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Serbia's berry fruit sector has potential

News from the Berry Business Forum; Serbian trade relations in the region and in the world; food control law to be introduced; the weight of the mushroom trade and the new agriculture budget - Our weekly briefing on agriculture, food, and nature news in Serbia.

Serbia has great potential in the production of berry fruits
The Berry Business Forum (BBF), a specialized conference intended for professional growers and exporters of fresh berries, was organized for the third consecutive year by Agro Belgrade, with the support of the Ministry of Agriculture and the Embassy of the Kingdom of the Netherlands in Serbia.

Forum participants had the opportunity to exchange experiences, learn, and discuss topics of interest at the various panel sessions. Ministry officials and representatives of companies like Popovic & Popovic Law Office, Fall Creek nursery, and Floriva debated topics like plant breeder's rights and the importance of healthy certified planting materials. Aleksandar Pavlovic, Chief of Party at ACIDI/VOCA "Big Small Business Project," and Richard Schouten, Director of Fresh Produce Centre Nl, presented market fluctuations, opportunities, and requirements.

This berry conference was also the final event of the Netherlands soft fruit solutions project implemented in Serbia over the last three years. Experiences, advice, and lessons learned over the last three years were summed by Fred Evers, Project Manager. Koen van Ginneken, Regional Agriculture Counselor of the Embassy of the Netherlands, underlined that agriculture is a very important element in the bilateral cooperation between Serbia and the Netherlands, and the berry sector is its prime example. Mr. Ginneken added that both sides are convinced that by joining forces, the immense potential of the Serbian berry sector can be unlocked.

The Agriculture Counsellor added that even though the project is coming to an end, "it does not mean that the cooperation ends as well. On the contrary. Through this project, the Dutch and Serbian professionals have sown the seeds for a lasting relationship that is yet to reach full bloom," stated Koen van Ginneken. That was also the reason the Dutch companies participated at the Berry Forum, to cement the foundations of that relationship.

Serbia supports the concept of establishing a common regional market in the Western Balkans
On Monday, October 16, at the Berlin Process Summit in Tirana, Serbian Prime Minister Mrs Ana Brnabic said that Serbia supported the concept of establishing a common regional market in the Western Balkans. At a working session held as part of a Berlin Process summit to address the integration of the region into a single market to improve convergence with the EU, Ana Brnabic said implementing the concept would expand possibilities for the advancement of economic cooperation in the region and produce immediate benefits to all citizens. "In September this year, the Republic of Serbia concluded an agreement with the European Commission on participation in the EU single market program. That way, Serbia once again demonstrated a commitment to take part in the community's programs as a candidate country," said the Prime Minister. That will boost market competition and improve preparations for full integration of the internal market, she said.

Serbia and China sign free trade agreement
Serbia and China signed a free trade agreement this week, bringing the two countries closer together at a time when much of Europe is seeking to "de-risk" trading ties with China. A high-level Serbian delegation led by President Aleksandar Vucic attended the "Belt and Road Forum for International Cooperation" in Beijing on October 17, 2023. Four agreements between Serbia and China were signed in Beijing on the occasion, of which the most important is the free trade agreement that refers to 10.412 products from Serbia and 8.930 from China. Though the details of the agreement have not been made public, it will particularly benefit Serbian producers of honey, pet food, and apple producers, Mrs Jelena Tanaskovic, Minister of Agriculture, said. The FTA will be beneficial for the country's winemakers as well. The Serbian President, Mr Vucic said he hoped the agreement would enter into force by May or June next year. It is the fourth free trade deal China has struck with a European country, after Switzerland, Iceland, and Georgia.

How much does Serbia make use of its free trade agreements?
Serbia has a network of free trade agreements with various countries, offering its domestic producers privileged access to a market of approximately 1.3 billion people. The recent Free Trade Agreement with China, which has a population of over 1.4 billion, effectively doubles the size of the global market for Serbian products. The most important free trade agreements Serbia has include the South East European Free Trade Agreement (CEFTA 2006), the Interim Trade Agreement with the EU, the Free Trade Agreement with the European Free Trade Association (EFTA) countries, Turkey, Russia, Belarus, Kazakhstan, and the United Kingdom.

Reports from the State Statistics Office reveal that Serbia has a positive external trade balance (surplus) with ten European countries, worth around €1.9 billion. Montenegro is the leading country in this regard, with a surplus of €532.6 million.

