"Agriculture sector performance in Serbia is characterized by both stagnant sector growth and a substantial increase in agricultural exports. This report describes the reasons for this paradox and its implications for future sector policy. Observed export growth is narrowly based, despite Serbia’s potential to produce and export a range of crop and livestock products. This export growth has been offset by stagnation or long-term contraction elsewhere in the sector. Current agricultural policy is not conducive to more broad based growth. High commodity support for cereal and oilseeds exacerbates the disparate regional and sub-sector trends in performance. Area and headage payments provide little incentive to increase farm output and freeze farm structure. Leased land is also ineligible for budget support, further discouraging farm expansion. The predominance of small, mixed-income farms thus remains a major constraint to increased competitiveness and sector growth. Policies also change
