South Pannon Food Chain Network. Hungary-Serbia IPA Cross-border Co-operation Programme 2011

The SPF Network project supported by EU’s IPA program want to point out that Vojvodina and the Southern Great Plain are territories strongly depending on agriculture and food industry, the rise of which regions could be based only on cooperation between the two countries, primarily in the fields of agriculture and food


Good neighbours creating common future South Pannon Food Chain Network
Hungary-Serbia IPA Cross-border Co-operation Programme 2011 Keywords: Hungary, Serbia, cross-border cooperation, food chain, EGTC

Abstract:
The SPF Network project supported by EU's IPA program want to point out that Vojvodina and the Southern Great Plain are territories strongly depending on agriculture and food industry, the rise of which regions could be based only on cooperation between the two countries, primarily in the fields of agriculture and food industry.
The Project shows that relations between the two countries, the two observed regions are still very limited in this sector of the economy, while there are so much the potentials still not capitalised.
The aim of this Project is to present sectoral characteristics of the two regions and the conditions by which cooperation could be established between them.

Foreword
It is an often heard statement that both in Hungary and Vojvodina we possess determining resources -arable land, tradition and good working culture of the populationprimarily in food industry, which could ensure competitive production even in the long run.
As a result of profound reform of economic policy in Central Eastern Europe, the volume of agricultural production has reduced considerably, and currently beside Hungary and Bulgaria only Serbia (mainly due to agriculture in Vojvodina) remained self-sufficing and net food exporters.
The Western European region could be the achievable target market for Vojvodian agriculture and food industry (because of the not really attractive Serbian inner market and despite huge competition). However, beside the intensified and effective agricultural subsidy system of EU countries, standards, quality requirements and the more and more strict system of quotas are also barriers to exporting agricultural products.
In the long run, the altering/liberalised system of competition control will gradually relocate mass production to regions with more favourable natural endowments, and this may improve the position of Vojvodina in food export, but currently in the foreseeable medium term, only production of labour intensive cultures and marketable final products, instead of mass production, could be an effective development alternative for our agriculture.
The SPF Network project supported by EU's IPA program want to point out that Vojvodina and the Southern Great Plain are territories strongly depending on agriculture and food industry, the rise of which regions could be based only on cooperation between the two countries, primarily in the fields of agriculture and food industry.
The Project shows that relations between the two countries, the two observed regions are still very limited in this sector of the economy, while there are so much the potentials still not capitalised.
The aim of this Project is to present sectoral characteristics of the two regions and the conditions by which cooperation could be established between them. We consider cooperation mainly in the fields of common production, manufacturing and sale, and since Hungary as an EU member country has had an almost a decade-long experience in this matter, we have been especially focused on taking over Hungarian experience and capital transfers towards Vojvodina. This could facilitate entering EU market for Vojvodian farmers, producers, enterprises and other business subjects, as well as the sale of EU products on the Serbian market.
I. Sectoral and environmental analysis 1. Regional statistics referring to the sector

Regional statistics of agricultural sector in Vojvodina
The proportion of agricultural areas is especially high in Vojvodina, as well as in certain districts (see 1. figure). This rate reaches or even exceeds 80% in the province as a whole and in all of its districts too.
The agricultural land area in Vojvodina is 1 729 000 hectares consisting of excellent quality soil types. From the agricultural land area 1 648 000 hectares are cultivated, which is 95.3% of the whole area. Arable land is prevalent in the cultivable area.
67.2% of the agricultural land area is owned by the total of 620 621 private farms.
Most of these farms face serious problems for size-economy reasons, since their average territory is 3.52 ha and even this area is divided into 3 plots on average, which does not provide opportunity for well-organised production. Moreover, concerning their sources of income, most of these private farms have non-agricultural or mixed income sources. This means that agricultural production is only an additional source of income for them. Owners do agriculture only in their free time (moon light agriculture), which is then also visible from the results. 100 even between certain districts in Vojvodina. The cultivation rate is the lowest in Central and North Banat where the soil condition is unfavourable because of the widespread licks.
Analysing the proportion of the most important crops, we can state that cereals are predominant with 40-70% in certain districts, but even their average rate approximates 60% at Vojvodian level. The proportion of industrial crops reaches 20% in Vojvodina, and their production has an important role in each district. More that 18 000 hectares of orchards, then 10 000 hectares of vineyards, 71 000 hectares of gardens and 75 000 hectares for growing fodder crops also represent considerable capacities. The production of certain crops can be characterised as follows.
The production of corn as the cereal grown on the largest sown area exceeds 600 000 hectares in the observed years. The oscillation of the covered area is relatively low, while the fluctuation of yield and total output is significant. The yield varied from 29 quintals per hectares in 2000 to 65 quintals in 2005, which shows quite big variations. This is mainly due to weather conditions, which could have been counterbalanced with irrigation. As a result of oscillating yield, the total output is also very variable.
As a result of price policy of former years, the sown area of wheat grew, then fell back and finally stagnated in recent years. The uncertainty of the purchase price and low profitability of wheat slowly makes its influence felt. Similarly to corn, total output and the

