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Goran Zivkov Rural Development and Poverty Reduction MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENT Republic of Serbia Belgrade, July 2006.

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Presentation on theme: "Goran Zivkov Rural Development and Poverty Reduction MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENT Republic of Serbia Belgrade, July 2006."— Presentation transcript:

1 Goran Zivkov Rural Development and Poverty Reduction MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENT Republic of Serbia Belgrade, July 2006

2 Contents of the Presentation Serbian agriculture – in general Rural development and rural economy Poverty in rural areas –Causes –Consequences Strategy for developing agriculture and addressing the problems Measures of the agrarian policy for reducing rural poverty Discussion and proposals

3 Agriculture in Serbia

4 5.7 million ha Agricultural land: 5.7 million ha 4.2 million ha Arable land: 4.2 million ha 87% private ownership 0.7 million farms Around 0.7 million farms Average farm size: 3 ha (10.6) 14 percent in GDP Share of primary production is 14 percent in GDP Agriculture Indicators Still very important

5 Country GNI per capita Share of agricult ure in GNI United Kingdom Germany Italy France Slovenia Spain Poland Slovakia Argentina Russian Federation Kazakhstan Brazil Croatia Belarus Macedonia Bulgaria Bosnia and Herzegovina Romania Ukraine Azerbaijan Serbia Georgia Moldova Armenia Turkmenistan Tajikistan Uzbekistan Albania Country GNI per capita Share of agricultur e in GNI World Developed countries Developing countries Asia South America Africa Europe Countries in transition Serbia Serbias wealth measured by the GNI is at the level of developing countries Share of agriculture in the GNI is at the level of African countries

6 Farm Capacities Policy Challenge Ownership over land Ownership over land % Number of cowsNumber of cows % Number of farms FarmsLess than 1 ha4%1-36%200,000 Small farms1- 5 ha35%3-541%400,000 Commercial farmsMore than 5 ha46%More than 1044%100,000 Cooperativesavg 4005%501%510 Complexesavg 70010%1008%549 Important for providing food and food safety, so that they should have access to inputs, but are outside commercial flows To encourage them to transfer to productions of a greater value or to become commercial farms Ensure for them further development and enlargement Create methods for them to develop a democratic decision-making structure and to transform them to serve producers Restructuring and privatization

7 Production Index 2000 – 2005 (previous year = 100) Trend line

8 Production Trends 2000 – 2005

9 Trade in Agricultural Products (mill. USD)

10 Trade with EU (mill USD)

11 Rural Areas

12 Despite the several-decade long trend of social and economic devastation, 44% of the inhabitants of Serbia live in the village Share of rural population in total population Criteria for measuring the rural population A lot or a little Effects of the increase of the population in rural areas? - Expense + Real estate value +Use of living space +Balanced development +...

13 Share of agricultural population in the total urban and rural population Almost all village inhabitants are engaged in agriculture, and for a third this is their main activity Still a very high share of the agricultural population Underdevelopment of other sectors Short-lasting refuge Economic growth / Development of the service sector in rural areas / Rural diversification

14 Number of villages in Serbia Leaving villages

15 1.Being engaged in agriculture is a difficult and painstaking process 2.Marginalization of the village (disparaging and belittling attitude to the village) 3.Entertainment and recreation practically do not exist in rural mountainous areas 4.Problem of finding a spouse Petar Bjelica, Ph.D. Process of the populations migration from villages to towns Number of settlements where population growth has been registered (53-91) Number of settlements where population reduction has been registered (53-91) Leaving villages

16 Tasks 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 plans Creation of space for the affirmation and use of territorial specificities Decentralization of support to rural development through the development of an interactive link between Government institutions and the local community Support 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.

