IJERD – International Journal of Environmental and Rural Development (2014) 5-2

Research article
erd

Organic Food Production as a Development Opportunity
for Serbia
JELENA PETROVIC*Business Economics Academy, Cacak, Serbia
Email: jelena1809976@gmail.com

NOUREDDIN DRIOUECH
Mediterranean Agronomic Institute of Bari (CIHEAM-MAIB), Valenzano, Bari, Italy

ADRIANA RADOSAVAC
Faculty of Agriculture, University of Novi Sad, Novi Sad, Serbia

STEFAN KOCIC
Business Economics Academy, Cacak, Serbia

ALEKSANDAR STOJANOVIC
Agricultural Extension Service, Pozarevac, Serbia

SINISA BERJAN
Faculty of Agriculture, University of East Sarajevo, East Sarajevo, Bosnia and Herzegovina

VESNA MILIC
Faculty of Agriculture, University of East Sarajevo, East Sarajevo, Bosnia and Herzegovina

HAMID EL BILALI
Mediterranean Agronomic Institute of Bari (CIHEAM-MAIB), Valenzano, Bari, Italy
Received 19 November 2013

Accepted 1 April 2014(*Corresponding Author)

Abstract Serbia doesn’t have many competitive advantages in relation to the competition
it faces. The growing demand for food has led to the fact that agricultural production relies
mostly on the use of chemicals, which endanger human health and disrupt nature balance,
and all in order to achieve a higher yield and profit. However, in the process ofglobalization, the only thing Serbia could rely on, except trained staff, are the natural
resources. Favorable climate, large areas of arable land and forests, a healthy environment
are the main prerequisites for the development of organic production (OP) in Serbia. This
paper aims at giving an overview of the current situation of the Serbian organic sector
especially potential, animal and crop production, governance, legal framework and market.
Some solutions to overcome the main barriers to OP development are discussed. This
paper is based on a secondary data review and exploratory semi-structured interviews dealing mainly with reasons for converting to organic; marketing channels; problems;
impacts; access to agricultural extension - conducted in summer 2013 with 40 organic
producers randomly chosen from cities/municipalities all over Serbia. Statistical methods,
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, induction anddeduction, as well as the technique of comparative analysis were used. The results indicate
the advantages which increase in the organic production could bring to Serbia, such as
economic growth, increased exports, reduced trade deficit, sustainable natural resourcesmanagement and rural development. For allowing OP to express all its potential, domestic
market should be further developed, legal framework and governance enhanced andinstitutional and financial support secured. Due to high prices of organic food in the world
market organic production can be a key generator of economic growth and socio-economic
development in Serbia, especially in rural areas.
Ⓒ ISERD

