Serbia Newsflash Week 42

Agro development investments, IPARD subsidy news, EU fund allocation and a cattle intervention - The week in Serbian agriculture

Fancy restaurant lunch.
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The winners of the famous Michelin stars will be announced in December, as Serbia has been included in the Michelin gastronomic guide. The National Tourism Organization believes this will have a positive effect on Serbian tourism.

Serbia included in Michelin gastronomic guide

Serbia has been included in the prestigious Michelin gastronomic guide and the winners of the famous Michelin stars will be announced in early December, said the Director of the National Tourism Organisation of Serbia. “From today, Serbia is a part of the Michelin family,” the Director told at a press conference, adding that the Michelin stars would be awarded to Belgrade restaurants as well as potentially to establishments outside the capital. She said the inclusion of Serbia in the Michelin guide affirms the country’s ability “to be on par with what the world has to offer gastronomically.” She said Michelin inspectors would visit Serbia once again before awarding the Michelin stars and that, as the first step in the cooperation with Michelin, the company’s travel guide had already been unveiled in Belgrade. The arrival of Michelin will have an favorable impact on Serbia and its positioning as a tourist destination.

The Michelin Guide was established in 1900 by brothers Edouard and Andre Michelin, also the founders of the world’s most famous car tire brand. The aim was to encourage people to travel by car and purchase their tires. The guide included maps, a list of stores, gas stations, and places where one could eat or stay overnight. The guide began to award stars to restaurants in 1926.

The EC assessment on Serbia’s EU accession

Each year the European Commission (EC) adopts its "Enlargement package" - a set of documents explaining its policy on EU enlargement. On October 6th, the EC published the latest progress report on the EU integration process of the WB6 and Turkey.

The EC notes that the Serbian government has maintained European integration as its strategic goal, which gives positive assessments on all economic criteria. Serbia has made moderate progress and carried out good preparations in the development of a functional market economy, the report says. By reducing the budget deficit and maintaining a cautious fiscal attitude, Serbia has significantly improved the debt sustainability. The report marks that Serbia’s labor market performance has improved and that the unemployment rate is at a ten-year low - albeit also as a result of significant emigration. Serbia is also moderately prepared to deal with the pressure of competition and market forces within the EU, the report says. The structure of the economy has continued to improve and the level of economic integration with the EU remains high, says the report, which notes that, while investment continues to rise, education and training are failing to meet the full needs of the labor market. The report also points to no progress in relation to the judicial system, while limited progress has been made in fighting corruption, organized crime and public administration reform.

In the past year, Serbia has achieved limited progress in the area of environmental protection and it should focus on sustainable development. The country has some level of preparation in agriculture and rural development. Some progress was made through the submission of the package for entrustment with implementation of IPARD funds. The process needs to be speeded up particularly with processing of applications received. Report notes that in the area of food safety, veterinary and phytosanitary policy Serbia is moderately prepared. Serbia is yet to adopt a strategy and action plan for full alignment with the EU acquis in this area. Animal welfare legislation is yet to be fully harmonized with the EU standards.

The gap between EU and WB needs to be closed

According to EU Enlargement Commissioner Olivér Várhelyi, the gap in the economic development between the Western Balkan region and the EU has to be closed as soon as possible, which will also speed up the process of integrating these countries in the EU. The Economic and Investment Plan sets out a substantial investment package mobilizing up to €9 billion of funding for the region. It will support sustainable connectivity, human capital, competitiveness and inclusive growth, and the twin green and digital transition. The plan foresees six billion for key infrastructure projects in the fields of transport, energy, digital connectivity, agriculture, health, education. Of the remaining three billion, about €1.5 billion is intended for the private sector, while about 1.5 billion would be for institutional reforms and harmonization with European legislation in key areas.

In parallel to the Economic Investment plan to support the region, the Commission has presented guidelines for implementing the Green Agenda in the Western Balkans, expected to be adopted at the Western Balkans Summit in Sofia in November 2020. It foresees actions around five pillars. These are: 1. climate action, including decarbonisation, energy and mobility; 2. circular economy, addressing in particular waste, recycling, sustainable production and efficient use of resources;  3. biodiversity, aiming to protect and restore the natural wealth of the region; 4. fighting air, water and soil pollution and 5. sustainable food systems and rural areas. Digitalization will be a key enabler for the above five pillars in line with the concept of the dual green and digital transition. Read more here.

