SMALL RURAL HOUSEHOLDS IN SERBIA AND RURAL NON – FARM ECONOMY Natalija Lj. Bogdanov Belgrade 2007 SMALL RURAL HOUSEHOLDS IN SERBIA AND RURAL NON-FARM ECONOMY Author Prof. Dr Natalija Lj. Bogdanov Publisher UNDP Serbia For more information, please contact: United Nations Development Programme Internacionalnih Brigada 69 11000 Belgrade, Serbia Editor Nenad Moslavac Poverty Reduction and Economic Development UNDP Serbia ISBN 978-86-7728-046-8 Translation Branka Robertson Proofreading Martin Malcolm Turner Centre for Rural Policy Research University of Exeter, UK Paul Keating Irish LEADER Support Unit (ILSU) Tipperary Institute, Ireland Cover Design Jelena Labus MASSVision d.o.o. Kneginje Ljubice 12 11000 Belgrade, Serbia Graphic Design and Prepress MASSVision d.o.o. Printed by DIS PUBLIC d.o.o. Belgrade 200 copies Belgrade, 2007 Contributors to the publication 1. UNDP Rural Development Task Force 2. UNDP Poverty Reduction and Economic Development Cluster 3. Sonja Avlijaš, Economic Development Researcher Center for Advanced Economic Studies Suggested citation Bogdanov, Natalija (2007) Small Rural Households in Serbia and Rural Non-Farm Economy, Beograd: UNDP Serbia [Internet] Available at: www.undp.org.yu SMALL rural HOusehOLDS IN Serbia AND rural NON-farm ECONOMY was prepared on the basis of carried out needs assessments of small rural households and local rural stakeholders, outsourced to the Strategic Marketing Research Agency (SMMRI Group) in 2006. The final field research data, stakeholder analysis, interviews, and other information on the relevant subject was further collected, interpreted and compiled into a final report. The author of the final report is Prof. Dr Natalija Bogdanov, from the Faculty of Agriculture of University of Belgrade, who was engaged as Senior Rural Development consultant for UNDP in Serbia. This publication includes and acknowledges the comments and contributions of UNDP Rural Development Task Force in Serbia and UNDP Poverty Reduction and Economic Development Cluster, Sector for Rural and Agriculture Development of the Ministry of Agriculture, Forestry, and Water Management of the Republic of Serbia, and from other stakeholders who were directly or indirectly involved in the final review of the document. The research project implementation and preparing of the publication was financially supported by the Austrian Development Agency and UNDP in Serbia. The opinions presented in this publication are those of the author and do not necessarily reflect the views of the United Nations Development Programme. 5 FOREWORD An analysis of the needs of small rural households, which gave incentives for writing this significant book, is the first of such analysis in Serbia. In-depth approach of the study and applied methodology presented through the results, enabled an assessment of the importance of the non-agricultural segments of rural economy, of which we know very little. This publication should assist in bringing to an end the negative attitude towards the phenomenon of eclecticism in the rural economy. It will also amply viewing the diversification of agriculture and its multifunctional roles, as well as the diversification of rural economy outside the farm, as an opportunity for the revitalization of Serbian rural areas. The Serbian village requires this in order to be excluded from any discourse of the poverty as a rural phenomenon. The Serbian society, however, needs this in order to preserve its health and culture and its natural resources. At last, Serbia as a state is in a need of such work, in order to establish a support system, which will enable a better life for its entire population. I hope that we will continue successful cooperation with UNDP in establishing theoretic baselines for the development of rural Serbia and materialize it through thriving development projects on its entire territory. The Ministry of Agriculture, Forestry and Water Management is decisive in accepting full responsibility for mobilizing the complete administration, all its resources and bodies and providing support to the development of rural areas, which will return their dignity and place in society where it undoubtedly belongs. Dr Suzana Đorđević-Milošević, Assistant Minister for Agriculture and Rural Development Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia 5 6 7 FOREWORD One of the overall activities of the United Nations Development Program, falling under the key objectives of the Millennium Development Goals, is the fight against poverty. Poverty, as such, is present in many aspects of today’s world and it affects both the urban and the rural population. In Serbia, it is clear that poverty is markedly greater among the rural population compared with the urban population. Thus, opportunities