Top 10 agro developments in Serbia in 2020

A global pandemic, urban greening, horticulture development, Dutch-Serbian cooperation, regional integration – Many things happened in 2020 and the year cannot end without Top 10 lists, so here is ours.

Dear reader,

We would like to wish you a happy, magnificent and prosperous new year on behalf of the Belgrade-Budapest agriculture team:

Geert Kits Nieuwenkamp, Mila Mirkovic, Martijn Homan, Zoltán Szászi

A cart packed with freshly harvested apples is placed between apple trees in an orchard.
©Jill Wellington
One of Serbia's strongest and most competitive agro sectors is fruit cultivation.The crisis had a net positive effect on the sales of horticultural products. While Serbian agricultural products overall increased by 10.3% in 2020, the growers of fresh fruits and vegetables recorded a 20% in sales as a consequence of the effects of the pandemic on consumer habits.

We have entered the last week of 2020 and let’s put our hands on our hearts and be honest, most of us are probably feeling like this year cannot end soon enough. It has been a year that introduced changes in our well-developed behavioral patterns and presented new challenges and opportunities.

That is business lingo for “did its best to wreck everything in its path.” Our homes became our offices; we learned to maintain social distancing even with our friends and loved ones. We got used to wearing face masks and purchase our groceries online. Numerous online meetings were proceeded by virtual social gatherings and we ended our days by watching the same TV series world-wide. And by numerous online meetings we mean a tidal wave of Zoom conferences – Which was followed by a collective Zoom exhaustion. And let’s be honest, we mostly remember the ones where someone’s pet walked in front of the camera nonchalantly, unconcerned about humans and their important work things. We all followed the dynamic of the pandemic curve with eyes glued to phone screens, waited for the curves to flatten and hoped for the adequate remedy to be developed. And meanwhile, we decided to return to our roots by learning how to bake bread at home.

And yet, 2020 also brought about positive change. In Serbia, the agro sectors weathered the storm and multiannual cooperation programs, innovation initiatives, administrative streamlining, regional collaboration, the development of e-commerce as well as sustainability all remained on track and progressed.

In appreciation of all the positive developments, and to remain fateful to the end-of –the-year traditions of the internet, we thought we would make a list of our choices for the top 10 developments in agro sectors in Serbia. This is not a ranked list – Just a list of things that our team believes carry the most significance in terms of sustainable economic practices, international business and investment, opportunities and just plain quality of life changes for businesses, stakeholders, farmers, producers, and everyone involved.

So, in true internet fashion: Top Ten Agro Developments in Serbia in 2020. Number 6 will SHOCK you!

Photo of the new Hprti Center in Serbia
©Mila Mirkovic
The new Horti Center will provide farmers with access to novel techniques and practices.

1. Horti Center Adria
Construction works on the new HortiCenter Adria started in January 2020. We were there to mark the starting of the groundworks and share the enthusiasm with Serbian  (Balkan Greenhouse DOO) and the Dutch (KG Greenhouse B.V & KG Systems) stakeholders whose cooperation dates back to 2000. The HortiCenter was finalized in December 2020. This logistic/training center is going to be an exemplary of how the Dutch model of transferring knowledge to farmers and entrepreneurs is implemented. The Horti Center will not only be a showroom for the latest technologies and equipment but also a place where farmers from Serbia and the surrounding countries will be able to learn about sophisticated glasshouse technologies and the use of energy efficient and sustainable solutions in horticulture. We will be there to mark the official opening once the health situation in the country allows it.

2. Dutch solutions for the Serbian soft fruit sector
The  Netherlands Soft Fruit Solutions, a new PIB project started in June 2020 and it is a  crowning achievement to the numerous preparatory activities which took place throughout the past years. This project represents a 3-year-long partnership within the program Partners for International Business. Through the project, the Dutch soft fruit sector - which is a world leader in using the most modern techniques in a sustainable way - will contribute to the improvement of Serbian berry production. With this project the Netherlands aims to conclude cooperation agreements with Serbian soft fruit growers but also with relevant knowledge centers in the fruit sector in Serbia.

3. One PHYTO certificate to all CEFTA countries
The One Phyto Certificate initiative is a governmental streamlining achievement that is certainly worthy of being included in our list. The lack of mutual recognition of border documents has been seen as one of the most harmful market access barriers to trade in the CEFTA region. This is of particular significance when dealing with perishable products. For that reason, focus was on fruits and vegetables. CEFTA Parties developed a framework to address this barrier and establish a protocol for the mutual recognition of procedures and documents in conformity with EU requirements and in support of the implementation of the CEFTA Additional Protocol 5 (AP5), Article 24.

