Serbia – great potential for organic growth

Serbia's organic sector has the potential to grow rapidly. Many farmers have not been able to afford chemical fertilizers, and a lot of land in rural areas could be easily converted. Berries and mushrooms are the country's most important products. Domestic retail is not very well developed, but interesting projects like the Milina Organic Project sound promising, and some stores like Hema-Kheya-Neye put high emphasis on organics. Zaplet, a restaurant in Belgrade, also offers organic food.

“Serbia Organica” (picture: the association's logo) is Serbia's national association for the promotion of organic agriculture, which was formed in May 2009 as an independent, non-governmental and not-for-profit organization advocating the promotion of organic production and the development of the organic food market in Serbia. Serbia Organica is an umbrella organisation which brings together the entire organic agricultural sector in Serbia. Their mission is to make organic production a reliable and competitive agribusiness, both nationally and in foreign markets, as Jovana Vuckovic, General Secretary, told Organic-Market.Info. Through their mission, they strive to protect national resources and preserve nature for present and future generations. By developing organic production, they wish to contribute to the promotion of human and animal health and environmental protection in general. Their vision is to have 20 % of all agricultural areas in Serbia (1 million hectares) under organic cultivation in the next 10 years. The activities of Serbia Organica constitute an integral part of the National Action Plan on Organic Farming Development in Serbia. 
 

According to the NGO “Terra’s”, that is involved in organic production, the total market value of organic products in Serbia is almost 40 million euros. Terra’s in the city of Subotica was the first association formed to assist Serbian farmers with organic production, mainly with education, promotion, lobbying, organizing seminars and workshops, in order to promote organic production. Terra’s organizes promotional activities through a “Bio Festival” that is held regularly in the North of Vojvodina. The second most active NGO, “Green Network” in Novi Sad,  regularly organizes open green markets called “My Farm”, that attract organic producers from the whole country. (Picture: Terra Organica's syrup)

Green Network also publishes an organic bulletin with news about organic production, giving advice to organic producers and promoting companies involved in organic production. The open markets (My Farm) are part of the larger project called “Sustainable Agriculture and Rural Development in Vojvodina” funded by Rockefeller Brothers Fund in New York, the Regional Ministry of Agriculture and several well known large companies involved in agriculture production. The My Farm green markets are held twice a month and bring together organic producers, mainly from Vojvodina, with the aim of promoting organic agriculture and helping small agriculture producers to sell organic products. Both organizations are members of  the national association for organic agriculture Serbia Organica.

The domestic market is developing slowly due to the lack of organizational structure in the production and promotion of organics and to insufficient exposure in the media. Less than 0.01 % of  products consumed in Serbia are organic. Most Serbians are unwilling to pay the 30-40 % (or even higher) premium for organic products since they have low incomes. Studies show that, like in other countries, organic consumers are between 25 and 40 years old, urban and educated, mostly female.

Some consumers are willing to pay higher prices for locally grown fruits, vegetables, meat and milk products and products from specific regions, because they know that fewer or no chemicals are used. In consequence, supermarkets, health food shops, specialized markets for organic products such as My Farm in Novi Sad, and ethnic and high-end restaurants have a constant demand for organic products. There are many different labels and brands in Serbia for healthy food like natural, eco and bio. Some of them are confusing and used by companies which are not certified organic. (Picture: Terra Organica is Foodland's organic brand, offering syrup, jams and juices.) 

Since Serbia does not have a system with a central database, it is hard to give exact figures for the sector. It is aimed to bring together the entire organic sector in Serbia, however, therefore Serbia Organica will start to work on an industry report gathering all data in March. According to data by Organic-World.net, organic production currently takes place on about 4,300 hectares. According to other sources, it is estimated that about 9,000 hectares are in transition. These 13,300 ha would still only represent about 0.3 % of the total arable land in Serbia, and only 218 farms are registered as organic. Since many Serbian farmers have not been able to afford synthetic fertilizers over the past fifteen years, there are only low levels of prohibited residues in many areas. As a result, conversion periods in Serbia are significantly shorter than in most developed nations, with conversions of one or two years not uncommon. There is, therefore, significant potential for rapid growth. (Picture: Busha cattle)
 

