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Library New Opportunities and Old Constraints

New Opportunities and Old Constraints

New Opportunities and Old Constraints

Resource information

Date of publication
апреля 2016
Resource Language
ISBN / Resource ID
oai:openknowledge.worldbank.org:10986/24169

Agriculture sector performance in Serbia is characterized by both stagnant sector growth and a substantial increase in agricultural exports. This report describes the reasons for this paradox and its implications for future sector policy. Observed export growth is narrowly based, despite Serbia’s potential to produce and export a range of crop and livestock products. This export growth has been offset by stagnation or long-term contraction elsewhere in the sector. Current agricultural policy is not conducive to more broad based growth. High commodity support for cereal and oilseeds exacerbates the disparate regional and sub-sector trends in performance. Area and headage payments provide little incentive to increase farm output and freeze farm structure. Leased land is also ineligible for budget support, further discouraging farm expansion. The predominance of small, mixed-income farms thus remains a major constraint to increased competitiveness and sector growth. Policies also change significantly from year to year, discouraging investment.

New trade agreements have increased the opportunities for both agricultural exports and imports. The EU is now Serbia’s major trading partner for agricultural products, displacing trade with its traditional CEFTA partners. These changes have exposed the sector to high levels of competition from EU products, however, on both domestic and regional markets. But while agriculture exhibits high revealed comparative advantage, most agriculture industries are struggling to maintain their position in domestic and foreign markets.

Three factors thus limit the sector’s capacity to benefit fully from its favorable resource base and new trade opportunities: a farm structure dominated by small to medium sized, mixed income farms; the low performance of industries selling into domestic and export markets; and an inappropriate policy framework. Future agricultural policy will need to increase support for medium-sized farms in order to broaden the base for growth; and increase policy stability to facilitate investment.

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Authors and Publishers

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Christensen, Garry

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