Serbia, The agricultural budget is one billion dinars higher, but still insufficient for development

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With the budget proposal for the year 2023, the Government of Serbia planned a total of 79.7 billion dinars for agriculture, which means that 4.32 percent of total revenues and receipts of the state treasury are planned for agriculture in the next year. Although the new agrarian budget planned one billion dinars more than the rebalance at the end of this year, our interlocutors warn that it is too little for development.

In a series of articles in the coming days, Biznis.rs will analyze the most important projects and allocations planned by the budget proposal for 2023, and we will especially cover the topics of agriculture, energy, infrastructure, as well as the policy of subsidies.

In 2023, agriculture should count on a total of 79.7 billion dinars, namely 71.4 billion dinars in general income and receipts, 5.5 billion dinars in the name of financial assistance from the EU, 2.6 billion from foreign borrowing, as well as 67.6 million dinars in donations from international organizations and 100 million dinars from the repayment of loans and the sale of financial assets.

Agroeconomist Milan Prostran told Biznis.rs, ahead of the publication of the proposed budget, that one billion euros should be set aside for agriculture in the republic’s coffers so that it gets “the place it deserves” considering its contribution to GDP growth. The budget proposal does indeed plan to increase allocations for agriculture, but – by one billion dinars!

The largest part of the total amount – 68.7 billion dinars – is planned for the payment of subsidies , and these funds are intended for “improvement of production and stability of producers’ income”, namely through milk premium, incentives for crop and livestock production and the realization of holiday allowances.

Agrarian analyst Branislav Gulan, however, draws attention to the fact that even the agrarian budget in 2023 will not fulfill the basic prerequisite that the profession has been insisting on for decades – that it should amount to at least five percent of the value of the republic’s budget.

“It was so big in 1996, and our officials claim that this year, after the rebalancing, it reached a value of 5.3 percent of the republic’s budget”, Gulan tells Biznis.rs and warns that it has already been established that the agrarian budget is “a list of empty promises.”

In the budget proposal for 2023, some of the goals that the state’s allocations should achieve are listed, such as the number of slaughtered cattle reaching 240,000 or the value of exported corn reaching 490 million euros.

“Neither the set goals nor the money mean anything if you don’t know where and how the money is spent, and 28 billion dinars were spent on animal husbandry subsidies in the period from 2016 to 2018, as determined by the State Audit Institution (DRI). while 26 billion dinars were spent for rural development from 2018 to 2020. That’s a total of about 457 million euros, and the SAI itself concluded in the expediency audit that this spending did not produce results either when it comes to increasing the number of animals or production. “Farmers are also wondering where that money went, because almost half a billion euros should really be ‘felt’ in our agriculture”, says our interlocutor.

The budget proposal also states that the agricultural sector is projected to grow by 6.9 percent in 2023 , due to extremely bad weather conditions in 2022 and a low base, and assuming average agrometeorological conditions, while maintaining the trend of increasing productivity.

“I will only mention that the current Agriculture Development Strategy foresees that the sector will grow by 9.1 percent per year from 2014 to 2024, and at a rate of 6 percent when it is a ‘bad’ year, like the last one,” Gulan said and stated that data indicate that this growth was actually 0.45 percent per year.

Agriculture not only needs more money, but also quality planning “, Gulan concluded, while agro-economist Milan Prostran previously argued for the urgent adoption of the Law on Regressing the Price of Fertilizers, Seeds, Seedlings, Plant Protection Products and Fuel, whose goal would be reduction of costs in agricultural production, as well as the long-term program of reconstruction of animal husbandry in Serbia, Biznis writes.