Serbia, One billion euros should be allocated for agriculture in the new budget

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In a series of articles, Biznis.rs is “counting down” the days until the release of the Budget Proposal for 2023, and with our interlocutors we are trying to determine how the budget should treat some of the key sectors – agriculture, energy and construction.

“All credit to energy, which has come to the fore everywhere in the world, but primary agricultural production has always been in the first place when there is a big crisis – and today we are facing the third biggest crisis in the prices of agricultural products ever in this region”, he told Biznis.rs agroeconomist Milan Prostran, who believes that the agricultural budget for 2023 should be in line with the participation of agriculture in Serbia’s GDP, which means that it should amount to at least 9.5 to 10 percent of the republic’s budget.

Bearing in mind that 62 billion dinars have been allocated for agriculture in this year’s budget, and another 16.5 billion through rebalancing, Prostran emphasized that in 2023, at least twice as much should be allocated for agriculture – about one billion euros.

Our interlocutor points out that the minimum for agriculture to get “the place it deserves” would be for the amount to be correlated with its participation in the gross national product of the country.

“I am advocating for that and because of our path to membership in the EU, in whose market we are trying to be competitive, and there the participation of agrarians in the total EU budget (which is adopted for a six-year period) is 33.3 percent, i.e. about 386 billion euros”, pointed out Prostran.

He believes that the previous agrarian budgets, amounting to five percent of the republic’s budget, simply do not have any development component nor do they talk about long-term development policy, but that they dealt with “fighting fires” instead of systemic solutions.

According to his assessment, if the share of the agricultural budget in the republic’s budget for 2023 does not increase, the consequences for agricultural production could be disastrous – from the fact that farmers will not use enough fertilizers, that there will be worse soil cultivation, that less quality will be used seeds and planting material…

That is why he believes that, along with increasing the share of agriculture in the republic budget, systemic laws to support agriculture should be adopted urgently.

“The first such law should be the Law on regressing the price of fertilizers, seeds, seedlings, plant protection products and fuel, the aim of which would be to reduce costs in agricultural production“, Prostran said, recalling that he personally participated in the adoption of such measures in 1980. .and in 1986, when the former Yugoslavia was facing crises in agriculture.

“Today, the third most critical period is underway when it comes to the price of agricultural products”, warned the agro-economist.

He pointed out that today, in addition to the Law on Price Regression, it is necessary to adopt a long-term program for the reconstruction of livestock farming in Serbia, and the third key issue is the management of arable land owned by the state.

“All this should be done through systemic laws, not regulations or rulebooks – accumulated problems cannot be solved by short-term regulations”, concluded Milan Prostran.

Budget in preparation

The budget for 2023 should be presented to the Government of Serbia this week, Minister of Finance Sinisa Mali announced on Saturday, November 12, on his official Instagram account.

At the beginning of the month, an agreement in principle was reached with the mission of the International Monetary Fund (IMF) to conclude a stand-by arrangement worth 2.4 billion euros, which the Board of Directors of the IMF will accept if the budget for 2023 is previously adopted in accordance with the guidelines that were accepted during the mission’s visit. It was agreed with the Mission to reduce the fiscal deficit, with the limitation of wage growth in the public sector, the adoption of a new fiscal rule (for borrowing) and the formula for indexation of pensions, as well as maintaining a high share of capital investments, Biznis writes.

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