Incentives for credit support of agriculture in the Republic of Serbia

Abstract

Since 2004, in the Republic of Serbia incentives for credit support to entities active in sector of agriculture have been included in the agricultural policy measures. Although the national model for mentioned financial support has been changed over time, in essence it remains the same. The main goal of the paper is to analyze incentives derived from the national agricultural budget used for credit support of agriculture, i.e. to review the main characteristics of the current support model, while to recommend possible improvements. The research was based on desk research and descriptive methods, as well as on methods of analysis and synthesis. According to performed research, it can be concluded that the average share of incentives for credit support within the total incentives paid from national agricultural budget was less than 2% in analyzed period (2014-2022.). The average level of realized incentives in observed period was 73%, indicating the significant need of agricultural entities for subsidized loans. In order to develop agriculture in the Republic of Serbia, the authors suggest certain advancement of current model of credit support, considering possibilities for extension of repayment period and increase in upper value limit for investment loans. Besides, authors suggest the consideration of establishing a "specialized agricultural bank" as a state financial institution, which will provide comprehensive credit support covering the developmental requirements of domestic agricultural producers.