Agribusiness Serbia 2022

INTERVIEW

MILAN PROSTRAN, AGRICULTURAL ECONOMIST

Serbia Is (Nonetheless) A Lucky Country

Serbia is a country of great natural resources that has good and well-educated farmers. That’s why, during these global crises, there are no major food supply problems and Serbia is managing to provide enough food for both its own needs and those of neighbouring countries

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he war in Ukraine and sanctions imposed against Russia have served to remind us once again that the agricultural sector is of strategic importance during both peacetime and war, as our interlocutor, agricultural economist Milan Prostran, likes to say.

One of Serbia’s preeminent experts in this field, during this conversation with him we touched on new technologies and the enduring poverty in Serbia that ensures the level of meat consumption in our country remains below that of the former Yugoslavia. As a recurring theme of this entire interview, and a way of better understanding the context in which farmers and the food industry operate, one of our interlocutor’s statements stand out – when he states that, over the course of more than 20 years, he’s failed to convince the authorities, from any part of the political spectrum in Serbia, of the need to invest more in this sector. Perhaps this crisis provides an opportunity for that.

“Food for the future” is among the key sectors singled out within the scope of smart specialisation processes as representing a competitive advantage for Serbia. Are you encouraged by this when it comes to the development of agriculture and the food industry in Serbia?

Serbia, as an agrarian country, has fewer worries than many other countries when it comes to food production. In the former Yugoslavia, Serbia produced 60 per cent of total food required for all Yugoslav republics, while today it exports surplus production 2

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and the turnover generated from exports of agricultural products exceeds four billion dollars and is heading towards five billion.

On that front, Serbia has no major problems supplying its own population with food during these global crises, while it also participates significantly when it comes to serving the basic needs of the countries of the region for food and agricultural products.

On the other hand, Serbian agriculture has yet to receive the respect it deserves from the government, from the creators of budgetary policy and incentive systems, and we shouldn’t overlook the fact that this

sector sustained great devastation during the privatisation process. We should also add to this the difficulties experienced by associated industries that ensure that, today, our farmers have major procurement problems with mineral fertilisers, plant protection products, agricultural machinery and spare parts, while there are also global issues, such as the price of oil as an ever-increasing cost.

From the standpoint of unexploited potential, our country is dominated up to 78 per cent by small farmers and agricultural smallholdings with estates of less than 0.5 to five hectares, which is also our critical

FUTURE

INTEREST

TURNAROUND

A task for the years ahead is to utilise the great potential of small and medium-sized producers in the function of increased food production and increased income

Generating an income must be the basic motivation for engaging in agriculture, because no one should engage in agriculture for some patriotic reasons

This crisis is an opportunity for politicians to change their opinions and for agriculture to receive the respect it deserves from the government, as the creators of budget policy and the incentive system

point to an extent. That is a task for the years ahead: to utilise this great potential of small and medium-sized producers in the function of increased food production and increased income.

Nonetheless, regardless of all of its problems, Serbia is a lucky country of great natural resources that has good and well-educated farmers and which manages, despite the circumstances, to provide enough food for both its own needs and those of neighbouring countries.

budget of Serbia had a billion euros a year for the needs of agriculture, we could do much more. Unfortunately, we won’t have higher investments and more intensive programmes for agriculture without a higher agrarian budget. This correlation must be established.

of our agricultural cooperatives.

This would also enable the better utilisation of resources and secure the long-term security of farmers, because we mustn’t forget that agriculture is an open-air factory and that it carries huge risks regardless of the availability of modern devices and technologies.

This is also a story of education to a certain extent. We have developed education, several agricultural colleges, a few good agricultural secondary schools, and it’s particularly important that a large proportion of these young people are being educated to work on their own farms, which guarantees more intensive production, higher yields and higher income.

You are of the opinion that the agrarian budget’s share of the national budget of the Republic of Serbia should correlate to agriculture’s contribution to generating the country’s GDP. Why is this still not the case?

The agrarian budget is 50 per cent lower

Agriculture is today a sector where new technologies are being applied more than ever – from smart tractors to artificial intelligence. How can Serbia handle such technological changes if 80% of farmland is still in the hands of small owners?

These problems aren’t easy to overcome.

