Serbia needs a fundamental agriculture reform, Fiscal Council says, as spending fails to lift output
Translated from Serbian and summarized by DistantNews. Read the original for the full story.
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Context piece
- Serbia’s Fiscal Council called for a fundamental agriculture reform after production failed to rise over the past 10 to 15 years despite annual budget support of about €1.4 billion.
- It said agricultural productivity stands at one-third of the EU average, while milk yields are half as high and crop yields are 25% lower.
- The council said reform should redirect existing support toward modernization, environmental practices and small and medium-sized farms rather than require additional budget funding.
Serbia spends about €1.4 billion a year supporting agriculture, yet production has not increased over the past 10 to 15 years. The Fiscal Council says the central problem is not the amount of money available, but how the state uses it.
In an analysis titled “Serbia’s Agriculture Between Stagnation and Reform: Production, Prices and Agricultural Policy,” the independent body said agricultural productivity is only one-third of the EU average. Milk production per cow is half the EU level, while yields per hectare are one-quarter lower.
Ninety percent of tractors and three-quarters of combine harvesters are more than 10 years old.
The sector also faces aging equipment and a shrinking workforce. Ninety percent of tractors and three-quarters of combine harvesters are more than 10 years old. The total volume of agricultural labor fell by more than 20% between the two agricultural censuses, and nearly half of farm holders are older than 65.
The problem is not how much money the state provides, but how it is used.
The council said Serbia’s competitiveness is gradually weakening, with imports growing noticeably faster than exports. Production is also more unstable than in most European countries, partly because the sector has not adapted sufficiently to droughts and other climate risks.
It described the existing subsidy structure as poorly aligned with modern agricultural practice. Payments in Serbia are much more closely tied to production volumes, livestock numbers and input use than in the EU. The council said eco-schemes, redistribution payments for small and medium-sized farms, and incentives for modernizing farms and protecting soil and water remain neglected.
The state mainly finances the maintenance of the current unsuccessful agricultural model instead of using available funds to transform it into more productive, competitive and resilient agriculture.
The system has also become difficult to plan around. Rules governing incentives changed 34 times between 2023 and 2025, discouraging long-term investment, particularly in livestock and perennial crops. The council linked unsuccessful agricultural policy to high food prices, saying food in Serbia now costs about 96% of the EU average. It argued that the available funds should transform agriculture into a more productive, competitive and resilient sector.
However, the structure of this support differs substantially from modern agricultural practice.
About this summary
Originally published by N1 Serbia in Serbian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.
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