Научная статья на тему 'COOPERATIVES IN SERBIA EVOLUTION AND CURRENT ISSUES'

COOPERATIVES IN SERBIA EVOLUTION AND CURRENT ISSUES Текст научной статьи по специальности «Социальная и экономическая география»

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Ключевые слова
coops / legal framework / ownership / agricultural household / individual producers / zadruge / pravni okvir / vlasništvo / poljoprivredno gazdinstvo / individualni proizvođači

Аннотация научной статьи по социальной и экономической географии, автор научной работы — Biljana Chroneos Krasavac, Goran Petković

Cooperatives in Serbia have long history, evolving from big traditional families to the contemporary social networked organizations and even private companies acting like coops. Current legal framework, on one side, enables many possibilities, but on the other side prevents further development of cooperatives. An interview of key players in the coop sector was one of the research methods. Other methods include historical method, comparative analysis method and case study method. In conclusion, the major obstacle for the further coops development in Serbia is legal status of ownership. Other obstacles are: the level of state interference, the loyalty of primary producers and participants, the average land size per households, etc. The paper includes three parts: historical evolution, successful case study and framework for future development.

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ZADRUGE U SRBIJI – RAZVOJ I AKTUELNA PITANJA

Zadruge u Srbiji imaju duboko istorijsko nasleđe, razvijajući se od tradicionalnih poljoprivrednih porodica do savremenih socijalno umreženih organizacija, a ponekad i privatnih kompanija koje se ponašaju kao zadruge. Postojeći pravni okvir sa jedne strane, otvara prostor za čitav niz mogućnosti, dok sa druge strane, na određeni način, onemogućava dalji razvoj zadruga u Srbiji. Intervju sa ključnim akterima u sektoru zadrugarstva je istraživački metod koji je korišćen u radu. Ostali istraživački metodi uključuju istorijski metod, metod komparativne analize kao i metod studije slučaja. Radom se zaključuje da je pravni status zadružne svojine glavna prepreka daljem razvoju zadruga u Srbiji. Među ostalim ključnim preprekama navode se: stepen ili nivo državnog mešanja, lojalnost primarnih proizvođača i ostalih učesnika, prosečna veličina poseda po gazdinstvu, itd. Rad se sastoji iz tri dela: istorijat razvoja, studija uspešnog slučaja, okvir i smernice budućeg razvoja.

Текст научной работы на тему «COOPERATIVES IN SERBIA EVOLUTION AND CURRENT ISSUES»

Review article Economics of Agriculture 3/2015

UDC: 631.115.8(497.11)

COOPERATIVES IN SERBIA - EVOLUTION AND CURRENT ISSUES

Biljana Chroneos Krasavac1, Goran Petkovic2 Abstract

Cooperatives in Serbia have long history, evolving from big traditional families to the contemporary social networked organizations and even private companies acting like coops. Current legal framework, on one side, enables many possibilities, but on the other side prevents further development of cooperatives. An interview of key players in the coop sector was one of the research methods. Other methods include historical method, comparative analysis method and case study method. In conclusion, the major obstacle for the further coops development in Serbia is legal status of ownership. Other obstacles are: the level of state interference, the loyalty of primary producers and participants, the average land size per households, etc. The paper includes three parts: historical evolution, successful case study and framework for future development.

Keywords: coops, legal framework, ownership, agricultural household, individual producers

JEL: Q130, O130

History of Cooperative Movement in Serbia

The history of cooperative farming and cooperative movement in Serbia has from its inception to date been primarily linked with the history of farmers 'cooperatives because Serbia is a country of rich cooperative history and tradition. That development was not identical in different regions of present-day Serbia.

The first credit-farmers' cooperative in the region of Central Serbia was founded in the village of Vranovo in 1894, in the vicinity of Smederevo, and only one year later was formed the association of farmers 'cooperatives under the name of Chief Union of Serbian Farm Cooperatives. Three years later was passed the first law - the Law on Crafts and Farmers' Cooperatives which governed the entire cooperative area. The number of cooperatives existing in Serbia prior to 1900 was over 650. The number

1 Biljana Chroneos Kresavac, Ph.D., Assistant Professor, Belgrade University, Faculty of Economics, Kamenicka Street no. 6, Belgrade, Serbia, Phone: +381 11 30 21 186, E-mail:biljanak@ekof.bg.ac.rs

2 Goran Petkovic. Ph.D., Full Professor, Belgrade University, Faculty of Economics, Kamenicka Street no. 6, Belgrade, Serbia, Phone: +381 11 30 21 130, E-mail: pego@eunet.rs

was increasing from year to year as the main purpose was to build a wall of protection against the loan sharks and impoverishment of the rural population in late 19th and early 20th century (Cooperative Union of Serbia, 2014).