U.S. and EU experience shows that the state must have a professional service that’s better organised and 100 per cent funded from the state budget. In the U.S., for example, the

When we liberalised the agricultural sector, we also made it possible for foreigners

In today’s difficult conditions, agricultural resources have been shown to be the most precious, and countries that have large areas of well-utilised agricultural land are the happiest. When things are established in such a way, it’s clear that we will suffer for a while due to the sale of land to foreigners, but it is what it is than deserved, which I’ve been trying to convince the authorities of for more than 20 years. Although a law was passed stipulating that the share of the agrarian budget mustn’t be less than five per cent of the total national budget of the Republic of Serbia, that five per cent has never been achieved. Over the last 10 years, according to the new calculation methodology, agriculture has contributed a share of around 9.5% to the country’s social product, while I’ve always insisted that it should be at least 10 per cent. If that was the case, instead of 400 million euros, its share would amount to a billion euros, and if the

optimal farm size is 1,000 hectares, because that reduces costs and increases productivity, which is why, in our country, trust is again being placed in the cooperative system or the communal system. Small, independent farmers can’t compete on the market if they aren’t backed by an association that will protect them and unify them in an economic sense, which will have both educational and lending functions. That unification is key, provided we don’t disregard the weaknesses of the former cooperatives and we restore everything that was positive. This is also how the EU works, via so-called cooperatives that are the equivalent

to own land, prompting great fears that all our land would be bought. What actually happened to the ownership structure of farmland in Serbia?

This was the consequence of a mistake made during the signing the of the [EU] Stabilisation and Association Agreement, when we were purportedly promised that we would become a full member of the EU in 2016. We conceded to the 2008 agreement allowing the sale of land to foreigners after only four years, despite us not even being close to joining the EU. Unfortunately, the SAA cannot be changed.

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INTERVIEW The largest swathes of agricultural land still remain in the hands of domestic owners, but there are also large areas held by companies from Arabic countries, while there are also Croatian landowners. The latest major transaction was the sale of PKB to company Al Dahra.

Do you expect the war in Ukraine and the sanctions imposed against Russia to substantially change the way all countries, including Serbia, view agriculture as a strategic resource - as you said, during both war and peacetime?

I think that many countries that don’t have developed agriculture, or don’t have enough agricultural products, will finally change their attitude towards this resource. When sanctions were imposed against Russia in 2014, it’s agriculture was very underdeveloped, even in parts of the country with excellent conditions to do so. They quickly changed their agrarian policy and, to the surprise of everyone, Russia became one of the world’s largest producers of wheat, barley and rye, and one of the largest fruit producers. And today many countries, including us, I hope, will change their stance regarding agriculture. It is important that this need is grasped by the politicians who make decisions, and the crisis is an opportunity for that.

What will this war change when it comes to agricultural production and prices in our country?

Prices will rise and we, unfortunately, won’t be able to influence that much, primarily due to the global market, or due to the high prices of energy, mineral fertilisers, plant protection products, agricultural machinery, spare parts and other outgoings that are included in the cost of agricultural products. Wealthy countries will be able to use subsidies to compensate for prices, i.e., to use budget contributions to help agricultural producers slightly reduce the prices of their products.

Another way is for farmers not to use some of these components, to save on additions, but that would reduce their yields, and thereby also their offer, which would again result price hikes.

In my opinion, prices will continue rising until autumn, until the harvest is finished.

If the wars stop, if the prices of additional 4

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In my opinion, prices will continue rising until autumn, until the harvest is finished. If the wars stop, if the prices of additional components fall, a better period will begin in 2023 components fall, a better period will begin in 2023. We mustn’t forget that these two warring countries, Ukraine and Russia, are responsible for more than 80 per cent of the world’s total production of sunflower oil and more than 25 per cent of world wheat production, and that can’t help but be reflected on the market.

We used to consume 65 kilograms of meat per capita annually, while today that total has fallen to 52 kilograms, which is significantly below the EU average. Should we rejoice in that as part of the transition to healthier lifestyles, or is it still a sign of poverty?

During the time of our crisis, in the 1990s, meat consumption fell from 65 to 30 kilos.

That total has improved slightly over the past twenty-odd years and we’ve now reached a level of 52 kgs per capita, but I don’t believe we’ll return to old levels anytime soon. We have a large number of ‘national kitchens’ [to feed the poor], which – as my parents told me – didn’t exist even in the post-WWII period, when the country was devastated.

We have a lot of poor citizens who survive

on basic foodstuffs and for whom meat is inaccessible, even the cheaper categories of meat. Beef today costs more than 1,000 dinars a kilo, veal costs more than 1,500 dinars, and quality chicken meat costs more than 500 dinars.

Does it make sense today to promote “meat produced in Serbia” if our livestock farming is under threat?