4. Green Corridors
The Western Balkans Six Green Corridors was the first joint activity of the custom services of CEFTA and it became operational only for one month (March-April 2020). Unfortunately, Serbia and the region of the Western Balkans are more experienced with crisis situations than the rest of Europe. This is one of the reasons why these countries can adjust more rapidly to such situations. In challenging times one must question the accepted reality because things are not going in the right direction. The loss of well-established market paths made businesspeople think in different ways. Regional initiatives that were progressing at a slow pace before were picked up instantly and became daily practice immediately. The “Green Corridors” were an example of a joint voice of the business community from the region of the Western Balkans. The COVID-19 pandemic brought uncertainty and economic turndown for economies in the CEFTA region, but opened up new opportunities as well. The Green Corridors along with the Green Lane initiative were an important step in combatting COVID-19 consequences and contributed to trade growth. Prompt implementation of the initiative of “Green Corridors” proves the necessity of further economic integration, growth and economic recovery of the CEFTA Parties.

5. E-commerce boom
The increase in e-commerce was a trend experienced in all countries worldwide. Serbia was no difference. In fact, the sudden boom in online shopping infrastructure and a rapidly changing consumer behavior towards online shopping was one of the unexpected changes in the Serbian agroeconomy this year. It was amazing to observe how in the times of crisis a business sector can often lead to an improvement in the community In April 2020, at the first peak of the pandemic in the country, online purchases in retail stores and at the farmer’s e-market recorded more that 400% increase y-t-y. Some of the leading retail chains in the country like Ahold Delhaize, struggled with the introduction of e-sales for years. And then, in a few days at the beginning of the lockdown, online shopping started spreading like wildfire. It is comfortable to buy groceries from an armchair in a living room and get them delivered to the front door – So it looks like the new shopping method is here to stay. The new challenge will be to improve logistics and arrange websites in such a way that they be more client-friendly, easy to search, easy to pick and choose. You can read more about this phenomenon here.

Photo rendition of ecommerce
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The unexpected e-commerce boom in the spring was one of the success stories of the year in the Serbian economy.

6. Digital agriculture
The digitalization of the agriculture in Serbia is quickly gaining momentum. Agriculture is a conservative sector and usually it takes its time to introduce new developments in daily practices. However, the global pandemic made Serbian farmers look for new technologies. This was supported by the Ministry of Agriculture and the state Agriculture Advisory Service. Serbian farmers now find themselves in an environment in which the economy can halt and restart at a moment’s notice, in which resilience, new business models, and perpetual adaptation will be paramount. For this reason, the Netherlands Embassy in Belgrade joined forces with the Serbian Ministry and organized an online training for agriculture advisors how to relay on the new ways of evaluation. Then again, strategic review should not be reserved only for crises and times of trouble but should be the common attitude in the spirit of innovation.

7. Urban greening
The Urban Greening Conference in March, co-organized by the consortium of the Dutch companies and the Netherlands Embassy in Serbia led to a business initiative that was crowned by the new project Dutch solutions for the greener cities in Serbia. Through the partnership of this PIB project “Green Cities”, the vast Dutch expertise on how green cities improve the environment, ensure rich biodiversity, reduce air pollution, ensure water storage, dampen noise will be shared with Serbian counterparts. We are sure this project will bring more color, especially the various shades of green, to Serbian cities.

8. Common regional market to bring the region closer to the EU single market
The Berlin Process is an initiative aimed at stepping up regional cooperation in the Western Balkans and aiding the integration of these countries into the European Union. It was launched on August 28, 2014, by the German Chancellor Angela Merkel. On November 10, at the Berlin Process Summit in Sofia, a plan to create a common regional market was discussed by the leaders of the six economies of the Western Balkans (WB6). The Leaders of the WB6 also agreed on a Declaration on Common Regional Market (CRM).

The purpose of the plan is to narrow the gap between the region and the EU and to bring the WB closer to the EU single market. The document "Common Regional Market – a catalyst for deeper regional economic integration and a stepping stone towards the EU single market" is an action plan covering the period between 2021 and 2024, created by the Regional Cooperation Council (RCC), together with the region's governments, the EU, CEFTA, Transportation Community and other partners.

The plan is in full compliance with the European Commission's Economic and Investment Plan, and is an integral part of the region's EU accession. The common regional market also includes a Mini Schengen initiative, providing for the free flow of people, goods, services and capital. More  information is available here.

9. Positive impact on fruit and vegetables sales

When looking back at the effects of the coronavirus pandemic on the agricultural industries in Serbia, the impact is different on different sectors. While the global pandemic pushed certain sectors to the verge of collapse, to others it resulted in a trade boom.

