A systematic analysis of the agribusiness sector in transition economies:

The Serbian meat value-chain

Food and Agriculture Organization

of the United Nations

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ACKNOWLEDGEMENTS

This study was commissioned by the European Bank for Reconstruction and Development (EBRD) jointly with the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO), under the co-operation agreement between the two institutions. The EBRD team was led by Heike Harmgart, Principal Economist in the Office of the Chief Economist in close collaboration with the Agribusiness banking team of the EBRD under the directorship of Gilles Mettetal. The FAO team was led by Emmanuel Hidier, Senior Economist; with team members D’mitry Prikhodko, Agricultural Economist, on whose background research a substantial part of this analysis is based, and Nada Zvekic, Communications Officer at the FAO. The report benefited further from discussions with Marc von Strydonck, Senior Banker, Vedrana Jelusic, Senior Banker and Miljan Zdrale, Principal Banker at the Agribusiness team of the EBRD. Special thanks to Kerstin Meins, analyst at the Office of the Chief Economist for her editing and layout assistance. The EBRD team would like to extend its warm thanks for the kind assistance received from all the government and private sector representatives who kindly shared time with the team, in particular. Zoran Bogdanov, Director, Nenad Miscevic, CFO and Svetlana Bogdanov, Economist from Mesopromet/Banat (meat processing company). From Ministry of Agriculture, Forestry and Water Management Tomislav Topalovic, Expert on Bovine Production and Mirko Novakovic, Expert on Pig production. The EBRD is also grateful to Dragana Pogarcic, Head of Unit for livestock breeding and fishing statistics at the Republic Statistical Office; and the Association of Pig Producers in Bogatic, for their helpful inputs. Special thanks are extended to Milos Milovanovich and the Ministry of Agriculture, Forestry and Water Management for his collaboration.

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Executive Summary

Serbian livestock husbandry has been faced with a twenty year crisis leading to a decline in the volume of production of around 1.5% every year. This has been driven by a significant shrinkage of the national market together with numerous other challenges of transition: the privatisation of state agricultural enterprises followed by the absence of any long-term livestock husbandry development strategy; the technological obsolescence and underinvestment into processing capacities, particularly in the exporting sector of the meat processing industry; poor relationships between livestock producers and processors with no coordinated representation on either side; an absence of positive structured policy measures and delays, sometimes lags lasting up to half a year, in the implementation of comparably sparse subsidy measures. All these factors resulted in the marginalisation in particular of livestock product exports. Compared to 1990, in 2005 total meat production was 30% lower, and by particular sectors the fall was: beef 42%; pig meat 11%; lamb 22% and poultry meat 40%. The major challenge now is to consolidate the primary production side to enlarge farm size and allow for specialisation. Farmers also need to upgrade genetic potential in particular in pig production. The slaughtering industry has the capacity to fulfil both domestic as well as export potential but years of underinvestment and low hygienic, sanitary and veterinary standards pose a significant obstacle. Here investment needs are substantial and one route the industry has taken is further vertical integration either with producers/farmers or with the processing industry. The processing industry itself has started to invest in increasing capacity, technology and standards, but only a few private processing companies have achieved EU standards. The major policy challenge is to harmonise certification beyond the beef industry with EU standards, as well as switching from vaccination of pigs against swine fever and poultry against Newcastle disease and most importantly upgrade slaughterhouses to EU HACCP quality standards.

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1. Introduction

This report will closely follow the structure of the meat value chain combined with the EBRD transition assessment indicator methodology (Table 1). The analysis will focus on the extent and structure of markets; existing policies and institutions; skills and business conduct. The report concentrates on the commercial production of pig and beef meat, its processing and retail. In addition to secondary sources this report draws on interviews with relevant parties along the value chain such as the Ministry of Agriculture, the Pig Producer Association, meat processing companies and the Statistical Offices responsible for livestock.

Table 1. The Meat Value Chain

Value chain segments Activities

Primary production Meat production (commercial pig and beef

production)

Processing Meat processing and preserving (slaughterhouses, processing plants) incl packaging and canning

Wholesale & Retail Wholesale Open market sales

Small-scale retail trade Large-scale retail trade

2. Primary production

In the following analysis we will differentiate – if applicable – between poultry, pork and beef production with the main focus on the latter two since they are of significantly higher commercial importance for the country. Some of the institutional conditions faced by each sector are rather similar, but in particular in the primary production the individual markets look quite different. Overall agricultural production accounted for 14.5% of total Serbian GDP in 2006, with food processing and agriculture combined amounting to 20%. Within agricultural production in 2006, 67% was crop production and only 33% livestock production. The total meat sector accounts for 6% of Serbia’s agricultural exports by value and 2% of the value of agricultural imports in 2006. Pig production dominates the Serbian livestock and meat production, accounting for 58% of the total production in 2005, while the contributions from beef (21%), poultry (16%) and lamb (5%) were only modest in comparison. The overall trend in Serbian livestock population and meat production in the period between 2000 and 2006 was a significant decline in overall numbers of nearly all kinds of livestock (see Table 2).

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Table 2 – Livestock population 2000-2006 and meat production 2000-2005

Kind of livestock

2000

2006/2005

Decrease in %

Cattle (in mill heads) 1,246 1,096 2.0

Pigs (in mill heads) 4,066 3,213 21.0

Poultry (in mill heads) 20,373 17,905 12.1

Beef (in 000t) 104 90 13.5

Pork (in 000t) 283 253 10.7

Poultry (in 000t) 67 64 0.5

Source: Ministry of Agriculture, Forestry and Water Management 2.1. Structure and extent of markets

Serbian livestock production is characterised by a dualism of a large number of small/medium- sized privately owned farms on the one side and of a large, unreformed state- owned livestock production on the other side. Only a small number of farms, in particular out of the smaller farms, are commercially orientated1 and we can observe two opposing trends: smallholdings consolidating into commercial farming, and medium farms downsizing and moving into subsistence farming. Table 3 shows the breakdown of farms by ownership in 2006; 80% of cattle are produced on privately owned farms, whereas only 61% of pigs and 59% of poultry is farmed on private farms. Evidence suggests that the overall decrease in both livestock population and animal productivity was mainly due to a decrease on state owned farms. One important productivity indicator – the difference in average weight – is most pronounced for cattle with over 10% less average weight for cooperatives-reared cattle. This is somewhat surprising since privately owned farms are on average only 3 ha in size and thus produce significantly below efficient scale. For a detailed comparison of carcass weights see Annex IV. Table 3. Farm ownership structure in 2006

