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 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 Cooperatives 2. Guarantee Fund for MSMEs Serbia and Montenegro

UNDP Response in economic development Why Cooperatives? Importance of agriculture Certain degree of local knowledge on agriculture Loss of industrial jobs Provision of part-time “jobs” Low level of productivity Bridging the inter-ethnic divide Serbia and Montenegro

Challenges to create cooperatives Internal: Trust (the proverb of the serbian cow) Knowledge Entrepreneurial spirit Low capital Access to markets Small Property (2 – 2.5 ha.) Poor mechanisation Low 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