Presentation on theme: "Rural Development and Poverty Reduction"— Presentation transcript:
1Rural Development and Poverty Reduction MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENTRepublic of SerbiaRural Development and Poverty ReductionGoran ZivkovBelgrade, July 2006
2Contents of the Presentation Serbian agriculture – in generalRural development and rural economyPoverty in rural areasCausesConsequencesStrategy for developing agriculture and addressing the problemsMeasures of the agrarian policy for reducing rural povertyDiscussion and proposals
4Agriculture Indicators Still very important Agricultural land: 5.7 million haArable land: 4.2 million ha87% private ownershipAround 0.7 million farmsAverage farm size: 3 ha (10.6)Share of primary production is 14 percent in GDP
5Share of agriculture in GNI Share of agriculture in GNI CountryGNI per capitaShare of agriculture in GNIUnited Kingdom25 1201.0Germany23 5601.3Italy19 3902.8France22 7302.9Slovenia9 7603.1Spain14 3003.6Poland4 340Slovakia3 7604.1Argentina6 9504.8Russian Federation1 7506.7Kazakhstan1 3409.0Brazil3 0609.2Croatia4 4109.7Belarus1 30010.7Macedonia1 70011.8Bulgaria1 67013.9Bosnia and Herzegovina1 27014.3Romania1 71015.0Ukraine72016.6Azerbaijan65017.3Serbia 2 90021.0Georgia60022.1Moldova4 0026.0Armenia70027.7Turkmenistan95028.8Tajikistan18029.4Uzbekistan55034.1Albania34.2Serbia’s wealth measured by the GNI is at the level of developing countriesShare of agriculture in the GNI is at the level of African countriesCountryGNI per capitaShare of agriculture in GNIWorld5 2326.2Developed countries19 7662.6Developing countries1 27411.9Asia92813.4South America3 7507.6Africa48217.1Europe28 0952.1Countries in transition1 9408.2Serbia2 90021.0
6Farm Capacities Policy Challenge Important for providing food and food safety, so that they should have access to inputs, but are outside commercial flowsTo encourage them to transfer to productions of a greater value or to become commercial farmsEnsure for them further development and enlargementCreate methods for them to develop a democratic decision-making structure and to transform them to serve producersRestructuring and privatizationOwnership over landOwnership over land %Number of cowsNumber of cows %Number of farmsFarmsLess than 1 ha4%1-36%200,000Small farms1- 5 ha35%3-541%400,000Commercial farmsMore than 5 ha46%More than 1044%100,000Cooperativesavg 4005%501%510Complexesavg 70010%1008%549
7Production Index 2000 – 2005 (previous year = 100) Trend line
12Criteria for measuring the rural population A lot or a little Despite the several-decade long trend of social and economic devastation, 44% of the inhabitants of Serbia live in the villageShare of rural population in total populationCriteria for measuring the rural populationA lot or a littleEffects of the increase of the population in rural areas?- Expense+ Real estate value+ Use of living space+ Balanced development+ ...
13Still a very high share of the agricultural population Almost all village inhabitants are engaged in agriculture, and for a third this is their main activityShare of agricultural population in the total urban and rural populationStill a very high share of the agricultural populationUnderdevelopment of other sectorsShort-lasting refugeEconomic growth / Development of the service sector in rural areas / Rural diversification
15Process of the population’s migration from villages to towns Leaving villagesProcess of the population’s migration from villages to townsBeing engaged in agriculture is a difficult and painstaking processMarginalization of the village (disparaging and belittling attitude to the village)Entertainment and recreation practically do not exist in rural mountainous areasProblem of finding a spousePetar Bjelica, Ph.D.Number of settlements where population growth has been registered (53-91)Number of settlements where population reduction has been registered (53-91)18564087
16Tasks of the Rural Policy Drawing up a National Action Plan for the development of the village and support to the drawing up of regional and local action plansCreation of space for the affirmation and use of territorial specificitiesDecentralization of support to rural development through the development of an interactive link between Government institutions and the local communitySupport to economically valuable projects created at the level of the local community and individuals in rural environments, as well as the promotion and exchange of examples and good practices with similar areas.