The numbers are terrible... In 1975 we had 2,250,000 head of livestock, while today we have approximately 800,000. Livestock is in a great crisis, and numbers of all domestic animals, with the exception of goats, are facing major decline. People have forgotten that destroying livestock also destroys agricultural land, because we have no organic manure and we don’t sow grass, unlike the Netherlands, which is important for recultivating land. You know, for example, that irrigation is extremely inefficient, and even harmful, without manure, because runoff/ leaching turns agricultural lands into barren wastelands or deserts.

I’ve been to Israel twice and seen how irrigation and manure turns deserts into fertile land. And they wouldn’t be able to do that without developed livestock, fantastic farms and the highest production of milk.

Livestock farming is the engine that drives agriculture, as shown by the fact that the value of European agriculture is set 70 per cent through livestock and only 30 per cent through plant production. Unfortunately, that ratio is flipped in our country, so livestock accounts for only 30 per cent of agriculture.

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COMMENT

VLADIMIR VASOJEVIĆ, COUNTRY MANAGER, BELCHIM SERBIA

We’re Growing Together With Certis Belchim Belchim Crop Protection is a development company that has harmonised its operations, both locally and globally, with all of the increasingly stringent environmental and safety standards for the programme of professional plant protection.

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his year is a special one for us and it will be inscribed in golden letters, because we are proudly announcing the creation of a new company – Certis Belchim B.V. – through the merging of Certis Europe B.V. and Belchim Crop Protection NV / SA, with the slogan ‘Growing together’ - announces Belchim Crop Protection Serbia, Country Manager Vladimir Vasojević.

Agriculture has been the central pillar of our country for centuries, particularly during difficult and challenging times. Can agriculture continue to be our central pillar and our trump card in the years ahead?

The people who live in our region have been forced to adapt to all historical tribulations. That’s also the case with the global crisis that we all find ourselves living through today. We all need to work more intelligently, each in their own field. During times of unstable market and monetary conditions, the optimising and adapting of all processes is a key and crucial element of company success, both in the agricultural sector and beyond. In times of such opportunities and predicaments, maintaining a balance between environmental norms and the quality of agricultural production represents a great challenge.

Environmentally sustainable agriculture starts with the kind of professional plant protection that’s promoted by your company. Is this the best route to great yields and top-quality products?

The concept of environmentally sustainable and professional plant protection is based on the functional integrating of conventional (traditional) and environmentally friendly agriculture, alongside applicable biorational solutions for plant protection. Since its very inception, our company has understood the essential need to conduct tests 6

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and the huge importance of knowledge, which come as a result of product testing in real time.

As the company developed, so did the important need for permanent testing stations. Our company’s first testing station was established in 2006 in [the Belgian municipality of] Londerzeel, which is just a 10-minute drive from the company’s headquarters. It was in 2016 that we launched the construction of our second testing station, which is located in the commune of Fronton near the French city of Toulouse. The focus at this testing station is on agricultural cultures from Southern and Southeast Europe. This process of constantly striving to achieve better and higher quality products represents the best route to great yields and top-quality products.

Has increased awareness about the importance of proper and healthy nutrition led to you working more intensively to harmonise your operations with increasingly stringent environmental and safety standards?

The production of food, or agricultural production, represents – in addition to human health – a priority sustainability goal for every society. The unexpected global crisis caused by the coronavirus pandemic has continued with a crisis of price instability for agricultural raw materials and semi-finished products. These events represent a global challenge. Nobody expected this kind of scenario. This is the right juncture for us to once again prove our key advantage and strength: flexibility. We have consolidated operations, our team has taken a proactive approach to conducting all necessary works to ensure that our proven, innovative solutions would be available to all of our agricultural producers. Our team responded to this challenge in the right way, which makes us very proud.

Do we have the knowhow and resources to keep pace with trends? To what extent are your products for improving agricultural production available to small producers?

In the scope of my work to date, I’ve had the opportunity to meet many high-quality people from all areas of agrotechnology and food sciences, across Europe and around the world. My general conclusion is that we have all the elements needed for success right here in our country and region, both in term of knowhow and the experience needed to be able to keep pace with world trends and accept those technologies that can place us among the worldwide competition to achieve high yields. Our lands already have serious professional producers

and companies that are already competing in that game and have already reached the very top, with their excellent yields and product quality. We see the role of our company as being to share as much as possible and to connect, doing everything in our power to help improve things greatly in the part in which producers need to advance. It is only in this way that we can count on generating better average yields. We see that as a huge challenge.