figure. Proportion of important crops by regions in 2008
Soybean shows explicit rise in sown area, increasing from 75 000 hectares in 1999 to 146 000 hectares in 2006, and its production area is constantly exceeding 130 000 hectares.
At the same time, the yields are fluctuating surprisingly, since the yield in 2000 was hardly 12 quintals, while in 2005 it reached 28 quintals per hectare, being above 20 quintals since then. Naturally, the total output also varies within wide limits, 149 000 and 400 000 tons.
The sown area of potato is gradually decreasing from 23 600 hectares in 1998 to 17 500 hectares in 2009. Most of the territory of Vojvodina is less favourable for growing potato, while in Serbia there are some other regions with good conditions for growing potatoes, so these can also supply customers of urban areas in Vojvodina. Otherwise, as a result of unfavourable conditions, the yields are also oscillating, between 80 and 160 quintals per hectare.
The sown area of tomato, cabbage, kale and bean does not show fluctuations, but the yields do. The most eye-catching is the fluctuation of bean yield from 681 to 1435 kg. The cannot sufficiently make use of rough fodder and agricultural secondary products. As a result of this, huge quantities of secondary products remain unused, and also the production of manure does not reach the required level. This situation influences production results as well. Intensive milk production with vast lactiferous stocks is an adequate partner of manufacturers, however small producers come to a more and more difficult situation.
Moreover, we also have to reckon with the fact that the meat quality of lactiferous species is not marketable, while production should be developed in the field of meat production.
Livestock breeding is characteristic of data shown in 5. figure, indicating the number of livestock by species.
In the field of breeding pigs there was no considerable growth in number. The number of livestock rises or falls depending on changes in price conditions. Technicaltechnological development and stock quality of our pig breeding is far behind the countries that are present on the world market.
The number of sheep is relatively low, varying between 91 000 and 180 000. The limited number is the result of scarce pasture lands, and mutton consumption also does not present a market demand and does not generate positive changes. The number of poultry varies between 5.7 and 14 million. Other service activities 66,5 It is visible even from these data series, how outstanding is the agriculture specific indicator of the observed region. This is a region traditionally prestigious of agriculture, however, we can see from the analyses of data series that it is a less and less significant sector.
The relative predominance of agriculture and the structure of business sectors in the region are essentially resulting from good-quality arable land. According to traditions, cultivation of grain crops and breeding livestock became significant. Food production in the region's cereal, meat, preserved-food and dairy factories makes 20-25% of the national production. The sandy soil in the western part of the region and the number of sunny hours being above the country average, widen agricultural potentials, giving space to grape, fruit and vegetable growing. companies was made difficult, since production based on centralised planned economy was hardly reconcilable with economic actors in collective property from Vojvodina having much greater freedom and power of local decision-making. This happened so in spite of the fact that Hungary could realise great-volume food production and considerable export during the period of socialistic economy. Although we must add that even Vojvodina was a region with pronouncedly agricultural and food-industrial character. So it was a selfsufficing region also participating in internal trade of food.
In this time, food-trade volumes between the two countries were insignificant.
Furthermore, Hungarian food statistics had categorised Yugoslavia as a capitalist country.
Therefore, there are no such detailed statistics and analyses of commercial relations of the two countries as for inner Comecon markets. From Hungary's aspect, Yugoslavia turned out to be an extremely rhapsodic food importer, so beside low volume they had also considered it for an unbalanced country. Goods exported from Hungary to Serbia were mostly eggs (30 million pcs in 1975), preserved vegetables-fruit, and non-food tobacco, fermented tobacco.
Between 1960 and 1990 Hungary was in the 3 rd to 5 th place in the world after By the beginning of the 1990s, official food trade between the two countries was terminated for two reasons: the UN imposed commercial embargo in 1992, and Vojvodina's increased exploitation had already squeezed its agriculture and food industry. The necessary vacuum of these times between the two regions was slightly loosened over the black market.
Serbia and Montenegro, then the Republic of Serbia have belonged to the noncategorised countries. Based on the existing statistics it can be said that there have been insignificant agricultural and food trade between the two countries. And concerning the Southern Great Plain Region and Vojvodina, it is even harder to express food-trade volumes of the two regions. Establishment of agribusiness cooperation, common networks and cooperations was not a priority in any of these regions.
For this reason, it is quite difficult to describe and explain historical aspects of food trade between the two regions or either between these countries. There is almost no data about agricultural and food trade between these countries, not to mention the two observed regions. Yugoslavia and today Serbia have never been among those groups of countries, which are usually used by analysts and statisticians (Comecon, capitalist, developing, EU member, OECD, Central and Eastern European countries etc.). In Hungary, both in the period of socialist planned economy and of capitalism, as well as before and after accessing the European Union, there were only few groups of products and slight volumes of agricultural and food trade between the two regions. This fact proves justification of this project, since there are considerable unemployed potentials of agricultural, food-industry, production and trade co-operations between the two regions.

Capacities, characteristics of commercial infrastructure
Retail Surveying the concentration of food-trade turnover is relatively the most general indicator of development level. However, currently the situation is not so easy, since it becomes more difficult to separate retail from wholesale in food trade.
The process of concentration began later -around 1989 -in commerce than in the industry. In this period in the European trade, market share of the TOP-10 countries was around 20% based on net revenue. Only few countries operated internationally. According to forecasts, about 15 multinational trade companies will cover 70-75% of the European market in the following 5-10 years.
Concentration and commercial turnover of consumer goods among new members of the European Union was the highest in Hungary (in 2004). In the 1990s the volume of foodretail turnover increased by 7-8%. It is closely connected to this tendency that there was a continuous decrease in the consumption of goods from own production.
Changes in Hungarian food retail for the past twenty years can be divided into five periods: -Spontaneous privatisation: In the 1989-1990 period small shops became private property and new groceries were founded. -Decelerating concentration: Since 2007 the process of concentration has not terminated, but Hungarian food-trade market starts to reach its saturation. The process has decelerated, and we can see medium-sized discount stores filling market gaps. Although there are still some new large-surface stores, the volume of Greenfield investments decreases.
Concentration in Hungary reached such extent that after analysing inner structure of the market we can say that the trade of consumer goods can be considered for an asymmetric oligopoly. This structural form, which is further concentrated by purchase side towards supply side, enables customer side to enforce its strength.
The alteration in the proportion of the ten biggest enterprises in entire trade also indicates intensified concentration. Between 1997 and 2003 the turnover of the first ten companies trebled, and their proportion in total turnover increased from 48% to 89%.
Meanwhile the proportion of stores led by these ten companies rose only from 19% to 22% by smaller numerical growth.
The development process of domestic retail is not only characterised by concentration that produced decrease in the number of stores, but also by new ways of business and types of enterprises -domesticated in the period after democratic transformation. The decreasing number of stores at country level was mainly caused by redirecting turnover into large-surface units, hypermarkets.
Supermarkets are still a significant market channel in Hungary, although with decreasing importance, in contrast to hypermarkets. Hungarian discount market experienced boom in the 1990s, followed by temporary stagnation, today prospering again due to does not provide purchase only for its own members. The logistics of big chains of food stores usually have 100% centralised purchasing. Sometimes even a few chains form a single purchase chain, with one centralised warehouse, or one centralised and a few regional warehouses, depending on the structure of the chains.
Analysing changes in retail, we can forecast the following processes: intensifying expansion of multinational companies in retail, selection of domestic chains in Central-Eastern European region and on nonsaturated markets, potential strengthened market position of remaining chains, newer, international expansion of companies operating discount stores.

Wholesale
One of the characteristics of the transformation of food trade, both in the 1990s and today, is that wholesale itself looses its importance, as well as that retail and wholesale functions are less and less separate.
Wholesale of nowadays differs from traditional one mostly in the following: -Relation between producers and dealers is not inevitably based on warehouse stores, but it can also operate with printed or online product catalogues.
-Warehousing can be a wholesaler's task.
-The wholesaler can provide only transport services.
Further decrease in the importance of wholesale can be expected with: increasing role of own brands of processed goods in retail chains and strengthening of producers' and sales organisations and growing producers in case of fresh goods.
Therefore the remaining role of wholesale may develop in three directions, however all with numerous obstacles: supplying stores outside chains supplying Horeca (hotel/restaurant/café) sector providing foreign trade services In case of supplying stores outside chains, C+C stores are competitors to traditional wholesalers. The turnover of stores outside chains has been decreasing for years, although not in absolute numbers, but in market share, so this is a narrowing market segment.
In case of Horeca sector, the threat to supplies enhanced with special services is in the more and more centralised purchasing in hotels, restaurants and public institutions.
In case of foreign trade, professional knowledge and relationships of exporters and importers may be capable of keeping markets, while threat is in internal circulation of commodities in multinational companies (manufacturers, retail dealers), which has become a realistic alternative after EU accession and considerable decrease of administrative barriers.

