Serbia Newsflash Week 41

Cumulative climate losses, foreign investment into the confectionary industry, international trade streamlining, the transformation of the bakery industry, subsidies for rural living, and Green Deal funds for Serbia - The week in Serbian agriculture

Serbian countryside
©Valentin Salja
In 2020, during the pandemic, more and more Serbians started to migrate from urban centers to the rural countryside. A governmental subsidy program was put into place to aid couples under 45 buy real estate in these areas.

“Barry Callebaut” opens chocolate factory in Novi Sad

The Barry Callebaut Group officially opened their chocolate factory last week in Novi Sad. The construction of the factory in Novi Sad began in March 2020. The factory is to produce 50 thousand metric tons of chocolate a year, and it will have about 100 employees.

The investment is worth €55 million, and the Swiss company received subsidies of €14.2 million from Serbia. Barry Callebaut is the largest single cocoa processor in the world, based in Zurich and the Novi Sad factory will serve as a regional hub from which Barry Callebaut can access the fast-growing chocolate markets in Southeast Europe. Read more about Serbian confectionary industry here.

Excise duty on peanuts decreased

The customs duty on imported peanuts has been reduced from 5% to 2%, resulting in annual savings of up to €300 thousand to the Serbian confectionery industry and peanut producers. This will also lead to a more competitive position on the international market for the domestic industry. The cut in excise duties is the result of a successful lobbying by the confectionery industry section at the Serbian Chamber of Commerce aimed at the ministries of Agriculture and Finance. The duty on peanuts in Serbia was 5%, while imports into the EU were exempt from this duty.

Companies mostly import peanuts from Argentina and India, countries with which Serbia has not signed free trade agreements, so there are no import benefits for domestic confectioners and producers of peanut products. Customs duties of 5% increases the price of the finished product by about 4%, and by reducing it to two percent, it creates conditions for Serbian companies to find their place and strengthen their positions in international trade. A total of around 9.500 tons of peanuts worth between €12-13 million is imported to Serbia annually.

Huge losses due to drought

Last year, out of a total of 3.4 million hectares of arable land in Serbia, only 52,441 hectares (1.5%) were irrigated. According to the data of the national Bureau of Statistics, that is 11.9% more than a year earlier, when 46,863 hectares were irrigated.

However, this slight upward shift of 0.1% still puts Serbia significantly behind the global average of 17%. Agrarian analyst Mr. Branislav Gulan says that the greatest damage in agriculture in recent decades is due to drought, and that analyses show that from 1990 until this year, which was extremely dry, there were as many as 10 drought years in Serbia. “From 2000 to 2021, they caused more than $6 billion in damage to agriculture. Damage from droughts in 2003 and 2007 was $1 billion each, in 2012 the drought destroyed crops worth $2 billion, and in 2014 and 2017 $1.5 billion each, or a third of the anticipated production”, Mr. Gulan said.

Fight against pesticides by the National Reference Laboratory

The National Reference Laboratory, part of the Ministry of Agriculture, is the umbrella laboratory in the process of food safety testing in Serbia. Analyses conducted in this laboratory are final and leave no room for further discussion. The laboratory is testing food products on remains of pesticides that currently represent the biggest risk for public health. Besides pesticides, they test food stuff on the presence of heavy metals, micro toxins and other contaminates.

Director of the NRL, Mr. Nenad Dolovac explained that EU regulations and local rulebooks used in food safety analyses are completely harmonized. Harmonization of local and the EU regulations in food safety is important for the health of the general public but also for the export of Serbian products to the EU market. The Director reminded that the EU invested €7.5 million in the construction and equipping of the Serbian Reference Laboratory.

Small bakeries no longer lucrative   

Small bakeries with homemade baked goods in Serbia are struggling with a shortage of labor and competition with large retail chains, Infostud writes. Trends have changed, so instead of “burek” and pastry masters, bakeries now employ workers who bake frozen dough that is of lower quality than the homemade equivalent.

