Transcript - EastAgri

REPUBLIC OF SERBIA
Ministry of Agriculture, Forestry and Water Management
www.minpolj.sr.gov.yu
Landing to agribusines/rural SMEs and micro-enterprises
Development of rural finance in Serbia
East Agri
2005 ANNUAL MEETING
Rome, March 2005
Goran Živkov
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Less then 75
Agriculture
resources
75 - 85
85 - 90
90 - 95
Over 95
% of
cultivable area
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
• Agricultural land: 5,734,000 ha
• Cultivatable land: 4,867,000 ha
• Agriculture land per capita: 0.56 ha
• Arable land per capita: 0.46 ha
• 35% of population have access to land
• 87% of land is private ownership
• Number of farms: Around 700.000
• Average size of farm: 3 ha
• Number of villages: 4.706
• 44% of the population live in rural areas
• 93% of municipalities and 75% of villages
with negative population growth
Agriculture - Major
component of the
economy
Agriculture share in GDP (%)
• Primary production from agriculture,
hunting and forestry accounted for 21
percent of GDP (25 % agro-processing)
2003
2000
• Exports of primary agricultural products
account for 26.3% of total export
1995
1990
• More than 10 % of employed are in
primary agriculture and agricultural
processing industry
1985
1980
0
5
10
15
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
20
25
The policy challenge: one size
does NOT fit all !!!!!
Important in
terms of
household food
& income
security, so
ensure
continued
access to
inputs, but
exclude from
commercial
policy
Encourage
switch to highvalue crops &/or
expansion to
private farms,
with some
reducing to ag.
households
Establishment
of democratic
structure,
transformation
to modern
cooperatives or
other structures
Ensure further
development
and
enlargement
Privatization
and
restructuring
Land own
Land own %
Cows own
Cows own
%
less than 1 ha
4%
1-3
6%
200,000
Small holdings
1- 5 ha
35%
3-5
41%
400,000
Private farms
more then 5 ha
46%
more then 10
44%
100,000
Cooperative
avg 400
5%
50
1%
510
Kombinats
avg 700
10%
100
8%
549
Agriculture households
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Number of
farms
Agricultural Products
Trade (mio USD)
Liberalization 2000 dabbled
the trade
Deficit decreased
800
600
400
200
0
-200
1996.
1997.
1998.
1999.
2000.
2001.
-400
Export
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Import
Trade balance
2002.
2003
2004
Budget expenditure for agriculture
in 2000-2005 (in billion dinars )
30000
6.00
25000
5.00
20000
4.00
15000
3.00
10000
2.00
5000
1.00
0
0.00
2000
2001
2002
Total ag. budget
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
2003
2004
2005
Percentage of overall budget
Budget goals
Modernization of the agriculture and
adjustment to the EU
2005 … +1…..______________n_______________….-1…..EU
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000
2001
2002
2003
2004
2005
+1
+1
+1
Market Intervention
Structural support
Administartion
Rural Incentives
Enviromental payment
Area payment
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
-1
-1
-1
EU
Finasial infrastructure
Current situation
in development of the
rural credit market
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Current situation
SHORT TERM CREDITS
Ministry of Finance
Development Fund
PRIVATE
BANKS
PRIVATE
BANKS
Input suppliers
• Fertilizers
• Pesticides
• Seeds …
PRIVATE
BANKS
Hidden interest
rate 30-70%
Processors
• Millers
• Oil factories
• Sugar factories …
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
PRIVATE
BANKS
Organizatiors
of production
• Zadruge
• Directors zadruge
• Kompanies …
Farmers
HIGH INTEREST RATE
(Limited influence)
Subvention
State Commodity Reserve
Ministry of Agriculture
• Farmers
• Cooperatives
• Kombints …
Proizvod
Pare
Current situation
MEDIUM TERM CREDITS
High demand
***
Available to the processors and SMEs not to the farmers
***
ProCredit Bank (around 20 mill € per year, average credit
size 3.000 €, interest rate 2% per month linked with € )
***
Mechanization suppliers
***
Ministry of economy – leasing for domestic mechanization
***
UNDEVELOPED MID-TERM CREDIT MARKET
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Current situation
LONG TERM CREDITS
Not exist
and
No sign that will be
established soon
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Agriculture credit market in
Serbia never existed!
The lack of commercial credit for agriculture can be attributed to:
• The lack of investment credit generally in the economy
• The particular risk and low profitability associated with agriculture
• The lack of collateral available (unfinished cadastre)
• Inefficient legal protection
• The relatively small loan size required in the private sector and the
associated relatively high fixed cost of establishing and monitoring it
• Lack of expertise in the banking sector for appraising agricultural
business plans
• Lack of experience and expertise amongst farmers in developing
and presenting business plans
• Farmers do not trust to banks (and opposite) - lack of credit history
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Are there successful agriculture without
developed credit market?
To wait
or
To do something to speed up (slow
down) process
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
MINISTARSTVO POLJOPRIVREDE, ŠUMARSTVA I VODOPRIVREDE
Ministry of Agriculture
Direct payment & Price support
Structural payment
RD (Investment
payment)
Budgetary payment
BANK
BANK
BANK
BANK
BANK
BANK
BANK
BANK
BANK
Open account
FARM REGISTRY
Commercial
credit
Short term credit
Medium term credit
Cooperatives
SMEs
FARMERS
70.000 farmers open account in one of the bank
Bank started to be interested for farmers
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Priorities: Financing
System Development
MAIN OBJECTIVES:
DURRATION:
BUDGET:
i)
Development sustainable system for financing agricultural
sector from real sources
ii) Develop credit history
iii) Improving of production through ensuring access to capital
to farmers
5 – 7 years
700 millions to 1 billion EURO
Needed capital
State budget (MoA)
2004
2005
2006
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
2007
2008
2009
2010 …
Short term credit
•
•
•
•
•
•
•
Short term credit to buy inputs
Loans on 1 years with interest rate on 7% (din)
Linked with farm size (150 – 1000 EURO)
Important to build credit history
Source of money is agrarian budget
Banks are managing credits
Programme 2004
– 68 SMEs received credits in total amount of 6.7 mill
EURO (avg. 89,338 EURO)
– 28.125 farmers received credits in total amount of
21.6 mill EURO (avg. 807 EURO)
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
Medium term credit
• Investment credit on 5 years with interest rate of
3% per year (€)
• Source of money is agrarian budget and banks
• Banks are managing credits
• Banks have 10% risk
• Government Guaranty found secure credit
• Programme 2004
– 157 SMEs received credits in total amount of 21.3 mill
EURO (avg. 135,880 EURO)
– 740 farmers received credits in total amount of 12.04
mill EURO (avg. 16.271 EURO)
East Agri - 2005 ANNUAL MEETING, Rome, March 2005
HVALA
Thank you
East Agri - 2005 ANNUAL MEETING, Rome, March 2005