KOSTIC: I do not agree that subsidies in agriculture should be cut

The owner of MK Group, Miodrag Kostic, has said today that the announced decrease of subsidies will generate huge problems in agriculture and added Serbia should stop the practice of treating subsidy as a social instead of developmental category.

Kostic mentioned as an example the fact that in total income of an average EU farmer income generated through subsidies totals 34%, while it is 4% in Serbia.

He added that 34% in total income of an average EU farmer has lasted for 20 - 30 years and that during that time, an average farmer succeeded in making experimental farms with pretty high productivity level through the funds he received.

- Now, we say let’s decrease what we are getting now. I agree with the president of the Fiscal Council, Pavle Petrovic, that the method of subsiding agriculture in Serbia per hectare is out of its function but with the suggested decrease in agriculture, productive sector cannot be made– Kostic outlined at the Belgrade Stock Market conference.

Kostic added Serbia needs even more subsidies but that they should not be assigned per hectare but per produced product as well as that the more successful should get more subsidies as well as that the story that subsidies are social category should stop.

He said that the story about subsidies cuts is particularly bad at this moment when agricultural product prices fell for some 50 to 60%.

Kostic suggested the government should sell 400.000 ha of agricultural land and thus generate budget income of EUR 3 billion.

He added that at this moment, based on the rent of 400.000 ha into budget, EUR 56 m per year is provided.

President of the Fiscal Council, Pavle Petrovic, said that savings of EUR 50 m could be generated through subsidies cuts in agriculture next year.