17 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 tourism Harmonizing economic interests in agriculture with interests of environmental protection and the reduction of agriculture-related contamination Tasks of the Rural Policy

18 Rural Poverty

19 Large and considerably larger than among the urban population

20 Rural Poverty Regional imbalance and critically large in certain areas

21 Annual variations and dependence on natural conditions The still large impact of agricultural production on poverty A considerable number around the poverty line A larger impact on temporary, and not chronic poverty The need to find a way to minimize the impact of an extremely bad year What are the main causes of poverty increase/reduction in rural areas

22 Supply Demand Price Quantity Price drop due to larger supply Price increase due to lower supply

23 Supply Demand Price Quantity Price drop due to larger supply Price growth due to lower supply How 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?

24 Development of the infrastructure which is to offer the basic services What are the main causes of poverty increase/reduction in rural areas Link between education and poverty Basic access to health institutions Larger expenses due to inaccessibility (of green markets, the hospital)...

25 Agrarian policy and state policy What are the main causes of poverty increase/reduction in rural areas Industry/services - agriculture transfer Agricultural producers - consumers transfer Non-functioning of the farmers pension system Policy resulting in refugee, IDPs…

26 1. ECONOMIC GROWTH AND DEVELOPMENT 2. ABSORBING THE TRANSITION SHOCK 3. SOCIAL WELFARE MEASURES

27 Main strategic directions Type GoalAbbreviated Economic effect Economic A sustainable and efficient agricultural sector which can compete on the world market, contributing to the growth of the national income Increase in competitiveness Profit Social To ensure that the quality and safety of the food satisfies the needs of consumers Food safetySpending Social To ensure support to the living standard of people dependant on agriculture, and who are unable to follow economic reforms with their development Support to the standard Spending Social Support to the sustainable development of the village Development of the village Profit and spending Environm ental protection To preserve the natural environment from the devastating effects of agricultural contamination Environmental protection Spending Political To prepare Serbias agriculture for integration in the EU Accession to the EU Complex Political To harmonize the policy of domestic support and agricultural trade to WTO rules Accession to the WTO Complex

28 Agrarian budget (million dinars) (25 bn dinars = 270 million euros in 2006)

29 2005 … +1…..______________n_______________….-1…..EU Modernization of Agricultural and Adjustment to the WTO & EU Budget Goal

30 Support Structure

31 Main 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 shocks 1. Economic growth and development 2. Alleviating transition shocks 3. Social welfare measures

32 1. Economic Growth and Development

33 To create adequate social and economic conditions in village environments and to ensure their contribution to the countrys economic growth Adoption of the basic principles of rural development. To make a categorization according to the EU model of less favorable areas for production To draw up a Program for the development of ecological agricultural systems, especially for marginal areas and areas of protected nature To adopt regional, local action plans for rural development To form a Rural Development Agency To prepare a rural development program for using the funds from the agrarian budget and funds from donations PROPOSED STRATEGY, Novi Sad, 12 November, 2004

34 Rural Development and Investment Support

35

36 Rural Development Support FOCUS ON THE USER PROGRAMOTHERLFA 1. Promotion of production and marketing Farms, Machinery, Storage capacities… 30% % 2. Rural diversification30-40%40-60% 3. Rural infrastructure40%50-60% Investment Support FOCUS ON THE INVESTMENT 1. Establishing cattle-raising farms30% 2. Improving milk quality30% 3. Increasing storage capacities40% 4. Machinery and equipment Irrigation Polythene greenhouses and greenhouses Sowing machines, sprayers, % OTHER. Introduction of standards (HACCP, ISO…) Establishing orchards and vineyards Selection measures in cattle-raising Land regulation measures...

