Serbia: August Agro Highlights

EU trade, women in agriculture, food prices, international export, waste recycling and agro AI development - Highlights of the month in Serbian agriculture

Close-up of sunflowers in a field.
©Pexels
The purchasing price of sunflower seed is €0.25/kg this season.

EC proposed facilitation of trade with the EU’s neighboring countries

The European Commission has adopted a series of proposals aiming to boost trade between the EU and its neighboring countries in the Pan-Euro-Mediterranean region, including Serbia. The Commission says the proposals will modernize preferential trade agreements between EU and 20 trading partners by making the relevant “rules of origin” in those agreements “more flexible and business-friendly.” The ultimate aim is to contribute to economic recovery from the COVID-19 pandemic and promote regional integration. ‘Rules of origin' are necessary under any trade agreement because they determine which goods can benefit from preferential treatment. When all the requirements are met, goods with preferential origin are eligible to be imported with lower duty rates, or even a zero rate, depending on the preferential tariff treatment.

Making the rules regarding the origin of goods more flexible will mean a lot to producers and exporters. Serbian Minister of Trade stated that it means a lot to all those exporting products from Serbia. Simply put, it means facilitating the way of proving the origin of a product exported to the EU to get preferential treatment or zero duty rates. As the Minister explains, in order for a product to be exported under preferential conditions to a country with which Serbia has a free trade agreement, that product’s domestic origin has to be proved, which is a demanding principle. A producer can import a raw materials or components from North Macedonia, Montenegro, or Bosnia & Herzegovina and make the final product in Serbia, but all the imported components are treated as Serbian when the product’s origin is being determined, Minister explained. He also added that increased thresholds of tolerance for non-originated materials from 10% to 15% were also important.

Apart from Serbia, the proposals cover the EU’s bilateral trade agreements with Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Turkey, Egypt, Israel, Jordan, Lebanon, Palestine, Georgia, the Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro and Kosovo.

EU lifts additional control measures for export of raspberries from Serbia 

The Standing Committee on Plants, Animals, Food and Feed of the EU (PAFF Committee) has decided to lift the measure of additional control of the export for frozen raspberries from Serbia. The measures of additional control of each tenth shipment of raspberries from Serbia for norovirus has led to additional costs for exporters and lower revenues for producers. Inspectors of the EU Food and Veterinary Office (FVO) visited Serbia in June and July 2019 in order to carry out field control of the conditions and the operations. Based on their findings, the PAFF Committee reached the decision to lift the additional controls on April 21, 2020. Over the past years, Serbian Ministry for Agriculture,  Sector for Agriculture Inspection has contributed intensively to establish a food safety system which guarantees the quality and safety of products in a very clear, sustainable and transparent way. The Ministry will work on upgrading this system, which was positively rated by the FVO. The basic rule for is raspberries not to be grown where animals are being kept, where waste is disposed or where a waste water treatment process is carried out. It's also important that fresh water is used in all processes involved in the growing of raspberries. Viruses can survive in many agri-chemicals, so it's important for clean water to be used when preparing protective products and plant feed. The harvesting equipment must also be hygienic and the crates must be clean, maintained and disinfected. Also, they cannot be used for any other purpose other than harvesting. If a transport vehicle is used for any other purpose, it must be thoroughly cleaned and washed, as well as disinfected, per need, before and after the transport. 

IPARD supports strengthening the position of women in agriculture

More than 1/5 women employed in agriculture work as a “helping member” of the agricultural holding in Serbia. Only in 15% of cases women are managers, and more than half of them are over 65, according to the recently published bulletin “IPARD na dlanu”. The Pre-accession fund IPARD is offering support in strengthening the position of women in agriculture through three accredited measures in Serbia. As the beneficiaries of measure one (investments into physical property of agricultural holdings), women can receive grants in the amount of 60% of the investment and they have advantage in certain cases of application. Within measure three (investments in physical assets concerning processing and marketing of agricultural and fishery product), women can achieve support in the amount of 50% of the investment in the area of processing milk, meat, fruit, vegetables and eggs, as well as in the wine production sector. As potential users of IPARD funds in rural tourism, women can apply through the so-called measure seven (farm diversification and business development). The money can be investment in various things – construction, reconstruction and equipment of accommodation facilities, procurement of recreational equipment, procurement of equipment for the production of energy from renewable sources, etc. So far, women have submitted 279 requests to five published calls for measure one, and they showed most interest for the purchase of new tractors. More than 3.3 mn EUR have been approved for them for the implementation of investments, and 1.4 mn EUR have been paid. 

