Serbia Newsflash Week 36

Agro export, environmental protection, trade disputes, foreign direct investments and rural tourism - The week in Serbian agriculture

Corn plants with ears of corn on the cob.
©Franz W.
With a good harvest approaching, Serbian producers are expecting record corn yields this year

150 thousand tons of packaging end up in landfills and nature

Last year in Serbia, about 150.000 tons of plastic, metal, and glass packaging ended up in landfills and in the environment, Head of the Circular Economy (CE) Center at the Serbian Chamber of Commerce stated. It is estimated that Serbia loses over EUR 100 mn per year on secondary raw materials that are thrown away when they could be recycled. At the same time, according to the Head of CE Center, over EUR 150 mn is spent on the import of secondary materials every year. Representative of the Environmental Protection Engineers Association, explained that only 37.5% of plastic packaging was recycled in Serbia. Serbia report the best results in terms of paper recycling since it is the dominant material in various economic sectors. 99% of cardboard packaging is recycled. According to the Serbian Environmental Protection Agency, 60% of the packaging used in the domestic market last year was collected and reused last year. Over 370,000 tons of packaging of various kinds was generated in 2019, around 220.000 tons of it was recycled, and some 150.000 was not recycled.

Green digitalization streamlines environmental protection 

All companies in Serbia that generate waste, emit pollutants into the water and air and import products that will become waste after use have an obligation to file a report to the Environmental Protection Agency. Following the recommendations of the European Commission on circular economy, the project of green digitisation was developed to enable a faster and easier exchange of information and its availability to those who want to invest in environmental protection. Instead of 120.000 annual reports archived in 25 cardboard boxes, emails and phone calls, all information will be available through the digital service. All information, except business secrets, will be available on the platform. This is very important for those that want to invest or connect with a certain company to store their waste or find the necessary raw materials. This approach will also improve business. With this way of submitting documents, it is easy to correct a mistake. Within the Green Deal, European companies have to cross over to the circular economy concept that follows digitisation, in order to remain competitive on the market.  

Serbian agriculture export is worth USD 3 billion

Agriculture is expected to account for 15% in the gross domestic product of Serbia this year, while exports, despite difficult conditions, will amount to a little more than USD 3 billion dollars, is the estimation of the agroeconomist Mr. Prostran. The yield of corn, whose harvest has begun, will be a record-breaking. Serbia also had a good wheat harvest. Likewise, sunflower is coming to an end, while soybeans will give average production. Wheat, corn, sunflower, soybeans and somewhat less sugar beet, will determine two thirds of the total value of agricultural production this year. Ac-cording to Mr Prostran, what is most worrying is the increased imports of some products that do not need to be imported. This primarily refers to pork, which took the first place in the imports of agricultural and food products, which certainly deserves a serious consideration. What must be imported are coffee and southern fruits, while the import of pork only harms the foreign trade balance, Prostran added.

Sunoco plans to produce around 250 thousand tons of sugar  

Sunoko company announced yesterday that it is starting a sugar beet processing campaign in Vrbas, and it is expected that about 250,000 tons of sugar will be produced during the campaign. As part of this year's campaign, all three Sunoko sugar factories in Vojvodina (Vrbas, Pecinci and Kovacica), will work at optimal capacity. Sunoco officials said that this year, despite the circumstances caused by the coronavirus pandemic during March and April, between 36.000 and 37.000 hectares of sugar beet were sown, and during the beet processing campaign aboveaverage results are expected. Speaking about the conditions of contracting the production of sugar beet, Sunoco CEO  pointed out that for 2021, despite the challenges on the sugar market, they are more favorable compared to the contract for 2020. He explained that the basic price of EUR 34 per ton of payable beet with a bonus for producers who achieve aboveaverage digestion, remain unchanged compared to the 2020 contract. "The novelty in relation to the previous contract is a bonus in the amount of half the value of the taken seed for establishing the contracted production," Sunoco CEO stated.

The Company Sunoko, which operates as part of the MK Group system is the largest producer and exporter of sugar in Serbia, while in Europe it is positioned as one of the most efficient. The Company Sunoko, with its three production centers is the most efficient sugar producer in Southeast Europe with an annual export of 150.000 tons. Export markets are for the most part countries in the region, given the Company’s goal of gaining a leading position in the Balkans.