37 COMPETITION 1 – PRODUCTION AND SALES PROMOTION Cattle imports Equipment and machinery Farms Curing, refrigeration, packing plants... COMPETITION 2 – VILLAGE INFRASTRUCTU RE Power grids District roads Waterworks Sewage system Village households Agro-business centers and incubators COMPETITION 4 – ORGANIC PRODUCTION Promotion and protection Education Demo farms Excursions and regional cooperation Field conversion Conversion of cattle farms Certification COMPETITION 1Farms COMPETITION 2Dairy industry COMPETITION 3 Warehouses, refrigeration plants, silos, curing plants, wineries COMPETITI ON 3 – VILLAGE PROMOTION Agro-tourism Tradition crafts Promotion of local products Cultural and sociological activities Education of the village population Promotion of integration Renewal of farms Agro - Eco Demo farms Excursions Village garbage dumps Pits, graves Wind-breaks Afforestation Protection from erosion Village dumps Polythene greenhouses High mountainous regions??? Mowing meadows

38 Less favorable areas (Areas with poorer conditions for agricultural production) Majdanpek Žagubica Bor Boljevac Soko Banja Knjaževac Svrljig Bela Palanka Gadžin Han Pirot Babušnica Dimitrovgrad Crna Trava Surdulica Bosilegrad Trgovište Preševo Kačanik Štrpce Prizren Opolje Gora Dečani Kladovo Kučevo Peć Istok Zubin Potok Zvečan Leposavić Kuršumlija Tutin Novi Pazar Raška Sjenica Prijepolje Nova Varoš Ivanjica Priboj Čajetina Užice Bajina Bašta Nova Crnja Žitište Sečanj Beočin Irig Alibunar Kovin INCENTIVES OF THE MAFWM FOR 2006

39 LFA A marginal area is an area of a municipality on whose territory there exist –natural (high altitude, poor land quality, slanting terrain, floods and all types of erosions) and –legal (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 and Protected 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).

