Serbia Newsflash Week 47

IPARD fund allocations, subsidy decisions for 2022, employment legislation introduced, fodd prices rising, HORECA industry suffering, and the purchase of the biggest soya processor by an NL-based company - The week in Serbian agriculture

Plant saplings on top of stacks of coin.
©Nattanan Kanchanaprat
In 2022, Serbia will allocate €527.6 million for the subsidy budget of the Ministry of Agriculture, Forestry and Water Management, which is an increase of 17.5% compared to 2021.

Budget allocations for agriculture to be increased in 2022

The Parliamentary Committee for Agriculture announced that in 2022 the budget allocated for the Ministry of Agriculture, Forestry and Water Management will amount €527.6 million, which is an increase of 17.5% compared to the initial budget for 2021.

The plan is to allocate 81% of the budget of the Ministry for subsidy schemes. Representative of the Ministry of Finance, Ms. Dragana Djordjevic, stated that subsidies in the agricultural sector make up to 35.25% of all state subsidies.

The most significant portion of the funds, €272.3 million, is tied to direct payments in agriculture, €54.4 million is allocated for IPARD, and through rural development measures €42.5 million will be distributed.

Nearly €25 million paid to Serbian farmers from IPARD funds

So far, a total of 771 projects worth €129 million have been approved from the Instrument for Pre-Accession for Rural Development fund (IPARD), and a total of 458 projects worth close to €25 million have been disbursed by the end of October, stated Ms. Jasmina Miljkovic, Head of the Managing Authority of the IPARD Operating Structure at the Ministry of Agriculture.

“We already have visible results in the field: tractors, agro-mechanization, equipment, cold storages, farms that have modernized their production thanks to these funds,” explained Ms. Miljkovic at the panel What the EU funds bring to Serbian agriculture and whether farmers are informed, organized by the portal Agrosmart.

Ms. Miljkovic added that the IPARD II program period is nearing its end, but the implementation of the new IPARD III program period is starting.

“Through the IPARD III programme, Ministry is introducing new sectors - the fisheries and fish processing sector,” Ms. Miljkovic specified and added that the projected budget for the IPARD III program for the period until 2027 is €288 million.

The panel in Novi Sad was held as part of the Reporting on Agriculture and Rural Development project, which Agrosmart is implementing in cooperation with the OSCE Mission to Serbia and with the support of the EU Delegation to Serbia.

Law on seasonal workers suppresses undeclared work

The Minister of Agriculture, Forestry and Water Management, Branislav Nedimovic explained that the Law on Hiring Seasonal Workers in Agriculture is an ideal solution for suppressing undeclared work and that all the stakeholders, workers, the private sector, and the state are satisfied with it.

Speaking at the panel within the final conference of the Public-Private Dialogue for Development project, the Minister reminded that this Law was implemented on the initiative of the private sector, in cooperation with the National Alliance for Local Economic Development (NALED).

“There is no better solution than this law because the state benefits from it, the system of reporting workers is simple and there is no need for the inspection to chase unreported workers,” said the Minister.

Mr. Nedimovic explained that he understood that the issue of seasonal workers was problematic while he was a Mayor of Sremska Mitrovica. At that time, farmers were contacting him about the issue of paying seasonal workers, which was not done in a legal manner, as well as with the problem of injuries at work of unreported workers.

Mr. Nedimovic underlined that when he started performing the function of Minister of Agriculture, he turned to NALED for help and pointed out that this legislation also regulates the issue of hiring foreigners who come to the country for seasonal work.

“This law, which has been applied since 2019, was passed with the goal of making it easier for employers to register workers, and, by 2021 seasonal undeclared work was halved,” the Minister added.

Picture of people buying fruits and vegetables at a supermarket.
©Pixabay
The price of food continues to rise in Serbia - In September, the price of agricultural and fishery products was 41.4% higher than a year before.

Potatoes became the record holder in price increase

While the prices of cereals at stock exchanges around the world are constantly breaking records, in Serbia at the top of the list of agricultural products with the highest price increase is potato.

Surprisingly, potatoes were 89% more expensive in September this year than in the same period in 2020.

Last year, potato yields were excellent, and the prices were low. This year, the drought decimated the yield. Shortages of this commodity on the market reflected in better purchase prices after several consecutive years of losses, experts explained.

"Prices are currently good, but still limited by imports. Potato farmers currently get around 0.34 EUR / kg, while the wholesale price of imported potatoes is €0.38-0.45/kg”, states Professor Zoran Broćić from the Belgrade Faculty of Agriculture.

Price of food to keep growing as long as the pandemic lasts

The prices of the agricultural and fishery products increased by 41.4% in September 2021 compared to September 2020, as announced by the Statistical Office of the Republic of Serbia.

The increase in the prices of food is a consequence of the COVID-19 pandemic and, as long as it lasts, the prices of food – fruit, vegetables, oil plants and grains – will keep growing too, says Zarko Galetin, an agrarian analyst from Novi Sad.

According to him, the price of wheat is growing, reaching all-time highs, and, as long as the price per kilogram of wheat keeps going up, it will keep breaking the previous records. “Other prices of primary cultures are also growing at an unprecedented rate, but those prices are influenced by the trends in the world markets and changes at the exchange markets,” Mr. Galetin says and adds that the prices of vegetables are not affected by the trends at the foreign markets but that the high prices of cabbage, potatoes and other vegetables are due to the local circumstances.

The climate, more precisely, this summer’s great drought which reduced yields, has influenced the prices. “The ratio between the supply and the demand was not balanced, leading to the fact that a retail price of a kilogram of potatoes costs close to €0.85 whereas a kilogram of cabbage cannot be found at a price below €0.59, which has never been seen before,” Mr. Galetin explained.

Caterers face problems due to shorter working hours 

A fifth of the people in the hospitality industry lost their jobs and turnover was practically halved during the pandemic. Since the end of October, immunization certificates are needed for an evening stay in catering facilities. Initially, they were required after 10 pm, and most cafes and restaurants adjusted their working hours accordingly.

However, since last week, the passes are required from 8 pm. Many bars close their doors at 8 pm because their waiters and cooks have not been vaccinated. This divided both citizens and caterers, and put the latter in front of a new problem. The Belgrade administration told Deutsche Welle that between October 23 and November 17, 42 warrants were issued against guests without a Covid certificate, and only two misdemeanour warrants were issued to caterers.  

Sales of Sojaprotein to the NL-based ADM Group approved

The Commission for Protection of Competition has approved the purchase by the Netherlands-based company Archer Daniels Midland Europe (ADM) of the company Victoria Group from Belgrade (and its subsidiary, the biggest soya processing facility in Serbia, Sojaprotein from Becej). The document published on the commission’s website says that the ADM Group has reported that it had global revenues of around €52,691 million in 2020 and that it has no registered companies in Serbia. With the  sale of 100% of the Victoria Group, 89.2% of Sojaprotein from Becej has been sold indirectly as well.