Transregional, international and food-trade volumes between Vojvodina and the Southern Great Plain
Agricultural production was one of the most important sectors in Hungary that brought foreign currency in the 1990s. Exports have increased as a result of export-pressure in food-industry companies at the beginning of the decade, but then it declined considerably.
This was especially the result of collapsing former Comecon markets, as well as of decreasing production after careless privatisation. Between 1994 and 1997 increasing production and significant fall of inner consumption opened the door to repeated rise of export. However, data of declining 1999 show that agricultural export made only 8% of total exports. Saturated markets and non-competitive agricultural and food-industry goods from Hungary had led to this situation.
At the same time, the proportion of import increased considerably. This was essentially the result of weak market protection. Due to this, large quantities of meat, diary products, apples etc. were imported that could have been produced in the country as well.
However, importing goods with huge EU subsidies in their background was a cheaper solution, while chains of stores imported highly processed products.
Geographical direction of agricultural foreign trade shows that more than 90% of exports are towards European markets. EU members have become the most important foreign trade partners of Hungary since 1990. In exports: 48.8%, in imports: 37.2%. Goods imported from subtropical and tropic countries make significant share of imports.
The foreign trade turnover shows significant variation in case of almost all products. This is equally influenced by fluctuating agricultural production and rhapsodic capacity of markets, which relate back on production over the hardship of sale. The export of wheat, corn, sunflower and vegetables is basically influenced by crop fluctuations in the country and the importing countries, while the export of processed goods mainly depends on market demand. The most extreme fluctuation of exports is characteristic to cereal sales.
Geographical direction of food export is one-sided: more than 90 percent is realised in Europe. Within that, the European Union is the main partner, which was the biggest trade partner of Hungary even in the pre-accession period with salient exports of $1 631 million and imports of $874 million.

Trade between Serbia and Hungary
We have only few data of economic cooperation, trade between the two countries, since Balkan Wars and Yugoslavia's disintegration reorganised the borders. As a result, data for Serbia are available only since 2005. Bilateral trade is quite a matter of instance for Serbia's economic problems and the delayed restructuration. The applicability of the available data is also questionable, since there are problems both with the categorisation and the measurement units of products. One example could be drawing together data for beverages and tobacco and expressing them in tons, or similar presentation of milk and eggs.
We can draw two conclusions from the trade of agricultural products: -The trade of such products is a matter of instance, showing huge yearly oscillations, presumably resulting from temporary lack of goods on one or the other side of the border.
-This phenomenon is more understandable from the fact that the bordering parts of the two countries are agricultural and food-processing territories with considerable supply of goods. In other words, they are competitive on the market of agricultural products and food.
Concerning the future, these two territories may develop serious cooperation, since with the integration of production of both raw materials and final products they can obtain size-economy advantages on the international market.
Hungary is Serbia's fifth biggest import and ninth biggest export partner. In Serbia, and within that mainly in Vojvodina, there are about 500 small and medium enterprises in mixed, Hungarian-Serbian ownership.

table. Trade volumes between Hungary-Serbia in the 2005-2009 period -Import (tons)
Year Country.

Standardisation
Since the 1980s the EU has developed a new approach based on standardisation in order to harmonise technical rules in Member Countries.

CE marking
The CE marking on products indicates that the product fulfils every relating requirements of the EU. Member Countries may not close there markets in front of products without CE marking except in cases when it is proven that the given product does not answer the rules.

Services
The freedom of settlement and the freedom of providing services are two central principles of the European Union playing important role in regulating the common market of services.

Establishing an enterprise
The Member States have introduced a one-stop system so that service providers can receive all relevant information in a single customer service centre, and all the required procedures can be arranged remotely, using electronic devices -without contacting various competent authorities.

Veterinary principles, important information
Hungary has no own veterinary regulation as it is regulated at Community level. In the field of international transport there are also Community regulations, as the Hungary-Serbia borderline is the border of the EU at the same time. So transport and letting in transit There are the following large categories in the animal hygiene system: meat of mammals poultry, poultry meat, eggs and products from eggs meat and meat produce milk and dairy products fishing products The European Union prescribes a so called "country list", which contains the countries from where animal products may be imported, and regulates the products, groups of products per countries that are allowed to be imported.
In case of Serbia, livestock must not be imported to the EU. From fresh and frozen meat only mutton and beef is allowed. (Fresh meat must be stored on 4°C and frozen meat on -18°C.) Heat-treated and preserved meat products may be imported to the EU from Serbia. Products that are not allowed will not be let in to the territory of the EU.
There is also a so called plant list, the products of which slaughter-houses and meat processing plants are only allowed to be imported and sold in the EU. There are plants on this list, which are outside the European Union. There is cooperation between EU and Serbia in this respect, which operates the following way: in the first step the Serbian authority controls the plant the EU may accept it, or it can organise its own control after the EU's own control the plant gets on the list or not In order to import food or raw materials to the EU, third countries must develop their food hygiene and health regulations. Additionally, the traceability of food from production, over transport and storage to consumption is a basic criterion. Third countries that do not develop their own controlling and monitoring system are not allowed to export food to the European Union. In case of Serbia currently that is the situation.

Phytosanitary principles, important information
Phytosanitary consists of two main activities: -Phytosanitary inspections referring to certain plants. There is a specific list for these in the whole territory on the EU. Decree 7/2001 FVM regulates procedures, methodology and the list.
• is there quarantine harmful organism (fungi, insects, viruses or other) -Quality control based on sensory survey of the plant food and inspection based on labelling and documents. It is regulated with decree 543/2011 EK.
• is the labelling appropriate • is the quality in accordance with the labelling • it must be clean, pure, free of soil, pest and insects • instrumental sensory inspection A provision of law determines which of the main control inspections must be done in case of certain plant product. In some cases, only one is needed, in some cases, both controls are compulsory. For example, it is prohibited to import potatoes and other potato products from Serbia. In Serbia, there is no such control system, which is acceptable by the EU. Decree 7/2001 FVM regulates what are the prohibited products from which countries.
Moreover there is the regulation of so called common entry document, regulating a more strict procedure compared to the above mentioned.
-It defines certain products and/or countries for which the Regulation (EC) 669/2009 is obligatory.
-It is applied in order to detect infections and manipulations.
-A sample must be taken from every fifth consignment and it must be analysed in a laboratory on the importers cost.
-The EU is often revising this regulation, easing or tightening the procedure for certain products and/or countries. The supervision is based on former statistics of such controls.
In case of plant hygiene, similarly to animal hygiene rules, traceability is the most important aspect. Countries that develop their own inner tracing system of agricultural and food products can more easily export a wider range of products to the EU.
There are three categories of goods entering the territory of the EU: -Everything was found correct and the goods are admitted to EU -Some suspicion emerged so an inspection is begun based on samples, but the authorities let is the goods to EU. If it is proved that it must not be put into circulation, the freight can be stopped anywhere in the EU, packed back in logistics and warehouse centres, or removed from the shelves from retail stores.
-If the goods are very suspicious, they are retained until the inspection is finished.
The decision is made after that whether to let in the EU or return from the border. 122 origin. The wooden wrapping material itself is a potential source of infections and pathogens. So these materials must be treated. Every certain pallet and wrapping material must be heat-treated, the certificate of which must be burnt into the surface of wood together with information code of the treatment method, the producer and the treating company.
In general, there is separate regulation of every certain plant product. These regulations are constantly changing, so before exporting goods to the EU, it is advisable to inform in the plant hygiene sub-office at the Roszke border crossing. representation is legally not independent of its founder, it is only preparing contracts and businesses to be concluded, but it cannot conclude contracts itself.