Total

Private

Cooperatives

# thous. av. weight

in kg # thous. av. weight

in kg # thous. av. weight

in kg

Cattle 1096 418.30 867 427.80 230 380.66

Pig 3212 64.63 1966 65.33 1246 63.54

Poultry 17905 2.26 10601 2.30 7304 2.20

Source: Ministry of Agriculture, Forestry and Water Management

1 See World Bank report on “Supporting Serbia’s Agriculture Strategy”, 2006.

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Private sector livestock production is still used to large extends in a semi-subsistence way for household consumption and as a safety net. Most of these very small farms (<1 ha) have not specialised, but rather mixed their animal holdings - an average farm consists of two cows plus 3-4 pigs and 20 chickens. Total agricultural labour force accounts for around 17 % of the population, or over 1,300,000 people. However, according to government data, the farming population is rapidly ageing, and not being replaced in sufficient numbers, in turn putting the country’s industry at risk. Government figures point to the following agricultural labour force structure: livestock breeding (43%), field crop farming (42%), fruit and wine production (12%) and other crops (3%). Figure 1 shows the distribution of agricultural land by categories and ways of use in 2005. Figure 1

Source: Ministry of Agriculture, Forestry and Water Management

Another important aspect for the decline both in numbers and productivity of livestock is the state of the food input industry in Serbia. Both fattening and overall numbers depend largely on maize availability and price. Several years of poor maize harvest and subsidised biofuel production have increased global maize prices, and led to lowered fattening and decreased overall livestock numbers. Domestic maize production still drastically underperforms in international yield comparisons. Figure 2 shows the development of maize quantity and price, and while maize production has decreased, world-wide feed use has increased. As a result, some of the major producers started to increase their own input feed production and to upgrade cultivation methods. Serbian livestock fattening is also characterised by relatively high import dependence for such fodder mixture components as coarse soybean meal, vitamins and micro elements vital in the production of effective feeding materials. Serbia has more than 750 livestock feed mills, of which 111 have a capacity to produce over 10 tonnes of concentrate per hour. Import dependence results in high concentrate prices, which in turn cause relatively high costs of fattening livestock. Heavy concentrate feeding is necessary because Serbia is one of the few European countries characterised by the slaughtering of a great proportion of young animals,

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most of all piglets of 30kg live weight, lambs of 25kg and calves of maximum 150kg live weight.2 Figure 2

Maize Prices

0

20

4060

80100

120

140

160180

2000

2001

2002

2003

2004

2005

2006

2007

US

D/t

on

Argentina, Up River, f.o.b. (Tuesday)

US No.2, Yellow, U.S. Gulf (Friday)

Source: FAO statistics On the demand side, the available data on household consumption suggests that consumption of beef has decreased substantially while pork consumption has only decreased slightly. Overall consumption and production data by category indicate that while exports have fallen, domestic demand is met. It is worth mentioning that official data does not take into account on-farm consumption which can be very high in rural areas. Pigs

The pig industry, the 3rd largest agricultural industry in Serbia, has experienced a significant decrease in pig population at the beginning of the decade, but has stabilised its numbers since then. Pig meat is still comparatively cheaper than beef or sheep meat and has therefore been less affected by the fall in disposable income and the loss of external markets prior to 2000. Serbian pig farming is now highly profitable, mainly due to low feed and labour costs and massive effective tariff rates between 60-130% in recent years. For instance, where a maize to pig live weight price ratio of 1:6 indicates a breakeven position, the current average ratio is 1:10. The huge tariff protection has in part contributed to an overall rather inefficient industry, both in comparison to EU standards as well as to those of neighbouring accession countries, as evidenced by both lower carcass weights as well as lower ratios of pig production over agricultural employment. All farms managed fully housed pigs. While larger farms tended to have better technology (heated pads, slatted floors, farrowing crates, and better insulated and ventilated sheds), they are not significantly more profitable per sow than smaller units. None of the farms visited in a recent survey, however, would meet EU animal welfare or environmental requirements.

2 See CEEC AGRi Policy: Situation and Perspective for the meat sector in Serbia, 2007.

Maize Production / Feed Use

0

100

200

300

400

500

600

700

800

2000 2001 2002 2003 2004 2005 2006

mil

l to

nn

es

Maize Production Maize Feed Use

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Cattle

The cattle industry is traditionally one of the most important ones both in terms of domestic production and also of export potential. It was therefore hardest hit by the ten-year sanctions. Prior to 1992, Serbia exported fat cattle and beef meet in particular to Germany, Italy and Greece. Since then, cattle numbers have decreased by nearly 50%, both due to the economic collapse of several state farms and a simultaneous decrease in private ownership as a result of rural depopulation. In terms of carcass weight, beef and veal production decreased less dramatically due to an increase in productivity per head.

Poultry

Consumption per annum of poultry meat in Serbia is at 8.8 kg/per capita (i.e. below pre-war levels of 11 kg/per capita consumed in 1991), which is substantially lower than in more advanced transition economies at 14-15 kg/per capita, EU-15 at 22.6 kg/per capita and the US at 39.4 kg/per capita. According to market estimates, 1/3 of poultry meat is currently produced by small farms, usually sold in small towns and open-air markets which are frequently beyond the control of state veterinary institutions and avoid paying VAT and other taxes. Also poultry production is the least commercially orientated of the three and the report will therefore concentrate in the later part on pork and beef production. 2.2. Market institutions and policies

A new legislation on veterinary matters, identification of animals, TSE/by-products, and notification of diseases, was adopted in October 2005. With the assistance of the European Union, Serbia has established an animal identification and registration system that is managed by the European Agency for Reconstruction. The main project – the animal tagging campaign – nears its completion. The first phase included a computerised register for cattle in line with current EU standards, with a comprehensive recording of births, deaths, slaughters and movement of animals. In addition, the World Bank is now undertaking a land cadastre project which is scheduled until 2009 and will help to clear remaining agricultural land issues. This should improve the market for rural land through increasing the registration of rural estates including efforts to discourage and deal with illegal buildings and construction in villages3. Farmers tend not to have a sufficient understanding of how land price formation works. This has led to underdeveloped and inefficient land markets, including land lease markets. Agricultural land lease markets currently operate predominantly with subsistence farmers and the price levels of leases are based on un-registered contracts and paid in-kind rather than in cash. Facilitating the operation of agricultural land markets as well as lease markets is crucial in speeding up land consolidation and allowing for efficient-scale farming. Responsibilities for feed and food controls are distributed between the Ministry of Agriculture and the Ministry of Health. Although management and organisation of official controls are in place, overlapping and unclear repartition of competences hamper the effectiveness of the

