#43 Serbia Agriculture Bulletin, BFC

04/2019

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43 S e r b i a Agriculture Bulletin RSD 700 million in incentives for agricultural cooperatives Serbia seeks control mechanism over 95% of food products Farmers uncertain of IPARD

Area used for agriculture up 1.1%

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

Amendments to regulation on agricultural land use adopted ........................................................ 2 RSD 700 million in incentives for agricultural cooperatives ............................................................ 2 Serbia seeks control mechanism over 95% of food products ......................................................... 2 Government to write off outstanding debt of berry producers...................................................... 2 Increased incentives for organic production ................................................................................... 3 Program to assist young farmers in purchasing agricultural land ................................................... 3

Foreign Aid ................................................................................................................. 3 7) 8) 9) 10)

Farmers uncertain of IPARD ............................................................................................................ 3 EU project helps preserve indigenous Serbian varieties ................................................................. 3 E-platform developed to boost agricultural exports ....................................................................... 4 Amendments to IPARD program approved ..................................................................................... 4

Private Sector.............................................................................................................. 4 11) 12) 13) 14) 15) 16)

Sugar beet production area halved ................................................................................................. 4 Machine learning and the future of agriculture .............................................................................. 4 Number of organic producers on the rise ....................................................................................... 5 Area used for agriculture up 1.1% ................................................................................................... 5 Agricultural exports to the EU triple in nine years .......................................................................... 5 Government, raspberry producers met to set prices ...................................................................... 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.

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BFC AgricultureBulletin

State Initiatives 1)

Amendments to regulation on agricultural land use adopted

April 25th, 2019, http://www.rtv.rs/sr_ci/ekonomija/aktuelno/uredba-vlade-o-poljoprivrednom-zemljistu_1012366.html

The government of Serbia has adopted amendments to the regulation that established a program on the protection, arrangement and use of agricultural land for 2019. Specifically, the amendments defined the conditions and manner for eliminating customs duties on certain goods used in carrying out works on agricultural land (e.g. elevator installation). The amendments are aimed at reducing the price of the finished agricultural products and increasing their competitiveness in both domestic and international markets. To this end, the Ministry of Agriculture has announced a call for public proposals in order to ensure procurement procedures for such equipment can be completed in a timely fashion.

2)

RSD 700 million in incentives for agricultural cooperatives

April 24th, 2019, http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:791081-Zadrugama-700-miliona-napoklon

Approximately 70 Serbian agricultural cooperatives will receive a total of RSD 700 million in incentives this year as part of a regional development program. Newly-formed cooperatives selected to receive funding under this program can expect RSD 7.5 million, with existing complex cooperatives eligible for up to RSD 60 million. The funds will be distributed on the basis of a competition, with each cooperative wanting access to the funds required to submit project proposals.

Cooperatives are seen as an important part of agricultural and rural development in Serbia, and a number of government initiatives have targeted their development. This includes the 500 Cooperatives for 500 Villages program, which has helped from 400 cooperatives since 2017.

3)

Serbia seeks control mechanism over 95% of food products

April 16th, 2019, http://purecutdesign.net/agrosmart.net/index.php/vesti/nedimovic-laboratorija-uskoro-kontrolisati.html

Food safety will be the focus of the Ministry of Agriculture this year, with Agriculture Minister Branislav Nedimovic emphasizing the government’s plan to have control mechanisms over 95% of food products.

This includes the establishment of the National Reference Laboratory for the control of milk quality. This is an important development for Serbia as it works to develop closer ties with the European Union (EU).

Minister Nedimovic also noted the importance of greater involvement from consumer associations in the food control process.

4)

Government to write off outstanding debt of berry producers

April 13th, 2019, https://www.021.rs/story/Info/Biznis-i-ekonomija/212231/Vlada-Srbije-otpisuje-deo-duga-malinara.html

The government of Serbia has fulfilled several demands of raspberry and blackberry producers, including debt write-offs that stemmed from a 2013 drought. In total, RSD 90 million in debt will be written off, and the government is considering returning another RSD 210 million to producers who had already repaid debt that would have otherwise been written off. This is an important move as outstanding debt has prohibited a number of producers from accessing raw materials from the Commodity Reserve.