You have launched the establishing of a new company that will represent a new force in plant protection, with strong foundations and great possibilities of conquering new markets. How much progress has been made with that?

region. This year, together with our Japanese and European partners, we have once again presented several products that are new to our market and will soon represent the standard in plant protection. We have harmonised our operations, both locally and globally, with all increasingly stringent environmental and safety standards through our professional plant protection programme, which aligns with the concept of precision agriculture. We invest in the development of new products through testing that we conduct everywhere, both across this region and around the world. We are working to make our products safer through so-called biorational solutions.

A UNIQUE & INNOVATIVE PORTFOLIO AND PIPELINE For this year, we’re announcing the creation of the company Certis Belchim B.V., through the merging of Certis Europe B.V. and Belchim Crop Protection NV/SA. Certis Europe and Belchim Crop Protection are both development companies that operate on the global market for plant protection, with a strong position in environmentally friendly biorational products that satisfy the requirements of sustainable agricultural production. Both companies are subsidiaries of Japanese company Mitsui & Co. Ltd., which forms part of Mitsui AgriScience International SA/NV.The merging and synergising of these two companies will enable Certis Belchim to further develop sustainable plant protection solutions while maintaining a stronger market position.

Will new company Certis Belchim introduce new solutions with the same dynamics as your company has done to date?

Certis Belchim develops professional, environmentally-friendly solutions in all branches of plant production: viticulture and the cultivation of fruit, vegetables and field crops. There are no small and large market segments for us, no small and large producers, rather only optimal, environmentally-friendly solutions that can help improve the competitiveness of the agriculture of our

Constantly striving to achieve better and higher quality products represents the best route to great yields and top-quality products If you had to highlight just a few of the characteristics that best describe Certis Belchim, like innovative and adaptable, what would they be?

What essentially distinguishes you from the competition?

Certis Belchim combines the strengths of two renowned companies in the area of plant protection, offering an even richer portfolio of products and additional resources to provide the highest level of technical support and customer service. Our new company is supported by Mitsui & Co. Ltd. With its global resources, as well as four major Japanese research and development companies: Nippon Soda, ISK Biosciences, Kumiai and Mitsui Chemicals Agriculture. Coupled with the developmental, regulatory and marketing expertise that exists within Certis Belchim, these companies bring innovative and exciting new solutions for plant protection, both around the world and across our region: Serbia, Montenegro, North Macedonia and Albania.

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NEWS & CURRENT AFFAIRS

AGRICULTURE

OUR OPPORTUNITY Exceptional natural agricultural resources for both plant and animal production are not enough by themselves for a country to feed its population and export food. This can be seen in the examples of small Serbia, large China, rich Australia... Nature needs help from the latest technology, besides returning to the good old hoe and natural fertilisers

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THE HOE RETURNS TO BANJA LUKA

Some people in Banja Luka were convinced that the pandemic had to bring some benefit, prompting hem to become gardeners overnight. It all started in 2018, when 10,000 square metres of land was distributed to inhabitants. As the interest was greater than the number of vacant plots, a public invitation was sent to landowners. In the midst of the pandemic, the Hoe in Hand, Let’s Feed Banja Luka initiative was born. That spring, 20 families founded their first garden and the following year the number of gardens increased to 30, but the interest in gardening is still growing.

The Hoe in Hand initiative has city gardens in Petrićevac, Starčevica and near the Agricultural School, besides the gardens already in Rakovački under the Banja Luka City Garden project. It is hoped that production will expand year-on-year and that the authorities will catch on to their popularity and allocate new planting areas.

AGRICULTURAL FAIR WITH THE OLD TIMING AND FORMAT

The largest and most important national event dedicated to agriculture is the International Agricultural Fair. This year’s 89th edition will be held from 21st to 27th May at the Novi Sad Fairgrounds, in its regular spring slot and traditional format, i.e. live. Exhibitors will again be able to exploit their own and the fair’s possibilities to better present and achieve great business results and, after the break caused by the pandemic, when the fair was held online, visitors will again walk among the stands with their live and mechanical exhibits.

As is the case every year, guests will have opportunities to check out the latest machinery, tools, agro-technical appliances, crops and scientific achievements...

With the support of the Ministry of Agriculture, Forestry and Water Management, there will be an exhibition of livestock, an exhibition of genetic possibilities, an exhibition of products with the national label, exhibitions of organic products, public prize contests of horses and cattle, a cattle breeders’ day with a ceremonial parade of prize cattle, a fruit day, a champion’s evening and much more.

THERE WILL BE ENOUGH FOOD, BUT IT WILL BE EXPENSIVE

“Due to the war in Ukraine and the crisis that has spilled over to the rest of Europe, food prices will inevitably rise in the coming period”, concluded the Business Trends summit panel held in Belgrade in late April, organised by Instore and NIN magazines.

