Serbia: Disagreement among farmers' associations leads to new round of protests

Disagreements among farmers’ associations in Serbia

Five agricultural associations in Serbia announced that they would stage a protest on November 1 if the Ministry of Agriculture fails to fulfill the agreement reached in July. The protest is prompted by the recent actions of the Subotica Association of Agricultural Producers, which was not a signatory to the original agreement but has now entered negotiations to reduce the subsidies in the agreed-upon terms. The agricultural associations: Stig, Slozni Pidikanci, Northern Banat, Brestovački Ratari, and milk producers Adrani have voiced opposition to reducing the subsidies for certified seed from €145 per hectare to €85/ha — a proposal now being negotiated by farmers from Subotica on the condition of receiving immediate payment to begin autumn sowing and meet loan obligations.

"A reduction in subsidies, as proposed by the government to farmers in Subotica, would violate the formally signed agreement and cause significant harm to those who have invested in certified seed, effectively rewarding those with fictitious farms established solely to receive subsidies without engaging in actual agricultural production," stated five associations. They expressed concerns about the credibility of future agreements with the Serbian government. "Due to the disregard of this agreement, we are compelled to call all honest and fair associations to a nationwide protest on November 1 at 9:00 a.m.," their statement concluded.

Pet food produced in Serbia becomes export leader

Pet food for dogs and cats produced in Serbia ranked third in last year's exports of primary agricultural products, with a 6.5% share, behind frozen raspberries and mercantile corn, and ahead of mercantile wheat, according to a report from the Ministry of Agriculture, as published in Biznis&Financije magazine. Pet food is the third most exported primary agricultural product from Serbia. The article highlights that global brands are facing a significant drop in sales due to price competition and consumers' growing awareness that lesser-known companies can offer high-quality products at lower prices.

Additionally, Serbian pet food's favorable quality-to-price ratio and the absence of GMO ingredients contribute to its success. According to the Serbian Chamber of Commerce (PKS), Serbia exported 64,956 tons of pet food worth €207.9 million last year, with export volume increasing by over 20% and value by an impressive 43.7%. In the first five months of 2024, around 26.000 tons of pet food were exported, marking a 2.4% increase compared to the same period in 2023. Serbia exports these products to 46 countries. The largest market for Serbian pet food in the past two years has been Russia, which accounted for more than a third of total exports in 2023. Other major markets include Italy (16.3%), Poland (8.9%), the United States (6.5%), Turkey (6.1%), and Greece (3.7%). In the first five months of this year, Italy became the largest buyer, and exports to the U.S. surged by 220% compared to the same period in 2023, while exports to the UK increased by 183%, with further growth recorded in 13 European countries. The report adds that Serbia's total pet food production has grown from 255 tons in 2010 to 95.470 tons in 2023.

New trees planted to mark anniversary             

Serbia Forests, the national forestry company, planted 33 saplings as a symbolic gesture to mark 33 years of its operations. The idea was to contribute to the planting campaign of thousands of trees across Serbia’s forest estates.

Decades of neglect have left parts of Serbia, especially in the north, without forest belts. The goal is to double reforestation efforts from 2,000 to 4,000 hectares per year, focusing on areas with no forests or on the locations where the forest has been destroyed. By the end of the year, 1,150 hectares will see the planting of 2.3 million saplings. A €2.1 million agreement has been signed with the Ministry of Agriculture for reforestation and forest protection. With the EU Deforestation regulation, Serbia Forests will become an essential partner in the wood-processing industry, as local companies must prove the legal origin of wood used in production for the sales on the EU market.

Serbia receives first investment rating

Serbia received its first-ever investment-grade credit rating on October 4. Standard & Poor's (S&P) Global Ratings, one of the big three international credit ratings agencies, raised the country's long-standing BB+ rating to BBB- with a stable outlook.

The rating decision positions Serbia as the first country in the Western Balkans, and the only EU candidate country, to achieve investment-grade status. By receiving an investment rating, Serbia has been placed among those whose debt is considered stable. With this, Serbia has moved to a group in which it has never been a member of. Mr. Pietro Dallari from the European Investment Bank's Economic Department emphasized that obtaining an investment rating is a significant milestone, recognizing Serbia's fiscal discipline, stable macroeconomic policies, and improved institutional framework. To maintain or upgrade this rating, Serbia must sustain healthy fiscal and macroeconomic policies, manage risks efficiently, and continue structural reforms. Additionally, progress towards EU membership is crucial for investor confidence.

Stronger institutions, including an independent judiciary, effective public administration, and anti-corruption measures, are vital. Aligning with EU financial regulations and expanding access to financial services, especially in rural areas and for SMEs, can further enhance Serbia's capital market and create alternative investment channels.

Serbian companies struggling with sustainability reporting

Sustainability reporting has been a legal requirement for the large companies in Serbia since 2021. However, many local companies appear to be struggling in this area, as an analysis conducted by the Ministry of Finance revealed that these reports are often incomplete or not aligned with prescribed standards, according to Bloomberg Adria. ESG (Environmental, Social, and Governance) reporting falls under non-financial reporting and, according to the Accounting Law, is mandatory for all large legal entities with more than 500 employees. Currently, 221 companies are required to submit these reports, which are part of their annual business reports.