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BFC AgricultureBulletin

5)

Increased incentives for organic production

April 4th, 2019, http://www.agronews.rs/povecani-podsticaji-za-organsku-proizvodnju/

The Ministry of Agriculture has increased the incentives for organic production. Specifically, incentives per hectare and the maximum amount per user have been increased. In order to qualify for the incentives, entrepreneurs and commercial family farm holdings must: (1) have concluded an organic control and certification agreement with an authorized control organization, (2) have a lease for land used for at least three years (in case land is not owned) and (3) apply methods of organic plant production in accordance with the law governing organic production.

6)

Program to assist young farmers in purchasing agricultural land

April 1st, 2019, http://www.agronews.rs/za-mlade-poljoprivrednike-duzi-rok-otplate-zemljista/

Agriculture Minister Branislav Nedimovic has announced a program to allow young farmers (those under 40 years of age) to purchase agricultural land over a period of 20 years and with an interest rate of 1.95%. The program will allow young farmers to purchase privately-owned agricultural land this year but is expected to be expanded to include state-owned land next year.

Foreign Aid 7)

Farmers uncertain of IPARD

April 25th, 2019, http://www.agronews.rs/poljoprivrednike-plasi-ipard-procedura/

Serbian farmers have expressed a reticence to IPARD funds, believing IPARD procedures to be very complicated. To this end, discussions are underway with the European Commission on how to better communicate conditions with farmers as well as possible ways to expand the use of IPARD funds, potentially including to those engaged in rural tourism. Currently, farmers are mostly interested in IPARD funds for the procurement of tractors; however, experts believe that IPARD funds can be spent in better ways to bolster Serbia’s agricultural and rural development.

In its first year, 738 farmers applied for IPARD funds, with 180 requests being approved. Of those 180 approved requests, 35 are ready to receive funds and only 10 have actually received the funds.

8)

EU project helps preserve indigenous Serbian varieties

April 11th, 2019, http://www.agronews.rs/podrska-srbiji-u-ocuvanju-autohtonih-sorti-voca-i-grozda/

A two-year, EUR 800,000 twinning project implemented between Serbia and the European Union (EU) is coming to close. The project, fully-funded by the EU, has facilitated the recovery, preservation and registration of indigenous fruits and vine varieties as well as helped define their future use. These indigenous varieties are currently being used as a basis for placing high-quality propagating material on the market as well as for the development of new varieties that will have important and valued characteristics.

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BFC AgricultureBulletin

9)

E-platform developed to boost agricultural exports

April 3rd, 2019, http://www.agronews.rs/predstavljena-digitalna-platforma-za-veci-izvoz-agro-sektora/

The Serbian Chamber of Commerce has developed an e-platform to promote and increase agricultural exports and competitiveness and improve the performance processing facilities. The platform, developed within the One Stop Shop project, was supported by the United Nations Development Program (UNDP) to help exporters, primarily those exporting to the Russian market. By placing products on the platform, Serbian exporters become more available to Russian partners. In addition, platform users can find all legal regulations and customs procedures necessary for export.

10) Amendments to IPARD program approved April 3rd, 2019, http://www.stips.minpolj.gov.rs/srl/vest/izmenjen-ipard-program

The government has adopted amendments to the IPARD program for the period of 2014-2020. The biggest changes relate to the fruit and vegetable sector and the fulfillment of national standards.

Specifically, the amendments will expand hectare requirements for initial investments in the fruit and vegetable sector as well as include the possibility of using funds for the purchase of perennial planting material. The amendments will also restrict inspections regarding compliance with national standards to only those areas on farms that benefited from IPARD funds (as opposed to the entire farm, regardless of whether or not an activity benefitted from IPARD funds).

