1. food and drink
2. food
3. fruits and vegetables

Global and Local Raspberry Supply Chains:
National-level Report of Serbia
Zaklina Stojanovic, Biljana Jovanovic Gavrilovic,Dragan
Loncar, Irena Jankovic,Bojan Ristic, Mirjana Gligoric
Faculty of Economics, University of Belgrade, 2015.
2015
GLAMUR is a EU FP7 project that aims at integrating advancement in scientific
knowledge about the impact of food chains to practice, to increase food chains
sustainability through public policies and private strategies. This general objective
will be pursued through the following specific objectives:
• To develop and validate a performance criteria matrix for assessment and
comparison of food chains operating at a range of geographical scales
through analysis of how food chain impacts are communicated in different
spheres of society.
• To build a database of quantifiable indicators of impact and a set of 20 case
studies aimed at understanding how impacts are generated within specific
food chains.
• To advance knowledge on methodological problems and trade-offs arising
when measuring and comparing the impact of food chains within and between
sectors.
• To assess how performance is perceived by stakeholders in different national
contexts through participatory assessment and multi-criteria analysis of the
different typologies of food chains.
• To assess the actual and potential role of public and private policies
addressing food chains and to turn assessment into policy recommendations.
• To build a network that turns the advancement of scientific knowledge into
decision making tools for domestic and public consumers, producers, citizens,
scientists, policy makers, civil society organizations.
Report to be quoted as:
Zaklina Stojanovic, Biljana Jovanovic Gavrilovic, Dragan Loncar, Irena Jankovic,
Bojan Ristic, Mirjana Gligoric. (2014) Global and Local Raspberry Supply Chains.
National Level Report of Serbia. Belgrade: Faculty of Economics, University of
Belgrade
www.glamur.eu
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Global and Local Raspberry Supply
Chains: National Report of Serbia
Zaklina Stojanovic, Biljana Jovanovic Gavrilovic,
Dragan Loncar, Irena Jankovic,
Bojan Ristic, Mirjana Gligoric
Faculty of Economics, University of Belgrade
2015
www.glamur.eu
3
Summary
The analysis of the local food chain addresses the Serbian fresh raspberries
produced in the Arilje Municipality (Ariljska raspberry - Ariljska malina). However,
almost entire raspberry supply chain in Serbia has been globally oriented. The
research questions addressed in our case study are defined within the WP3
framework, while specific research questions are collaboratively designed with
the Latvian team (Baltic Studies Centre, Riga) and address specific issues in
berries sector. The report elaborates ten attributes in total while the common list
of attributes was shortened for the purposes of the study. The Serbian raspberry
supply chain was reviewed using the available statistics and studies,
supplemented and strengthened by the WP3 field research (data gathered by indepth interviews with key stakeholders in the chain).
Our analysis shows that the global food chain performs better regarding
resources use (land and labour productivity), wage level and labour relations,
creation and distribution of added value and food safety (volume of production
that has successfully passed the quality control). The Local food chain performs
better than global in environmental, health, ethic, and even partially in economic
(net income) dimension. Additionally, increasing of organic and traditional
products supply in berry sector is marked as the strategic opportunity leading to
the significant increase of the local raspberry food chain importance in the future.
However, the global raspberry food chain has took more attention than the fresh
(local) raspberry food chain in our practice as far as market, public & policy
stakeholders opinion is concerned.
Key words: food chain, local, global, stakeholders, attributes performance.
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Contents
Summary ...............................................................................................4
Contents ................................................................................................5
Abbreviations ......................................................................................7
1. Introduction ........................................................................................8
2. Case study definition - general overview.................................................9
3. The Raspberries Local & Global FSC in Serbia .....................................19
3.1 Geographical scope ......................................................................19
3.2 Description of local and global product ............................................21
3.2.1 Fresh raspberry (local chain) .......................................................21
3.2.2 Frozen raspberries (global chain) .................................................22
3. Research design ............................................................................23
3.1 Research questions ......................................................................25
3.2 Attributes selection process ...........................................................25
3.3 Selected indicators .......................................................................27
3.4 Selection of stakeholders and interviews - the participatory approach ..31
4. Results and discussion.......................................................................33
4.1 Description of the chains ...............................................................33
4.1.1 Local FSC model (Fresh raspberries) ...........................................33
4.1.2 Global FSC model (Frozen raspberries) ........................................34
4.2 Stakeholder analysis - Global versus Local FSC ...............................36
4.2.1 The Local supply chain stakeholders ............................................36
4.2.2 Global supply chain stakeholders .................................................38
4.3 Description of attributes and indicators ............................................41
4.3.1 Creation and distribution of added value .......................................41
Added value......................................................................................42
Distribution of added value..................................................................48
4.3.2 Contribution to economic development .........................................49
Net income .......................................................................................49
Regional workforce ............................................................................51
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4.3.3 Governance ..............................................................................57
4.3.4 Labour relations.........................................................................61
Wage Level.......................................................................................61
Other labour relations indicators ..........................................................63
4.3.5 Other indicators .........................................................................64
Resource use/Efficiency .....................................................................64
Food safety.......................................................................................68
Responsibility....................................................................................71
5. Conclusions......................................................................................73
Literature ..........................................................................................75
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Abbreviations
AWU - Annual working unite
ESU - Economic size of unite
EU - The European Union
NBS - The National Bank of Serbia
PDO - Product Designation of Origin
RS - The Republic of Serbia
RSD - The Republic of Serbia Dinar
SAFA - Sustainability Assessment of Food and Agriculture systems indicators
SIEPA - The Serbia Investment and Export Promotion Agency
SORS - The Statistical Office of the Republic of Serbia
STIPS - The System of the market information for the agriculture in Serbia
SWOT - Strengths, Weaknesses, Opportunities and Threats
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1. Introduction
Due to its high market share, global recognition and competitiveness, the
raspberry production has been the most important fruit production in Serbia. This
sector is also interesting due to its high potential of fresh and high value added
market development (traditional food and organic production). Furthermore, the
analysis of the raspberries sector allow deeper insights in the value chain
linkages, resulting in local and global food chain attributes description as the
main goal of this report. The Serbian raspberry supply chain holds an important
position regarding the overall agricultural and rural development in the country.
From the economic point of view, raspberries sector contribute in a high share to
total agricultural export from Serbia to the EU and global market. Broader
perspective includes the sector importance for the multifunctional rural
development (development of activities connected with the storage facilities,
packaging, transportation, trade & marketing of products). It includes ethic and
social aspects as well, particularly relevant for the western regions of the country.
This sector generates the significant contribution to farm income in the Sumadija
& Western Serbia District. Currently applied production methods are mainly
traditional and with the positive environmental impact. Finally, raspberries hold
the superior properties compared to other fruits regarding the health benefits
(particularly high antioxidants content is recorded for Arilje raspberry).
The analysis covers specific areas of interests in evaluation of global and local
aspects of food chain. The Serbian raspberry supply chain was reviewed using
the available statistics and studies, supplemented and strengthened by the WP3
field research (data gathered by in-depth interviews with key stakeholders in the
chain). Consequently, the relevant food chain stakeholders, such as
representatives of producers, associations of producers, processors, policy
makers, traders and certification bodies, were specifically targeted and engaged
with the project research. The analysis of the local food chain addresses the
Serbian fresh raspberries produced in the Arilje Municipality (Ariljska raspberry Ariljska malina). However, almost entire raspberry supply chain in Serbia is
globally oriented, and most of the raspberries are processed and exported as
frozen product. Therefore the frozen raspberries food chain represents in our
case the global food chain.
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2. Case study definition - general overview
Raspberry production in Serbia in the period 2005-2013 year ranged between
68,000 and 90,000 tones (production highly depends on weather conditions). The
highest production of raspberries was achieved in 2011 (90,000 tones, whereas
the lowest production values were recorded in 2012 (70,000 tones) and 2013
(68,000 tones).
Raspberry production in Serbia, in 000 tons
100
86
84
90
80
87
84
77
84
90
80
70
70
68
2012
2013
60
50
40
30
20
10
0
2004
2005
2006
2007
2008
2009
2010
2011
Source: SORS
Raspberry is produced on the area covering 15,433 ha in 2013. In Serbia, only 35 % of areas planted with raspberry are irrigated (note: open air only).
Area planted, ha
16,000
15,800
15,600
15,400
15,200
15,000
14,800
14,600
14,400
14,200
14,000
13,800
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: SORS
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Raspberries picking in Serbia begins in late June and ends in July, depending on
weather conditions and fields location. Most fresh raspberries are sold and
consumed during the summer season, and only a small number is exported fresh
mostly in the Western Balkan region. The fresh raspberries are cleaned,
prepared and stored at a temperature of 0° C and transported in refrigerated
trucks to their destinations within three days. Fresh raspberries are consumed or
processed for homemade juices and concentrates. They account for less than 23% of total raspberries production in Serbia which includes home made products
of fresh raspberries (juices, traditional food).
For small farms it is difficult to take advantage of the economy of scale and its
production costs are usually high. Investments in transportation and technology
improvements are required to facilitate export of high quality fresh raspberries.
Also, they are characterized by low market and bargaining power. There exist a
limiting number of organizations/cooperatives that can help farms to sell their
raspberries at wholesale/green markets. The Federation of Associations of
raspberry producers of Western Serbia exists from 2012.
Fresh raspberries are sold at farm gates and wholesale and green markets.
Intermediaries (buyers or traders) are buying raspberries directly from producers.
They are usually located close to producers (usually in the municipality centre).
They group fresh raspberries and transport them to processing facilities
(cooperatives). Producers are facing the problems of transportation and usually
sell fresh raspberries to wholesalers adequately equipped with storage and
transportation means.
Total supply of raspberry in Serbia, in 000 tons
100
90
80
70
60
50
40
30
20
10
0
2004/05
VI-V
2005/06
VI-V
2006/07
VI-V
2007/08
VI-V
Begining stocks
2008/09
VI-V
2009/10
VI-V
Domestic production
2010/11
VI-V
2011/12
VI-V
Import
Source: http://www.mpt.gov.rs, Supply utilization balance: Raspberry
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The total annual supply of raspberries in Serbia varies between 77,000-95,000
tons and includes beginning stocks from the previous season, domestic
production in the concrete period plus the import. The total supply and its
structure for the June 2004-May 2012 period is presented in the Graph above.
The annual consumption of raspberries is divided between domestic
consumption and export. Domestic consumption encompasses domestic use in
fresh and processed form, losses and ending stocks.
Total consumption of raspberry in Serbia, in 000 tons
100
90
80
70
60
50
40
30
20
10
0
2004/05
VI-V
2005/06
VI-V
2006/07
VI-V
2007/08
VI-V
Domestic use
2008/09
VI-V
Losses
2009/10
VI-V
Ending stocks
2010/11
VI-V
2011/12
VI-V
Export
Source: http://www.mpt.gov.rs, Supply utilization balance: Raspberry
The dominant part of Serbian raspberries is exported, predominantly in frozen
form.1 A very small portion is exported as fresh.
Domestic use and export as % of total consumption of Serbian raspberry
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12
VI-V
VI-V
VI-V
VI-V
VI-V
VI-V
VI-V
VI-V
Total
domestic use
23%
20%
8%
13%
33%
23%
20%
17%
Export
77%
80%
93%
87%
67%
77%
80%
83%
Source: http://www.mpt.gov.rs, Supply utilization balance: Raspberry
1
In Serbia, there are over two hundred cold storages with deep freezing regime (- 18°C), with
capacity of 100 – 5.000 tons.
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Domestic consumption vs export of raspberry from Serbia, in % of
total consumption
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2004/05
VI-V
2005/06
VI-V
2006/07
VI-V
2007/08
VI-V
2008/09
VI-V
Domestic consuption
2009/10
VI-V
2010/11
VI-V
2011/12
VI-V
Export
Source: http://www.mpt.gov.rs, Supply utilization balance: Raspberry
Export of frozen raspberry amounted from 109.0 million of USD in 2005. to180.2
million of USD in 2012. After continuous growth from the beginning of the period,
the export recorded stagnation in 2009 compared to the previous year and
became volatile since then (recorded drop in 2010, recovery in 2011 followed by
drop in 2012). This volatility is mostly due to prices of raspberry, because
quantity exported was relatively stable during the observed time interval.
