Living Standards Measurements Study - Serbia 2002 - 2007

significantly lower (Table 2). Stated data indicate
that the relevancy of the agricultural activities for
the rural population in Vojvodina is smaller
compared to Central Serbia (excluding the territory
of Belgrade as unrepresentative for the purpose of
this analysis). Rural areas for the Vojvodina
population have primarily a residential role, and not
(primarily) a role in terms of income generation.
2. Insufficient diversification of the rural
economy is caused by the high share of agriculture
in the rural employment structure (Graph 1).
Although the share of agriculture in the labour force
employment structure broken down by sectors has
reduced by approximately 5 percent in past five
years, against an increase in the share of industrial
and tertiary sectors, employment in the agricultural
sector is still extremely high. Such a high level of
the rural population employed in agriculture
classifies Serbia as one of the most agrarian
European countries. In addition to agriculture, the
rural labour force is recruited in the processing
industry (15.6 percent), wholesale and retail sale (10
percent) and civil engineering (6.3 percent). The
underdeveloped public services and service sector in
rural areas generates a limited number of jobs.
Graph 10.1. Rural labour employment by sector
5.4 3.4
23 25.8
19.2
52.4
23.8
47.0
2002 2007
Other
Services
Industry
Agriculture
3. Despite high employment in agriculture, low
productivity and the unfavourable economic
position of agriculture cause income generated in
this sector to have little impact on the rural
population living standards, but income from
salaries have crucial importance for consumption
growth. Analysis of rural population income by
deciles of consumption indicates a positive
correlation between salary growth and consumption
(Graph 2). Income from salaries is the most
important for all groups of rural households ranging
from 18.5 percent for the poorest households to 42
percent for the 7 th to 9 th deciles. For more vulnerable
categories of rural households income from
pensions has greater relative importance. After the
third decile, there is growth of importance of
salaries and reduction in share of pensions in the
rural population income structure, confirming that
elderly households are the most vulnerable rural
households. Income from agriculture is the less
relevant for the most vulnerable households (7.9
percent), while its importance grows in the
following deciles (2 nd to 7th), and the importance
remains relatively unchanged (9.5-11 percent).
Relevancy of agriculture income increases only for
10 percent of the wealthiest rural households, whose
income from salaries, remittances from abroad and
from agriculture in absolute values are several times
higher compared to the lowest decile.
Insufficient competitiveness of agricultural
income is illustrated also by the fact that the
employed in the agricultural sector accounts for
almost a half of (47 percent) the employed below
the poverty line as well the small percentage (8.5
percent) of farmers that are in the richest quintile
(Graph 3).
The data shows that in circumstances of
underdeveloped rural economy, agriculture has a
high impact on the rural vulnerability. Studies
analyzing samples of rural households with poor
3
potential2F show that these households have a
negative perception of their current position and feel
very vulnerable (Graph 4). On the other hand, their
optimism increases in relation to the mid-term
prospective (Graph 5).
138 Living Standards Measurements Study - Serbia 2002 - 2007