From January to September this year, employers, through employment portal “Infostud”, published a total of 94 job ads for the position of a baker. The lowest offered salary was €300, and the highest was €1020, offered by a bakery in the Belgrade. “At the beginning of the eighties, there were 27 small bakery shops in Belgrade, today there are less than ten. Now, pie shops, sandwich shops, and confectioneries are being opened. The tradition of independent craft pastry shops is dying out, and the trend is to buy baked goods in large retail chains, which are far from the quality it used to be”, says Mr. Zoran Grubanoski from the Union of Bakers of Serbia. Mr. Grubanoski warned that if the state does nothing, the craft will become extinct within the next five years. “Until 2010, this job was excellent, and since then, it has been a struggle” said Mr. Grubanoski, adding that the position of the bakery is additionally affected by the current increase in the price of raw materials.

Wheat ears
©Picjumbo
Last year, only 1.5% of Serbia's arable lands was regularly irrigated. Professionals estimate that between 2000 and 2021, droughts have caused damages worth $6 billion in Serbia's agriculture.

Serbian food products at Anuga Fair

A broad spectrum of Serbian products has been presented at Anuga, the leading global trade fair for food and beverages which took place in Cologne, October 9 - 13. With the support of the Chamber of Commerce and the Serbian Development Agency, local companies showcased their exports for the seventh year in a row, using two pavilions, one for ready-made products with 14 Serbian companies and the other for frozen foods, where 13 frozen food companies presented their products.  

Zorana Delic from the Serbian Chamber of Commerce explained that by participating at Anuga, the Serbian companies tried to promote and boost Serbian food exports to Germany and the European Union at large.

More subsidies for purchase of houses in the countryside

With the rebalancing of the central budget, new funds will be allocated for the program of buying abandoned houses in the countryside, stated Mr Milan Krkobacic, the Minister of Rural Welfare. Minister Krkobacic said that budget for the initiative, €4.2 million, which the Government of Serbia allocated in June, has almost been entirely spent, and underlined that “the Government of Serbia will allocate additional funds in the budget revision. The message to young people is that the more persistent they are when looking for houses - the more the state will be persistent in allocating funds”, the minister said.

Mr. Krkobacic mentioned that married couples up to the age of 45 can count on non-refundable funds of up to €10 thousand in RSD equivalent for the purchase of houses in rural areas in Serbia. According to official data, there are 250 thousand unmarried men under the age of 45 in Serbia and 100 thousand unmarried women under the age of 45, which is why it was decided that there should be an age limit. After the COVID-19 pandemic broke out early in the spring of 2020, the number of families moving from urban to rural areas increased. The improvement of rural infrastructure including  broadband internet are prerequisites for this trend to continue.

Serbia recycles only 4% of its waste

Data from the European Statistical Office (Eurostat) show that Serbia reuses only four percent of the total treated waste, while the share of reused waste at the level of the European Union is 49.4 percent. Only Romania (3.5 percent) and Bulgaria (2.9 percent) have a smaller share of reused waste than Serbia, while Slovenia, with a share of about 93 percent, is far above the European average, as is Hungary, with about 69 percent. The data refer to 2018, the last year that was statistically completely processed. The President of the Expert Council of the Centre for Environmental Policy and Sustainable Development (CEPOR) of the Faculty of Political Sciences, Professor Darko Nadic, believes that "very poor reuse of waste in Serbia is a consequence of the situation where Serbia only lately started using treated waste as a new type of resource." He expects that data for 2020 will be different, since the tendency towards consumerism has decreased. In addition, the process of ecological transition of the society in terms of legislative activity has been intensified, as a consequence of the EU accession process.

€9 billion for the Green Deal in the Western Balkans

The economic investment plan for the Western Balkans includes financial support to help achieve the goals of the Green Deal for the region, which amounts to nine billion euros in non-refundable aid, stated the Minister for European Integration of Serbia, Mrs. Jadranka Joksimovic, at the conference Strengthening the Circular Economy in Serbia - Nordic Experiences.

Minister Joksimovic explained that the funds were intended for a seven-year period, and that in addition, the Western Balkans were provided with an accompanying guarantee scheme amounting to an additional €20 billion. “The green transition must be fair, as defined and prepared by the EU, so that the funds and mechanisms that are available to Member States in this process, are available to us as an associated country as well”, the minister said. According to Mrs. Joksimovic, disbursing the funds will be in each case conditional upon complete project documentation prepared by the Serbian administration, and this will contribute to the acceleration of the entire region towards the goals of the Green Agenda. “As for the circular economy agenda itself, it was revised in March 2020 at the EU level, and one of the tasks is for the countries from the Western Balkans to prepare their agenda, which Serbia will do in 2023”, stated the Minister.