Monopoly, government policy and milk shortage in Serbia

Abstract

The ownership concentration in the processing of fresh milk sector in Serbia, together with a considerable dispersion and fragmentation of the primary production of raw cows milk has led to insufficient supply and lack of basic dairy products on the market. The shortage phenomena is manifested in the circumstances of depressed and economically unsustainable low prices of production inputs – raw milk, and quantity decrease, accompanied by changes in the structure of the milk products final production. Over the past five years, the Serbian government has led the wrong economic policy of the milk primary production incentives, and thus, the breeding of milk cows. Additionally, the poor economic policy was conducted in the area of ownership structure changes and incentives for the development of new production facilities for the processing of fresh milk for the Serbian market necessities.

Keywords

• monopoly, market imbalance, prices growth, insufficient production, and processing.