Serbian Ministry of Agriculture satisfied with the sector achivements  

Serbian Minister of Agriculture said that the previous months had shown that Serbia had enough food for its own purposes and for the exports. Agriculture today is a far more significant branch of economy than before. Minister believes that farmers themselves finally sense the care and the support provided by the state. According to the Minister, a whole set of aid measures were secured with the first indications that certain agriculture sectors would suffer damages due to the pandemic. This includes 93.6 mn EUR of loans to farmers with 1% interest for any type of need. State paid about 21,2 mn EUR for the most endangered sectors directly on farmers’ accounts.

Minister underlined that there is enough food for Serbian citizens and for the export, including even vital supplies such as wheat, corn and fruit. Serbia exported 70.000 tons of wheat and flour more in April and May than in prior year. Majority of exports went to the neighbouring countries, followed by Italy, Western Europe, Scandinavia, Germany and Belgium. According to the Minister, there will be no problems with the food this autumn either, as there's enough wheat for more than two years. The wheat had been sown on 589.000 hectares and the yields were about five tons per hectare. This amounts to aproximately 3 million tons of wheat, and Serbia needs about 1.3 to 1.4. This year, agriculture will be a good generator of GDP growth and reduction of the consequences of the coronavirus in the country. According to him, corn and soybeans are waiting for the harvest, and the sunflower harvest has begun on several plots in northern province.

As he said, there were no problems with fruit either, except for the sour cherry, which was damaged due to a rainy spring. He said that things were similar when it comes to tomatoes, which used to be exported to neighbouring countries. Due to the bad tourist season in those countries due to the pandemic, the export dicreased drastically. The exports dropped and the supplies increased. According to the Minister this is a classic case of supply and demand. He understands the problems of farmers who already had problems with market fluctuations. The Minister will visit south Serbia and the villages in the Leskovac area where farmers discard tomatoes due to the low price of 0,08 EUR/ kilogram. When asked why tomatoes were imported from Macedonia and Albania, when grown in Serbia, he said that tomatoes had not been imported in the preceding month and a half.

Speaking about anti-hail protection, he said that there is no complete anti-hail protection anywhere, but maximum about 50-60%. There is never a complete hail protection and for that reason the Ministry is building an automatic anti-hail system, which is much more precise. He added that not only the anti-hail system should be used as protection, but farmers must insure their crops as well.

Regarding the complaints from farmers who have not yet received subsidies for 2019, he assumed that it pertained to the sum of 170 EUR per head for the cattle farming sector and that the problem was probably of administrative nature. He also added that there was a problem in cattle farming, especially in the cattle fattening sector, and that the new government, upon being formed, would provide support.

(Weather calamities influenced the yields of berry fruit sector this season decreasing it for 30-40% compared to last year. More on that here.)

Close-up of vegetables on a table.
©Jerzy Górecki
Consumer prices in Serbia are relatively low - According to a recent study by Eurostat, food prices are 30% lower than the EU average.

