Epsilon Archive for Student Projects

Abstract

This thesis is part of the evaluation of a development project in Serbia, where cooperatives
have been formed in order to make the members support themselves trough organic farming.
The purpose of the paper has been to find out if the goal of making the current members and
potential new members able to support themselves on what the cooperatives produce, has
been reached. The goal is to be considered as partly fulfilled; according to the last annual
report from Odraz, “the registered cooperatives have become fully functional and stable and
they have started making some modest profit.”…“the majority of the beneficiaries think that
they are self-reliant”…. In order to find out what is required in order to fulfil the established
goal entirely, (for example there are no reports of that new members have been recruited, and
the fact that most, not all, current members of the cooperatives (the beneficiaries) say that
they are supplied from what the cooperatives produce), I have tried to identify the conditions
which the cooperatives operate under. The basis of the paper consists of a literature review,
interviews with the directors of the cooperatives, a questionnaire dealing with the business
environment and various external sources in Serbia.

The members have received training, but with some doubt regarding its applicability,
according to the enquiry performed by Odraz. Study circle/adult education classes and similar
can be a good way to supplement and to further develop these skills, however, the access to
these and other higher educational forms remain unclear according to the business climate
enquiry. Knowledge of what the market demands, laws and regulations from government
agencies, certification bodies and research within the profession requires constant updating.
The access to media is high, as well as information provided through counselling according to
the business climate enquiry, however, the members lack information gained through
research. Media independence in Serbia should not be considered as a matter of course
according to the literature review.

A safe home-environment is a necessity for the members in order for them to have full focus
on the running of the cooperatives. This need is to be considered fulfilled when the members
got their houses. According to the business climate enquiry, the members have high
confidence in their neighbours, associations, police and judiciary, aid organizations, salesmen
and local and national policymakers. By contrast, confidence in the banks is low or nonexistent.
The confidence of purchasers is unclear. According to the Odraz enquiry, there is a
problem with the members' (especially the women's) lack of motivation to participate in
practical work of the cooperatives. This and inner conflicts pose a threat to the existence and
development of the cooperatives.

According to the literature review, financial aid is available in form of subsidises from the
government and probably also from the EU in the future. According to the business-climate
enquiry, the members lack access to incentives, inspiration and new impressions from special
interest organizations. They also lack inspiration and new impressions from trade fairs,
exhibitions and conferences. Whether there are incentives from banks, the EU, politicians,
businesses and the society in general is unclear according to the business climate enquiry. To what degree the later ones affect the members is unclear according to the business climate enquiry.

Drought, late frost, wind, hail and the humid climate may be challenges, according to the
interviews with the directors of the cooperatives, but otherwise, the climate is an asset, the
quality of the soil is very high and there is enough water of good quality, according to the
literature review. However, the cooperatives limited access to arable land can restrain the
development of the cooperatives. A large part of the farms in Serbia is small and fragmented
according to the literature review. This could be a disadvantage for Serbia and the
cooperatives in the competition with the outside world because the inefficient use of the
arable land that could mean higher costs, according to the literature review. A future possible
membership in the EU is supported by a convincing majority of the members according to the
business climate enquiry, which is a higher share than in the rest of the country.

The process to certify the cooperatives has taken a long time, but it is a necessity that allows
them to get a higher price for their products.

The cooperatives' access to capital and land can be a crucial factor for their survival, but the
availability of these factors is unclear according to the business climate inquiry.
According to the same enquiry, the availability of skilled workers is low. This does not affect
the development of the cooperatives at the moment, but may become a limiting factor in the
future. It is unclear according to the business climate enquiry, if gender, origin, language,
religion, or lack of childcare is an obstacle in order for people to get a job. The availability
and quality of the infrastructure in all its forms may be well below the known, both according
to the literature review and the business climate enquiry. This constitutes a clear obstacle to
the development of cooperatives.

The outlet possibilities for the cooperatives' products in the domestic market is according to
the business climate enquiry high, while no conclusions can be drawn regarding their attitude
towards the global market. However, a number of things indicate that there is no domestic
market in Serbia at present according to the literature review, and it seems like the
cooperatives have no alternative than to try to export their products if they still want to
produce organically. Storage facilities may have to be required if they are to offer the
purchasers the continuity, quality and quantity that they demand, according to the literature
review. At present, refinement of the products do not appear to be an alternative, the volumes
are too small.

The project can from many perspectives be considered successful. The factors which the
members of the cooperatives feel that they lack are all external circumstances that IM-SOIR
has no influence over. In my opinion their followers, Odraz need to continue to be a link
between the cooperatives and authorities, the certification company, purchases and banks. In
the absent of special interests organizations, they need to ensure that the cooperatives
remaining needs get attention from those decision makers who can change the situation, and
thereby raise the cooperatives capability to support current and future members. The
cooperatives are not yet able to do all that on their own.
To sum it all up, the domestic market was quite overrated when the project was planned and
that has restrained the development of the cooperatives. More efforts should have been put on
reaching the global market already from the beginning.