17Tasks of the Rural Policy Support to the development of sustainable agriculture with autochthonous products that have a geographic origin, the development of processing and the local market through the promotion of rural, agro and ecological tourismHarmonizing economic interests in agriculture with interests of environmental protection and the reduction of agriculture-related contamination
19Large and considerably larger than among the urban population Rural PovertyLarge and considerably larger than among the urban population
20Regional imbalance and critically large in certain areas Rural PovertyRegional imbalance and critically large in certain areas
21What are the main causes of poverty increase/reduction in rural areas Annual variations and dependence on natural conditionsThe still large impact of agricultural production on povertyA considerable number around the poverty lineA larger impact on temporary, and not chronic povertyThe need to find a way to minimize the impact of an extremely bad year
22Quantity Supply Demand Price Price drop due to larger supply Price increase due to lower supplyDemandPrice
23QuantitySupplyHow to minimize the impact of extremely bad years when we have a shortfall in all productions and a considerably reduced demand due to the high price which cannot compensate for the drop in production?Price drop due to larger supplyPrice growth due to lower supplyDemandPrice
24What are the main causes of poverty increase/reduction in rural areas Development of the infrastructure which is to offer thebasic servicesLink between education and povertyBasic access to health institutionsLarger expenses due to inaccessibility (of green markets, the hospital)...
25What are the main causes of poverty increase/reduction in rural areas Agrarian policy and state policyIndustry/services - agriculture transferAgricultural producers - consumers transferNon-functioning of the farmers’ pension systemPolicy resulting in refugee, IDPs…
26ECONOMIC GROWTH AND DEVELOPMENT ABSORBING THE TRANSITION SHOCKSOCIAL WELFARE MEASURES
27Main strategic directions TypeGoalAbbreviatedEconomic effectEconomicA sustainable and efficient agricultural sector which can compete on the world market, contributing to the growth of the national incomeIncrease in competitivenessProfitSocialTo ensure that the quality and safety of the food satisfies the needs of consumersFood safetySpendingTo ensure support to the living standard of people dependant on agriculture, and who are unable to follow economic reforms with their developmentSupport to the standardSupport to the sustainable development of the villageDevelopment of the villageProfit and spendingEnvironmental protectionTo preserve the natural environment from the devastating effects of agricultural contaminationPoliticalTo prepare Serbia’s agriculture for integration in the EUAccession to the EUComplexTo harmonize the policy of domestic support and agricultural trade to WTO rulesAccession to the WTO
28Agrarian budget 2000-2006 (million dinars) (25 bn dinars = 270 million euros in 2006)
29Modernization of Agricultural and Adjustment to the WTO & EU Budget Goal2005 … +1…..______________n_______________….-1…..EU
31Main Policy Directions Policy Separation MARKET SUPPORT: The abolition of support to prices and payments by hectare and replacement with subsidies for inputs (a reduction from 90% to 38%)STRUCTURAL SUPPORT: Introduction of payments for rural development to support investments (25% of total support)CREDIT SUPPORT: Introduction of credit support (22%)INCOME SUPPORT: Considerable support for income (12%)2. Alleviating transition shocks1. Economic growth and development3. Social welfare measures
33Adoption of the basic principles of rural development. To create adequate social and economic conditions in village environments and to ensure their contribution to the country’s economic growthAdoption of the basic principles of rural development.To make a categorization according to the EU model of less favorable areas for productionTo draw up a Program for the development of ecological agricultural systems, especially for marginal areas and areas of protected natureTo adopt regional, local action plans for rural developmentTo form a Rural Development AgencyTo prepare a rural development program for using the funds from the agrarian budget and funds from donationsPROPOSED STRATEGY, Novi Sad, 12 November, 2004
36Rural Development Support FOCUS ON THE USER PROGRAMOTHERLFA1. Promotion of production and marketingFarms,Machinery,Storage capacities…30%%2. Rural diversification30-40%40-60%3. Rural infrastructure40%50-60%Investment SupportFOCUS ON THE INVESTMENT1. Establishing cattle-raising farms2. Improving milk quality3. Increasing storage capacities4. Machinery and equipmentIrrigationPolythene greenhouses and greenhousesSowing machines, sprayers, ....OTHER. Introduction of standards (HACCP, ISO…)Establishing orchards and vineyardsSelection measures in cattle-raisingLand regulation measures ...