Meat industry difficulties

Secretary of the Association for Livestock and Processing of Livestock Products at the Serbian Chamber of Commerce announced that in the first five months of 2020, the total value of imports of meat and meat products in Serbia stood at some EUR 50 mn, with importers mostly being retail chains, while Serbian meat exports amounted to approximately EUR 33.3 mn. The overall import of pork and pork products was around 43% higher y-o-y, while pork exports were down by some 41% y-o-y. Serbia imported 9.200 tons of pork worth about EUR 26.6 mn, as well as approximately 9.000 tons of semi-durable and durable products worth around EUR 23 mn. The beef imports were almost non-existent, apart from a small quantity of veal. On the other hand, the country exported 2.200 tons of beef in the amount of about EU 10 mn, with Turkey accounting for 1,300 tons, China 320 tons, Italy 150 tons, and CEFTA countries the rest. As for pork, only 210 tons worth EUR 300.000 was exported (about 120 tons to China and the rest to the CEFTA region). Exports of durable and semi-durable meat products came at 8,800 tons (some EUR 23 mn).

According to the co-owner of “Matijevic” meat processor, the Serbian meat industry is on the verge of collapse as it has no one to whom it could offer pork, beef, and poultry, considering that hotels and restaurants are empty due to the COVID-19 pandemic. There are no foreign or domestic tourists, and exports have been suspended. He adds that summer usually means the highest demand for meat of all kinds, which drives the prices up, but now the market is oversaturated. “There are no buyers of meat in the domestic market, the offer is high as there are no exports, the prices are down, and producers are facing major problems,” Matijevic explained. According to him, fattened pigs are sold at prices 10-15% lower than last year, and liveweight pork prices range between EUR 1,1 and EUR 1,27 per kg.

Matijevic said that beef farmers have been facing problems for two years because Minister of Agriculture announced export of 5.000 tons of beef to Turkey and farmers increased their production. Unfortunately, the exports did not come close to that amount. He said poultry meat prices were 20% lower than costs. He sees the reasons for drop of meat prices in large imports of meat for processing free of customs duties. That forced two large meat retailers to close down their slaughterhouses. Owner of the Djurdjevic meat processing plant said that exports of beef to Turkey, Italy and China stopped in March because of the pandemic. Djurdjevic Company exported 500 bulls a week and have 5.000 ready to go now but there are no buyers. 

Sunflower purchasing price set  

Victoria Group, the biggest purchaser of sunflower seeds in Serbia, has announced the purchasing price for 2020 – 0,25 EUR per kg plus the corresponding VAT. It is stated that the product must be ripe, uninfected with pests and diseases, without extraneous smells, with a relative humidity of up to 20% and impurities up to 10%, Agrosmart portal reports. In mid-August 2019, Victoria Logistic (part of Victoria Group) announced a purchasing price of 0,21 EUR per kg of sunflower seeds, but then in late August, they said the final price for the 2019 product is 0,25 EUR/kg. Victoria Logistic pledged to pay the purchasing price to sunflower producers after the delivery and invoicing. The sunflower harvest in some parts of Vojvodina has started, and experts working in domestic institutes say the yield is expected to be some 3 t/ha. They say that is a standard national average, and it is good given Serbia’s climate. This spring, sunflower seeds were sown on 220.000 ha.

Cherry Serbia’s most competitive agriculture product

Even though raspberry has the biggest share in global production, cherry is the most competitive Serbian agriculture product in the last five years, because of small competition in Europe, the latest research of agriculture experts from www.seedev.org shows. Within about 40 agriculture products from Serbia, only a few manage to succeed in the European and global market. Wheat, corn, early vegetables and fruit also have good perspective. However, cherry has the best projections, since its competitiveness index is higher than the raspberry’s. As the research showed, only Spain and Hungary are better than Serbia when it comes to competitiveness in cherry production. Still, experts say, cherry production needs to be intensified in the future. 

(Find out more about how the fruit sector is doing in Hungary this year over here and here.)

Purchase of cow-milking robots subsidized by the state

About 20 farms in Serbia have purchased robotic cow-milking systems using state subsidies. The average price of such a robot, with accompanying equipment is about EUR 120.000, and the subsidies cover 65%. President of the Serbian Association of Cattle Breeders said that farmers also had to invest in a facility that must be adequately prepared for the automated, robotic milking system. According to the President of the Association, the Serbian state began subsidizing the purchase of cow-milking robots for the first time in 2019, and before that, subsidies were provided for cow-milking equipment of lower quality. Serbian farmers purchase robots made in Germany, Sweden, and the UK, and robots from the Netherlands could soon become available as well. The subsidies mean farmers could buy maximum two robots per agricultural holding, and one robot could be used for 65 cows each day. The state support measure was intended for family holdings with a maximum of 200 cows exclusively, noting that the investment was not profitable for farms with 20 or 30 cows.

