There will be food, no expected import issues, new price hikes possible
Skopje, 3 August 2022 (MIA) – The global food crisis is turning into a big issue. Things are concerning, and the consequences, according to expert opinions, have yet to be felt. The Russian-Ukrainian conflict has additionally disrupted global supply that was already threatened by climate change and the pandemic.
Has this country managed to deal with these threats? What’s the result from the measures taken so far to protect the citizens and economy, is local farming more intensified, and what crops are the most critical ones?
Authorities are assuring that there will be food, and scientists believe there won’t be a shortage, but they caution over the prices of certain products. Farmers say that we can handle the challenges and supply our own food only if policies, measures and subsidies are created towards strengthening the right producers, those primarily focused on agriculture. The business sector is certain that the global shortage will affect us, but we can’t say how much because it depends on the measures taken to mitigate unwanted effects.
“The current state of affairs is concerning, but I believe we won’t face food shortages. What does affect us, however, and what we need to be cautious of, is the prices of certain farming products that we don’t make enough of and that we import, and the fact that those prices have increased significantly. We depend on imports of certain basic foodstuffs such as wheat, flour, cooking oil, chicken and beef, milk etc. A positive in this situation is that we’re not dependent on imports from the main countries involved in the Russian-Ukrainian conflict and we mainly import these products from Serbia, Croatia, Bulgaria, Hungary etc.,” professor Dragi Dimitrievski of the Faculty of Agricultural Sciences and Food.
Dimitrievski notes that agricultural production is marking a decline, and yields are low.
“We have a production that has been declining over the past years. There are less arable surfaces for the aforementioned crops, and the number of livestock is reducing. This is all the result of the combination of multiple factors, depopulation being the most serious one. We have no truly significant changes in terms of yields and they generally remain low,” the professor explains.
He does not expect import disruptions and issues.
“I believe that the market will remain functional and that we won’t find ourselves in a situation where we’ll have nowhere to import from, but that will depend on the decisions of the countries we import from. The countries that produce large quantities of these products should place this production so that their producers aren’t left without income. These products have a limited shelf life, so they have to be placed onto the market,” Dimitrievski points out.
The professor also points out that for such crises, the recommendations of science are clear - domestic production should be seriously supported and promoted.
“In such conditions, the importance of domestic production is noted, which should be seriously supported and promoted, and science should follow the production and it should be supported as well. Hence, all measures to support agriculture should be aimed at using all production capacities, increasing productivity in production through the introduction of modern technologies, using modern technical achievements, which, in turn, can only be achieved by using science, i.e. of the entire scientific potential of the state,” Dimitrievski emphasizes.
The National Federation of Farmers (NFF) estimates that in terms of food, the country is becoming import dependent, which is particularly concerning now, in the face of a health, energy and economic crisis, and even greater increases in prices of food products are not excluded.
“We should all understand that we are becoming an import dependent country, food-wise. According to statistics, in 2020, imports of food and live animals amount to EUR 618 million and exports are EUR 392 million. The largest imports are recorded in meat, then vegetables and fruits, cereals, milk and dairy products, as well as sugar. These facts are worrisome, and we, as an import dependent country, face negative impact on the Macedonian economy. Even greater increases in the prices of food products will follow, and this is happening everywhere in the region, as well as the world. Farmers and consumers suffer the greatest damage. We have a paradox – food products' prices are increasing, and primary agricultural products are at low purchase prices, no matter that input prices are on the rise, such as oil, protective preparations, fertilizers, while the seasonal workforce is either nonexistent or is very expensive,” NFF President Vaska Mojsovska told MIA.
She stresses that such movements in agriculture, where prices of purchased products are very low in terms of production prices, seem demotivating to small farmers who are starting to reduce their areas and leave rural environments.
