Miljan Ždrale, Regional Director of the Agribusiness Sector for Central and South-Eastern Europe (EBRD) – COVID has expedited the digital revolution of the agricultural sector

Agribusiness is a very important priority for our bank in Serbia and the region, and we will continue to strongly support this important sector through investments.

Digitalization is one of the EBRD’s strategic priorities in the coming period and we are looking forward to opportunities to connect agribusiness with the otherwise developed IT industry in Serbia, as comparative advantages of our market. The bank’s advisory team is particularly involved in this process with small businesses.

Miljan Ždrale, Regional Director of the Agribusiness Sector for Central and South-Eastern Europe (EBRD)

 How would you rate the current situation in the agricultural sector (agribusiness) in Serbia?

Serbia’s agricultural sector has been recording positive trends in external trade, growth of average yields in many branches of agricultural production and the implementation of latest solutions throughout the agribusiness market chain. This is an extremely important sector for Serbia, as an agrarian country, and its share in GDP of about 10% has been affected by the challenges of climate change, labour shortages, changes in consumer habits and market liberalization which need to be resolved. Such challenges require a coordinated and comprehensive approach of all stakeholders – from farmers, manufacturing, retail and distribution, on the one hand, and the relevant part of the public sector where the EBRD, as a unique international financial institution with a focus on the private sector, can be important link through investments and reform process.

 This is where we are truly unique because, in addition to investments in this sector, we have the largest number of projects in Serbia after Ukraine, the so-called political dialogue and technical assistance with the Ministry and relevant institutions, which in itself speaks about our view of how important is this sector for the Serbian economy.

 How can the problems of financing in agriculture be resolved? Can this be done via funds and how can we prevent relevant risks?

 The EBRD finances exclusively the private agribusiness sector, and very often those companies, which due to their size, do not qualify to be beneficiaries of the agricultural budget. In that case, the EBRD meets part of the financing needs in the country in a way that is complementary to the state. Also, in cooperation with commercial banks, we finance micro, small and medium-sized enterprises and farmers, thus contributing to the provision of financial resources for doing agricultural business to a large and diversified circle of clients. Although still in development, and being aware of the fact that SME agri clients are perceived as a higher risk by banks and other financial institutions, we plan to work on new instruments, the so-called “risk sharing” and similar guarantee schemes.

Since 2006 and the beginning of our operations in Serbia, the EBRD has invested over EUR 760 million in agriculture, beverage and food production, FMCG sector and food retail chains

 The use of advanced technological solutions in agriculture is increasing. Is this a way to overcome numerous challenges?

We are witnessing a very fast implementation of digital solutions in numerous sub-sectors of agriculture and agribusiness. Precision agriculture, smart irrigation, fertigation, satellite imagery, sensors, drones, blockchain, online retail, etc., facilitate agricultural operations, positively affect profitability but also contribute to food safety. Furthermore, digital technologies must enable farmers and others engaged in the sector to make production-related decisions based on evidence rather than prediction, experience or feeling, as has been the case in the past.

Only recently we had the very first investment in online retail (non-store retailing) in Hungary and Romania, which is an upcoming trend. I believe that we will have similar investments in the Western Balkans quite soon.

How does the EBRD help agribusiness not only in Serbia but also in the region, and how important is for the Western Balkan countries to be linked?

Since 2006 and the launch of our operations in Serbia, the EBRD has invested over EUR 760 million in agriculture, beverage and food production, FMCG sector and food retail chains, mostly in the Western Balkans region in which we invested a total of over one billion euro. For example, we have invested over EUR 260 million in the cereals and oilseed sector alone. In addition to credit arrangements, we are increasingly focused on capital investments and similar financial instruments, either independently or with other investors and funds, as was the case with companies such as Imlek and the like. We are also making effort to boost the dialogue between the public and private sectors and we are glad to have had the opportunity to help the process of Serbia and Egypt harmonizing the phytosanitary certificate for wheat, thanks to which administrative barriers to Serbia exporting to the Egyptian market have been removed.

People claim that Vojvodina can feed the whole of Europe. What does it take for Serbia to position itself as one of the agribusiness leaders on the global map? 

Serbia needs more allocations to support agriculture and agribusiness through agricultural policy measures that have the maximum effect, attract and stimulate domestic and foreign investments have more investments in rural and logistics infrastructure (railway, river transport) that will better connect Serbian producers with export markets, greater investments in irrigation systems to reduce the impact of climate change on agricultural production and better promotion of domestic products in foreign markets. Last but not least, Serbia needs to improve its education system to support further development of the sector and professionals, and learn from the best through cooperation with other developed countries, institutes and educational institutions.

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