In the Republic of Serbia, agricultural policy is based on the Act on Agriculture and Rural Development and the Act on Incentives in Agriculture and Rural Development. However, none of these two acts enable the regulation of the agricultural products market and the introduction of new market regulation mechanisms, which are necessary to help Serbian agriculture maintain steady development. Market mechanisms in the Republic of Serbia are not in accordance with the common EU market organization. Serbia lacks a similar unique legal framework to implement most measures of market regulation.
In order to harmonize further with mechanisms in the EU, the Agriculture, Forestry and Water Management Committee of the Serbian National Assembly accepted the Bill on the Regulation of the Agricultural Products Market (“The Bill”). The Bill regulates the requirements and measures for the regulation of the agricultural products market.
The Bill encompasses products in the following sectors: 1) cereals; 2) sugar; 3) dry fodder; 4) seed; 5) hops; 6) fruits and vegetables; 7) fruits and vegetable products; 8) wine; 9) live plants and flowers; 10) tobacco; 11) beef and veal 12) milk and dairy products; 13) pork meat; 14) sheep and goat meat; 15) eggs; 16) poultry; 17) bee products; 18) other sectors.
The Bill defines requirements that are related to the sales of agricultural products on market, specifically: (i) requirements for sales of agricultural products on market, (ii) special requirements in specific sectors, (iii) requirements and rules that are related to producer organizations, associations of producer organizations and interbranch organizations, (iv) adjusting product offer to market demand in the wine sector and (v) contractual relations in specific sectors.
Until now there were no producer organizations in the Republic of Serbia in the forms that exist in the EU. Experiences of new EU Member States show the need to strengthen collaboration between agricultural producers through producer organizations as soon as possible, in order to prepare the agricultural producers on time so they could increase their competitiveness with European producers.
Producer organizations are established based on the initiative of agricultural producers, to combine the activities of independent agricultural producers with the aim of: (i) production planning and adjustment to demand, (ii) concentration of supply and organization of sales of members’ products on the market, (iii) optimization of production expenses, (iv) stabilization of product prices, (v) increasing the commercial value and promotion of products and (vi) crisis prevention and efficient management. By marketing their products through producer organizations, farmers strengthen their market position, ensure sustainability, cost-effectiveness, and continuity of production, as well as price stability. It is in their best interest to market their products through producer organizations, as they build a stronger economic position through consolidated action on the market and obtain a stronger bargaining position.
Measures of market regulation include market intervention: (i) public intervention, (ii) support to private storage and (iii) measures of special intervention. Also, it is worth mentioning that the Bill prescribes special support to agricultural products that are related to (i) measures promoting the improvement of nutritional habits of children and youth and (ii) operational programs in the fruits and vegetables sector.
In addition to public intervention, the Bill prescribes a measure of support to private storage should market prices drop below the reference level. This measure, along with public intervention, must be enacted by the Government of the Republic of Serbia as these may have a significant influence on budget expenditures. There is a total of six areas where private storage support can be granted in the EU for certain products. These are sugar, olive oil, beef, veal, pork, lamb, mutton and goatmeat, as well as milk and dairy products.
Special intervention measures are designed to prevent market disturbances due to preventive measures to curtail the spreading of animal diseases, and those that can be directly attributed to loss of consumer confidence due to an emerging threat to public or animal health.
The Bill also prescribes special support for agricultural products that promote the improvement of nutritional habits of children and youth and operative programs in the fruit and vegetables sector. Essentially, these measures support the sectors of (i) milk and dairy products, and (ii) fruits and vegetables and products. These measures are aimed at improving the nutritional habits of children and youth at educational institutions and increasing public awareness of the importance of a healthy diet in the development of children and youth. The objective is to distribute snacks comprising milk and dairy products, fruits and vegetables and products from fruits and vegetables to educational institutions in cooperation with businesses. This would increase the consumption of healthy local products among preschool and school children and highlight the importance of local produce and a healthy diet.
Taking into account that measures of market regulation are financed from the budget of the Republic of Serbia, the obligations of those who benefit from them must be defined. Above all, recipients of measures of market regulation have the obligation to report on how the measures were implemented. The responsibility of potential recipients is thus clearly determined to return any amount (i) paid based on incorrect data, (ii) received contrary to the conditions and provisions of this act and other relevant regulations, and (iii) if the resources have not been used in accordance with the objective.
