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Analysis reveals how changes in agricultural support impact productivity and efficiency in Serbia, suggesting critical policy implications.
Serbia’s agricultural budget has shifted repeatedly between production-linked market support and direct payments (MSDPs) and investment-oriented rural development support (RD). Using harmonized annual data for 2015–2025 from final amended incentive regulations, food-price indices, and yield statistics, we examine whether the composition of agricultural support is associated with short-run productivity and technical-efficiency dynamics. Descriptive analysis documents partial decoupling through 2017–2023, followed by an abrupt recoupling in 2024–2025 when MSDP absorbed over 92% of the incentive budget. Econometric results from OLS models with Newey–West standard errors indicate that food-price inflation is strongly associated with lower productivity growth, while the dominance of coupled instruments does not predict improved short-run performance. The political-importance indicator is not statistically significant once inflation is controlled for. The findings suggest that the structure and stability of agricultural spending matter at least as much as its volume, underscoring the importance of safeguarding investment-oriented measures as Serbia pursues EU policy alignment.
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Stevanović et al. (2026) studied this question.
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