Employment law
As a general rule, this law refers to every employee working in Serbia irrespective to his/her citizenship. Every person above 15 may be employed. Employment is established with signing an employment contract between the employer and the employee for a determined or undetermined period. The contract may prescribe probation up to six months, in case of which the period of notice is at least 5 days. The working week lasts 40 hours in Serbia, while paid holiday is 20 days. The Serbian employment law also knows the institution of minimal wage. The amount of contributions paid by the employer is currently: 22% pension contribution, 12.3% health insurance and 1.5% unemployment contribution.
As a general rule, the employer must close a collective contract with the employees.

Law of taxation
The Serbian tax system is quite simple and liberal. We can say in general that tax rates are much lower compared to other countries of this region. Serbian corporate tax is the lowest in the region. Its base is the profit realised during the business year (which is the same as the calendar year), and the tax rate is only 10%. The capital return tax is also not high, being only 20%. The corporate tax law contains several motivating regulations, form which maybe the most important is that the taxpayer is freed of the corporate tax liability for 10 years in case it invests at least RSD 600 million in Serbia and employs regularly (not part-time) at least 100 employees. Additionally, investors get tax allowance for investing in underdeveloped parts of the country or if performs concession activities.
Personal income tax is not high either, being only 14% on wage income and 20% on other incomes. In this case the tax base is again the earnings of the calendar year. In case of wage income, it is the employer's obligation to withhold the advance tax payment from the gross income. Moreover, there is a kind of social tax or yearly tax for individuals, whose total yearly income realised in Serbia and anywhere in the world exceeds the quadruple of the average Serbian yearly income (in case of Serbian citizens) or is ten times higher (in case of foreigners). The rate of this special tax is 10%.
The subject of the value added tax (PDV) in Serbia is the trade of goods and services and the imports. PDV must be paid by everyone dealing with the trade of goods and providing services. The tax base is the value of goods (in case of imports duty and tariffs are also included). The general tax rate is 18%. The exception is a list of goods and services defined by law, for which the tax rate is 8% or 0%.
Beside the above mentioned, we have to mention two more taxes. One of them is property tax, the extent of which is 0.4% of the real estate's value at yearly level. The other one is the excise tax. In accordance with the law, for the import of some products, such as petroleum products, tobacco products, alcoholic beverages, coffee, and some of the raw material used in soft drink production, excise tax must be paid. In addition to these tax types, investors still must reckon with local taxes, which vary by municipality and the most typical one is the land-use charge.
Establishing free zones -free-trade agreements Serbia also has a valid free-trade agreement with Russia, but according to some experts, it still has not adequately capitalised the chances provided by the agreement. Serbia deserved the so called "normal trade relations" status from the United States of America in December 2003, which is equivalent to the former "most favoured nation" status. Due to this goods from Serbia are not discriminated at imports any longer. But the actual prosperity began in 2005, when Serbia got the GSP system of duty concession for 4650 products. The duty-free export mostly refers to industrial and agricultural products. The precondition is that the product must be delivered directly from Serbia and at least 35% of its value must be added here.

Food safety
From 11 th June 2011, the HACCP standard of food safety is obligatory in Serbia as well. Those who do not obey these regulations may be closed down by the inspectorate. The Serbian law on food hygiene was passed two years ago, which enforced the HACCP system.
According to HACCP, full traceability of food must be ensured in food production and distribution processes and, if necessary, quick action or even recall of goods, in order to prevent harm to consumers' health. Every participant of food production chain in Serbia must perform its work processes according to HACCP requirements since 11 th June 2011. The experience of informative previous surveys shows that in most cases they have understood the advantages and importance of introducing this regulation. Those who have decided not to apply it, exclude themselves from food production chain, and they will not get permission for operating in the future. The inspectorate denounces them to authorised prosecution and court, and their task is to cancel the licence according to the law. In case of those, who have not finished the process yet but stated to obtain necessary documentation and to reorganise, they will get an extension of time. Of course, it is determined for everyone separately, during which period they must rectify omissions.
6. Presentation of financial and banking sector, and of the system of state agricultural subsidies The total assets of banks sum €9 billion, while the household savings reach €2.3 billion and this sum is increasing. There are 26 000 employees in the banking sector, approximately 3.8 million bank cards, which can be used in 1000 ATMs country-wide.
The main activity of banks is crediting the economy and households, providing payment traffic services and other financial services. In a regional comparison, interest rates are higher than the average, but lower than they had been in former decades. The work of banks has greatly been facilitated over legislation -with the banking law, law on leasing, insurance and mortgages. These laws help the banks collect their receivable claims.
The National Bank of Serbia is the country's central bank, the main task of which is to support price level and maintain financial stability in the country. It defines and implements monetary policy, subscribes the exchange rate of dinar (RSD), controls payment traffic, supervises commercial banks, insurance companies and other financial service providers, and mints and issues money. The National Bank is operating independently.
We can say that the transformation of the Serbian banking system has been finished by the end of the decade; most of the Serbian banks have been bought out by foreign banks during the 2000s.
Banks have important role in financing agriculture. Since most of the banks are owned by foreign multinational companies, their goal is to maximise profits, mainly over lending out credits. Part of the credits given to the economy is used for financing agricultural production and the relating food-industry. Some banks have developed special products for crediting agriculture, and over penetrating a specific market gap, they accept crediting such private farms that do not carry out any book-keeping and other tax-related activities.

