• Agriculture in Serbia

    What can we expect from EU accession?

    In Brussels from 18 to 20 March an explanatory screening for Chapter 11 – Agriculture and Rural Development was held.

    On this occasion, European Commission officials explained all the details of the most important laws relating to agriculture and rural development to the Serbian delegation. Given the importance of this chapter, this article takes a brief look at the most important aspects for successful negotiations of this chapter for Serbia.

    According to the information from the last census on agriculture in Serbia there are 631,122 farms, which handle a total of 3,355,859 hectares of land. Of the total number of farms, 628,555 are family run, and 2,567 belong to enterprises, cooperatives, companies or are owned by state institutions or churches and religious communities. Also, according to the information from the Serbian Chamber of Commerce, agriculture and food industry account for about 17% of the overall gross domestic product (GDP), but the overall contribution of agriculture to other sectors of the economy, especially to the producers and processors of raw materials, this share exceeds 40% of the total GDP.

    Because of the great importance of agriculture for the economic stability and sustainable development, adjustment of domestic policies and legislation with the legislation and the common agricultural policy of the European Union (CAP) is crucial. Rapprochement of these policies and legislation can provide a number of benefits for the agricultural sector in Serbia.

    The Common Agricultural Policy is determined at the EU level but implemented by the Member States. The main objective of this policy is to assure a stable income farmers in a form of financial support and subsidies, to enable them to have a certain level of annual income, but also to encourage the farmers to raise the quality of its production and invest in new development trends.

    There are four primary priorities of the CAP:

    1. Ensuring the quality and safety of products
    2. Protection of the environment and animals
    3. Increasing the competitiveness of EU farmers
    4. Preservation of rural communities and strengthening their internal dynamics and sustainability.

    Since the CAP was reformed again in 2013 after ten years, the European Commission has set up another set of priorities for improving agriculture in Europe, like: measures for encouraging innovation and research (R & D), better risk management capacities (risk management), higher rates of social inclusion, more efficient use of resources and better conservation of the ecosystem. The slogan of the reform is “greener and fairer CAP”, which clearly shows that the main objective of the reform to raise awareness about better protection of the environment and resources, as well as better and more efficient distribution of assistance to farmers.

    What does the harmonization of these policies actually mean for Serbia?

    First of all, during the period of EU accession, Serbia will receive significant financial support for the development of agricultural facilities, as well as for the rural areas. In the previous IPA and programs Serbia has already received substantial funds for the improvement of agriculture and regional development, especially within RSEDP2 program, which funded 32 projects related to agriculture. These projects were related to the improvement of the wine sector, harmonization of technical procedures in the production with the best European practices, vaccination of animals and suppression of rabies and other diseases, as well as projects related to improving food safety and quality standards.

    During this program, the EU launched a major project called “Garden of Serbia”, which aims to solve the problem in the manufacturing of fruit, vegetables and flowers, sectors of great importance, because the value of crop production is 70% of the total agricultural production in Serbia.

    This year, the implementation of IPA II programme starts, which is of great importance for the development of Serbian agriculture, since with its status as a candidate country Serbia can now access more financial resources, and thus provide a significant contribution to the development of agricultural capacity. Of course, it will all depend on how Serbia will be able to improve the strategic planning system in this sector, the work of local authorities, as well as training of farmers for the preparation of projects for agricultural funding. Serbia will in this process greatly benefit from the experience of other countries, particularly Croatia, primarily in assuring a better use of IPA II funds and in harmonization with EU policies, in order to efficiently use EU CAP funds one day as a member.

    Chapter 11 – Agriculture and rural development will be for Serbia one of the most difficult chapters, since the regulations governing this area account to almost one third of all EU regulations. These regulations include, among other things, all issues related to agricultural subsidies, marketing and sale of agricultural products, as well as legislation on the protection of geographical indications and traditional products.

    During the explanatory screening, some very important issues have been identified. Probably the most important alignment with EU practices that Serbia needs to achieve is the issue of subsidies to farmers, which at the EU level are mainly implemented at the regional level, structurally it is quite complicated, because it identifies the various categories of recipients of aid, as well as different conditions under which the assistance is given. During the screening, special attention was paid to the clarification of the novelties introduced by the CAP reform which was extremely useful for the Serbian delegation, because Serbia will have to be fully transfer these novelties into its legislation and incorporate into its practices before joining the EU. In this context, the issue of environmental standards in the sector of agricultural production was underlined, since with the new reform it became a strict condition for receiving subsidies.

    Delegation of Serbia, showed great interest for the legislation regulating organic production, protection of Serbian products, as well as for the practices relating to the promotion of agricultural products. A problem was identified, since the Delegation stated that Serbia currently has no state office or agency, that deals only specifically with the issue of product promotion, the way it’s done in the EU Member States who benefit from EU programmes for promotion. Also, the issue of state market intervention required more clarification, especially since CAP strongly regulates this issue, in order to guarantee the competitiveness of the agricultural sector in Europe.

    Serbia faces a very difficult and lengthy process of adjustment, which should gain a lot of attention due to the economic importance of this sector. During the bilateral screening programmed for May this year, Serbia will have the opportunity to better present its current state of affairs in this sector and get concrete advice form the Commission on how to be better reform this sector.

    In conclusion, it is important to denote that in Serbia there is currently a huge untapped potential in agricultural production, especially in sectors such as wine, organic food and animal farming. The period of negotiations with the European Union, as well as the access to IPA II funds represent an ideal opportunity to increase the role of agriculture in economic development of Serbia and assure a better marketing and placement of our products on the European single market.

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