Why are farmers dissatisfied?

Serbian farmers have been experiencing a lot of problems for a long time but these problems have increased rapidly in recent years.

Dairy farmers in Serbia are experiencing the worst crisis in decades. The number of dairy cows has been reduced to approximately 200,000 and that does not even meet the needs of domestic consumption. Serbia has been considered the “land of milk” for a long time since we used to export two-thirds of domestic milk to neighbouring countries, while one-third was sufficient for covering the needs of the local market. Today, we are forced to import milk.

Conflict in Ukraine

Last year, especially, imports took off and largely replaced domestically produced milk. Although we mainly import powdered milk mostly for the confectioners, dairy farming and milk production have become unprofitable in Serbia. A household that is also engaged in farming and only produces feed for cattle can still survive financially, unlike dairy farmers which are struggling.

Until a few years ago, farmers were relatively satisfied as the prices of wheat, corn, soybeans and sunflower seed were good so they focused on growing these four types of crops. On the other hand, the production of fodder, sugar beet or medicinal plants has been drastically reduced for years. However, the conflict in Ukraine has radically changed things. It turned out that there is enough grain and oilseeds in the world, so after the initial jump, the prices fell drastically. Serbia reacted ignorantly by first banning and then limiting exports. The consequences are such that Serbia now has wheat and corn surpluses and the harvest is only three months away.

The question is whether there will be enough room in the silos for the new crop. An additional problem is a much more difficult and expensive export/transport via the port of Constance in Romania, as well as the lack of appropriate freight wagons. The worst thing is that the farming outlook for this year is not that good too.

Beekeepers are also in a difficult situation. For years, Serbia has been exporting honey and related products at prices often 50 percent higher than those on the Serbian market. However, low-quality honey from Asian countries, even more so from Ukraine, which is sold at dumping prices, is now dominating the European market. Serbian beekeepers do not want to lower the price of first-class goods and they have decided to wait for the situation to improve as honey is one of those goods that doesn’t require a quick sale.

Raspberry growers have been complaining for a long time, more precisely the owners of cold storage. Due to considerable pressure from authorities last year, the owners of the cold storage units agreed to pay an extremely high advance price to raspberry growers for raspberry that is yet to be picked, despite the fact that the price of raspberry in the European market has dropped.

Another problem that has been evident for a long time now is that the Serbian government is supporting the unrealistically overpriced dinar which value against the euro has grown by six to seven percent in the last decade, although its purchasing power has almost halved in the same period.

(Biznis i Finansije, 10.04.2023)


This post is also available in: Italiano

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