Serbia: Raspberries - Export, frozen, without sugar, 2005-2012
250000
200000
150000
100000
50000
0
2005
2006
2007
2008
Export Value, 000 USD
2009
2010
2011
2012
Export Quantity, tones
Source: Statistical yearbook and Monthly statistical bulletin.
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The main export destinations for the export of frozen raspberries without sugar
from Serbia are Germany, France, Belgium, Austria, Sweden and Great Britain.
Total export to these six countries is 83 % of the export value of raspberries. The
most important destinations for export of these products where more than half of
their value is exported are: Germany (34 %) and France (24 % of total export
value, see Graph below).
Raspberries: Export ‐ categories of raspberries, average Value Exported by country destination in 2005‐2011 total exported value, average 2008‐2012 Original, 4% Other countries, 17% Other, 1% Bruh, 7% Germany, 34% Blok, 7% Great Britain, 4% Rolend, 41% Sweden, 4% Fresh, 9% Austria, 6% France, 24% Belgium, 11% Source: Statistical yearbook and Monthly statistical bulletin Griz, 32% Source: Ministry of Agriculture, Forestry and Water Management based on SORS, Report 2012. Data are given as average exported value share by country destination in the
total value of exports of frozen raspberries from Serbia. Average value is
calculated for a shorter period (from 2008 to 2012) and for the values of export of
frozen raspberries considering that the data of the National Statistical Office were
only available as export data of frozen raspberries with sugar before that time. If
we look at export by raspberries categories, it can be seen that the major part of
the export of raspberries "Rolend" (41% of export of this raspberry category is
average value for the period 2005-2011). This category is followed by a raspberry
"Griz" (32%), which is followed by the export of fresh raspberry (9%). Categories
"Block" and "Bruh" make export share with 7% each, whereas the original
raspberry is exported in small quantities (only 4% of the total export of
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raspberries). 2 Detailed quantities of categories of raspberry exported are
presented in the Graph below.
Export - categories of raspberries, average 2005-2011
90
79 80
73 71 70
60
000 t 50
62 63 2009
2010
53 42 40
30
20
10
0
2005
Rolend
2006
Griz
2007
Fresh
2008
Bruh
Blok
Original
Other
2011
Total
Source: Ministry of agriculture, forestry and water management based on SORS, Report
2012.
Sale and purchase of raspberries are shown in terms of quantity and value,
respectively (see next two graphs). Data are for the period from 2005 to 2012.
The amount of sale and purchase of the territory of Serbia is in the range of
27,000-47,000 tons. In graph 10 it can be seen that the two extreme values of the
volume of sale and purchase were reached in two consecutive years - 2011 and
2012, respectively.
2
“Rolend” is category of raspberry that represents the name for whole, prime berries of identical
colour. It is packed in 4 packs of 2.5 kg each, and in compliance with standards. “Rolend” is
packed into 300g, 450g or 1kg packages and is used as input for final product in EU shops.
Raspberry “Griz” is ground frozen raspberry, packed in 10kg and 15kg containers and used for
industry. Usually, very small amount of ground raspberry end up in shops. Raspberry “Blok”
represents the third class of frozen raspberry is used for the fruit juice industry. (Radosavljević,
2008).
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Raspberries: quantity of sale and purchase, 2005-2012
50
47 45
40
41 38 000 tones 35
31 30
34 32 31 27 25
20
15
10
5
0
2005
2006
2007
2008
2009
2010
2011
2012
Sale and purchase
Source: Statistical yearbook
Raspberries: value of sale and purchase, 2005-2012
6000
5279 5000
mil. RSD 4000
4917 3871 3840 3364 3000
2954 2000
1592 1771 1000
0
2005
2006
2007
2008
2009
2010
2011
2012
Sale and purchase
Source: Statistical yearbook
When looking at the values of sale and purchase, they are due to price
fluctuations highly volatile in relation to the data expressed in tons. The lowest
value was recorded at the beginning of the observed period when 1,592 million
RSD raspberries were sold and repurchased. After that, the value of sale and
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purchase reached its maximum in 2008. After the reduction in 2009, the value
recorded its growth again followed by gradual decline during the last two years.
Statistical Office of the Republic of Serbia regularly publishes information about
the value of sales of raspberries at marketplaces. As we can see, with the
extreme volatility of the value of sale, at the beginning of the period it was much
lower than in the middle and end of the period. After the maximum value of sale
at marketplaces recorded in 2008, the value was falling during the two
consecutive years, and since 2010 this value has gradually increased. Thus, in
2012, the sale of raspberries at Serbian marketplaces amounted to 70 million
RSD.
Sale of raspberries at marketplace, 2005-2012
90
83 80
70
mil. RSD 60
30
63 55 50
40
70 70 62 46 36 20
10
0
2005
2006
2007
2008
2009
2010
2011
2012
Sale of raspberries at marketplace
Source: Statistical yearbook
Market prices data for fresh raspberries and other agricultural products are
available from centralized System of the market information for the agriculture in
Serbia (STIPS, http://www.stips.minpolj.gov.rs).
Data on fresh raspberry prices are collected and provided by STIPS in the fruits
category. It is important to notice that these data are available exclusively for the
fresh raspberry and thus they are available only seasonally, in months when the
raspberry is produced. It can be concluded that STIPS covers local supply chain
of fresh raspberry. The scope of this short supply chain is national.
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The system offers data on weekly current market prices over time and main
markets (cities in Serbia and their major markets places, plus it offers
comparisons with Croatia and Montenegro markets). The system offers national
reports on product prices, detailed reports on product prices, data on product
prices in different cities and weekly bulletins for each product category.
Weekly average wholesale prices of raspberry in RSD/kg in the period 20042013*
500
450
400
350
300
250
200
150
100
50
40. week
41. week
42. week
43. week
44. week
40. week
41. week
42. week
43. week
44. week
38. week
37. week
36. week
2007
39. week
2006
35. week
34. week
33. week
32. week
31. week
2005
39. week
2004
30. week
29. week
28. week
27. week
26. week
25. week
24. week
23. week
22. week
21. week
0
2008
500
450
400
350
300
250
200
150
100
50
2009
2010
2011
2012
38. week
37. week
36. week
35. week
34. week
33. week
32. week
31. week
30. week
29. week
28. week
27. week
26. week
25. week
24. week
23. week
22. week
21. week
0
2013
* Averages are calculated for weekly prices from wholesale markets in Belgrade, Kraljevo, Nis,
Novi Sad and Subotica
Source: http://www.stips.minpolj.gov.rs/stips/nacionalni
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National reports of fruit prices are providing weekly prices per kilogram for
different sorts of fruits traded in the wholesale and green (retail) markets in
Belgrade and other major cities (Kraljevo, Nis, Novi Sad, Subotica). Data are
available for particular product sort, size and type of product packaging.
Market prices of raspberry on wholesale and green markets in Serbia vary
depending on product supply. On average, fresh raspberry is available on the
market from week 21 till week 36. Belgrade market is, in general, facing higher
prices of raspberry than other cities’ markets. It can be noted that wholesale
prices in 2013 have increased in comparison to previous years reaching the
levels between 230-500 RSD/kg (Euro 2.03-4.42).
Weekly average green market (retail) prices of raspberry in RSD/kg in the
period 2004-2013*
1000
900
800
700
600
500
400
300
200
100
2004
2005
2006
2007
2008
2009
2010
2011
2012
44. week
43. week
42. week
41. week
40. week
39. week
38. week
37. week
36. week
35. week
34. week
33. week
32. week
31. week
30. week
29. week
28. week
27. week
26. week
25. week
24. week
23. week
0
2013
* Averages are calculated for weekly prices from green markets in Belgrade (Kalenic), Kraljevo,
Nis, Novi Sad and Subotica
Source: http://www.stips.minpolj.gov.rs/stips/nacionalni
Raspberry retail prices on green markets in Serbia differ based on the product
origin, seasonal factors in production and concrete retail market. Availability of
raspberry has prolonged to period between week 23 and week 44. Prices vary
between 80-1000 RSD/kg, while they are significantly higher in Belgrade,
especially at the beginning and the end of the season.
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3. The Raspberries Local & Global FSC in
Serbia
3.1 Geographical scope
The fruit sector, in general, holds higher relative importance in the total
agricultural activity in the selected regions compared to the Serbian average (see
the graph below). According to Agricultural Census data, the total number of
farms in Serbia is 631552 in the year 2012. More than one third of all farms are
located in the Region of Sumadija & Western Serbia which is in our focus for the
global raspberries food chain. Moreover, one third of total arable land in this
region is specialized for the fruit production 3 (dominantly raspberries). As far as
the local food chain is concerned, total number of farms registered in the Arilje
Municipality is 4793, while 27% of total arable land is dedicated to the fruit
production.
No of farms and relative importance of fruit production in the selected
regions
700000
35
631552
600000
30
500000
25
400000
20
300000
15
262940
200000
10
100000
5
4793
0
0
Serbia
Sumadija & West Serbia Region
Number of farms
Arilje Municipality
% of total land dedicated to fruit production
Source: SORS.
3
The vineyards are excluded.
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Although raspberries production is the main activity of rural economy the Western
Serbia, it is important to emphasize that the new (modern) farms exist also in the
Northern part of Serbia (Region of Vojvodina). Their activity has been particularly
evident starting from 2010, which have influenced the average yields in the
sector. The new raspberries farms introduce new technology and use new
varieties in production ("Polana" particularly). However, their influence on the
global raspberries food chain is still very low, and therefore, we do not include
data for Vojvodina in comparison of selected food chain attributes.
Raspberry production in Vojvodina:
Area harvested, yields and average yields
3000
6,00
2630
2500
5,00
2000
4,00
1659
1500
3,00
1230
1124
964
1000
506
912
516
500
480
462
470
2,00
457
0
1,00
0,00
2008
2009
2010
Area
Yield, t
2011
2012
2013
Average yield, t/ha
Source: SORS.
From the spatial point of view, farms that belong to the global food chain are
dominantly located in the Region of Sumadija & Western Serbia, while the Arilje
raspberries producers represent the local fresh food chain in Serbia. Arilje
represents a hub of raspberry production. Commercial raspberry growing is
carried out in every village in the municipality (Market analysis of the fruit sector
in Zlatibor County, 2010).
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The Region of Sumadija & Western Serbia The Arilje Municipality 3.2 Description of local and global product
3.2.1 Fresh raspberry (local chain)
The Arilje raspberry is the protected name for the raspberry with special features
originating from Arilje region in the Western Serbia (reg.no 52 - The Republic of
Serbia Intelectual Property Protection Institute).
Fresh raspberries production from Arilje is an important economic activity of the
Arilje Municipality (rural region). However, fresh raspberries production is also
important for simultaneous development of other mutually dependable activities
of rural economy. Arilje raspberry variety is particularly suitable for organic
production. Fruit production has the largest share in total organic area (46.36%)
in Serbia, while raspberries production counts around 13% of total fruit organic
production (Organic agriculture in Serbia, 2013). Due to its nutritional properties,
the Arilje raspberry is considered a the high value added food with huge
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potentials both at the domestic and global markets. Description of currently
available product at the domestic market is given in the table below.
Description of product sold at local market
Product - fresh raspberry Market
Fresh Raspberry local green market Arilje
Fresh Raspberry wholesale market Belgrade
Package - plastic box
Net weight: 250 gr +- 10% per box.
Domestic fresh raspberry (I class) retailers
Package - transparent plastic box
Net weight - 250 gr +- 10%
Shelf life: 4 days at temperature range 0
to 8°C .
3.2.2 Frozen raspberries (global chain)
Almost 90% of raspberry production is frozen in cold storage plants, while only
10% of it is used for processing or sale in retail stores. Most raspberries are
exported in frozen state (up to 93%). Semi-organized process for producers
association that includes cold storages, transport and export. Raspberries are
frozen at a temperature of -40 ° C and stored at temperatures between -18 and 20. Most of the production is exported to EU market. Between 90-95 percent of
Serbian raspberries is the North American “Willamette” - variety. Other raspberry
varieties include “Meeker”, “Promise” and “Gradina” from Europe. (Buric, 2003).