28

IJERD – International Journal of Environmental and Rural Development (2014) 5-2

Keywords organic production, economic development, Serbia

INTRODUCTION
In developed countries, where modern agriculture with the aggressive use of all available chemicals
has led to degradation of the quality of air, water, land, is almost impossible to establish organic
production, resulting with a huge lack of organic products. Therefore, the developing countries,
where the agricultural system is still preserved, have a chance to increase their exports throughorganic products. In the European Union (EU), sales of organic products have tripled in the period
2001 to 2008 (FiBL, 2010). The largest European market for organic products is in Germany. It isestimated that the share of these products in the food market will continue to grow in the coming
years.
Serbia has 5.11 million hectares of agricultural (60% of the territory) and 4.1 million hectaresof arable land (Chamber of Commerce and Industry of Serbia, 2013). Serbian agriculture is facing
many problems, such as the small size of the private households, unorganized farmers, reduced
state subsidies, inability to achieve sales, etc. Even so, Serbia has conditions and outstanding
opportunity in the production of organic food.
The fact that over 80% of land in Serbia is in uncontaminated soil, that there are areas that are
not still exploited, which could be used for organic production (OP) without major investments, aswell as a high percentage of rural population, can be pointed out as the important prerequisites forthe successful development of the OP in Serbia (Ćurkovic, 2013). Inglorious facts about the lowlevel of industrial production in Serbia, gives to this country, in terms of the development oforganic agriculture, an incomparable advantage in relation to the EU, due to the lower
concentrations of pollutants in the environment. Organic agriculture is focused on the future andimprovement of the environment and human health; therefore the benefits of investing in it havetimeless character.
Today’s state of Serbian agriculture, its potentials and limitations, still have the same trend that in agriculture are used less inputs than are really needed - and therefore the results are lower
than desired. The last 10 years, agriculture is going through a transition phase, and the entire
Serbian economy as well, which involved privatization process that has been implemented without
adequate and clearly defined measures of agricultural development policy. Currently the only
competitive advantages of Serbia are the natural resources, low labor costs and low land prices(Tomic & Tomic, 2011).
However, available resources (favorable natural and climatic conditions) are not sufficient forthe survival of agriculture and sustainable rural development. It is necessary to support thedevelopment of agricultural and rural policy with adequate and intensive budget allocation.
Organic farming achieves more stable and better yields (Kilrcher, 2007). The market of foodproducts has greater earning power through higher selling prices, and thus provides greater
economic benefits in the form of profit and long-term economic benefits.
The most important organic agro-food products in Serbia are wild or cultivated berries, frozen
and dried plums, sour cherries, organic certified jams, sweets, apple concentrate, vinegar andjuices, and salted and dried wild mushrooms. The main regions for organic fruit production are
Central and South Serbia.
Certified organic vegetable production is relatively small. While fresh, frozen and preserved
vegetables, especially ground red peppers, are mainly exported, some fresh vegetables find their
way to domestic market as well. In Vojvodina, organic cereals are well developed. There are few
examples of organically certified livestock production.
The Serbian market is still largely dominated by conventionally produced products. There is aslight growth of demand for organic products, but still consumers are skeptical and confused, since
there have been many products on the market with labels for “healthy food” like natural, bio, eco,organic, but none of them is certified organic product. Market channels of the organic products in
Serbia are on-farm selling, farmers green markets, large supermarket chains and specialized shopsof healthy food.
Ⓒ ISERD

29

IJERD – International Journal of Environmental and Rural Development (2014) 5-2

This paper aims at giving an overview of the current situation of organic farming (legal
framework, production, market) in Serbia and highlighting its potential as a development
opportunity for Serbian rural areas.
METHODOLOGY
The work is based on a secondary data review and exploratory semi-structured interviews. The
main secondary data sources were ministries (Ministry of Agriculture), professional organizations(Chamber of Commerce and Industry of Serbia, Serbia Organica association), universities(Belgrade, Novi Sad), the International Federation of Organic Agriculture Movements (IFOAM),
Research Institute of Organic Agriculture (FiBL), the Mediterranean Organic Agriculture Network(MOAN), United States Department of Agriculture (USDA), etc.
Semi-structured interviews (SSI) were conducted in summer 2013 with 40 organic producers
randomly chosen from several cities/municipalities all over Serbia: Sombor, Kraljevo, Novi Sad,
Negotin, Kovacica, Vrsac, Pozarevac, Cacak, Subotica, Zrenjanin, Soko Banja, Bojnik, Barajevo,
Bela Crkva, Pecinci, Petrovac na Mlavi, Kursumlija, Becej, Sremski Karlovci, Kanjiza, Vrbas,
Zagubica, Srbobran, Krusevac, Kikinda, Alibuna and Zabalj. The checklist prepared for SSI
included 24 questions dealing mainly with: reasons for converting to organic farming; organic
animal and crop production as well as beekeeping; main marketing channels; problems andconstraints; main economic, social and environmental impacts of organic agriculture; access toagricultural extension and subsidies; main sources of information about organic agriculture;
involvement in organic agriculture projects and initiatives; social capital of organic producers;
collaboration and contact with other institutions and actors; etc. Some solutions andrecommendations to overcome the main barriers to organic production development are discussed.
The average age of the interviewed organic operators is 48.3 (age range: 29-73). In the total
number of interviewees, 75% are men and 25% are women. Among the interviewees there are no
illiterate, 80% have secondary education, while 20% of them have high education. The surveyed
rural households generate income mainly through farming, pensions and salaries from the public
sector. Farm surface ranges from less than one to about 2000 hectares. Land use is dominated byarable crops mainly cereals and vegetables.
It should be pointed out that the lack of a central database system makes it very hard to give
precise figures about the size of organic production in Serbia.
RESULTS AND DISCUSSION
For the last ten years, production and processing of organic products in Serbia became more
popular and economically more important, considering the first steps made in OP in late 70’s
(GAIN, 2009). According to the MOAN, with a view to further development of organic farming in
the Mediterranean countries, Serbia is at the very top as the country with the largest number of
hectares intended for organic production, immediately after Italy. As Serbia is full of regions thatare practically “untouched nature”, there is a chance for these areas to be immediately engaged inorganic farming without wasting time for conversion (which is a big advantage in terms of costsaving and profit) (MAIB, 2008).
The Serbian Law on Organic production and a number of regulations control the production ofagricultural products and other methods of organic production and processing, storage,transportation, marking, labeling and sale of these products, their certification and recertification,
as well as other important issues in this area (Republic of Serbia, 2010). The goal is to obtain aproduct with documented production procedure, contributing to sustainable socio-economic ruraldevelopment, consumer protection, sustainable natural resources management, soil fertility, etc.
Nevertheless, the process of harmonization of Serbian legislation with the EU acquis in the field oforganic farming is still pending. For this reason, there is an ongoing initiative for amending theexisting Law from 2010.

