The strategy of agriculture and rural development of the republic

In terms of the value of the trade balance in relation to the volume of available agricultural land, Serbia is placed at the bottom of the list among European countries with positive trade balance of agricultural and food sector. This group of countries also includes Poland, Lithuania and Bulgaria. The cause of such low value of balance in relation to the available land area is in the structure of export, where raw materials, grains (21% of exports) and fruit (17 %) are highly represented. The share of commodities that include expensive products and produce of higher processing phase is much smaller, which practically positioned Serbian agriculture as a supplier of raw materials.

Chart . The balance of foreign trade of agri - food products

of the Republic of Serbia and the EU countries (euro/ha)

Source: RSO and EUROSTAT

There were no significant changes in the structure of trade in agricultural and food products in the last decade. Traditionally, the most important export products were grains (HS10), fruits and nuts (HS08), sugar (HS17), fats and oils (HS15) and beverages (HS22), which together account for about 60% of the total value of exports of agricultural and food sector. Import of agricultural products was much more diverse. Four major imported products (fruits and nuts, coffee/tea, various food products and beverages) accounts for 30% of imports of agricultural products in Serbia. There was relatively little trade in meat and dairy products in both directions.


Live animals

Meat and other slaughtering products

Fish and Shellfish

Milk, eggs and honey

Vegetables, roots and tubers for eating

Other products of animal origin

Ornamental plants, roots and similar

Stone fruits, peel of citrus fruit, melons & w.melons

Coffee, tea and spices

Grains

Products of the milling industry and starch

Grains, seeds, fruits, feed and similar

Shellac, rubbers, and resins

Wickerwork plant material and similar

Vegetable and animal fat, wax and similar


Meat, fish and shellfish products


Sugar and sugar products


Cocoa and cocoa products


Prod. Based on grains, milk and similar


Products from fruits and vegetables


Different food products


Beverages, alcohols and vinegars


Remains and waste from the food ind.

Tobacco and tobacco replacements

Chart . The balance of trade based on group of products

in 2002 and 2005 (millions of euro)

Source: RSO

The most important trade partners of Serbia are the countries of EU-27. Half of the exports and 45% of imports of agricultural and food products is carried out with the EU countries. Five major agricultural products imported in Serbia from the EU are different food products (HS21), fruits (HS08), beverages (HS22), remains and waste from the food industry (HS23) and tobacco (HS24), which accounts for about 40 % of total imports of agricultural products. Main exports from Serbia to the EU are fruits (HS08 - especially raspberry, sour cherry and blackberry), cereals (HS10), sugar (HS17), animal and vegetable fats and oils (HS15, of which soya and sunflower oils are major export products of Serbia to EU). The five categories of products account for about 70 % of total Serbian exports to the EU.




CIS

CIS



EU27

EU27

Other Countries

Other Countries

West Balkan

West Balkan

Export

Import

Chart . The structure of exports and imports of agricultural and food products of

Serbia by groups of countries (%)

Source: RSO and EUROSTAT
Trade with EU countries has been conducted on the basis of the Interim Trade Agreement (ITA). Serbia decided to start with the implementation of the Agreement on January 30th 2009, while the EU started applying the Agreement on February 1^st, 2010. The European Union approved the elimination of all quantitative restrictions, tariffs and duties on their own imports of agricultural and fishery products from Serbia. Exceptions are alive male calves and "baby beef", sugar and wine. For calves tariffs were reduced (compared to the MFN tariff levels) but not completely abolished, while for the "baby beef" and sugar the annual quota (of 8.700 tons and 180.000 tons, respectively) has been applied. Also, when it comes to certain categories of fruits and vegetables, specific tariffs (fixed amount per ton) were eliminated, while the tariffs of the added value although reduced, were retained. and.

Second important foreign trade partner of Serbia are former Yugoslav republics. Almost half of the exports of agricultural products Serbia has the ultimate destination to one of these countries, and nearly a quarter of total imports of agricultural and food products in Serbia originates from these countries. Trade in agricultural products between Serbia and neighboring countries is quite diverse. Grains or products/processed grains are the main products that Serbia export to the region. Beverages are the main product in the export to and import from the former Yugoslav republics. In the trade on the regional market, Serbia has (traditionally) been a net exporter in each of these countries except Croatia.

Growing share in the structure of exports of agricultural and food products was recorded by a group of countries of the Commonwealth of Independent States (CIS). Serbia is the only country in Europe, apart from some members of the Commonwealth of Independent States, which has signed a Free Trade Agreement with Russia. The agreement stipulates that the goods for which it can be proven to originate from Serbia (goods that have more than 50% of the content from Serbia), do not pay customs duties when they are intended for the Russian market, unless exempted from free trade regime. A list of products on which the free trade regime is not applied changes every year, but agricultural products have not been affected until now. A major problem in exporting products to the Russian market is the large number of technical barriers. These barriers were caused by the existence of strict regulations and standards that are defining the characteristics of the products that can be traded on the Russian market. These standards are in some respects more demanding then standards that apply to the EU market.

