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April 2003

Developing producer groups and rural organizations in Central and Eastern Europe - Issues and challenges

Ten countries from former centrally planned economies have applied to join the European Union (EU). The ten applicants are: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. When they are compared to existing member countries, over the past 50 years, all have had a very different history, and most recently each has experienced remarkable economic and political changes that have significantly impacted on both agricultural and rural communities. This paper reviews recent studies and proceedings completed by the Food and Agriculture Organization of the United Nations (FAO) and others, in relation to recent agricultural reform and rural development policies across the transition economies of Central and Eastern Europe (CEE) and in particular it explores the role of producer groups and rural Organizations.

In theory, producer groups and rural Organizations should have a central role to play in enabling their members, and the wider rural community, to take an active part in their own development. Yet when compared to current EU member countries very few have a major share in supplying inputs, providing farm or rural services or marketing production and even fewer influence national policy or decision-making making. In reality it seems that their role still cannot be entirely divorced from wider historical, political and socio-economic considerations and the generally negative experiences of "co-operation" gained throughout the region.

Production co-operation continues to decline and, although most former state-managed post harvest and processing co-operatives now largely operate independently, they are often burdened with excessive debt, inappropriate management and management systems, reduced membership numbers as well as increasing national and international competition. Commercial and social objectives and obligations are often confused. Conflicts of interest also arise between their diverse owners that neither enables them to raise sufficient capital nor provide clearly measurable benefits to their members.

Yet few producers are individually large enough to compete effectively in national or global markets and almost paradoxically informal co-operation is on the increase. Ultimately its success will depend upon local initiatives, individual motivations, consensus and voluntary participation. To survive and grow many new groups will also have to be dynamic, creative, flexible, responsive to change and probably somewhat optimistic. However most importantly they will need to be well structured and managed, continuously aim to improve their activities, identify competitive and added value market opportunities, focus on quality and service, and most essentially, maintain a committed and active membership.

Few newly established producer or other rural groups have adequate access to information, advice, training or technical assistance that enables them to carry out a situation analysis on their own terms, trace their own path or generate innovations without being over burdened with inappropriate models or dogma. Yet producers and rural communities do need time to mobilise their resources in order to respond to the pressures of competitive markets. This paper presents a number of practical suggestions as to how Governments, donors and advisers might best facilitate this process.

Click here to see the document (340KB).

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