Branislav Nedimović, Minister of Agriculture, Forestry and Water Economy

IPАRD – Development Opportunity For Serbian Agriculture

The launch of construction of large irrigation systems in Serbia, the announcement of the first calls for IPARD and the purchase of company IMT by renowned Indian company TAFE have all marked the previous period, and Minister Nedimović also announces the further continuation of investments and intensive work on utilising the potential of the agriculture and manufacturing industries

In the first phase, the IPARD programme will be implemented through two measures: Measure 1 (M1) – Investments in the physical assets of agricultural holdings intended for individual persons and legal entities; and Measure 3 (M3) – Investments in physical assets relating to the processing and marketing of agricultural and fishery products, intended for legal entities.

Farmers, entrepreneurs and legal entities will be able to procure machinery and equipment with the return of funds and to invest in the expansion, adaptation or building of their capacities.

After many years of waiting, the first calls for IPARD have finally been announced in Serbia. How many calls will be made this year and for what purposes?

– Five public calls are planned for this year under both measures – M1and M3. In addition to the two public calls that have been announced and closed, the first public invitation was also recently published for M3 Investments in physical assets that relate to the processing and marketing of agricultural products and fishery products, which is intended for legal entities, entrepreneurs and agricultural cooperatives for the development of the processing sector. The first public call for M3 was announced on 27th March, while the deadline for submitting requests under this call lasts until 28th May 2018. The funds will be intended for the purchase of equipment and 11.7 million euros will be made available.

Two more public calls will follow in the summer period, under both measures that will encompass the construction of facilities, the purchase of new equipment and machinery, including tractors within the framework of Measure 1 and the construction of facilities and the purchase of new equipment within the framework of Measure 3.

Predictability, certainty, long-term planning and the amount of investment support are the main features of IPARD,which are particularly important when it comes to investment in the processing industry.

Considering the experiences of other countries and our potential, what are the expected advantages for Serbian agriculture and rural development? Can this be a financial injection that will launch investments on a wider scale?

– If we look at IPARD as a new instrument that the Republic of Serbia is starting to apply, we can state freely that there are multiple expected benefits for Serbian agriculture. IPARD could definitely be a driving impulse that would contribute to the modernisation of agricultural holdings, raising the overall standards and competitiveness of the agriculture-food sector.

Predictability, certainty, long-term planning and the amount of investment support are the main features of IPARD, which are of particular importance when it comes to investment in the manufacturing industry. We at the Ministry of Agriculture believe deeply that Serbia should find its chance for long-term economic growth precisely in the development of agriculture. We won’t achieve this unless we develop a strong manufacturing industry and continue to merely sell cheap raw materials.

We have all the preconditions, and in recent years we have been working intensively on modernising outdated mechanisation, renewing and developing production and processing capacities. IPARD represents a developmental opportunity that should be maximally exploited in order to achieve the set goals.

Alongside the financial impact on users who pass strict IPARD criteria, the greatest benefit will be the transfer of knowledge about standards and procedures that also apply in EU member states.

In the previous period, you have spoken with representatives of several countries that are interested in investing in our agricultural production and food industry. What are their assessments of our advantages and possible shortcomings when it comes to being more attractive for foreign investment in the agriculture sector?

– The list of advantages and shortcomings is long and complex. Advantages include the excellent quality of land in Serbia, high quality fruit and vegetables, as well as enormous potential for further processing and the creation of final products with a higher level of processing, the possibility of cooperation with local farmers, Serbia’s connectivity with the largest markets in the world: the EU, Russia, Turkey, CEFTA , and the reputable history of Serbian agriculture in the cultivation of various fruits and vegetables, etc.

The shortcomings include unresolved property-legal problems from the past (primarily restitution), the dividing of land parcels, complicated legislation and bureaucracy, an underdeveloped irrigation channel system etc. The situation is not simple, but there is generally huge potential for investments in the agriculture and manufacturing industries, which needs to be worked on intensively, with the most active possible participation of domestic businessmen in new projects of the processing industry.

The United Nations Development Programme (UNDP), in cooperation with the Ministry of Agriculture, Forestry and Water Management, is implementing a programme entitled “Support to Productive Capacities in the Agro-Industrial Sector in Serbia”. The project is being funded by the Government of the Russian Federation, in the amount of $1.5 million, and has a projected implementation period of 2016 to 2019. The main objectives of the project are related to improving conditions for accessing new markets and improving export capacities, as well as creating a favourable framework for the development of trade in the agro-industrial sector.

