The FGD farmers all agreed that after the start of the F&B programme in 2010, the situation in the F&B sector has improved significantly in terms of modernization of the equipment, establishment of the new fruit plantations, and increasing capacities of the processors. The opportunities in the export markets for F&B also look promising for Serbia.
Processors in the south of Serbia estimate that through the support from the F&B Programme the capacities for F&B production and processing have increased by 20-30% in terms of plantation expansion, new equipment and machinery, cold storage and drying facilities. That provides a good foundation for further development of the sector in the region.
Producers are also optimistic regarding the future of the F&B sector. They expect the sector to grow further, but they are also aware that changes have to happen also at the level of policy, knowing that uncontrolled establishment of plantations will lead to market overload with certain type of fruits. The producers also think that the new law on cooperatives needs to establish a more solid foundation for farmers to associate.
However, the F&B sector in Serbia still faces a number of challenges and obstacles for future F&B production increase and value chain development. These include:
- Need for planning and implementation of an operational strategy for the F&B sector in Serbia that goes down to the regional levels. The importance and opportunities of the sector are evident but an overview and plan for how to take advantage of the potentials for F&B production within the different regions of Serbia is urgently needed. This should include operational sector development plan with clear regional perspectives and targets for F&B production and capacities.
- Need for a better organisation of the F&B sector and its key actors in Serbia. F&B sector in Serbia is very fragmented, also compared to other sectors within agriculture. This limits both the possibility to influence the political level at central and regional levels as well as to be able to more effectively utilize the opportunities for exporting.
- The land ownership issue in the region needs to be solved by the government in order to encourage further expansion of production capacity.
- Water and irrigation constraints need to be addressed in a systematic way and at policy level, before producers are forced to stop their production activities.
- There is a concern that the IPARD grant (expected to be launched in 2017 and to “take over” from the F&B Programme grants) may exclude a large number of relatively small and new (young) producers and processors in the F&B sector in Southern Serbia due to more strict requirements to land size and farming experience.
- Models for aggregating farmers should be explored beyond associations and cooperatives. There is currently an absence of associations or cooperatives that could help small producers to raise their competitiveness, but at the same time, no one has answer or clear vision of why or how would they can associate.
- There is need for building trust between government institutions and the F&B market actors as well as between the actors themselves. This would include more fixed agreements and commitments between the actors in the future.
- Despite the efforts and short-term achievements through the F&B Programme support, there will still be a strong need for investments in production, processing and storage facilities in the F&B sector in Southern Serbia in the near future. Not least investing in fresh fruit facilities and establishing of export linkages will require particular efforts.