Organic production in Serbia is regulated by the Ministry of Agriculture, Forestry and Water Management’s department for organic production. The new Law on Organic Production and Organic Products was adopted by the Serbian Parliament in July 2006 (“Official Gazette” No. 62/2006). The law and ordinances adopted were harmonized with EU Organic Regulation 2092/91 and EU Regulation 834/2007 on organic production and labelling. Consultants, certifiers, professors, researchers, producers, ministry officials and NGO representatives were involved in the creation of the first Serbian law on organic production and organic products. Certification is carried out by separate accredited organisations.The Ministry of Agriculture is responsible for issuing their accreditation, the registration of organic producers, inspection of the certifying bodies and proposing measures for further development of organic agriculture in Serbia. The compulsory national label for organics in Serbia (picture) is authorized and maintained by the Ministry of Agriculture. As well as this label, the Ministry of Agriculture has introduced another label for products that come from land in the process of conversion.
 

Organic production in Serbia started in the late 1970s. But only within the last ten years, production and processing of organics has become more common and economically more important. Organic development in Serbia is export- driven, with Great Britain, USA, Germany, Belgium, Austria and Switzerland being the main destinations for exports. A high proportion of produce is still exported raw and unprocessed, but important processed exports are frozen berries (raspberries, strawberries, blackberries and blueberries) and smaller amounts of frozen and dried plums and sour cherries, certified organic jams, sweets, apple concentrate, vinegar and juices, as well as medical and aromatic herbs and salted and dried wild mushrooms. (Picture: area surrounding the factory of Zadugar near Ljubovija)

A large volume of processed high-value products, like jams and syrup, is sold on the domestic market, for example in supermarkets, health food stores, at local markets or at the farm gate. However, since local markets are not regulated, there is no guarantee that all these products are actually organic. There are also some inititiatives to open organic bakeries and organic restaurants in the country. Although Serbia imports organic products such as baby food from Germany, organic spaghetti from Slovenia and rice from Macedonia, there is still no official data on organic imports.

The “Milina” project (Serbian for wellness) was launched through an initiative to preserve the heritage of Serbian agriculture, initially without any commercial target. Two financial experts from Belgrade decided to found a small farm to invest in the traditional breeding of endangered domestic species. In the region Stara Planina,  two small companies were bought, as well as some animals. (Picture: bags from Milina)
 

A little later, “Milina Organic d.o.o.” was founded to ensure the financial sustainability of breeding endangered indigenous species and growing local crop varieties organically. In terms of the number of breeds and varieties, Milina is now the most important initiative in Central Serbia for preserving biodiversity in agriculture. Three farms belong to Milina Organic – Mojinsko farm and Rudina farm, and the Vlada Farm near Arandjelovac in Central Serbia, according to the Save Foundation.

The Milina Organic project is still at an early stage in animal breeding, but some production has already been achieved. The most important product categories are: meat, with lamb from Karakachan and Pirot Zackel sheep, goat and kid meat, beef from Busha cattle, sausage from Balkan donkeys, and pork from Mangalitza and Moravka pigs; dairy products, with white cheese from sheep and goats, donkey milk for cosmetics and ethnic medical purposes; wool products, with hand-knitted woollen socks, jackets, etc. Services, are also planned like the  use donkeys for hippotherapy and the herds of sheep to keep open the mountain pastures of the national park in Stara Planina. (Picture: leaflet of the National park). 

Milina Organic is also preparing a special shop in the centre of Belgrade so the Serbian consumer can buy all these items and the products of other animal species too. The opening of the store is planned for the near future, probably it will open in the first six months of 2010. In collaboration with the Slow-Food-Movement, Milina Organic organized a promising presentation of indigenous species in the restaurant “Zaplet” in Belgrade (picture). This was the first event to be organized by Slow Food in Serbia. 