Increased registration of seasonal farm workers

The simplified application procedure through the portal and the application introduced 47% of seasonal farm workers into legal flows, shows the analysis on the effects of the application of the Law on Simplified Work Engagement on Seasonal Jobs, which was jointly conducted by the National Alliance for Local Economic Development (NALED) and the German organization for international cooperation GIZ. They came to the data that in a year and a half of the implementation of the new system, employers hired a total of 37.597 seasonal workers and thus contributed to the realization of the right to pension years of service and health care in case of occupational injury. The NALED bulletin reminds that two years ago, the contract was obtained by only five percent out of 80.000 seasonal workers, as estimated to work in agriculture in Serbia. The portal and the application were used by 413 employers, of which 127 were natural persons, i.e. owners of agricultural farms, and so far they have paid more than EUR 3.4 mil in the name of taxes and contributions to the budget of Serbia.

75 products receive the right to use trade mark “Cuvarkuca”

The right to the Cuvarkuca trademark, within the project of the Serbian Chamber of Commerce Cre-ated in Serbia, was given to 75 products as a guarantee of products’ domestic origin and quality. Cuvarkuca was given to 19 “Tastes from my Region” products by retailer “Mercator S”, 15 fruit juice Nectar products, 14 products of Dairy Sabac, 10 Vital products, 6 products of the company Esensa, five products of the company Vrtlari, four of Dairy Granice, as well as craft lager beer Mala barka and plum brandy by SIL 3 Žitište, Chamber of Commerce announced. The decision was made by the Council for deciding on the right to use the collective trademark Cuvarkuca. "Starting next week, the Cuvarkuca trademark can be expected on these first products that were entitled the right to use it, and an additional 150 are waiting for the decisions of the technical commission and the Council. At the beginning of autumn already, about 250 domestic products are expected to bear this trademark", the President of the Council and the director of the Sector for Strategic Analysis, Services and Internationalization of PKS explained. Cuvarkuca guarantees that more than 80% of the product's value were created in Serbia.

Western Balkan citizens expect just decisions from the EU 

The AlJazeera Balkans reports that Regional Cooperation Council (RCC) Secretary General Majlinda Bregu has said that Western Balkan citizens expect just decisions from EU members. She added that access to European chains of value and supply would encourage economic growth and bring stability to the region. As she said, the EU is the main trade partner and investor on the Western Balkans. It doesn’t threaten the security of any country, it promotes real values, and regional cooperation is a reality thankful to the role of the EU and regional political awareness, said Bregu. She added that the EU will be faced with clear and bold decisions to confirm the benefit of the Western Balkans in the EU, and the damage regarding the postponed EU membership. She also underlined that the citizens of the region are mostly pro-European.   

girl picking blueberries in a plantation
©Andrea Barstow
With the increased registration of seasonal workers, more and more are now employed legally according to a recent analysis.

IPARD: great interest in rural tourism

Owners of hospitality outlets who want to improve their tourist offer or those who want to start such a business in Serbia’s rural areas can receive IPARD incentives, and the deadline for submitting applications is October 1, 2020. A beneficiary can receive between EUR 5.000 and EUR 300.000 per request, regardless of the total investment value. This refers to a public call launched in June for submitting applications regarding incentives for farm diversification through investment in the tourist offer. The aim is for those farms to make income through non-agricultural activities. That includes the construction of accommodation capacities, accompanying facilities, and the purchase of equipment necessary for providing services in the tourism and hospitality sector. The amount of incentives is up to 65% of the eligible investment costs, minus VAT. A total of 20 mn EUR  has been set aside for this project.

Bakeries not issuing fiscal invoices  

In an interview for daily “Politika”, Serbian Minister of Finance said there was a big problem with shops not issuing fiscal invoices. “Over the past ten years, the Tax Administration has inspected fiscal cash registers in over 500 bakeries in Serbia, discovering that over 60% of them involved irregularities in terms of unrecorded turnover or unregistered employees. In Belgrade, that percentage is even higher, over 70%. According to him, out of the 508 shops inspected, irregularities were discovered in 307. The Minister urged citizens to demand an invoice every time they shop because that money and VAT collection is used to build hospitals, schools and highways. To suppress the gray economy, another prize contest will start in the upcoming months with citizens collecting fiscal invoices, but this time, the entire process will be carried out electronically.

Al Dahra to invest EUR 173 Million in modern agricultural complex

Al Dahra Serbia, an affiliate from UAE, intends to invest EUR 173 mn by the end of 2022 in the construction of agricultural and industrial complexes in the territories of the Belgrade municipalities of Palilula and Surcin, reports the eKapija newsportal. Based on the company’s three-year investment program (2019-2022), investment in Pancevacki Rit in the municipality of Palilula will involve several phases within two stages. The first stage includes building four agricultural and industrial complexes, an animal feed processing factory in Kovilovo (outskirts of Belgrade), two complexes of new farms for a total of 7,500 dairy cows with stalls and silos, and 15 independent bio-gas facilities, as well as the construction of an agricultural machinery center. According to the project, construction work within stage I began in August and will be finalized in October next year. In stage II, Al Dahra intends to reconstruct the existing animal feed factory, build a complex of ten hubs, invest in the Pancevacki Rit infrastructure, clean and revitalize the existing canal networks, and build new modern irrigation and drainage systems, as well as reconstruct current production facilities.