37COMPETITION 3 – VILLAGE PROMOTION 3.1.1 Agro-tourism3.1.2 Tradition crafts3.2.1 Promotion of local products3.2.2 Cultural and sociological activities3.3.1 Education of the village population3.3.2 Promotion of integration3.3.3 Renewal of farms3.3.4 Agro - Eco Demo farms3.3.5 Excursions3.4.1 Village garbage dumps3.4.2 Pits, graves3.4.3 Wind-breaks3.4.4 Afforestation3.4.5 Protection from erosion3.4.6 Village dumps3.4.7 Polythene greenhouses3.4.8 High mountainous regions???3.4.9 Mowing meadowsCOMPETITION 1 – PRODUCTION AND SALES PROMOTION1.1.1 Cattle imports1.1.2 Equipment and machinery1.1.3 Farms1.2.1 Curing, refrigeration, packing plants...COMPETITION 2 – VILLAGE INFRASTRUCTURE2.1.1 Power grids2.1.2 District roads2.1.3 Waterworks2.1.4 Sewage system2.1.5 Village households2.1.6 Agro-business centers and incubatorsCOMPETITION 4 – ORGANIC PRODUCTION4.1.1 Promotion and protection4.2.1 Education4.2.2 Demo farms4.2.3 Excursions and regional cooperation4.3.1 Field conversion4.3.2 Conversion of cattle farmsCertificationCOMPETITION 1FarmsCOMPETITION 2Dairy industryCOMPETITION 3Warehouses, refrigeration plants, silos, curing plants, wineries
38(Areas with poorer conditions for agricultural production) PećIstokZubin PotokZvečanLeposavićKuršumlijaTutinNovi PazarRaškaSjenicaPrijepoljeNova VarošIvanjicaPribojČajetinaUžiceBajina BaštaNova CrnjaŽitišteSečanjBeočinIrigAlibunarKovinMajdanpekŽagubicaBorBoljevacSoko BanjaKnjaževacSvrljigBela PalankaGadžin HanPirotBabušnicaDimitrovgradCrna TravaSurdulicaBosilegradTrgovištePreševoKačanikŠtrpcePrizrenOpoljeGoraDečaniKladovoKučevoLess favorable areas(Areas with poorer conditions for agricultural production)INCENTIVES OF THE MAFWM FOR 2006
39LFAA marginal area is an area of a municipality on whose territory there existnatural (high altitude, poor land quality, slanting terrain, floods and all types of erosions) andlegal (protection of nature and protection of water sources) restrictions for the development of intensive agricultural production on large areas.Insufficiently developed areas (Law on Insufficiently Developed Areas of the Republic of Serbia for the period until 2005, Official Gazette of RS number 53/95 – settlements in the territories of the mentioned municipalities from articles 3 and 4 including the municipal center),The altitude of the settlement, i.e. the area where the investment is being realized, above 600 m andProtected areas – national parks and areas of exceptional natural value of special importance (Law on the Spatial Plan of the Republic of Serbia, Official Gazette of RS number13/96).
41ECONOMIC COMPANY/ACTIVITY TYPE OF PROCESSINGCONSULTING COMPANYAPPROVED AMOUNTREQUESTED FUNDS FORPRODUCTION"HIGLO" ADrefrigeration plantConsAct Mr. Janoš Varga525,840.00For imports and costs of certification HACCPDeeply frozen vegetables, peas and green beans 2000t, and they also produce: cauliflower, peppers, carrots, potatoes, parsnip, kohlrabi and broccoli."DONIMPEKS" ДООQualitass education800,000.00For the costs of introduction and certification HACCP and ISO 9001peas-630, green beans-840, carrots-290, peppers-660, spinach-480, onions-300, corn-1050, parsnip-100, celery-110t."DELTA FUNGI" DOOmushroom processingAQA639,200.00" JUGPROM" DOOfruit and vegetable processing380,800.00"MARNI" DOOrefrigeration plant, mushroomsAQMFor the costs of introduction and certification HACCPSTR″ŠULOVIĆ″292,400.00mushroom processing, Capacity usage 100%"DELIKATES SPICES & PEPPER" DOOspice pepper processingQuality consulting217,800.0080% of total production is exported to the foreign market"SLOVAN - PROGRES" DOOFruit and vegetable processingJugoinspekt399,000.00"MARTIS COMERCE" DOO465,460.0090% exported to EU countries"AGRO-MOBIL" DOOproduction of seed and mercantile potatoesTehnomagproduction of seed and mercantile potatoes, Capacity usage 90%"3 MART" DOOmedicinal herbs, mushroomsAlfa-team309,600.00JUROFUNGO DOOmushrooms353,600.00POLIMARKketchup, mayonnaise