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Description of product sold at global market
Product
Name
Willamet Raspberry
Meeker Raspberry
Raspberry whole and
broken
- 80% whole + 20%
broken
- 50% whole + 50%
broken
- 40% whole + 30%
broken + 30% crumble
Raspberry crumble
Raspberry Block
Packaging
Plastic bags - 500 gr 2,5 kg
Cartons Boxes - 300 gr
Large cartons - 10 kg
Plastic bags - 500 gr 2,5 kg
Boxes - 10 kg
Cartons - 10 kg
Plastic bags - 2,5 kg
Boxes - 20 - 30 kg
Cartons - 10 - 14 kg
Cartons - 14 kg
3. Research design
Serbia’s agricultural sector is dominated by private farms utilizing more than 85%
of available agricultural land with state farms and cooperatives accounting for
less than 15% of the UAA. It is a historical consequence of specific agrarian
reforms performed before 1990s, during the socialist era. The private sector
particularly dominates the supply of fruit, vegetables and milk in Serbia. However,
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23
the majority of these farms own less than five hectares, usually fragmented into a
number of small separate parcels. Because of their small size, most of them are
faced with signficant problems of trade negotiations with processors and
wholesalers, who hold the power at the market. Consequently, many farming
families are heavily dependent of farm income generated in highly unfovaurable
conditions. This aspect imposes specific food chain structure and therefore –
specific chain problems as well (for example - what would be best ways for
horizontal and vertical integration, how sustainable development of rural
communities could be achieved, etc.). The following necessary assessment
elements in the comparison are identified:
•
•
•
•
•
•
Number of stakeholders involved in the different stages of food supply and
their importance in terms of volume of production and trade, their size etc.
Quality of relationships between stakeholders - Chain governance (Does
the production or marketing contracts exist or not? How these contracts
are defined, what are their most important elements?)
Market power (related to purchase price of raspberries, value chain
structure)
Production efficiency, positive/negative externalities (yields per ha over
time, technology applied - inputs use per ha (energy, water, pesticides,
fertilizer,…), QIF system, etc.)
How is the system institutionally supported - from local to national level
including the NGO organizations (knowledge transfer, better organization
of food supply chain)?
How local and global food chains contribute the local community and
country competitiveness/development?
This list of important issues concerning our case study includes all five
dimensions (economic, social, environmental, health and ethical). Production and
distribution of fresh raspberries would lead both to development of food supply
chain and rural economy in the country. However, existing system of connections
between food sector stakeholders allow only frozen raspberries market
development. It seems that a lack of higher levels of processing indicates a low
level of innovation, which is a consequence of lack of information and existing
food chain organization.
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24
3.1 Research questions
The FP7 GLAMUR overall research questions (RQ) that are addressed in our
case study as well: (1) What are the key food chain performance issues with
regards to a global-local comparison?; (2) What is the methodological strength
and weakness of overall applied comparative analysis?; and (3) What are the
specific interactions of the food chains under study and the policy settings?
The specific RQ are collaboratively designed with the Latvian team (Baltic
Studies Centre, Riga) and address specific issues in berries sector. The
additional questions are: (1) What are the main differences in organization
between the local and global chains?; (2) How are governance and control
enforced in the local and global fruit supply chains?; (3) How do the analysed
LFSC and GFSC influence national and regional economies?; (4) Are costs and
benefits distributed in a fair way among actors in the chain? How does this differ
for the local and global chain?, and (5) What aspects describe labour market and
common employment practices within sector? Elaboration aloud systematic
approach to specific characteristics and attributes both of local and global food
chains, leading to a meaningful comparison of different food chain dimensions in
the focus of our analysis.
3.2 Attributes selection process
The analysis starts from definition of attribute given by the GLAMUR project Work
Package 2. During the comparative study attributes have been defined and
normalized basing on evidence from Latvian and Serbian contexts. Thus
attributes are fine-tuned methodological instrument that serve as an optional tool
for food chain performance assessment and comparison.
The report elaborates ten attributes of local and global raspberries food chains.
The common list of attributes has been shortened for the purposes of the study
due to berry sectors particularities in the Latvia and Serbia. The list of attributes
used in the study has been developed in several steps. First step was based on
quick scan report. Interviews with chain actors and analysis of secondary data
were used to identify initial list of attributes. This list was then discussed with
project partners studying berries sector and trade in Latvia and apples production
and trade in Belgium. During the discussion the list of common attributes were
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25
defined. Afterwards second round of interviews was conducted during which
attributes where continuously tuned. The final list of attributes are illustrated in
Table below. The common attributes are underlined (in the marked lines).
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
The list of attributes and attributes selected for the case
Attributes (the list from WP2 Synthesis
Serbia
Report)
Raspberry case
Affordability
X
Creation and distribution of added value
X
Contribution to economic development
X
Technological innovation
Governance
X
Efficiency
X
Profitability/competitiveness
Connection
Resilience
Food waste
Information and communication
Food security
Consumer behaviour
Territoriality
Labour relations
X
Resource use
X
Pollution
Biodiversity
Nutrition
Food safety
X
Traceability
Animal welfare
Responsibility
X
Fair trade
X
Selected attributes address main problems identified in the berry food chains.
The identified list allows responding research questions posed for this study while
the selected attributes corresponds the issues defined in description of the
context. The analysis gives the main insights of the raspberry food chain
development related to local/regional and national economy.
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26
3.3 Selected indicators
The attributes are measured by indicators. For each attribute we have defined a
list of indicators. The selected common indicators, as well as specific indicators
described in the Serbian case study, are presented in the table below.
Attribute
Creation and
distribution of added
value*
Contribution to
economic
development
Governance
Ethical/ Economic
Economic/ Social
Economic/ Social
Dimension
The list of indicators
www.glamur.eu
Brief attribute
description (cf.
Comparative
Report)
Used indicators
Research questions
Data collection
methods
The common set of indicators for comparison between Latvia and Serbia
Are costs and
Value added
The attribute
• Financial
benefits distributed in
calculation
represents both –
statements for
a fair way among
how added value is
Price for the
selected companies
actors in the chain?
created and how it is
farmer / final
(database
How does this differ
distributed in FC.
price of the
boniteti.rs)
for the local and
product
• SORS database
global chain?
• In-depth interviews
Attribute that signifies
the contribution that
FSC can bring to
national, regional and
local economies.
Net Income
Regional
workforce
Attribute covers
regulation and
governance structure
as well as power and
presence of
democracy in food
chains.
Grievance
procedures
Conflict
resolution
Legitimacy
Civic
Responsibility
Free, Prior and
Informed
Consent
Sustainability
Management
Plan
Full-Cost
Accounting
Platform for
decision making
What are the main
differences in
contribution to
national, regional and
local economies
regarding local and
global chain
development ?
What are the main
differences in
organization between
the local and global
chains?
How are governance
and control enforced
in the local and global
fruit supply chains?
What aspects
describe labour
market and common
employment
practices within
sector?
• SORS database
• Financial
statements for
selected companies
(database
boniteti.rs)
• In-depth interviews
• Policy documents
• Secondary sources
• In-depth interviews
27
Labour relations
Social/ Ethical
What aspects
Right to Quality
describe labour
of Life
market and common
Wage Level
employment
Employment
practices within
Relations
sector?
Freedom of
Association and
Right to
Bargaining
Health Coverage
and Access to
Medical care
Capacity
Development
The other indicators presented in the study
Attribute identifies
socio-economic
welfare and
recognition of
workers as well as
considers risks these
workers are exposed
to and analyses
availability of
qualified labour.
Affordability
Prices for
consumers
Product quality
and information
Food safety
Product Labelling
Labour
productivity
Resource use/Efficiency
Land productivity
www.glamur.eu
Fair trade
Distribution of
revenues
Responsibility
Expended
sustainability
Price paid by the final
consumer expresed
in eur/kg of fresh or
frozen berries
The share of the total
volume of production
that meets quality
standards which are
necessary to ensure
safety, transparency
in trade and good
eating quality
Product labelling is
an essential part of
transparent
accountability to
consumers.
Total kilograms of
raspberries produced
per labour unit at
farm stage
Total kilograms of
raspberries produced
per land use unit at
farm stage
Price received by the
producer compared
to the price payed by
the consumer
Environmental,
Social, Ethical
Economic and Healht
aspects of
Resposibility
• Policy documents
• Database
boniteti.rs
• SORS database
• In-depth interviews
• SORS database
• MoAFW-STIPS
database
•
•
•
•
Observations
Secondary sources
In-depth interviews
Republic of Serbia /
Institute of public
health
• Observations
• Secondary sources
• SORS
• In-depth interviews
• SORS
• In-depth interviews
• SORS
• MoAFW-STIPS
database
• Secondary sources
• In-depth interviews
28
As indicated beforehand, we have selected four main attributes and the list of
indicators allowing not only comparison of local and global food chains for the
individual country, but also comparison of pairwaise countries case studies for
the berry sectors. The previous food chain analysis in Serbia was performed
without any comments on connections and comparisons of its local and global
perspectives. Different bottom-up initiatives co-financed by the local governments
were included in our report as a valuable input. Quality score of the selected
indicators is given in the table below.
Quality score of indicators used for the berry case studies comparison
Name of the
indicator
Definition*
Grievance
procedures
Stakeholder access to fair grievance
procedures.
Conflict
Resolution
Resolved conflicts of interests between
stakeholders
Legitimacy
Scale*
Benchmark*
Quality score*
LOCAL
CHAIN
GLOBAL
CHAIN
Scale 1
to 4
3
0.4
0.4
%
80
0.4
0.4
Enterprise's compliance to the law
Scale 1
to 4
4
0.2
0.2
Civic
Responsibility
This indicator illustrates the relations of
most powerful actors of food chains with
laws and civic schemes protecting rights of
the weakest food chain actors.
Scale 1
to 3
2
1
1
Free, Prior and
Informed
Consent
Indicator addresses consent achieved
between the big enterprises and the
community.
Scale 1/2
2
0.2
0.2
Sustainability
Management
Plan
Does enterprise have a sustainability plan.
Scale 1
to 3
2
0.2
0.2
Platform for
decision making
There is an interprofessional association or
a platform for all actors of the chain to
meet and to negotiate.
Scale 1
to 3
2
0.4
0.4
Right to Quality
of Life
Primary producers, small-scale producers
and employees in enterprises of all scales
have the right to a quality of life that affords
time to spend with family and for
recreation, adequate rest from work,
overtime that is voluntary, and educational
opportunity for themselves and their
immediate families.
Scale 1
to 3
3
0.2
0.2
Wage Level
Percentage of wage above minimum wage
%
-
1
1
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29
level
100
0.4
0.6
3
0.2
0.5
Yes/No
-
0.4
0.6
Do employees have access to capacity
development
Yes/No
-
0,2
0.4
Value added
calculation
Creation and distribution of added value
%
-
1
1
Price for the
farmer / final
price of the
product
Share of price received by picker
%
-
1
1
%
-
0.4
0.6
%
-
0.6
0.6
t/ha
-
1
1
kg/
labour
unit
-
0,6
1
Scale 1
to 3
-
0,2
0,4
Scale 1
to 3
-
0,2
0,4
Euro/kg
-
1
1
Employment
Relations
Percentage of employees that have
legally-binding transparent contracts with
their employers.
Freedom of
Association and
Right to
Bargaining
Evaluation of employees’ possibilities to
associate and bargain.
Health
Coverage and
Access to
Medical care
Do employees have health coverage and
access to medical care
Capacity
Development
Net Income
Regional
workforce
Regional Workforce refers to the
employees hired by the enterprise that
come from the region where the enterprise
operations are based. Shown as % of local
employees.
Land
productivity
Total kilograms of raspberries
produced per land use unit at farm
stage
Labour
productivity
Total kilograms of raspberries
produced per labour unit at farm stage
Product quality
& information
Production that meets quality
standards which are necessary to
ensure safety, transparency in trade
and food quality
Product
Labelling
Product labelling is an essential part of
transparent accountability to
consumers.
Prices for
consumers
Price paid by the final consumer
expresed in eur/kg of fresh or frozen
berries
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%
30
Fair trade
Expended
sustainability
Price received by the producer
compared to the price payed by the
consumer
Environmental, Social, Ethical
Economic and Healht aspects of
Resposibility
%
-
-
1
1
0,2
0,2
*Definition – cell definition refers to explanation of our indicator interpretation; Scale –
measurement instrument used; Benchmark – “values or qualitative descriptions of activities,
used as the basis by which the performance of an enterprise is evaluated within an indicator
domain to facilitate a rating of sustainability performance.” (FAO 2013, 216); Quality score –
data quality score calculated basing of pedigree matrix approach; Chain L (local) and G
(global).
