ANALYSIS OF SUBVENTIONS FOR AGRICULTURE IN REPUBLIC OF SERBIA AND REPUBLIC OF SRPSKA ANALYSIS OF SUBVENTIONS FOR AGRICULTURE IN REPUBLIC OF SERBIA AND REPUBLIC OF SRPSKA

In this paper, a comparative analysis of subventions for agriculture and rural development is conducted, based on the budgets of Republic of Serbia and Republic of Srpska. Based on the analysis of the gross value added and the subvention amount in the period 2008-2013, it is concluded that there is no country with the causativelyconsequent connection between the subvention volume and gross value added which ensigns to inadequate policy of stimulations.


Introduction
The food assurance is today one of the most important strategic goals everywhere in the world. Republic of Serbia and Republic of Srpska identified the agriculture and rural development as the areas of special interest for the growth of gross-social (Cvijanović, Mihailović, Vuković, 2014), and the available resources in this area are considered to be among the most important available resources.
According to that, it is expected to conduct the adequate policy of agricultural and village support firstly through budget expenditures. Stable and constantly growing budget expenses in this area refer to the permanent organ appropriation of the economic policy to develop and strengthen the agricultural production sector.
In our work we conduct the expenses analysis of the subventions in Republic of Srpska and Republic of Serbia in the period from 2008-2013, based on which it can be concluded about the agrarian support and the quality of agrarian policy, as well as the comparison of the countries observed, according to this parameter.

Data sources and used methodology
In this paper, with the analysis of the statistical data, firstly the analysis of the subvention influence to the gross value added in agriculture during the observed years is conducted, followed by the comparative analysis of the budget expenses to the subventions in agriculture and its effects in Republic of Serbia and Republic of Srpska.
Besides that, by the usage of the parallel-legal method the legal background is analyzed, i.e. the security of all the legal solutions, which enables the subvention distribution in a legal and rightful way, stimulating the balanced development of all agricultural sectors.
Based on the analysis of the given points, the conclusions on the effectiveness of the republican subventions in both economies are made, so the certain directions are given for the future expenses.
The official statistic data were used for the analysis. The data in the gross-social product and gross value added in the agriculture in Republic of Serbia are taken from the Strategy of agriculture and rural development of Republic of Serbia for the period from 2014-2020. The data on the subventions are taken from the Bulletin of public finances no 102.
The data used for Republic of Srpska which refer to gross-social product and gross value added are from the website of the Investment-development bank, i.e. the official statistics.
The data on the subvention participation for the agricultural production in the total budget expenses are from author's calculations and based on the Law on budgets for every observed year. The points are taken from the adopted budgets of Republic of Srpska for the referred year. The calculation was performed by calculating subvention part (from the common budget part under the name the Subvention for the stimulation of the development of agriculture and village, budget code 414100, i.e. 614400 according to the economic classification) in the total budget expenses of the Republic.

The significance of the subvention for the development of agriculture and village in Republic of Srpska
The main economic potential of the Republic of Srpska beside hydro potential and mineral raw materials is considered to be the fertile land and forests.
Republic of Srpska has significant surfaces of fertile land. The availability of the agricultural surfaces is estimated to be around 0.952 hectares per inhabitant. The agricultural production and agricultural services are the occupation of the 221,000 households in which there are around 800,000 inhabitants which is around 57.1% of the total population. (The data downloaded from the webpage www.irbrs.org, entered 1 st November 2014) However, the available capacities are not used enough. From the point of exchange, the annual import of the agricultural products is on the level of 350 million dollars, while the export is 30 million dollars, which shows that the cover of export by import is around 87% (The strategy of the agricultural development of Republic of Srpska, 2006).
The review of the agricultural participation in the regeneration of the gross-social product is given in the following table. The strategy includes the following measures: -The creation of the adequate institutional frame by the reform of the legislation; -The protective customs policy and the export subvention; -The stimulation of the agrarian loan market development; -With the aim of better development monitoring and more adequate support of the agricultural production it is planned to conduct the household registration and classify them to commercial and non-commercial (non-productive). Like this, the establishing of the capacities of these production units is eased. It is expected that, as the time passes the commercial households become the legal persons, and that would enable easier business on the market and easier loan access, and -The formation of the agrarian budget, from which with the help of the authorized ministry, the assets for the agricultural production subvention would be selected. It is planned for the agrarian budget to be 6% from the domestic budget revenues lasting for first three years of the enforcement, and later to increase to 8%.
Many laws were adopted -the Law on Agriculture ( From all undertaken measures, the agricultural producers expect the most from the subsidized production. The assets provided for these intents are used for the interventions and investments in agriculture. Itemized the whole range of intents for the interventions in agriculture and that (the Law on Security and Direction of the Assets for the Development of Agriculture and Village, article 3) where we have various intents from bonuses in the production of the agricultural products, regressions for the semi-finished products supply, the financing of measures for the agricultural advancement, but also for the financing of the expert services, programs and studies.
Investments in agriculture are encouraged by the loan co-financing to the loans approved to the agrarians by the bank (Subić, Vasiljević, Zorica, Mihailović, 2010). They include the regressions for the loans taken for the fixed and current assets in agriculture, for construction financing and reconstruction of the productive and reproductive capacities, amelioration of the laws and pasture, irrigation systems and financing equipment for the repurchased units of the agricultural products (Mihailović, Cvijanović, Cvijanović Gorica, 2014).
The ministry is obliged to pass a Law on the Conditions and the Way of Gaining Financial Stimulus for the development of agriculture and village, which enables the choice of agricultural households and projects which would be financed.
The review of the assets appropriation for the stimulation of the agricultural development is given in the following table. After that period the assets' amounts to the subventions decrease more and more in relative indicators, even though they stagnated in the absolute, i.e. they increased.
Even though the material support for the agriculture was directed in three different areas -current subventions, investment programs and rural development, the budget assets were marketed on 47 different positions, it can be concluded that the subvention policy had more social than agrarian component. The comprehensively analysis of the given subventions in Republic of Srpska was never done. According to the authorized ministry, more than a half of the assets for the stimulation of the agricultural development were spent for the direct support of the certain products (milk, seeds, and tobacco). Then, the especially negative fact when it comes to the subvention efficiency is that the significant part of the stimulation was given only to the minority of producers In the end, the fact that Republic of Srpska compensates only 43% of the needs for wheat, 59% for corn, 2.9% for soy, 23.9% for beef, 32.6% for pork, 42.6% for poultry, and 31.2% for milk (The Strategy of the Agricultural Development of Republic of Srpska, 78), only proves the weak agrarian policy and low subvention efficiency.
If we compare the previous two tables, it can be concluded that the expense amount from the republican budget for the help of agriculture and village does not have any significant part for the agricultural production growth. So the gross value added in agriculture increased during 2010 even though, the subvention amount is decreased by 20,000,000.
The agricultural part in the creation of GDP in 2013 increased when compared to 2012 for more than one percentage point, even though the subvention amount stayed has not changed.