40 Grants for rural development Dependence on demand

41 fruit and vegetable processing (HLADNJAČE) Centralna Srbija15952 Imaju ili su u procesu uvodjenja HACCP and ISO 9001 Vojvodina29 fruit and vegetable processing (FABRIKE ZA TOPLU PRERADU) Ukupno 6020 imaju ili su u fazi uvodjenja HACCP and ISO 9001 ECONOMIC COMPANY/ACTIVI TY TYPE OF PROCESS ING CONSULTIN G COMPANY APPROVE D AMOUNT REQUESTED FUNDS FOR PRODUCTION "HIGLO" AD refrigeratio n plant ConsAct Mr. Janoš Varga 525, For imports and costs of certification HACCP Deeply frozen vegetables, peas and green beans 2000t, and they also produce: cauliflower, peppers, carrots, potatoes, parsnip, kohlrabi and broccoli. "DONIMPEKS" ДОО refrigeratio n plant Qualitass education 800, For the costs of introduction and certification HACCP and ISO 9001 peas-630, green beans-840, carrots-290, peppers-660, spinach-480, onions-300, corn-1050, parsnip-100, celery-110t. "DELTA FUNGI" DOO mushroom processing AQA639, For the costs of introduction and certification HACCP and ISO 9001 mushroom processing " JUGPROM" DOO fruit and vegetable processing AQA380, For the costs of introduction and certification HACCP and ISO 9001 "MARNI" DOO refrigeratio n plant, mushroom s AQM800, For the costs of introduction and certification HACCP mushroom processing STRŠULOVIĆ fruit and vegetable processing AQA292, For the costs of introduction and certification HACCP and ISO 9001mushroom processing, Capacity usage 100% "DELIKATES SPICES & PEPPER" DOO spice pepper processing Quality consulting 217, For the costs of introduction and certification HACCP 80% of total production is exported to the foreign market "SLOVAN - PROGRES" DOO Fruit and vegetable processing Jugoinspekt399, For the costs of introduction and certification HACCP and ISO 9001 "MARTIS COMERCE" DOO spice pepper processing Quality consulting 465, For the costs of introduction and certification HACCP and ISO % exported to EU countries "AGRO-MOBIL" DOO production of seed and mercantile potatoes Tehnomag800, For the costs of introduction and certification HACCP and ISO 9001 production of seed and mercantile potatoes, Capacity usage 90% "3 MART" DOO medicinal herbs, mushroom s Alfa-team309, For the costs of introduction and certification HACCP JUROFUNGO DOO mushroom s AQA353, For the costs of introduction and certification HACCP and ISO 9001 mushroom processing POLIMARK ketchup, mayonnais e and mustard production 186, For re-certification in HACCP system and ISO 9001 PK "PRVI MAJ" AD, refrigeration plant RUSKI KRSTUR refrigeratio n plant ConsAct Mr. Janoš Varga 220, For the costs of introduction and certification HACCP frozen vegetables (peas, sweet corn, root vegetables, broccoli, cauliflower, onions and peppers). DOO "POLO" Fruit and vegetable processing Gradac479, For the costs of introduction and certification HACCP and ISO 9001 vinegar production and warm vegetable processing (pickles, peppers, beet, pickled foods and red-pepper chutney) "MERKOP" DOO fruit and vegetable preservatio n Ingel798, For the costs of introduction and certification HACCP and ISO 9001 pickles, chili peppers and peppers. Capacity usage 60% "FUNGO-JUG" DOO refrigeratio n plant AQA For the costs of introduction and certification HACCP and ISO 9001 forest fruit processing (Boletus mushroom and chanterelle), fruit processing - purchase, freezing and packaging (raspberries, blackberries, strawberries, plums, currants and blueberries) "RUMEN" ZZ fruit and vegetable processing Q expert For the costs of introduction and certification HACCP and ISO 9001 preserved 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" DOO Mushroom processing AQA For the costs of introduction and certification HACCP and ISO 9001 mushroom purchase and processing (fresh, dry and pickled (Boletus mushroom and chanterelle) ZZ "VOĆAR - DRAGAČEVO" refrigeratio n plant Jugoinspekt For the costs of introduction and certification HACCP and ISO 9001 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 AD fruit and vegetable processing AQA For the costs of introduction and certification HACCP and ISO 9001 Warm 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.O refrigeratio n plant AQM268, frozen fruit "J.P.L. SPECIAL" DOO refrigeratio n plant AQA444, The refrigeration plant is located in Kosjerić. FLORA refrigeratio n plant SMS Consulting 770, frozen fruit purchase and processing DRAGAČEVAC PROMET DOO refrigeratio n plant SMS Consulting 800, LIBERTAS D.O.O refrigeratio n plant AQA800, "STANIĆ" DOO refrigeratio n plant SMS Consulting 446,880.00Two items deep freezing, warehousing and fruit processing, primarilz raspberries. Exports are to the West European market. "JUŽNI BANAT" AD refrigeratio n plant AQA800, scope of production: fruit t/god, grapes t/year, brandy l. "EXAL" CO DOO refrigeratio n plant Citadela800, fruit and vegetable deep freezing, fruit and vegetable drying. "DONIMPEKS" ДОО refrigeratio n plant Qualitass education 800,000.00www.donimpex.com 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 DOO refrigeratio n plant AQA350, frozen plums, sour cherries AGROLISA DOO refrigeratio n plant Kom projekt533, frozen fruit, mostly raspberries "PAMS" DOO refrigeratio n plant AQA353, purchase, processing and exports of forest fruits and fruit (mushrooms, strawberries, raspberries and plums). MENEX refrigeratio n plant AQM598, ZADRUGAR DOO refrigeratio n plant AQM584, SIROGOJNO COMPANY DOO refrigeratio n plant AQM617, frozen fruit purchase and processing (raspberries, blackberries) JUGOTREJD DOO refrigeratio n plant SMS518, purchase and fruit processing (raspberries and blackberries) raspberries PRODUKT DOO refrigeratio n plant 274, cultivation, processing and exports of frozen raspberries. The refrigeration plant has a total warehousing capacity of 3,000 tons TRGOVINSKO