3.4 Selection of stakeholders and interviews - the
participatory approach
Activities performed for the WP3 were based on strong interactions with the food
chain representatives (the participatory approach was implemented). From the
very beginning of the case study analysis, main issues and the research
questions where discussed with stakeholders. They were involved in in-depth
interviewing, and during the additional data collection the stakeholders were
constantly involved in verifying previously made conclusions.
In our case study term “stakeholders” is accepted as a broader context, since it
consists of all participants who directly or indirectly benefit from the raspberries
supply chain.
Thus, Government and Governmental organizations are mainly in collaborative
relationships with farmers and raspberries associations, because raspberry is
identified as a strategic exporting agricultural product in some parts of Serbia,
and its production is essential to the standard of the agricultural population in
certain regions of Serbia. In the frame of Government organizations quite
meaningful participation of the SIEPA agency (Serbia Investment and Export
Promotion Agency) should be noticed. SIEPA supports Serbian raspberry export.
In addition to the Government organizations, some foreign organizations also
appear as the game players (such as USAID). In recent past those organizations
have shown considerable interest in this agricultural sector, through the
sponsorship of a number of raspberry production development projects.
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31
The list of experts
Stakeholder
Serbian Chamber of
Commerce, Belgrade
SIEPA
Association of
raspberries producers
Raspberry producer
Association of
raspberries producers
Local food company
Certification company
Global food company
Global food company
Ministry of Agriculture,
Forestry and Water
Management, Serbia
Food processor
Function
Advisor for agriculture
Position in the chain
Market analysis
Global-local chain
Global-Local
Serbian export
promotion agency
President
Food industry and
agricultural advisor
The producers
association
Production
Global
Farm manager and
owner
President
Global
Local
The producers
association
Warehouse / cold
storage and trader
Certification
Local
Global
Broker
Advisor
Food company / Cool
storage and Export
Exporter
Policy maker
Marketing manager
Production
Local-Global
Trade specialist
Quality insurance
inspector
Trade sector manager
Local-Global
Global
Global
Global-Local
The actors selected for the interviewing hold the key positions and importance
both in local and global chain. Most of them have worked in the two types of
chains and gave significant insights valuable for the comparisons. The
information regarding the experts interviewed are given in the table above.
Interviews were semi-structured and organized in the way that aloud comparison
of results obtained for the fruit sectors in Latvia and Serbia (WP4). The main
purpose of the interviewing was to find out specific data on production and trade
that could not be found in the official statistics. Findings are qualitative in the
nature, and they are incorporated in our reporting as additional information
together with the secondary data available from the official statistical databases.
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32
4. Results and discussion
4.1 Description of the chains
4.1.1 Local FSC model (Fresh raspberries)
In this part we elaborate the typical models of local and global supply chains
connected, respectively, to fresh raspberries from Arilje and frozen raspberries
on the whole Serbian territory, as final products of Serbian agriculture. Therefore,
fresh and frozen raspberries are subjects of our case study. In accordance to the
fact that over 90% of the total raspberries production in Serbia is exported in the
form of frozen raspberries, it is evident that fresh raspberries from Arilje
represents only a small fraction of the total production of that specific fruit. Fresh
raspberries supply chain is predominantly local in its character, and only a small
portion of fresh raspberries is exported to neighbouring countries, i.e. regional
markets when it comes to Serbia. Due to the fact that a negligible part of the local
chain is oriented towards export to the neighboring countries, export is dropped
as insignificant for local chain formation. This is certainly not the case with the
global chain, where domination of export activities is obvious.
Local supply chain, which refers to the fresh raspberries from Arilje is typical
because it is a case of a specific product with a distinctive and protected origin.
Fresh raspberries are predominantly consumed during the summer season
(June-July) on the Serbian wide market, and only a small share (around 3%) is
exported to the nearby countries in the fresh product form. Inputs for primary
production are predominantly local by its origin, since this is a highly labor
intensive production activity. Production of fresh raspberries mainly involves
small farms with up to 0.5 hectares of fields under this perennial crops. For
example, commercial raspberry growing is carried out in every village in the
municipality and, according to estimates, the average farm cultivates raspberries
over 0.25 hectares. Workforce on such farms is mostly made up of the family
members and, when it is necessary during the picking season, seasonal workers.
Logically, labor, water and land as production inputs are local in its nature. A
significant portion of planting materials is produced in Serbia, where we should
emphasizes the importance of the Fruit Research Institute from Cacak (town in
the central part of middle Serbia) with up to 600,000 certified seedlings annually.
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33
Only a small portion of imported seedlings is used in the case of fresh
raspberries supply chain (up to 5%).
Figure - Model of the Serbian local supply chain (Fresh raspberries from
Arilje region)
Serbia
INPUT Suppliers
INTERMEDIARIES
FARMERS
WHOLESALERS
(Domestic)
RETAILERS
CONSUMERS
CONSUMERS
The majority of fresh raspberries production (produced mainly on small farms) is
being bought by intermediaries (buying agents or traders) and then directed to
companies which perform fruit selection and refrigerated transport to the
distribution (retail) channels, all the way to the final consumer. Each storage as
well as transport of fresh raspberries involves 0oC cooling mode. A tiny branch of
the local supply chain includes the export of fresh raspberries in the neighboring
countries. Certainly this is the insignificant part of the total production of fresh
raspberries from Arilje, and that’s the main reason why foreign component is
missing in our model of local supply chain.
4.1.2 Global FSC model (Frozen raspberries)
Unlike a local supply chain, global one implies more complexity, since it involves
significant portion of foreign participants. Medium and large farms have been
added to the small farmers in the process of primary production. In accordance to
the production stands Western part of the Serbia (Zlatibor district) should be
underlined, because it alone generates up to 25% of total production of the
country. As well as in the above mentioned case of the local chain, so-called low
input technology in primary production is also present in the global context, with
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34
the prevailing share of the seasonal labor force during the raspberries ripening
season.
Over 90% of the total production of raspberry in Serbia is exported in frozen form.
Raspberries are frozen at a - 40oC and stored between -18oC and -20oC (which
applies also to the transportation). The largest portion of frozen raspberries is
exported to the EU (94%) and the rest to the USA, Switzerland, Russia and
Japan. Primary storage and transportation companies possess especially
important role in the global context. They can be classified as intermediaries
(buying agents/traders), cold storage companies, exporters and cooperatives.
Figure - Model of the Serbian global supply chain (Frozen raspberries)
Serbia
FARMERS
INPUT
suppliers
EXPORTERS
FARMERS
INTERMEDIAR.
IMPORTERS
(Wholesalers)
Food service
CONSUMERS
(I t
ti
l)
RETAILERS
FARMERS
COOPERATIVES
PROCESSORS
(Domestic)
Food service
RETAILERS
(D
ti )
CONSUMERS
(D
ti )
Frozen raspberries are exported to foreign markets where they are usually
repacked, because most of the Serbian companies do not meet the high
standards when it comes to raspberries packing. Frozen raspberries are directed
towards food processors, and after processing final food product through the
distribution chain (food service operators) arrives to the domestic and to foreign
consumers.
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35
4.2 Stakeholder analysis - Global versus Local FSC
Previous two figures represents typical raspberry production and sales channels
in Serbia from which it is possible to identify key stakeholders and its relationship
network. Therefore, the main stakeholders of both local and global raspberries
supply chains are presented in the following network diagrams based on their
relationship matrices. The nodes represent the main stakeholders on both
diagrams and relationships are depicted by connective arrows. At first glance it is
evident that the global network is far more complex than the local one (similar to
supply chain models) since it has a higher number of stakeholders, and therefore
significantly higher number of connections and relationships between them.
Therefore, we will analyse them separately, starting with the local one.
4.2.1 The Local supply chain stakeholders
In short (local) food chain, as we already underlined, fresh raspberries are sold at
green/open markets or on farm gate. It counts less than 2-3% of total raspberries
production in Serbia. It also includes home made products of fresh raspberries
(juices, traditional food – fruit preserve etc.). As major stakeholders of the local
chain, we have emphasized: (1) input suppliers, (2) farmers, (3) intermediaries,
(4) domestic retailers and (5) domestic consumers. All stakeholders are
predominantly domestic, what is compatible by the nature of a local chain –
subject of our analysis. Unlike the previously shown local chain, in order to
simplify the analysis, we have included domestic wholesalers in the context of
intermediaries.
Based on interviews it was found that the role of intermediaries and wholesalers
are often intertwined, which makes possible to connect them within one node in
the network.
The next table and figure illustrate the relationships between stakeholders in the
local chain. Links can have a characters of: type 0 (no relation), type 1 (one
player informs another one about its needs or demand) and type 2 (one player
sells his product to another player).
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36
Relationship matrix of the Serbian local raspberry supply chain
LOCAL CHAIN
Relationship
INPUT
matrix
(Suppliers)
RETAILERS
CONSUMERS
(Domestic)
(Domestic)
2
0
0
0
2
0
2
1
0
2
0
0
0
1
0
2
0
1
0
1
0
FARMERS
INTERMEDIAR.
0
2
FARMERS
1
INTERMEDIAR.
1
INPUT
(Suppliers)
RETAILERS
(Domestic)
CONSUMERS
(Domestic)
Relationship type
0
Row player is not related to the column player
1
Information flow (Row player gives information to the column player)
2
Trade relation (Row player sales to the column player)
INTERMEDIARIES
FARMERS
1
2
2
1
2
1
1
CONSUMERS
(Domestic)
2
2
1
1
2
INPUT (Suppliers)
RETAILERS (Domestic)
Network of actors in the Serbian local raspberry supply chain
In accordance with the number of relations established in the stakeholders
network (Figure above), intermediaries and farmers turn out to be the most
important nods. But in the light of the facts that the structure of farmers is
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37
atomized in comparison to the relatively small number of intermediaries,
intermediaries seem to be the key players of the local chain and probably the
ones with the highest market power.
This is also supported by the fact that the production of raspberries is dominantly
labor-intensive activity, where harvesting is done by hand and large number of
seasonally workers is usually hired at picking. On the other hand we have
intermediaries, with significant concentration of capital which, as it is already
mentioned, group fresh raspberries and transport them to processing facilities
(cooperatives). There are around 100 processing facilities (Djurkovic, 2012)
where raspberry processing is done manually. Cooperatives can be also included
under the term intermediaries in our stakeholder analysis of local chain.
4.2.2 Global supply chain stakeholders
Frozen raspberries are sold to food industry or mostly exported. Downstream
food chain consists of regional centres (cooling houses) and brokers/exporters
(Radosavljevic, 2010). EU is the most important market for Serbian raspberries
(94%) and the rest is usually sold in USA, Switzerland, Russia and Japan. In EU
Serbian raspberry is repacked to fulfil required standards and then re-exported to
Australia, USA and Japan. More than 90% of Serbian raspberry production is
frozen in cold storage and exported later on (Djurkovic, 2012).
Accordingly, the global chain, as shown in next Figure, is partly domestic (located
in Serbia), and partly related to the international space. In this sense all
stakeholders can be separated in two groups, respectively, domestic and foreign.
Therefore as the key players within domestic group we have distinguished: (1)
input suppliers, (2) farmers, (3) intermediaries, (4) domestic processors, (5)
domestic retailers, (6) domestic consumers, and within the international: (7)
foreign importers (8) foreign processors, (9) foreign retailers and (10)
international consumers.
As in the case of a local chain, table and the following network diagram show the
relationships between stakeholders in the global supply chain. Links can have a
characters of: type 0 (no relation), type 1 (one player informs another one about
its needs or demand), type 2 (one player sells his product to another player), but
we have also type 3 as the difference from local chain, which implies mutual
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38
cooperation between players. Small, medium and large farmers are united into
single nod in our relationship network, since their almost identical interconnection
with other elements of the chain.
Relationship matrix of the Serbian local raspberry supply chain
GLOBAL CHAIN
Relationship
matrix
INPUT
INPUT
(Suppliers FARMERS INTERM.
)
PROCESSORS
RETAILERS
(Domestic)
(Domestic)
CONSUM.
(Domestic
)
IMPORTERS
PROCESSORS
RETAILERS
(Foreign)
(International)
(Foreign)
(Foreign)
CONSUM.
0
2
3
0
0
0
0
0
0
0
INTERM.
1
3
0
1
2
0
0
2
0
2
0
0
0
2
0
0
0
0
0
0
PROCESSORS
0
0
1
0
2
0
2
0
0
0
RETAILERS
0
0
1
1
0
2
0
0
0
0
CONSUM.
