Serbia Newsflash Week 43

Delayed sowing, organic database, COVID-19 effects, raspberry certification - The week in Serbian agriculture

Freshly harvested organic vegetables on a table
Beeld: ©Jill Wellington
While there are seven thousand farmers in Serbia who grow organic food, today less than 1% of the total agricultural area is dedicated to organic production, which is why the Serbia Organica is building a new database to aid organic farmers and to inform customers on how and where to get green products.

Proof of origin required from raspberry producers

After Reuters published a story about a scam with Chilean raspberries on the Canadian market,  most traders started asking producers of these berry fruits for additional guarantees when it comes to the origin of the produce. As reported by daily Politika, additional guarantees were requested by French buyers and cold storages operating in Serbia. The “food fraud” protocol guarantees the origin of the fruits. Phytosanitary authorities increased control of export consignments. The certificate of conformity and Guarantee Document are documents proving that the goods have been produced in Serbia. These documents are providing additional confirmation but also are legally binding in case of any misuse. Raspberry growers in Western Serbia went one step further and protected the origin of their fruits by new hologram stickers printed by the Treasury. (More about this in our previous Newsflash)

Rainy weather postpones the sowing season

This month’s rainy weather has forced farmers to postpone the sowing of winter wheat, a wheat expert and a Chief of the Association of Serbian Grains (Žita Srbije) stated for the press.  He emphasized  that wheat had been sown on just 10 percent of the planned 600 thousand hectares of farmland. According to him, rainfall prevented farmers from preparing the soil for the sowing and slowed down the corn harvest. “Experts say that the best time to sow wheat, barley and rye is by October 25 but in Serbia that can extend into November,” Sakovic said. He said that the rising price of wheat (ranging from €0.16/kg to €0.17/kg) makes it more worthwile for farmers to sow this crop and added that he expects farmers to sow 50 thousand hectares more than in 2019. He mentioned that farmers in Serbia won’t sell their wheat as long as the price keeps rising and will then offer it in bulk when the price starts to fall. He also pointed out that the price and yield will be affected by the fact that some 50% of the declared seed will be used. 

(Hungarian farmers north of the border are facing the same problem. See this week's Hungary Newsflash here.)   

The biggest exporter of grains and oilseeds from Serbia

According to the Annual Report of the Association Serbian Grains, the total export of all grains and oilseeds in 2019 amounted to 4.3 million tons. When it comes to the most represented crop in the world, corn, the record 3.12 million tons of export in 2019 was a consequence of good corn yields for two years in a row (2018 and 2019), but also owes its results to the consistent exports throughout 2019. Of the 3.12 million tons exported, 2.17 million tons were shipped through the River Danube, which is 71.08% of total exports (58.33% last year). Most of the corn was exported to Romania, Italy, and Austria.

MK Group is the largest exporter of grains and oilseeds in Serbia. For the sixth year in a row, this company, led by Agroglobe and its members, together exported 689 thousand tons of grain and oilseeds, cementing its top exporter position. As in previous years, the company produced almost one-fifth of the total export of grains and oilseeds from Serbia.

MK Group (together with the company Agroglobe and its members) exported  635.2 thousand tons of corn in 2019. The company is also at the top in terms of wheat export, with a total of 44.1 thousand tons. After the previous year’s record 1.2 million tons, in 2019, only 318.9 thousand tons of wheat were exported. The poor export was caused by the problems with the quality of wheat, heavy rains and the yield in 2018 and 2019. An interesting fact is that in 2019, 182.4 thousand tons of soybean were exported, which is a record annual figure.

Corn and wheat are strategically important crops for the development of agriculture in Serbia. These two crops represent only a portion of the portfolio of the agriculture division of MK Group, which independently cultivates more than 15 different crops on 20 thousand hectares of land. 40% of the company’s cultivated area is systematically irrigated, which is significantly above the average in Serbia.

A bowl of freshly picked raspberries in the late afternoon sunshine
Beeld: ©.
As foreign buyers are now requesting additional guarantees for the origin of produce following raspberry scandal in Canada, certificates of conformity and guarantee documents now accompany Serbian raspberries.

Database on organic food production to be ready in a month

Organic food products are being cultivated on less than 1% of agricultural land in Serbia, which is a very small percentage compared to over 20% in some industrialized countries such as Austria, said Ministry of Agriculture, Forestry and Water Management official Mr. Raketic. At an online workshop organized last week by the Association for Promotion of Serbian Food, Raketic said that there were around 7 thousand producers in the Serbian organic food sector and most of them were small farmers. “Organic production will be increasingly important. With that in mind, the Ministry has increased subsidies and will be looking to increase them even further still, in order to diversify by introducing varying amounts of subsidies per hectare depending on the type of organic products,” the official said. The national organization for organic production, Serbia Organica is working on a database on organic production in Serbia. The database will be set up to protect organic producers in the country and to help consumers find food that is produced according to the organic standards. Serbia’s organic food exports, mostly sold in EU member states, are worth €25 million/year, which shows the significance of organic food production.

Brewers seek support due to COVID-19

With the aim of mitigating the impact of the COVID-19 pandemic, representatives of the Serbian Brewers Association have asked for a VAT reduction and subsidized commercial business space leasing for the HoReCa sector. The association includes Heineken Srbija, Carlsberg Srbija, Apatin Brewery and Sladara Soufflet Srbija. Talking with the President of the Serbian Chamber of Commerce, the association representatives stated stable excise duties were a precondition for growth, innovation, and new investment. Revising the excise duty calculation method would improve predictability and facilitate operations, without a negative impact on industry employees and consumers, securing stable budget revenue. It was noted that a special kind of support was needed to allow local farmers to increase hop production and thus meet local breweries’ needs.

World Bank to provide grants to Serbian farmers from spring 2021

Starting next year, Serbian farmers will receive grants worth $50 million from the World Bank, the Editor-in-Chief of Agrobiznis Magazine announced. “Next year will bring the best news to farmers. It will be one of the years with the largest funds for investment in agriculture available to us because, among other things, the World Bank will provide $50 million,” Djakovic stated for the national broadcaster. According to him, the project should start in spring 2021. “Farmers will be getting the money in advance – 50% of non-refundable investment in advance, 40% will be provided by banks, and 10% will be the farmers’ own funds,” he explained. As pointed out, there has never been a better opportunity to get more favorable conditions, apart from young farmers getting 70% of funds in advance.

No VAT on food donations would mean 1.2 million more meals per year

Abolishing VAT on food donations would mean an additional 1.2 million meals per year in soup kitchens. Those are the results of an analysis by the Coalition for Charity and the Forum for Responsible Business. According to data from 2018, nearly half million people in Serbia could not meet their basic living needs. “By abolishing VAT on donated food, those donations would increase by some €1.3 million, reaching close to €6 million a year. That would mean another 1.2 million meals in soup kitchens every year,” said Ms Miskovic of the Forum for Responsible Business. In her words, the results show that 90% of companies say the quantity of destroyed or discarded food would be much lower if there was a difference in the use of food products with labels “usable until” and “best used until.” Twenty EU member states require no VAT on food donations. Within the framework of the UN Agenda until 2030, which Serbia also pledged to implement, the plan is to reduce the amount of wasted food by 50% in the period mentioned.