for helping rural households to have a better and more sustainable livelihood must be sought and used. This study focuses on rural development, and in particular on small rural households, and gives recommendations as to what measures should be taken in order to improve the status of rural development in Serbia. It specifically focuses on small rural households since they represent a large percentage of the Serbian rural population. One conclusion of the study is the importance of diversification of activities, and therefore of income, is important for small rural households. This is supported by comparative analyses from countries in the region, and from new EU members. This diversification brings favorable impacts in particular among vulnerable groups such as the impoverished, youth, and women. The study also highlights the important impact that rural non-farm economy development may have on rural development, and on the reduction of rural poverty. Among the recommendations of the study are to promote the local community participation and cooperation in rural development efforts, and to increase the knowledge available to rural households through well-thought educational programs and innovative approaches. The recommendations should be of special importance for rural development stakeholders such as the Government, donors, non-governmental organizations, the private sector and local authorities. The project of Small Rural Households in Serbia was initiated as a response to the request of the Ministry of Agriculture, Forestry and Water Management. The publication and the research study were undertaken jointly by the Ministry and UNDP, with funding from the Austrian Development Agency. I would like to take this opportunity to thank all the members of the UNDP Rural Development Task Force, the members of the Donor Group on Agriculture and Rural Development, and the Sector for Agriculture and Rural Development of the Ministry of Agriculture, Forestry, and Water Management for participating in the project and in the development of the publication. 6 7 I hope that this publication will help to all who are concerned about rural development in Serbia to work towards inclusive growth within rural development, and to help create sustainable livelihoods for the rural population. I trust that our joint rural development programming and partnerships will continue to be nurtured and contribute to a better life for the people living in small rural households and rural communities in Serbia. Lance Clark UN Resident Coordinator and Undp Resident Representative 8 9 ACKNOWLEDGEMENTS The author of this publication expresses the genuine gratitude to Mr. Nenad Moslavac for the extraordinary assistance and cooperation during the whole period of implementation of the „Need Assessment Analysis of Small Rural Households in Serbia and Rural Non Farm Economy“. Mr. Moslavac, programme manager of UNDP has been engaged as the focal point for Rural Development within the Poverty Reduction and Economic Development (PRED) Cluster, a department of UNDP in Serbia, but also he is working towards his MSc degree at Imperial College London, Department of Agricultural Science, of the University of London in UK. Therefore, his devotion, responsibility, and enthusiasm on the subject were an indispensable inspiration and assistance to the author at all stages. Nenad’s creativity and invaluable support is due to all respect. The author would like to express the highest appreciation to the UNDP CO Serbia, and especially to the PRED Cluster for having the confidence in her and giving her the privilege to work on the research which implied high professional challenge, valuable experience and knowledge gained throughout the implementation. For the very useful suggestions in the systematization of the text and final interpretations of the research results, the author credits the reviewers Mr. Paul Keating (of the Irish LEADER Support Unit and Sustainable Rural Development Department of the Tipperary Institute, Ireland) and Mr. Martin Turner (Senior Research Associate of the Department of Geography and Assistant Director at the Centre for Rural Policy Research of University of Exeter, UK). Their suggestions and comments significantly improved the final form of the publication and contributed to the systematical outline of the work. The great admiration of the author belongs to Dr Sophia Efstratoglou (Professor at the Agricultural University of Athens, Greece) with whom it was a pleasure to corporate and whose immense experience and in-depth knowledge helped in understanding and interpreting of the rural development indicators in Serbia. Author is grateful to Dr Panagiotis Kolyris (Rural Development Expert on Support to a Rural Development