0
0
0
0
1
0
0
0
0
0
IMPORTERS
0
0
1
1
0
0
0
2
2
0
0
0
0
0
0
0
1
0
2
0
RETAILERS
0
0
0
0
0
0
1
1
0
2
CONSUM.
0
0
0
0
0
0
0
0
1
0
(Suppliers)
FARMERS
(Domestic)
(Domestic)
(Domestic)
(Foreign)
PROCESSORS
(Foreign)
(Foreign)
(International)
Relationship
type
0
Row player is not related to the column player
1
Information flow (Row player gives information to the column player)
2
Trade relation (Row player sales to the column player)
3
Collaboration relation (Row player collaborates with the column player)
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39
Quality control, although shown in the model of the global chain, has been
omitted in order to simplify the network of stakeholders, because it does not
belong to a key players set in the global chain. Also, within the nod that belongs
to intermediaries we have incorporated cooperatives, and wholesalers and
exporters, since their connections are intertwined.
INTERMEDIARIES
1
FARMERS
2
2
2
3
RETAILERS (Domestic)
2
1
2
1
1
1
2
1
CONSUMERS
(Domestic)
1
CONSUMERS
(International)
1
2
2
1
3
PROCESSORS (Domestic)
IMPORTERS
(Foreign)
INPUT (Suppliers)
2
2
1
2
1
2
1
RETAILERS (Foreign)
PROCESSORS (Foreign)
Network of actors in the Serbian global raspberry supply chain
Undoubtedly the largest number of significant relationships in this case belongs
to intermediaries, which makes them as the most important part of network.
Significant position goes with a significant bargaining and consequently
significant market power which is primarily expressed in relation to the farmers as
the primary producers. There are between 200-250 cold storages with deep
freezing regime (-18C), with capacities between 100-5,000t, which at least tells
the approximate number of intermediaries within the global chain. On the other
side it is estimated that there are about 15,000 raspberry producers (Nikolic et
al.). Serbian raspberry farms are small, usually family owned seasonal business.
Average raspberry plots are between 0.5 and 1 ha. Farmers sell their products to
intermediaries rarely directly to processing companies or exporters, usually with
no further engagement.
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40
In other words, the bargaining power of farmers regardless of the size is not
significant in comparison to intermediaries. For this reason, we do not distinguish
between small, medium and large farmers when showing the relations among
key stakeholders, since their roles in the network are almost identical.
Government and non-governmental organizations are omitted within both the
local and global chains and respective networks of stakeholders, in order to
preserve the essence and transparency of key relations. Relations that could be
established in the case of government and non-governmental organisations with
other elements of network are provision of information or cooperation. The
associations of raspberry producers are not listed too, because they cannot make
any qualitatively different link with other elements of the chain which farmers
already have.
4.3 Description of attributes and indicators
4.3.1 Creation and distribution of added value
The value added calculation in the process of production and distribution of fresh
and frozen raspberry is important indicator of production factors employed
capacity to efficiently utilize raw materials and other production services. The
distribution of value added along the food value chain provides additional
information about the chain participants’ power and dominance in the concrete
production and distribution process of the generated product from the farm gate
to final consumer.
Thus, the value added indicators provide more information about food chain
structure in sense of measurement of:
•
•
•
•
performance and productivity
growth and size, i.e. importance
vertical integration
economic concentration
The added value is calculated as the difference between farm gate, wholesale
and retail prices and non-factor costs at each stage of the food chain from
producer to final consumer.
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41
The unit value added can be calculated as the difference between the sale price
and the production cost of a product plus the unit depreciation cost and the unit
labour cost. Total value added is gained through summing value added per unit
over all units sold. Total value added is equivalent to revenues less outside
purchases of materials and services.
In order to estimate the value added in the raspberry value chains for Serbia we
have collected the balance sheet data for small and medium size companies that
are processing and distributing fresh and frozen raspberries and raspberry
products for the period 2009-2013. We have collected data for 31 companies
based on the Serbia Investment and Export Promotion Agency (SIEPA)
database. Balance sheet data are provided by database Boniteti.rs. In our
sample we have 20 small and 11 medium size companies.
Two subsamples are created: first referring to raspberry processing and export
companies that represent global raspberry food chain and the second composed
of main producers and wholesalers of fresh raspberry. Based on the Balance
sheet and Income statements of these companies the Value added and Value
added per employee is calculated for global and local raspberry food chains
based on the following formulas:
Value added =
(Operating profit – Business loss)
- (Increase in inventories – Decrease in inventories)
- Other operating income
Value added per employee = Value added / the average number of
employees
Data are then aggregated for local and global subsamples and average values
are calculated.
Added value
Global chain
Serbia is predominantly exporting raspberry in the frozen form. The average
value added and value added per employee in the global raspberry chain are
provided in the table. Data indicate high total and per employee value created in
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42
the pre-crisis period and significant drop in the recession years characterized by
decreasing demand and export.
Average value added and average value added per employee for raspberry
processors and exporters
In Euros
2009
2010
2011
2012
2013
Average value added
21789.59 1130.36 25827.83 7313.62 -799.1314
Average value
added/employee
497.75
-15
1082.40
87.25
364.25
Source: Authors’ calculation based on SIEPA and Boniteti.rs data
Average value added and average value added per employee for raspberry
processors and exporters, in Euros
30000
1200
25000
1000
20000
800
15000
600
10000
400
5000
200
0
0
-5000
2009
2010
2011
Average value added
2012
2013
-200
Average value added/employee
Source: Authors’ calculation and presentation based on SIEPA and Boniteti.rs data
Based on the available average farm gate, wholesale and retail prices of
raspberry per kg (Statistical Office of the Republic of Serbia and STIPS) and
exchange rate data from the NBS we have estimated value added created and
distributed in each segment of the chain per kg of raspberry.
Value added creation and distribution in global raspberry food chain
In Euros/kg
Farm gate price
Farm costs*
Wholesale price
www.glamur.eu
2005
2006
2007
2008
2009
2010
2011
2012
2013
0.471
0.68
1.142
2.107
1.199
1.2643
0.8082
1.104
1.6284
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.807
0.975
1.588
2.787
2.001
2.0865
1.4713
1.5911
2.2981
43
Retail price
Value added
Farm gate price
- costs
Wholesale price
- farm gate
Retail pricewholesale
Total value
added per kg
Value added
for the farmer
Value added
for the
wholesaler
Value added
for the retailer
Farm
gate/retail
price
(Wholesale farm gate)
/Retail price
(Retail –
wholesale) /
Retail price
1.615
2.342
2.989
3.684
2.906
4.2701
1.9617
2.6519
3.0052
-0.229
-0.02
0.442
1.407
0.499
0.5643
0.1082
0.404
0.9284
0.336
0.295
0.446
0.68
0.802
0.8222
0.6631
0.4871
0.6697
0.807
1.367
1.401
0.896
0.905
2.1836
0.4904
1.0607
0.7071
0.915
1.642
2.289
2.984
2.206
3.5701
1.2617
1.9519
2.3052
-25%
-1%
19%
47%
23%
16%
9%
21%
40%
37%
18%
19%
23%
36%
23%
53%
25%
29%
88%
83%
61%
30%
41%
61%
39%
54%
31%
29%
29%
38%
57%
41%
30%
41%
42%
54%
21%
13%
15%
18%
28%
19%
34%
18%
22%
50%
58%
47%
24%
31%
51%
25%
40%
24%
Source: Authors’ calculation based on Statistical Office of the Republic of Serbia, STIPS and NBS data
* Farm costs data are available from Swiss Agency for development and Cooperation, Market analysis of the
fruit sector in the Zlatibor county, Serbia and interviews with relevant sector’s stakeholders
Value added creation and distribution in global raspberry food chain, in
Euros/kg
4.5
4
Retail prices
3.5
Wholesale prices
3
2.5
Farm gate prices
2
1.5
1
0.5
0
2005
Farm costs
2006
2007
Retail prices
2008
2009
Wholesale prices
2010
Farm gate prices
2011
2012
Farm costs
Source: Authors’ calculation and presentation based on Statistical Office of the Republic of
Serbia, STIPS and NBS data
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44
2013
For example, in 2013, the value added distribution could be illustrated in the
following manner:
Farm gate
Wholesaler
Retailer
Consumer
40%
29%
31%
It can be noticed that value created per kg of raspberry was mostly increasing in
the 2005-2013 period reaching the peak in 2010 and significant drop in 2011 with
recovery tendency in the following years. The significant drop in 2011 was related
to price decrease in 2010. And what is of high importance is the increasing share
of farmers in created value distribution in the whole chain, from negative values
in mid 2000s to 40% in 2013 indicating their increasing cooperation and market
power.
Local chain
The local raspberry chain refers to the sale of fresh raspberry in the wholesale
and green markets in Serbia. Due to dominant export of produced raspberry the
remaining local supply, or the part sold in the local wholesale and retail, i.e. green
markets, as less organized value chain is subject to higher price for the final
consumer and higher value added for the wholesalers and retailers.
Average value added and average value added per employee in the local
fresh raspberry chain
In Euros
2009
2010
2011
2012
2013
Average value added
1831
8582
24489.33
11703
15907.67
Average value
added/employee
1223.33
2907
4626.33 1622.33
1555
Source: Authors’ calculation based on Boniteti.rs data and interviews
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45
While less dependent on the external demand, domestically sold raspberries
resulted in more stable food chain participants value added.
Average value added and average value added per employee in the local
fresh raspberry food chain, in Euros
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
30000
25000
20000
15000
10000
5000
0
2009
2010
2011
Average value added
2012
2013
Average value added/employee
Based on the available average farm gate, wholesale and retail prices of fresh
raspberry per kg (Statistical Office of the Republic of Serbia and STIPS) and
exchange rate data from the NBS we have estimated value added created and
distributed in each segment of the local fresh raspberry chain per kg of raspberry.
Value added creation and distribution in the local raspberry food chain
In Euros/kg
Farm gate price
2005
2006
2007
2008
2009
2010
2011
2012
2013
0.471
0.68
1.142
2.107
1.199
1.2643
0.8082
1.104
1.6284
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
Wholesale price
1.258
1.209
1.72
2.777
2.413
2.0794
2.2058
2.3327
2.8084
Retail price
1.886
2.965
3.66
4.485
3.409
3.4047
4.3045
3.7745
3.7458
-0.229
-0.02
0.442
1.407
0.499
0.5643
0.1082
0.404
0.9284
Farm costs*
Value added
Farm gate price
- costs
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46
Wholesale price
0.787 0.528 0.577
0.67 1.213
0.815 1.3976 1.2287
1.18
- farm gate
Retail price0.628 1.757
1.94 1.708 0.997 1.3254 2.0987 1.4418 0.9374
wholesale
Total value
1.186 2.265
2.96 3.785 2.709 2.7047 3.6045 3.0745 3.0458
added per kg
Value added
-19%
-1%
15%
37%
18%
21%
3%
13%
30%
for the farmer
Value added
for the
wholesaler
66%
23%
20%
18%
45%
30%
39%
40%
39%
Value added
53%
78%
66%
45%
37%
49%
58%
47%
31%
for the retailer
Farm
gate/retail
price
25%
23%
31%
47%
35%
37%
19%
29%
43%
(Wholesale farm gate)
/Retail price
42%
18%
16%
15%
36%
24%
32%
33%
32%
(Retail –
wholesale) /
33%
59%
53%
38%
29%
39%
49%
38%
25%
Retail price
Source: Authors’ calculation based on Statistical Office of the Republic of Serbia, STIPS and NBS
data
Farm costs data are available from Swiss Agency for development and Cooperation, Market
analysis of the fruit sector in the Zlatibor county, Serbia and interviews with relevant sector’s
stakeholders
For example, in 2013, the value added distribution in the local raspberry food
chain could be illustrated in the following manner:
Farm gate
Wholesaler
30%
39%
Retailer-green market
Consumer
31%
Through comparison of value added created in the global and local raspberry
food chain it can be noticed that higher value per kg of raspberry is created in the
local chain. The value created also indicates lower volatility over time in the local
market.
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47
Distribution of added value
Concerning the value created distribution among food chain participants it is
evident that producers have more significant role in recent period in both chains
with relatively higher share in the global chain value distribution. Local chain as
less organized and standardized keeps space for further improvements and need
for better organizing of raspberry producers that would increase their market
power and share in value created distribution.
