FAO.org

Serbia has a population of 7.2 million across nearly 78,000 square kilometres of territory. The rural population accounts for 40.6 per cent of those people. Agriculture accounts for 21 per cent of Serbia’s employment, generating €29.6 billion of the country’s gross domestic product. Among Serbia’s 631,000 agricultural holdings, 99.5 per cent are family farms, and 17 per cent of those are held by women. The average farm size is 5.4 hectares, which is 2.7 less than the European Union average. Small-scale producers are prevalent in the livestock sector. Farms of between 2 and 10 hectares make up the largest share of the country’s farms while holdings of less than 1 hectare account for 29.2 per cent.

The legal framework of agricultural policy and rural development in the Republic of Serbia is based on the Law on Agriculture and Rural Development1 and the Law on Subsidies in Agriculture and Rural Development. The Law on Agriculture and Rural Development foresees that a strategy for agriculture and rural development of the Republic of Serbia will define long-term development tendencies in  agriculture for the next 10-year period.

The National Programme for Agriculture and Rural Development will determine mid-term and short-term goals; the means, hierarchy and a time frame for achieving these goals; anticipated results; and the form, purpose, category and scope of certain subsidies for a seven-year period. The Law on Subsidies in Agriculture and Rural Development prescribes conditions for the creation of consistent and predictable long-term agricultural policy. This law defines types of subsidies such as direct payments, subsidies for rural development measures and special subsidies – defining the means of use and conditions for applying for subsidies, as well as minimal amounts per subsidy. Subsidies for rural development measures include support for programmes that apply to investments in agriculture for the improvement of market competitiveness and reaching certain standards; sustainable rural development; enhancement of the rural economy; and the preparation and implementation of local rural development strategies.

The Ministry of Agriculture and Environmental Protection is paying special attention to the development of small family farms. These farms enable the establishment of a sustainable development system and significantly contribute to the preservation of rural areas, as well as keeping the population, especially young people, in the countryside. Therefore the ministry has recently adopted the new Strategy of Agriculture and Rural Development 2014-2020 of the Republic of Serbia. The strategy took over a year to develop, with contributions from more than 200 relevant representatives of the sector, led by Sector Working Groups and Expert Teams.  This long-term strategic document, defines:
• objectives, priorities and frameworks of political and institutional reforms in the field of agriculture and rural development
• a framework of budget support (total and per pillar), which reflects the development commitment of the new strategy
• indicators for monitoring the objectives realization, position of family farms and opportunities for their development.

The main strategic goals of this strategy are the growth of production and income stability; growth of competitiveness with adjustments to the requirements of domestic and foreign markets and technical-technological promotion of the sector; sustainable management of resources and environment protection; promotion of quality of life in rural areas and poverty reduction; efficient management of public policies, and the promotion of an institutional frame for agricultural and rural development.

Looking at farm structure in the Republic of Serbia, it is evident that small-scale farms are dominant. Owing to their number and specific ways of functioning, small family farms represent an indispensable part of Serbia’s rural economy. The ageing of family farms, migrations and globalization are causing a significant decrease in the number of family farms. On the other hand, small family farms, as invaluable guardians of the countryside, need to be given special attention in agricultural policy, because of the influence they have on the preservation of rural resources and rural ambience, participation in local commodities and services markets, their own production of food and the rural economy. Therefore, the basic goal of the Strategy of Agriculture and Rural Development 2014-2020 is to define the specifics of rural areas through a rural development policy and to ensure possibilities for the growth of small family farms in Serbia. Small family farms in Serbia make a very heterogeneous group and could be dividing into several categories.

The category of poor farms can be further divided to two subtypes: ageing farms which are often run by a single person, and farms owned by people who were once employed outside of agriculture and/or have been long-term unemployed. The next category is people ‘returning’ from urban areas. These are mostly older, retired people or sporadically young families which prefer rural ambience and are willing to start some alternative activity on a small agricultural farm. The third category is habitants of rural areas with regular incomes from sectors outside agriculture. These could be entrepreneurs or employees of public services or other firms in or near to the place where they live. The current potential of small rural farms in the Republic of Serbia is modest, inadequate and thus insufficiently attractive for investments.