Ⓒ ISERD

30

IJERD – International Journal of Environmental and Rural Development (2014) 5-2

An increase of about 30% of plant area with organic production as well as a complete growthof organic livestock production has been recorded in Serbia from 2011 to 2012. Arable land used
for organic farming occupies an area of over 11,000 hectares, dominated by fruit (46.36%) andcrops (41.31%), with the constant growth in production of grains and oilseeds, meadows andpastures (7.57%), while the vegetables are grown on 4.77% of organic area. Most of these products
are exported, especially in the EU, as the domestic market is underdeveloped due to lack ofpurchasing power. Legislation for organic food harmonized with EU regulations is the basis forsuch food production and its export, but as itself is not enough. State support in the placement ofgoods to foreign markets and to small producers of organic food is essential. If considered thatorganic food is 30-50% more expensive than conventional, and the standard of living in Serbia isvery low, it can be concluded that the only secure sales that can be provided to organic foodproducers, are sales across national borders.
Although in recent years the production of organic food is gaining importance in Serbia, thenumber of people engaged in this branch of agriculture is extremely low. In this area it is necessary
to possess the adequate knowledge and skills to deal with the OP, as well as the knowledge ofapplying fairly strict standards and controls. The problems faced by the OP in Serbia are primarily
low social and political awareness of the importance of organic agriculture to life and health of thenation, as well as the economic benefits of this type of agriculture. Due to the lack of adequate,
understandable and easily accessible literature, actors involved in organic agriculture are poorly
informed. High cost of certification, lack of state support to organic agriculture, a declining budget
for agriculture, underdeveloped markets and sales channels are the main difficulties faced by
farmers entering the sector of organic production.
With less than 0.01% of the products consumed in Serbia being organic, compared with 3-4%
within Europe, growth is inevitable (GAIN, 2009). Almost 90% of organic products in Serbia are
aimed at the export market (e.g. EU, U.S., Japan). As the demand on the world market increases, it
is expected that in the future period the production in Serbia will find more customers - both abroad
and in the country - thus fostering economic strength and competitiveness of the Serbian economy.
As the organic farming does not use harmful synthetic chemical substances in the form of
pesticides, requires more labor force participation, i.e. this type of production can be very
supportive in reducing unemployment in rural areas. In Serbia there is still a trend of migration of
population from rural to urban areas, so that rural areas become economically depressed anddevastated. The potential that has organic farming and its benefits can significantly improve
employment and thereby reduce the gap in living standards between the big cities and rural areas,
as well as keep population growth in agricultural Serbian areas (Berber et al., 2011).
The exploratory field survey showed that the main reasons for converting to organic farming
are: economic profit; environmental protection; personal satisfaction and healthy production. Mostof the interviewees consider that organic agriculture has generated multiple economic benefits totheir rural households and communities thanks to higher prices (premium prices) and income,lower production costs and local economy revitalization. The main social impacts of organic
agriculture are the level of trust and solidarity achieved within society, physical and psychicalsatisfaction, and social capital strengthening. Meanwhile, the main environmental impacts are
reduced soil and water pollution and the conservation of biodiversity (e.g. local and traditionalvarieties).
All the interviewed organic operators were crop and animal producers. However, some ofthem deal also with other activities such as processing (67.5%), retail sale (17.5%) or beekeeping(7.5%). The field survey showed that a wide range of crops is grown organically in Serbia. The
most common organically grown crops are: onion, pepper, carrot, potato, tomato, rye, maize,
buckwheat and barley. As for livestock, the most important reared species are bovines, goats, sheep
and poultry. The interviewed organic operators have about 46 beehives.
The main marketing channels used by the interviewed organic producers are on-farm sale andfarmers’ markets. Also, supermarkets, exhibitions and fairs are relevant marketing channels.
Most of the interviewed organic operators (82.5%) think that the decision to convert to organic
was appropriate as production of healthy food is a good way to increase household income and to
make agricultural production more sustainable. The main problems faced by the interviewedⒸ ISERD