3 See World Bank Report on “Supporting Serbia’s Agriculture Strategy”, August 2006.

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system. Furthermore, Serbia is still missing a separate food safety strategy establishing a sustainable food chain system and a subsequent action plan. The existing laws on Sanitary Control of Food and Goods apply the old Law of Yugoslavia which regulates both food hygiene and nutritive value. All current sanitary inspectors work according to this law. Quality controls for all types of products are done by visual checks determining labelling and packaging requirements and laboratory testing on basic ingredients. The quality control of individual groups of products is subject to specific ordinances (i.e. Quality of Swine meat and meat products, Official Gazette No. 24/86). Labelling is regulated by the “Law on Sanitary Correctness of Food and Goods of General Use” and requires identification of manufacturer, date of manufacturing, any additives, basic ingredients and whether a product is organic. In terms of adoption of some remaining legislation, such as the Law on Agricultural Land, Food Safety Law, Law on Fisheries, Law on Agency for Laboratory Management, Law on Plant Protection and some others, Serbia is progressing rather slowly. Tariffs

The new law on customs tariffs (Official Gazette 62/05) adopted changes to a number of tariff lines that are now in accordance with EU tariff schedules. This harmonisation was necessary to facilitate customs clearance with EU countries and assist future WTO negotiations. Overall tariff protection of live animals, meat and processed products is comparatively high varying between 30 per cent and 110 per cent with the highest protection on poultry meat (fresh and frozen). Beef has an average protection of 49.2 per cent with no huge variation between product lines, whereas pork has an average protection of 50.2 per cent, varying between 38.3 per cent and 73.3. per cent ad valorem. The biggest export markets for Serbia are the neighbouring Western Balkans countries – in particular Montenegro, Bosnia and Macedonia - and the European Union. Serbia has signed CEFTA (Central European Free Trade Agreement) in December 2006 and finally ratified it in September 2007. This will lead to a further lowering of selected import duties and increased regional competition. Serbia also enjoys US GSP status and is the only country in the region that has signed a free-trade agreement with Russia. Since the end of 2000 Serbia has preferential access to the EU market as part of the so-called autonomous trade measures (ATMs) allowing the country to export agricultural products to the EU free of tariff duties (with quota limitation on a very limited subset of products like sugar, veal meat and wine). Current exports of veal only utilised 25% of the assigned quota, mainly due to reduced cattle numbers. This is true even after the Serbian government supports exports of beef meat with a 20% export value subsidy. The main importers of Serbian veal meat are Italy and Greece. Although Serbia is not utilising their given EU quota at the moment, given ongoing comprehensive reforms and market consolidation in the agricultural sector, the quota might indeed lead to a constraint on Serbia’s meat export. According to some reports, there is a continuing and illegal trade exporting calves to Croatia amounting to several thousand calves a year, of which some 80 per cent are slaughtered in slaughterhouses in the coastal region to satisfy veal demand during the tourist season. Besides Croatia, calves from Serbia are also illegally exported to BiH and Montenegro with illegal exports to the latter two countries amounting to about half of the level of illegal exports to

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Croatia. These illegal activities significantly reduce the production potential for cattle fattening as well as for veal production in Serbia. Due to its practise of vaccinating pigs against swine fever, Serbia can neither export pork meat to the EU, nor can it export poultry meat, seeing as the Newcastle disease has not yet been eliminated among the national poultry flock. Domestic support

Policy interventions to actively increase investment into improvements in livestock production started in 2004. These included grants for buying breeding livestock and equipment for livestock production and a small credit programme that was launched to overcome financial constraints since the private sector is still extremely reluctant to extend agricultural credit. Farmers complain that these measures do not reach far enough and don’t allow for necessary production upgrades. In particular, costly investments into improving environmental management in livestock farms and processing facilities are not possible in the current credit constraint situation. Overall government support has shifted from pure market (price) support towards structural and credit support. The value of these structural support mechanisms is currently undermined by a weak system for the targeting and administration of grants. The system lacks adequate strategic or operational guidance to ensure that funds are allocated to their highest-value and most efficient use, there are too few staff with too little training, as well as insufficient transparency in the process of grant approval and distribution. The rural communities show limited engagement in the grant processes and no mechanism is in place to track and monitor the effectiveness or impact of grants in relation to the objectives of improving competitiveness of agricultural products or strengthening rural economies and communities. These shortcomings mean that the grant scheme does not meet the requirements for an EU-certified paying system, and would not be able to receive or absorb the EU pre-accession funds that the Serbian government expects to be eligible for within a few years. Figure 3

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Budget 2003 Budget 2004 Budget 2005 Budget 2006

Market support Structural support Income support

Credit support Institutional support

Source: Ministry of Agriculture, Forestry and Water Management

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2.3. Business conduct and skills

Small-scale farming lacks the resources to invest in necessary hygiene, genetics, and improvement of feeding for the production of high quality meat. Thus in order to increase productivity, one of the major challenges is to speed up the land and farm consolidation process. While comprehensive data on agricultural land is not available, anecdotal evidence suggests that the overall progress in the creation and consolidation of agricultural land markets is still very slow. Clearly consolidation has taken place, but at a very slow pace since 2003, hindered by the fact that a real property market is hardly existent. As mentioned, overall productivity levels in Serbian livestock production are generally lower that in the EU, both due to limited use of inputs and technologies. There is still limited commercialisation and many farms have a large share of production consumed on-farm. For instance, most small scale farms use feed produced on farm at comparatively low productivity levels. The use of fertilizer and premixed feed is limited to a small number of large commercially-oriented farms since most farms do not have the scale of production to make use of modern agricultural technologies and bargain for competitive prices. Further improvements can be enhanced by increasing investment in farmer’s skills, knowledge and capacity to adopt modern technology. Livestock farmers also lack assistance with improving animal genetics and nutrition. Most mating is through natural service, with a resultant low rate of genetic improvement and the attenuate risk of transmission of venereal disease. A first artificial pig insemination run by the pig farmers’ association lacks the necessary finances to upgrade to productive scale. Classical Swine Fever is managed through vaccination rather than slaughter and compensation, preventing export to the EU. Trichinosis is another serious disease, but one that could easily be curtailed through effective meat inspection and simple laboratory testing. Livestock farmers will also need to adopt more comprehensive animal welfare and traceability systems, as well as more environmentally conscious manure management practices. Currently, soil contamination and eutrophication problems in Serbia are mostly due to uncontrolled effluents from livestock farms. There is little wastewater storage or treatment facilities, even on larger farms. Possibilities both in vertical and horizontal integration are hampered by a lack of functioning farmers’ and processors’ organisations. Input prices are high and there is little coordinated bulk input purchase or VAT recovery. Many pig farmers are elderly and there are few young entrants to the industry, partly due to credit constraints. Another issue which is mentioned in the latest World Bank report on Serbia’s agricultural strategy is the contribution of the transformation of the sector to rural poverty. Agriculture employs approximately 20 per cent of the total labour force excluding family labour, and poverty rates among individual small-scale farmers are particularly high. Sector modernisation and further consolidation threatens to increase both unemployment rates and rural poverty if no concurrent development of off-farm employment opportunities is created. Since detailed information on exact percentages of price support is not readily available, representatives of the Ministry of Agriculture confirmed in an interview that on average, pig

