Serbia faces the potential loss of up to €74 million from the EU’s IPARD program due to delays in utilizing these funds. This “hidden” loss primarily affects farmers, who have announced a nationwide protest on November 1, citing the government’s failure to uphold agreements and concerns about potential reductions in subsidies.
The IPARD program is an EU pre-accession assistance tool designed to support rural development, enabling candidate countries like Serbia to access funding for agricultural investments. The funds in jeopardy pertain to the IPARD II program, which was set for the 2014-2020 period and is valued at €175 million. Although these funds remain available until the end of 2024, the ongoing IPARD III program, which covers 2021-2027 with €288 million in EU support, has already been launched.
Experts attribute the potential loss of IPARD funds to several factors, including a lack of farmer engagement with public calls from the Ministry of Agriculture, as well as the diminished capacity of the Administration for Agrarian Payments, which manages the program. Delays in processing investment requests and disbursing funds have also been reported.
The European Commission’s annual reports have emphasized the need for enhanced human resources within the Administration for Agrarian Payments and highlighted ongoing delays in adopting legal regulations that affect agricultural product quality schemes. The Commission has urged Serbia to expedite IPARD implementation to ensure timely access to EU financial support and to prevent further losses.
To illustrate the financial impact, the European Commission reported that Serbia lost €12.8 million from IPARD in 2022 and €3.7 million in 2021.
Since its establishment in 2009, the Administration for Agrarian Payments has been pivotal in enabling Serbian farmers to access EU pre-accession funds and prepare for future EU membership by aligning with the Common Agricultural Policy.
How does IPARD work in practice?
In practice, potential investors must first apply to the Administration for Agrarian Payments. Upon receiving approval, they can begin their investments within a specified timeframe. They receive a formal decision that guarantees a significant portion of their investment funds will be reimbursed.
Since 2021, an option has been introduced allowing investors to receive up to 50% of their requested subsidy in advance, prior to starting their investment.
Importance of IPARD programs for farmers
Farmers in Serbia can apply for IPARD funds for various types of investments simultaneously, such as rural tourism, agricultural production, and processing. Financial support can cover up to 75% of project costs, with a maximum incentive of €2 million, while the remaining funds are sourced from the Serbian budget.
