Private Briefing October 2024

No. 139 | Year XII

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October Private Briefing arrives with analyses of support programs ranging from the latest IPARD call, featuring substantial support amounts and an even more significant total budget, to the fourth Smart Start program—a full-scale startup support initiative. Between these two programs, we also present an analysis of the Ministry of Agriculture’s regular annual subsidies for agricultural holdings’ physical assets, along with RAS’s comprehensive mentorship program aimed at boosting businesses’ capacity to capitalize on existing opportunities with the guidance of experienced mentors.

// The “Smart Start” program, implemented by the Innovation Fund, is a relatively new support model for innovative teams in the stage of testing and enhancing business ideas under real market conditions. Intended for the development of initial prototypes or Minimum Viable Products (MVP), this program provides financial support in the form of grants, as well as mentorship throughout the project’s implementation. The total amount of grant funding is up to 5.4 million dinars per project, covering as much as 90% of planned project costs, while the applicant must secure their own contribution for the total project value, with non-financial investments deemed ineligible. Additionally, teams have access to an additional 600,000 dinars for securing mentorship support, whose advice and expert guidance can significantly contribute to the successful execution of projects.

// The current call, the fourth since the program was launched, applies to projects from various scientific and technological fields, with a special emphasis on four areas identified as developmental priorities within the Smart Specialization Strategy: Information and Communication Technology, Machinery and Production Processes, Future Food, and Creative Industries. Qualification criteria for teams require 2 to 5 members, with a project based on a clearly formulated business idea for innovative products or services with potential for market success. During evaluation, the proposed solutions are assessed for their utility, competitive advantages, market potential, as well as the team’s capacity to implement the project. This evaluation process is designed to select the most promising ideas and prioritize those whose chances of successful realization are judged to be the highest, taking into account the team’s overall capacity and the potential of the idea. The program assumes a project implementation period of nine months, during which teams are expected to progress from idea to prototype or a basic version of the product.

// The approach applied by the Smart Start program enables teams to assess the commercial potential of their ideas and tailor their products to meet market demands. This not only helps them overcome critical initial obstacles such as the costs associated with materializing an idea but also boosts their competitiveness and readiness for further investments. The comprehensive support package, combining funding with mentorship, is a proven way for teams and micro-enterprises with quality business ideas to bring their concepts to fruition. Overcoming the challenges in the early stages of developing products, services, or technologies is the largest hurdle in transforming a good idea into a successful business. The program’s structure helps participants refine their products for the market, increase visibility, and prepare for additional funding, allowing them to successfully navigate early development steps and fully engage in growth processes, with prospects for long-term sustainability and advancement of innovative solutions. This program is undoubtedly deserving of a strong recommendation.

New Tractor Through an IPARD III Grant

// The Ministry of Agriculture, through the Directorate for Agrarian Payments, has announced a second public call for applications to secure incentives under the IPARD III program within Measure 1. This initiative aims to enhance primary agricultural production by supporting the purchase of new machinery and equipment for 2024. As part of the multi-year IPARD III program with EU support, this call is designed to improve the physical assets of agricultural holdings, thereby boosting their productivity, efficiency, and market competitiveness.

The incentives cover investments, specifically the purchase of a new tractor with standard parts, devices, and equipment for performing agricultural tasks, including the corresponding tractor cabin. Eligible production sectors for improvement include primary crop production, covering fruit, grape, vegetable, flower, aromatic, and medicinal plant sectors, along with standard sectors such as cereals, industrial crops, and forage crops. The IPARD incentives are available to registered agricultural holdings, individuals and legal entities, cooperatives, and entrepreneurs, provided all registered

investments are carried out after the previous call deadline and no later than the application submission date. The total funds allocated for this call amount to 2.7 billion dinars, with the maximum incentive per individual application set at 1,500,000 dinars per calendar year. The incentive rate, depending on equipment type and applicant status, ranges from 60% to 70% of eligible costs, with higher percentages for young farmers and holdings in mountainous areas, further supporting agricultural development in regions facing sustainability and market accessibility challenges.

Through this call, the IPARD III program enables beneficiaries to modernize their production processes and align their practices with European Union standards, particularly concerning environmental and sustainable solutions. Tractors and other machinery acquired through IPARD support must meet EU environmental standards, including emissions restrictions. Consequently, these investments are not only an opportunity to improve productivity and efficiency but also a chance to comply with modern environmental standards, facilitating easier access to the European market.

// This call targets a broad range of agricultural holdings, from smaller fruit and vegetable growers to large cereal and industrial crop producers, with special benefits for young farmers seeking to upgrade their farms and for holdings in mountainous areas where additional support is necessary due to challenging work conditions and limited transport options to reach markets. However, previous calls have highlighted challenges in fund absorption under Measure 1, even for simpler investments like tractors and basic equipment. The fact that deadlines were extended in the previous call points to the need for timely preparation and support in the application process to ensure successful outcomes. Our experience with previous applications has shown that success largely depends on the quality of prepared documentation and a business plan that clearly defines objectives and covers all aspects of the investment. Given that the IPARD III program provides grants for significant improvements, we strongly recommend that all interested parties gather information on the call conditions as early as possible. Our team is available to offer expert support in preparing and submitting applications. Glenfield’s agro-experts can assist in drafting the business plan, gathering the necessary documentation, and managing the entire process to ensure the project meets all the criteria required to obtain the incentive. Now is the ideal time to apply, as timely preparation increases the chances of success. We invite you to seize this opportunity to enhance your capabilities and secure the support you need for further growth and development of your farm.

