Serbia Newsflash Week 9

Achievements in organic farming, COVID-19 recovery, e-commerce boom, international trade news, foreign investments, agroeconomic figures - The week in Serbian agriculture

Close-up picture of fresh, ripe, red strawberries
©Beth Thomas
Serbia's growing organic farming sector has very good export potential.

New (COVID-19) assistance package worth €2.2 billion

The Serbian government adopted all legal documents necessary for the third assistance package, worth €2.2 billion, intended for businesses and citizens. The Minister of Finance noted that the overall government assistance offered so far to mitigate the COVID-19 crisis has so far reached approximately €8 billion. The state will provide direct aid in the form of three payments, each equal to half the minimum wage to 1,505,093 entrepreneurs and employees in SMEs and large companies. The first payment will be in April, the second one in May, and the third one in June.

(The package does not apply to banks and financial institutions. In addition to the three payments, together 150% of one month’s worth of minimum wage salary, hospitality outlets, travel agencies, licensed tour guides, hotels, resorts, and car rental companies will receive another full monthly salary. Urban hotels will get €350 per bed and €150 per accommodation unit. Transport companies will receive €600 per bus monthly over the next six months. A total of 6,118,911 adult citizens will receive €60 (two €30 payments in May and November). About 1.7 million pensioners will be given an additional €50, which means they will receive €110 in total.)

Government reduces decoupled payments  

The Serbian government has reduced the amount of decoupled payments (subsidies) for plant production from €44.2 per hectare to €34 per ha, thus lowering the overall subsidies from €82.5 million to €63.8 million EUR. In 2021, instead of the previous figure, €210.2 million, only €191.5 million will be available for direct payments. Based on amendments to a decree on subsidy distribution in the field of agriculture and rural development, the state will provide €12 million in total, which is €2.5 million less than last year.

On the other hand, when it comes to requests arising from unrealized direct payments from previous years, the state will provide €40 million instead of the planned €20.4 million. The portal Agroklub writes that based on a report by the Agricultural Inspection, due to irregularities discovered in subsidy users’ activities, the Directorate for Agrarian Payments is expected to suspend the payment of approximately €3.2 million based on inspectors’ records. As Agroklub recalls, the procedure for becoming eligible to receive agricultural incentives starts by submitting a request with the Ministry of Finance, Ministry of Economy and the Treasury Administration every year between March 1 and April 30.

Increase in the export of pet food  

Producing dog and cat food has become a profitable business in Serbia over the past few years. In 2020 alone, Serbia exported more than 39 thousand tons of pet feed worth €89.5 million. In comparison, in 2012, this number was almost ten times lower – €7.1 million, and the quantity was 8,280 tons, reports daily Vecernje novosti. “In Serbia, finished and semi-processed products are made, as well as category 3 slaughterhouse waste, processed up to a certain level and then exported,” stated Mr Budimovic from Serbian Chamber of Commerce. According to him, the main export destinations were Russia and the EU countries. On the other hand, official data show that Serbia imported 39,520 tons of dog and cat food in 2020. Those imports equaled €37.5 million. The difference in the value of exports and imports despite the similar quantities is notable because Serbian factories put those products in single-use bags, whereas Serbia imports dog and cat food in bags of up to 25 kg, which is less expensive, explained Mr Budimovic.

Honey exports up by 46% in 2020

Last year, Serbia exported 2,701 tons of honey, mostly to Italy, Norway and Germany, announced the Serbian Chamber of Commerce (PKS). The value of those exports was slightly under €13.1 million, a rise of 46% y-o-y. At the same time, honey imports increased too. In 2020, Serbia imported 548 tons of honey from Moldova, Ukraine, Greece, and New Zealand. “The growing demand for honey creates great opportunities in terms of notable development of beekeeping in Serbia. Beekeeping brings indirect benefits (pollination of fruit, vegetables, and other plants) that are very important for increasing yields, as well as the ecosystem. Beekeeping technology is making continued progress in Serbia, as evident from the growth of the number of beehives per farm as well as from exports of honey to high-paying markets. According to the Statistical Office of the Republic of Serbia, in 2019, Serbia had 977,000 beehives, up by 7% compared to 2018.

E-commerce on rise, logistics and delivery speed to be improved  

In 2020, e-commerce in Serbia generated €343 million in revenue, and 583 new online stores appeared in the domestic market, reported the national TV broadcaster RTS. It is estimated that the revenue will exceed €400 million this year. According to the Statista website, some 3.3 million Serbian consumers are estimated to shop online, and RTS says the biggest problem so far is logistics, that is, the delivery of goods. “In addition to the breakthrough of e-commerce in the food category in the future, we can also expect trade to develop in terms of personalized offers. The development of information society and artificial intelligence will allow sellers and producers to conceptualize and personify their offer for individual buyers,” says Mr Malinovic from the Serbian Chamber of Commerce. Health safety, comfort, and saving time are the main advantages of online shopping when it comes to consumers, while traders save in terms of fixed costs. “Compared to pre-pandemic times, e-commerce in Serbia is up by some 80%. I would mention fruits, vegetables, and healthy foods as a category with a rise of 150%, as well as dairy products and processed meat with a rise of 120%,” says Stefan Filipovic from retail chain Mercator-S.