The tradition of cooperative organization in the territory of present-day Vojvodina is more than 150 years old. The first farmers'-credit cooperative in Vojvodina, established in 1846 in Backi Petrovac, was the third cooperative formed by that time in the world. Becoming aware of the advantages the cooperative movement was providing, forming of new cooperatives in this region started soon thereafter, first in Erdevik (1855), in Titel and Pivnice (1868), in Glozan (1869), Ruma (1883), etc. The cooperative movement in the region of Vojvodina was in the first half of the 20th century developing in parallel with the cooperative movement in the developed countries of Europe.

Abrupt development of the cooperative movement was a consequence of the accelerated development of the commodity-money economy, farmers' orientation towards producing for the market, increase of fiscal obligations to the state, fragmented land holdings, primitive land cultivation, extensive livestock breeding, poor yields, and poor harvest years. All of the listed unfavourable circumstances were a fertile soil for usurious lending provided by country landlords and merchants. Cooperative ideas were recognized under the influence of Serbian scholars of the second half of the 19th century, primarily that of Svetozar Markovic and Mihailo Abramovic (Zakic, Stojanovic, 2009). Under their influence, cooperatives were becoming an indispensable prerequisite for existence of the village and peasantry. They were founded on the basis of cooperative principles, topical even today, and were until World War One constantly on the rise both in terms of numbers and performances. During the First Word War, more than 800 cooperatives were operating in Serbia. The war left serious consequences on the cooperative movement in Serbia, and the recovery was long and painstaking. Until 1937, cooperatives in Vojvodina were operating according to the Austro-Hungarian legislation which did not limit the cooperative members in accomplishing their economic interests through cooperative organization. Cooperative movement consolidated during the thirties of the past century both from social and economic point of view, which entailed the passage of the Law on Economic Cooperatives in 1937. In this way, standardization of cooperative legislation was achieved. Taking into account that Serbia was an underdeveloped agrarian country, this law enabled the rural population to improve their material standing.

In the period between the end of World War II and the 90-ties, four models under direct influence of the state were applied in the domain of cooperative movement:

- Purchasing - Sales Cooperative,

- Farm Cooperative,

- General Farm Cooperative, and

- Basic Organization of Cooperative Members.

Basic Law on Farm Cooperatives envisaged two forms of association, general farmers' cooperatives and farmers' cooperatives that mostly looked like Soviet kolkhozes which were formed by simple association of farmers' holdings. Agrarian theory claims that this form of organization had a highly negative impact on the farmers' cooperative movement, which view proved, over time, to be correct in practice (Hofstede, 2001). Obligatory membership in the cooperatives was contrary to the cooperative principles of voluntariness, which resulted in the lack of motivation on the side of members for the work of cooperatives. Soon after, state authorities permitted withdrawal from membership in farmers' cooperatives. Farmers availed of this opportunity to a great extent as they did not see any economic interest in doing business on the basis of this form of cooperation. As a result of farmers' withdrawal from farm cooperatives, they were massively discontinuing their operation.

Law on agrarian reform and colonization was adopted in 1945 (Official Gazette of the Federal Republic ofYugoslavia; No.64/45, 24/46, 105/48). The renewal of the farmers' cooperative movement started in 1953 through the formation of general farmers' cooperatives that significantly contributed to the strengthening of cooperative funds and improvement of the standard of living of the rural population and quality of life in the countryside. Primary objective of these cooperatives was the purchase and sales activity, and improvement of agricultural production

The accelerated progress of farmers' cooperatives and economic consolidation of farmers during the 50s and early 60s entailed creation of a significant cooperative property. For example, the cooperatives increased their holdings from 10,438 ha in 1954 to 202,683 ha in 1966; obsolete equipment was at that time replaced by the new one; livestock breeding was developing on the cooperative holdings, and the like. It is worth mentioning that the 1953 Constitutional Law (Law on Agricultural Land Fund of National Property and Land Allocation to Agricultural Organizations, Official Gazette of the Federal Republic of Yugoslavia; No. 22/53) transformed the cooperative ownership into socially-owned ownership. In this way, entire property that the cooperatives had acquired by private capital investment of cooperative members became part of "nobody's" and "everybody's" socially-owned property.