and mustard production186,104.00For re-certification in HACCP system and ISO 9001PK "PRVI MAJ" AD, refrigeration plant RUSKI KRSTUR220,160.00frozen vegetables (peas, sweet corn, root vegetables, broccoli, cauliflower, onions and peppers).DOO "POLO"Gradac479,080.00vinegar production and warm vegetable processing (pickles, peppers, beet, pickled foods and red-pepper chutney)"MERKOP" DOOfruit and vegetable preservationIngel798,080.00pickles, chili peppers and peppers. Capacity usage 60%"FUNGO-JUG" DOOforest fruit processing (Boletus mushroom and chanterelle), fruit processing - purchase, freezing and packaging (raspberries, blackberries, strawberries, plums, currants and blueberries)"RUMEN" ZZQ expertpreserved vegetables (beet, tomato puree, mild ketchup, meat and vegetable stew, cucumbers, peppers) - capacity 2260t. frozen vegetables (peas, green beans, carrots, potatoes (cubes and French fries), parsley, parsnip, peppers, onions, vegetbles for soups and vegetables for soups and chowders, spinach, cauliflower - capacity 2170t."INTERFOOD 20" DOOMushroom processingmushroom purchase and processing (fresh, dry and pickled (Boletus mushroom and chanterelle)ZZ "VOĆAR - DRAGAČEVO"Processing of potatoes into French fries, reception and storage of berries, drupes and other fruit, as necessary. The refrigeration plant capacity is 5000 t, under way is the construction of a refrigeration plant of a 1000 t capacity. Total freezing capacity is 120t/24h. Cooperation with 120 households"TITEL BRAND" TITEL ADWarm and cold fruit and vegetable processing (peas, carrots, tomatoes, peppers, cucumbers, sweet corn) and (apricots, plums, sour cherries), capacity kg, usage 40%FROSTEX D.O.O268,800.00frozen fruit"J.P.L. SPECIAL" DOO444,620.00The refrigeration plant is located in Kosjerić.FLORASMS Consulting770,000.00frozen fruit purchase and processingDRAGAČEVAC PROMET DOOLIBERTAS D.O.O"STANIĆ" DOO446,880.00Two itemsdeep freezing, warehousing and fruit processing, primarilz raspberries. Exports are to the West European market."JUŽNI BANAT" ADscope of production: fruit t/god, grapes t/year, brandy l."EXAL" CO DOOCitadelafruit and vegetable deep freezing, fruit and vegetable drying.raspberries-1030 t, blackberries-900 t, strawberries-580 t, sour cherries-1430, plums-600, peaches-450, apricots-840, pears-520, quince-410, currants-190, forest blueberries-180, forest blackberries-140t.ABD PROM DOO350,880.00frozen plums, sour cherriesAGROLISA DOOKom projekt533,800.00frozen fruit, mostly raspberries"PAMS" DOOpurchase, processing and exports of forest fruits and fruit (mushrooms, strawberries, raspberries and plums).MENEX598,400.00ZADRUGAR DOO584,800.00SIROGOJNO COMPANY DOO617,728.00frozen fruit purchase and processing (raspberries, blackberries)JUGOTREJD DOOSMS518,500.00purchase and fruit processing (raspberries and blackberries)raspberries PRODUKT DOO274,079.00cultivation, processing and exports of frozen raspberries. The refrigeration plant has a total warehousing capacity of 3,000 tonsTRGOVINSKO PREDUZEĆE "GRADINA DMR" ADQ expert international448,000.00Four chambers of a 600 t capacity for warehousing frozen fruit and vegetables, tunnel for freezing of a 20t/24h capacity. The fruit and vegetables are purchased from agricultural producers (raspberries mostly 400 producers)DOO "BUDIMGRAD"ARSfrozen fruit purchase and processing (raspberries, blackberries and plums). Tunnel for deep freezing 8t/24h and 15t/24h. Chambers for the simultaneous warehousing of 500t.MIRALEX FRUIT DOOSMS consulting343,400.00Exports to EU countries (France, Germany, Austria, Italy, Belgium). Production of frozen raspberries (mostly Rolend)"BSF" AD633,080.00HIBRID ADTwo refrigeration plants for the purchase and processing of fruit (frozen) 1000 and 1100t, almost everything is exported"YUGENT" DOOPreliminary contract with a certification company and bill of chargesfrozen fruit (raspberries)EURO