Serbia Newsflash Week 12

Soft fruit production news, frost damages, new subsidies, digital circular economy platform launch and water news - The week in Serbian agriculture

Close-up of ripe raspberries.
©ejaugsburg
Raspberries have reached the price of €42.5/kg in Serbia's grocery stores - Breaking the record for the highest-ever consumer price.

Highest ever retail prices of raspberries

After several difficult years for Serbian soft fruit producers, it seems that this year will be a good one, at least as far as produce prices are concerned. Shelves of the local supermarkets in Serbia are getting filled with raspberries packed in 125g boxes. The price per box is now €5.9, which means that the price per kilogram has reached €42.5. Low yields worldwide as well as increased demand resulted in high berry fruit prices. Mr Radovic, representative of the Raspberry Association in Serbia stated that domestic producers are expecting good purchasing price for their produce this season. He also underlined that the price will depend on the yields as well as on the quality of the product.

The PIB Soft Fruit Project can definitely contribute towards higher yields and better product quality.

Subsidies for fruit and cattle breeders

The Minister of Agriculture visited municipalities in Western Serbia and presented a new line for subsidies that will be given to farmers starting the end of March, or begin April. “The new line of subsidies is primarily dedicated to the farmers in Western and Eastern Serbia orientated to the cattle breeding and fruit growing," stated the Minister. "This means that if a producer wants to buy something, for example, a tractor worth €20 thousand, a subsidy equal to 50% of the value will be provided by the government, 40% from the bank for a period of three to seven years, and the producer is obliged to provide 10%. So, if the value of the tractor is €20 thousand, €10 thousand will be non-refundable” stated the Minister. He also commented on his recent visit to Bahrain, and he said that it is very important to conquer new markets, primarily for different types of berry fruits. "Apart from Bahrain, markets like Emirates, Turkey, Egypt, are to be targeted. Even the raspberry has found its way to China," he said.

Frost damage in fruit crops

A pprofessor from the Agriculture University in Novi Sad warned that this year’s fruit crop has been damaged by frost over the past few weeks. Professor Magazin said that in February and March, the frost damage to apricot blossoms was between 30% and 70% while the damage to peaches was between 30% and 40%. “The blossoms were destroyed all over Vojvodina, and in the area of western and southern Serbia the temperatures dropped to 14 degrees below zero,” he said. According to the professor, the frost also damaged 30% of the cherries and more than 10% of blueberries. He said that almond blossoms were also affected.

€850 thousand for afforestation of Serbian municipalities

On the occasion of the International Day of Forests, the Minister of Environmental Protection announced that the Ministry will sign agreements with 38 local municipalities in Serbia to co-finance afforestation projects totaling €850 thousand. "When I took over heading the Ministry of Environmental Protection a few months ago, one of the main priorities I set was to reduce air pollution and preserve nature," said the Minister. In the coming days, the Ministry will sign agreements with 38 local municipal administrations, which will help them afforest parts of their territory, get more parks and green school playgrounds. According to the Minister, forest protection is one of the most important elements of environmental protection, "that is why we must preserve and improve habitats, the diversity of flora and fauna and improve the air quality." 

The organization WWF Adria has warned that forests are key for the quality of human life. However, they are being destroyed at alarming speed. “The human impact has already led to the loss of about 40% of the world’s forests, and it is expected that the global need for lumber will triple in the next three decades,” WWF Adria commented. As the organization said, some of the main problems of managing forests in Serbia include excessive deforestation, lack of information on forests in private property and poor control of their use, as well as negative effects of climate change and pollution. They said that strategic documents for their management needed to promote their vital services – securing food, clean water and air, medicine, recreation, construction material, that is, existence. WWF Adria said that in the coming period, public policies should set specific and ambitious goals regarding renewing forests.  

Serbia should improve the care of its water resources  

The Serbian Institute for Nature Conservation said that the country has very low quantities of natural water. A press release issued on World Water Day states that Serbia is one of the water-poorest countries in Europe with an annual 1.840 m3 per capita. The situation is made slightly better by the transit waters of the River Danube and its tributaries. It was said that underground waters are the main water source for both the population and industry, accounting for 90% of the water supply.

