Support to Agriculture Cooperatives in Southern Serbia: Evolving Challenges

Serbia and Montenegro

Structure

• Background (1)• UNDP Response in economic

development (4-5)• Challenges and results in

supporting Agriculture Cooperatives (6-8)

• Lessons Learned (9-10)

Serbia and Montenegro

Background of Southern Serbia

• 13 Municipalities• Approx 500,000 inhabitants •Low income region• Least developed region.• Inter-ethnic conflict 2001.• Dilapidated industrial sector• Low number of SME• Large grey economy

Serbia and Montenegro

UNDP Response in economic development

- Southern Serbia Municipal Improvement and Recovery Programme. (3.6 million/1.6$ for Economic Development activities).

- Two main activities:1. Agriculture Cooperatives2. Guarantee Fund for MSMEs

Serbia and Montenegro

UNDP Response in economic development• Why Cooperatives? Importance of agricultureCertain degree of local

knowledge on agricultureLoss of industrial jobsProvision of part-time “jobs” Low level of productivity Bridging the inter-ethnic divide

Serbia and Montenegro

Challenges to create cooperativesInternal:Trust (the proverb of the serbian cow)KnowledgeEntrepreneurial spirit Low capitalAccess to marketsSmall Property (2 – 2.5 ha.)Poor mechanisationLow interest

Serbia and Montenegro

Challenges to create cooperatives (cont.)External:

Slow Privatization process of socially-owned coops

Taxes an social benefits (100 Euros a month salary for Director)

Low consumption of agriculture products Absence of national policy on cooperatives Access to commercial credit High market competition Poor infrastructure

Serbia and Montenegro

Results to date

• 8 Registered Cooperatives• 19 Identified potential groups• Agricultural Fair• Establishment of marketing contacts• Hands-on production and marketing

trainings

Serbia and Montenegro

UNDP: Lessons Learned

• Time + Patience + Strategy + Goal = Trust

• First step is small producers groups

• Role of hand outs and grants• Pressure in delivery• Importance of Common donor

strategy

Serbia and Montenegro

UNDP: Lessons Learned (Cont)

• Lobbying at the central level in policy formulation

• The role of local government • Non conducive environment

(registration)• Adapt to concrete local situation

(e.g. Cooperatives in the EU)

Serbia and Montenegro