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farmers earn half of the consumer price with another third received by processors for combined processing costs and margins. Retail margins for pork products are comparatively high with approximately 19%. Foreign Trade

Geographical location combined with preferential access to the country’s main export markets significantly raises the potential for successful export performance. Agricultural trade accounts for a very important part of total international trade in Serbia. It is also the only sector with a trade surplus (see Figure 4). In 2006, the trade surplus in agriculture amounted to 355 million US$ with total exports of 1.25 billion US$. Figure 4: Agricultural product trade (mill USD)

-400

-200

0

200

400

600

800

1000

1200

1996. 1997. 1998. 1999. 2000. 2001. 2002. 2003 2004 2005 2006

(I-IX)

Export Import Trade balance

Source: Ministry of Agriculture, Forestry and Water Management

2.4. Remaining transition challenges

Basic requirements to improve and extend commercially-oriented farming both for pigs and cattle are further land consolidation and significant increases in the number of animals per hectare. Specific transition challenges for improving pig production are to increase the number of piglets per litter, to achieve better feed conversion rates and an improved lean-meat-to-fat ratio. This would require investment into improved breeding material. Thus the production of breeding material needs to be enhanced and should be based on specialisation of production. Farms need to have a size of at least 50 to 100 sows, fattening above 1,000 and more pigs annually to benefit from economies of scale. Efficiency in the pig meat sector depends crucially on improved access to better breeding animals, greater use of artificial insemination and on modernised slaughtering facilities. A pilot scheme for artificial pig insemination run by the pig farmers’ association is an encouraging first step, but one that needs repetition and extension. The challenges for beef production are similar: increase of farm size, specialisation of production and utilisation of animals with high genetic potential. Additionally, improvements

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in the quality of feed, better veterinary support, and access to finance. In particular, hill and mountain regions (plain regions) would need better organisation for fattening cattle to at least 250 kg (up to 500 kg). In contrast to the beef and poultry industries, the domestic pork industry remains still very profitable with retail margins of approximately 20 per cent. Pig farmers receive half of the consumer price with another third received by processors for combined processing costs and margins. Retail margins are as high as 19 per cent and increasing with growing bargaining power of retail chains. These high margins can only be sustained by excessive import protection with effective tariffs of up to 130 per cent. But both CEFTA and WTO accession will put pressure on Serbia to lower its tariffs and thus make its domestic pork industry vulnerable to foreign competition. Tariff protection, in addition to keeping margins and consumer prices high, has caused delays in efficiency improvements in the sector that will be induced by external competition in the medium term.

3. Meat Processing and Preserving Agro-processing accounts for about 80 percent of total agricultural exports. The key trade partners are the EU-25 and Serbia’s neighbouring countries (mostly BiH and FYR Macedonia). The Serbian processing and preserving industry has already undergone significant privatisation and is overall more commercially-orientated and competitive than the primary sector. Nevertheless, the large fragmentation, under-capitalisation and slow progress towards European Union certification have hampered overall competitiveness and export potential. 3.1. Structure and extent of markets

It is difficult to characterise the entire slaughtering and procesesing industry as it varies from large and often financially-challenged multi-species plants with under-utilized capacity to medium-scale abattoir/smallgoods processors and the local butcher’s slaughter slab. Overall there are 53 major processing plants4, with the majority still socially owned, and around 1,700 private and municipality slaughter houses of smaller capacity.5 Privatisation is still at an early stage and a high proportion of agro-processors have only recently become independent of their former AK parent companies and might only now attract interest for privatisation. Most of these processors have very low operating efficiencies and need substantial investments to improve product quality and increase competitiveness. Only the largest private companies have started investing in modern equipment, but the vast majority lacks the quality, hygiene and technological standards to compete on an international scale. Many Serbian slaughterhouses will have difficulties surviving the transition to EU integration with its progressive reduction of tariffs, in particular on imported pork, increased grading, testing and traceability requirements and strict environment controls. The low cost of skilled labour in Serbia – one comparative advantage in pig processing – will most likely not offset the high cost of EU compliance.

4 For a detailed list of processing companies, see Annex IV. 5 Source:DVM Nenad Budimovic, Economic Chamber of Serbia, Meat Sector; Ministry of Agriculture Serbia.

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At the moment the processing product market is highly fragmented with local and regional market leaders. The markets for most processed products are very much defined by local competitors and only the largest processors have a national presence. Nearly all major processing plants have integrated canning and packaging facility and use their own distribution network. Brand recognition is present in the main cities and consumers are willing to pay a mark-up for branded products. Many of the leading processors distribute their products mainly through a network of their own retail shops but most processing interviewees forecast a growing importance of key accounts with major supermarket chains. Here, the lack of a joint processor representation/association is expected to prove detrimental for processors’ bargaining position, and margins are thought to come down substantially. On the other hand, private labels are not expected to increase in importance any time soon. 3.2. Market institutions and policies

Since 2005 government funding has helped the introduction of a HACCP system in slaughterhouses and industrial meat-processing plants. Compared to 2002 when only two slaughterhouses were licensed for beef production for the EU market (IM “Cajetina” Cajetina and “Stokoimpeks” Knjazevac), in 2006 three further slaughterhouses (“Yuhor” Jagodina, “Big Bull” Bacinici and “Colbis” Novi Sad) have been certified for both beef and pig meat. A further handful of processing companies have started the application process or the necessary investments only recently. However, as Serbia currently vaccinates pigs against swine fever, EU regulations still ban Serbian pig meat form EU markets. On of the main characteristics of the slaughtering industry is the lack of HACCP certificates and hygiene standards paired with an over-capacity in relation to the number of animals for slaughtering. This results in a low percentage of capacity utilisation, illiquidity and obsolete equipment. Due to the large number of small-scale slaughtering houses, the production technology is outdated and the product assortment is relatively small. Overall, improvements in hygiene standards and technical levels in slaughtering and processing facilities are paramount, and to raise the necessary investments the sector needs significant consolidation. The government in turn needs to intensify veterinary and sanitary supervision and expand support for HACCP certification. A priority of the government should be to aid the private sector to respond to the immanent market challenges rather than to distort market incentives.

3.3. Business conduct and skills

A combination of protectionism, government subsidies, and a slow privatisation and consolidation process has led to high processing margins and insufficient pressure to upgrade processing facilities, particularly in the pork processing sector. An indicative cost structure of pork production is presented in the following figure.