Value added per kg in global vs local raspberry food chain in Serbia
4
3.5
3
2.5
2
1.5
1
0.5
0
2005
2006
2007
2008
2009
Value added in global chain/kg
2010
2011
2012
2013
Value added in local chain/kg
Source: Based on authors’ calculations
Global raspberry food chain participants’ shares in value created
140%
120%
100%
80%
60%
40%
20%
0%
-20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
-40%
Farmers - global chain
Wholesalers - global chain
Retailers - global chain
Source: Based on authors’ calculations
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48
Local raspberry food chain participants’ shares in value created
120%
100%
80%
60%
40%
20%
0%
-20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
-40%
Farmers - local chain
Wholesalers - local chain
Retailers - local chain
Source: Based on authors’ calculations
4.3.2 Contribution to economic development
Net income
Based on the Income statements for 31 fresh and frozen raspberry producing
and export companies Net income data have been collected and aggregated in
local and global chain subsamples. Then average values and average values per
worker were calculated and are presented below. Average net income per
employee is calculated for global and local raspberry food chains based on the
following formula:
Revenue - Expenses = Earnings before taxes - Taxes =
Net income/loss / number of workers
Global chain
Global raspberry chain as significantly dependent on foreign demand has faced
post-crises demand and revenue reduction that led to net losses in 2012.
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49
Average net income and average net income per worker for raspberry
processors and exporters
In Euros
2009
2010
2011
2012
2013
Average net
income/loss
179757.13 188620.84 463709.99 351614.02 95520.22
Average net
income/worker
3236.7
2865.64
6969.34
-5203.59 1585.40
Source: Authors’ calculation based on SIEPA and Boniteti.rs data
Average net income and average net income per worker for raspberry
processors and exporters, in Euros
8000
450000
6000
350000
250000
4000
150000
2000
50000
-50000
0
2009
2010
2011
2012
2013
-150000
-2000
-250000
-4000
-350000
-6000
Average net income/loss
Average net income/worker
Source: Authors’ calculation and presentation based on SIEPA and Boniteti.rs data
Local chain
Since local raspberry food chain is mostly linked to domestic demand, net income
generated in domestic raspberry food chain was steadily increasing in the
previous five year period.
Average net income and average net income per worker for fresh raspberry
food chain
In Euros
2009
2010
2011
2012
2013
Average net
income/loss
9330.23 35659.37 52234.14 154044.20 140946.54
Average net
income/worker
6997.68 17829.69 17411.38 30808.84 18384.33
Source: Authors’ calculation based on Boniteti.rs data and interviews
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50
Average net income and average net income per worker for fresh raspberry
food chain, in Euros
180000
160000
140000
35000
30000
25000
120000
100000
80000
60000
20000
15000
10000
40000
20000
0
5000
0
2009
2010
Average net income
2011
2012
2013
Average net income/worker
Source: Authors’ calculation and presentation based on Boniteti.rs data and interviews
Net income data for global and local raspberry food chains confirm Serbia’s
important role in export of frozen raspberry on the foreign markets and as such
significant dependency of those flows and value created on external markets and
demand instability. On the other hand, local market for fresh raspberry shows a
potential for further growth that is confirmed by steady increase in the net income
generated in the local raspberry food chain.
Regional workforce
Regional Workforce refers to the employees hired by the enterprise that come
from the region where the enterprise operations are based. It distinguishes
community, municipality or region where the enterprise operations are based. It
distinguishes with those employees that come from other regions, or countries,
not directly involved with the community and micro-environment where the
enterprise operates. The indicator is defined based on the SAFA (C 4.1.1.).
The contribution of the enterprise to the local economy through the employment
of local professionals and technicians is a significant component of sustainable
development and might benefit the long-term business viability of the enterprise.
There are several principles that could frame the value creation of the enterprise
to the local economy when hiring regional workforce: it creates an adaptable
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51
skilled labour force; it supports employment progression and skills upgrading; it
contributes to develop local governance and to build local capacities; it invests in
education and training of the selected employees; and it contributes to improve
local employment rates through job creation.
Agriculture is still fundamental for rural economy in Serbia (the modern rural
economy is still in its infancy, and the first stage of rural development
characterized by significant share of agricultural activities in the overall rural
economy), as the welfare of rural people is dependent on the success of
agriculture. For the regions in the focus, the fruit production, particularly
raspberry, is of extremely importance for the household income. However, there
is significant difference between Sumadija & Western Serbia region and the
Municipality of Arilje regarding this issue. Well known and developed tourism
destinations in Serbia are located in Sumadija & Western Serbia region. Number
of farms capable to generate income "around the agriculture activities",
particularly connected to rural tourism, in this region is 34,41% higher than the
Serbian average. Opposite, the activities of farmers in the Municipality of Arilje
are more oriented toward the agricultural sector. Number of farms with nonagricultural income in the local food chain is 29,66% lower than the Serbian
average (SORS, 2012). Generally, standard output per farm is still lower in this
region compared to the Serbian average (see the graph below).
No of farms with other sources of income and standard output per farm
90000
80000
10000,00
78301
9000,00
8000,00
70000
7000,00
60000
6000,00
50000
43816
5000,00
40000
4000,00
30000
3000,00
20000
2000,00
10000
1000,00
418
0,00
0
Republic of Serbia
Sumadija & West Serbia
No of farms
Municipality of Arilje
Standard output per farm
Source: Authors’ calculation based on SORS.
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52
The next graph demonstrates a share of the number of persons working on
family farms on one hand, and the number of persons working in enterprises and
with entrepreneurs on the other hand, in the total number of employee in
agriculture in Serbia.
Farms structure in Serbia by economic size
120%
100%
80%
60%
40%
20%
0%
in 000 EUR
Enterprises
Household members
Share of farm in total number of farm, by economic value
Source: Authors’ calculation based on SORS.
The shares are displayed according to the economic value of the households
(intervals on the x axis expressed in 000 EUR). In the graph it can be seen that in
Serbia family farms are of primarily less economic power, while entrepreneurs
and enterprises have great economic power. However, the black line in the graph
shows that the greatest number of workers on households is just at the lowest
levels of the scale, i.e. even 37% of all farms earns up to 2,000 euros per year,
60% of them earns up to 4,000 euros per year and 81% of them earns up to
8,000 euros per year.
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53
Farms by ESU in the regions in our focus
The Sumadija
The
& Western
Municipality of
ESU
Serbia Region
Arilje
0-2
2-4
4-8
8-15
15-25
25-50
50-100
100-250
>100
Total
112803
60676
52183
23286
6070
2223
474
119
131
257846
Source: SORS.
2345
1106
848
328
52
13
1
1
0
4694
Having in mind previously elaborated farms structure by economic size, small
farms dominate particularly in the local food chain. By definition, small farms
should be more concentrated on family workforce. The next graph shows AWU
(Annual Working Unite) in the local and global food chains in comparison to the
Serbian average in 2012. Unexpectedly, it could be noticed that the Municipality
of Arilje farms generates significantly larger portion of seasonal workforce.
People from all over the Serbia, and even from other countries (Kljajić, 2013),
each year traditionally find a job during the peaking season in Arilje. As far as the
global food chain is concerned, raspberry producers are more oriented toward
family members’ engagement in production process followed by new technology
and equipment implementation in the practice.
The Illustration: In-depth interview typical statements
"Although family members are involved during the top of season, it is still not
enough. We are forced to attract the additional workers. These are seasonal
workers who traditionally come in the local community not only from neighbouring
municipalities, but all over the Serbia. I always employ members of the same
family year by year." (Local producer)
"Seasonal workers from neighbouring countries are engaged too. They live in the
cross-border municipalities. Faced with problems of unemployment they use the
opportunity to win over the season." (Policy maker)
"Harvest seasons can employ up to 200.000 workers." (Producers association)
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54
AWU in the local and global food chain, deviation from the Serbian average
2012.
25
20
15
10
5
0
Legal
entities
seasonal
workforce
Farm
seasonal
workforce
Legal
entities
workforce
permanent
Farm
workforce
permanent
Family
-10
members
Farmers
-5
-15
The Municipality of Arilje
The Sumadija & West Serbia Region
Source: Authors’ calculation based on SORS.
Data of a share of the number of annual work units specialized in fruits (except
for citrus, tropical fruits and nuts) in the total number of annual work units heavily
supports previously mentioned conclusions regarding the regional workforce.
Specialized farms in fruit sector: AWU structure
80%
71%
70%
60%
54%
50%
42%
43%
40%
40%
34%
30%
20%
10%
14%
12%
4% 5%
4% 5%
3% 4%
3%
0%
0%
Overall
workforce
Holders of
households
Household
members
13%
11%
7%
7%
Permanently
employed
workers on
family farms
2%
Permanently
employed
workers in
enterprises and
with
entrepreneurs
Seasonal
workforce and
the workforce
under contract
on family farms
Seasonal
workforce and
the workforce
under contract in
enterprises and
entrepreneurs
Serbia
4%
4%
3%
3%
2%
12%
11%
Sumadia & West Serbia Region
5%
5%
4%
7%
7%
14%
13%
Arilje Municipality
42%
40%
34%
0%
71%
54%
43%
Source: Authors’ calculation based on SORS.
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55
The data have been given both for Serbia and the region of Sumadija and
Western Serbia and Arilje Municipality. Additionally, data are separately
displayed for holders of households, household members, permanently employed
workers on family farms, in enterprises and with entrepreneurs. Data are also
separately shown for seasonal workforce and the workforce under contract on
family farms and in enterprises and entrepreneurs as well as for the overall
workforce.
Next graph shows a share of the number of annual work units of workers who are
seasonal workforce and the workforce under contract specialized in fruits (except
for citrus, tropical fruits and nuts) in the number of annual work units of both farm
holders and members specialized in the production of the same fruits.
The data have been given for the region of Sumadija and Western Serbia as well
as for Arilje Municipality. In the graph we can see that in Sumadija and Western
Serbia region there is one seasonal worker on every 7 farm household persons
whereas in Arilje there are a great number of seasonal workers – one seasonal
worker on every 2 farm household persons.
Number of seasonal workers compared to number of household members
60%
51%
50%
40%
30%
20%
15%
10%
0%
Sumadija & West Serbia
Regon
Arilje
15%
51%
Number of seasonal workers
divided by number of
household members
Source: Authors’ calculation based on SORS.
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The analysis confirms higher labour intensity of the Serbian raspberry local food
chain compared to the global one. Raspberries are grown on small family owned
farms on lots that average 0.5 hectares. They are picked by hand. Small scale
producers are organizing planting, crops care, irrigation, weed control, pruning,
picking, storage and transportation. Generally, traditional, low input technology is
dominantly applied. Opposite, the farms cooperating within the global food chain
are technologically more equipped, and consequently, not heavily dependent on
seasonal workforce.
4.3.3 Governance
The attribute analyses governance structure of local and global raspberry food
chains in Serbia. Indicators in the focus are defined as follows: grievance
procedures, conflict resolution, legitimacy, civic responsibility, free, prior and
informed consent, sustainability management plan, and platform for decision
making. However, civic responsibility might be also considered as a constitute
part of Responsibility as an unique food chain attribute. The results were
obtained by secondary sources and experts in-depth interviews, and summarized
in the table below. The research confirms better governance of the global
raspberry food chain than the local one, except for Free, Prior and Informed
Consent.
Indicators for attribute “Governance”
Chain
Indicator
Grievance
procedures
Conflict
Resolution
Legitimacy
Benchmark
L
4
G
4
80
90
80
2
4
3
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4
Comments
Indicator is measured with scale where 4 - highly operational grievance procedures
(significant share of actors have access and are satisfied with official or unofficial grievance
procedures); 3 - rather operational grievance procedures (most of the actors have access
and are satisfied with official or unofficial grievance procedures); 2 - rather un-operational
grievance procedures (some of the actors does not have access or remains unsatisfied with
the grievance procedures); 1 – un-operational grievance procedures (most of the actors
does not have access or are unsatisfied with the grievance procedures).
Scale: 4 - actors of food chain complies to the law (and ensures that when new legal
problems are indicated they are immediately solved) and monitors the legitimacy of their
collaboration partners. Additional inner codes may be established; 3 - actors of food chain
complies with the law, however, collaboration partners are not controlled. Compliance
remains within each enterprise and overall inner food chain control is lacking; 2 - in general
actors of food chain comply with the law. However, some actors may exploit the weaknesses
57
Civic
Responsibility
1
1
1
Free, Prior and
Informed
Consent
2
1
2
Sustainability
Management
Plan
2
3
2
Platform for
decision making
2
2
2
of regulation system (either by exploiting production or distribution aspects laws have not
defined or by benefiting from the lack of controlling structures); 1 - actors in food chains are
openly breaching the law yet this does not influence their access to food chain.
