This Policy Note looks at impacts of European Union accession on agriculture and rural sectors, taking into account specific sectoral features and policy choices pre- and post-accession. The most important lesson learned from recently acceded member states is that policy choices before accession will largely determine whether the agriculture sector will be able to fully reap the benefits of EU membership, by expanding trade, or will struggle in the face of increased market pressure. Every EU candidate country faces a twofold challenge: it needs to direct its agriculture and rural development policy towards increased sectoral competitiveness, and align its legal framework and institutions with the EU membership requirements. Far too often, fulfilling the latter becomes the leading priority, while some underlying sectoral challenges are overlooked. These fail to receive appropriate support pre- and post- accession − due to suboptimal domestic policies and/or foregone EU funding opportunities. The unresolved issues may continue to linger once the country joins the EU, and diminish the effectiveness of EU policies and funding. Serbia is at the very junction where this challenge needs to be addressed. Some producers have already started to benefit from trade liberalization, with strong growth in response to a rapid increase in exports (cereals, oilseeds, fresh fruit and vegetables)
others are unable to adapt and are dwindling (dairy and meat production). Based on past experience and taking into account the key features of its agriculture sector, Serbia needs to use this short window of opportunity to focus on re-calibrating its budget resources so that they better stimulate the development of competitive farm units. In parallel, it needs to ensure that alignment with EU requirements - both in policy and institutional terms - remains on track, yet it does not sideline the needed sector transformation prior to EU accession.