Serbia agricultural reform needed despite 1.4 billion euro annual budget

The Fiscal Council of Serbia has called for a fundamental reform of the country's agricultural sector, noting that production has failed to increase over the last 10 to 15 years despite annual budget allocations of approximately 1.4 billion euros. An analysis titled ‘Agriculture of Serbia between stagnation and reform: Production, prices and agrarian policy’ highlights that Serbian agricultural productivity is only one-third of the European Union average.

Key challenges identified include significantly lower milk yields per cow and lower yields per hectare compared to regional standards. The sector also suffers from aging machinery, with 90 percent of tractors and 75 percent of combines being more than ten years old. Furthermore, the workforce is rapidly shrinking; data shows a decrease in total employment within the sector of over 20 percent between agricultural censuses, and nearly half of farm owners are over the age of 65.

The Council concluded that the issue is not the amount of funding provided, but rather how it is utilized. It stated that the state is primarily financing the maintenance of an unsuccessful agricultural model instead of using funds to transform the sector into a more productive, competitive, and resilient industry. The Council suggests that a policy shift is required to address climate risks, such as droughts, and to improve international competitiveness, which is currently weakening as import growth outpaces exports.