The 1965 economic reform had a negative bearing on cooperatives because farmers were given a possibility to establish manufacturing-economic relations with other economic operators. Cooperative associations were also suffering sizeable damages in that period. Adoption of the Law on Unique Chambers of Trade and Industry in 1962, cooperative associations lost the status of legal entity, while chambers of trade and industry became legal successors to the overall highly valuable property of cooperative associations. By adoption of the new 1974 Constitution (Official Gazette, year xxx; No. February 9 -21, 1974) was also adopted the Law on Farmers' Pooling in Association. In this way, cooperative unions regained in 1976 the status of legal entity, but without property.

The period from the end of World War Two until the 90s mainly resulted, unlike the pre-war period, in the devastation of the cooperative movement and in distancing

from the cooperative principles and market-based doing business. By its permanent interventions in the area of cooperative movement (as in other areas of agriculture), the state contributed to the drastic drop in the farmer's trust in the cooperative movement and in other forms of farmers' pooling and association in buying inputs, cultivating land and in selling produce, which is one the reasons for lagging behind in the development of primary agricultural production in relation to market economy countries.

This new Law on Cooperatives enabled setting up of farmers' cooperatives as independent legal entities. The 1990 Law on Cooperatives (Official Gazette of the Federal Republic of Yugoslavia; Nos. 67/93, 46/95 and 101/05) sets forth the obligation of returning the earlier cooperatives' property that had been transferred to agricultural enterprises and agro-industrial complexes to those cooperatives. According to the provisions of the Law, a part of basic organizations of contract farmers had to be separated from enterprises and organized in cooperatives; however, a major portion of their property had to remain in enterprises. As the bulk of cooperatives' property was not returned to the cooperatives in accordance with the provisions of this law, another attempt was made by a new Law on Cooperatives passed in 1996 (Official Gazette of the Federal Republic of Yugoslavia; Nos. 41/96 and 12/98) to enable restitution of this property. Political motives, inefficiency of competent authorities and, generally, careless attitude vis-à-vis the ownership issues was again the reason for inefficient enforcement of the provisions which governed restitution of the cooperative property under the new Law, so that only a small portion of this property was returned to the cooperative sector. In Vojvodina, almost 700 thousand hectares of arable land were taken away by nationalization and the return of that ownership will represent an enormous expenditure for the Serbian state. Estimates indicate that only about 60,000 ha of agricultural land have been returned to cooperatives, while agricultural companies are still holding more than 130,000 ha of agricultural land in cooperative ownership (source: Cooperative Union of Serbia, 2014).

The period of transition and accelerated privatization is opening up a series of new issues for the cooperative property and, accordingly, for the cooperative movement as well. The 1996 Law on Cooperatives imposes that the property of earlier cooperatives, transferred free of charge by organizational and status changes to other users, who are not cooperatives, be returned to the cooperatives it used to belong to. If such a cooperative does not exist any longer, the property shall be returned to the cooperative of the same type that operates in the given region. The courts where these processes are conducted are insisting on establishment of the facts, namely, whether a cooperative was an owner or just a user of the requested property. Such insistence is actually suggesting a negative solution because in the period 1953-1988 all legal entities were treated only as users of social ownership over the means of production.

Therefore, a general conclusion is that cooperatives operate as economically weak entities on the market. Although economic weak, these cooperatives are indispensable for small and medium-sized farmers who, in their absence, would not be able in most cases to set up the production or achieve appropriate conditions for the sale of their commodities and for collecting the proceeds from such sold products. Cooperatives

are also highly significant for the processing industry, intermediaries in trade and end-consumers who purchase in one place, through them, the quantity of goods that they would otherwise have to contract with, or buy from, a large number of farmers if cooperatives did not exist.