For the first time the Serbian dairy products will be available on the Chinese market

Mlekoprodukt, a part of the Savencia Fromage & Dairy Group, has received the necessary certificate and is about to start exporting its products to China and the EU, the company announced in mid-August. Mlekoprodukt General Manager points out that getting the international certificate for the export of local products to the Chinese and EU markets is a huge success for the company. Company’s main strategy is to preserve current jobs, as well as creating the possibility for new employment. In addition, Mlekoprodukt aims to expand the milk purchase zone and their cooperation with producers and farmers. According to GM, the company has invested in the development of production capacities in order to offer Serbian products to Chinese consumers, as well as consumers in the EU. This is the first time that Serbian milk and dairy products can be found in China. Mlekoprodukt has so far exported its products to Balkan countries. Certified products that will be exported to China are semi-hard, hard, and processed cheeses.

Empty reusable plastic cups laid out in a pile
©EKM-Mittelsachsen
Last year in Serbia, 371 thousand tons of packaging was used, out of which, 228 thousand tons, (around 62%) were reused.

Export of plums to the Middle East a chance for Serbian producers

The Head of the Office of the Serbian Chamber of Commerce in Dubai, Mr Selakovic, pointed out to the potentials and prospects of Serbian plum exporters to the UAE market. He said that the potential of the Serbian plum market is extremely large and that Serbian producers can be competitive with that fruit  at the demanding Middle East market. At the online event "Plum Days" in Blace, South Serbia, he said that Serbia is among the global leaders in plum production, and the leading regions are Macva, Kolubara and Sumadija districts. In 2019, 558.930 tons of plums were produced. He added that 75% of plums in Serbia, which are dominated by old indigenous varieties, are used for brandy, and that the type of plums in that area is significantly different than the types in other areas that are oriented towards export to the Middle East. Selakovic pointed out to the duty-free export, a symbolic 5% VAT and the possibility of direct contact of producers with distributors as the advantages of exporting plums to the Middle East market.

Serbian brandies receive awards at London competition 

The Confederation of Rakija Makers of Serbia released a statement to announce that rakija from three domestic distilleries (members of the National Association of Rakija Producers Srpska Rakija) had received awards at the International Wines and Spirit Competition (IWSC), held in London. The awards went to rakija from the Tok, Stara Sokolova, and Ognjen distilleries, which competed against 3.000 other strong alcoholic beverages from over 90 countries from all continents. A panel consisting of various international experts awarded Tok with two silver medals for four and five-year-old plum rakija. Stara Sokolova also received a silver medal for its 12-year-old prepecenica (double-distilled rakija), as well as a bronze medal for its seven-year-old plum rakija. Both brandies are made by the Uzice-based company RB Global. A bronze medal was also given to eight-year-old apple rakija produced under the Ognjen brand, made by the Prijepolje-based company Braca Tomasevic. The IWSC has been organized for 51 years and is considered one of the world’s most significant wine and spirit quality competitions.

Food in Serbia cheaper than in most EU states

Life in Serbia is much cheaper than in most European states, and the price of food alone is more than 30% lower than the European Union’s average. The latest study was done by “Eurostat,” in which it compared the prices of food and services in 37 European states. Bread and milk are among the cheapest products in Serbia, compared to other countries. Serbia is also at the bottom of the list when it comes to prices of chicken, as well as coffee and restaurant dining. Experts say that Serbian food industry is dominant in the region, and that citizens get equal quality as EU citizens, if not better, for a low price. Zarko Malinovic from the Serbian Chamber of Commerce (PKS) says that this study only confirms that Serbian citizens pay far below EU average for food. “It is also important to note that Serbian customers receive equal, if not higher quality than in the EU for that price, considering that almost 80% of food from the observed categories is produced in Serbia,” he says.  