31

IJERD – International Journal of Environmental and Rural Development (2014) 5-2

organic operators are difficulties in finding organically allowed inputs in the market, highcertification costs and absence of support. They mentioned also other constraints such as highprices of organically allowed inputs, marketing/sale difficulty, very rigid regulation, lack oftraining on organic farming.
According to the organic operators, institutions that should make more efforts to solve theproblems they face are: the State, municipalities, cooperatives and the extension service. It is clear
from the provided answers that a joint effort of many institutions is necessary.
Half of the interviewed organic operators declared that they received subsidies and 45% didn’t
receive them. The main subsidies and incentives needed by the interviewed Serbian organic
operators are for certification, input procurement, equipment and more financial resources meaningeasier access to funds and loans with low interest rates. However, additional requests concern
support for organic farms mechanization and for storage, processing and irrigation facilities.
As for the social capital of organic operators, 70% of the interviewees are members ofagricultural and/or rural associations and cooperatives. Some organic producers are also membersof other participatory and civil society groups or organizations. Only 10% of the interviewees do
not have any ongoing collaboration with other institutions. The remaining, 90%, deal with thefollowing institutions: municipalities, Ministry of Agriculture; cooperatives (e.g. Ekoland herbs,
Spice Germany), research institutes (e.g. Veterinary Institute of Serbia, Institute of Field andVegetable Crops, Institute for Nature Conservation of Serbia, SP Laboratory Becej), certification
bodies, extension service, etc.
The interviewees get information about organic agriculture through magazines andnewspapers mostly and via Internet; a significant number of organic operators are informed
through courses and conferences, trips and visits to other organic farms as well as through TV andradio. More than a half of the interviewed organic producers (60%) has contact with theagricultural extension staff and uses services provided by them. Used extension services andinformation are related to fruit and vegetable growing technologies, subsidy possibilities, soil
fertility management and certification. According to MAIB (2008), most organic producers andprocessors in the Western Balkan Countries (WBC) complain about the lack of adequate advisory
services which are crucial for the well-functioning of the whole organic supply chain. The creationand improvement of supporting structures and services for production and market development is
crucial.
Around 70% of interviewees do not know anything about organic agriculture programs andprojects, but would like to know more, while only 20% of them have been involved in previous
ones. According to the National Association for Organic Production - Serbia Organica (2013), withthe aim of further promoting and reaching a higher share of organic food at the greenmarkets,“Serbia Organica” launched in July 2011 - in cooperation with the Public Utility Company “CityMarkets” - the project “Organic Food Greenmarket”, currently implemented on one of the Belgrade
greenmarkets. Stalls with organic products are present at other Belgrade greenmarkets as well. In
view of the success of the project and interest shown by both buyers and sellers, organic food stallsshould be part of permanent offer at the city greenmarkets.
EU Member States in their own significant production still show the need for imports oforganic products. Serbia can take advantage of this opportunity and provide the foreign market
with important amounts of organic products. Production and economic impact of agriculture in
Serbia are not at the level of the opportunities provided by rich natural resources and the country
lags behind competitor countries in the region. The world market for organic food is ruled by thesame economic principles as well as in other sectors. Demand is growing much faster thandomestic supply, and it is this trend that can lead one economy to transform its potential of organic
food production into export opportunities. With this possibility and opportunity Serbia could easily
strengthen export and domestic market as well. The increase in exports is one of the most important
prerequisites for increasing economic activity in every country, especially in small developing
countries. The increase in exports contributes to macroeconomic stability of the country, increasing
production, and therefore employment and living standard of citizens and allows service of external
debt.
Ⓒ ISERD

