Montenegrin Agriculture: Diagnosis And Policy Recommendations

Montenegro has turned to the service sector in the last two decades and agriculture is largely neglected. The neglect of agriculture has a negative effect on the creation of GDP, employment, current account deficit (of balance of payment) and starting of migrations from rural to urban areas of the country. The authors of this paper set up two goals. First to do an analysis of the situation in agriculture from macroeconomic and accounting aspect. Second goal is to provide policy recommendations for improving situation in agriculture of Montenegro on the bases of the obtained results. The authors used the base of the final accounts of Central Bank of Montenegro for the calculation of the most important ratio indicators. Key recommendations relate to the credit support to agricultural sector, increasing amount of subventions, granting of tax benefits, raising the degree of technical equipment and application of agro-technical measures, as well as the improvement of general living conditions in rural areas.