Producer prices of agriculture and fishing products up by 6,9% y-o-y

In June this year, producer prices of agricultural and fishing products increased by 6.9% y-o-y, announced the Statistical Office of the Republic of Serbia. Observed by main product groups, compared to the same month in 2019, the biggest impact on the rise in prices was noted in Industrial crops (4.6%) and Fruit (37.0%). Producer prices of agricultural and fishing products in June 2020, compared to May 2020, declined by 1.4% average. Observed by main product groups compared to May 2020, the biggest impact on the drop in prices was reported in the group Cereals (-3.2%). Producer prices of agricultural and fishing products in January-June 2020, compared to the same period in 2019, increased by 0.7% on average. In that period, the biggest impact on the rise in prices y-o-y was noted in the following groups: Cattle and poultry (4.6%) and Industrial crops (2.4%).

Online food sales up by 200% since April

Since April this year, online food sales in Serbia have grown by 200%, clothes by 100%, and technology and computer equipment by 50%, says the Ministry of Trade, Tourism, and Telecommunications. At the same time, the number of complaints regarding consumer rights has increased by 30%. According to State Secretary at the Ministry of Trade, during the state of emergency launched because of the COVID-19 pandemic, postal operators saw a major 40% rise in the number of parcels, that is, delivery of goods purchased online, while shops reported a rise of 50-300% in terms of E-commerce. Even though the state of emergency has been lifted, postal operators are still recording an increase of 50-100%, while most shops are noting a rise of some 100% on average in e-commerce, according to data offered by the Serbian E-Commerce Association. She explained that Serbian citizens’ complaints mostly referred to the defective nature of goods, warranties, delivery deadlines, money refunds, etc.

Local platform for business analysis of data from social networks and e-commerce platforms to arrive 

An innovative platform for business analysis of data from social networks and e-commerce platforms will soon appear in the Serbian market. In the IT world, especially on social networks, there is a huge amount of data that businesses currently don't process in a useful way. The director of the agency “The Social Formula”, a member of the Science-Technology Park of Belgrade says that their software will change this and adapt the information for business users of Facebook, Instagram, Pinterest, Twitter, Mailchimp, Google Analytics etc.

Company owners and teams for digital (and other) marketing will be able to get information relevant to online presence and sales in a simple, clear way. The usual practice is that companies' managements get an exhausting amount of info on a large number of PDF pages. The information needs to be interpreted in order to reach certain conclusions. However, these conclusions and the decisions based on them must be made fast in the world of digital marketing. If, for example, the beginning of an online campaign is planned for next week, it's difficult to efficiently analyse all the details of reports from all social networks. The situation is made even more difficult by the fact that the teams which analyse the data are often small, so the efficiency goes down. The platform on which The Social Formula is working will facilitate the process of data analysis and reporting through the use of artificial intelligence. Toward the end of the year, the beta testing of the platform in the Serbian market is expected. A testing period for companies is planned. The platform will be presented in the global market in 2021. 

Ripe plums.
©congerdesign
There is a potential window of opportunity in the export of Serbian plums to Middle Eastern markets, according to stakeholders.

Researchers from faculties of civil engineering and mathematics developing AI for better yields in agriculture

Within the Program for Development of AI Projects, the Science Fund will finance 12 projects. Through the CERES project, a team of researchers from the faculties of civil engineering and mathematics will develop algorithms based on artificial intelligence, with the aim of enabling useful and timely decision-making in agriculture, based on numerous available data and satellite images. The head of the EO-Based Information for “Smarter” Agriculture and Carbon Farming project is professor Dr Milos Kovacevic, according to the website of the Faculty of Civil Engineering. The program aims to stimulate excellence and relevance of scientific research in Serbia in the domain of artificial intelligence and to incite the implementation of the results of scientific research in the AI domain in the development of Serbia's economy and human resources.