PREDUZEĆE "GRADINA DMR" AD refrigeratio n plant Q expert international 448, Four 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" refrigeratio n plant ARS639, frozen 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 DOO refrigeratio n plant SMS consulting 343, Exports to EU countries (France, Germany, Austria, Italy, Belgium). Production of frozen raspberries (mostly Rolend) "BSF" AD refrigeratio n plant ConsAct Mr. Janoš Varga 633, HIBRID AD refrigeratio n plant AQM800, Two refrigeration plants for the purchase and processing of fruit (frozen) 1000 and 1100t, almost everything is exported "YUGENT" DOO refrigeratio n plant SMS consulting Preliminary contract with a certification company and bill of chargesfrozen fruit (raspberries) EURO FRIGO DOO refrigeratio n plant SMS consulting frozen fruit (raspberries) "D.M.B" DOO refrigeratio n plant SMS consulting Contract with a certification company and bill of charges Juice of berries and forest fruits,non-concentrated, frozen raspberries "FRUKOM" DOO refrigeratio n plant SMS consulting frozen raspberries ZA FRUIT DOO refrigeratio n plant AQM production, purchase and fruit processing, 90% is exported, one of the founders is the German company Obst Trautner GmbH "PROGRES PROMET- refrigeration plant MILENIĆ" refrigeratio n plant They do not have a preliminary contract with a certification and consulting company, a bill of charges and a certification deadline DOO "PANIĆI" refrigeratio n plant AQA purchase, processing and fruit freezing (sour cherries, raspberries, blackberries, plums). capacity 1500t, installed capacities 450t, daily processing 35t. "FRIKOS" DOO refrigeratio n plant ConsAct Mr. Janoš Varga frozen fruit (raspberries, blackberries, sour cherries, plums, strawberries) and mushrooms. Warehousing capacities 800t. AD "EUROFRIGO" refrigeratio n plant AQA purchase, freezing, finishing (sour cherries, plums, raspberries, blackberries). 90% exports PREDUZEĆE "INTERFOOD 60" DOO refrigeratio n plant AQA "RADENKO POPOVIĆ" DOO refrigeratio n plant AQM DOO "TRI KLASA" refrigeratio n plant ARS purchase i fruit freezing (strawberries, sour cherries, raspberries, blackberries, plums) "AGROFOST" DOO refrigeratio n plant ConsAct Mr. Janoš Varga freezing, finishing and packaging of raspberries, blackberries, plums and sour cherries "BERY-EXPO" DOO refrigeratio n plant ConsAct Mr. Janoš Varga They do not have an offer from a certification company frozen fruit (raspberries, blackberries, plums, sour cherries strawberries and dog- rose berries) "ORBITA" DOO refrigeratio n plant AQA purchase finishing and exports frozen raspberries "LEDENICE" AD refrigeratio n plant FON Offer of a certification company purchase and fruit processing HORTO FRUITS INTERNATIONAL refrigeratio n plant AQA fruit processing (purchase, freezing, finishing i packaging). Berries (raspberries, blackberries, strawberries) and plums "GOLDEN FALCON" DOO refrigeratio n plant TUV purchase of fresh fruit, freezing, warehousing, processing, packaging and sale "GODENS" DOO refrigeratio n plant ConsAct They do not have a certification deadline and an offer from a certification company "FRIGOFRUTTI" DOO refrigeratio n plant Bonex Frozen fruit production "AGROTEKS" DOO refrigeratio n plant AQM Frozen fruit (raspberries, blackberries plums) "ESKIMO S PRODUKT" DOO refrigeratio n plant Jugoinspekt They do not have an offer from a certification company capacity 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 DOO refrigeratio n plant AQA processing and freezing of fresh and frozen berries, processing fresh, dry, frozen and pickled mushrooms. Scope of production 800t per year "MIG-PROMET" DOO refrigeratio n plant ConsAct Chamber of a 150t capacity. "BELFRUT" AD refrigeratio n plant Jugoinspekt They do not have a certification deadline and an offer from a certification company capacity t. raspberries blackberries, strawberries, plums, sour cherries, apples and other "ML" DOO refrigeratio n plant Delpas offer from a certification company One 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" ADBeveragesAQA800, vinegar production l. "FRUVITA" DOOBeverages Qualitass education 800, production 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" DOOBeveragesSupport521, Wild apple vinegar, juices and sirups made of forest fruits, fruit wines made of forest fruits " DUGA FRUIT" DOO BeveragesSupport800, refrigeration 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 DOOBeveragesAQM800, " NEKTAR " DOO fruit and vegetable processing Q quality800, production of fruit and vegetables on a space of 2000 ha. Exports: Canada, Australia, Switzerland, EU, China, US, BiH, Macedonia and Croatia RESAVA KOMERC DOO fruit and vegetable processing Q quality629, 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- KOPAONIK fruit and vegetable processing ARS639, Total 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. " JUGPROM" DOO fruit and vegetable processing AQA380, 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) STRŠULOVIĆ fruit and vegetable processing AQA292, production, processing and packaging of fruit and vegetables (production of prunes). Capacity usage 100%. "SLOVAN - PROGRES" DOO fruit and vegetable processing Jugoinspekt399, "VINO ŽUPA" ADBeverages Qualitas education For 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" BeveragesYumek production of alcoholic, non-alcoholic beverages and marmelade "VOĆAR-PALANKA" AD fruit and vegetable processing Ingel Warm fruit and vegetable processing, Capacity usage 52%, "RADO-SLOV-I" DOO fruit processing AQA VULOVIĆ I DR. MEGA-F.KOMERC OD fruit and vegetable processing Support They have no certification deadline PTP"KARLO EXPORT IMPORT" DOO fruit and vegetable processing Support Warm fruit and vegetable processing Subsidies for introducing standards