However, Serbia has a negative external trade balance (deficit) with ten countries, amounting to a total deficit of €3.9 billion. The largest trade deficit was recorded with China (approximately €1.7 billion) and Turkey (€622.3 million). Dr. Dragana Mitrovic, a professor at the University of Belgrade, has cautioned that the Free Trade Agreement with China should be approached carefully to avoid growing deficits, similar to the situation with Turkey. The import of goods can potentially suffocate small and medium-sized domestic businesses that are crucial for economic dynamism. In addition to these existing agreements, the Serbian government is working on concluding Free Trade Agreements with Egypt, the Republic of Korea, and the United Arab Emirates. Serbia's international trade landscape is evolving, with various trade agreements impacting its economic relations with other countries.

Law on official control of food to facilitate export of goods
The Law on official controls in the field of food is expected to be adopted next year in order to introduce more effective supervision of all participants in the production chain and facilitate the export of these goods, stated NALED - the National Alliance for Local Economic Development. Until now, Serbia has not had such a law, and the main goal is to harmonize the monitoring system with the European Union's regulations and ensure an equal level of food safety.

It was stated at a meeting of NALED's Alliance for Food & Agriculture, which was held on the occasion of World Food Day, that the focus should be on food waste management because more than 99% of organic waste ends up in landfills. One of the recommendations of NALED and other civil society organizations is to make it easier to donate food that is about to expire.

"One of the ways to stimulate companies to donate surplus food is to abolish the value-added tax (VAT) on donations because, due to the high costs, they often give up on the action," said Slobodan Krstovic, Director for Sustainable Development at NALED. Branislav Raketic, the Head of the Unit of Food Quality & Labelling at the Ministry of Agriculture, reiterated that food safety is one of the most extensive legislative frameworks in the negotiations with the EU, where 10 draft laws were sent for consultations in Brussels, and seven are still being prepared. "In order to abolish VAT on food donations, we have to carry out all the preparatory actions to determine who are the donors, who are the intermediaries, who would be the ultimate recipients," explained Raketic.

Serbia's mushroom export in 2022 amounts to €25 million
Last year, Serbia exported mushrooms worth around 25 million EUR, the Chamber of Commerce of Serbia (PKS) stated. The exports vary from year to year depending on the weather conditions, as the climate has a direct impact on the mushroom yield every year. Serbia exports fresh, frozen, dried, and canned mushrooms. According to PKS data, dried mushrooms accounted for most of the income, as Serbia got €10 million for 282 tons. They are followed by frozen mushrooms, which were sold for €5.3 million, fresh porcinis earned the country €2.8 million, fresh girolles €1.8 million and canned mushrooms €1.6 million. Serbia sold €1.5 million worth of fresh truffles in 2022, and fresh and chilled mushrooms were sold for €1.2 million. The above-mentioned types of mushrooms were primarily sold in EU countries, with the USA and Russia following as significant markets.

Parliamentary Committee adopts agriculture budget for 2024
The Parliamentary Committee for Agriculture, Forestry & Water Management has adopted the proposed 2024 budget for agriculture amounting to approximately €900 million (104.7 billion RSD). The representative of the Ministry of Finance, Marija Filipovic, said at the committee meeting that the budget for agriculture is smaller compared to the revised budget for this year, which included, among other things, the payment of debts to farmers on various grounds for 2022. She said that the proposed budget is intended to include all increases in subsidies and incentives agreed with farmers, as well as subsidies for increased areas for payment (from 20 to 100 hectares).

"Of the total subsidy expenditures, the most has been set aside for agriculture, namely 48%, that is, €752 million. The biggest expenditures are for the Directorate for Agrarian Payments, €547 million, and that is the money for subsidies for the producers through premiums for milk, incentives for plant and livestock production, and similar activities," Filipovic explained. She said that slightly over €51 million was meant for the IPARD measures, around €68 million for the rural development measures, and slightly over €25 million for the Veterinary Directorate, that is, for the protection of animal health.

Committee President Marijan Risticevic said that such a budget with increased subsidies and incentives was requested by the farmers' associations that reached an agreement with the Serbian government after protests in the streets. The Committee supports the agreement, but Marijan Risticevic thinks that in the agriculture sector, the focus should be placed not on incentives but on improved support for the primary production of meat, milk, and eggs and the processing industry.


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