DAVIDE BERLONI
MONTENEGRO 2005
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COOPERATIVES:
STRATEGIES FOR TERRITORIAL DEVELOPMENT IN THE BALKANS

The purpose of this speech is to briefly illustrate an important initiative elaborated and successfully organised by the Ancona Chamber of Commerce in collaboration with the Province of Ancona in the context of the workgroup established during the previous Adriatic and Ionian Chambers Forum held in April 2004 in Neum.
The project objective was to analyse the cooperatives of food and agricultural sector in the Marche region, particularly with regard to their territorial organisation and functioning. The initiative denomination "Cooperatives: strategies for territorial development in the Balkans" clearly describes the objectives of the activities carried out in the four day period (14-17 Dicember 2004) including theory and farm visits in Ancona (Moie).
The initiative aimed to offer entrepreneurs and technicians from South Eeastern Europe interested in the regional cooperativism a on-field experience for illustrating the functioning of Marche's cooperatives and describing the way by which they have addressed some difficulties arisen in the regional primary sector.
The aim was to identify some strong points and answers given to concrete difficulties by the cooperative system that can be utilised and adjusted in the Balkan area in order to solve some critical points of its agricultural sector. However, this does not mean that such experience should be exported as an "agricultural model"  or even that it is the best possible model. Even aware of the limits related to any simplification of reality, the "Marche model" was utilised only as example of one viable model of development based on quality goods  production.
As described above, the project was originated from the discussions made by the workgroup in Neum. The challenges faced by the new Balkan states are complex because they involve different sectors and still troublesome relationships among public and private institutions. Insofar as the agricultural sector is concerned, the most important question refers to the fragmentation of land into small lots and the farmers’ difficulty to join forces.
This situation makes it more difficult to cultivate those products that require a specific number of hectares (minimum efficient scale) for an economically viable production. The existence of small properties represents an obstacle to the cultivation of more than one product in the same area: production costs become very high and sales do not yield good profits to farmers. This characteristic should be added to the main peculiarity of the primary sector that consists in its strong weather-dependence, which requires both crop rotation and production diversification. Thus, a vicious circle is created between scale inefficiency and atmospheric variability.
It should also be highlighted that the presence of small land owners, often not associated, makes them highly vulnerable to the market, both in terms of volatility of demand and competition with foreign goods. As concerns the former, it is necessary to bear in mind that an efficient enterprise should be flexible with regard to consumer preferences and their changes: particularly over recent years the request for quality goods and environmental-friendly production processes have significantly increased; nutritional habits have also changed in favour of light and natural diets. As concerns competition with foreign goods, the opening of Balkan markets to the European Union exposes them to the direct competition with the European production.
Therefore, taking into account both competition with EU markets and the possibility of becoming potential candidates to EU membership, these countries should align regulations and environmental legislation with European standards. The dilemma is between, on one side, high costs involved in the compliance with European environmental, food security and animal protection concerns as set out by the recent Mid Term Reform (MTR) of Common Agricultural Policy (CAP) and, on the other side, competitiveness based on prices: the current consumption pattern of several high quality goods testifies the consumer willingness to pay higher prices for products which are unique due to some characteristics - other than alimentary ones - such as the product identification with the territory of production, cultural and traditional components. On the other hand, it should be considered not only the opportunity represented by contacts - not strictly of a commercial nature - between the UE and the Balkans, but also the utilisation of common funds for financing current and future joint projects.
 The alignment of Balkan sector regulations and practises with EU standards may enhance competitiveness by opening new commercialisation channels, in terms of quotas on the neighbouring European market. The new EU "neighbourhood policy" is oriented towards this objective, favouring cross-border and territorial cooperation in neighbour countries. The general aim is to constitute an "Adriatic Euroregion" and cooperation is deemed as a crucial element of the new policy of economic and social cohesion in the framework of the new Structural Funds programme 2007-2013.
The same EU policy guidelines inspired the new regional law on "promotion of cooperation for rural development", recently approved by the Council of the Marche Region. This law provides for the concession of incentives for cooperation "based on the new CAP". Thus, agricultural activities that pay attention to environmental concerns, stimulate multi-functionality and production of high quality products through efficient productive processes shall be prioritised in the granting of financing. Incentives to capitalisation, access to credits and constitution  of the company shareholders’ base are also among the law's objectives (Bolognini, T. Giuliano, M., Una nuova legge per la cooperazione, in: "Cooptime", novembre 2004). Cooperativism and its best practises may provide basic elements for resolving some of the several problems affecting the primary sector in the Balkans, as described above.
