About 1 billion euros have been spent annually on food imports in recent years, despite the long-standing practice of subsidizing agriculture. Subsidies, so that the country can produce its own food, are not our invention, all other countries do it, and about a third is allocated from the European Union budget. But what bothers us is how from year to year we have an increase in subsidies with a simultaneous increase in food imports and a decrease in the number of farmers. According to data from the World Bank, in the period between 2014 and 2024, the budget for agriculture and rural development was 1,3 percent of gross domestic product. That is twice as much as the percentage comparison in the Western Balkans and almost three times more than the EU average!

The government is aware that something is wrong with the subsidies. A new model of subsidization has been announced. Farmers, those who declare themselves to be genuine, say that in recent years there has been a lot of fraud and that the money often did not end up in the right place. They also complain about the untimely payment of subsidies, and together with the government they agree that the financial assistance does not have a development component.

The situation is exactly reflected in the numbers. According to data from the State Statistical Office, which were ready for last year as of November, food, live animals, animal and vegetable oils, fats and waxes were imported for just over one billion euros, which is 9% more than the previous year for the same period. Of course, Macedonia also manages to export and has a significant foreign exchange inflow from agricultural products. Thus, food exports in the 11 months of 2024 were 520,8 million euros. However, the numbers clearly show that we are in a big deficit with food, that is, exports are half of imports. We are in a surplus with tobacco. Our exports of tobacco and tobacco products, last year as of November, weighed 132,7 million euros, while imports were 39,6 million euros.

Agricultural subsidies have been in operation for almost two decades. According to information, about 1,5 billion euros have been allocated from the agricultural budget for these years.
This year, 7,2 billion denars (about 120 million euros) are foreseen as support for direct payments allocated to financial support programs. The financial support program for agriculture for 2024 amounted to 7 billion denars, in 2023 it was 6,4 billion denars, in 2022 – 3,6 billion denars, in 2021 it was 3,7 billion denars, in 2020 just over 4 billion denars. These are the initial programs, which may have subsequently undergone changes.

Tripunovski: Changes have begun, regulations will also change

The Ministry of Agriculture says that they have identified shortcomings in the current way of supporting farmers, and that changes to the support system have been initiated within the framework of the new financial support programs for 2025.

– Already this year, the complicated and inappropriate system of double and conditional application has been abolished, which complicated the administration and control procedures for both beneficiaries and institutions. The measures have been merged and the structure has been simplified as much as possible. By including inspectors from the State Inspectorate for Agriculture (DIZ), the presence of inspectors in the field will be increased. In the coming period, controls will be strengthened in order to monitor the situation and prevent possible abuse. The appropriate and intended use of funds from financial support programs will provide more money for real farmers – Minister of Agriculture, Forestry and Water Management Cvetan Tripunovski told "Sloboden Pechat".

Cvetan Tripunovski, Minister of Agriculture, Forestry and Water Management

However, the minister explains, for a series of planned changes or introduction of new measures, the implementation will be possible after the amendments to the Law on Agriculture and Rural Development that are underway.

Minister Tripunovski also explained in detail which farmers can expect more money this year.

An increase in the amount of support through direct payments will be implemented in subsectors that are facing a serious decline in production, but have a comparative advantage and produce products important for the nutrition of the population, such as livestock subsectors, for example.

The Minister also points out that there will be investments in irrigation and drainage, support for market forms of association, setting up an efficient system for knowledge and innovation in agriculture. Support will be provided for targeted groups of beneficiaries with development potential, primarily young farmers. The accreditation process of the new IPARD measures will be intensified, which will enable access to new EU funds that were not previously available.

– Additional transformation and improvement of the measures will be implemented through the programs in the next period due to the necessity of the previous legal amendments planned for this year. Direct payments should be structured according to the strategy, which will mean adaptation to European policies – Tripunovski specifies.

Professor Dimitrievski: Less direct payments, more rural development

Dragi Dimitrievski, a professor at the Faculty of Agricultural Sciences and Food, says that without subsidies, agriculture will have a hard time surviving, but that we must make some changes in the model, in line with what the common EU policy requires. He emphasizes that a smaller part of the money should go into direct payments, and a larger part into rural development.

– Subsidies are everywhere. If you take the European Union, most of the budget is spent on supporting agriculture. Yes, in recent years, support has been decreasing, but at the beginning of the common European policy, subsidies exceeded 50 or 60 percent of the budget. Today it is around 32-33 percent. What we have previously advocated is that in this budgetary support for agriculture, a significant part should go to the Rural Development Program, that is, in what means supporting private investments, applying new technologies, introducing new technical means, in digitalization. Unfortunately, most of the money over the years has gone to direct payments, and this does not lead to changing the structure and subsidies do not provide the expected results. On the contrary – areas are decreasing, farmers are leaving this activity, production is decreasing – says Dimitrievski.

Professor Dimitrievski also emphasizes that it is necessary to prepare an action plan, to analyze which sectors should be supported through direct payments.

– It must provide a transition period in which we will make all those changes. If that happens overnight, it could have a devastating effect on some subsectors. For example, in horticulture, fruit growing, and even viticulture, we now have relatively more intensive subsidies, and if we switch to a model of production-unlinked subsidies, without creating other measures and instruments to support those sectors, we could potentially have serious problems – says the professor.

