MEASURES AND ACTIVITIES FOR REALIZATION OF THE STRATEGIC GOALS

5. MEASURES AND ACTIVITIES FOR REALIZATION OF THE STRATEGIC GOALS

5.1 Budget plan 2014-2023

The budget projection depends on many factors whose influence could be simulated in the situation when there are adequate sophisticated models for that purpose. Since such solution is lacking, the relevant presumptions will be the ability of the national budget for financing the agriculture and rural development, as well as the estimation of the accession and pre-accession EU funds.

The projected budget framework was made aiming at defining the following:

Realistic basis for reforming the agricultural policy;

Realistic framework of the financial resources necessary for support to Strategy goals realization;

Structure of the measures and tools which enable increased absorption of the pre-accession EU funds;

Reform of the support system necessary to gradual adjustment of the budget to what the country is going to face by entering the EU.

Aiming at setting the more clear and precise guidelines for budget resources planning, the strategic period 2014–2024 has been presented according to sub-periods instead of years. The reason for that is the fact that in this moment the precise time of starting the use of pre-accession funds is not clear yet, and the deep economic crisis the country is facing. The period 2014–2024 is divided into two pre-accession sub-periods, and the third, last one, which is expected to come right before joining the EU (or in the first period after joining). This structure enables the support programs for agriculture to be defined on the level of three-year intervals, while the program for the last sub-period would be in accordance with the EU policy for the period that will come after 2020.

The planned sub-periods are:

Sub-period of the economic crisis (probably 2014–2016) – This is the period when the significant support to agriculture and rural development cannot be expected. During this period, it is important to preserve the support system stability, without radical changes to the measures’ structure and scope of the funds allocated for individual measures and programs. The period of the economic crisis for a country whose economy strongly relies on agriculture is, as a rule, a period during which the agricultural sector is expected to be a kind of a buffer for social and economic misbalances. In such circumstances, agriculture contributes more to the social welfare and national economy than it is being given through budget allocations, which has been recognized in the presumption that the budget allocations for the sector will remain the same during the crisis period.

Sub-period of the renewed economic growth and access to IPARD funds (probably 2017–2020) – the more significant GDP growth is expected in this period, which would make the room for increase in allocations for agriculture. This is the period in which the underestimated allocations for agriculture from the previous period should be compensated, and that is why it is necessary for the agricultural budget to grow at a rate higher than GDP growth rate (realistic growth of the budget value).

The other, equally important characteristic of this period is characterized with the fact that in this period the dynamics of Serbia moving in international integration processes will be far clearer. It is expected that from the beginning of this sub-period the time of Serbia joining the EU will be more visible, and thus the complete integration of the agricultural policy into CAP. In order for the agricultural sector to be ready for that time and for the sector to be able to attract the most funds from the pre-accession assistance, it is necessary to make an effort in this sub-period to increase the support to agriculture. The goal is to reach the biggest possible support for the domestic producers, but it cannot exceed the support they would have after joining the EU. Only in that way would the sustainable system be created and would the competitive level of income be preserved after the integration.

The planning of the budget funds for sub-periods included several factors:

The basis for budget planning for the first sub-period is the situation with the budget transfers of the Ministry in 2012, calculated on the basis of the support analysis according to support pillars and measure groups. The budget structure from 2012 is indicative enough to suggest the possible and realistic budget framework for agriculture in the following several years, which will not change significantly in the conditions of the uncertain financing (as in the period of crisis).

The other factor, i.e. the targeted situation in terms of scope and structure of the budget after the last sub-period, is the estimation of the possible budget in the first year after Serbia joined the EU. This estimated value includes the domestic budget funds and potential EU pre-accession funds.

The amount of the EU funds was estimated on the basis of comparison of scope and structure of the agriculture support in the countries which joined the EU the most recently. The structure and scope of support in Serbia in the last several years significantly deviate from the agriculture support in the mentioned countries in the period before and after their accession. Besides, in Serbia the level of support per ha and per a citizen is much lower (by around 50%)³⁴, the share of the rural development policy in the whole Serbian budget comparing to these countries is insignificant, while in the Serbian support structure the measures incompatible with the CAP are still dominant. The proposed budget framework and its adjustment in the area of support structure according to pillars and measures, is trying to alleviate these differences.

The budget projection took into account the financial framework of the agriculture support as planned in the Multi-annual budget plan of the Republic of Serbia for agriculture 2014–2016 (the internal document of the Ministry of Agriculture and Ministry of Finance).