Financial system in Hungary
The Hungarian National Bank is the monetary authority of the Hungarian financial Characteristics of banks: • They provide complete financial services, e.g. collecting deposits, providing credits, keeping accounts, domestic and foreign payment transactions • They operate as stock companies • Their subscribed capital must be at least 2 billion HUF Characteristics of specialised loan-offices: • Their activities and the clientele are restricted • They operate as stock companies • Their subscribed capital must be at least 1 billion HUF Characteristics of cooperative loan-offices: • Their activities are restricted only to members of the cooperative • They operate as cooperatives (at least 15 members) • Their subscribed capital must be at least 100 million HUF

System of state agricultural subsidies in Serbia
Not treating theoretic background of subsidies or their positive and negative effects, we have to state that the Serbian system of agricultural subsidies is still not comparable with the system in EU, and its accounting relations are not significant either. For this we primarily have to understand the situation of agriculture in Serbia.
Serbia's most important agricultural and food-industry target market consists of former Yugoslav countries and the European Union. Naturally, the Serbian agricultural and food-industry surplus does not make it for an important actor on EU market, but this export is important for the country. Thus agriculture -despite its unfavourable position and backwardness -plays an important role in the country's achievement in exports. It is easy to see that even in comparison to the incomplete budget, the agricultural budget is too low, much lower than its contribution to GDP, as it can be seen from 9. There are some other subsidies as well, but we have no data of these product-based subsidies. Beside supports, the National Program also foresees some According to the plans, funds will be divided among these four areas in the ratio of 25-5-5-25%.
Within the stimulation of development of manufacturing industry and marketing activities, there are three target areas defined: 132 1. Stimulation of investments in milk processing, marketing of milk and diary products 2. Stimulation of investments in meat processing and marketing of meat products

Stimulation of investments in fruit and vegetable processing and promoting sales
The foreseen amount of funds and their sources are visible from the Funds will be divided among these three areas in the ratio of 30-30-40%.
Taken all in all we can say that these subsidies and stimulation cannot improve much on the weak position of agriculture and manufacturing industry.

System of state agricultural subsidies in Hungary
The accepted definition of subsidies existing in the European Union says: "Subsidy is the name of all donations and premiums that can be expressed in terms of money, given by the Community or some of its financial sources to Member Countries or their regions for specific industries, enterprises, or a certain circle of enterprises, as well asin case of some special programmes -to individuals." The concept of granted business unit can also have a wider interpretation. Among them are public companies, corporations, individual proprietorships, as well as non-profit organisations.
Thereafter, with the well -known agricultural support system the project no longer deal.

Accounting rules of subsidies
Accounting settling of the grants received is different depending on whether: -it is accounted in the firm to the benefit of net assets -it is accounted in the firm to the benefit of the outcome or not -it is given in cash or not -it is given for development purposes or the subsidy covers costs, expenses -it is a grant given under legal regulations or based on a contract.

Short and medium term forecasts of global agriculture and agricultural trade
Before analysing agribusiness forecasts, we deem it necessary to enumerate all the factors that influence the tendencies of international food production and trade.
Environmental factors: accelerating erosion of soil with the growing population the need for inhabitable areas is also rising So in the current situation, it comes to more and more cases when people rise against their dictators reigning for a long time, in especially over-populated countries without goods for export, where the own natural resources have already been exhausted while they are unable to be self-sufficient, their economy is uncompetitive, but the country has a strategic geographic position. For example, Egypt has become insolvent, while they cannot expect considerable foreign investments in the country. Tourism becomes disloyal in no time, but returns only after a long time, so the economy cannot be based exclusively on tourism.
Several countries of the Middle East have to face these problems and can be characterised by these parameters.
In our opinion, it comes to a contradiction in simplified handling of demand and supply as to, while the population grows generating increasing supply in food trade, for the increasing number of -environmental, energy, financial, political, economic, naturalcrises an increasing part of the world's population lives in poverty. With the growing food prices solvent demand for food is falling. (Similar processes are predicted in case of oil.) So it is very difficult to foresee, which of these opposing processes will prevail. Though it is probable, that food prices will rise monotonously with ever bigger oscillations.
In the long run, it will not be enough to regulate markets and develop cooperation between countries. Because of the growing population, intensifying food production cannot be put off any longer. Some French experts suggest increasing the world's agricultural output for not less than 70 percent by 2050, although it is hardly feasible without stopping stimulation of biodiesel production that makes food production non-competitive, and without relaxing restrictions relating to the production of genetically modified crops.
It could be a solution for the target area of this project if they increase the proportion of local products and develop regional marketplaces as soon as possible. Organic farming in locale could prevent the catastrophic consequences of a potential global food crisis in the region for the next 40 years. The proportion of arable land in agricultural areas should be increased. Speculative impacts and the influence of foreign interests should be minimised.
Food production must not serve energy production even in the future. The territory of energy and food plantations in the region must be harmonised. In order to ensure food safety, agrarian society must be preserved; the production-cultivation knowledge base must be protected and developed.

Targeting
Considering the objectives of this project and analysing the current situation of agriculture and food industry in Vojvodina and the Southern Great Plain, the only solution for breaking free from the present situation is in agriculture and food industry based on cooperation, as well as in the development of cross-border trade. This objective has been divided to the following partial goals: • Development of cross-border trade based on the strengthening of local economy • Developing agribusiness in the border region in order to utilise economic, infrastructure and human resources capacities • Mobilising internal resources in order to capitalise production and sales capacities • Improving income attracting capacities of the region with the development of trade sector All four partial goals have common background, which is the increase of trade and movement of goods relating to agriculture and food industry along the Serbian-Hungarian border. We have to achieve movement of all of the agricultural products, final products, and input materials of production and manufacturing over the border by creating fundamental conditions. For this it is necessary to know factors and capacities of production of raw materials, as well as the manufacturing, logistic and trade capacities of the two sides.
It is especially important to demolish the border as a limiting factor, which will be, knowing Serbia's current status outside the European Union, a complex and demanding task. This process is not the task of this project or these project partners. Results can be expected only after the alteration of legislation in the Republic of Serbia, resulting from negotiations between Serbia and the European Union.
The strategy developed within this project can be an appropriate framework to developing institutional relations and connections between producers, manufacturers and dealers, which could be properly utilised in agricultural co-operations after the administrative boundaries of cooperation between the two countries are demolished.
Until then, these relations should bear fruit in preparation with results that help all of production systems, food safety systems and different logistic systems become harmonised, but it is inevitable to mobilise and better utilise currently dormant inner resources.
In the preparatory period the emphasis should be on training farmers, and here emerges Hungary's almost a decade-long experience, the transfer of which is quite necessary for Serbian farmers, who do not know production regulations of the European Union, nor the methods, background and quality assurance regulations of food industry.

Strategy development
For the realisation of the above mentioned system of goals we have to determine an institutional framework, which could develop these planned activities to detailed projects and can resolve the execution of these projects, their financing and follow-up. The following strategic system is necessary for this: -Development of horizontal and vertical co-operations: horizontally they are cooperatives, vertically they are clusters.
In Serbia and Hungary, similarly to many other countries, it has been realised that for developing the economy it is not enough to use former economic planning practice, but following the practice of developed countries, new methods, development and economic development practices should be utilised, which require similar, or often even less resources, resulting in considerable improvement and enabling faster structural change.
The simplest and relatively capital saving solution for the burning problems of farmers is establishing cooperatives. On the one hand, it facilitates problems with size economy on supply-side and with the sale of goods, while on the other hand, it treats even problems with holding structure and market position, even if it cannot resolve them.
Following tried and tested solutions from Europe and other parts of the world, it is necessary to establish Producer and Marketing Cooperatives (PMC) for purchasing, organising production and sale of goods. Such cooperatives resolve the lack of capital to an extent, with joint funding, common procurement, joint use of equipment and reducing production expenses. They also facilitate entering the market, as members can produce marketable products if they follow good agricultural practice, quality assurance and the common solutions for marketing problems.

