Associating farmers reduces costs and increases profits

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In order for farmers in Serbia to be more competitive on the European and world markets, but also to reduce costs and increase production, one of the options is to create cooperatives. There are currently 3,000 cooperatives in Serbia that are active in various fields, mostly agriculture.

The Ministry of Rural Care told Biznis.rs that in today’s socio-economic climate of business of large retail chains, it is easier to place larger quantities of their goods in megamarkets than in smaller markets. It is becoming more and more common for cooperatives to sell 5,000 tons of potatoes, for example, more easily than one producer sells 500 kilograms on the market.

With the small and fragmented estates that dominate in Serbia, the goal of joining the cooperative is for its members to perform their work more simply and cheaply and thus be more productive and competitive. It should be emphasized that cooperative members bring only their products into the cooperative, not their real estate or land.

“United reduce production costs, achieve a higher degree of competitiveness in the market and increase earnings. “International experience and numerous impressive cooperatives (cooperatives) testify to various social, economic and economic advantages over other forms of business, such as better quality of services than corporate solutions, higher profits and security of farmers, as well as easy employment,” the ministry said. .

It is also important to emphasize the resilience – the so-called elasticity of cooperatives to the blows of global economic and financial crises, because cooperatives were created during the crisis out of the need to solve the problems of individual producers.

Cooperatives in the world make up a large array of people who are engaged in a variety of jobs, not just agriculture, which is the most common form of association in our country. Thus, many kindergartens in London and tourism organizations in the UK are cooperatives. Every fourth German in the strongest economy in Europe is a cooperative member. And in Italy, even suitcase carriers have joined forces.

“More than 70 percent of registered cooperatives in Serbia are agricultural and agricultural, in various branches. “Fruit growing is perhaps the most represented, but there are more and more vegetable, beekeeping and even livestock cooperatives, and that branch is currently a great untapped potential of our country, which needs reorganization and encouragement,” our interlocutors explain.

About the relief of cooperatives in relation to special producers

The National Program for the Revival of Serbian Villages proposes that agricultural cooperatives in any part of Serbia have a special status and pay 50 percent of the prescribed VAT rate, and those in hilly, mountainous and border areas be exempt from VAT.

The strategic document prepared by the National Team for the Revival of Serbian Villages in 2020 also proposes that cooperatives have the right of priority in leasing state land and using pastures. In order for these proposals to come to life, political will is needed, which would translate these benefits into legal acts and become a reality.

A good example of the advantages of the cooperative is the possibility of more favorable and timely procurement of raw materials and intermediate goods, which the cooperatives distribute to their farmers at these prices. In this way, manufacturers solve the problem of both prices and the availability of important inputs for their work, which is a significant relief in today’s complex times.

On the other hand, cooperatives equipped with storage capacities (silos, cold stores) are more resistant to price variations on the market, because they can wait for the most favorable moment for the placement of their products.

The tradition of farmers’ associations

Cooperatives in Serbia have an enviable tradition. Namely, after the first cooperative in the world, which was founded in 1844 by maternity weavers in England, two years later (1846) the third cooperative in the world was founded, in our area, in Bački Petrovac.

Since 2017, when the program of financial assistance to old and newly established agricultural and agricultural cooperatives, popularly called “500 cooperatives in 500 villages”, began, to date, 1,100 new cooperatives have been established, while in the previous period about 100 were closed down and new it almost wasn’t.

“These data are irrefutable proof that the lost trust in the association has been restored to our hosts, and that was the most difficult part of the mission of renewing the cooperative.” The success of the program for the revival of cooperatives, which was continued by the Ministry for the Care of the Village, headed by Minister Krkobabic, is evident. In a few years, new fruit, vegetable, livestock, beekeeping and other cooperatives were established in Serbia, and the state helped the work of 207 cooperatives of all activities and in all parts of Serbia with 2.13 billion dinars, “said the competent ministry, Biznis writes.