Farmers Associations in Macedonia

1. Farmers Associations in Macedonia The WB-CEI-FAO Workshop Sarajevo, May 24-27 2004

2. The need of macedonian farmers to be organized in associations/cooperatives is due to: • Transition to a market economy; • Collapse of the former agro-combinats and big traders; • Limited absorption capacity of Macedonian market (former Yugoslavian market 22 millions); • Problems regarding sale and payments; • Support in overcoming different problems of technical and informative nature; • Realization of common inters through FAs;

3. History of FAs in Macedonia • First FA in Macedonia is established 90 years ago, by Bee- Keepers as the pioneers in this field, Association established in 1910 at Veles. • Noticeable support activities for the establishment of FA’s started in 1995. • The process was initiated by groups of farmers under the direct support from the WB “Private Farmer Support Project”. • The support obtained by the Regional Branches of the National Extension Agency (NEA) through preparation and distribution of Statute proposals and organization of General Assemblies.

4. Farmers Associations in Macedonia • More intensive establishment of FAs after 1999, facilitated by the Law on Association of Citizens and Foundations of 1998; • Established with initial optimism expecting foreign funds and support by various donors;

5. Variable number of established FAs • More than 300 farmer associations, according World Bank Agriculture Sector Review, 2003; • 200 local FAs function in 2003, according Agriculture Report 2003, MAWFE; • 178 local FA’s according FMF. The most of the FA’s are organized into 38 regional and 9 national branch unions under the Federation of the Macedonian Farmers (FMF); • New National Union of Organic Food Producers (NUOFP) is establishing;

6. Status of FAs • Most associations tend to be commodity based for example as milk, grape, livestock, bee keepers, goats, pigs, rabbits, poultry, vegetables and arable crops production associations; • Some associations tend to privatize extension, but most are commodity based; • More than half of them only registered, but not functioning;

7. The Law on Citizen Associations and Foundations, 1998 • It is not permitted to be engaged in business/economic activities (FA can found limited liability companies and shareholding companies); • FA’s have a status of non-profit organisations though: - The law comments on the possibility to have profits; - Definition of term “profit” unclear, how profit is determined, how far profits are allowed, utilisation of profits (A weakness of the law to be clarified); • Foreigners are not allowed to be founders of FA/CA, according The Law on Citizen Associations and Foundations Art.16, only as members Art.21

8. Structure of Association • All members equal at the Assembly and select the President and Steering Committee of the FA. • An association is managed by a president, assisted by a secretary. • The number of members per FA depends on the type of agricultural activity, but also on the reputation of the President of the association (from 15-950 members). • The members of FA’s pays an annual membership fee from €5 to € 10.

9. The main activities of existing FAs • FAs are engaged in distribution (sometimes sales) of inputs obtained through the assistance of foreign foundations; • Providing of production inputs like seeds, fertilizer, plant protection materials, live animal, animal feed, building material etc; • FAs provide education through vocational training, workshops/seminars, study tours, etc. on agriculture practices/marketing within the specific subject matter of the association; • Application of modern technologies in the production process, sometimes implementation demonstration trials;

10. FAs activities • Staff training on management and business plan development; • Presentation at various local/ regional/international fairs; • Contacts with various donors and MAFWE; • Co-operation with other FAs from the region and the country; • The more progressive associations developed activities in the field of collection, processing and trade, but only in relation to the function of the activity; FA’s activities vary from place to place:

11. FAs and farmers relations • Farmers have high expectations of the FAs; • Farmers have demand much higher levels of openness and transparency, especially regarding financial contributions from donor agencies; • Farmers show low levels of pro-active behaviour in getting their FAs functioning; • Difficulties collecting membership fees from registered members;

12. Negative trends • A lack of clearly defined functional objectives among new-established associations; • Dependence on donor funding; • Insufficient institutional/managing capacity and low level of activities; • Inadequate services to members and lack of transparency and information flow inside FAs; • Lack of assets, offices and office equipment; • Lack of agricultural products marketing and communication; • Lack of democracy, activity planning. recording; • Bad financial management, difficult collection of membership;

13. Negative trends • The state doesn’t lease the state-owned land to the FAs, because the FAs don’t have legal rights and obligation like registered companies. • The majority of members of the associations sell their products individually to the buyers, without mediation of the association, therefore weak negotiation power and poor marketing procedures; • not organized approach to banks, saving houses, local branches of MAWFE, donors.

14. Current trends • Too much emphasis on building regional and national associations in order to boost political influence; • Not enough emphasis on using associations to strengthen access to markets; • Little direct return to association membership, the impact and credibility of group-based activity is being undermined; • Macedonian Economic Chamber of Commerce also claims to represent the interests of small farmers, but has registered only one private farmers’ association;

15. FMF - Federation of Macedonian farmers • Established 2002 • Under their umbrella: - 9 National Associations; - 38 Regional Associations; - 178 Associations; - Over 27,000 farmers; The activities supported by GTZ and SIDA through international NGOs

16. Activities of FMF • Representation of the FAs in relations with the Ministry of Agriculture and other players; • Adopt Codex of the farmers and their organizations; • Issuing informative bulletin; • Web page of the FMF; • SWOT analysis for 5 national associations; • Study tour and co-operation with Federation of Swedish farmers;

17. FMF constraints • The national bodies have been formed prematurely without the important farmer support; • Communication difficulties between FMF management and the member associations (co-ordination, participation, membership, etc); • Activities on voluntary base (not engaged professionals on salary) without proper skill, because lack of finance; • Waiting support from donors, the leadership has low competency, administration ability is poor;

18. FAO experience with FAs • Previous projects supported already established FA’s, where the presidents of FAs limit the proper functioning; • With the new project, new FAS built on more transparent, democratic and economic base. • FAs need support at least 2 years for institution strengthening and capacity building, democracy in decision making and functioning;

19. FAO supports 3 new Associations in Horticulture - AGROS Kocani – 190 farmers/10 villages ; - AGRO-MERIS v. Studenicani, Skopje 80 farmers/ 2 villages; - AGRO-RECICA v. Recica, Kumanovo 24 farmers/1 village; • FAO support by Technical Advisor, responsible for planning, development, co-ordination and capacity building; • President and Steering Committee are paid from the membership for the activities; • The President and the Advisor (in future employed Professional) activities: - Group input supply, implementation of good agriculture practices, institutional strengthening, negotiation with the buyers for organized selling, implementation of Contract Farming; • The provision for buy-out and quality control services in Association fund;

20. Next steps for stronger FAs • Institutional strengthening and capacity building, engagement of professionals; • Permanent education and awareness of FAs role; • Involvement of the associations into market chains; • Contract farming between farmers and traders/processors, where is possible through FAs; • Introducing quality and food safety standards, EUROGAP, traceability; • Organized input supply and sale of the commodities; • Support in new investments, equipment, finance etc.

21. Agriculture Cooperatives In1997 survey from 240 agricultural cooperatives re-registered: • 100 cooperatives had ceased business; • 45 were under bankruptcy procedures; • 60 were more or less moribund but retained 1-30 employees • 35 retained some land assets and active in agricultural production. In 2002 brought new Law on Cooperatives. • Unfortunately the re-registration is still not performed, because administrative and legal constraints of the status of founders and employed, cooperatives property etc.

22. Status of Agro-cooperatives • The former co-operatives are in unenviable position at the moment; • The legal framework for the structure of cooperatives also needs to be thoroughly updated to provide membership on a one-member-one-vote basis, with fees-proportional to throughput, and management and membership separated.