Private Sector 11) Sugar beet production area halved April 23rd, 2019, http://www.politika.rs/scc/clanak/428063/Secera-jedva-za-domace-potrebe-ceka-nas-uvoz

Agricultural producers in Serbia have planted about 30,000 hectares of sugar beet this year, about half of last year’s area. Depending on yield, this will result in enough sugar to meet domestic needs but not enough for exports.

Serbia has a sugar export quota of 180,000 tons with the European Union (EU); however, sugar opportunities on the European market have changed in recent years with Europe finding cheaper sugar imports from other sources. Additionally, drought conditions in March and disease have made many farmers nervous about planting sugar beet.

The lack of raw sugar beet is expected to leave some sugar companies in Serbia without enough raw product to reach full production capacity this year.

12) Machine learning and the future of agriculture April 21st, 2019, https://www.ekapija.com/en/news/2478291/future-comes-from-novi-sad-illusive-artificial-intelligence-savingcrops-from-heat

BioSense has won third prize at the prestigious Crop Challenge contest for its implementation of artificial intelligence in agriculture. Specifically, BioSense used machine learning to link a number of parameters to known yield quantities in order to identify hybrids most resistant to drought and high temperatures.

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BFC AgricultureBulletin

Recent years have shown the importance of cooperation between seed production companies, farmers and science institutes, especially with climate change altering agricultural production across the world.

In this context, digital farms are becoming an increasingly popular way of producing agricultural products.

13) Number of organic producers on the rise April 18th, 2019, http://www.stips.minpolj.gov.rs/srl/vest/raste-broj-proizvodaca-u-organskoj-proizvodnji

There are 6,500 organic food producers operating on 13,500 hectares in Serbia. This represents an increase of 1,000 in total number of organic producers. Experts predict that organic production will continue to increase in popularity and reach 50,000 hectares within the next few years.

In 2017, organic exports amounted to EUR 24 million.

14) Area used for agriculture up 1.1% April 18th, 2019, http://www.rtv.rs/sr_ci/ekonomija/aktuelno/vise-njiva-i-traktora-manje-ljudi-i-gazdinstava_1010409.html

Over the last six years, the number of agricultural holdings has fallen by 9.9%. At the same time, the area used for agriculture has grown by 1.1%. There are now 569,000 farms in Serbia operating on more than 3.8 million hectares of agricultural land, with an average area per farm of 5.4 hectares for family farms and 304.1 hectares for farm establishments.

In total, there are just over 1.3 million people working on Serbian farms, 7.3% less than in 2012.

15) Agricultural exports to the EU triple in nine years April 16th, 2019, https://www.ekapija.com/en/news/2474556/agricultural-exports-from-serbia-to-eu-triple-in-past-nine-years

The export of agricultural products from Serbia to the European Union (EU) in 2018 amounted to EUR 1.3 billion in value and has tripled in the past nine years. Experts point to this increase as evidence of the success of EU policies aimed at improvement Serbia’s agricultural production – an important measure as Serbia moves towards EU membership. Serbia, however, needs to continue working on harmonizing its policies and administrative capacities with those in the EU, especially in regards to training, inspection and border control.

16) Government, raspberry producers met to set prices April 8th, 2019, http://rs.n1info.com/Biznis/a474487/Dogovorena-ovogodisnja-cena-maline.html

A meeting between government representatives and Serbian raspberry producers was held to set a producer price for raspberries at RSD 110.9 per kilogram for yields of 10-12 tons per hectare and RSD 139.3 per kilogram for yields of 8 tons per hectare. Ministry of Agriculture teams in the field will also provide expert assistance to producers in order to further improve raspberry production.

The government has also agreed to establish a special operational team to determine and eliminate any possible market irregularities, especially regarding raspberry purchases. The government will also consider proposing that the future VAT on delivered raspberries be paid directly to producer accounts.

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