Aug. 30 (Bloomberg) -- Serbia will spend 160 million euros ($200 million) to counter the effects of this year’s drought, which cut corn, soy and sunflower harvests in half in parts of the Balkan nation.
Rescheduling agriculture loans and providing additional subsidies to farmers and discounted diesel fuel will amount to the “biggest intervention in the agriculture sector in more than 20 years,” Agriculture Minister Goran Knezevic told reporters as he presented the measure in Belgrade today. The cost includes possible use of the state’s commodity reserves to prevent possible shortage, he said.
“We still won’t be able to annul the effects of the drought, but we can ease some of the pressure,” he said. The state will give farmers 6,420 dinars ($67.7) per hectare (2.47 acres) of their arable land, he said.
The cost will be included in reviewed budget spending the government plans to adopt next month, he said. Serbia is also struggling to narrow its budget gap, which reached 7.2 percent of gross domestic product at the end of June, 2.7 percentage points above the country’s own fiscal rules.
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