Serbia Newasflash Week 9

The far-reaching effects of the war in Ukraine, farmers suspending their protest against the government, agro digitalization streamlines employment administration, training started for farmers on precision agriculture farm management, and the Serbia-Hungary business forum - The week in Serbian agriculture

Workers harvesting strawberries in a plantation.
Through the digitalization and streamlining of administration duties around employment, 48% of seasonal workers are now registered online through NALED's new electric system.

Cereal prices reach record high 

Due to the war in Ukraine, the prices of basic cereals, corn, and wheat on the Serbian and world stock exchanges have reached a record high, stated the Director of the Product Exchange in Novi Sad, Milos Janjic. Mr. Janjic explained for the BETA news agency that the price of a kilogram of corn on the Product Exchange is at a record level of €0.29, with value-added tax (VAT) while a kilogram of wheat is €0.30. Soy is €0.73/kg with VAT, but, as Mr. Janjic explained, it is not traded much because it is more expensive than wheat and corn, so traders have focused on those two types of cereal.

The price of mineral fertilizer is also rising again on the Product Exchange. A kilogram of urea cost €0.9 in January, it was €0.79 two days ago, and almost €0.81 yesterday. As Mr. Janjic said, corn and wheat are also rising in price in double-digit amounts on the world stock exchanges.

On the Chicago Board of Trade, wheat has increased by almost 26% since last Monday, and corn by 13%. On the Paris Stock Exchange, wheat increased by 29%, and corn by almost 34%. “There is a sense of catastrophe in the commodity markets, and speculation has returned,” Mr. Janjic said. He added that if the war in Ukraine continues, it is possible that financial funds will enter the market, because the purchase of these goods represents a lower risk and higher earnings than some other investments. In that case, cereal prices could increase even more.

Serbian Chamber of Commerce developing new program to mitigate the impact of the war on businesses  

Last Friday, the Serbian Chamber of Commerce (PKS) has formed a Crisis Response Team in order to assist companies that have business operations in the countries involved in the conflict.  The PKS will undertake urgent measures to mitigate the consequences caused by the war in Ukraine, referring to the collection of receivables and transport. As they announced, the Chamber will soon prepare a concrete and realistic proposal of measures to aid the companies most endangered and send it to the Serbian Government. The President of PKS, Marko Cadez, stated that they are in constant communication with businesses, and that solutions are being put together for the problems of companies in the field and for payment transactions.

Sufficient quantities of food and energy secured

Serbian President Aleksandar Vucic said that there were no indications there would be market disruptions as a result of the conflict and that Serbia had procured sufficient quantities of energy and food. President Vucic stated that the purchased quantities of wheat and corn were enough for the period of the next six months, and that 30 thousand tons of additional quantities of flour were purchased.

The President also added that sufficient quantities of rice, oil, salt, long-life milk, and sardines were also secured and mentioned the purchase of an additional 3 thousand tons of milk powder. “We are waiting for confirmation for additional quantities of powdered milk because there is a shortage on the global market,” added Mr. Vucic.

Serbia is now trying to get milk powder from China. When it comes to energy, the President said that there is enough diesel, gasoline, fuel oil, crude oil, jet fuel, and other reserves for supplying the country with energy from 13 to 22 days, depending on the energy source. He added that the Government would have to invest another €117 million to fill the warehouses to 100%. “Energy prices are high, but we will provide the necessary quantities,” President Vucic said.

Serbian farmers to stop the protest until the end of the elections

The Association of Farmers of Banat has made a decision to stop their protests due to unfulfilled demands of the Serbian Government until the end of the election campaign, said the President of the association, Dragan Kleut. Mr. Kleut said that the decision was made in consultation with other farmers’ associations in Serbia, which are not satisfied with the Government's offer to help them with a one-time payment of increased subsidies per hectare from €34 to €68.