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Figure 5

Source: Ministry of Agriculture, Forestry and Water Management The Ministry of Agriculture, Forestry and Water Management conducted a market survey that shows margins of 8-10% for pork wholesalers and up to 35% for retailers. The lower returns for wholesalers, who are also often abattoirs, may just reflect the allocation of costs and benefits across their business. As a result, consumers are faced with high prices for standard meat products. 3.4. Remaining transition challenges

Neither farmers’ nor processors’ organisations work properly. It seems impossible at any stage of the value chain to find a common-enough cause to coordinate action. This is particularly pronounced at the processing level, partly due to the high market fragmentation that does not stimulate the development of a joint association. There is a notable exception on the farming level where the pig farmers’ association started an artificial insemination station and is planning a jointly-operated slaughtering facility including cooling storage. In comparison to other Eastern European countries, vertical integration of the sector is rather limited – only a few processing companies start to acquire their own farms –, making quality control costly and inefficient. Further regional integration and WTO application will eventually lead to a significant reduction in import tariffs and increasing competition from products from advanced processors in the EU and US. Especially small processors will struggle to upgrade and will either need to join up with similar-sized ones, be bought up/integrated into larger production ventures or close down. The larger, still socially owned processors will also have a difficult time finding a buyer willing to invest in a complete overhaul of inventory and production technology. So in the short and medium run, the sector will need support to significantly consolidate, make the necessary investments and comply with EU quality standards. The biggest challenge will be the establishment of a comparable EU system of border controls, a network of laboratories, and a clarified role of institutional responsibilities.

Cost Structure of Serbian Pork Production

0%

20%

40%

60%

80%

100%

Serbian Pork

Percent Cost VAT

Retail margin

Portioning/de- boning/storage

Wholesale margin

Processing costs

Farm gate price

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4. Retail of meat and meat products

4.1. Structure and extent of markets

Hypermarkets6 led the way during the first wave of Central and Southern Europe’s retail transition, which began during the early 1990s with market liberalisation, the entry of Western European players and the formation of national and regional grocery chains. This development took place with a small time delay in Serbia with the entry of international chains such as Agrokor (Croatia), Metro (Germany), Veropulos (Greece), Interex (France) and Mercator (Slovenia) that occurred after the process of consolidation had gained a new momentum after 2002. These chains entered both the hypermarket and supermarket segments, but the latter one to a much larger extent. Smaller local firms have largely been acquired by other domestic or foreign concerns with the most outlets located in or around Belgrade. Figure 6: Structure of Serbia and Montenegro’s Modern Grocery Retail Market

Value Sales USDbn

5.8

0.4

1.8

8.0

Supermarkets Hypermakets

Convenience Stores Total modern retail formats

Source: Federal Bureau of Statistics, Serbia

6 Hypermarkets can be broadly defined as mixed food and non-food retail stores generally occupying a trading area of 12,000-20,000sqm.

Number of Outlets

0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006

Supermarkets Hypermakets

Convenience Stores Total modern retail formats

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The entry of foreign supermarkets will pose a significant challenge to Serbian producers, processors and retailers. These chains benefit from well-established supply chains, long-term contracts and low bulk-purchase prices of large product volumes from their existing suppliers. Their cash-register systems are automated from the point of sale to the suppliers’ warehouses, making reordering a largely automated process. These chains will put pressure on local products to meet stringent quality standards (ISO 9000 and HACCP), low prices and guaranteed delivery schedules. Figure 6 shows the distribution of modern retail formats in Serbia since 2000, with an estimated 336 outlets in 2006. Supermarkets dominate the sector with a share of 75% (USD 5.4bn) of the overall modern-format market value (USD 7.2bn). In 2005, hypermarkets were a novelty, with only five located around the country (Mercator, Interex and Metro), and not performing strongly. However, the format took off quickly in terms of profitability and is forecasted to expand rapidly in the medium term. Most supermarkets are still concentrated in the main cities, and rural areas remain dependent on small markets and grocery stores for their shopping, as disposable incomes are not sufficient to merit supermarket openings in these areas. A recent study by GfK & INCOMA has highlighted significant differences in shopping preferences among Eastern European consumers. Overall, supermarkets are the most popular format but preferences vary widely by country. In most emerging markets like Romania or Serbia and Montenegro, small stores still dominate the shopping landscape. Figure 7 shows the distribution of consumer preferences for different retail formats. Comparing the different demand patterns to speeds of overall transition to a market economy, one would expect hypermarket, supermarket as well as convenience store density in Serbia to increase dramatically over the coming years. One of the highlights in 2006 included the opening of two shopping malls – ImmoCenter in Belgrade and Sad Novi Baazar in Novi Sad. The focus of modern retail formats is also extending beyond Belgrade to other large regional cities such as Nis, Novi Sad and Kragujevac, while the capital saw two major openings – Delta launched the largest cash-and-carry facility in the Balkans7, while Croatian Idea opened another hypermarket of 12,500 sqm in New Belgrade.

7 18,000 sqm close to Belgrade Airport.

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Figure 7: Regional Shopping Patterns

Source: GfK CEE Shopping Monitor, 2005 4.2. Market institutions and policies

Foreign investment into the retail sector has been one of the driving forces in upgrading supermarkets to modern standards and in driving ICT investment and productivity. Figure 8 shows the development of both retail and wholesale trade in terms of number of shops, turnover and employees, and while turnover has increased overall, the most prominent development is in the retail sector where the productivity increase is most pronounced even with falling employee numbers. Figure 8

Domestic Trade Development

0

20

40

60

80

100

120

140

160

180

2001 2002 2003 2004 2005

Indic

es, 2002=100

# of Shops Employees in retail trade

Employees in wholesale trade Turnover in retail trade

Turnover in wholesale trade

Source: Statistical Office of Republic of Serbia

18

Meat wholesale and retail has developed roughly in line with the overall retail development, but with some notable exceptions. Since some of the top processors have their own network of retail shops, growth in these channels has been more organic and not only driven by foreign entry. Also, up to 20% of processed meat sales are distributed via key accounts to restaurants and hotels. Exports play only a minor role, but are expected to substantially increase in importance once facilities – in particular slaughterhouses – are upgraded to EU standards. Virtually all processed products are sold under the processing brand and private label processed meat products play only a marginal role. In the processed segment, consumers are brand-conscious and the respective processor retail networks sell only own brands. According to interviews with processing companies, the mix of distribution channels will change in the medium term. They expect supermarkets to play a much more important role, and sales growth to depend on increasing key accounts with the major players. This in turn will put pressure on processor margins and incentivise further consolidation in the processing sector to reach sufficient bargaining power with the major retail chains. The underdeveloped distribution and warehouse market is rapidly changing as the requirements for distribution warehouses to serve the expanding retail sector increase. Most of the modern logistics developments are owner-occupied and located along the major traffic links, in Krnješevci and Ŝimanovci districts and in the Port of Belgrade. The majority of these developments has been built in the last three years with estimates between 90,000 – 108,000 sqm.8 4.3. Business conduct and skills