Creation of a critical intellectual mass in the village is one of the crucial conditions for employment of experts who need to be a locomotive of a faster transfer of technology and knowledge, more efficient and better marketing of agricultural commodities and successful management of farm cooperatives that need to become a focal point of agricultural development of the country (Zeuli, Cropp 2004). Cooperatives are also the protagonists of rural development as confirmed by the history of the cooperative movement, which is currently one of the leading problems in Serbia (Gulen, 2013). This gives additional value to the cooperatives and points to their great importance and role in the economic development of Serbia. In the following text we are presenting one of the coops successful stories in the area of primary agricultural production with the good prospects for further development.

Business Case of Farmers' Cooperative (FC) Gospodjinci

The Cooperative was formed on 06 October 1993 as a consequence of the transformation of the old former cooperative into a socially-owned agricultural manufacturing enterprise. Former cooperative members were suddenly deprived of the support they had enjoyed by that time. Twenty-seven (27) of them got associated in a cooperative in order to jointly perform certain activities as cooperative members. In this way, FC Gospodjinci found itself in a group of new cooperatives in that conditional division into new and old cooperatives, which is generally adhered to. These new cooperatives can also be conditionally divided into three dub-groups: a) "Private" cooperatives - which sounds paradoxically; however, common sense leads one to make such a conclusion based on the perusal of the entries in the Business Registers Agency where several persons with the same name and surname can be found among the founders; b) "Donation cooperatives" - resulting from the donations from the projects, a large number of which could not survive after the cease of money inflow from donations; and c) Genuine new cooperatives - originating from the need of agricultural producers, such as the cooperative in Gospodjinci.

FC Gospodjinci engages in organization of primary agricultural production, in

view of the fact that it was formed without fixed assets. FC Gospodjinci has one hundred equal coop members. Besides those members, there are about 70 to 100 non-members which are cooperating on contract bases with the organization. Cooperative members contributed only their original cash capital, but not the land, with an intention to perform through the cooperative certain works jointly at lower costs. The Cooperative performs the following activities:

a) contracting production - cooperative members and contract farmers voluntarily contract the sales through the cooperative. Sale of 100% of crop farming products

is contracted through the cooperative, as well as a part of vegetable growing production. However, cooperative members and contract farmers are free and frequently contract the sale of vegetables individually. Many of them are highly competitive and produce 70-80 t/ha of various vegetables, which is at European level. As channels for the sale of vegetables are still open for individual producers, particularly for products for which, apart from the domestic there is a marked foreign demand (USAID, 2008, pp.35-37), they often prefer individual sales. However, taking into account the poor financial standing of numerous processing companies (facing bankruptcy) that are no longer reliable buyers (payers), the need for the cooperative's services is increasing here as well

b) leasing infrastructure (buying stations, silos, etc.)

c) advisory services - since 2006 has also been recruited a plant protection engineer. His role is to provide in the field basic advice and seek answer in other places to more complex questions that he is not able to provide in the field

d) agricultural pharmacy - direct payment or even deferred payment after the harvest

e) supply of intermediates at more favourable prices and terms of payment. Services are used by the cooperative members and contract farmers, or by about 70% of agricultural community in the village.

The key factors of success entailed a successful performance of the listed activities by the cooperative and its further growth. The figure of 27 cooperative members in 1993 rose to 54 in 2003. Cooperative members and contract farmers are now cultivating about 2,500 ha. The basic factor of the cooperative's growth is confidence. Director of the cooperative is always one of the cooperative members. Secondly, cooperative members have invested their personal money contributions in the cooperative, which happened particularly dramatically during the purchase of business premises. The third factor of success was a fruit of professionalization of management. The fourth factor of success is the accession of FC Gospodjinci to business association "Vojvodina Agrar", which represents collectively 26 members of the association in negotiations with the buyers (processing companies and exporters) and other business partners. It suffices to say that this association is the largest single supplier of the leading soya processing plant in Serbia, Victoria Group, with a share of about 40%. The fifth factor is the fact that the cooperative has at least partially settled one of the biggest problems faced by the farmers in Serbia, the access to bank loans.