FRIGO DOO"D.M.B" DOOContract with a certification company and bill of chargesJuice of berries and forest fruits,non-concentrated, frozen raspberries"FRUKOM" DOOfrozen raspberriesZA FRUIT DOOproduction, purchase and fruit processing, 90% is exported, one of the founders is the German company Obst Trautner GmbH"PROGRES PROMET-refrigeration plant MILENIĆ"They do not have a preliminary contract with a certification and consulting company, a bill of charges and a certification deadlineDOO "PANIĆI"purchase, processing and fruit freezing (sour cherries, raspberries, blackberries, plums). capacity 1500t, installed capacities 450t, daily processing 35t."FRIKOS" DOOfrozen fruit (raspberries, blackberries, sour cherries, plums, strawberries) and mushrooms. Warehousing capacities 800t.AD "EUROFRIGO"purchase, freezing, finishing (sour cherries, plums, raspberries, blackberries). 90% exportsPREDUZEĆE "INTERFOOD 60" DOO"RADENKO POPOVIĆ" DOODOO "TRI KLASA"purchase i fruit freezing (strawberries, sour cherries, raspberries, blackberries, plums)"AGROFOST" DOOfreezing, finishing and packaging of raspberries, blackberries, plums and sour cherries"BERY-EXPO" DOOThey do not have an offer from a certification companyfrozen fruit (raspberries, blackberries, plums, sour cherries strawberries and dog-rose berries)"ORBITA" DOOpurchase finishing and exports frozen raspberries"LEDENICE" ADFONOffer of a certification companypurchase and fruit processingHORTO FRUITS INTERNATIONALfruit processing (purchase, freezing, finishing i packaging). Berries (raspberries, blackberries, strawberries) and plums"GOLDEN FALCON" DOOTUVpurchase of fresh fruit, freezing, warehousing, processing, packaging and sale"GODENS" DOOConsActThey do not have a certification deadline and an offer from a certification company"FRIGOFRUTTI" DOOBonexFrozen fruit production"AGROTEKS" DOOFrozen fruit (raspberries, blackberries plums)"ESKIMO S PRODUKT" DOOcapacity 200t, two standard tunnels of 5 and 10 t. Deep freezing of fruit and vegetables and the pre-freeying of fresh fruit, grapes and vegetables.LUKAFOOD DOOprocessing and freezing of fresh and frozen berries, processing fresh, dry, frozen and pickled mushrooms. Scope of production 800t per year"MIG-PROMET" DOOChamber of a 150t capacity."BELFRUT" ADcapacity t. raspberries blackberries, strawberries, plums, sour cherries, apples and other"ML" DOODelpasoffer from a certification companyOne line for the sorting andpackaging, frozen fruit in packages of10, 5, 2,5 and 1 kg., as well as 450, 250 and 284 g."PANON" ADBeveragesvinegar production l."FRUVITA" DOOproduction of fruit juice and non-alcoholic beverages based on fruit, the fruit usage for the peach and apricot is 70% , for berries and baccate fruilt is 90%." EKOFARM" DOOSupport521,976.00Wild apple vinegar, juices and sirups made of forest fruits, fruit wines made of forest fruits" DUGA FRUIT" DOOrefrigeration plant for keeping frozen mash and concentrates of a 70t capacity. Production line capacities: milk pack 1l 3600 l/h, milk pack 02l 1200l/h and glass bottle 0,125 and 0,2 5000kom/h, exports (Macedonia, BIH, Albania)FRESH & CO DOO" NEKTAR " DOOQ qualityproduction of fruit and vegetables on a space of 2000 ha. Exports: Canada, Australia, Switzerland, EU, China, US, BiH, Macedonia and CroatiaRESAVA KOMERC DOO629,000.001000 t, processing of cucumbers, pepers and chilli peppers into jams and preserves. 90% sour program and 10% sweet program. Mostly the entire production is exported.DOO VOĆAR-KOPAONIKTotal fruit warehousing capacity is77000 liters. The basic raw material for production (fruit and grapes) is own production and purchase from agricultural producers of the region. Exports mostly go to Austria, Sloveni and Switzerland. 