“A large proportion of farmers reduce their areas because their production prices are higher than their profits. The NFF has stressed multiple times that processing facilities need to be developed in order to increase the purchase of domestic products that need to produce domestic processing of vegetables and fruit. This is a really significant segment that can encourage and help the development of our agriculture. Particular attention should be paid to improving and maintaining agricultural infrastructure related to roads, irrigation, drainage and tackling climate change, but contractual production must be respected and it must work in accordance with the Law on Agriculture and Rural Development. If this is not done, of course, as an import dependent country of food products we will have an even higher increase in food products prices, especially those we consume most, such as bread, milk and meat,” Mojsovska points out.
According to her, domestic food supply chains should be developed and strengthened.
We do not have enough domestic production and we import food because the sector, as low-profit, is not attractive to young people at all, and production is not very automated, the Agro Business Chamber of Commerce assesses.
“According to data from the State Statistical Office, food products worth EUR 745.4 million were imported in 2021, an annual growth of 12.2% compared to the previous year, while growth in the first five months of this year compared to the same period last year was 17%. Meat and meat products are most imported, then vegetables and fruit, grain and processed grain . When these figures are correlated with the fact that we have excellent natural and climate conditions for agricultural development, it becomes clear that the agricultural sector does not receive adequate support from growth and development policymakers. Although there are some positive initiatives and commitments, this support is often not timely and has no continuity," noted Agro Business Chamber President Goran Gjorgievski.
The country, he adds, will certainly be affected by global food shortages, but how much exactly is impossible to say because it depends on which measures will be taken to reduce the unwanted effects.
“For example, if we strive to have organised agricultural production, new support measures should be adopted for autumn sowing and they should be announced as soon as possible. One of these measures should be to provide interest-free loans for the procurement of raw materials. Talks are also underway under the Open Balkan initiative to jointly find ways to address burning challenges such as food and energy shortages,” Gjorgevski notes.
The Agriculture and Food Industry Association within the Chamber of Commerce believes that while we are unlikely to face a general shortage of food products, it is realistic to expect a reduced offer in terms of quantities and an assortment of products, as well as prioritisation by processors. In addition, as the Association says, it should also be borne in mind that the possibilities for supplementing domestic consumption by importing why the food crisis has a wider scale not only in the region around us, but also in Europe.
“It is realistic to expect price rise to compensate for the increased costs, increased prices for imported products, but it is also realistic to expect that this growth cannot go to infinity, which is why measures to support vulnerable categories of population (consumer vouchers), but also compensation for processors' costs have to come into play. Currently, domestic production of raw milk, meat, wheat, raw cooking oil cannot fully cover domestic needs. But it is not something new. The deficit in external trade has been dragging on for a long time, with certain products' imports are up to three times the export (dairy products). The main source of imports, raw materials, but also of finished product, are neighbouring countries, where livestock and agriculture are more advanced, more productive and where the focus is on giving land for its own production of feed and reducing price dependence in trade. These import opportunities are also narrowed due to the emerging crisis and in neighbouring countries where we traditionally import raw feed materials,” the Association explains.
According to the Association, the issue is particularly sensitive when it comes to basic food products.
“The reality in the dairy industry is that domestic milk production has been declining for several years in a row, but the decline has particularly escalated in the last six months. The situation is similar in the part of cereal, beef and chicken production (except in pig farming, where the figure is in a mild positive trend). This is due to a whole range of factors, especially climate, as well as the enormous growth in prices of livestock food, raw materials, raw materials and energy. Domestic processors face a drastic jump in input costs, which cannot be fully mirrored in the final price of products due to the limited purchasing power of consumers,” the Chamber of Commerce said.
Minister of Agriculture, Forestry and Water Economy Ljupcho Nikolovski is decisive there will be food and appeals for citizens not to worry.
“We are facing a severe food crisis, but the citizens should stay calm. We'll have enough food for everyone. We’re facilitating and stabilizing domestic production strategically, as well as creating new measures to support farmers and autumn sowing. Through the revision, we have drafted an agricultural budget to clear the backlog of obligations to farmers, and the advance payment of subsidies begins,” Nikolovski stresses.
