Economic developmentin Serbia andMontenegro (S&M) during the last half
of the 20
century was based on the process of industrialisation. The process
was capital intensive with primary emphasis on the factors of production in
urban areas. Only agriculture remains as the main economic activity in the
rural areas-the primary source of income and improvementin the standard of
living of the rural population. In that sense, reducing poverty, eliminating
hunger, raising productivity, and protecting the environmentin rural areas- all
in a sustainable manner - represent a number of complex objectives which has
to be efficiently governed toward development of a market oriented agriculture
and is one of the most fundamental challenges the country is facing today.
Currently, agricultural production in rural areas is performed both in the
private and so-called “social” sectors.
The private sector owns 85% of
cultivated land (77% of total agricultural land) and the “social” sector owns
15%. The private sector controls 90% of livestock and 96% of agricultural
mechanisation, and generates 80% of the agricultural GDP and about 50% of
the market surplus. Its concept of agricultural production could be seen as a
mixed one, rather than a specialised one. The surplus sells on the “green”
market, to the private and “social” enterprises for processing or to the trade
and cooperatives – so called “zadruga”. The whole market organisation was
established to develop a modern, socialist agricultural sector and a gradual
socialisation by gradually abolishing the private farms. Such a strategic
orientation makesthe entire agriculturalsector inefficientin the long run and
replacesthe economic basis of the developmentstrategy with a political one.
In that way, lack of understanding and commitment – political and economic
– was a major reason for the low priority given to agricultural - rural
development in Serbia and Montenegro..