SDA – Mentorship as a Key to Successful Business Initiatives

// The Serbian Development Agency (SDA) continuously supports the micro, small, and medium enterprise sector, as well as entrepreneurs and cooperatives, through specialized programs designed to foster their growth. The current public call for standardized mentorship services offers an opportunity for businesses to gain targeted support, aimed at maintaining stability and strengthening the sustainability of domestic companies. The program is conducted in cooperation with a network of accredited regional development agencies (ARRA), which provide assistance through professionally guided activities tailored to the business needs of final beneficiaries.

Eligible beneficiaries include newly established and existing micro, small, and medium enterprises, as well as cooperatives. Depending on their specific needs and business challenges, participants can receive 25 to 50 hours of free mentorship support. Developed in collaboration with the Japan International Cooperation Agency (JICA), this standardized methodology ensures that mentorship is adapted to each user, facilitating effective knowledge and skill transfer necessary to overcome market barriers and improve business operations. Applications for the mentoring program are open in three categories, depending on the enterprise’s status. These include newly established businesses (up to three years old), existing businesses registered before October 2021, and cooperatives. This structure ensures that the program reaches a broad range of entrepreneurs and enterprises needing expert guidance and additional support.

The mentoring program includes a detailed diagnosis of the business structure and current performance, based on which a customized set of activities is developed, enabling entrepreneurs to plan and implement key business processes more efficiently. This foundation allows a precise focus on areas requiring the most attention, whether in finance, operational activities, or strategies for business growth and model development, which, according to our research among MSMEs in the region, are areas with the greatest need for support. After the initial analysis, the focus shifts to developing concrete plans and projects. Mentors assist

 with document preparation and strategy development aligned with the user’s goals, and users can also rely on a tailored set of activities, including advice on accessing funds and implementing new technologies. This support simultaneously strengthens the ability to access additional funding sources, including preparing applications for loans and state support programs. Mentors may also help improve productivity, enabling users to continuously enhance work processes to boost efficiency and reduce operating costs. In this way, the program not only supports sustainability but gradually builds competitive advantages for participants.

// The Serbian Development Agency’s mentorship program offers a unique opportunity for domestic businesses and cooperatives to advance their operations through specialized support tailored to the specific needs of each user. The support provided by regional development agencies through the standardized service set, in which Glenfield also participated by transforming best practices and experiences gained from working with financial and development institutions and MSMEs into a comprehensive toolkit, accompanied by training and certification of trainers for implementation, is an essential ingredient in the success formula. This program undoubtedly deserves recognition and support as a substantial boost for development. For all entrepreneurs looking to elevate their business to a higher level, this program represents a valuable opportunity for growth and improvement based on knowledge, experience, and best practices. If you don’t fit the programme eligibility criteria, we are available for initial assessment and support in identifying more adequate support opportunities.

DAP: Regular Support for Improving Agricultural Holdings’ Physical Assets

// The Ministry of Agriculture has announced its annual public call for subsidies dedicated to agricultural holdings’ physical assets. This call supports investments in new equipment and machinery for primary crop production, playing a vital role in enhancing the production capacity and competitiveness of Serbian agriculture. The support budget totals 400 million dinars, and the call is open to individuals and legal entities, including cooperatives, schools, and research organizations, provided they are registered in the Agricultural Holdings Register and are in active status. Subsidies are provided for acquiring new equipment used in sectors like fruit growing, vegetable farming, cereals, and industrial crops, as well as activities related to soil cultivation, crop protection, harvesting, and irrigation.  

The maximum incentive per application is 1.5 million dinars, with subsidies covering 50% to 70% of investment costs, depending on the user category. This program allows financing of a wide range of investments in equipment and machinery essential for primary crop production. This includes new machinery for soil cultivation, equipment for protecting crops from diseases, harmful insects, and adverse weather conditions like hail or drought, as well as fertilization and

irrigation systems. Subsidies are also available for machinery and equipment that facilitate the harvesting and transport of products, including fruits, vegetables, aromatic, and medicinal plants, helping maintain product quality until sale. These investments encompass everything from basic land preparation to the final stages of primary production, enabling farms to operate with greater independence and efficiency in their daily work.

// The importance of subsidies for acquiring physical assets is reflected primarily in the opportunity they provide for farms to boost efficiency and reduce labor costs, which in turn increases the sustainability of production in an increasingly competitive environment. The stable framework of this program, in terms of predictability and regularity, allows for the planned enhancement of essential resources, such as machinery and equipment. This gives farmers a basis for further development and targeted investments, which they can finance either from commercial sources or from other support programs with specific purposes. For these reasons, this program deserves a strong recommendation as one of the valuable opportunities for lasting improvements in farm operations.

KEY ECONOMIC INDICATORSOct - 24
1Annual inflation4,20%
2Reference interest rate5,75%
3Unemployment rate8,20%
4Average net salary - RSD96.649
5Average pension - RSD45.714
6Exchange rate RSD/EUR
On the last day of the month117,0840
Average exchange rate for the month117,0462
7Exchange rate RSD/USD
On the last day of the month104,8670
Average exchange rate for the month105,3239

For additional information or questions, please contact us. Share your impressions, inquiries and news, or share the updates on the current projects.

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Glenfield Training and Consulting Doo | +381 11 407 9066 | office@glenfield.rs | www.glenfield.rs

Disclaimer: this report was prepared and published under the authority of Glenfield Training and Consulting Ltd. and is used only for informational purposes. Information that is used, have been obtained from sources that Glenfield Training and Consulting Ltd. believes to be reliable, but no guarantees their accuracy and completeness. None of the information or the proposal cannot be construed as an offer or solicitation to buy or sell. No part of this publication may be reproduced without written permission Glenfield Training and Consulting Ltd.