Three projects of DFC dedicated to agriculture

The Ministry of Agriculture offered three projects in the field of agriculture to the American DFC (International Development Finance Corporation), which recently opened a regional office in Belgrade. The DFC has been offered projects to support young farmers, women in agriculture and the development of the food industry, the Ministry announced. "When it comes to start-ups and young farmers, the project will cover the fruit, vegetable and livestock sectors," said the Minister and added that the program should provide young people with non-refundable loans of around €15 thousand. The project whose realization with DFC is already in progress is a guarantee scheme for credit support to Serbian farmers, which provides collateral, Minister specified. The project whose implementation with the DFC is already in progress is the guarantee scheme for loan support to Serbian farmers . "The Ministry with DFC, will guarantee 60 percent of collateral if someone wants to buy a machine, land, start a business in agriculture, food industry. If something costs a hundred units, we guarantee for 60 percent," explained the Minister, stating that this project is being done through three commercial banks that passed the competition.

Apple in rain
©Chulmin Park
Fall rains have produced 30l/square meter precipitation levels in Serbia, delaying the sowing season of winter wheat, winter barley, rye and oat.

Three new IPARD calls for agricultural machinery and construction by the end of the year

According to the plan of Agrarian Paying Agency another three public invitations within Serbia’s IPARD II program for the acquisition of new machines, machinery and construction, acquisition of new tractors and processing of agriculture products, would be called by the end of the year. IPARD fund for tractors during the next invitation would be approximately €5.2 million, while through invitations for machinery and construction, as well as processing, the farmers would have approximately €21 million at their disposal.

The new Government to keep prioritizing development of agriculture

One of the new government’s priorities will be supporting the development of villages and agriculture in Serbia, the Prime Minister stated. “We are facing a pandemic that has shown how important it is to rely on our own resources and domestic food production. In the past period, we strengthened agriculture, and Serbia reported no food shortages, although the demand was four to five times higher than usual,” the PM said at the presentation of the National Program for the Recovery of Serbian Villages. She underlined that the plan was to invest even more in knowledge and science applied in agricultural production, including digitalization and internet network expansion, so that young people would stop leaving rural areas.

“We will invest in the electrification of agricultural fields and anti-hail protection. We are offering incentives worth €15 thousand to young farmers to establish their agricultural holdings, and we plan to provide even greater assistance, as well as support rural tourism,” said the PM. Designate about to put together a new government. Without the incentives, domestic agriculture has no conditions for conquering new markets, she added.

Hologram to protect the origin of Serbian raspberries

Due to recent affairs in Chile in raspberry market, Serbian producers decided to protect the origin of their produce with hologram stickers. The hologram guarantees that goods are of Serbian origin, variety “Vilamet” and “Miker” and that there is no possibility of re-export or re-packaging.  Raspberry producers in Western Serbia have long-standing tradition in berry production. Besides the highest production standards, they decided to protect the origin of berries in order to be distinguished on the market. The consumers become more aware of the products they are buying, where it was produced and how it was produced, said the Director of the Cooperative “Nasi Vocari” (Our fruit farmers). “We need to make a plan and find strategic solution for production, distribution and processing of raspberries”, said the Director Bozo Jokovic. Such planned production can result in more than half  a billion euros of raspberry trade. At the moment, Serbia is exporting €200 million of raspberries annually, added the Director.

State lifeline for cattle fatteners

Due to a 70% drop in demand for beef on the world market, the Serbian government decided in early September to seek to alleviate the problems of cattle keepers through intervention buying. The Ministry of Agriculture has set aside €2 million to buy beef cattle. The farmers received €2.15 per kilogram of bulls live weight. Since then, exports to China and Turkey have resumed, but the Ministry insisted on intervention buying to ease the adverse effects the epidemic had on the meat market and to preserve cattle farming in Serbia. The Ministry of Agriculture and State Commodity Reserves have organized “corn for beef” campaign, with 3 thousand cattle taken over by slaughterhouses. Nevertheless, in recent months, thousands of ready-to-sell animals have once again accumulated among Serbian farmers due to declining demand.

On September 24, the Government made another decision, the essence of which is that cattle fatteners can apply for another purchase subsidy at the Ministry until November 5. With this, the Serbian state provides support to producers for every kilogram of legally sold beef weighing more than 600 kilograms. In Serbia, this help means a lot, as the number of small farms engaged in fattening cattle in the country is between 12 and 16 thousand. Such farms fatten an average of 5-6 bulls. Including large farms, about 220 thousand fattening cattle are produced annually in the country, of which 120,000 are usually sold abroad

The rain has postponed the new sowing season of cereals  

The rainfall has stopped soil preparation for the new sowing season of wheat, rye, barley and oat in Vojvodina. The optimal dates are from October 1st to October 25th,  said the President of the Independent Association of Farmers of Serbia.  He said that 2020 is a “weird year” and that in last couple of days there were 30l of rainfall/m2 in some parts of Vojvodina and in some there was just some so the soil is dry. The farmers are motivated to sow the wheat because the price and the quality are better than last year.