Preconditions of establishing new types of co-operatives
Currently the biggest problem of the operation of agricultural cooperatives is that Further principles are open membership, equality, democratic system, equal right to manage, providing information and trainings to members, and domestic and international relations between cooperatives.
The original capital of the cooperative as a legal entity is the founders' stake. This stake can be in cash or not, and the amount of the least stake is defined by cooperative rules.
The founder has ownership over the cooperative's assets in proportion with his/her stake.
The functional rules are defined during the foundation. The statute defines beside the name and circle of operation, other rules also, like the members' rights and obligations, the amount of original capital, the amount of stake, the distribution of profits and the inside organisation of the cooperative.
Member of the cooperative may be an individual or a legal entity that pays in the stake. Every cooperative must keep book on its members, which is available to all the members and authorised third parties.
One of the law's main functions is to define the way of managing. The right to manage belongs to every member, having one vote each. The exceptions are those members, who have bigger role in the operation, having 3 votes maximum.
Organs of cooperatives: general assembly, management board, manager and board of supervision. They make decisions with the majority of participant if law of the status do not dispose differently.
Assets of cooperatives are the all the founders' stakes and cash, securities and means of production obtained during their operation. The cooperation is responsible with its entire assets and operates in its own name on behalf of its own account or the members' accounts.
Profit is divided according to the general assembly's decision after annual settlement is accepted. Firstly the losses of previous years must be covered from the profit, and then follows the necessary reserves, and only the remainder is divided as net profit among members according to their stakes' share.
Books are kept and financial statements are prepared according to the relating laws and the internal regulations of cooperatives.
The operation of cooperatives is supervised by cooperative auditing service. It can be a cooperative or company that has got the permission of the authorised ministry.
Audition is obligatory for every cooperative, and it can be regular or exceptional. If a cooperative misses audition, its liquidation will be initiated. After auditing the auditor prepares a report with his opinion and sends it to the ministry and the given cooperative.

Strategy for developing clusters
In Serbia, similarly to many other countries, it has been realised that for developing the economy it is not enough to use former economic planning practice, but following the practice of developed countries, new methods, development and economic development practices should be utilised, which require similar, or often even less resources, resulting in considerable improvement and enabling faster structural change.
Clusters are based on connections between firms. The connections can be common or complementary products, same technology, need for similar natural resources, need for certain professions and/or sale channels. The system of connections between companies is the first requirement for establishing a cluster. The second requirement is large concentration of firms from the same industry within a certain territory. The third precondition of founding a cluster is to have working relations with scientific research institutions for providing new ideas and innovations.
Unfortunately, we do not have such an example, which applies the characteristics of every region, but there is a so called general model, which serves the foundation of clusters and involves important development factors and phases and reckons with the scarcity of resources and the special needs.
Successful operation of a cluster does not only depend from the success of certain companies, but also from their cooperation within a unified organisation. Thus it must be highlighted, that though a company's continuous development is necessary, but not enough precondition for the cluster's success, which requires integrated management, organisation, planning and development.
Integrations in the form of clusters have three main parts: -Defining the strategic plan and outlining the vision -establishment and development plan, preparing adequate atmosphere, which directs changes towards integration.
-Integration and development of basic economic processes -realisation of the cluster's and the companies' core functions.
-Development of a modern information system -the core supporter of the integration process.
Certain clusters can resolve their financing over membership fees, but it is usually characteristic to clusters that they search for financial sources to maintain their operation.
Regional support can be a long-term solution -through providing financing for several years.
If we formulate the question -after everything said -why there are no clusters in undeveloped regions, which could increase competence of the region, the answer may be the high complexity of clusters' organisation and development.

Detailed presentation of strategy elements
-Production of traditional products founded on the region, their delivery to local and external markets. Establishment of local processing plants and chains of stores, their development and making the system of labelling regional products.
It is necessary to take into consideration local endowments, traditions; reveal local values and competence; prepare food cadastre and value inventory; map local potentials; make a list of local food-industry actors and determine drawing branches of agriculture. For developing local products, it is essential to help organisation by value chains, which beside sales and promotion involve processing, storing and transport activities as well -vertical approach. Developing suppliers' and buyers' networks is key element of this process. Here belong local market development, local marketing activities and the establishment of local food brands as well.
-Adequate utilisation of local natural endowments, employing local people for achieving adequate employment rate.
Without the enthusiasm, conscious behaviour and active participation of local actors, local agribusiness cannot be intensified, strengthened, improved in a sustainable way. So those activities are especially emphatic that are aimed at developing consumers' awareness, the habit of conscious consumption. This can create local market and collaboration between local enterprises. In is indispensable to strengthen local identity (especially among the young) and the preference of local resources, products, services, knowledge, as a general rule. Local economic actors, involving municipalities, should prefer local products, services and should employ local people. Another element of forming the approach is the entrepreneurial spirit, improving willingness to doing business, since -even if it was forced -self-employment can be answer to continuous decline and huge unemployment.
This segment of the strategy aims at human resource development of local producers and food-industry companies over flexible trainings. The goal is teaching such skills that improve the professional quality of the farm, enterprise. This involves beside general entrepreneurial, economic and financial knowledge, the current topics and forecasts of the given profession, as well as contents from local history. Professional training should, if possible, adjust to the needs of local economy teaching those professions, which are important in the given region.
-Cooperation between producers and their organisations in production and marketing, exploiting trade opportunities in the border region.
Community development is of core importance, though it is a time-consuming process, but results in strong community feelings, willingness to collaborate and ability to manage conflicts. Common planning also contributes to team spirit, strengthening of self-control, solidarity and tolerance. For farmers and manufacturers from the two countries, relationships should be established first, and later based on these relations, production and economic aspects of cooperation can also be exploited, realised both in horizontal and vertical integration, and forecast even cross-border trade after the administrative barriers are demolished.
-Making sale chains the shortest possible in order to preserve most of the income for enterprises in the region There are different forms of territorial economic cooperation: production and sales cooperatives, clusters, suppliers' networks, as well as thematic routes and conscious connection of certain sectors, and organisation by chains of interests. Local thematic routes based on local agribusiness and gastronomy also belongs here. If these systems are successfully developed and managed by farmers directly, then most of the profit will appear in local producers' incomes.
-Revealing such market niches where products with high added value can be sold successfully, motivating procurement of input materials in the regional market near the border.
Development of such local food products together with their marketing that are intended exclusively for the international market. These are special local products with high added value, excellent quality and uniqueness. There is chance for purchasing input material in gross at preferential prices in case of both these and other products. It can be a good example of cross-border trade, from which producers of both countries may gain, only the administrative obstacles must be eliminated first.
-Developing common advisory network and informational monitoring system.
The general objective of advisory networks is to inform and teach agricultural producers in order to increase their income and improve their business management skills. Special goal is to help them solve their production problems and organisational, economy questions of farm development, as well as to contribute to rural development in their environment, preserving the environment and resources. Development steps should be based on the Hungarian advisory and monitoring network, since the Serbian system is much less developed. The Hungarian system takes into account the values of the European Union, has a widespreading background and is better embedded, while in Serbia the system was initiated from above.
-Insisting on collaboration between local decision-makers and producers for achieving commonly set goals.
Here are those programmes that are managed and implemented by municipalities being the investors. Basic community supply systems should function in common property and management, since it would have economy development effects locally. These are opportunities for implementing renewable energy and investment stimulating programmes.
Local agriculture may be developed and alternative incomes may be realised with complex energy programmes. Giving impulse to municipality-owned enterprises is beneficial for the community.
-Ensuring food safety, introducing own regional standards for premium category products above EU and national regulations.
Beside the introduction of the EU and national food safety regulations, regional food quality standards should be developed. As we said above, it is necessary to develop traditional products and product groups, characteristic to the region. For a farmer who wants to enter this circle not only prescriptions of exterior characteristics, but interior and quality prescriptions are also obligatory. These rules should be developed with the collaboration of local farmers and manufacturers and the improving profession.
-Developing common agricultural marketing system based on local labelling system of products.
Local product development activities should be handled in close connection. This programme involves image development of local products, setting the specialised shop of local products (locally, in towns nearby or in the Internet) or placing shelves of local products in stores nearby. Here is the wide range of marketing tools as well: food promotion on village feasts, festivals, in towns and establishment of model farms that can be visited.
There is the opportunity of participating on markets in neighbouring towns. With the help of market research, some international channels can be determined for marketing local products regionally or internationally.
-Founding two model farms on both sides of the border.
In order to simulate putting into practice of the planned activities, two model farms should be established on both sides of the border. These can be already existing business units where production system and infrastructure should be transformed according to adequate rules and principles. Both farms operate in their own environments. Based on received feedback, experience and results, the system can later be implemented more widely in both countries.

