Administrative & European Public Law

Serbia: Accession to the EU – State of play in Agriculture

Accession negotiations

Serbia – along with 5 other Western Balkans countries – was identified as a potential candidate for EU membership during the Thessaloniki European Council summit in 2003.

The EU’s relations with the Western Balkan countries take place within a special framework known as the stabilisation and association process. In this framework a country is offered the prospect of membership (it becomes a potential candidate) and should be offered official candidate status when it is ready.

In 2008, a European partnership for Serbia was adopted, setting out priorities for the country’s membership application, and in 2009 Serbia formally applied. In March 2012 Serbia was granted EU candidate status and in September 2013 a Stabilisation and Association Agreement between the EU and Serbia entered into force.

Following a major agreement between Belgrade (Serbia) and Priština (Kosovo) reached in Brussels on 19 April 2013, the European Council decided in June 2013 to open accession negotiations with Serbia. The Council adopted in December 2013 the negotiating framework and agreed to hold the 1st Intergovernmental Conference with Serbia in January 2014, which signalled the formal start of Serbia’s accession negotiations.

As of today, the accession negotiations process is stalled, with no chapter having opened more than a year after their official launch.

Serbian Prime Minister Aleksandar Vučić insists that the country has met the EU’s requirements and that it is for Brussels to make the first move, while the EU considers that Serbia still has to fully implement some of the conditions imposed by the EU.

During Enlargement Commissioner Johannes Hahn’s visit to Serbia on 7 May 2015, Prime Minister Oinister Vučić said that Serbia is ready for the opening of the negotiating chapters. Vučić noted that there are some “informal conditions” creating obstacles, like the fact that Serbia is expected to place a hydroelectric plant and Lake Gazivode under full control of Priština. Vučić has stated that he will not allow it. The Serbian Prime Minister also reiterated Belgrade’s position that the main shortcoming in the implementation of the so-called Brussels agreement with Pristina has to do with the creation of a community of Serbian municipalities (Serbia blames the situation on Pristina). The implementation of this deal with Kosovo has been slow, in part because of how politically unpalatable some of the elements are, as well as the absence of a government for six months in the former Serbian province. Vučić also pointed out during the meeting with Commissioner Hahn, the economic reforms undertaken by the Serbian government, including finalizing the privatization process and decreasing salaries and pensions in the public sector in order to maintain macroeconomic stability.

Commissioner Hahn emphasized that it’s up to Serbia to ensure further progress, regarding both technical and political issues. Hahn’s said that Brussels is waiting for the action plans, especially for negotiating Chapter 23 regarding judiciary and fundamental rights and Chapter 24 regarding justice, freedom and security, which were due the first week of May, but were not delivered because of internal consultations. Serbia’s ties with Russia were also mentioned as an issue. Other issues could also be raised, as the 28 EU Member States have different priorities, from the rule of law, to human rights and media freedom.

Serbia, a landlocked country of 7.3 million people, wants the boost of membership talks to help attract foreign investors to its struggling economy but actual accession, at this rate, is unlikely before 2022.

Agriculture and rural development

Even though the agriculture sector is important to Serbia’s economy, contributing 10% of GDP, much of it is uncompetitive. Farms are highly fragmented and there are big regional disparities. While in the northern part of Serbia there are some large, well-equipped holdings, the southeast is dominated by small farms. Farms above 20 hectare represent only 2% of all agricultural holdings according to the 2012 agricultural census. The agriculture sector also suffers from a lack of investment, dependence on weather conditions and uncertain land market.

Regional disparities are high due to geographical conditions (mountainous, hilly, plain agricultural land), demographic trends, economic structures, environmental conditions, transport accessibility and employment and income possibilities. Services in rural areas are generally in decline and many areas lack access to basic services due to lack of investment in construction or reconstruction of local roads, waste management and sewage systems. Climate change poses additional risks to agricultural production, supply of water and other natural resources. Depopulation, internal migration and lack of access to job possibilities in rural areas remain critical issues that so far have not been fully addressed. Creation of new employment possibilities through diversification of on/off farm economic activities is needed. Overall there is a need to improve socio-economic living conditions of rural population, including development of rural infrastructure.

In the agriculture and rural development area, the alignment of legislation and the establishment of the necessary administrative and control structures required by the acquis are the main challenges. This will, in particular, require Serbia to develop the structures and systems necessary to apply EU rules on direct support schemes and to ensure the implementation of the common market organisation for various agricultural products.

The Commission has stated in its Indicative Strategy Paper for Serbia[1] that  while some progress has been made on harmonisation of legislation with the acquis, effective implementation is only at an early stage in most areas. Improved implementation and further alignment of legislation and control standards is required in the areas of food safety, veterinary and phytosanitary policy and animal health.