Precise data on the size of the open markets is not available, but the entrance of foreign supermarket and hypermarket chains has significantly increased competition in the modern retail format. However, as figure 8 has shown, retail turnover is still increasing and margins haven’t come down as yet. Recent activity in the traditionally sluggish Serbian mass grocery retail market has been accelerating in 2007, mostly as a result of expanding local influence of the leading Slovenian retailer Mercator, which became a majority owner of Serbian Rodic M&B. This deal illustrates a continually increasing interest of foreign companies, including those from neighbouring Croatia, in the Serbian retail sector. The recent Mercator-Rodic M&B tie-up, as well as Delta Holding and Croatian Agrokor’s combination of their retail divisions is also a good example of a trend of joint ventures with outside players that put competitive pressure on the sector and will lead to further consolidation. Serbia’s business environment has also seen some important improvements, especially greater security to physical and intellectual property rights and the continuing privatisation of state-owned enterprises.

8 Source: King Sturge – Property Market in Serbia (90,000) and Urban Retail Properties (108,000).

19

4.4. Remaining transition challenges

One of the main issues raised in interviews is the lack of warehousing and transport to some of the regions outside Belgrade and the Vojvodina, where most of the processors are located. This problem is exacerbated for chilled products where warehouse facilities are not adequate and retailers have limited storage capacity. Some processors have now started to invest in their own motor pool that is equipped with cold-storage vehicles, but smaller ones are not able to upgrade their transport equipment. While retail warehousing has seen an unprecedented growth in 2006, the market is still underdeveloped and industry analysts forecast the need for further investment into this sector, in particular for chilled facilities, for a minimum of five years. Currently, all major retail warehouse investments are undertaken by the supermarket/hypermarket chains, but as other CEE countries have shown, vertical integration from the processing to the warehouse side is also a distinct possibility. Another challenge might well be regulatory and political in nature, with remaining cumbersome zoning-approval procedures and land use regulations. As of now, Serbia is still not facing a political backlash from the arrival of hypermarkets like in Poland or Russia, and it may have the biggest potential in this sector. For the hypermarket sector, analysts forecast the highest absolute growth rate in the whole of the region9, although clearly from a very low baseline. Overall, to increase the share of locally-produced meat products in the major international supermarket chains, the processing sector needs consolidation and significant quality upgrades to be able to compete with imported products.

9 BMI forecasts 20fold increases from USD 200mn in 2006 to USD 4.1 bn.

20

References

BMI, 2007, “Serbia Food & Drink Report Q2 2007” CEEC AGRi Policy: Situation and Perspective for the meat sector in Serbia, 2007. King Sturge – Property Market in Serbia, 2007. WB Report, 2006, No. 37825-YF, “Supporting Serbia’s Agriculture Strategy”.

21

Annex I

Structure of livestock number per categories in Serbia (2000-2006) – in %

2000 2001 2002 2003 2004 2005 2006

Cattle

Total 100 100 100 100 100 100 100

Calves up to 3 month 10.3 10.2 10.5 10.8 10.7 10.3 10.6

Cattle from 3 month to 2 years 20.2 18.4 18.1 18.7 18.6 20.2 22.1

Cattle older than 2 years 1.2 1.1 1.4 1.3 1.5 1.1 1.3

Cows and in-calf heifers 65.6 67.7 66.7 66.6 67.4 66.8 64.8

of which working cows 5.5 5.6 5.6 4.8 2.4 2.1 1.5

Breeding bulls 0.3 0.7 0.8 0.6 0.6 0.7 0.5

Oxen 2.4 1.8 2.5 1.9 1.1 0.8 0.7

Pigs

Total 100 100 100 100 100 100 100

Piglets up to 2 month 28.9 29.6 27.4 28.1 32.7 30.4 28.8

Pigs from 2 to 6 month 39.4 38.7 40 39.4 37.8 38 40.6

Sows and in-pig sows 21.8 21.9 22.7 22.7 20.1 20.7 21.4

Breeding boars 0.6 1 1.4 1.2 1.2 0.9 1.1

Other pigs 9.3 8.8 8.5 8.5 8.2 10 8.1

Sheep

Total 100 100 100 100 100 100 100

Lambs and ewes up to 1 year 16.8 14.4 14.2 18 20.8 19.9 20.6

Breeding sheep 76.5 79.6 78.1 74.8 72.9 74.2 73.5

Breeding rams, gelded rams and barren ewes 6.6 6 7.7 7.2 6.3 5.9 5.8

Goats

Total 100 100 100 100 100 100 100

Horses

Total 100 100 100 100 100 100 100

Mail and mare foals 8.3 6.9 10.3 8.3 11.1 11.5 5.3

Mares and in-foal mare foals 55.6 62.1 55.2 54.2 48.1 46.2 57.9

Stallions and other horses 36.1 31 34.5 37.5 40.7 42.3 36.8

Poultry

Total 100 100 100 100 100 100 100

Beehives (in 000)

Total 100 100 100 100 100 100 100

Source: Serbian Ministry of Agriculture, Food and Water Management

22

Annex II

Pork Processing

Factory Processing Costs Unit Unit Cost Quantity Total Cost

(Denar)