Miloš Mijović, director of MK Agriculture, believes that growth in the price of artificial fertilisers, which is three times higher than before the crisis, will certainly affect Serbian food producers. He doesn’t expect business to be jeopardised this year, but he believes that next year will be more challenging. As he emphasised, there will be quite enough wheat for national needs, but export can be threatened.

According to Luka Popović, COO of Delta Agrar and director of Danubius and Delta Feed, we are facing a period without cheap food, but also without sufficient shortage capacities.

“Serbia is a serious agricultural country ranked in the top 10 world producers of corn, wheat and beets, so there will certainly be food for local needs”, said Popovic, adding that supply chains are important for production but have seen significant disruption, and that all this will increase the price of food.

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COMMENT

LIFE RETURNS TO SERBIAN VILLAGES

In 2022 the commission for the allocation of grants for the purchase of a rural house with a garden distributed 90 rural houses and delighted 13 young farmers, 13 single parents and 64 families throughout Serbia. Grants for the purchase of rural houses are allocated on a first-come-first-served basis as long as funds last, but no later than 1st November 2022.

Young married and unmarried couples, single parents and young farmers up to the age of 45 can apply for a grant to buy a country house. According to the terms of the competition, the house can be located in all populated areas of the Republic of Serbia, except in urban and municipal centres and suburbs, and its value can amount to a maximum of 1.2 million dinars.

In last year’s cycle, 651 rural houses with gardens were awarded in as many as 100 local government units, and a total of 500 million dinars was set aside for this in the budget of the Republic of Serbia for 2022.

EATING INSECTS SAVES THE PLANET

A recent study by Finnish scientists showed that replacing livestock products with insects in our diets would reduce the effects of agriculture on global warming and water and soil pollution by 80 percent.

Finnish researchers have used computer models to determine the optimal combination of diets that would meet all nutritional needs, while minimising the impact on the environment, water consumption and soil pollution.

Experts from the University of Helsinki say that vegetarians and vegans have demonstrated the health and environmental benefits that can result from reduced meat consumption. Not only could switching to ‘food of the future’ such as insects and mushroom protein meet our needs, but also contribute to a better intake of essential nutrients.

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CHINESE FARMERS DEVELOP SMART AGRICULTURE

Five Chinese provinces will receive technical guidelines from expert teams sent by the Ministry of Agriculture, after last year’s floods had a negative effect on sowing and on the harvest.

More than 800,000 people will be able to attend online training through the National Platform for Agricultural Technology, as the Chinese authorities have concluded that the future of agriculture lies in modernising and developing technology.

With modern farming platforms and smart farming technology, including drones, satellite imagery and computer modeling, the state provides support to farmers across the country, turning farmers’ mobile phones into intelligent tools and resources for environmental protection.

IT’S TIME FOR WEEDS

The Serbian Intellectual Property Institute is celebrating its centenary and has published a calendar of the greatest Serbian scientists and inventors, including Dr Danica Gajić. The only woman among the great scientists stood shoulder to shoulder with Nikola Tesla, Mihailo Pupin and Milutin Milanković, thanks to “agrostemin”, a broad-spectrum bioenergy agent that serves to increase yields, improve crop quality and optimise production costs.

The need for the application of this natural preparation, which is obtained from a powder of weeds and other cultivated and wild plants, has been particularly evident in recent months due to extremely high prices of fertilisers, but also due to the need to turn to agrotechnical measures suitable for organic agriculture. Back in 1987, the World Intellectual Property Organisation awarded Dr Danica Gajić their Gold Medal for Lifetime Achievement, and Agrostemin has since become one of the standard agrotechnical measures based on research and decades of practical use in our country and around the world.

A FARM WITH NO FARMER? YES

Australia last year gained the world’s first fully automated farm covering 1,900 hectares, where human hands do absolutely nothing. Agricultural production on this property takes place with the help of artificial intelligence, robots and smart sensors, and the goal is to show how technology can make the industry more productive and efficient.

According to ABC News, installing the system cost 20 million dollars. The project was conducted by researchers at Charles Sturt University in Wagga Wagga in cooperation with the Food Agility Institute. This is proof that technological innovation is not just spreading to smart cities, smart buildings or new hybrid work models, robots are also transforming agriculture with artificial intelligence, autonomous tractors, real-time sensors that monitor crops, drones or fruit and vegetable picking robots.

The farm has unmanned aerial vehicles, robotic tractors, combines and smart sensors for measuring emissions of carbon released into the atmosphere.

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