Photo rendition of ecommerce
©.
In 2020, 583 new online stores appeared in the domestic market in Serbia and e-commerce in the country generated €343 million in revenue. It is estimated that in 2021, the revenue of the e-commerce segment will exceed €400 million.

Trade of agro products on green markets down by 6.6% in 2020

Compared to 2019, the total turnover value of agricultural products on green markets in Serbia in 2020 declined by 6.3%, reported the Statistical Office of Serbia. As for the value structure of the turnover, the biggest share pertains to the following groups of products: vegetables (one-third of the total amount), fruits and grapes (18.6%), milk and dairy products (13.6%), and poultry and eggs (12.8%). In 2020, the total turnover value of agricultural products on Serbian green markets came at €328.5 million, with the Belgrade region accounting for  almost €150 million. In Sumadija and Western Serbia, the turnover was €56.6 million, in Vojvodina €57.8 million, and in Southern and Eastern Serbia €53.5 million. Due to the coronavirus pandemic, Serbian green markets were closed during the lockdown in the spring of 2020 to prevent the virus from spreading and e-green market platforms were introduced. (See our overview here.)

Serbian companies did well at “BIOFACH 2021” – online organic production fair 

The companies from Serbia which took part in the first digital organic production fair BIOFACH 2021 eSpecial had over 315 meetings with potential clients and the value of the contracted jobs is around €2 million, the Chamber of Commerce of Serbia announced. Nine companies presented themselves at the fair under the slogan “We Speak Organic”. They promoted their organic products in an innovative way, in a digital format, which attracted a lot of attention and interest from the partners. Organic products made of fresh, dried, lyophilised (freeze-dried) and frozen fruit, vegetables, grains and various kinds of jams were presented at the digital National Stand. Between February 17 and 19, companies Ecoagri Serbia Bela Crkva, Drenovac Arilje, All Natural Foods Nova Pazova, Menex Krusevac, Master Food Uzice, ITN Group and AWISS Belgrade, Interfood 60 Cacak and Frutorga Prokuplje showcased their offer at the online fair. The virtual presentation of the Serbian companies at BIOFACH eSpecial 2021 was organised by the Chamber of Commerce of Serbia with the support of the Swiss Import Promotion Program (SIPPO) and in cooperation with the National Association for Organic Production Serbia Organica and the Development Agency of Serbia

Organic food plantations growing despite COVID-19 

Despite the COVID-19 situation, organic food plantations in Serbia increased by 800 ha in 2020 from almost 2,200 ha in 2019. (See more in our Week 6 Newsflash over here). The Head of Organic production Department Mr. Raketic said that Serbia had around 7,000 organic food producers and that the organic food sector was gaining significance. He said various crops accounted for most of the agricultural land being used for organic production and that meadows and pastures made up the rest. Potential producers seeking to produce and market organic food must first sign a contract with one of the six controlling organizations authorized by the Ministry of Agriculture, he said. “It is a trend that exists in the EU as well. Organic production represents a good export potential and the upcoming period must be used to strengthen organic production of food. We must get that food as close to our consumers as possible so that they can see the benefits of organic products,” he said. The target group of consumers for organic food consists of young married couples, pre-schoolers and pupils, he said. 

Agriculture trade between Russia and Serbia increased

Agricultural products trade between Russia and Serbia increased by 7% to $516 million. Meanwhile, Russian exports to the country rose by 25% to $112 million, the Ministry of Agriculture of the Russian Federation sad in their statement. The co-chairmen of the Russian-Serbian Working Group on Agriculture Mr. Levin, the Deputy Minister of Agriculture of Russia, and Mr. Igic, Serbian State Secretary in the Ministry of Agriculture, discussed the development of agricultural cooperation between the two countries. Business representatives from two countries also took part in the event. “Russia is committed to further expanding mutual trade. Currently, the countries discuss supplies of Russian dairy products to the Serbian market. Besides, Russian retailers are interested in direct shipments of fresh fruit and vegetables from Serbia”, the Ministry said in the statement.

Another retail chain from Russia to enter the Serbian market

The Russian retail giant Torgservis – which entered the Serbian market last year by opening the MERE retail chain (more details in our Week 1 Newsflash) will soon also bring to the country its other retail chain, operating under the name of Svetofor, reports the Retail Serbia portal. Torgservis announced that its first Svetofor stores in Serbia would be opened in the north of the country, in Subotica and in Southern Serbia, in Krusevac on February 26. The first MERE store was opened in the outskirts of Belgrade at the end of 2020. Torgservis also operates in Germany, Romania and Poland. It is the biggest discount supermarket chain in Russia. In the upcoming years, the company plans to also start operating in Austria, Italy, the US, Greece, and other countries.