“We are very disappointed, but we will stop the protests until the elections are over, and we will present our demands to the new Serbian Government,” said Mr. Kleut, who also called on farmers to go to the polls and vote “keeping their destiny in mind.”

Farmers demanded the payment of subsidies of €200 per hectare, and the abolition of excise duties on fuel in order to reduce its price. They asked to receive the recent subsidies that the Government had not paid on time and the control of the import of milk powder and meat. “Out of five requests for the Government, only one was offered to be fulfilled, a one-time increase in subsidies. For the request for payment of debts on the basis of unpaid subsidies, we received only a promise that they would be paid mid-March,” Dragan Kleut said.

Close-up picture of plants growing in a field.
Beeld: ©Jan Kopřiva
45% of Serbia's territory is farmland, yet production is often ineffective and deteriorating. A new program in the Digitalization of municipal land management project now focuses on introducing farmers to the use of the AgroLIFE platform, helping foster digital planning and management in farming.

Precision agriculture in land management

More than 45% of Serbia’s territory is used as agricultural land, and practice has shown that due to the lack of information and improper processing, the quality of agricultural land is deteriorating. Farmers from five towns (Sombor, Indjija, Vrbas, Backa Topola and Subotica) in Vojvodina, Northern Serbia have been introduced to the use of AgroLIFE platform through five interactive trainings, as a part of the project Digitalization of municipal land management.  

The AgroLIFE platform enables a more efficient planning and management of agricultural production, using modern weather stations that provide data on microclimate conditions and forecast weather conditions with 90% accuracy. The project is being carried out within the developPPP program conducted by the National Alliance for Local Economic Development (NALED) as a part of the GIZ Serbia ( development partnership. 

Online registration of the seasonal workers in agriculture

Almost 60 thousand seasonal workers in the agricultural sector have been registered in the electronic system for simplified application since the beginning of 2019, the National Alliance for Local Economic Development (NALED) stated.

NALED's analysis of the first three years of reform in this sector shows that the number of registered seasonal workers is growing from year to year. During 2019, 28,407 workers were registered, in 2020, 32,906 registered workers were noted, and in 2021 as many as  38,501, or 48% of seasonal workers were registered in the online system. In comparison, in 2018, just over 3.500 workers, or about 5%, had a contract.

“The success of the reform lies in its efficiency because the procedure of signing contracts on paper and having to visit governmental institutions to physically handle paperwork has been replaced by registration via the seasonal workers’ portal, or mobile application that require just a few minutes,” said Jelena Radnovic Vukcevic, the Head of the NALED Agriculture and Health Unit.

The analysis of the data of the portal shows that 583 employers used the electronic application of seasonal workers, mostly from the territory of Vojvodina (Novi Sad, Sombor, and Subotica). For the workers they hired, they paid 7.6 mn EUR into the budget in the name of taxes and contributions. Demand is highest for cleaning, peeling, sorting, packaging products (617.000 engagements). This is followed by apple picking (482.000) and land preparation, planting, sowing, and harvesting (317.000).

Serbia-Hungary business forum

The Serbia-Hungary Business Forum with the attendance of 100 companies was held in Budapest the first week of March. The organizers of the Forum, which was held within the 12th session of the Joint Commission for Economic Cooperation between Serbia and Hungary, were the Serbian Chamber of Commerce and the Hungarian Export Promotion Agency (HEPA). Serbian Minister of Economy, Andjelka Atanaskovic, who opened the forum, pointed out that Hungary was the third trade partner of Serbia in 2021 when it comes to EU member states. She added that both Serbian and Hungarian businesspeople can expect full support and assistance in the realization of every investment in Serbia.

The Deputy State Secretary in the Ministry of Foreign Affairs and Trade of Hungary, Istvan Joo, pointed out that all the necessary preconditions for the further strengthening of bilateral economic relations were fulfilled and emphasized the excellent results achieved especially in the field of infrastructure, and railway connections between Serbia and Hungary.