The Ministry of Economy reminds that measures have been taken to mitigate the situation under the Trade Law, measures to limit trade and profit margins in large and small trade and measures banning exports of certain products.
“All these measures are concerned with basic food products. The latest measures taken to mitigate the situation are the Decision on special conditions for the trade in certain goods, which determines the highest trade margin of basic food products, the Decision to restrict exports of certain goods banning exports of wheat and wheat flour, the Decision to restrict exports of separate goods prohibiting the export of firewood, pellets, briquettes and other raw wood, as well as the Decision to abolish the import duty rate for imports of sunflower oil for cooking,” the Ministry of Economy said.
[caption id="attachment_1457287" align="alignnone" width="920"]
epa09895599 Indian farmers show the wheat production at a village in outskirts of New Delhi, India 17 April 2022 ( issued on 18 April 2022). Wheat is usually planted in January and harvested from March to May. India is the second largest wheat producer in the world. Wheat and wheat flour play an increasingly important role in the management of India's food economy. EPA-EFE/HARISH TYAGI[/caption]
The Ministry also refers to external trade and stresses that in the face of food shortages, "we cannot put ourselves in a situation where we have nowhere to import from."
“Statistics show that we are net importers, but given the geographical structure of our imports mainly made by the EU, from the countries of the region (CEFTA), Turkey, Ukraine and the United Kingdom with which we have preferential free trade agreements, in the face of food shortages, we cannot put ourselves in a situation where we have nowhere to import from. If the total foreign trade in the food section is looked at, one can see that the Republic of North Macedonia is a net importer, with imports twice the size of exports. The trade deficit in the food part is highest in meat and meat products, milk and dairy products and animal and vegetable oils. There is surplus only in vegetables, fruits and canned vegetables and fruits. The largest food imports, more than 50%, come from EU countries, then CEFTA, with Serbia topping the list,” the Ministry of Economy said.
Intervention fund – Mden 250 million (EUR 4 million) earmarked for plant production and animal husbandry
In March of this year, the Government adopted the Programme for the Intervention Fund in Agriculture, valued at EUR 4 million that, as Minister Nikolovski explained at the time, has nothing to do with other regular direct payment programmes. Of the Fund, Mden 120 million (EUR 2 million), are for subsidising fertiliser costs, but there are additional funds for lamb and pig breeders.
“It is good that this Fund has been formed, which is a serious instrument for dealing with crisis situations like this. Some of the policy measures are supported by it and should produce positive results, but the effects are yet to be measured and assessed,” Professor Dimitrievski believes.
NFF President Mojsovska estimates that the Intervention Fund has helped the fields in the part of barley and wheat plantations.
“But, the situation on the ground shows that with inputs increasing, wheat production this year is at a very high price, and the purchase price given by the mills is very low and is at Mden 18 (EUR 0.3) per kilogram. In order for these crops to survive and the autumn sowing to be realized, there should be additional support,” Mojsovska says.
The Agro Business Chamber also agrees that the Intervention Fund had a significant positive impact because it helped cover the costs of raw materials and fertilizers.
“However, this measure was delayed. In agriculture, the process is organized in cycles that cannot be postponed, so if you do not receive the funds in time to buy what is necessary, for example some fertilizer, time will pass, cannot be applied later and eventually, it affects the yield," the President of the Chamber, Georgievski, stresses.
The Agriculture and Food Industry Associationdoes not see any concrete effects from the Intervention Fund.
“Certain segments of the agri-sector have not been covered by the Intervention Fund's measures so far, so concrete effects can not be presented at this time. There is an announcement that the budget revision provides funds to pay back subsidies and this may act in the direction of mitigating the situation. At the same time, at an even more increased pace, the realisation of state support programmes to increase the livestock fund, the allocation of livestock land for its own production of livestock food, begins. Meanwhile, exports of cereals used as livestock food (wheat, barley) as well as alfalfa should be banned. It is unclear why these crops were not covered by the export ban measures alongside wheat,” the Association said.
