Analysis of the Impact of Agrarian Policy Measures on Cereal Production in Serbia in the Conditions of Climate Changes

Wheat and corn have a dominant part in cereal structure production in the Republic of Serbia. Considering the importance of these products, two studies were carried in the paper. First, one had the goal of analyzing the economic results of wheat and corn production in Serbia in the period from 2014–2024. Second, the other had the goal of analysing the intensity of the drought and its harmful impact on wheat and corn production in Serbia in the perid from 2014–2024. The research question that is analyzed in this paper refers to the analysis, whether direct payments were a sufficient incentive to achieve short-term economic sustainability in production of wheat and corn in Serbia in drought conditions during the period from 2014–2024. For the purpose of economic analysis, the method of analytical calculations is used on the basis of variable costs; that is, on the basis of the calculation of the contribution margin. The SPEI method is used in order to analyze the intensity of the drought. The authors conclude that the amount of the direct payments plays the key role in achieving a positive contribution margin; that is, in achieving the short-term economic sustainability in wheat and corn production in Serbia in drought condition. To achieve long-term economic sustainability in this production in Serbia, in changed climatic conditions, adaptive varieties and hybrids, education of farmers, adequate sources of financing, application of irrigation systems, and application of the concept of climate-smart agriculture are needed.