In the first half of the year, agricultural exports recorded an increase of 10.3% compared to the same period in 2019. Data of the Statistic Office of Serbia show an increase of exports of cereals of 9.8% and an increase of export of pome and stone fruits of 19.8%. In August 2020, frozen raspberries were the fifth most exported product from Serbia. In the same month the export value was €22.2 million. Serbian companies whose core business is the sales of fresh fruits and vegetables agree that COVID-19 positively impacted consumption and that they all recorded an increase in their business operations by 20%. The main export markets for these fresh items are Russian Federation, Czech Republic; Poland; Croatia and Italy.

Smaller fruit and vegetable producers and processors (different types of marmalades and traditional spreads) were mostly oriented towards the domestic market and online sales. At the very beginning of this health crisis, in March, individual vegetable producers (lettuce and other early spring veggies) were hit hard by closure of green markets and imposed lock down. Read more here.

Long term contracts with supermarket chains were definitely a blessing to producers of perishable goods at those times. Difficult times proved to be inspirational for alternative thinking and it resulted in a modernization of this conservative sector. Fruit and vegetable producers with the help of the Government officials and the society as a whole, turned to on-line sales. More on this here.

10. Serbian Grains

Serbia is the largest producer of agricultural and food products in the Western Balkans. In the CEFTA region, Serbia provides at least half of the regional production of different agro products. Its strongest sub-sector is fruit production, but Serbian plantations also make up more than half of the regional output of corn, barley, sugar beet and soybeans.

Serbia is the second largest producer of soybeans in Europe, just after Italy, with a potential to reach the leading position. In 2019, Serbia accounted for one-fourth of the total soya production in the EU. In 2020, this share will probably be higher. Assessing soya production from the level of euro-regions, Vojvodina ranks the first among more than 300 European regions. (More about soya production in Serbia here.)

Serbia’s total wheat crop production area was estimated to be around 600 thousand hectares in 2020, 5% higher than in the previous year mostly due to high wheat prices during 2019/20. Corn production for 2020/21 is estimated to be 8 million metric tons, almost 10% higher than the previous year. Serbia’s corn exports of 3.2 million tons in 2019/20 was a record. As of October 2020, Serbia had exported almost 460 thousand tons of corn, 87% higher than in October 2019. It is estimated that in 2020/21 Serbia could export up to 3.8 million tons and regain its position as one of the leading European exporters of corn.

A tractor plowing in a field in front of the backdrop of the setting sun.
©.
The events of 2020 made Serbian farmers more open to innovation, new methods and new technologies.

+1 Expected greenlight to Serbian apple trees entering the EU market

Serbia, with its sunlit plains and hillocks, is a fruit producing powerhouse – Which means that it comes as no surprise that Serbia is also strong in the nursery sector and a leading exporter of grafted plants. Serbian fruit tree saplings are regularly export to the Eastern markets of the former Soviet Union, e.g. Georgia and Azerbaijan. What does come as a surprise however, is that exporting to Western Europe is kind of a “moving target” because the EU’s changing regulations constantly shift to fit the changing European and global market. This makes business hard for growers, including several Dutch nursery companies which had transferred their entire production line into Serbia, keeping only the R&D functions in their branches in the Netherlands. In particular, the EU Regulation 2016/2031 and its implementing procedures in 2018 put the entire Serbian sector at risk with the introduction of the “high risk plants” concept regulating the trade of plant products.

In response to this, an umbrella organization was formed to represent the Serbian sector and with the specific guarantees of the Serbian Plant Protection Directorate, a “country dossier” was submitted to the European Food Safety Authority (EFSA). Stakeholders now expect that with EFSA’s presentation of the document to the European Commission, upon the finalization of the administrative procedures, the EU market will be finally open to Serbian apple trees. You can find out more about this case in our article over here.

Do You Remember The Taste of Strawberries?

As the weirdest, most tumultuous, most trying year in a long time is finally coming to an end, the advent of a new decade is presenting both new challenges and opportunities. Just like everywhere else, citizens, growers, traders, farmers in Serbia are eagerly waiting the end of the crisis. And yet as various agro sectors experienced the shock waves differently, the work continued to make Serbian agro businesses greener, more connected, more sustainable and more integrated into the economy of the Western Balkans region and the European neighborhood. Serbian field crop cultivation ended a highly successful season, and horticulture, the food sectors, agro innovation and logistics achieved many small victories from the development of e-commerce through border control streamlining, through Serbian-Dutch innovation projects to the laying down of the foundations of a new Horti Center in Serbia. As 2020 is ending, one thing is for certain: The agro sectors have proved this year that whatever the new decade has in store, Serbian agriculture is up for the challenge.