For small rural farms, agricultural land itself is the basis of their security, but equipment, facilities and mechanization are very modest, outdated and rarely used for gaining additional income. Unfortunately, poverty in Serbia is mostly a rural phenomenon, and in certain periods rural areas have been almost two times more affected by poverty than urban areas. Considering that economic crisis has a strong impact on employment in the agricultural sector – one of the most dominant sectors in the rural economy – it is almost certain that the trend of poverty growth in the rural areas will increase in upcoming years. As the socioeconomic profile of small family farms is very diverse, their survival strategies and  consequently their attitude towards agriculture and rural development should be significantly different.

With all this in mind, the Ministry of Agriculture and Environmental Protection has prepared the National Programme for Rural Development of the Republic of Serbia 2015-2020 as a long-term plan that will address most of the issues that rural areas are currently facing. It defines special activities, all aiming to support the income of small family farms. The policy of rural development for the Republic of Serbia, defined by this programme, will focus on efficient mechanisms that will coordinate agricultural development and other activities in rural areas with principles governing sustainable development, in an effort to improve living standards and quality of life in rural areas. Diversification of the rural economy and the income of small family farms has represented an important part of the agrarian policy of the Republic of Serbia for many years now. Agrarian policy is also orientated towards the production of traditional food products, intended not only for local markets but for international markets as well.

An important part of the Programme for Rural Development is dealing with the diversification of rural activities, aiming to lessen poverty in small farms by broadening their activities and engaging all resources towards increased employment of members of these farms. Currently there is an intense concurrency of agricultural products, not only on the national market but also on the global market. In their effort to be concurrent on the global market, many producers are turning to the production of traditional (authentic) products – that is, products with a geographical indication, which are distinguished not only by  special quality and characteristics resulting from their specific composition, means of production and processing, but by their geographical origin as well. The Republic of Serbia has huge potential in this segment, as it is a country with vast climate and geographical differences, rich in culture and tradition. In order to fulfil this potential, the Programme for Rural Development defines, as one of its most important priorities, protection of the geographical indication of agricultural and food products. Its aim is to define and develop the identity of Serbia’s products and to create added value, in order to enable family farms to achieve better prices for their products, better market placement, and higher levels of buyers’ trust and branding of their products. This is the right and proper way to achieve one of the priorities of Serbian agrarian policy – to increase the level of concurrency of national food production. According to the number of traditional agricultural and food products, Serbia is among the countries with a significant number of Protected Geographical Indication (PGI) products. However, for many of these PGI products there are no adequately authorized producers (authorized for the production and marketing of PGI products).

Therefore the Ministry of  Agriculture and Environmental Protection is focusing its activities on increases in production and the inclusion of a larger number of producers in the production of traditional products with the Protected Designation of Origin (PDO) or PGI label. Being aware of the fact that it is dealing with small producers, the ministry has adopted the Law on Incentives in Agriculture and Rural Development, which foresees subsidies for small farmers. Producers of traditional agricultural and food products with the PDO/PGI label will receive additional subsidies for control and certification of their products as well as for labelling their products with control stamps.

The Ministry of Agriculture and Environmental Protection recognized the importance and necessity for rural development policy to promote specifications of rural areas and accordingly, the Rural Development Programme will define incentives for development of the countryside in marginal and protected areas. The future prospect of family farms in Serbia is envisaged in several directions, ranging from the gradual disappearance of ageing farms to the development of innovative products and services from rural areas (farms with a vital and highly qualified labour force and strong social capital), with several transitional solutions like adaptation to different market flows.

The strategic approach of the Programme for Rural Development will define developmental concepts, especially multifunctional rural development, promoting the  functionality of rural areas, the significance of the preservation of natural habitat and biodiversity, ethno-ambience and so on – all of which make small family farms an important developmental force in rural areas. With all the aforesaid, it would be fair to say that one of the priorities of the Strategy for Agriculture and Rural Development of the Republic of Serbia 2014-2020 and National Programme for Rural Development is to support Serbia’s traditional food production as one of the main forces of rural development.

This text is kindly provided by the authorities of this country.