Serbia has offered farmers a 40 per cent discount on fertilizer prices, only weeks after farmers threatened not to use the chemicals unless the government doubled subsidies to make up for soaring production costs.
Farmers said the move was welcome, but came a bit late after many of them have abandoned sowing seasonal crops, including wheat, due to low market prices.
The Agriculture Ministry plans to spend one billion dinars or nearly $17 million to subsidize the sale of 50,000 tonnes of fertilizers – a quarter of what farmers need for autumn sowing.
Small farmers are entitled to 100 tonnes of cheaper chemicals and co-operatives to 300 tonnes.
Spot wheat traded at 14.26 dinars per kg or 174 euros per tonne at the Novi Sad Commodity Exchange on Tuesday, while fertilizers cost up to 41.04 dinars/kg.
In September, farmers urged the government to double subsidies to agriculture to make up for an 80 per cent increase in costs of fuel, fertilizers and seed, boosting the chances for Serbian farmers to compete in western European markets.
“It’s a great help, but it’s a pity they haven’t done it before,” said Veselin Lazic, the secretary at the Farmers’ Association. “Optimum sowing for wheat is Oct. 10 to 25, and many farmers have already given up on sowing plans, since low wheat prices could not cover production costs.”
Serbia sows usually 450,000 to 600,000 hectares with wheat.