In Serbia, the price of food remains stubbornly high compared to the EU, and it’s not just about slippery stairs and missing bells. Traders factor in the country’s risk premium, influenced by corruption, nepotism, and crime, into their prices.
The comparison with Germany illustrates this disparity. Doing business in Germany comes with low risk, efficient courts, and reliable supply chains, resulting in modest profits. However, in Serbia, navigating business risks feels like an adventure, with lengthy court battles and uncertainty. Thus, traders opt for higher profits to mitigate these risks, leading to inflated prices.
Factors like efficiency, productivity, customs, and consumer preferences also play a role. But the key difference lies in the absence of an organized state and agricultural subsidies. In the EU, substantial subsidies ensure abundant and affordable food. Without such support, Serbian prices struggle to compete.
While some blame greedy traders, the solution isn’t as simple as boycotting or reducing margins. Even if margins were eliminated, Serbian prices wouldn’t match those in the EU due to agricultural subsidies. These subsidies, unavailable in Serbia, keep EU prices artificially low.
To bridge this gap, Serbia needs systemic change, eradicating corruption and crime, and eventually gaining access to EU subsidies as a member state. Until then, the bell of disparity will continue to ring.
