A new Euro model being announced in Montenegro would set minimum wages at 1,000, 1,250 and 1,400 euros according to the education required for a job, prompting concerns about the ability of farms and domestic producers to absorb higher labour costs. The policy argument calls for pairing higher wages with expanded production and productivity, including a stronger agricultural budget for 2027.
Under the model, the minimum would vary with the qualification level required for a position. An alternative would be a single minimum wage, with other salaries determined by job complexity, responsibility, experience and work results rather than by several administratively set wage floors.
Farmers want to improve pay but are finding it increasingly difficult to attract and retain good workers. The capacity of an employer to raise wages depends on the value created collectively, while the full cost of the proposed measures still needs to be calculated precisely.
For small agricultural producers, particularly in northern Montenegro, it could be difficult to immediately provide a newly graduated engineer with a net salary of at least 1,400 euros, plus the associated obligations. That is especially challenging when the graduate still needs to gain practical experience, according to the argument about the impact on smaller farms.
Farmers have limited ability to pass higher costs on to customers, unlike businesses in trade and some services. They do not control the purchase prices of milk and meat, particularly lamb, or the prices of imported fruit and grapes competing with their products. Their influence over the prices at which they sell vegetables is also limited.
Producers also have little control over drought, frost, hail, or plant and animal diseases, but must still pay workers when yields fall short. The argument presents rising labour costs as a question of rural communities and the competitiveness of domestic agriculture, not only as an issue of employee wages.
Fiscal risks and import dependence
The Vienna Institute for International Economic Studies has warned of fiscal risks from the announced Euro model. The institute said Montenegro’s budget deficit could rise to 4.5% of GDP in 2028 and economic growth could slow.
Latvian economist and professor Inna Šteinbuka has warned that European Union membership alone does not guarantee economic success. Latvia joined the bloc in 2004, then recorded strong economic growth alongside serious imbalances that contributed to a later severe crisis.
In Latvia, wages grew faster than productivity while consumption, borrowing and imports rose rapidly. The argument does not say Montenegro will face the same scenario, but says Latvia’s experience should not be overlooked as Montenegro considers wage policy and its economic priorities.
Latvia and other newer EU members also illustrate the potential importance of European funds as a source of investment and economic development. To make use of those funds, Montenegro would need to prepare projects in advance, strengthen the capacity of institutions and establish development priorities.
Montenegro imported food and live animals worth about 842 million euros in 2025, or more than 2.3 million euros a day. Including beverages, vegetable and animal oils and other related categories, the value of imports exceeded 1 billion euros.
If wages rise without domestic production expanding, a significant share of the additional purchasing power could go to foreign food producers instead of domestic farmers and livestock producers. The argument is that higher wages need to be accompanied by policies to increase production, productivity and the creation of new value.
Productivity and agricultural investment
Montenegro could become an EU member in 2028, according to the conditional projection in the policy argument. In that event, its farmers would compete with producers operating modern plantations and livestock farms, using highly productive machinery and automated systems, and serving large markets through distribution centres.
Membership alone would not resolve the problems of fragmented farms, insufficient mechanisation, abandoned land, weak market organisation or a growing shortage of workers. The preparation of the 2027 Agricultural Budget is proposed as an opportunity for a more substantial shift in agricultural policy.
Rather than relying only on higher subsidies, the proposal calls for investments that enable the same number of workers to produce more and better-quality goods, at a lower cost per unit. Suggested projects include modern livestock farms and barns, greenhouses, intensive fruit and vineyard plantations, smart irrigation, modern machinery and automation.
The proposed investment agenda also includes storage facilities, cold stores and distribution centres. It calls for more processing and product finishing so that a larger share of the value of agricultural goods remains with domestic producers.
Montenegro does not have large plains, but it has natural and climatic conditions for intensive fruit growing, including olive and grape production, as well as vegetable growing, certain branches of livestock farming and higher-value food production. The policy argument points to these sectors as areas where investment could support domestic output.
The country’s tourism market consumes large quantities of food every year and could offer an opportunity for “exports on the doorstep”. Hotels and restaurants, however, rely heavily on imports, while domestic producers often lack organised access to markets and secure buyers. Connecting producers with that demand is presented as a way to help local farms supply the tourism sector.
Experiences in Croatia, Cyprus, Malta and the Baltic states point to the importance of modernising production and irrigation, organising producers and linking agricultural research with practical farming. Some countries that joined the EU in 2004 also received special transitional arrangements, including the possibility of additional national support for vulnerable agricultural sectors.
Montenegro should prepare a technically and economically justified proposal for special measures for its most vulnerable agricultural production, according to the policy recommendations. European institutions will not themselves offer measures that Montenegro has not designed and supported with data.
Montenegrin farmers have called for agriculture to receive 5% of the state budget. For 2027, the proposal is to allocate at least 3%, seek to bring the share closer to 4%, and retain 5% as a medium-term development target.
Budget planning should clearly distinguish national public funds from European funds, donations and loans, so the state’s own contribution to agricultural development can be seen. Higher agricultural allocations are not presented as a call for uncontrolled public spending, but as a shift in priorities towards investment that creates value, expands production and strengthens the domestic economy over time.
A larger budget would need to be matched by a more capable administration, a more efficient Paying Agency, a stronger advisory service and better-prepared investment projects. Additional funding would be less useful if producers waited a long time for decisions, application calls were delayed or farms could not provide their own contribution to investments.
The ability to use European funds would also be an important indicator of Montenegro’s readiness for EU membership. The proposals include an Agricultural Guarantee Fund to improve producers’ access to more favourable loans, especially for those with knowledge, land and development projects but insufficient funds or collateral for banks.
A proposed agro-land bank would establish an organised system for returning abandoned and unused agricultural land to use while fully respecting ownership rights. The policy recommendations also call for the 2027 budget to fund measures that raise productivity, rather than relying on higher subsidies alone.