The importance of subvention for the development of agriculture and village in Republic Serbia
The   The assets from the Article 2 of this regulation are disposed for the following types of stimuli: direct payments, stimuli for the measures of rural development, special stimuli.
The amounts of the assets to subventions and their participation in the total expenses of the budget of Republic of Serbia are given in the following table. From the data it can be seen that the biggest budget expenses for subventions from Republican budget were in 2008, when it starts decreasing suddenly. This is a consequence of total economic movements keeping in mind that 2008 and 2009 are the years when the first effects of the economic crisis could be felt. The sharp rise by one percent in total expenses is noted in 2012, and that trend continued in 2013. However, comparing the data from the attached tables there is no clear connection between subventions and newly added value in the observed years. It can be concluded that subventions, even though they are unfortunately inevitable profitability factor in agricultural production of Serbia, they are not of crucial importance for the enhancement of the agricultural role in the total production. It seems that the total role of the agricultural production more depends on the growth of other sectors than on the potential exploitation in the very agriculture.

Results and discussion
The contribution of agriculture to gross value added in Republic of Srpska in the observed period is constantly decreasing. It ranges from 13.9 to 12%. Even though in 2013 it was higher than in 2012, in 2014 the additional fall is expected, keeping in mind that the regions of Semberija and Posavina were affected by great floods. 4 Even though the agricultural land is considered to be one of the most important resources of Srpska, and that over 57% of the population lives in and from the countryside, the availability of the agricultural surfaces is estimated to be around 0.952 ha per inhabitant, the agricultural production covers just a small part of the needs for the agricultural products. The cover of the import by export is just 87%.
There is no clear correlation between the subvention volume from the republican budget and revenues to the newly accomplished value. The share of subsidies in total budget expenditures ranges from 3.49 to 5%. Subvention assets, in the observed period had more the form of the social support to the agricultural producers and village, than they had the character of the aimed influence to the development of this economy branch.
Even though the subvention policy declaratively refers to the interventions and investments in production, the assets are mainly directed to the development of the certain products.
Republic of Serbia also disposes with great agricultural surfaces; the availability of the agricultural surfaces is 0.68 ha per inhabitant. More than 50% of the total population lives in the countryside, while only 20% of them actively deal with agriculture.
The contribution of the agricultural production to the gross value added in Republic of Serbia in the observed period goes in the interval from 8.0-9.5%. The noticed oscillations are more the result of changes in other sectors than the changes in agricultural production.
Republic of Serbia produces surplus in the external exchange of the agricultural products, the cover of import by export in the first half of 2014 was 1.8%.
The total subvention amount in the observed period was between 2.04-3.61%. However, there is no clear correlation between the volume of the newly achieved value in agriculture and subvention amount. The highest value added from 9.1% was in 2011, and the subvention amount was among the lowest in the observed period 2.05% expenditure if the republican budget. 5 Even though the production would be unprofitable without subventions, the general opinion is that the budget support to the agriculture of Serbia is insufficient and that it significantly lags behind other countries. Besides that, the frequent change of policy of subvention assignment is noticed, which additionally affects the uncertainness of the long-term investments in this sector.
The trend of unfavorable movements in agriculture of Republic of Serbia will probably be continued in the following 2015 having on mind the annunciations Assembly