The turning point of the growth took place in 2003 within the participation in the international project with the development agency "Jaeren Produktutvikling" of Stavanger, Rogaland District in the south-west Norway. This development agency had already been engaged in development projects in Norway, Croatia and Bosnia and Herzegovina. They started working in Serbia in 2002 with the cooperatives in Bac and in Gornja Jarusnica. In June 2003, FC "Gospodjinci", FC "Srbobran" of Srbobran, FC "Agro-Raca" of Raca, and FC "Resnik" of Resnik joined the project. In 2005, FC "Brazda" in Rusko selo and FC "Sebecevo" near Novi Pazar also joined. It is interesting to note that almost all of these

cooperatives originate in multiethnic regions with an intention, inter alia, to improve the economic ambiance in these socially sensitive environments. FC "Gospodjinci" joined as one of the smallest among these cooperatives, but very soon outgrew many of them in terms of turnover. The project brought two donations. The first, standard donation according to the project programme, involved a total sum of EUR 350,000, which was distributed according to the following formula: 70% of the funds to the cooperative members and 30 % to the cooperative. Cooperative members were approved a loan of EUR 5000 on a 5-year term for the purchase of machinery or a foundation stock. The cooperative could use its part for infrastructure. Thus, an extruder for soya bean was purchased, an electronic truck scale of a 50t capacity was built, and the storage space within the cooperative was adapted.

The second donation was a non-standard grant for the purchase ofthe former plant for filling steel cartridges with CO2 gas of "Karbodioksid" factory of Becej, which was transformed into the cooperative's head office. This fully arranged and equipped space (electric power, water-supply, access road, buildings) was at sale for DEM 90,000 only. The Norwegian project did not include in its program such a type of support, but the project team rightly assessed that this could be a key step for the cooperative's development. A condition was imposed that the cooperative provide one half of the necessary money. In three days, cooperative members managed to raise about 1 million dinars, and ensured financial assistance from Zabalj Municipality worth 0.4 million dinars. This sum represented more than one-half of the necessary money and was sufficient for the Norwegian project to approve the second half of the necessary funds. The Cooperative got its head-office, storage space, administration building, agricultural pharmacy, etc.

Professionalization of management gave additional impetus to the development.

The Norwegian project required recruitment of a professional director. By that time, directors worked on a voluntary basis. For this purpose was provided a new grant in the form of one-year salary (in a modest amount of about EUR 300 per month). In such circumstances, one ofthe cooperative members, a graduate agronomist, became director which function he has been discharging successfully ever since. The cooperative has also been enabled to assist its members in technical terms by developing its third type of activity, advisory services. The grant earmarked for the director's salary was used, instead for the salary, to develop the fourth activity - purchase of the first stocks of commercial goods for the agricultural pharmacy. The pharmacy justified its existence in the first year having realized a turnover of 4 million dinars. Managing director fits perfectly in the process of decision making, proposed by the Law on the Coops. All 100 coop members are participants to the governing body of the coop (Parliament of the Coop). From the ranks of this governing body seven members are chosen for the Executive Board and 3 members for the Supervisory Board. Managing Director is as well elected from the ranks of the governing body. On the temporary basis the coop is engaging consultants for agriculture issues from the private as well as the state sector. The contractually involved cooperants are not allowed to participate in the aforementioned process of governing the coop.

FC "Gospodjinci" is currently a successful cooperative. Since 2012, the cooperative has its silo and a buying station, the infrastructure which additionally raises security on the side of cooperative members - producers. Current performance is very good. Today, FC "Gospodjinci" has annual turnover of about EUR 2 million. Out of this figure, the pharmacy's share in the said turnover is about 70-80 million dinars (EUR 600,000-700,000). The cooperative employs 7 persons on a full-time basis: director (1), plant protection engineer (1), bookkeeper (1), unloading station and silo (1), pharmacy (2), supporting worker (1). Cooperative members, contract farmers and employees are economically motivated for cooperation and work.

One of the essential factors of unity is also the undertaking of some social functions

by the cooperative. The cooperative is the central institution in the village. It is the place where villagers buy intermediates, sell their products, get advice and store their goods. Also, they find in the cooperative a support for their numerous social activities, such as the work of sport clubs, organization of cultural and sports manifestations, etc (Merrett, Walzer, 2012). They see the future in the strengthening of integral production and in further promotion of cooperatives' joining business associations.

In the former SFRY, cooperatives were based upon association of farmers with small holdings. Average size of a holding was about 4ha per household. Such a holding is economically unsustainable. This is why the existing regulations are oriented towards enlargement of the average holding size, which is expected in the period between 2014 and 2020. Private agricultural production in the SFRY was after 1945 brought down to the production on small holdings while large-scale primary agricultural production was shifted to agro-industrial complexes and only partially to cooperatives. In contemporary circumstances, large-scale private agricultural production is renewing, and holdings are getting larger and larger. Is there a room for cooperatives in this division of labour?

