Serbia Newsflash Week 18

E-commerce on the rise, combating air pollution, pandemic aid measures, vineyards facing challenges - The last week in Serbian agriculture

Sunlit vineyards in Serbia.
©Snowyns
Serbian wine is facing hard times.

E-commerce flourishes in the shadow of the coronavirus

In the past years the public and the media have only been interested in e-commerce during major online sales days: New Year’s sales, Black Friday, back to school sales, the beginning of summer and other similar periods when the number of online shoppers is higher. Recently, e-commerce in Serbia has grown exponentially in a hockey stick curve fashion. The pandemic and the global economic crisis have not affected adversely the growth of e-commerce - Au contraire, with the closure of green markets lots of farmers redirected their business to n line markets on social networks like Facebook, Instagram or on other web portals. Through intensive promotion on social media, online purchases increased significantly. Used to picking and choosing their fruits and vegetables, Serbians quickly adopted new way of shopping: Even after the reopening of green markets, online purchasing of fresh produce did not decline significantly. Retail chains struggled with home deliveries throughout the first weeks of pandemic due to a 4-5 times higher number of online purchases. It is notable that Serbians are opting more for local products and that they buy more at domestic online stores.

Air pollution is a major problem in the Western Balkans

Air pollution in Western Balkan (WB) states has the attention of European institutions. The European Commission (EC) is aware of the air pollution problems in Western Balkan states and the needs of those countries on the path to a transition to clean energy. The EC is cooperating with WB countries in harmonizing the legislature of all six countries with EU standards in the context of enlargement. Based on the European Green Deal, which includes the reduction of noxious gas emission, the upcoming Green Agenda for the Western Balkans will also deal with challenges regarding the transition of the region into clean energy and the fight against air pollution. With a string of financial and other instruments the EU is helping the WB fight for clean air. The EC recalls that reduction of air pollution is an obligation for WB states, not just because of the EU aspirations of those countries, but also because the states of the region are signatories of numerous international agreements on noxious gas emission.   

State aid to farmers due to the corona pandemic

The payment of financial aid to the most vulnerable farmers in Serbia has started. They are the most affected by the coronavirus pandemic, and the distribution of aid is expected to be finalized by the end of next week through the Payment Agency. This includes indoor vegetable growers, small dairies, and beekeepers over the age of 70. For vegetable growers, the maximum subsidy is aprox 766 EUR (RSD 90.000). As for milk producers, it is up to EUR 255 (RSD 30.000) for cows and up to EUR 170 (RSD 20.000) for sheep and goats. Finally, for beekeepers, it is up to EUR 170 (RSD 20.000). Serbian government’s support to farmers with EUR 12.35 milion (RSD 1.45 bn) for subsidizing interest on loans previously taken. Farmers do not have to be in the VAT system to apply for state aid. They simply need to be registered in the Register of Agricultural Holdings

Increase in sales of seasonal potted plants

Even though horticulture producers suffered from the corona outbreak, it turns out that losses among producers vary. While the cut flower business suffered the most due to closure of green markets, specialized flower shops and producers of pot plants experienced just the opposite with the introduction of the curfew. Demand for potted plants unexpectedly increased during the pandemic. Online sales in March this year were higher than thoselas March and the only challenge they faced was home delivery, since a majority of producers are small family businesses without hired labor.

Strawberry plant can be seen in a garden
©Mila Mirkovic
Strawberries in a garden. E-commerce brought about a new way to sell fresh produce.

Serbia exported goods worth EUR 882.2 million since March 15

From the implementation of the state of emergency on March 15, until April 15, companies in Serbia exported goods worth EUR 882.2 million, whereas in the same period last year, under regular circumstances, the amount was EUR 1.14 billion, as stated by the Customs Administration of the Ministry of Finance.

The export of corn realised the highest value, at over EUR 57 million. Corn is followed by processed fruit, special products made of iron, paper, cardboard, electricity (EUR 17.5 million), apples, pears, quinces, electric motors, bread, baked products, cakes etc. Serbia exported the most to Germany, Bosnia and Herzegovina, Romania, Russia, Italy, North Macedonia, France, Turkey, Slovenia, Croatia.

Wine sector is experiencing its toughest moments

The wine sector is among the best organized sectors in Serbian agriculture. Wine producers did an outstanding job over the last ten years. But when the gastronomy sector closed down, it effected the wine sector significantly. Besides coffee shops, restaurants and hotels, the wine export also came to a halt. The only remaining undisrupted segment is specialized wine stores and e-shops. Unfortunately, profits are dimiishing there as well. The main problem is the storing of wine from previous years, which in turn increases production costs for the current season.

The vineyard Aleksandrovic is one of the biggest wine producers in central Serbia with 75 ha of vineyards, producing  300.000 bottles of wine annually, 25% of which is sold abroad. Their main issues are financial. They need to prepare new grapes, free wine vessels, barrels and bushels, as well as tanks with wine left over from the 2019 harvest. This is a very financially demanding activity. They have to invest 4.000 EUR/ha prior to the next harvesting season. This issue, so called “financing of stored wines”, is pressuring smaller producers as well. Besides sales, smaller producers are challenged with the restarting of the whole production cycle since their storage capacities are full. They place their hopes in sales once the market reopens. Expectations are to achieve February sales levels by August. Relaxation of precautionary pandemic measures might open paths to wine tourism again.  

PIS Innovation Prizes: Competition for startups in South and Eastern Europe in agrifood sector

RIS Innovation Prizes awards the most innovative companies to support the development of new products and services which can help transform food system, making it healthier, more sustainable and more trusted. It is one of the largest startup competitions in the agrifood in Southern and Eastern Europe. Competitions aims for an early stage entrepreneurs and companies with innovative products or services that could transform the European agrifood sector from the countries in Southern and Eastern Europe. Find out more here.

Image credit: Vineyards, Sremski Karlovci, Fruška Gora, Vojvodina, Serbia by Snowyns via Wikimedia Commons