He says that as a Faculty they are involved in the activities of the Ministry of Agriculture and are conducting an in-depth analysis of the Strategy for Agriculture and Rural Development and the findings are that the model of budget support in agriculture needs to be changed.

Farmers are also aware that the model must change.

"Sloboden Pechat" also spoke with several agricultural associations. Farmers are aware that the support model must be changed, but they also point out that a number of current situations must be overcome in order to increase the production of agricultural products.

Gjorgji Karakasharev from the National Agricultural Network says that they were invited by the Ministry to a consultative meeting regarding the Draft Program for Direct Payments for 2025.

– What is important for us is that now there will be no double reporting as there was before, that is, administrative procedures are being shortened as much as possible. The direction from the Ministry is to improve quality more than quantity, and that is good. There are some minimal corrections in the items, something is going up – Karakasharev told “Sloboden Pechat”.

However, he emphasizes that the funds allocated for agricultural development do not meet the needs.

– We are at a very low level of development and if we want to produce faster development, we need to have greater support in terms of incentive measures. More of the funds should be directed towards the development of agriculture itself and in those areas where greater economic development is generated. Support cannot be everywhere at the same pace. Support should be more directed towards the production of products that are necessary for the nutrition of the population. In agriculture, every denar invested is returned with at least one denar in profit. No one can say that the money invested in agriculture is a waste of money – says Karakasharev.

Karakasharev pointed out that in parallel with a new subsidy model, work should also be done on the legal regulations, in which he claims there are many ambiguities. In the conversation, he also noted that we have very low purchase prices that do not reflect real costs, we have uncertain placement, we have a lack of strategy, in some places we have overproduction, in some sectors minimal production.

– Unfortunately, we still have monopolies in the country, let's not call them cartels, which carry out mass exploitation of farmers, and the victims of all this are us as primary producers and ultimately the citizens – says Karakasharev.

The president of "Agrosoyuz" from Strumica, Risto Velkov, says that the most important thing for farmers is to have a higher price for their products, and that subsidies are certainly welcome. However, according to him, support should be provided in a different way.

– The last two years have been good for horticultural products. Prices have increased and that is the best thing that could have happened to farmers. Subsidies are welcome, but if the price is not good, they are nonsense. Horticulture is one of the branches that has the highest cost. Subsidies of 3.000 denars per decare are a small compensation for our costs, for example, that is not even 2 kilograms of a preparation that we have to use – says Velkov.

According to him, in gardening, real cost amortization would occur if, for example, the preparations or seeds they use were subsidized.

– With some kind of subsidy, manipulations would also be avoided. I think that there are not many of them in horticultural production, but there are opportunities for them where there are very large areas, such as in arable farming – says Velkov.

 Farmers Federation: The most important thing is that the money goes to the real farmers

The National Farmers Federation (NFF) says that they are a socio-economic partner of the Ministry of Agriculture and that they are fully involved in the model of agricultural policy creation through the system of sub-sector groups in accordance with the Law on Agriculture and Rural Development.

– The biggest commitment of the National Federation of Farmers is that subsidies should be intended for real farmers, that is, for the category that lives from agriculture, invests and maintains it. Subsidies are necessary for the maintenance of agriculture, especially for small farmers. In this regard, a time frame for subsidy programs and rural development should be respected, so that funds can be planned and used in a timely manner. It is also necessary to establish a monitoring system to monitor the spending of funds and the effects of these programs, as well as timely information for farmers about the programs and changes in the programs through the websites of the MAFWE and the Agency for Financial Support of Agriculture and Rural Development – ​​the NFF told "Sloboden Pechat".

According to the NFF, the current method of subsidizing is a model that has been in use for a long time, and follows the EU's Common Agricultural Policy.

– In the application of the model, beneficiaries, criteria, method of application and monitoring of the measures, several changes have been made so far. The National Farmers Federation constantly insists on improving certain mechanisms in the application and payment of subsidies in accordance with field analyses, but also for the type of beneficiaries and the type of support measures – say the NFF.

What are the shortcomings of the current model?

Minister Tripunovski explains that "the setup of the direct payments system in the past period has been complex, further fragmented and complicated."

– The application procedures for support programs are complicated by requiring farmers to come to the regional units of the Ministry at least twice to apply, which has led to a large number of them not exercising their rights at all. The accreditation of several very important measures such as agri-environmental measures, rural infrastructure and the LEADER approach has not been implemented in the past period, although they have been programmed in the last two program cycles, which, in addition to the inability to adequately treat the problems, may prospectively affect the insufficient implementation of future IPARD programs. Additionally, in rural development policies and joint management of markets, the implementation of a number of important measures envisaged by the strategic document (National Strategy for Agriculture and Rural Development 2021-2027) has not yet begun, although half of the strategic period has passed – Minister Tripunovski answered our question about how he assesses the existing model and where the key weaknesses have been detected.

Ahead of us, however, is a new agricultural season, with new challenges posed by climate change. For now, according to statements from the Ministry of Agriculture, there are no fundamental changes in the subsidy model and support is still mainly concentrated through direct payments. If the subsidies were effective, the state would have had greater production and could have influenced inflation in recent years. For example, last year, on an annual basis, November inflation stood at 4,3 percent, but for food it was even higher, by as much as 5,7 percent!

With this text, Sloboden Pechat joins the initiative for  increased transparency of the institutions that the Institute for Communication  The study is being conducted in cooperation with the media within the framework of the "Use the Facts" project, which is supported by the British Embassy.