Cooperatives have numerous defects:

a) Management system is complicated and sluggish; cooperative members who are decision-makers are sometimes not sufficiently informed or technically competent to assess or forecast how events will be unfolding;

b) Equality of cooperative members in the decision-making represents a barrier when a loan needs to be guaranteed or when pooling of assets requires participation because some of the members cannot participate at all or can participate with a smaller share, but always have the same vote in the decision-making. Cooperative members who are able to bear the risk are not motivated due to possible risk/benefit asymmetry;

c) Cooperatives' management is sometimes insufficiently professional and does not match the needs of modern agricultural production. Also, (in)competence of cooperative members as such limits their abilities to control the management;

d) Cooperatives either do not have property (new ones) or the property is treated as socially owned and the disposal of which requires consent of the Privatization

Agency through a long and uncertain process; e) The Law on Cooperative Farming is understated - it is neither possible to buy a cooperative nor otherwise transform it in business terms; there is a large number of actions filed concerning the cooperatives because of the unclear status.

On the other side, cooperatives have a great number of advantages (Zakic, Stojanovic, 2009):

a) Trust of cooperative members in collective work, particularly strengthened through the system of collective decision-making and entrusting enforcement of the decisions and reporting on their implementation to one of their members (director);

b) Non-profit nature of the cooperative - which assures the participants in the collective operation that only most necessary costs will be collected;

c) Social functions of the cooperative - for which it is easier to accept than it is for a company, due to its non-profit nature, the financing of social activities in the village.

Cooperatives, in Serbian economy, are moving in the right direction, but slowly and often in back and forth manner.

Framework for future development

It is evident that the development of the cooperative sector in Serbia came to a halt almost two decades ago and that there is no adequate solution. A question can be raised as to what is it so complicated that causes such a long standstill? Several different legal issues cumulated by the evolution of cooperative farming in Serbia have been simultaneously preventing the development of this concrete segment.

Cooperative farming improvement strategy in Serbia would need to rest on the below listed principles.

Settlement of property rights relations - legal status of cooperatives' and/or cooperative unions' property recorded as social or state ownership. Property status determination will, inter alia, make it possible for cooperatives to use such property as an instrument securing the repayment of bank loans.

The legal matter will need to be consolidated so as to ensure the internal and external harmonization of legal regulations. New regulations will lay down the foundations of modern cooperative policy and a relevant legislative-legal ambiance for implementation of the reform in the cooperative sector. Legal recognition and regulation of a higher degree of autonomy of the cooperative sector within the category of economic entities will create a legal basis for enactment of adequate incentives and facilities in separate laws.

Reorganization of cooperative unions needs to be oriented towards placing accent on their business functions. The reorganization will need to reflect primarily in the performance of commercial functions aimed at ensuring better market conditions both on the side of purchase and sale for all cooperatives - members of cooperative unions. Also, it would be necessary for the reorganization to go towards autonomy of the association formed by the

cooperatives on the basis of their free association, and not to be a practically state body vested with public authorizations and powers (Mijatovic, Paunovic, Kovacevic, 2012).

Establishment of a new legal concept of cooperative audit will upgrade the work in the area of cooperative audit, in conformity with positive examples from the world practice.

The cooperative sector is not able to settle the above issues without the influence of the state. Independent acting of market mechanisms has already led to a significant decrease in the number of active cooperatives and even to their disappearance in some parts of the country. Absence of active government measures would result in implosion of this segment of business operation in the long run.

A set of different measures is in place which can be used by the government to help further development of the cooperative movement in Serbia. The first set includes the measures of regulatory nature. Adoption of the new law would help arrange in a much better way the form and organization of cooperatives, their management, funding and property with an accent placed on the return of socially- and state-owned property to cooperate ownership.

