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15/10/2009

Serbia takes initial steps to establish Grain Warehouse Receipts system

In June 2009, the Warehouse Receipts Law of the Republic of Serbia was approved. Grain Warehouse Receipts (GWR) systems allow local grain farmers and agribusiness entrepreneurs to access short-term credit from banks by depositing grain in certified warehouses and using it as collateral. With more short-term credit available, farmers do not need to sell their crop immediately after harvest, when prices are typically at their lowest, to buy inputs for the next year. To ensure the successful implementation of the system, the Government of Serbia has required a focused technical assistance programme to elaborate policy directions for the development of the system and to train key stakeholders. 

The FAO Investment Centre has been involved in providing technical assistance in the area of GWR for more than a decade under FAO’s cooperation programme with the European Bank for Reconstruction and Development (EBRD), which helps to establish such systems in transition countries by financing technical assistance and by providing credit lines to local banks that use the systems.

As a first step to implement the new law in Serbia, the FAO Investment Centre agreed with the Serbian Ministry of Agriculture to support a study tour to Bulgaria for key Serbian stakeholders. Bulgaria is one of the countries in the region that has successfully implemented a GWR system.

The tour, involving Serbian warehouse inspectors and government representatives in Bulgaria, took place from 28 September to 2 October 2009. Its purpose was to present to the participants the experience of the Bulgarian system with a special focus on the activities of the National Grain Service of Bulgaria which is the licensing and inspection body. The participants were introduced to all components of the system and the management process – licensing, inspection, indemnity fund, and operational bookkeeping of the licensed warehouses.

Highlights of the tour included visiting the headquarters of the Bulgaria National Grain Service and licensed public warehouses in the Bulgarian cities of Vratza, Popovo and Varna.

More information on this knowledge exchange experience is provided in the following audio interviews:

1. Krasimir Kiriakov, President of VOCA Consult, Bulgaria, FAO consultant and expert on warehouse receipt systems (mp3: 2min31sec)

2. Milan Djakov, the Director of the Indemnity Fund, Serbia (mp3: 2min 36sec)