Necessity and development of common statistical and monitoring system
Agriculture and relating food industry are determining the economy in both regions.
Agribusiness is an endowment, potential and comparative advantage in both regions. In case of certain social-economic problems of the two regions, only the development of agribusiness can be effective.
The EU integration process has started in Serbia, within which beside legal harmonisation, reform of administration, harmonisation of economic and financial policy and implementation of EU standards, there will be serious changes in the field of development policy as well. It is also necessary to harmonise agricultural statistics and to prepare for implementing food monitoring system in Serbia.
Territorial and economic compatibility should be ensured in the Hungarian-Serbian border region, since this is a professional, political and business interest in both regions.
The target areas of special programmes within the Danube Strategy are irrespective of state borders, providing direct and indirect results in community, regional and economic development. Furthermore, other countries of the Danube Region outside the EU may also participate in programming and the implementation. A developed agribusiness statistical and monitoring system in both regions could be basis for implementing trans-national programmes of common development in the fields of agriculture, food industry and trade. A database with dynamic data series and cadastres of business subjects could provide necessary raw information for further planning, realisation of new programmes and projects.
It can safely be stated that in the process of rebuilding the economy after the crisis, clusters will be the drivers of the economy. Predicted tendencies of the next decade: connection and collaboration of industrial and knowledge clusters, process of crossing regional and national borders, establishment of so called World Class Clusters -these super clusters will probably outgrow statistical/planning regions.
Regionalism is being intensified. Because of hectic global agribusiness and food trade, and in order to decrease food dependency and enable traceability, development of regional markets has priority to forming international marketing channels or filling market niches.

Necessary tasks
The survey and documentation of agribusiness actors is not a one-time activity.
Regional colleagues should update data constantly, and register potential changes at farmers and enterprises. Data entry of new participants of the system is also necessary.
The questionnaire and data sheet as well as the instructions should be revised every year. Processing feedbacks, comments received from data gathering and the operation of the electronic sale system, and possible corrections based on them are indispensable for continuous operation.

Tasks of the system
Continuous update of the database, processing and evaluation of data. The same questionnaire and data processing method should be used in both regions for providing compatibility. There is a complete agricultural survey in Hungary every ten years, done by the Central Statistical Office. Since there is no such system in Serbia, therefore the monitoring system should adopt to the established survey system in Hungary.
The survey documents should take into consideration methods applied in Hungary. If the system of complete agricultural survey will be introduced in Serbia as well, then the survey documents of this programme should be based on common denominator of the two systems.
It is practical to present the results and experience of the programme to the Serbian ministries of agriculture and industry in order to influence the development of sectoral policies for agro-statistical compatibility of the two countries.
The database should fulfil the following requirements: filters for presenting active economic subjects dynamic database, constantly updated, actualised modular system, capable of integrating newer statistical data groups bilingual automatic procession of data, execution of queries, graphical presentation of the results the graphic interface must be accessible online to anybody -RSS compatible -RSS connection to local and regional databases -four separate interfaces: one public, accessible to anybody; one for uploading information with registration system; one interface for regional managers accessible with their own entry codes; adminisrative interface devide agribusiness into supply, demand and trade spheres devide actors on those who perform agricultural basic activities and on those who produce added value typology of basic agricultural producers, analysis of production sphere Informative portal on common state and regional subsidies. Subsidy systems are also dynamic categories, being revised by the authorities at least once a year. Additionally, changes in financial-supporting funds and the macroeconomic situation also influence the system of subsidies.
Development of a common interregional food trade monitoring system.

