Farmers Supporting Dinar

A month ahead of the wheat harvest, the Serbian Government has finally annulled former Serbian PM Radoman Bozovic's decrees from 1992 which ensured a state monopoly on the buy up and trade in basic agricultural products. The position of the authorities with regard to the farmers is favorable, because there are great stocks in the silos in Vojvodinaaround 600,000 tons, while a yield of 3,470,000 tons is expected from 900,000 hectares of fields. Since the country's annual consumption is 2.5 million tons, the state is faced with the problem of how to export around 1.5 million tons of bread wheat.

At a closed meeting with Serbian President Slobodan Milosevic, during his visit to the 61. Agricultural Fair in Novi Sad, the heads of the agribusinesses warned the President that there was space for only a fourth of the harvest in the silos.

It was decided on the spot that wheat stocks would be transported to southern Serbia by railway. Preparations for (illegal) exports are late, so that the Novi Sadbased ``Zitokop'' will have a great deal of trouble in exporting some 200,000 tons of wheat over the next few months. The state miscalculated price trends on the world market, because a ton of wheat can be bought for 70 dollars now, while the going price last winter was around 140 dollars.

A bad policy with regard to stocks is now allowing the authorities to buy up wheat at favorable prices, and as Serbian PM Mirko Marjanovic said (and this was later confirmed by Milosevic himself), without help from the primary issue.

If a simple calculation is made, and the often quoted guaranteed price of 0.20 dinar/kilo of the new yield is multiplied with the usual market ``surplus'' of around 2 million tons, it turns out that it would be necessary to ensure 400 million dinars for the entire buy up. Considering the extra stocks and the stability of the dinar, the buy up could be carried out successfully with 100150 million dinars. In the last few weeks, Serbian politicians have repeated in parrotlike fashion that money won't be forthcoming from the primary issue for the buy up, probably because the ``successful sowing'' was helped by the Central Bank. Namely, 280 million dinars' credit was approved for the sowingtime in Yugoslavia, while Vojvodina, where twothirds of the spring works are under way, received only 86 million. This fact points to the conclusion that state debts for food were manipulated with as before.

Federal Prime Minister Radoje Kontic who opened the 61. Agricultural Fair in Novi Sad, did not tell the farmers the new guaranteed prices of basic products (old wheat formally costs 0.18 dinar/kilo). Apart from saying that agriculture was the ``most vital branch of the Yugoslav economy,'' and that ``it was making a large contribution towards the realization of the policy of economic stability'' and that it had ``confirmed the resistance, enterprise and strength of relying on one's own resources,'' PM Kontic announced breezily that this year's buy up would be carried out ``with prices which will ensure the simple reproduction for producers.'' We shall not debate here what ``simple reproduction'' means, since this is something over which the farmers have been at odds with the industry, during the past five decades of Socialism. The matter concerns the fact that with his statement Kontic disparaged the demand made by NBJ Governor Dragoslav Avramovic that the state's actions be directed to interventions on the market, and cutting the price of bread and meat, and that the farmers' interests were best defended with higher guaranteed prices.

It is difficult to estimate right now if the messages being sent out to the farmers by leading politicians are tactical, or if they are the remains of a stultified policy. Milosevic's widely popularized statement that ``the state must take care of the farmers, and the farmers must take care of the state,'' probably wasn't just a tactical move aimed at disguising an ``antiagrarian wave'' in economic policy, but a fall back on the old idea of ``state agriculture,'' in which the farmers have the honor of feeding the state which, on its part, ``ensures'' the distribution of production.

Spring taxes, 60% of the necessary fuel in coupons for farmers, interventions on the market by selling stocks just ahead of the harvest, the perspective of ``simple reproduction,'' a disastrous export policy, and a limited marketall these are elements of agricultural policy. The farmers will be expected to continue to shoulder a policy of stubbornness with regard to sanctions, and a policy of ``cheap bread'' which is supposed to increase the buying power of the miserable wages in Yugoslavia.