Serbian Government adopts measures to ease drought impact on farmers and grain traders.
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USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: RB1210
Serbian Government Adopts Measures to Ease Drought
Serbian Government adopts measures to ease drought impact on farmers and grain traders including
exempting farmers from some taxes, increasing financial incentives, and removing customs duties and
levies on all grain imports until the next harvest. Grain import taxes were 30 percent.
On August 23, the Ministry of Agriculture waived several obligations towards the government as part of
a disaster relief package, which included providing a one-year grace period for repaying the principal on
state-subsidized farm loans, exempting farmers from paying irrigation fees for 2011 and 2012, and
exempting farmers from paying leasing fees for state-owned agricultural land for 2012. The Serbian
government also authorized the further distribution of diesel fuel at state-subsidized prices to farmers
for the fall planting season.
The Ministry of Agriculture also plans to increase livestock subsidies until the end of the year (i.e.
subsidies for beef cattle will be raised from $53 to $105 per head, swine from $5 to $10 per head, and
raw milk premiums will increase from 5 cents to 7 cents per liter). Approximately $126-160 million will
be set aside for this purpose.
The State Commodity Reserves also will buy up to 200,000 metric tons of mercantile corn for strategic
reserves and all customs duties and levies on imports of all types of grains will be removed until the
next harvest (import taxes on grains were 30 percent). At the same time, grain exports will be monitored
on a daily basis in order to take timely steps to prevent a threat to domestic supplies. By liberalizing the
grain market, the Serbian Government stopped rumors that it planned to impose a corn export ban in
order to keep enough quantities for domestic needs.
This summer Serbia has been hit by an extreme drought with record dry weather and high temperature
conditions. The Serbian Chamber of Commerce estimates that total losses in agriculture production will
be around USD 2 billion. Estimated losses by major crops are: corn (USD 1 billion), sugar (130
million), soybeans (USD 117 million), fruits and vegetables (USD 100 million), sunflowers (USD 55
million), and other agriculture crops (USD 600 million). Agriculture in Serbia is the economic and
development engine for rural areas. Agriculture is also the only sector in the Serbian economy with a
positive foreign trade balance - contributing about 10 percent to the country’s GDP. The Serbian
Chamber of Commerce is estimating that Serbia will have enough food for domestic supply, but much
smaller quantities will be available for export. Serbian Commodity Reserves currently are: wheat
(300,000MT), refined sugar (100,000MT), and edible oil (60,000MT). Corn ending stocks for
MY2011/2012, which include the reduced MY2012/2013 production and are mostly kept on private
farms or silos of export companies, are estimated at approximately 1 million MT instead of 1.8 million