvodina. A loan may be withdrawn in euros or dinars and range between EUR 1,000-100,000 or its dinar equivalent. The euro and dinar loans will have fixed interest rates of 6.5% and 9.9% per annum respectively. Maturity may be tailored to the specific needs of the applicant, with repayments coming in one-month, quarterly, six-month, or one-time tranches. The insurance policy will provide EUR 8 million in basic coverage. The product aims to increase access to funds for those with difficulty obtaining credit and is an integral part of the German-Serbian initiative for sustainable growth and employment, according to KfW Director Arne Gross.
18) German Company to Invest EUR 300 Million in Pork Production February 24th, 2016, http://www.balkans.com/open-news.php?uniquenumber=210958
Toennies – a German meat supplier with annual turnover of EUR 5 billion – is to invest EUR 300 million in Serbia over the next five years, according to Prime Minister Aleksander Vucic. A contract is expected in June. Beforehand, Serbia must significantly improve farmer education and the ground must be laid for the creation of a vertical enterprise, said Vucic. Toennies will initially purchase pigs from local farmers. However, it is also plans to build 10 farms, providing work for Serbian meat producers, rather than stifling production, according to company owner Clemens Toennies. The company produces more than 17 million pigs and 400,000 cattle annually, while Serbia produces 2.8 million pigs annually, according to Vucic.
19) EU Sanctions and Subsidization Flood Domestic Market with Cheap Pork February 24th, 2016, http://www.agronews.rs/pojedinacni-farmeri-ce-tesko-opstati-jer-nisu-konkurentni/
The large-scale import of pigs from the European Union (EU) is due to much higher subsidization levels in member countries, while Serbia suffers from poor feed, breed selection, and producer unity, according to Nenad Budimirovic of the Serbian Chamber of Commerce. EU sanctions imposed on Russia have flooded the market with pork, while the Russian ruble has collapsed, further exacerbating the situation, he added. Moreover, Serbia lacks a logistics center where surplus could be collected. The state has not imposed protectionist duties for fear of reciprocal measures, said Budimirovic. Cooperative formation may help mitigate problems, but this is likely to happen only if local farmers are better educated and the state imposes a legal framework that would facilitate their creation.
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20) Prijepolje Oversees RSD 600 Million Raspberry Windfall February 23rd, 2016, http://www.agronews.rs/nicu-malinjaci-u-prijepolju/
In 2015, Prijepolje municipality earned RSD 600 million from raspberry sales. Over the past 3 years, raspberry cultivation has become the leading agricultural activity, significantly increasing revenues and employment. The municipality already has 6 cold storage facilities with a capacity of 3,200 tons. Last year, Prijepolje invested most of its RSD 22 million agriculture budget in raspberry cultivation, subsidizing seedlings and irrigations systems, while tripling agricultural machinery purchases. This year’s budget is expected to rise to RSD 32 million, while raspberry revenues are expected to reach RSD 900 million. The industry employs more than 1,000 people and keeps large numbers of local seasonal workers in the community.
21) Agronews: Farm Size Doesn’t Matter, Serbia Should Invest in Organic Agriculture February 22nd, 2016, http://www.agronews.rs/lice-i-nalicje-srpskog-agrara/
The small size of Serbian farms compared to the EU is often touted as the reason for their lack of competitiveness – however, existing data shows this is not the case, according to Agronews. While the average farm size in the EU is higher – 15 hectares compared to 5.44 hectares in Serbia – the percentage of small farms is also much higher. In the EU, farms between 0-5 hectares total 69.3%, while the figure is only 25.3% in Serbia. On the other hand, farms over 100 hectares total only 3% in the EU, yet 23.6% in Serbia. Rather than size, fragmentation seems to be one of the major issues, argues Agronews. In Serbia land parcels are often disconnected by some distance, while also varying in soil quality. The average farm has 6 separate parcels of land. Another problem is efficiency and productivity. As opposed to Serbia, large EU farms are often intensive monocultures, which are highly subsidized, vertically integrated, polluting and deplete soil quality. Serbia cannot compete with this type of farming; instead, small-scale farmers are suited to developing high quality, organic production, according to Agronews. The high growth sector needs considerable investment, particularly in education, as well as in packaging and processing plants, warehouses and the formation of cooperatives. The state should also provide cheap credit for organic farming, concludes Agronews.
