Agricultural cooperatives are an efficient way of organising farmers and other agribusiness stakeholders.
The European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO), with funding from Luxembourg, have been working with the Serbian government and the Serbian Union of Cooperatives to promote the development of cooperative organisations across the country’s agricultural sector.
Serbian farmers do not yet recognise cooperatives as beneficial for their businesses. Only a minority of farmers are members of agricultural cooperatives, and cooperative land accounts for only 17 per cent of agricultural land in the country. Globally, however, cooperatives account for an estimated 50 per cent of agricultural production.
To boost cooperatives in the country, the EBRD and FAO have been providing training to Serbian producers and small and medium-sized enterprises (SMEs) on cooperative structures and financial sustainability. They are just over halfway through a series of seven roundtable meetings at various locations in Serbia. And since the recent passage of a law mandating audits for cooperatives, the two organisations have been providing counsel on guidelines and methods for conducting those audits.
Agricultural cooperatives are an efficient way of organising farmers and other agribusiness stakeholders, and countries such as Germany, France and Italy offer glowing examples of how they can benefit farmers.
According to Miljan Zdrale, the EBRD's regional head of agribusiness for central and south-eastern Europe, increased collaboration brings numerous advantages.
“Producers and processors organised in cooperatives are more likely to overcome bottlenecks and other obstacles to become more productive, efficient and ultimately more prepared to face the challenges of globalisation,” he said.
A fruitful example
Agro Eco Voće is a thriving raspberry cooperative established in 2013 in the Serbian municipality of Arilje, an area renowned for its fruit production.
The cooperative is part of an association whose members – which count the Association of the Entrepreneurs of Arilje among them – have worked together to register the Arilje raspberry with a geographical indication, or GI, which is a label linking a high-quality product to its area of cultivation. A product achieving GI status will often increase its sale price.
“Coming together as 145 members has already helped the producers diversify and therefore become more resilient,” said Božo Joković, Agro Eco Voće’s general manager. “And now that the raspberry has been registered with a GI, we expect our members to reach wider markets and achieve higher prices for their products.”
In 2015, the government of Serbia adopted a law on cooperatives stipulating the mandatory adoption of cooperative audits. The guidance being provided by FAO and the EBRD is especially timely given these recent legal changes, said Dmitry Prikhodko, an economist with FAO.
Prikhodko explained that the audit’s purpose is to help cooperatives in Serbia function efficiently within the state guidelines.
“The audit aims to ensure that cooperatives are compliant with cooperative principles and legislation,” he said. “Essentially, it is a monitoring tool that helps a cooperative improve both its decision-making processes and its business performance.”
The tour of Serbia continues
The president of the Serbian Cooperative Union, Nikola Mihailovic, is adamant that cooperatives will play a central role in galvanising and strengthening Serbia’s agriculture industry.
“Public-private policy dialogue is key to agribusiness growth,” he said. “This is why we’re pleased to collaborate with FAO and the EBRD, and I’m sure the training in particular will prove invaluable to Serbian cooperatives and their members.”
The latest event, held in Niš in southern Serbia, gathered over 40 cooperative managers – as well as the minister for regional development, Milan Krkobabic – to discuss ongoing initiatives and new potential policy instruments to boost cooperative organisation among farmers and agricultural SMEs.
Having already visited five cities, the roundtable roadshow will continue to another two stops in Serbia. And later in the year, an assessment of agricultural cooperatives in Serbia will be conducted by FAO and the EBRD.