Fiscal Council: Serbia spends 1.4 billion euros on farming
Fiscal Council analysis: Serbia spends about 1.4 billion euros a year on agriculture, yet food prices hit 96.6% of the EU average in 2024 while living standards sit at just 51.8%.
Serbia spends roughly 1.4 billion euros a year on agriculture once budget subsidies, fuel excise refunds and other payments are added together, according to an analysis by the Fiscal Council of the Republic of Serbia. That money is not bringing food prices down at the checkout: in 2024, food prices in Serbia reached 96.6% of the European Union average, while the real standard of living for Serbian citizens sits at only 51.8% of the European average.
The Fiscal Council published the analysis on August 31, titled “Serbia’s Agriculture Between Stagnation and Reform: Production, Prices and Agricultural Policy.” The portal Biznis.rs ran a summary of its findings on September 5 at 8:01 a.m. The point of the analysis is not that agriculture needs a bigger budget, but that the money already being spent needs to be redistributed differently.
The food price figure hits household budgets directly: families in Serbia spend nearly a third of their income on food, so every extra percentage point on the price of milk or meat weighs more heavily on a Serbian household than it would in countries where food takes up a smaller share of spending.
Why doesn’t more in subsidies mean cheaper prices at the store?
Budget subsidies for agriculture amount to roughly one percent of gross domestic product, and total support, including local payments and tax breaks on fuel, comes to about 1.5% of GDP. Despite that, the real gross value added of agriculture has fallen 0.4% over the past ten years, while the rest of the economy grew 40% in the same period. Agriculture’s share of Serbia’s total gross value added dropped from around 8% to just 3.7% in 2024: the state is putting in more and more money, even as the sector’s economic weight keeps shrinking.
Livestock farming has taken the hardest hit. The total number of livestock fell 23.9%, pigs 26.8%, and cattle 21.2%. Milk production dropped 8.4%, and the number of dairy cows fell 28.5%. The area under pastures and meadows shrank 34.2%, or roughly 240,000 hectares, comparing the last two agricultural censuses.
The Fiscal Council traces that outcome back to the historical structure of the incentives:
This approach further favored extensive and primary production, while less support went to capital-intensive areas such as livestock farming and processing, which can generate greater added value, productivity and export potential.
The assessment, laid out in the analysis published on August 31, covers decades in which the incentive system rewarded land area and head count rather than investment and product quality.
The drop in livestock numbers and milk output is already showing up on store shelves: according to the analysis, Serbia used to be a net exporter of meat and dairy products, and now imports both to meet domestic demand. The portal Srpske Novine reported in late August that drought had damaged corn and soybean crops and warned of coming meat price increases, so the new findings on the shrinking livestock herd fit into that same story as part of one structural problem, not as an isolated data point.
The demographics of rural Serbia make the picture harder still: 45% of farm holders are older than 65, while only 5% are younger than 35.
Where does the agricultural budget money actually go?
The Ministry of Agriculture’s budget grew from 31.6 billion dinars in 2015 to 130.3 billion dinars in 2025. About 85% of the agricultural budget goes to subsidies, and the single largest program in crop production is the basic incentive of 18,000 dinars per hectare, plus another 17,000 dinars per hectare for certified seed.
The Fiscal Council is not calling for less support overall, but for restructuring it in three phases over the next ten years. The first phase would introduce supplementary, redistributive support, known as CRISS, for the first ten hectares of a holding, aimed at small and medium farms. The second phase would extend that coverage to twenty hectares. Only in the third phase, according to the analysis, should the system be fully aligned with the European Union’s Common Agricultural Policy.
Whether the reform begins as soon as the next budget year, or agricultural policy stays on its current, more expensive track, will depend on whether the government adopts the first phase of the Fiscal Council’s proposal as the basis for the 2027 budget.