Mirjana Chakarova
Translated by Dragana Knezhevikj
Authorities are assuring that there will be food, and scientists believe there won’t be a shortage, but they caution over the prices of certain products. Farmers say that we can handle the challenges and supply our own food only if policies, measures and subsidies are created towards strengthening the right producers, those primarily focused on agriculture. The business sector is certain that the global shortage will affect us, but we can’t say how much because it depends on the measures taken to mitigate unwanted effects.
“The current state of affairs is concerning, but I believe we won’t face food shortages. What does affect us, however, and what we need to be cautious of, is the prices of certain farming products that we don’t make enough of and that we import, and the fact that those prices have increased significantly. We depend on imports of certain basic foodstuffs such as wheat, flour, cooking oil, chicken and beef, milk etc. A positive in this situation is that we’re not dependent on imports from the main countries involved in the Russian-Ukrainian conflict and we mainly import these products from Serbia, Croatia, Bulgaria, Hungary etc.,” professor Dragi Dimitrievski of the Faculty of Agricultural Sciences and Food.
Dimitrievski notes that agricultural production is marking a decline, and yields are low.
“We have a production that has been declining over the past years. There are less arable surfaces for the aforementioned crops, and the number of livestock is reducing. This is all the result of the combination of multiple factors, depopulation being the most serious one. We have no truly significant changes in terms of yields and they generally remain low,” the professor explains.
He does not expect import disruptions and issues.
“I believe that the market will remain functional and that we won’t find ourselves in a situation where we’ll have nowhere to import from, but that will depend on the decisions of the countries we import from. The countries that produce large quantities of these products should place this production so that their producers aren’t left without income. These products have a limited shelf life, so they have to be placed onto the market,” Dimitrievski points out.
The professor also points out that for such crises, the recommendations of science are clear - domestic production should be seriously supported and promoted.
“In such conditions, the importance of domestic production is noted, which should be seriously supported and promoted, and science should follow the production and it should be supported as well. Hence, all measures to support agriculture should be aimed at using all production capacities, increasing productivity in production through the introduction of modern technologies, using modern technical achievements, which, in turn, can only be achieved by using science, i.e. of the entire scientific potential of the state,” Dimitrievski emphasizes.
The National Federation of Farmers (NFF) estimates that in terms of food, the country is becoming import dependent, which is particularly concerning now, in the face of a health, energy and economic crisis, and even greater increases in prices of food products are not excluded.
“We should all understand that we are becoming an import dependent country, food-wise. According to statistics, in 2020, imports of food and live animals amount to EUR 618 million and exports are EUR 392 million. The largest imports are recorded in meat, then vegetables and fruits, cereals, milk and dairy products, as well as sugar. These facts are worrisome, and we, as an import dependent country, face negative impact on the Macedonian economy. Even greater increases in the prices of food products will follow, and this is happening everywhere in the region, as well as the world. Farmers and consumers suffer the greatest damage. We have a paradox – food products' prices are increasing, and primary agricultural products are at low purchase prices, no matter that input prices are on the rise, such as oil, protective preparations, fertilizers, while the seasonal workforce is either nonexistent or is very expensive,” NFF President Vaska Mojsovska told MIA.
She stresses that such movements in agriculture, where prices of purchased products are very low in terms of production prices, seem demotivating to small farmers who are starting to reduce their areas and leave rural environments.
“A large proportion of farmers reduce their areas because their production prices are higher than their profits. The NFF has stressed multiple times that processing facilities need to be developed in order to increase the purchase of domestic products that need to produce domestic processing of vegetables and fruit. This is a really significant segment that can encourage and help the development of our agriculture. Particular attention should be paid to improving and maintaining agricultural infrastructure related to roads, irrigation, drainage and tackling climate change, but contractual production must be respected and it must work in accordance with the Law on Agriculture and Rural Development. If this is not done, of course, as an import dependent country of food products we will have an even higher increase in food products prices, especially those we consume most, such as bread, milk and meat,” Mojsovska points out.