Slaughtered Animals

Head/yr 20,000 100,000,000

Animal Slaughter Per Head

Electricity KW 7 30,000 KW 11

Water heating Kg oil 28 4,000 6

Refrigeration KW 7 20,000 7

Water ton 10 10,000 Ton 5

Packaging material (annual) Annual 10,000 annual 1

Building O&M % 3% 20,000 per year 8

Machinery O&M % 7% 20,000 per year 14

Machinery Depreciation % 10% 20,000 per year 20

Building Depreciation % 5% 20,000 per year 13

Sub-total 83

Transportation Costs

Livestock Collection annual 30,000 Denar 1.50

Meat Distribution annual 8,000 Denar 0.40

Sub-total 1.9

Factory labour Person year

Slaughter 5 200000 Denar/year 50

Cutting/packaging 10 200000 Denar/year 100

Management 3 500000 Denar/year 75

Sub-total 225

Total Operating Costs/head slaughtered 310

Total Variable Operating Cost 6,190,000

Total Procurement Cost 100,000,000

Total Cost 106,190,000

Total Product Sales Income

Pork carcas 1,400 tons 100,000 Denar 140,000,000

Offals 250 tons 30,000 Denar 7,500,000

Total income 147,500,000

Net Income 41,310,000

Taxes 10% 4,131,000

Factory Management Profit Margin 15% 6,196,500

Wholesale meat Price Denar/ton 100,000

VAT 19% 19,000

Retail Margin 30% 30,000

Retail value/ton Denar 149,000

Retail Price/Kg Denar 149

Source: Serbian Ministry of Agriculture, Forestry and Water Management

23

Annex III

Retail Network Company

Total Sales

(€) Own

brands

Private

labels

Own

retail

stores

Other

retail

stores

Restaurants,

Hotels,

Catering

Exports

Carnex 55,166,725 90% 0% 0% 10% 0% 0%

Agroziv 46,858,772 50% 0% 45% 5% 0% 0%

Matijevic 41,602,561 0% 0% 100% 0% 0% 0%

Neoplanta 36,626,596 75% 0% 15% 5% 5% 0%

Yuhor 35,684,994 65% 0% 15% 5% 0% 15%

Damjanovic 22,138,363 40% 0% 25% 30% 5% 0%

Topola 18,935,439 40% 0% 0% 50% 10% 10%

Topiko 18,625,357 45% 0% 20% 25% 10% 0%

Big-Bull 17,260,772 10% 0% 30% 35% 10% 15%

Mesopromet 8,311,778 25% 0% 15% 40% 20% 0%

This is not an official statistics, but based on FAO estimates.

24

Annex IV

List of Meat Processors in Serbia according to Operating Revenues (>1 mil €).

Name Place Operating Revenues (€) 31.12.2005

1 Carnex Vrbas 55,166,725

2 Agroziv Pancevo 46,858,772

3 Matijevic Novi Sad 41,602,561

4 Neoplanta Novi Sad 36,626,596

5 Yuhor Jagodina 35,684,994

6 Damjanovic Mladenovac 22,138,363

7 Topola Backa Topola 18,935,439

8 Topiko Backa Topola 18,625,357

9 Big-Bull Bacinci 17,260,772

10 Storkimes Lipar 16,290,737

11 Pro-Bekom Zrenjanin 11,240,491

12 Agrimes Beograd 10,271,064

13 Mesopromet Pancevo 8,311,778

14 Klanica Divci 7,429,345

15 Banat Banatski Karlovac 6,876,398

16 Stokoimpeks Nis 6,630,585

17 Zlatibor Cajetina 5,773,322

18 Dragan Markovic Obrenovac 5,544,561

19 Gombit Beograd 5,114,865

20 SL Mitros Beograd 4,925,041

21 Srbokoka Jagodina 4,378,690

22 Mak Internacional Nis 4,116,538

23 Beomes Plus Export-Import Stara Pazova 4,042,807

24 Paxel Beograd 3,926,468

25 Agro-Papuk Kukujevci 3,512,550

26 SMKR-Sasa Stara Pazova 3,265,637

27 Famis Co Beograd 3,012,351

28 Kolbis Novi Sad 2,938,632

29 Pantomarket Stocar Cacak 2,869,158

30 Zmajevac Beocin 2,818,222

31 Srbocoop Beograd 2,628,632

32 Eco - Koko Valjevo 2,583,614

33 Oreovica Oreovica 2,420,421

34 Cekimes Beograd 1,967,509

35 AMD Picck Novi Sad 1,812,807

36 Mesokombinat Turekovac 1,754,854

37 Biomes Beograd 1,746,105

38 Ambar Surcin 1,616,924

25

39 Kosmoprodukt Veliko Gradiste 1,361,088

40 Sopalovic Mackat 1,290,012

41 Mesara Vule Beograd 1,103,825

26

Annex V

Benchmark of the Meat sector

France Germany Poland Hungary Bulgaria Croatia Serbia

Population* 62,702,371 82,469,422 38,165,445 10,087,065 7,739,900 4,443,343 7,440,769

GDP* mill. € 1,781,122 2,307,200 267,371 89,191 24,263 33,665 23,300

GDP*per capita € 28,406 27,976 7,006 8,842 3,135 7,577 3,131

Total number of animals (head)*/**

Cattle 18,902,000 12,600,800 5,280,967 702,000 633,228 438,000 1,306,000

Pigs 15,009,000 26,602,000 18,812,975 3,987,000 1,010,789 1,300,000 3,165,000

Poultry 200,000,000 110,000,000 61,926,000 47,268,000 18,390,000 11,750,000 16,631,000

Density, head/sqkm of agricultural land in 2004****

Cattle 65 79 29 13 14 15 23

Including dairy cattle 14 26 15 6 7 8 13

% of dairy in total cattle 21% 33% 53% 44% 50% 51% 58%

Pigs 51 156 93 84 19 47 62

Poultry 896 717 510 806 345 356 307

Slaughtered animals (head)*/**

Cattle 5,165,798 3,806,522 1,463,096 125,812 352,000 127,000 759,551

Cattle herd turnover per year, % (animals slaughtered vs. total)

27% 30% 28% 18% 56% 29% 58%

Pigs 25,484,411 50,113,093 24,288,711 5,242,883 3,300,000 1,500,000 6,800,000

Pig herd turnover per year, % (animals slaughtered vs. total) 170% 188% 129% 131% 326% 115% 215%

Poultry 953,264,000 548,234,630 155,295,650 70,000 37,865 83,540

Meat production (ton)****

Bovine meat 1,896,440 1,338,350 475,680 58,380 36,910 25,000 166,000

Pig meat 2,279,600 4,499,990 1,955,500 456,200 74,530 48,500 562,000

Chicken meat 1,232,220 605,120 984,840 286,350 79,510 31,000 67,180

Meat production per capita (kg/year)

Cattle meat 30.25 16.23 12.46 5.79 4.77 5.63 22.31

Pork meat 36.36 54.57 51.24 45.23 9.63 10.92 75.53

Chicken meat 19.65 7.34 25.80 28.39 10.27 6.98 9.03

Productivity of Livestock and Poultry Farming */**/****

Cattle carcass weight, kg 367 352 325 464 105 197 219

Pig carcass weight, kg 88 93 86 98 76 77 86

Chickens (g/head) 1,423 1,697 1,571 945 823

Beef production Kg/person involved in agric (2002) 903 697 40 45 90 81 86

Pork production Kg/person involved in agric (2004) 1,380 2,533 318 584 546 401 329

27

Eggs, Chickens, Kg/bird, layer (2004) 17 17 11 12 10 8 5

Poultry meat, Kg/sqkm of agric. land (2002) 7,121 5,257 4,401 8,175 2,254 1,356 1,573

