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Weak demand on the domestic market

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Cereals without additional chemicals, high standards and the best ecological practices are the basic principles of organic production, but despite the fact that this seems healthy, the demand for organic products in Serbia remains small, and the organic food market in our country is almost non-existent. Because of this, exporting is not an advantage for domestic producers, but the only way to survive.

“The main market is Western Europe, first of all Germany, Italy, and partly Switzerland. There we encounter the problems that accompany the Serbian market. First of all, we are not part of the EU, so we are displaced from the main markets. The costs are always significantly higher, and we are also to the last place in their supply chains and provision of raw materials,” Kosanović said.

Although the state helps domestic producers with subsidies per hectare of EUR 537, this does not mean much to large producers. For example, Kosanović’s company cultivates over 1,600 hectares, while the state supports a maximum of 20 hectares.

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“The increase in producers contributes to the fact that organic production pays off”

Despite the harshness of the market, data from the Ministry of Agriculture show that the number of those opting for organic production grows year by year in Serbia, and the adviser to the president of the Serbian Chamber of Commerce, Veljko Jovanović, said that the recorded increase speaks in favor of the fact that organic production pays off.

“However, the story is not as easy as it seems. When we talk about the example of a large manufacturer, the fact is that if we talk about subsidies, there are things that need to be fixed and that should probably be a little more in their favor,” he said. Jovanovic.

How to encourage producers to engage in organic production?

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When asked what the state can do to encourage producers to engage in organic production, Jovanović said that PKS is putting pressure on the state and competent ministries, as well as monitoring the needs of companies so that regulations can be changed to meet them.

“When it comes to small producers, they should really be satisfied, especially producers of certain fruits and vegetables. As for larger consumers, we always expect more support for those systems that pull the value chains. The point is that large producers transfer the standards to the small ones, to export them and take them to the market where they themselves do not have the knowledge, skills and capacity to do it,” says Jovanović.

He adds that smaller manufacturers should focus on production and choose whether to work for a larger system or look for a customer themselves in some more modest capacity, for example online.

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