The decision of the Government of Serbia adopted in late July 2020, which is part of the project documentation, states that, based on the company's three-year investment program from 2019 to 2022, the investment is to be carried out in phases, in two stages, with the aim of Al Dahra meeting its investment obligation toward the Republic of Serbia in the total amount of EUR 30 million. In its decision, considering the amount of the planned investments and the creation of new jobs for highly qualified young employees, the government pronounced Al Dahra's investment an investment of special importance for Serbia.

Projects comprising second phase of development of irrigation in Serbia  have been discussed at the meeting between Abu Dhabi Development Fund (Al Dahra-Srbija) and public enterprise Serbia Waters took place in late August. Given the importance of agriculture in Serbia, the project was launched by the Ministry of Agriculture, Forestry and Water Management, and it is financed from the loan of the Abu Dhabi Development Fund. Due to the complexity of this project, and taking into account that irrigation in Serbia is considered in several strategic documents and considering that adequate economic and organisational frameworks need to be created for the development of irrigation, the project is to be realised in phases, as announced on the Srbija Waters website. It is added that the aim of the project is to increase the productivity and efficiency in the agriculture sector through the expansion of the irrigation system. Within this fund, new projects are being prepared as well, which will comprise the second phase and cover around 55.000 hectares more. Within this phase, the construction and expansion of the irrigation system in Pancevacki Rit – phases II and III, Surcin, Topola and modernization of 58 pumping stations in central Serbia are planned. 

New dispute over land intended for German meat processor Tönnis

A new dispute is underway before the Novi Sad Administrative Court regarding the allocation of land for Germany’s meat processing company Tönnis. In 2017, it was planned for German meat processor to get 5.000 ha of agricultural land in Vojvodina, in municipalities of Kikinda, Zrenjanin, Secanj, Vesac, and Plandiste. The investment is still on shaky ground, so the land is being leased. In Zrenjanin alone, 2.400 ha of the best agricultural fields are intended for the German company. The dispute was initiated last year by the Association of Banat Farmers. “Over the past few years, we have won disputes against the Provincial Secretariat for Agriculture concerning the assignment of land for Tönnis in the Zrenjanin area. The court first decided to reconsider the case, but as the Provincial Secretariat gave the land to Tönnis again, we initiated the administrative dispute for the second time,” said farmer Slavko Vukov to daily Danas. “Every year, that land is leased for a year at high prices that an ordinary farmer cannot pay. We will not give up on the dispute. State-owned land should be available to all farmers at auctions,” Vukov noted.

Goods from Serbia dominant in Kosovan market

Several months after Pristina’s 100% import tariffs were revoked, businesses from central Serbia managed to restore nearly 60% of the quantity of goods they used to deliver to Kosovo and Metohija, reports the newsportal Novosti. The value of those goods would certainly have been higher in this period if the coronavirus crisis had not happened, as well as reciprocity measures between May 30 and June 6 when the delivery of Serbian goods was suspended, the Serbian Chamber of Commerce (PKS) told the daily. In June this year, central Serbia provided Kosovo with goods worth EUR 23.4 mn. In June 2018, before the tariffs were introduced, that figure stood at EUR 40.3 mn. It means Serbian businesses have managed to restore nearly 58% of their former results, the PKS says. This was also noted by the Pristina media, which recently said “the Kosovo market is flooded with goods from Serbia.” Buletini Ekonomik says that June data offered by Kosovo services show Serbia has regained its primacy among CEFTA member states in terms of exports to Kosovo.

Bosnia and Herzegovina bans import of fresh beef

Bosnia and Herzegovina will suspend the import of fresh chilled beef until further notice. As of Monday, August 24, only frozen shipments can be imported into the country. The notification sent by the Veterinary Office to the departments of the border veterinary inspection states that the decisions for the import of beef will not be issued due to the high risk. Permitted imports of frozen beef consignments will be subject to rigorous controls.

"Frozen meat will be subject to detailed verification through the veterinary information system, in particular the verification of documentation. It is necessary to draw the attention of freight forwarders to correctly announce shipments, especially to take care when entering data and veterinary certificates", the BiH Veterinary Office reports.

Photo credit:

"Corn on the cob" by Franz W. via Pixabay

"Blue" by Andrea Barstow via Pixabay