Serbia Newsflash Week 3

Dutch investments, environmental protection, single market news, potato innovation and breweries in crisis - The week in Serbian agriculture

Beech forest canopy
©Gennaro Leonardi
Environmental protection and finding a balance between agricultural production and sustainability will be central issues for European countries in the coming decades. While the EU adopted the Green Deal as an answer to these questions, Serbia, as a member candidate country, takes part in the ambitious undertaking of tackling the issues of environmental degradation and sustainability by taking part in the Green Agenda for the Western Balkans framework.

The Netherlands ranks first among foreign investors in Serbia

After a record high inflow of €3.8 billion in foreign direct investments (FDI) in Serbia in 2019, a significant inflow continued throughout the last year, although there was a decline due to the coronavirus crisis, totaling in €2.9 billion, daily Blic reported. According to the data of the National Bank of Serbia (NBS), the Netherlands is the first among foreign investors, investing €411.8 million in the first quarter of last year. The Netherlands is followed by China (€332.2 million), Germany

(€214.2 million) and Austria (€101.2 million), whereas the other six among the top 10 invested less than €100 million each. The NBS explains that the Netherlands ranks first among foreign investor since numerous companies established their offices in this country and are managing their businesses from the Netherlands in order to make use of the liberal Dutch financial and banking system.

Single market is important for all Western Balkans countries

Establishing a single market in the Western Balkans is the most significant issue for Serbia, Chamber of Commerce and Industry of Serbia President Marko Cadez said to the national broadcaster, noting that Serbia had last year attracted 60% of the total FDI in the region. All economies in the region are important, said Cadez, adding that overall FDI in the Western Balkans had reached almost €3 billion last year. “The figure would have been much higher if we had had a single market for Serbia and other economies in the region, because all of them would profit from that,” Cadez told the RTS. He said Serbia had registered a 20% increase of food and agricultural exports and a minimal decline of industrial output in 2020 despite the coronavirus pandemic.

Eggs and poultry from Serbia might be on the EU market before the end of the year

By the end of this year (potentially even sooner), Serbia expects to obtain a permit to export eggs and poultry to the EU, writes portal E-kapija. “I expect Serbia to get a permit to export poultry and eggs to the EU market much sooner than the end of the year. Interest in poultry is currently much higher compared to eggs, but that is because Europe is facing avian influenza, unlike Serbia,” explained Ms Milakara, the Serbian Chief Veterinary Officer (CVO). According to her, the competent authority in Serbia is currently working on the documents necessary for the country to be on the EU’s list of poultry imports. The European Commission is expected to send a questionnaire soon. That means Serbia will sum up everything it has done so far, and once the Veterinary Directorate completes administrative procedures, the documents will be submitted. “We did everything that needed to be done. Rulebooks are harmonized with the European regulations, the treatment of Salmonella infection has been eliminated (as it was another obstacle to exports), and all laying hen flocks have been recorded. We have also made an app in which data is entered; vaccination against Salmonella is ongoing but not obligatory, and part of the cost is refunded from the budget” stated the CVO.

Small breweries in crisis

According to the Serbian Chamber of Commerce, there are some 40 registered craft breweries in the country, including 10 in Belgrade alone. The craft breweries do not produce sufficient quantities but the range of beers expands the offer on the market. Even though all the breweries in Serbia can produce about 12 million hectoliters, annual production has been around five million for the past few years. The craft breweries have less than 1% market share, the National Rural Renewal Team said. It said that the pandemic has hit breweries hard despite their profits and good business results in the past few years. “According to our estimates, small craft breweries have seen a sales drop of 80-90 % because their sales through the catering industry and festivals did not happen this year. 5-6 of those small breweries have shut down and more will close,” the portal Biznis was told by Mr. Siljanic, the President of the Association of Small Independent Breweries of Serbia.

A glass of beer placed on a barrel in a cellar.
©StockSnap
Craft beew brewing is a budding sector in Serbia. However, independent small breweries have been hit hard by the pandemic crisis. According to their sectoral alliance, small breweries saw a stunning 80-90% drop in sales since the beginning of the crisis.

Innovation Center produced “elite” potato seeds

The Innovation Center, located in Guca, the potato production powerhouse of Serbia, has produced a new, “elite” type of potato seeds. “Next year, for the first time ever, around 50 ha of land will be sawed with potato seeds produced in Serbia”, states proudly the leader of the project, professor Brocic from the Agro Faculty in Belgrade. Serbia spends around €5 million annually on the import of potato seeds since there was no relevant institution is Serbia that produced elite type of potato seeds. The import resulted in diminishing local potato varieties, thus varieties “Jelica”, “Dragacevka” and “Universal” are not present on the market of Serbia reports Serbian news portal  Vestirbija. Ware potato produced in Serbia are mostly produced from Dutch and to some extent, German potato seeds.

Green Agenda: EU-Serbia environmental cooperation

The European Union, slightly over a year ago, laid out the European Green Deal – a joint plan for sustainable development and environmental protection that intends to reach its targets by 2050. The plan includes more than 27 EU countries, and Serbia has in the last year behind put in a lot of work into different aspects of the Deal. Meanwhile, the COVID-induced economic crisis has put even more focus on the need for a circular economy, while the digital 2020 highlighted the importance of new technology and connectivity opportunities. Head of the EU Delegation to Serbia Sem Fabrizi pointed out the importance of the Green Deal for both the EU and Serbia: “The EU reached a consensus on the Green Deal as the key element for economic recovery and growth and we would like Serbia and other candidate countries to take part in it as much as possible. The economic and investment plan of the European Union and the Green Agenda for the Western Balkans were adopted at the recent Sofia Summit and they are important building blocks in further strengthening the already strong cooperation between the EU and Serbia.” (More on the Green Agenda for the Western Balkans here and further information of the Sofia Summit can be found here.)

Ambassador Fabrizi also talked about the importance of environmental protection and ecology for Serbia's EU accession as well as the need for Serbia to adopt the Law on Climate Change and the Strategy on Carbon Reduction. “Ecological transition of Europe can be fully achieved only if all of us take measures swiftly. I am glad that Serbia and the EU share this common goal. I am looking forward to making a contribution to supporting Serbia in this regard,” the Ambassador said in his interview for Cord magazine.

EBRD invested €679 million in Serbia in 2020 

The European Bank for Reconstruction and Development (EBRD) has announced that it supported the economy in Serbia in 2020 with new investments worth €679 million. The statement specified that €576 million went to the private sector and small companies, through direct funding or through financial institutions. Also, through the program for the recovery from the consequences of the crisis caused by the coronavirus pandemic, EBRD allocated €145 million to commercial banks for maintaining the liquidity of SMEs, and that program will also be active in 2021. It also secured a loans for the state strategic projects like road infrastructure, digital infrastructure and funded the project of the construction of optical broadband network in rural areas.