Since the beginning of the 2000s, Serbia has been going through profound economic and institutional shifts, with significant consequences for structural changes in the agricultural sector, its output and productivity, as well as agricultural policy.

By the early 1980s Serbia had experienced significant growth in agricultural production, which stagnated in the late 1980s and declined sharply in the 1990s. Extremely unfavorable production and economic indicators for Serbian agriculture in the 1990s were reflected in negative trends in the production of almost all agricultural products. The decline in agriculture was primarily caused by a combination of institutional disorders, subsidy cuts, and market collapse. It is evident that multiple factors (both subjective and objective) have caused Serbia’s failure to exploit the competitive advantages it had over other countries in the pre-transitional period (Van Berkum & Bogdanov, 2012). Fundamental reforms of the Serbian agro-business sector were introduced in the early 2000s, a decade later than in other transitional countries. The first years of transition brought radical changes compared to the policies of the 1990s. The first reform-oriented government devoted most of its attention to strengthening institutional capacity, especially with regard to legislative solutions. A major challenge in the early 2000s was to reduce the space for grey market activities and to establish a stable market of basic agricultural products.