The Institute stated that underground waters are not sufficiently exploited and are not being rationally used. Serbia has more than a thousand rivers and streams over a length of 65.980 kilometers. The Institute warned that although the waters in the country have been under protection for 70 years, the exploitation of mineral resources, flora and fauna have to be controlled constantly, recalling that Serbia has some 100 species of fish in its rivers and streams, accounting for 20% of all freshwater fish species in Europe.

A thistle flower and panoramic view of a river valley between hills in the  Đerdap National Park in Serbia
©Fotografbee
The Serbian Institute for Nature Conservation issued a statement on World Water Day, warning that Serbia's natural water supplies are too scarce and aren't utilized rationally. While the River Danube and its tributaries provide a steady supply of water, at 1.840 cubic meters per capita, Serbia is one of the most water-poor countries in Europe.

High-speed internet for rural households  

The Serbian Minister of Trade, Tourism, and Telecommunications stated that around 80 thousand households in 500 villages would get fiber broadband infrastructure for high-speed internet by the end of 2023. This project was announced last year (see our report here), thanks to a  €18 million loan from the European Bank for Reconstruction and Development (EBRD). Explaining a bill on the ratification of the loan agreement between Serbia and the EBRD, the Minister said that the country had so-called white zones, or areas without adequate broadband access, noting that operators had no intention of building up the network infrastructure in these zones in the next three years. “It has been recognized that around 2,800 settlements with over 320,000 households have issues with broadband access, and those are candidate areas for state incentives,” the Minister explained. Availability of high speed internet will enable the application of new technologies and IT solutions in agriculture by young farmers and new startups in agro businesses.

Western Balkans to be more competitive through common market

Western Balkan economies can increase their competitiveness in the EU only with the support of regional governments in terms of building a common regional market. This was stated at a meeting of the Western Balkans 6 Chamber Investment Forum representatives and Montenegrin ministers held in Podgorica last week. It was also noted that a solution was necessary to simplify Western Balkan businesses’ operations, facilitate entry into the common market, and expedite the economic integration of the region into the EU. “This year has especially taught us that governments cannot function without the support of businesses, just as businesses cannot cope well in such difficult circumstances if governments do not understand their demands,” stated the representative of the Serbian Chamber of Commerce after the meeting.

Digital platform for circular economy opened 

During the green transition it is expected that Serbia will have a 1% GDP growth. “If we know that this will increase the resilience of our economy to climate change, then the transition to circular economy is a very good thing” said the Head of the Centre for Circular Economy of the Serbian Chamber of Commerce (PKS). At the launch of the Digital Platform for Circular Economy it was explained that this was a chance for the Serbian economy to be “rebooted” in line with low-carbon innovations. The platform, founded by the PKS, the UNDP and GIZ, will offer examples of good practices and tools and support to the companies to facilitate their application of the circular economy model in their  businesses more easily.  

Fitch agency affirms credit rating of Serbia at BB+

Serbia’s ratings are supported by macroeconomic policy credibility, which has resulted in low inflation, higher foreign-exchange (FX) buffers, relative macroeconomic resilience to the coronavirus shock, and underpins their confidence in a post-crisis fiscal adjustment, the recent Fitch Agency report reads. The report added that “governance, human development indicators, and GDP per capita compare favorably with ‘BB’ medians. Set against these factors are Serbia’s greater share of foreign-currency-denominated public debt, somewhat higher net external debt/GDP, and wider current account deficit (although fully covered by strong foreign direct investments (FDI) in recent years) than peer group medians.”

Its banking sector has a high degree of erotization, and Serbia’s small open economy is exposed to the Eurozone, the report states. It adds that “the GDP contracted 1% in 2020, less than the ‘BB’ median contraction of 4.8%, helped by a large fiscal support package (6.3% of GDP), strong wage growth, and resilient FDI. Fitch forecasts the economy to grow 5.2% in 2021, supported by a positive carry-over effect, and strengthening activity in 2H21 due to Serbia’s fast vaccination rollout (currently 22 doses per hundred people) and recovering demand from the Eurozone (which comprises 40% of exports).” “We project growth to remain above trend in 2022, at 4.5%. Serbia’s GDP growth averaged 3.2% in 2015-2019, and unfavorable demographics and weak total factor productivity growth weigh on longer-term growth potential. Inflation has remained low and stable at 1.2% in February, averaging 2% over the last seven years.”