Prices of livestock for slaughter (€/100kg)***

Young bulls 296.20 288.00 241.80 264.70 233.00 150.00

Heifers 340.90 266.30 203.60 194.20 137.50

Cows 264.00 224.50 195.20 191.10 166.20 100.00

Bulls 255.00 267.30 236.50 150.00

Total consumption (ton)****

Bovine meat 1,193,550 1,011,350 112,840 24,580 42,480 34,790 114,040

Pork meat 1,782,990 3,457,790 1,465,170 305,730 125,870 77,420 396,640

Chicken meat 861,100 611,110 660,590 276,440 90,880 35,450 87,360

Consumption per capita (kg/year)

Cattle meat 19.04 12.26 2.96 2.44 5.49 7.83 15.33

Pork meat 28.44 41.93 38.39 30.31 16.26 17.42 53.31

Chicken meat 13.73 7.41 17.31 27.41 11.74 7.98 11.74

Difference between meat production and consumption: negative = deficit (imports); positive =

surplus (exports), kg/year

Cattle meat 11.21 3.97 9.51 3.35 -0.72 -2.20 6.98

Pork meat 7.92 12.64 12.85 14.92 -6.63 -6.51 22.22

Chicken meat 5.92 -0.07 8.50 0.98 -1.47 -1.00 -2.71

Exports (ton)****

Cattle meat 150,079 169,332 84,908 7,534 37 529 2,191

Pork meat 287,103 405,624 138,332 59,810 29 96 28

Chicken meat 355,788 166,785 101,740 32,564 7,830 2,947 1,211

Imports (ton)****

Cattle meat 306,151 173,441 4,365 8,001 50,658 1,584 2,412

Pork meat 92,487 530,429 89,354 57,629 502 5,670 7,022

Chicken meat 180,642 221,031 43,415 27,571 15,858 3,368 5,014

Producer price of meat, year 2003 (US$/ton) ****

Bovine meat 2,960.38 2,671.45 1,285.14 1,809.43 1,300.47 2,043.40 2,853.69

Pig meat 1,302.43 1,275.35 910.76 1,322.84 1,257.00 1,735.80 1,227.92

Poultry meat 1,290.02 1,160.23 884.01 1,071.85 1,033.07 1,667.18 1,472.36

* European Comission Agricultural Statistics

** EastAgri

*** Ministry of Argiculture - Serbia

**** FaoStat

na - not available

2002 data for Serbia Cattle

28

Meat Production (in 1000 Metric Tonn)

Cattle

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Bulgaria 63.3 77.8 55.5 54.5 61.1 60.4 68.5 47.6 52.6 69.7

Croatia 25.8 21.5 26.3 25.7 27.6 27.9 25.6 26.6 22.5 23.0

Denmark 181.7 178.0 174.8 161.8 156.6 153.9 153.4 153.5 147.6 148.0

France 1683.3 1737.0 1720.0 1632.0 1609.0 1527.6 1566.0 1640.0 1631.0 1590.0

Germany 1407.8 1481.8 1447.6 1367.0 1374.0 1303.5 1361.5 1316.4 1226.2 1258.0

Hungary 57.5 50.2 55.3 47.0 51.0 66.9 51.6 49.9 64.0 63.0

Netherlands 580.0 580.1 564.7 534.7 507.6 471.0 372.0 384.0 364.0 363.0

Poland 385.7 414.9 429.1 429.9 384.6 348.5 316.3 281.3 317.4 317.0

Romania 201.8 177.4 185.1 150.2 153.0 162.0 144.6 156.1 185.4 190.0

Serbia end Montenegro 226.6 242.2 208.6 215.5 185.2 194.2 164.8 166.0 170.0 170.0

Slovakia 59.3 61.1 65.6 58.8 50.2 48.0 38.2 41.6 40.0 40.0

Pigs

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Bulgaria 256.4 252.4 226.7 248.1 267.1 242.9 237.0 248.0 250.0 250.0

Croatia 55.6 56.4 54.5 60.1 115.7 114.7 115.1 117.2 115.0 115.0

Denmark 1494.0 1493.7 1520.6 1629.3 1641.8 1624.5 1716.0 1759.0 1762.0 1762.0

France 2144.0 2161.0 2219.0 2328.0 2353.0 2312.0 2315.2 2346.0 2321.0 2290.0

Germany 3602.4 3635.0 3563.8 3834.1 4102.6 3981.9 4074.3 4110.2 4239.3 4366.0

Hungary 578.3 670.7 580.7 569.9 625.9 613.4 556.1 639.7 665.0 600.0

Netherlands 1622.1 1624.0 1375.6 1725.0 1710.7 1622.8 1432.0 1377.0 1250.0 1245.0

Poland 1962.3 2063.7 1891.3 2026.2 2043.0 1923.0 1849.0 2023.3 2188.0 2100.0

Romania 673.0 630.6 666.7 617.2 595.1 502.3 460.1 476.2 532.5 532.5

Serbia end Montenegro 644.0 673.4 632.2 625.0 652.7 634.5 564.6 616.7 573.9 582.0

Slovakia 242.8 250.8 254.8 227.0 220.3 163.6 153.0 154.3 158.1 160.0

Poultry

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Bulgaria 92.2 99.1 100.8 105.1 106.0 104.7 110.0 120.0 110.0 110.0

Croatia 38.9 37.4 36.8 33.1 32.4 32.8 33.7 42.6 42.6 42.6

Denmark 173.0 170.2 175.7 190.3 202.5 201.7 216.1 217.5 200.0 205.6

France 2071.5 2203.5 2251.4 2292.6 2188.1 2220.8 2215.4 2104.6 2010.7 2007.4

Germany 641.7 692.8 724.8 735.1 748.1 801.0 860.0 892.0 963.0 964.0

Hungary 387.0 377.3 402.1 451.5 399.4 470.0 472.3 479.6 438.6 458.6

Netherlands 641.0 716.0 731.0 761.0 758.0 754.0 760.0 745.0 564.0 654.0

Poland 383.6 438.0 478.0 522.5 573.0 584.9 686.9 807.3 781.0 821.0

Romania 286.1 292.6 254.3 267.0 268.5 259.4 283.9 339.9 344.2 360.0

SerbiaendMontenegro 106.5 109.8 117.0 104.6 93.6 88.6 84.5 87.8 79.8 85.6

Slovakia 89.0 113.6 85.6 121.9 129.5 119.7 121.2 127.5 127.3 127.3

29

30

Source: FAOStat

Pig Meat Production (1000 Tonn)

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

4500.0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Croatia

Denmark

France

Germany

Netherlands

Poland

Serbia end

Montenegro

Slovakia