This year, a record 149.5 billion dinars were earmarked from the republic’s treasury for agriculture, which is as much as 7.5 percent of the total budget. Experts agree that this is the most money allocated for domestic agriculture. However, they warn that, according to the plan, most of the funds will go to solving acute problems and helping producers to overcome the crisis that they have reached due to several bad years when climate change had major consequences on food production.
Experts agree – the agricultural budget of 149.5 billion dinars is historic. However, many consider it a crisis, because it is a consequence of the extremely bad results we have recorded in recent years in domestic agriculture. From the decline in the number of cattle, the land fund to productivity and low purchase prices of agricultural products.
“In a short period of time, we went from a country that could feed half of Europe to a country that imports milk, meat, processed products, even livestock and baked goods. I think that’s why the state decided, as the people say, to loosen the purse strings and give agriculture a little more attention and a little more money,” says Žarko Galetin, an agro-economic analyst.
The budget for agriculture is divided into five segments – direct payments, rural development measures, credit support, special and IPARD incentives. As much as 80 percent of the budget is intended for direct payments.
“These are the measures that should extinguish an acute fire. To help farmers reduce their production costs. On the one hand, we have an effort to increase production capacity, and this is reflected in the allocation per hectare, and on the other hand, there is a part to reduce production costs through reprocessing for diesel fuel and for certified seeds. When 80 percent of the budget is directed to direct benefits, something must have gone wrong. Obviously, it was neglected in the part of the budget that was supposed to have a development note”, explains our interlocutor.
Although it is necessary to invest money from the budget differently for the development of agriculture, this year’s plan for spending funds is, in Galetin’s opinion, still justified. Producers must be helped to overcome the problems they have been facing in recent years, primarily climate change. In 2024 alone, he recalls, we had more than 40 tropical days, with almost no precipitation for a long period.
“In such circumstances, when you have a large drop in production and an unfavorable market in terms of low product prices, then obviously our farmer is in serious trouble to fundamentally renew production. This is a forced move, but necessary in order for the producers to relax”, explains this agro-economic analyst.
The largest part of the agricultural budget is intended for direct payments
Professor Žaklina Stojanović from the Faculty of Economics says that this year’s funds from the agricultural budget are predominantly directed towards direct incentives, while for years the part related to rural development in the total allocated funds has been decreasing. Within direct incentives, participation for the purchase of seed and fuel, premiums for milk, benefits per hectare or head of livestock is significant.
“The impression is that the budget was formed based on the demands of farmers expressed through protests in 2024. What needs to be understood is that farmers are looking for stability and care for their business in difficult, crisis situations”, explains prof. Dr. Žaklina Stojanović, Dean of the Faculty of Economics in Belgrade.
“The current situation in our agriculture is a consequence of both the general carelessness and lack of concern for this sector decades ago, as well as previously made, problematic decisions during the pandemic and the crisis in the world food market caused by the war events in Ukraine, along with the increasingly pronounced, unfavorable impact of climate change.” , adds our interlocutor.
Solving the aforementioned challenges, he says, is possible with stronger technological innovation and functional connection – joining or contracting production, including marketing contracts that are implemented on the stock market.
“Money from the agricultural budget should be directed towards users who can improve their own production and produce food in a larger quantity, in a more productive and efficient way than they did before. It is a condition of all conditions – food should be available at lower prices for consumers in order to open up space for faster economic growth and development. Otherwise, due to the large share of food costs in the structure of the total consumption of the average household in Serbia, agriculture with its current performance becomes a stone around the neck, because it limits the space for the development of other market segments”, believes Stojanović.
Despite the subsidies, food is getting more expensive, and imports are getting bigger
Experts warn that the most important thing is that money from the budget reaches farmers at the right time.
“Subsidies must help farmers. That they come into the right hands and at the right time. Public invitations must be announced on time, and the speed of payment of incentives is also very important. For producers to receive money for fuel, seeds, and fertilizer before spring sowing. Controls are also very important. To stand in the way of those who until now illegally took money”, says Kosta Rajević, a commentator in the newspaper “Poljoprivrednik”.
Farmers should use the money they receive from the state to ensure better conditions for production and new investments. This would have a positive impact on their earnings, as well as on all consumers.
“Is giving subsidies good for us consumers? Not for now. No matter what incentives are given, food is more and more expensive, and food imports are increasing. There needs to be order,” Rajević adds.
Serbia lacks two systemic laws in agriculture
For agro-economic analyst Milan Prostrana, the decision to support livestock production is more than good, because the results in this area are devastating. 20-30 years ago, Serbia exported meat and meat products, and now it imports in large quantities. He adds that 10 percent of the national budget should be allocated for agriculture in the coming period. In order for the money to be spent rationally and for both farmers and the public in Serbia to have an insight into it, it is necessary, he explains, to pass two systemic laws.
“One is needed to amortize the high costs of investment in agriculture. I am referring here to the costs, which have been announced, of declared seeds and fuel, but also seedlings, mineral fertilizers and plant protection products, which we cannot do without today. Subsidy percentages should be determined, and then the amount of money to cover those percentages of support would be determined every year in the assembly. This is important for control. It is not good to conduct agrarian policy through regulations”, says Milan Prostran, agro-economic analyst.
The second law, he says, should be of a development type, namely development premiums, such as giving per head of livestock.
“The premium has a developmental character, and the recourse reduces production costs. Neither one nor the other is part of the price. We have to think about development projects. Credit lines should be opened, above all, when it comes to irrigation and drainage systems. These are infrastructure projects that can mitigate the consequences of climate change, because, unfortunately, our canals are neglected. We entered into investment loans, but bearing in mind the trends and the food crisis, we have to equip the infrastructure facilities”, adds Prostran.
It is extremely important, he warns, to preserve the scientific institutes for the production of plants, but also to restore the repro-centers that we once had, in order to reduce the import of live livestock.
According to experts, Serbia is at a turning point, as the devastating data of the latest agricultural census warn us. Without stronger modernization and market connection of farmers, the survival of the Serbian countryside will not be possible. And in the countryside, as the experiences of the developed show, one does not necessarily have to deal only with agriculture, but it is possible to develop complementary activities within the framework of the rural economy from which one can make decent money and live.
Source: RTS
Source: energetskiportal.rs