Chapter 11

The Agriculture Negotiating Chapter for agriculture (Chapter 11) has not been opened yet. On 18 April 2013 implementation of the Action Plan was agreed with political leaders in the Ministry of Agriculture, Forestry mad Water Management of the Government of the Republic of Serbia. Pursuant to this, the implementation of the Action Plan started.

According to the latest Commission Progress Report[2] there has been some progress in the area of agriculture and rural development like the adoption of the Agricultural and Rural Development Strategy and the expansion of the Farm Accountancy Data Network. Nevertheless the Instrument for Pre-Accession Assistance in Rural Development (IPARD) operating structures need to be considerably resourced and major national obstacles for accreditation related to all IPARD bodies should be solved.

A comprehensive strategy for agricultural and rural development for the period 2014-2024 was adopted by the Serbian government in July 2015. It defines the framework for a) the institutional and political reform process, b) for subsidies allocated to agriculture and rural development and c) the EU and WTO integration process. According to the strategy the subsidies for agriculture and rural development will be gradually aligned to the Common Agricultural Policy of the EU.

The establishment of the Farm Accountancy Data Network (FADN) is progressing. The number of participating holdings increased from 173 to 499. The rule book fully transposing the FADN regulation have yet to be adopted and the required administrative structures and capacity need strengthening. There has been no progress as regards the development of the integrated administration and control system.

As regards alignment with the common market organisation (CMO), progress is on going, notably in the wine sector, where registration of vineyards continued smoothly. However, the capacity of the administration in charge of the wine sector still needs further strengthening. A draft law on spirit drinks needs to be further aligned with the acquis before adoption. Serbia will need to develop a roadmap for the alignment and implementation of the CMO for other products.

Regarding rural development, preparations for the Instrument for IPARD programme 2014-2020 continued. While substantial progress has been achieved as regards the preparation of the programme, the capacity and readiness of the required operating structures for accreditation for IPARD has not progressed at the same pace. A major obstacle to the accreditation preparations is the relocation of the IPARD Agency to Belgrade and the related recruitment and training of sufficient staff to fulfil accreditation requirements. In addition, the functions and responsibilities of the National Authorising Officer (NAO), National IPA Coordinator (NIPAC) and the Audit Authority in relation to IPARD still have to be established. This is a serious concern as regards the early implementation of IPARD. Solid and effective cooperation between all IPARD bodies must be established.

In the area of quality policy work is underway towards revising the law on geographical indications.

As regards organic farming the area cultivated has increased, with considerable potential for further development. A national action plan for the development of the organic sector is still outstanding.

Overall, in the area of agriculture and rural development, alignment with the acquis remains at an early stage and significant work is still required.

There is no doubt that the Better Regulation package has the potential to make better laws. But it is also clear that it has the potential to slow down decision-making in the EU. In fact, it can be considered that the work being done to sharpen the EU’s Better Regulation policy is a reflection of the fact that the EU is somewhat lost in the direction it wants to follow on a series of substantive issues. In this sense, the wider review that will be a direct consequence of the UK’s drive to reform the EU is to be welcomed.

It should also be noted that four members of the High Level Advisory ground on the Better Regulation package issued a dissenting opinion. This is unusual for EU policy initiatives. The dissenters were concerned that behind the Better Regulation agenda there was a de-regulation agenda. They argue that laws can be administratively burdensome but that does not mean that they are not appropriate: to give priority to the burdensome aspect of the law might diminish the need for law in the first place.

The Better Regulation package recognises that the more free movement there is within the common market the more there is a need to regulate at the level of the EU. In this sense, the dissenters take the view that the ‘burdens’ can be considered a ‘passport’ and thus a benefit to business and to EU citizens.

In practice, the dissenters object to ideas central to the Better Regulation package that before adding new burdens, old burdens must be removed. They argue that if the ‘burden’ continues to serve a purpose it should be retained. They also object to the recommendation that impact assessments should be made available before proposals are sent to the legislator. This, the argue with much reason, could cause regulatory paralysis and deny the EU legislator (the Parliament and the Council are the two legislative chambers) the chance to discuss the details.

It now has to be seen whether the European Parliament, in particular, will agree with the Commission on the new Inter-Institutional Agreement based on the Better Regulation Package. If they consider that it might restrict or constrain their function as the proper venue to review the benefits of regulation or new laws, it is very possible that it will be rejected.

[1] Instrument for pre-accession assistance (IPA II), Indicative Strategy Paper for Serbia (2014-2020), 19 August 2014.

[2] Commission Progress Report on Serbia, October 2014.

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