Farmers in Serbia have long complained that the purchase prices for key crops, especially cereals like wheat, do not cover production costs, leaving them with little or no profit. Recently, the Cooperative Association of Vojvodina proposed to authorities the introduction of so-called guaranteed or protective prices for wheat and other strategic agricultural products to support farmers.
According to their calculations, the cost of producing one kilogram of wheat this year is about 26.04 dinars, while current purchase prices hover around 20 dinars per kilogram, significantly below production costs. The guaranteed price would represent the minimum price that covers production expenses for an average yield, ensuring farmers can remain viable even during market disruptions.
This measure would be funded and administered by the government, compensating producers for the difference between the market price and the guaranteed price. Experts note that similar systems existed in Serbia and former Yugoslavia until about 25 years ago but were discontinued around 2001 with the country’s shift to a neoliberal market economy.
Guaranteed prices would primarily benefit small and medium-sized farms that have suffered losses due to high production costs and low market prices. While the measure would require additional government budget allocation, it would help preserve domestic producers and ensure national food security.
Agroeconomist Milan Prostran recalls that past guaranteed prices covered around 20 strategic products, including wheat, corn, sugar beet, sunflower, soy, milk, and meat. He warns that if guaranteed prices are reintroduced, the state must be prepared to purchase products at these prices when market prices fall below them, making it a significant financial obligation.
On the other hand, some experts, such as Professor Zoran Rajić from the University of Belgrade, argue against guaranteed prices, calling them potentially demotivating. Instead, they emphasize increasing productivity, adopting modern technologies, and improving efficiency as more sustainable solutions for Serbian agriculture.
The government has already taken some steps to support farmers, such as purchasing part of the wheat harvest for state reserves at 23 dinars per kilogram. However, official positions on the reintroduction of guaranteed prices remain unclear, with no concrete information yet from relevant ministries.
In summary, the debate continues between those advocating guaranteed prices to protect farmers amid volatile markets and those urging productivity improvements to enhance competitiveness.
