Serbian agriculture policy: Economic analysis using the PSE approach

Abstract

The purpose of the research is to identify the level of Government support to farmers' income in the Republic of Serbia. This support is based on market measures and budgetary transfers directed towards producers. As budgetary transfers are defined in the agricultural policy, by applying the producer support estimate (PSE) methodology, it is indirectly evaluated whether agricultural policies have a positive or negative impact on farmers' income and their economic status and the economic sustainability of farms. Producers of more significant agricultural commodities covered by the analysis in the period between 2012 and 2016 did not get any significant support from the state. Namely, most of the analyzed commodities had negative values of single commodity transfer (SCT) indicators, which means that agricultural producers received more taxes than incentives. In addition to the modest budgetary transfers, variations in their forms further negatively affect producers' income. Low share of budgetary transfers in the support structure to farmers leads to the conclusion that the support to farmers' income through higher prices on the domestic market is paid by consumers.