Scale: 3 - actors are responsible and promote the rights of weakest chain participants; 2 big entities does not hinder nor promote rights of other actors; 1 - big entities try to hinder
the rights of smaller actors.
Scale: 2 - relevant enterprises has had a discussion and consent with local community about
its influence on surrounding space and/or realizes its created impact and is working to
reduce it; 1 - relevant enterprise have not had a discussion and consent with local
community and is not reducing its impact on local community.
Scale: 3 - enterprise has a written sustainability plan that addresses all main sustainability
dimensions; 2 - enterprises analyses sustainability of their decisions, however it does not
have a written sustainability plan; 1 - enterprises does not consider how sustainable their
decisions are.
Scale: There are several questions that should be taken into account to evaluate this
indicator: (1) are there such an association/ platform; (2) does it have a real power; (3) does
it have regular meetings; (4) is it representing all of the food chain; (5) do everybody holds a
power to express themselves. IF all five questions can be answered with YES, than the mark
for the indicator should be 3 - there is a platform for decision making; if (1) and (2) = YES,
but (3) or (4) or (5) = NO, than the mark for the indicator should be 2 - there is a platform
only partially; if either (1) or (2) = NO or (3) and (4) and (5) = NO, than mark the indicator
with value 1 - there is not a platform for decision making.
Local chain
The research shows significant share of actors with the access to official or
unofficial grievance procedures both in the local and global food chain. Although
actors of the local food chain comply with the law in general, some actors exploit
the weaknesses of regulation system. The actors benefit from the lack of
controlling structures particularly regarding the market structure and food safety.
The participants in the local food chain in most of cases have no written
sustainability plan. In spite of the fact that the local action plans exist, partners at
the local level usually set their own development alternatives in more unofficial
way. This particularly refers to the local family farms.
The Illustration: In-depth interview typical statements
"The union of berry fruit producers in Serbia has asked President to intervene to
protect them from retailers who have reduced raspberry purchase prices. This
form of protection simply continues to be implemented year by year." (Local
Trader)
"The Ministry should take our problems seriously and save 300,000 employees in
this open-air factory from possible lay-offs." (Local Producer)
"The inspection teams have been sent to observe the situation and to ensure
compliance with the Law on Protection of Competition." (Policy maker)
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58
As far as governance indicators are concerned, particular attention should be
paid to the conflict resolution. The position of small producers depends on
developments in the supply chain (Zarić et al., 2012). Conflicts are resolved
usually "on the streets" (by blocking the roads). Dissatisfied by farm gate price
offered by traders or processors, producers use the practice of blocking regional
roads, and resolve the problem directly with the national government and local
authorities.
The farmers groups have developed their activities at the local level starting from
the 2010 particularly. They continue to gather a small number of producers (at
the moment on average around 15 family farms). They plan to increase food
safety requirements as well as to improve distribution and marketing of the fresh
raspberries. Producers groups therefore pay special attention to the technology
improvement, thus giving local farmers greater stability in terms of organization
and supply. However, the leaders of the groups are local traders or processors
instead of producers.
Global chain
Generally, the global food chain performs better than local in majority of selected
governance indicators. Generally, actors of food chain comply with the law and
ensure that when new legal problems are indicated they are immediately solved
and monitor the legitimacy of their collaboration partners. If we look at the
number of trials in selected 31 fresh and frozen raspberry producing and export
companies in 2013, the highest number of trials was registered in a local
company (23). The companies that belong to the global food chain recorded 3
trials on average in the observed year, while the local companies were faced with
8 legal processes on the court on average.
Well know companies that operate at global market put a lot of attention to
education of their local partners in the chain. They educate farmers about the
new methods of production, implementation of new technologies, intensive
production input use, how to increase yields per ha etc. Furthermore, this
companies supply farmers with production inputs (fertilizers and other chemicals,
or even mediate in providing favourable conditions for the purchase of machinery
for farms. The farmers involved in the global food chain, on the other hand,
comply with the international standards related to food production and safety, and
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59
act completely as entrepreneurs or modern agribusiness producers. Their
production is under the constant control by the foreign partners and traders.
However, the similar problems noticed in the local food chain persist in the global
food chain too. The following fact was particularly emphasized by our experts: big
entities try to hinder the rights of smaller actors.
The selected companies number of trials, 2013.
Source: Bisnode database
The chain failed particularly to build closer contacts with the local community in
the context of sustainable development and resources use. Although the chain
actors have a written sustainability plan that addresses all main sustainability
dimensions, relevant enterprises have not had a discussion and consent with
local community and are not reducing its negative impact on resources use (soil
and water quality).
The Illustration: In-depth interview typical statements
"The year 2014 of raspberries in Western Serbia began with a great expectations
of producers, with announced contracts with foreign buyers. The agreements
guaranteed the price for all produced raspberry. Then, suddenly, right before
harvest, contracts were cancelled!" (Association of raspberry producers)
"Only an irresponsible company will sign a contract in March for the purchase of
almost entire raspberry crop without even knowing what will be the quality, what
will be the price... It was clear from the very beginning that it was impossible."
(Policy maker)
"Inspections observe the situation and determine which retailers are attempting
to reduce the purchase price for raspberries." (Advisor, Chamber of Commerce)
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60
4.3.4 Labour relations
Wage Level
In 2011 some 150,000 people were employed in agriculture and some 90,000
people were employed in the food processing industry in Serbia. This represents
(on aggregate) 12% of the total labour force. However, the share of agriculture in
the total active population takes in addition the labour force also self-employed
and unemployed people as well as unpaid occupations into account. Information
on the commercial farms in the agricultural households’ record shows some
450,000 active farmers in Serbia, which equals some 15% of the total active
population of Serbia. "Active population" includes all persons with an active
occupation. Active occupation is defined as "activity for earning a living". The
term "active population" takes into account all people of a minimum age of 15
who (i) carry out professions and (ii) are unemployed and looking for a job.
Economically active population performing the occupation, by activities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
The Republic of Serbia
Agriculture, forestry and fishing
The Sumadija & West Serbia
Manufacturing
Wholesale and retail trade
The Arilje Municipality
Transportation and storage
Source: Authors’ calculation based on SORS.
There is a negative deviation from the average salary in Serbia in all observed
years in the following areas: Agricultural production, hunting and related service
activities, Manufacture of food products, Retail trade, except for motor vehicles
and motorcycles, and Activity of preparing and serving food and drinks. The
higher average salary than the average salary in Serbia is only at Wholesale
trade, except for motor vehicles and motorcycles.
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61
20%
10%
0%
‐10%
‐20%
‐30%
‐40%
‐50%
‐60%
Agricultural
production, hunting
and related service
activities
Manufacture of food
products
Wholesale trade,
except for motor
vehicles and
motorcycles
Retail trade, except
for motor vehicles
and motorcycles
Activity of preparing
and serving food and
drinks
2005
‐32%
‐1%
10%
‐23%
‐42%
2006
‐30%
‐3%
12%
‐24%
‐41%
2007
‐35%
‐11%
5%
‐22%
‐38%
2008
‐29%
‐11%
6%
‐18%
‐36%
2009
‐22%
‐16%
9%
‐37%
‐47%
2010
‐23%
‐18%
11%
‐38%
‐47%
2005
2006
2007
2008
2009
2010
Source: Authors’ calculation based on SORS.
As far as the districts in the focus are concerned, a negative deviation of the
average salary in relation to average salary in Serbia per year is noticed. The line
shows deviation of the average salary in Arilje Municipality from the average
salary in Serbia. The average salary in the local community in the focus is much
lower than in other districts were raspberry production is concentrated in the
region (the graph shows related data of four out of six districts in the Sumadija &
Western Serbia region).
Deviation of the average salary compared to average salary in Serbia
‐40%
‐36%
‐35%
‐37%
‐30%
‐30%
‐22%
‐25%
‐20%
‐24%
‐16%
‐15%
‐10%
‐5%
0%
2005
2006
2007
2008
2009
2010
Kolubara Distrct
Sumadija Distrct
Zlatibor Distrct
Morava Distrct
Arilje Municipality
Source: Authors’ calculation based on SORS.
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62
Particular attention should be paid to importance of the seasonal work force.
Based on the data collected by in-depth interviews, no matter of fact whether the
global or local food chain is concerned, the seasonal workers are usually paid 15
euros per day (around 600 euro per season). The differences between global and
local food chain exist in number of workers and working hours per day. In
addition to farmer's family members primary producers pay on average four
seasonal workers per farm (the average size of farms is 0,5 ha) during the
picking season. Duration of a working day is 12 hours with a break for lunch.
Accommodation and food are included. The workers have no employment
contract and are directly paid in cash. The global food chain experts emphasized
that seasonal workers usually work under the contract - 8 hours a day (56 hours
per week). The average number of seasonal workers on the farm that operates in
the global supply chain is 3 per hectare in full time equivalent.. Raspberries are
generally ripe for harvesting in June/July (duration of the picking season is about
1,5 months).
Other labour relations indicators
Other labour relations indicators of local and global food chain are presented in
the table below. If we look at the role of education, it should be noted that
companies that operate globally invest in education and constantly contact the
manufacturers in the context of application of new technologies. On the other
hand, local producers are supported by their associations, as well as by local
government that invests in training programs of farmers. Education programs are
supported through programs of public-private partnerships and co-financed by
the international institutions that support the development of the farming sector in
Serbia.
The Indicators for attribute “Labour relations”
Indicator
Right to Quality
of Life
Employment
Relations
Freedom of
(L)
2
Chain
(G)
3
70
100
90
Scale: 3 - employment follows national and global labour regulations and does not
have any restrictions that would employees right to choose; 2 - employment has small
deviations from national labour regulations or have insignificant restrictions; 1 employment has significant deviations from national labour regulations or have
significant restrictions for employees.
Seasonal work force in the local food chain is not officially contracted.
2
3
3
3 - addressed employees has freedom of association and understands this right; 2 -
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Benchmark
2
Comments
63
Association and
Right to
Bargaining
Health
Coverage and
Access to
Medical care
No
Yes
-
Capacity
Development
Yes
Yes
-
addressed employees theoretically has freedom of association, however, they either
do not understand it or are afraid to practice it; 1 - addressed employees does not
have freedom of association. Labour unions in the sector are passive although the
Agricultural Labour Union has existed since 2011.
Work force under the contract have full access to health coverage and medical care.
Farmers and their family members are also users of health and social insurance in
Serbia. Only seasonal workers in the raspberries local supply chain are in a grey zone
regarding insurance. Through the National Employment Agency they are registered as
unemployed, and have full access to the public health services.
Educational programmes are designed both for local and global food chain
participants in the context of capacity development.
Finally, the raspberry production is also faced with general problem related to the
emigration of manpower from villages and an increased number of older people.
On the other side, there are lots of uneducated and unqualified seasonal
workers, especially in the prime fruit-picking season including workers from the
EU (Romania and Bulgaria) (Zarić, 2012).
4.3.5 Other indicators
Resource use/Efficiency
Average annual yield of raspberry in Serbia varies between 4.4-5.8 t/ha. In the
local food chain raspberries are grown on small family owned farms on lots that
average 0.5 hectares. They are picked by hand. Small scale producers are
organizing planting, crops care, irrigation, weed control, pruning, picking, storage
and transportation. The farms involved in the global food chain activities are
larger on average (farm size varies from 5 to 50ha).
Average yield, t/ha
7.0
6.0
5.6
5.4
5.3
5.3
5.7
5.8
5.5
5.8
5.0
4.5
4.4
2012
2013
4.0
3.0
2.0
1.0
0.0
2004
2005
2006
2007
2008
2009
2010
2011
Source: SORS.
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64
A deviation of the average yield of raspberries expressed in tones per hectare in
Central Serbia, where the Region of Sumadija & Western Serbia, as well as the
Arilje Minicipality are located, in relation to the average of this indicator (average
yield) in Serbia is presented in the graph below. We can notice from the graph
that only in 2010 the average yield was slightly below the average yield of
raspberries in Serbia whereas in all other observed years it was by 1.5-2.5%
higher than the average in Serbia.