Organisational structure
The backbone of the organisation is the central office and the regional offices, interpreted as network centres. The central office determines the tasks; performs their execution, control and monitoring. It manages the networks, performs professional-diplomacy tasks and leads the network's further development. Colleagues of regional offices are selected on professional basis, being graduates who know the given local environment and are highly competent.
The monitoring system should have a network of external partners as well. It involves connections with authorities, professional organisations, other agricultural cooperatives, state organs. Gathering secondary data is also important, since monitoring must be based on primary data and external, secondary data at the same time.
5. Mapping trans-regional or cross-border cooperation potentials within related business sectors Cross-border cooperation may by no means be based on mass production, mainly referring to the production of cereals and other grain crops of fodder. There are no adequate regulations for that, and the size of holdings is also below the profitable level. Furthermore, since these are strategic crops, it is not reasonable to increase the quality and quantity of production over cross-border co-operations.
We have to enter such market niches where knowledge, skills and technical conditions of local small producers enable them to achieve increased revenues over added value.
In our opinion, there are several such branches, which could reach additional production volume growth over cross-border joining of the Southern Great Plain Region and Vojvodina. Moreover, there are some development projects, with the implementation of which we can exploit great potentials over the synergy of complementary advantages.
1. Complex overview of the region's agriculture, its horizontal territorial and vertical branch system, mapping its potentials, establishment of the current strategic agricultural and rural development programme.
The agricultural character is a traditional characteristic of the region that determines organic identity of the area and its inhabitants. and glasshouses is such branch, though this can involve even flower growing.
Utilising given natural conditions and the experience of production and marketing in neighbouring Hungary, numerous opportunities will emerge in this branch. There are many small farms, which could rapidly begin production of organic food after adequate training and capital injection, this way providing income for the whole family.
3. Both in Hungary and the European Union bio-energy production has become popular due to EU regulation that requires development of alternative energy resources and mixing bio-fuel derivatives with mineral fuels. Hungary in far in front of Vojvodina in this respect, in tune with the EU undertakings. Though environmental conditions in Serbia do not differ from Hungary, so the production of alternative energy sources is possible there as well. Of course, for exploiting such potentials, state support must be provided in the form of guaranteed price and terms of buying up.
4. Production of energy crops, utilisation of agricultural wastage, production and use of biogas present significant potentials for heat and electricity production both at regional and country level. There were advanced researches in this subject in Subotica already at the beginning of the 1980s. Similar researches are done even nowadays, but the realisation is limited only to heating family house using soybean and corn-stalk and straw.
5. There is a wide scope of action in the field of improving manufacturing and marketing of products. Currently the difference between producers' and consumers' prices comes down outside agriculture. In order to prevent this, farmers should create the entire product path, from the buyer and manufacturer to the marketer. It is obvious that this is not feasible on all product paths, since in case of strategic crops like cereals and oil crops these paths have already been established, but in case of new, high-quality and special organic products, this potential must not be missed.
6. Developing the system of test plants for cross-border production integration. It is inevitable for planning, realisation and supervising agricultural policy measures, to possess current and reliable information of agriculture as a whole, and of every important group of production plants. There is no centralised information system of test plants in Serbia now, which could provide practical, exact information for the above mentioned activities. In order to provide information necessary for developing the Common Agricultural Policy of the European Union, every Member Countries operate a farm information system based on collecting representative data. Member Countries are obliged to supply this information to the European Commission. In the region, there is the possibility of developing a pilot system of test pants that will reflect and gather the features of the two countries and the European Union. During the development of data system of this test plant network, data should be considered divided by the Serbian-Hungarian state border is considered globally for a region rich in water (since two rivers with high water output supply it with water, the Danube and the Tisa River, and it has significant underground water reserves as well), but seasonally and locally it is often water-poor and even (the two major rivers Sand Ridge) it is highly exposed to the risk of desertification (on the Sandland running through the hilly ridge between the rivers).
For handling the severe water supply situation in the region, it is necessary to develop and urgently implement a water management conception, which is largescale, precise and definite and of wider regional character and scale, in harmony with the priorities of the Danube Strategy.
The basic presupposition of this programme concept is sustainability and retaining water in the long-run -by optimal handling of numerous regional/local water management interests that are often opposing each other.
Fundamental questions of developing a conception that covers and treats uniformly the whole wider region are the following: • Water management, drainage and flood control: Water withholding treatment of water output of the rivers between ever higher dikes.
Development and operation of small and large integrated regional water management systems. (The Danube-Tisa-Danube DTD channel system for water management, navigation and watering, with 130 transfer and/or reversible pumping stations could be an example to Hungary even in its current poor technical condition.) • Drinking-water bases, wastewater treatment, environmental protection: The question of drinking-water supply in the region must be revised, since in many cases -especially in Northern Vojvodina -water supply is based on extensive and wasteful exploitation of underground water bases (which is disposable only in limited amount and it is renewed very slowly). At the same time, wastewater treatment in smaller settlements must also be resolved, since (beside treatment of solid waste) this is the question of the hour for preserving natural and man-made environment and of receptive living waters.
• Building water-management infrastructure: The potentials of infrastructural development in river control for drainage and flood control purposes, the question of channels and collecting water reservoirs, resolving irrigation at industrial and SME level, all should be revised. Channels should be widened for navigation purposes and to utilise energy potentials of the two big rivers and the channel system between them. The conflicts between national economy, natural preservation and environmental protection aspects of these enlargements must be handled with compromise the way that the region's economic resources should not be overtaxed.
• Resources of thermal and medicinal water: The technology, economics, marketability and environmental potentials and constraints of actually exploitable and available underground depth water resources must be revised, for their environment-friendly agricultural, medical, energy and tourism exploitation. A realistic long-term utilisation strategy concept should be formulated and developed with regional approach.
There have been several substantial initiatives recently for synchronised resolution of water management problems at wider regional level.
• For developing this program, it is inevitable to reveal ownership, authority and functional structure of the Sandland, determine social, economy and professional water management factors, ensure transparency of their complexity and establish a partnership network.
• Another essential pile of the program is the professional preparedness, functionality of the relevant institutions in water management.
• For developing the professional concept of the program, it is necessary to confront, harmonise, integrate and mix all the former surveys, analyses and proposals concerning water management on the Sandland.
• It is also indispensable to socialise, popularise and discuss the planned concept with the members of Sandland Partnership Network, in order to offer connection opportunities to municipalities, micro regional organisations, community and economic actors.
• This complex program could be an especially important revitalising factor of the Sandland's agriculture, population, communities and SMEs, all of which are facing serious problems. Literature: • Buday-Sánta Attila: Agrárpolitika-vidékpolitika; A magyar gazdaság és az EU -Az EU agárrendszere a gyakorlatban where the concentration of such farms is expressed, while in Hungary the sandland is one of the main forcing vegetable production territories.
3. Both in Hungary and the European Union bio-energy production has become popular due to EU regulation that requires development of alternative energy resources and mixing biofuel derivatives with mineral fuels.
4. Production of energy crops, utilisation of agricultural wastage, production and use of biogas present significant potentials for heat and electricity production both at regional and country level.
5. There is a wide scope of action in the field of improving manufacturing and marketing of products. It is obvious that this is not feasible on all product paths, since in case of strategic crops like cereals and oil crops these paths have already been established, but in case of new, high-quality and special organic products, this potential must not be missed.
6. Developing the system of test plants for cross-border production integration. There is no centralised information system of test plants in Serbia now, which could provide practical, exact information for the above mentioned activities.
7.Preparing and coordination of professional development of the complex drainage and flood control and environmental partnership programme in the Sandland, divided by the Serbian-Hungarian border ( Water management, drainage and flood control; drinking-water bases, wastewater treatment, environmental protection; building water-management infrastructure; resources of thermal and medicinal water.