Countries: Serbia

Agricultural sector development in Serbia has been severely impeded during the last 20 years by the economic fluctuations and political problems which followed the break-up of the former Yugoslavia. As a result, agricultural output has been far below its potential. These influences have also depleted the capital base of farmers and agro-processors, leading to inefficient production and public institutions that are ill-suited to a market economy. Fruit producers from Tavankut and Backi Vinogradi were among those affected by the political and economic changes in Serbia. Major problems were related to the lack of investment resources and non commercial loan arrangements (high interest rates, collateral and payback period). Also, extension services were not able to provide quality services. Consequently, farmers were stuck with old fashioned apple orchards not marketable to sophisticated markets in Europe.

 

Recognizing the significant potential for the growth and development of fruit farming , USAID through its implementing partner ADF supported the “Vocko” cooperative from Tavankut, a community near Subotica, by providing it with basic equipment for handling and storing the apples. In addition, ADF negotiated preferential loan arrangements for the cooperative and facilitated capacity building trainings for its management. Following its initial achievements, the cooperative decided to partner with the “Prima” cooperative from Backi Vinogradi and to register a Fruit Marketing Federation, titled “Apple Land.” In addition, the Federation invested into the construction of two cold storage facilities with the potential to store around 2,500 tons of the first quality apples in 2006. The cold storage facility construction in Backi Vinogradi is designed using “controlled regime” (ULO) technology, a system which provides multiple benefits, the primary advantage being preservation of the apples until the period when demand is high and offer very limited. The increase in price ranges from 30-40%, which shall ultimately repay the investment in a period of three to four years.

 

These groups’ success is evidenced by the support provided by the Serbian Ministry of Finance in construction of the facilities. As the Federation was obliged to commit at least the same amount of money into the cold storage setup, ADF/CRDA negotiated with the ProCredit Bank to approve $80,000 in loans and $200,000 in leasing for the cold storage equipment to 25 “Vocko” cooperative members under very favorable conditions. Furthermore, 30 “Prima” Coop farmers accepted a loan arrangement from Hypo Alpe Adria bank averaging from $15-25,000. The investments resulted into the cold storage in Backi Vinogradi being operational since the end of 2005, while the Tavankut cold storage facility will be operational for the harvesting season in 2006.

 

ADF recently provided the Fruit Marketing Federation with sophisticated equipment to handle apples in the cold storage, including forklifts and digital scales. Additionally, the cooperative from Tavankut created its own extension service by contracting 5 local experts in fruit production. Therefore, farmers secured apple quality and cut production costs, making the final produce marketable. “Vocko” farmers are winners of several awards for the quality of apple on regional fairs in Serbia and Montenegro.