The second set of measures, non-regulatory and economic in nature, relates to stimulating cooperative development. These measures include subsidies and other types of government assistance (inviting applications for participation in programs and projects). This set also includes the measures of social nature, with a lower level of government intervention, such as various forms of information, educational and media campaigns aimed at raising the level of awareness on the side cooperative members and users of cooperatives' products and services (Sunderic, 2008). Also significant are the measures for raising the level of professionalism of cooperative members, and those relating to the strengthening of social responsibility (Deller, Hoyt, Hueth, 2009). Genuine effects of these measures will be accomplished only if they will follow the application of the law that has settled the essential issues in advance.

The expected improvement of the business environment should stem from the new law on cooperatives, which is to be proposed by the Ministry of Economy. It will be the basis for the simple and clear way to regulate this area and would contribute to increased motivation and interest in the establishment of cooperatives. In addition to the Law on cooperatives, better development of the cooperative sector will be supported by the development of Law on internal organization of the agricultural market, currently under the jurisdiction of the Ministry of Agriculture and Environment. This regulation will define the organization of agricultural producers that would be licensed and controlled by the Directorate for Agrarian Payments. These organizations are, in essence, associations of all producers of one kind of product. They are significant for the state administration because they represent a single point of contact with all producers of that product, which co-operatives are currently not providing. Furthermore, the improvement of the cooperative sector will be achieved through the inclusion of advisers for agricultural associations to assist in the creation, establishment and more efficient functioning of the cooperatives in Serbia.

Conclusions

Change and creation of a stimulating legal framework and settlement of the property status of old cooperatives is the first and the most important task in the creation of a favourable ambiance for a successful development of cooperatives in Serbia. The issue of cooperative property disposal dates back to 1974, followed by two unsuccessful attempts for its settlement in 1990 and 1996, so that the outcome is a very small number of decided court cases.

Government support is necessary, in reasonable amounts, however, and targeted in a manner to spur the activities that produce specifically defined effects (Iliopoulos, 2013). It is advisable to avoid leasing in the cooperative sector, and also the negative discrimination of the private sector (Mijatovic, Paunovic, Kovacevic, 2012).

Cooperative unions must get reorganized by putting in the focus of their work the interest of the cooperatives instead of the interest of own administration and the state. Cooperative unions which help accomplishment of the market objectives of their members contribute to the settlement of diverse issues of the member cooperatives, enable networking and exchange of experience and knowledge, and also lobby for a better position of the cooperatives, such as the Cooperative Union of Vojvodina, contribute to the recognition of the cooperatives' role in the national economy (Sevarlic, 2012).

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ZADRUGE U SRBIJI - RAZVOJ I AKTUELNA PITANJA

Biljana Chroneos Krasavac3, Goran PetkovicC4 Rezime

Zadruge u Srbiji imaju duboko istorijsko nasleäe, razvijajuci se od tradicionalnih poljoprivrednih porodica do savremenih socijalno umrezenih organizacija, a ponekad i privatnih kompanija koje se ponasaju kao zadruge. Postojeci pravni okvir sa jedne strane, otvaraprostor za citav niz mogucnosti, dok sa druge strane, na odreäeni nacin, onemogucava dalji razvoj zadruga u Srbiji. Intervju sa kljucnim akterima u sektoru zadrugarstva je istrazivacki metod koji je koriscen u radu. Ostali istrazivacki metodi ukljucuju istorijski metod, metod komparativne analize kao i metod studije slucaja. Radom se zakljucuje da je pravni status zadruzne svojine glavna prepreka daljem razvoju zadruga u Srbiji. Meäu ostalimkljucnimpreprekamanavode se: stepen ilinivodrzavnogmesanja, lojalnostprimarnih proizvoäaca i ostalih ucesnika, prosecna velicina poseda po gazdinstvu, itd. Rad se sastoji iz tri dela: istorijat razvoja, studija uspesnog slucaja, okvir i smernice buduceg razvoja.

Kljucne reci: zadruge, pravni okvir, vlasnistvo, poljoprivredno gazdinstvo, individualniproizvoäaci

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3 Docent, dr Biljana Chroneos Kresavac, Univerzitet u Beogradu, Ekonomski fakultet, Kamenicka 6, Beograd, Srbija, Telefon: +381 11 30 21 186, E-mail: biljanak@ekof.bg.ac.rs

4 Redovni profesor, dr Goran Petkovic, Univerzitet u Beogradu, Ekonomski fakultet, Kamenicka 6, Beograd, Srbija, Telefon: +381 11 30 21 130, E-mail: pego@eunet.rs

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