80% goes to the foreign market.processing of fresh fruit and vegetables (plums, sour cherries, raspberries, blackberries, strawberries, apricots, peaches). Capacity usage 100%. Exports almost 100% (France, the Netherlands, Belgium, Germany)production, processing and packaging of fruit and vegetables (production of prunes). Capacity usage 100%."VINO ŽUPA" ADQualitas educationFor the production of juices and non-alcoholic beverages in a controlled atmosphere t, refrigeration plant for warehousing berries and forest fruits t.AD "SWISSLION MILODUH"Yumekproduction of alcoholic, non-alcoholic beverages and marmelade"VOĆAR-PALANKA" ADWarm fruit and vegetable processing, Capacity usage 52%,"RADO-SLOV-I" DOOfruit processingVULOVIĆ I DR. MEGA-F.KOMERC ODThey have no certification deadlinePTP"KARLO EXPORT IMPORT" DOOWarm fruit and vegetable processingfruit and vegetable processing (HLADNJAČE)Centralna Srbija15952 Imaju ili su u procesu uvodjenja HACCP and ISO 9001Vojvodina29fruit and vegetable processing (FABRIKE ZA TOPLU PRERADU)Ukupno 6020 imaju ili su u fazi uvodjenja HACCP and ISO 9001Subsidies forintroducingstandards
43Fuels Fertilizers 100 liters 16 dinars Registered InputsubsidizingFuelsFertilizersINCREASED CONSUMPTION100 liters16 dinarsRegisteredFinding new marketsConsumption growth on existing marketIncreased purchasing powerLowering of cost price30% refund with a receiptBetter product marketingIntegrationIntroduction of new technologies
44Credit support MAIN GOAL: DURATION: NECESSARY FUNDS: ACTIVITIES: To develop the financing of the agricultural sector from real sources, instead of burdening producersDevelopment of a credit historyIncreased competitiveness by enabling producers to gain access to capital5 – 7 years700 million to 1 billion EURTo support the credit market with money from the agrarian budgetTo withdraw and leave financing to banks…Necessary fundsBank fundsFunds of the agrarian budgetThe establishment of a credit history (acquired trust)Changed structureChange in the payment system through the establishment of a register
45Short-term Credits in 2005A total of over 23,341 short-term credits paidAverage credit value 69,879 dinars20052006Up to 1 ha101-5 ha40605-10 ha80120Over 10240
46Long-term credits in 2005 A total of over 1,923 long-term credits paid Average value 16,188 EUR
48Main goals of agriculture in Serbia AbbreviatedEconomic effectSustainable and efficient agricultural sector which can compete on the world market, contributing to an increase in the national incomeIncreased competitivenessProfitTo ensure that the quality and safety of food satisfies the needs of consumersFood safetySpendingTo ensure support to the living standard of people depending on agriculture, and who are unable to follow the economic reforms with their developmentSupport to the standardSupport to sustainable village developmentVillage developmentProfit and spendingTo preserve the natural environment from the devastating effects of agricultural productionEnvironmental protectionTo prepare Serbia’s agriculture for integration into the EUAccession to EUComplexTo adjust the policy of domestic support and agricultural trade to WTO rulesAccession to WTOSupport to non-commercial farms40,000 dinars per household memberPeople above 55 years of ageFarmer insured for a minimum of 10 years
49Development of a Land Leasing Market the development of a land leasing market implying that the land is cultivated by the one who is able to do so in a more successful manner;the joining of cultivated land;support to households whose members are no longer able to cultivate their land due to their age.Producer above the age of 60Producer below the age of 404.000 dinars+4.000 dinarsNEW
50MessagePoverty requires the special attention of all the factors of society and its reduction must be a priorityWithout understanding the essence of lasting and occasional poverty it is impossible to check itRural poverty is the result of the long-lasting neglect of a balanced development, which is why it is necessary to establish coordination among all those who can contribute to its reduction