22) Crop Conference Held in Vrbas February 20th, 2016, http://www.agronews.rs/svaki-osmi-suncokret-posejan-u-svetu-je-novosadski/
A conference on crops, organized by the Vrbas Agriculture Department and the Novi Sad Institute of Field and Vegetable Crops (IFVC), was held in Vrbas. Corn cultivation in Vojvodina totaled 600,000 hectares, according to Dr. Goran Bekavac of the IFVC. Considering precipitation levels in the country, the crop should not be burned after harvest, recommended Bekavac, adding that simple decomposition is better for soil moisture levels. Serbia has 562 sunflower varieties, most of which are exported to Russia and Ukraine, but also other European countries, according to Dr. Igor Balalic of the IFVC. An important competitive advantage of local sunflower is that it is not genetically modified, he added. Last year was unfavorable for soy production said Dr. Vuk Kjordjevic, also of the IFVC. Sowing decisions should be based solely on soil temperatures, said Kjordjevic, adding that trial plots showed that Ruma, Sremska Mitrovica, and Loznica produce the best yields.
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Serbia has 70 species of forage crops, according to Snezana Katanski of the IFVC. The most common is alfalfa, while peas and beans are increasingly being used, said Katanski. Sudan grass has proved an excellent forage crop due to high yields – it is used mainly for sheep and horse feed. Dr. Djura Karayic, also of the IFVC, lectured the conference on the nutritional preservation of fodder, as well as haylage, which experiences 13-15% less rainfall related damage. The conference also heard that alfalfa should ideally be mowed a first time between April 25-28, a second time when flowering begins, a third time during full flowering and finally between October 10-20. Frequent mowing leads to quicker recovery, with the first batch having the highest quality, according to Karayic. Nutrition accounts for 60% of milk quality, with breeding accounting for only 25%, concluded Karayic.
23) Slavic Union Promotes Organic Produce and Cooperatives in Eastern Serbia February 16th, 2016, http://www.agronews.rs/pomoc-ratarima-akcenat-na-organskoj-hrani/
The Slavic Union of Vienna is to promote organic production and the formation of cooperatives in eastern Serbia, according to President Stevan Raducic. The project will be launched in Kladovo, where the Union has committed to buying 4.5 tons of organic tomatoes, cucumbers and other agricultural products. Local farmers will have access to Belarussian agricultural machinery. Organic products will be available from two stores. The organization is committed to developing eastern Serbia while providing its inhabitants with healthy local organic produce, said Raducic.
24) Serbia Receives US Privileged Trade Partner Status February 2nd, 2016, http://www.agronews.rs/nasi-proizvodi-odgovaraju-sad-problem-kolicina/
In mid-2015, Serbia received privileged status as a United States trade partner. This allows goods, including most agricultural products, to be exported to the US duty-free should certain conditions be met, including certification of origin and at least 35% of the value added in Serbia. The Chamber of Commerce and Industry of Serbia (PKS) provide all the necessary information to companies wishing to take advantage the program, according to its President, Veljko Jovanovic. However, few have been taking advantage, he added. Jeremy Long, Head of the Economic Department at the US Embassy in Serbia reiterates this point, saying that few Serbian agri-business research the US as a potential trade partner. Jovanovic urges agri-business to pool their resources, providing the necessary packaging and quantity continuity and cost effectiveness to be competitive on the US market – as well as the Chinese and Russian markets. The US will review the trade privileges at the end of 2017.
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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.