2.6. The condition and trends in rural areas

On the territory of the Republic of Serbia there are 6,158 settlements, of which 193 are in urban areas (3.1%), and 5,965 are other settlements, which are automatically considered rural ones. Since 1981, The Republic Statistical Office of the Republic of Serbia has been applying administrative criteria for identification of the type of settlement, according to which settlements are divided into "urban" and "other". The division was based on the decision of the administrative units of local government to declare certain settlement as urban. All other settlements that are not designated city are classified as "other". For the description of the situation in the rural areas of Serbia in this document the official statistics data on "other areas" as defined by the RSO will be used.

2.6.1. Demographic characteristics and trends

Population Census results from 2011 show that the demographic trends in Serbia, especially in its rural areas, are increasingly unfavorable. In the period of 2002-2011 there was a decline in the total population of 4.15%, which was primarily a result of negative population growth and due to migration abroad. The rural population in this period was reduced for 311.139 people (10.9%), and fell below 3 million, and now is 40.6% of the total population of Serbia. The following information explains the negative demographic trends in rural areas:

In about 1000 villages population is less than 100 inhabitants, which basically shows that every fifth villages on the verge of disappearing, the biggest concentration of such settlements are on the south and on the east of the country, where every third village has fewer than 100 residents.

Ten villages do not have a female resident, while in two villages live only women.

In rural areas of Southern and Eastern Serbia population was reduced by 19% during the period of nine years. The average population density in a square kilometer in Crna Trava was boiled down to just five people, and the average age of its residents is ten years above the national average.

Region Šumadija and Western Serbia is the only one where more people live in rural than in urban areas (52.6%).

The age structure of the rural population

One of the key characteristics of demographic development in Serbia is an increasingly unfavorable age structure. Changes in the age structure in the period of 2002-2011, indicate a continuation of the process of declining of share of young people, with simultaneous increase in share of the elderly people. The parameters of the age structure of the rural population are even worse. Every fifth resident of village in Serbia is older than 65 years of age, while in the Southern and Eastern Serbia it is every fourth one. The coefficients of age dependency in rural areas, with the exception of the region of Vojvodina, indicate that per each person older than 65 years, there are three (in some areas even less) in the age group of 15-65 years. On the other hand, the relationship between the young and old populations shows that per every 100 people older than 65 years, there are only 69 of those under the age of 15 years (in the Southern and Eastern Serbia, only 52).

Table . Age structure of the rural population in the Republic of Serbia, in 2011

	Population structure by age groups (%)			The coefficient of age dependency	The relationship between the young and old populations
	0-14	14-64	65+
Serbia	13,9	66,0	20,1	30,4	69,3
Belgrade region	15,0	69,1	15,8	22,9	95,2
Vojvodina	14,3	68,5	17,3	25,2	82,7
Region Šumadija and Western Serbia	14,1	65,3	20,6	31,5	68,7
Region Southern and Eastern Serbia	12,8	63,1	24,1	38,3	52,9

Source: RSO

The educational structure of the population

In the educational structure of persons older than 15 years of age in the Republic of Serbia, the most common are those with a high school education (47%), whose share has increased since the previous Census by 5 percentage points. The same trend is also present in rural areas, where people with a high school education make up 37% of the population over 15 years of age, and for the first time there are more people in this category than in the category of the illiterate or people without primary education (which made 15% according to the last Census). Growth in the share of people with secondary education took place at the expense of reducing the share of persons with lower education. However, noticeable is the reduction in the share of highly educated rural population, in all regions. Favorable educational and age structure of the population have villages in Vojvodina.

Chart . Educational structure of rural population in the Republic of Serbia, based on regions

Source: RSO

Modest knowledge and lack of additional skills of the rural population are confirmed by the data according to which 97% of the rural population has not attended additional training programs, and 54% does not have special knowledge and skills²⁵. These results adversely affect the overall capacity and competitiveness of the labor force in rural areas. The low quality of the labor force can be considered as one of the factors that hold back economic development in rural areas, since it is the reason of low entrepreneurial potential of the people in rural areas, just as it causes low economic interest of foreign investors. Such an environment encourages the migration of highly educated population, because it is difficult for an educated workforce to remain in areas without enough attractive jobs that match their education and ambition.

2.6.2 Rural Economy

The state of the rural economy of Serbia, due to lack of data cannot be represented by standard indicators related to rural GDP and its structure. For this reason, the overview is focused on different aspects of the labor market and income of rural households.