42 2. Alleviating the Transition Shock

43 Better product marketing INCREASED CONSUMPTION Finding new marketsConsumption growth on existing market Increased purchasing power Lowering of cost price Introduction of new technologies Integration Input subsidizing Fuels Fertilizers 100 liters 16 dinars Registered 30% refund with a receipt

44 MAIN GOAL: DURATION: NECESSARY FUNDS: ACTIVITIES: i)To develop the financing of the agricultural sector from real sources, instead of burdening producers ii)Development of a credit history iii)Increased competitiveness by enabling producers to gain access to capital 5 – 7 years 700 million to 1 billion EUR - To support the credit market with money from the agrarian budget -To withdraw and leave financing to banks … Necessary funds Bank funds Funds of the agrarian budget The establishment of a credit history (acquired trust) Changed structure Change in the payment system through the establishment of a register Credit support

45 A total of over 23,341 short-term credits paid –Average credit value 69,879 dinars Short-term Credits in Up to 1 ha ha ha80120 Over

46 A total of over 1,923 long-term credits paid Average value 16,188 EUR Long-term credits in 2005

47 3. Social Welfare Measures

48 Main goals of agriculture in SerbiaAbbreviatedEconomic effect Sustainable and efficient agricultural sector which can compete on the world market, contributing to an increase in the national income Increased competitivene ss Profit To ensure that the quality and safety of food satisfies the needs of consumers Food safetySpending To ensure support to the living standard of people depending on agriculture, and who are unable to follow the economic reforms with their development Support to the standard Spending Support to sustainable village development Village development Profit and spending To preserve the natural environment from the devastating effects of agricultural production Environmental protection Spending To prepare Serbias agriculture for integration into the EU Accession to EU Complex To adjust the policy of domestic support and agricultural trade to WTO rules Accession to WTO Complex Main goals Support to non-commercial farms 40,000 dinars per household member People above 55 years of age Farmer insured for a minimum of 10 years

49 i)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; ii)the joining of cultivated land; iii)support to households whose members are no longer able to cultivate their land due to their age. Producer above the age of 60 Producer below the age of dinars dinars Development of a Land Leasing Market NEW

50 Message Poverty requires the special attention of all the factors of society and its reduction must be a priority Without understanding the essence of lasting and occasional poverty it is impossible to check it Rural 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


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