Resources and Capacities as Factors of National Agro-Industrial Reforms: Evidences From Serbia

Resources and Capacities as Factors of National Agro-Industrial Reforms: Evidences From Serbia

Sofija Adzic (University of Novi Sad, Serbia)
Copyright: © 2018 |Pages: 18
DOI: 10.4018/978-1-5225-3856-1.ch015


Research findings indicate that the basic condition for overcoming the current development entropy is agro-industry internationalization. During the last few years, innovative system of work and new model of agrarian industrial business management crystallized in Serbia. The innovations of development trends point to better and more appropriate using of resources and necessary production capacities for the purpose of successful agro-industrial reforms. The reform process within the agro-industrial business will carried out the country from trap of medium development dictated by investors. The conducted studies indicate that there is a basis to improve state and future development of agricultural industry in the European integration process. Radical change in economic and institutional infrastructure towards the agro-industrial sector's competitiveness improvement is modern challenges for regional economic policy makers and actors of transitional macro management. Increase of competitiveness will generate a new development potential which would contribute to the overall economic prosperity of the country.
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Agro-industrial economic is a key sector by gross added value, number of employees and exports a key of the real in Serbia economy. Due to the natural resources, traditions of diversified farming and nearness of important customers from the European and global market it is realistic to expect a further increasing of Serbian agricultural production, income and export. But reality is not so bright because the agro-industrial sector faces with:

  • 1.

    Problem of structural adjustment that requires the selection of economic sectors with produced high added value,

  • 2.

    Reduction of national employment of labor and capital saturation,

  • 3.

    Long-term declining of production in key agricultural sectors,

  • 4.

    Export more directed to less demanding markets, as a result of internal and external factors operations.

Externally the development trends through the processes of globalization and global production system transition, speeding up the technological development in terms of greater participation of knowledge in manufacture and unscrupulous competition. That is a complex problem that is becoming more complex for public regulation indicates. The common EU institutions in recent years have launched numerous modern projects to find comprehensive solutions to the numerous challenges. Among them there are certainly two most important strategies of re-industrialization: Lisbon Agenda of March 2000 and Europe 2020.

Although these strategies have their operational justification, often produce retrograde effects, especially in less developed countries such as Serbia. This causes the unregulated market in all segments, inadequate production structure and great lack of producers and suppliers organization. The instability caused by a large non-competitiveness, corruption supported by inadequate role of the state threatens in domestic market small sized and with low purchasing power (Pejanović, 2013), while the foreign market is demanding and should be conquered in a long period of time. The fact is that the economic activity is developing with positive effects of accelerated growth in agro-industrial sector and very intensive export growth (that accompanies imports increase and disproportionate consumption growth at all consumers’ levels) is indebtedness. Therefore, the state should not make concessions to the needs of economy and foreign investors who were attracted by cheap labor, but must cause a change in the structure and quality of economic activities in order to contribute whole society and economy development. The populist activities should be avoided. There are few developed countries that do not protect their market. The thesis that free market is a condition for EU membership is unfounded because the EU members very well know how to protect their economy and many of them do not allow importing of raw materials and products that already exist on domestic market. In addition, it is very important to check the arrival of foreign capital in all relevant sectors, especially in agro-industrial, because of involvement of valuable resources and productive capacity. Today it is certain that the serious checks are needed because any servility can have bad consequences. So far, the practice confirmed it countless times, and Serbia did nothing to correct such serious visible mistakes. There should be rules governing the behavior and operations of multinational companies and they must be made clear that the free market does not mean the absence of rules (Adzic, 2011; Domazet, 2011).

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