Bio Spajz d.o.o was the first health food shop opened in former Yugoslavia in 1986. This shop is still successfully working and is a leader in the health food retail market. Since 1997, it has expanded and breached the national boundaries by opening a company with the same name, aiming at importing the highest quality products available. It has been a general representative and distributor for well-known companies like Mitoku (Japan), Do-It (Netherlands), Biogran (Poland), and for local companies like Biovega (Croatia), and Pecivarne Liptovsky Hradok (Czech Republic), for example. Today, the company employes 20 people and supplies more than 150 health food stores, supermarkets as dm and Mercator, as well as pharmacies across Serbia and Montenegro. Besides operating a shop, an online shop and working as a wholesaler, the company also produces rice cakes, muesli and ghee. 
  

The health food store Hema-Kheya-Neye was launched more than ten years ago in the summer of 1999. The sales area measures 35 square metres, and the company also has offices and a warehouse for imported goods. Last year, the total assortment of organic products increased significantly, so more than 50 % of the company's product range is now organic and consists of, for example, fruit and vegetables, cereals, grains, seaweeds, miso, tamari, shoyu, flour, snacks and bread.

Besides these, they sell macrobiotic products, which are imported from Japan. Products are sold to shoppers in their own store, and the company is also a wholesaler to various customers. It also exports products to Macedonia. In an interview with Organic-Market.Info, Marina Knezevic – the owner of the store - explained that, since the store is situated in the heart of the city, customers are health-conscious people, for example artists and people who have already developed an awareness of a certain lifestyle, and also those who are searching for alternative ways of healing, like macrobiotic food for cancer. Most customers are female – 70 %. (Picture: Organic berries from BMD)

As for the future, the company intends to open a further store in a different city. As Ms Knezevic pointed out, there are no specialised stores for organics in Serbia yet. The main reason, she thinks, might be the lack of diversity of products, since there are strict and expensive customs regulations for imports. Some of the rules are very old, 20 to 30 years. Costs increase by 100 %, which makes the end product much too expensive. Since the average income in Serbia is quite low, customers simply cannot afford them. The company also cooperates with farmers cultivating organic gardens, but all together they do not produce enough to meet the demand despite some of the gardens having been started 15 years ago. The reasons are that the economic and political situation in the country has been very difficult. 

BMD processes, packs and sells wild mushrooms (picture) and wild berries. The family business was established in 1989, and the company’s product line includes Porcini, Chanterelle, Dark Chanterelle, Black Trumpet, and Morel mushrooms. The options include fresh, sun-dried, frozen or packed in brine. Raspberries, wild strawberries and wild blueberries are also available. All BMD’s products are certified organic by BCS-Öko Garantie and are available for co-packaging. 
 

Zadrugar d.o.o. (pictures) was founded in 1990. The company is engaged in purchasing, freezing and processing all berry-like fruits. It operates two IQF processing and storage facilities. The main factory, where the final grading, laser sorting and export packing takes place, is situated in the rural farming Serbian town Ljubovija, about 230 km west of Belgrade. It was built in 2001 and has a storage capacity of 2,000 metric tons. Recently, a new factory was built in Bastav, about 25 km from Ljubovija.

According to John Walker, sales director of the company, the idea behind the second factory was to be as close to two of their crop-growing regions as possible, in order to avoid transporting delicate fresh fruit the 25 km to the main factory: The creation of the second factory allows them to collect, freeze and store the fresh fruit in situ and to avoid unnecessary damage to the fruit. Their total annual processing capacity is around 6,000 metric tons of both conventional and organically certified fruits. The organic project currently consists of 134 hectares of raspberries (1,300 tons), 34 hectares of blackberries (600 tons), and 12 hectares of plums (150 tons).

The company Zadrugar is certified by Ecocert International and is the only organically certified project in Serbia to hold organic certificates of conformity according to EEC 834/2007, NOP final rule # 7, JAS (Japanese market) and Bio Suisse (Swiss market) regulations. The project is certified by Ecocert based on group certification due to the fact that their small-scale farmers are also an integral part of their organic system. Their farmers are divided into six main OGG (Organic Grower Groups) and represent the 6 main organic collecting regions which fall within a 45 km radius of the main factory. The principal markets are Germany, Belgium, Holland, France, Spain, UK, Sweden, Norway, Poland, USA, Japan  and Israel. Very little of their production is sold within the Serbian market. Some of it goes to a jam producer, who sells a range of organic jams in selected supermarkets, although the bulk of their business is selling their non-organic jams. A small amount is freeze-dried.