More than half of packaging reused  

Last year, a total of 1.935 companies marketed 371.510 tons of packaging, and 228.546 tons were reused, according to the Environmental Protection Agency’s annual report on packaging and packaging waste management. According to the report, it means that Serbia reused 61.9% of the overall amount of the packaging reported last year. The amount of recycled waste totaled 218.662 tons, which is 59.2% of the total waste. Packaging waste management, referring to packaging companies use for their products, was performed by seven operators. Mineral water bottling company Minaqua was the only one with a permit for the independent management of waste packaging; however, Minaqua did not engage in that activity but had operators tackle that task.

Reusable organic bags for fruits and vegetables introduced by Ahold Delhaize

In selected retail shops of Ahold Delhaize: Maxi, Tempo, Shop & Go stores and in Mega Maxi, reusable bags suitable for packing fruits and vegetables are available to customers from mid-August. Organisations around the world warn the public that disposable plastic bags that a person uses for an average of 25 minutes remain in the environment for up to 500 years. During that period, they emit toxic substances that pollute ecosystems, watercourses, soil, water, food. The European Union produces 3.4 million tons of plastic bags a year, which corresponds to the weight of more than two million cars. In order to further reduce the use of plastic packaging, but also to make our environment cleaner, the company Ahold Delhaize Serbia offered customers in the selected stores bags for fruit and vegetables. Bags made of recycled material are a reusable ecological solution, and can be used for measuring, washing and storing fruits and vegetables. Reusable bags of different sizes for fruits and vegetables can be found in selected Maxi, Tempo, Shop & Go stores and in Mega Maxi, and by choosing this ecological solution, one contribute to cleaner streets and cities across Serbia. 

Russian retail chain “MERE” coming to Serbia

Russian food chain MERE is coming to the Serbian market, states the Retail Serbia portal. MERE is an affiliate of the Russian Torgservis Group, established in 2009, which currently operates in over 800 locations across Russia under the Svetofor brand and is the third-largest chain in that country, following X5 and Magnit. “So far, we have opened 1,500 discount markets, and we operate in 10 countries. It is time to expand our business to the Serbian market with at least 100 stores and an average area of some 1,000 m2,” says the Russian company’s branch in Serbia. Namely, they plan to work directly with manufacturers, with strict quality control and a low trade margin. They also underscore that their prices will be 20% lower than average prices. By entering the German market, MERE had to temporarily close its stores because of high demand and shortage of goods in stocks. As for the region, the company has a discount market in Romania, and the Russian giant also offers some Serbian products. In addition to Serbia, the company intends to expand to the Greek market, as well.

Organic Chocolate Plant to Open in Belgrade

Chocollama ltd. from Belgrade is about to start producing organic raw chocolate in Belgrade. As the owner states, this is the only company in Serbia that produces certified organic raw chocolate. According to Ms Stojicic, the company was founded last summer. Their products can be found at well-stocked stores of healthy and organic food in Belgrade, and now, with the help of a credit from the Development Fund for the procurement of equipment, Chocollama is to make a step forward by opening a facility in the municipality of Zvezdara, Belgrade. The production starts in July and the capacities will be quite sufficient for our market and will be expanded per need, says the owner. Discussing the production process, Ms Stojcic says that Chocollama chocolate is produced manually, without additives, soy lecithins or refined sugar. She adds that the ingredients are ground on a mill which further improves the flavour, giving the chocolate a creamy texture and a slight hint of tropical fruit. They learned their craft in London. These chocolates have been present in their market for years, and Chocollama is now bringing the production technology to Belgrade and Serbia. Their chocolate can be eaten while fasting and is vegan-friendly.

More information about confectionery industry in Serbia over here)

Photo credit:

Cover image: Bloom by Pexels via Pixabay
Vegetables by Jerzy Górecki via Pixabay
Garbage by EKM-Mittelsachsen via Pixabay
Plums by congerdesign via Pixabay