The application of IPARD will impact on strengthening social capital and market connections between producers, strengthening rural areas and their sustainable development.

When it comes to improving cooperation with India, you’ve held talks with representatives of three of the world’s top 10 tractor manufacturers. Are there any new developments and concrete steps on this issue?

– India is a huge country with enormous potential, which will become one of the world’s top three markets in the next 10 years.

Now is the right moment for Serbian products to position themselves, because there is still sufficient space: the market is growing at an incredible pace, there are numerous opportunities for two-way cooperation, for our mutual benefit, but it should be considered that this is a long-term process requiring time, serious human and financial capacities, and planning activities for the next few years.

Meetings have been held with the largest Indian companies, while the first tangible result was the purchase of IMT by Indian company TAFE, a renowned tractor manufacturer. But that’s not all.

We’re working intensively on connecting the economies of Serbia and India (through the arrival of some other major investors), as well as on creating the conditions for exporting Serbian apples and berry fruit to the Indian market.

Last year was significant due to the commencement, after a 30-year break, of the construction of large irrigation systems. How much progress has been made on the implementation of this project and what are the plans until year’s end?

– In 2017, on the territory of the Vojvodina, following the conducting of public procurement procedures, works began on the enhanced maintenance of canals –the two-way systems of Rečej, Međa, Itebej, Jankov I and II, on the construction of pumping stations Jegrička, Pesir and Kaloča, as well as carrying out works on the subsystem Nova Crnja – Žitište, Tisa – Palić, Kikinda – CS Mokrinska II and Mali Iđoš.

Likewise, 2018 saw the Decision brought on awarding contracts for the procurement of works on the reconstruction and construction of facilities within the framework of the Mačva system. The total value of the noted works is €15,192,425, without VAT. These works will ensure the irrigation of around 47,954 hectares of additional agricultural land surface area.

Implementation of the project “Irrigation system development – phase one” will continue in 2018 and 2019, with contracted works to be completed in 2018, but also the contractual continuation of the works on the Mali Iđоš subsystem, the realisation of which is planned for 2018 and 2019, which will provide for the irrigation of all 11,500 ha of agricultural land area in this subsystem. The estimated value of these works is approximately €4.7 million.

There are high-quality companies in the Republic of Serbia that can carry out the design and implementation of infrastructure projects on irrigation systems.

As of the start of this year, small producers of meat and milk can legally enter the market on the basis of the new rulebook. How will their operations now function and what are their benefits for them, but also for the state and consumers?

– Considering the importance of this group of producers and striving in particular to preserve the tradition and life in the countryside, in consultation with them we prepared and adopted a Rulebook that prescribed incentives and exemptions (flexibility measures) for small producers of meat, milk, eggs and fish, in terms of equipment, facility appearance and the activities they perform.

In cooperation with the FAO/EBRD, the Ministry also issued guidelines for the implementation of the Rulebook and accompanying forms, which should be implemented by producers, without using additional services of external companies, i.e. without any additional charges.

All of this will enable producers to leave the “grey zone” and, with minimal investment, place high-quality and safe products on the market.

You have announced that the Ministry will focus in the period ahead on young people and that all incentive measures will be available to them. What measures does this relate to and for which sectors is this support primarily intended?

– Our ministry plans to support young farmers in 2018. Farmers aged under 40 are given additional points in processing the requirements within the framework of measures to improve the competitiveness of agricultural holdings in the programme IPARD II. They will also have additional points for those national rural development measures, with ranking carried out.

One tangible measure for young farmers will be changed and we will direct attention towards newly established agricultural holdings that are held by farmers aged under 40, i.e.“start-up” assistance to launch and improve agricultural production at these farms. The level of funding will be increased to 1.5 million dinars per smallholding, and those funds can be used for the procurement of machinery, equipment for primary agricultural production and quality breeding stock.

You often spend time in the field, in direct contact with agricultural producers. What can be a chance for our further development and the creating of advantages over neighbouring countries?

– The application of IPARD will impact on strengthening social capital and market connections between producers, strengthening rural areas and their sustainable development. Great development opportunities for agriculture and rural areas lie in the creation of an efficient system for transferring know-how, technologies and information, as well as innovative ways of using biodiversity.

The goal of the Ministry of Agriculture, Forestry and Water Economy in the period ahead is to improve the attractiveness of rural areas as enticing places for the lives of young families, and is closely related to improving physical infrastructure, better access to social services, improved social structures and support for the development of youth entrepreneurship.

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