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At the occasion of Novi Sad's 82th International Agriculture Fair, Minister Snezana Bogosavljevic Boskovic presented a new way to finance Serbian farmers before harvest.

Belgrade, Novi Sad, 14 May 2015 - From 1 June 2015, thanks to the new Law on Financing Agricultural Production, farmers in Serbia will be able to use future crops as collateral to obtain credit from banks and input suppliers. The Law, developed by the Ministry of Agriculture and Environmental Protection (MAEP) with support from the European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO) was adopted by the Serbian Parliament in November 2014 and will be implemented from 1 June this year.

The legislation adopted in Serbia is inspired by Brazil's legislation on Certificates of Rural Products or CPRs. CPRs are a simple and trusted financing tool, introduced by the Government of Brazil, to fill a gap in agricultural financing that the banking sector could not meet.

"A chronic lack of funds for agricultural production is one of the limiting factors to achieve higher production results in the agricultural sector. In order to solve this problem, the MAEP developed the Law on Financing Agricultural Production, which regulates the establishment of a pledge on future agricultural products," explained Minister Snezana Bogosavljevic Boskovic at a side-event of the Novi Sad Fair on pre-harvest finance.

Miljan Zdrale, Head for South-East Europe in EBRD's Agribusiness Department believes in the success of this Law: "We do not expect that the Law will generate revolutionary success overnight but it does offer a great alternative source of financing for agricultural production."

Minister Bogosavljevic Boskovic expressed her support to the joint EBRD/FAO project "Development of a Legal Framework for Pre-Harvest Financing in Serbia" that has helped introduce pre-harvest financing in Serbia. The project will continue to provide technical and legal support throughout the development of the system, for instance to draft supporting regulations, establish a national register for the new instrument, train potential participants in the system and launch a promotional campaign to explain the benefits of pre-harvest financing to farmers, agribusiness companies, input suppliers and banks.

Mr Zdrale confirmed that EBRD, in cooperation with FAO, has set aside funds to help implement the legislation, in particular to establish a transparent register for the new instrument and train the future users of the new system.

For more information on the joint initiative, click here and www.pzf.rs.