The average yield of raspberries in the Region in relation to the national
average
5.0
4.0
in %
3.0
2.4
2.0
1.8
1.6
1.7
1.4
1.0
‐0.1
0.0
2008
2009
2010
2011
2012
2013
‐1.0
Source: Authors’ calculation based on SORS.
Based on the Agricultural census data, 2012 and the official statistics (SORS) the
yields per hectare were calculated for global and local raspberry food chains. The
farms were fragmented based on their size, and total yields, arable land and
number of workers per farm were calculated for two subsamples. The huge
difference is the result of the application / non application of agro-technical
measures (use of fertilizers and pesticides, as well as modern machinery and
irrigation on the farm).
Land productivity (yields kg/ha)
Food chain
Local
Global
Yields (kg/ha)
7.700
30.000
Source: Authors’ calculation based on SORS, the Agricultural census data.
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Having in mind previously noticed differences between local and global raspberry
food chains in Serbia, the analysis of type of farming and land under irrigation
confirms why such a huge difference exist. The next graph shows the percentage
of the size of land that is irrigated in a separate region (Sumadija and Western
Serbia) and municipality (Arilje) in the total area under irrigation in Serbia.
Irrigated land
30%
25%
20%
15%
10%
5%
0%
Irrigation
Sumadija & West Serbia Region
Arilje Municipality
28%
3%
Source: Source: Authors’ calculation based on SORS
However, the local food chain yields are still higher than average in Serbia as a
result of favourable micro climate conditions for raspberry production in the
Municipality of Arilje. The municipality of Arilje is located in Western Serbia,
within the Zlatibor district, at the altitude between 330 and 1,382 m. It is the
smallest of ten municipalities in the district. Arilje has the world reputation for the
raspberry production, so it is often called the world capital of this aromatic fruit.
This municipality has the biggest concentration of plantations in the world – more
than 5,000 small plantations grows raspberry.
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66
A) Global food chain ‐ larger farms on average with the modern equipment B) Local food chain ‐ small farms on average keep tradition An Illustration: Differences between farms cooperating within the local and
global chain
Due to its traditional orientation in production methods applied and high labour
intensity, the local raspberry food chain performs worse than global one in the
context of labour productivity.
Labour productivity (yields kg/labour unite)
Food chain
Local
Global
Yields (kg/h)
14,10
43,71
Source: Authors’ calculation based on SORS, the Agricultural census data.
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67
Food safety
Institutional framework
Development of food safety policy in Serbia, is supported by its Veterinary and
Phytosanitary Directorates, which have a regional network of offices throughout
Serbia. The Ministry of Agriculture, Forestry and Water Management is also
responsible for coordinating the services of veterinary laboratories and
phytosanitary laboratories (the number of the latter has considerably decreased
recently). Of equal importance is the Ministry of Health (MoH). The MoH has a
network of approximately 36 regional public health institutes, which are also
responsible for food safety issues and carry out inspections of food retail
premises. The Food Safety Law has implemented starting from the year 2009.
In acknowledging the necessity of investments the EC has supported Serbia’s
efforts to upgrade its system of food safety. In a first step the equipment of
veterinary, phytosanitary and food-safety laboratories was upgraded and the
laboratories themselves were refurbished. In addition facilities and equipment for
the veterinary and phytosanitary inspection at external border crossings was
supplied. Veterinary and phytosanitary border inspection facilities at nominated
border posts have been installed in order to ensure effective veterinary and
phytosanitary control of imported food products.
Food quality / health - volume of production that has successfully passed the
quality control
Food safety as an attribute should be measured by share of the volume of
production that has successfully passed the quality control. From the institutional
point of view, the National Reference Phytosanitary Laboratory within Directorate
for National Reference Laboratories has jurisdiction over performance of public
tasks according to the Law on Plant Health and the Law on Pesticides (biological
efficacy of pesticides).
Totally 14 regional phytosanitary laboratories within agricultural stations exist. in
Sombor, Novi Sad, Vrbas, Sremska Mitrovica, Vrsac, Pancevo, Kikinda,
Kragujevac, Krusevac, CACAK, Smederevo, Nis, Vranje and Zajecar). Only five
regional phytosanitary laboratories (Sombor, Sremska Mitrovica, CACAK,
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68
Smederevo and Nis) perform detection and some identification tests for harmful
organisms. Regional Phytosanitary Laboratory Cacak is registered for fruits
control (The Sumadija & Western Serbia Region).
The National Public Health Institute (Batut) each year publishes The Health
Statistical Yearbook of Serbia. Particular attention is paid to the health safety of
drinking water (physicochemical safety and microbiological safety). Additionally,
the focus is also on systematic monitoring of air quality (emission) performed by
measuring and recording the values of certain indicators within the urban network
of sampling sites. The Report also covers health safety of food and consumer
goods in the Republic of Serbia (infant formulae, follow-on formulae, food for
infants and baby’s food, food for weight reduction diets, food for special medical
purposes, – a gluten-free food, dietary supplements, enzyme preparations for
food products and food processing aids). Unfortunately, there are no publicly
available reports on raspberry phytosanitary control. Having in mind the overall
restrictions, secondary sources and the typical statements were used to describe
the volume of production that has successfully passed the quality checks both for
domestic and international consumption as a qualitative indicator.
The Illustration: An In-depth interview and secondary sources typical
statements
"Due to the high quantities of pesticides used in its cultivation some raspberry
shipments (very small amounts, such as a couple of hundred tons) had been
returned recently from the EU markets due to high pesticide levels."(Exporter)
"This only concerned shipments which were falsely declared as organically
grown." (Producers association)
"There are rules, but the monitoring of their full implementation is not applied in
practice." (Food industry and agricultural advisor)
"The control found more than 20 active substances in the raspberry. In our
country, for example, with raspberry fruit stipulates the presence of specific
component to two milligrams, while the world accepted norms allow only 0.02
milligrams" (Certification body)
"Raspberry is red gold for Serbia. It is the most important export product. So it is
very important to give precise instructions on how to properly apply agro
technical inputs in the production process, especially fertilizers and plant
protection inputs." (Trader)
"They examine whether fruit has traces of pesticides that are banned, and do not
control whether the dose may be increased by some 2,000 pesticides in use and
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69
whether the goods are sold under the withdrawal period on open (green)
markets." (The consumer organization representative, Daily journal Novosti, 18.
July 2013).
Although the food safety institutional framework exists, implementation of food
safety rules is still in its infancy in Serbia. Both chains are faced with this issue.
However, the global food chain has exposed its production to additional controls
of foreign inspections and bodies responsible for the food safety issues.
Therefore, the traders as well as processors in the global food chain strongly
argue on strict implementation of the internationally standardized rules. The
international standards are completely adopted by major exporters in Serbia. At
least, the global chain is more controlled and standardized than the local
raspberry food chain in Serbia.
Food quality / health - product labelling
Serbian Red Raspberries are prized for their color, flavor and firmness. Due to
content of carbohydrates, vitamin c, antioxidants, organic acids, anthocyanins
and elagic acid, this fruit is often advertised as with the specific nutritional and
health properties. Generally, raspberries from Serbia have a good reputation.
The fresh local product from Arilje is additionally protected by a geographical
indication registration within the country of Serbia. Producers and other
stakeholders are considering promoting this Geographical indication (GI) produce
outside of Serbia with the neighboring countries as the targeted markets. .
However, the willingness to pay is slightly higher for organic raspberries than for
GI labelled raspberries. This could imply that a combination of strategies, rather
than focusing on GI labelling only, may be more beneficial for Serbian producers
(Ivana Radich & Maurizio Canavari, 2014). The export of fresh raspberry is just in
the initial phase in general, and protecting geographical indication of raspberry
from Arilje also in the EU is seen as a good opportunity for the whole western
area of the country.
Organic raspberry production produces sufficient quantities of high quality food
with a rational exploitation of natural resources and preservation of the
environment. Organic agriculture is a sustainable, natural alternative for the
intensification of production methods and presents a production management
system that promotes the recovery of ecosystems. Encouraging fact is that the
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70
land under organic production in Serbia is constantly growing, in fruit sector
particularly in raspberry production.
Responsibility
This indicator is derived from the SAFA (G 2.2.1). The SAFA indicator relays on
the enterprise’s governance body who takes responsibility for the enterprise’s
performance in each pillar of the SAFA. The proposed indicator is slightly
differently described in our report. We assume that responsible governance count
on the good chain stakeholders’ performance in each of five GLAMUR
dimensions (economic, social, health, environmental and ethic). It is a qualitative
indicator, and it can be "counted" only after all other indicators were counted and
known. As our report doesn't cover all dimensions, we will focus only on the
indicators used in our study.
The Responsibility of the raspberry food chains stakeholders in Serbia
The indicator
Added value
Net income
Regional workforce
Governance indicators
Fair trade
Affordability
Wage level
Labour relations
Land productivity
Labour productivity
Food quality / food safety
Food quality / product labelling
Total
Mean
Mode
The Local
raspberry chain
2
1
1
2
The Global
raspberry chain
1
2
2
1
2
2
2
3
3
3
2
1
24
2
2
1
1
1
1
2
2
1
2
17
1.41
1
The performance of this attribute is assessed by the qualitative means of
research. We use mark one to three to describe the stakeholders responsibility
over the FP7 GLAMUR dimensions (1 means "the chain stakeholders can clearly
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71
show that its governance takes responsibility for its impact"; 2 - "The main
players in the chain has consistently excluded the views of relevant
stakeholders"; 3 - "The chain stakeholders has not taken early responsibility for
its impact in any dispute with the other chain stakeholders"). Under the term
responsibility for the impact we concern positive impact of the chain within the
specific dimension. Lower the total score - higher responsibility of the chain.
***
Finally, price received by the producer compared to the price paid by the
consumer (Fair trade) as well as price paid by the final consumer expressed in
euro/kg of fresh and frozen raspberries (Affordability) were already explained in
the section Creation and distribution of added value.
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72
5. Conclusions
Starting from the indictors applied in the process of global and local food chain
assessment in Serbia, the main conclusion regarding the chains advantages and
disadvantages are derived. The results are summarized using the SWOT matrix
(see table below).
SWOT analysis of global and local raspberry food chain in Serbia
Strengths
Local raspberry food chain
Favourable conditions for production
Preservation of varieties and traditional
method of production
Positive effect on employment and
development of other gainful actitiviies of
rural economy
Health properties of the fresh raspberry
Proximity to the major markets
Weaknesses
Land fragmentation - small average size
of farm
High post-harvest losses
Perishable crop
Aged farmers and rural devastation
Lack of standards
Lack of marketing knowledge and
services
Opportunities
Farming methods to improve yields and
sustainability
Improvement of the packaging design
Role of producers organzations
High value added food (traditional and
organic)
International support to local community
Low purchasing power at local and
regional market
Low access to the new technologies
Low level of education of agricultural
producers
Migration of young population to the
urban areas
The local community capacity
Treats
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Global raspberry food chain
Strategic importance regarding export
Use of irrigation systems and modern
inputs
Technology improvement
Quality of employment - qualified and
educated labour
High productivity
Improvement of the commercial services
ISO standardization and increase of
product quality
Food safety and quality control systems
Developed storage capacities
High input costs and availability of inputs
High transportation costs
Development of the export trademark /
Branding
Higher level of product finalization in own
processing capacities
Price volatility
Climate change
Lower profit for farmers
Rising input costs
Change in consumer preferences
Competition / other large exporters
73
The Local food chain performs better than global environmental, health, ethic,
and even partially in economic (net income) dimension. However, regarding the
overall market, public & policy sphere stakeholders opinion, the global raspberry
food chain took more attention than the fresh (local) raspberry food chain in our
practice. The main reasons are found in high significance of the global raspberry
food chain for the overall economy development, including the activity of rural
areas in the Sumadija & Western Serbia region. Furthermore, the study argues
about better performance of the global food chain regarding resources use (land
and labour productivity), wage level and labour relations, creation and distribution
of added value and food safety (volume of production that has successfully
passed the quality control). Strict application of standards and implementation of
regulations in the practice, as well as better governance structure (greater
participation of adequately linked stakeholders) lead to higher efficiency of the
entire chain. However, the most recently published scientific papers in the
domestic journals argue about exploration of PDO or organic raspberry
production as the strategic opportunity as far as the fruit sector development in
Serbia is concerned, which might lead to the significant increase of the local
raspberry food chain importance in the future.
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