According to her, domestic food supply chains should be developed and strengthened.
We do not have enough domestic production and we import food because the sector, as low-profit, is not attractive to young people at all, and production is not very automated, the Agro Business Chamber of Commerce assesses.
“According to data from the State Statistical Office, food products worth EUR 745.4 million were imported in 2021, an annual growth of 12.2% compared to the previous year, while growth in the first five months of this year compared to the same period last year was 17%. Meat and meat products are most imported, then vegetables and fruit, grain and processed grain . When these figures are correlated with the fact that we have excellent natural and climate conditions for agricultural development, it becomes clear that the agricultural sector does not receive adequate support from growth and development policymakers. Although there are some positive initiatives and commitments, this support is often not timely and has no continuity," noted Agro Business Chamber President Goran Gjorgievski.
The country, he adds, will certainly be affected by global food shortages, but how much exactly is impossible to say because it depends on which measures will be taken to reduce the unwanted effects.
“For example, if we strive to have organised agricultural production, new support measures should be adopted for autumn sowing and they should be announced as soon as possible. One of these measures should be to provide interest-free loans for the procurement of raw materials. Talks are also underway under the Open Balkan initiative to jointly find ways to address burning challenges such as food and energy shortages,” Gjorgevski notes.
The Agriculture and Food Industry Association within the Chamber of Commerce believes that while we are unlikely to face a general shortage of food products, it is realistic to expect a reduced offer in terms of quantities and an assortment of products, as well as prioritisation by processors. In addition, as the Association says, it should also be borne in mind that the possibilities for supplementing domestic consumption by importing why the food crisis has a wider scale not only in the region around us, but also in Europe.
“It is realistic to expect price rise to compensate for the increased costs, increased prices for imported products, but it is also realistic to expect that this growth cannot go to infinity, which is why measures to support vulnerable categories of population (consumer vouchers), but also compensation for processors' costs have to come into play. Currently, domestic production of raw milk, meat, wheat, raw cooking oil cannot fully cover domestic needs. But it is not something new. The deficit in external trade has been dragging on for a long time, with certain products' imports are up to three times the export (dairy products). The main source of imports, raw materials, but also of finished product, are neighbouring countries, where livestock and agriculture are more advanced, more productive and where the focus is on giving land for its own production of feed and reducing price dependence in trade. These import opportunities are also narrowed due to the emerging crisis and in neighbouring countries where we traditionally import raw feed materials,” the Association explains.
According to the Association, the issue is particularly sensitive when it comes to basic food products.
“The reality in the dairy industry is that domestic milk production has been declining for several years in a row, but the decline has particularly escalated in the last six months. The situation is similar in the part of cereal, beef and chicken production (except in pig farming, where the figure is in a mild positive trend). This is due to a whole range of factors, especially climate, as well as the enormous growth in prices of livestock food, raw materials, raw materials and energy. Domestic processors face a drastic jump in input costs, which cannot be fully mirrored in the final price of products due to the limited purchasing power of consumers,” the Chamber of Commerce said.
Minister of Agriculture, Forestry and Water Economy Ljupcho Nikolovski is decisive there will be food and appeals for citizens not to worry.
“We are facing a severe food crisis, but the citizens should stay calm. We'll have enough food for everyone. We’re facilitating and stabilizing domestic production strategically, as well as creating new measures to support farmers and autumn sowing. Through the revision, we have drafted an agricultural budget to clear the backlog of obligations to farmers, and the advance payment of subsidies begins,” Nikolovski stresses.
The Ministry of Economy reminds that measures have been taken to mitigate the situation under the Trade Law, measures to limit trade and profit margins in large and small trade and measures banning exports of certain products.