32

IJERD – International Journal of Environmental and Rural Development (2014) 5-2

The interviewed organic producers provided many recommendations for improving thedevelopment process of OP in Serbia: more active involvement and support of the Ministry ofAgriculture and other state institutions, higher level of state subsidies, favorable loan conditions
and better support from the financial institutions, faster and easier certification, more strict State’scontrol on traffic of pesticides in organic production and in regulating markets, implementing ofappropriate strategy for development of organic farming, etc.
CONCLUSION
The economics of the current food system are unfavorable for many food chain actors including
producers and consumers. Many studies highlight the potential of organic agriculture as asustainable development opportunity for developing and transition countries. Organic agriculture
development brings about multiple and multifaceted benefits to rural economies, urban consumers
and the society as a whole. It contributes also to farmer livelihoods improvement, environmental
protection and public health enhancement. Organic farms have economic multiplier effects that go
beyond the farm boundary. They support local economies in rural communities by providing jobs
for community members and purchasing local products. Short supply chains initiatives (e.g.
farmers markets, food cooperatives, community-supported agriculture) allow consumers to put
their money directly into farmers’ pockets thus strengthening sustainable regional food systems.
Organic production is very important for Serbia as it has always been an agricultural country
with rich natural resources and a long production tradition. As more consumers consider theenvironmental, health and social consequences of industrial food production, demand forsustainably raised foods is growing. Contemporary trends and awareness of the necessity of ahealthy society and preservation of the environment fostered an organic production as analternative to conventional agriculture. Farmers are dedicating more and more land to organic
production in response to consumer demand.
Organic farming has a significant role in rural areas as it allows developing economies,
diversifying activities and attracting financial resources therefore it is an integral part of rural andagricultural development strategy. Organic agriculture provides opportunities for the developmentof family farms and small producers in Serbia, the promotion of eco- and agro-tourism and thepreservation of traditions. In this sense, the contribution of the state, in the form of proper funding
and subsidies to organic producers, is invaluable and important for the whole national economy. At
the same time, state’s interventions should also aim at improving the access of organic producers to
information and communication of organic food products properties and features to consumers.
REFERENCES
Berber, N., Đokic, N., and Kocic Vugdelija, V. 2011. Organic agricultural production as an element of thestrategy of sustainable development in Serbia. Faculty of Economy, Novi Sad.
Chamber of Commerce and Industry of Serbia. 2013. Privredne Vesti: Hrana donosi šest milijardi dolara(Serbian Business News: Food returns six billion dollar), (Available from; http://www.pks.rs/
Vesti.aspx?IDVestiDogadjaji=7792, accessed on 20.09.2013.).
Ćurković, V. 2013. Finansijska podrška države proizvodnji organske hrane - velika razvojna šansa Srbije(State's Financial Support for production of organic food - a development opportunity for Serbia),
Belgrade.
FiBL. 2010. Organic farming in Europe. Organic Europe: European section of the Organic Word website.
Research Institute of Organic Agriculture (FiBL), (Available from; www.organic-europe.net, accessedon 20.09.2013.).
GAIN. 2009. Organic agriculture in Serbia. GAIN (Global Agriculture and Information Network) report
number RB9002. United States Department of Agriculture (USDA) Foreign Agricultural Service.
Washington DC.
Kilcher, L. 2007. How organic agriculture contributes to sustainable development. Journal of Agriculture andRural Development in the Tropics and Subtropics (JARTS) Germany, Supplement 89, 31-49.
MAIB. 2008. Organic agriculture in the Balkan area: a comparative analysis. Mediterranean Agronomic
Institute of Bari (MAIB), Bari, Italy.
Ⓒ ISERD

33

IJERD – International Journal of Environmental and Rural Development (2014) 5-2

National Association Serbia Organica. 2013. Organic agriculture in Serbia at a glance. Belgrade.
Republic of Serbia. 2010. Law on organic production. Official Gazette No 30/2010, Belgrade.
Tomić, R. and Tomić, D. 2011. Proizvodni potencijali agroprivrede Srbije - faktor unapredjenja
konkurentnosti (Production potential of agrarian sector in Serbia - a factor of improvement ofcompetitiveness). School of Business 3/2011, Belgrade.
Vittuari M. 2011. Organic Balkans. Stakeholders, policies, and institutions: a regional perspective.
Osservatorio Balcani e Caucaso, Trento.

Ⓒ ISERD

34