“All these measures are concerned with basic food products. The latest measures taken to mitigate the situation are the Decision on special conditions for the trade in certain goods, which determines the highest trade margin of basic food products, the Decision to restrict exports of certain goods banning exports of wheat and wheat flour, the Decision to restrict exports of separate goods prohibiting the export of firewood, pellets, briquettes and other raw wood, as well as the Decision to abolish the import duty rate for imports of sunflower oil for cooking,” the Ministry of Economy said.
[caption id="attachment_1457287" align="alignnone" width="920"] epa09895599 Indian farmers show the wheat production at a village in outskirts of New Delhi, India 17 April 2022 ( issued on 18 April 2022). Wheat is usually planted in January and harvested from March to May. India is the second largest wheat producer in the world. Wheat and wheat flour play an increasingly important role in the management of India's food economy. EPA-EFE/HARISH TYAGI[/caption]
The Ministry also refers to external trade and stresses that in the face of food shortages, "we cannot put ourselves in a situation where we have nowhere to import from."
“Statistics show that we are net importers, but given the geographical structure of our imports mainly made by the EU, from the countries of the region (CEFTA), Turkey, Ukraine and the United Kingdom with which we have preferential free trade agreements, in the face of food shortages, we cannot put ourselves in a situation where we have nowhere to import from. If the total foreign trade in the food section is looked at, one can see that the Republic of North Macedonia is a net importer, with imports twice the size of exports. The trade deficit in the food part is highest in meat and meat products, milk and dairy products and animal and vegetable oils. There is surplus only in vegetables, fruits and canned vegetables and fruits. The largest food imports, more than 50%, come from EU countries, then CEFTA, with Serbia topping the list,” the Ministry of Economy said.
Intervention fund – Mden 250 million (EUR 4 million) earmarked for plant production and animal husbandry
In March of this year, the Government adopted the Programme for the Intervention Fund in Agriculture, valued at EUR 4 million that, as Minister Nikolovski explained at the time, has nothing to do with other regular direct payment programmes. Of the Fund, Mden 120 million (EUR 2 million), are for subsidising fertiliser costs, but there are additional funds for lamb and pig breeders.
“It is good that this Fund has been formed, which is a serious instrument for dealing with crisis situations like this. Some of the policy measures are supported by it and should produce positive results, but the effects are yet to be measured and assessed,” Professor Dimitrievski believes.
NFF President Mojsovska estimates that the Intervention Fund has helped the fields in the part of barley and wheat plantations.
“But, the situation on the ground shows that with inputs increasing, wheat production this year is at a very high price, and the purchase price given by the mills is very low and is at Mden 18 (EUR 0.3) per kilogram. In order for these crops to survive and the autumn sowing to be realized, there should be additional support,” Mojsovska says.
The Agro Business Chamber also agrees that the Intervention Fund had a significant positive impact because it helped cover the costs of raw materials and fertilizers.
“However, this measure was delayed. In agriculture, the process is organized in cycles that cannot be postponed, so if you do not receive the funds in time to buy what is necessary, for example some fertilizer, time will pass, cannot be applied later and eventually, it affects the yield," the President of the Chamber, Georgievski, stresses.
The Agriculture and Food Industry Associationdoes not see any concrete effects from the Intervention Fund.
“Certain segments of the agri-sector have not been covered by the Intervention Fund's measures so far, so concrete effects can not be presented at this time. There is an announcement that the budget revision provides funds to pay back subsidies and this may act in the direction of mitigating the situation. At the same time, at an even more increased pace, the realisation of state support programmes to increase the livestock fund, the allocation of livestock land for its own production of livestock food, begins. Meanwhile, exports of cereals used as livestock food (wheat, barley) as well as alfalfa should be banned. It is unclear why these crops were not covered by the export ban measures alongside wheat,” the Association said.
Mirjana Chakarova
Translated by Dragana Knezhevikj 