The state of Marche’s and some Balkan countries' cooperatives was discussed by the Workgroup "Agriculture" in Neum last year, when some important points of contact between the two regional economies were illustrated: the proximity of both Adriatic coasts and the development of an efficient cooperativism model in the Marche region have stimulated the Balkan entrepreneurs’ will to be acquainted with problems faced  and solutions successfully adopted by Marche's cooperatives. It should be borne in mind that development models should be contextualized and are not always exportable to other realities because of social, cultural and institutional peculiarities characterizing the economy of each region, city and people. Thus, the strong points should be highlighted, studied and considered as the base on which each single model of economic development should be shaped. The Marche's experience should be analysed and compared with other experiences as well as with the Balkans' territorial reality.
Therefore, the project, agreed upon by the workgroup's participants, was organised in two phases: a theoretical phase represented by the seminar called "Cooperatives: perspectives in the Balkan region" and a practical phase which consisted in targeted farm visits.
Marche's cooperativism’s peculiarity consists in the contrast between the small size of many cooperatives and their great market shares. In addition, many regional cooperatives are well-known at national level because of their high quality products, which account for the popularity of their image. With regard to food and agricultural sector, even though not characterized by real specialisation, it seems to exist in the Ancona province a certain prevalence of cooperatives producing high quality wines frequently offering restaurant services as a complementary activity. It is also possible to observe the existence of cooperatives that have chosen agro-biological and environment-friendly activities as an entrepreneurial mission. 
The common characteristic of the Marche's cooperatives seems to be the close link with the territory: many enterprises adopt familiar management and craftmade production processes in some productive stages (like olive harvest and press); nevertheless, the same family-managed oil press are "big enterprises" in terms of sales value and market share. Links among cooperatives are strong as well.  It is possible to observe how peculiar is the link between the rural and industrial sectors. All these factors constitute the singularity of the Marche territory and its model of economic development. 
The seminar, held in Moie (Ancona Province) in the afternoon of December 14 and in the morning of the following day, aimed to illustrate this reality to 30 Balkan entrepreneurs participating in the initiative, through the description of the institutional cooperative framework in Italy, particularly in the Marche Region.  
Following the Chamber of Commerce greetings (Luciana Frontini), the speeches by Legacoop (Giuliano Massimo) and the Provincial Agriculture Representative Bucciarelli were particularly appreciated. The Legacoop speech consisted in a description of activities carried out by Marche's cooperative and presentation of some data on employment, export and import volumes.
Within the Marche Region, Ancona seems to be the province most interested in cooperativism, both in absolute and relative terms. Another interesting aspect is that regional and provincial cooperatives seem to cover all productive sectors: social and health services, educational and professional activities as well as other services provided to enterprises in the agriculture, forestry and manufacturing sectors.
The 10% growth rate of cooperativism at regional level (Lanzavecchia M. , Un rapporto sulle imprese cooperative nelle Marche, in: "Cooptime", November 2004) also deserves particular attention; data evince the consistent growth of cooperativism in all Marche’s provinces, except in Pesaro (only in 2003). Such figures confirm the hypothetical importance of cooperativism as a choice of entrepreneurial organisation.
The Legacoop speech highlighted the importance of the Social Balance which is increasingly recognised as an instrument of transparency and symbol of entrepreneurial quality. The drafting of Social Balance by Legacoop cooperatives and their member companies is a practise started in the nineties and from then  patrimony has grown significantly. Ethical responsibility, social responsibility and social balance drafting are regarded as inseparable components by cooperatives (see: Legacoop, Ufficio studi Legacoop, La responsabilità sociale cooperativa, a cura di M. P. Salani, Firenze Il Ponte Editore, 2004). 
Nowadays social responsibility is one of the most debated economic subjects, probably due to the increasing need for confidence, transparency and fairness felt by both final consumers and investors. In concrete terms, social responsibility in the management of enterprises, whether cooperative or not, is imperative if the purpose is that of establishing an ethical background for real and loyal competition. It consists essentially in the search for a compromise between the social environment in which activities are developed and the impacts exerted upon it (Checcoli, E., L'evoluzione dell'impresa cooperativa nel mercato globale  - Presidente Legacoop in: "Cooperazione Italiana" n.6/2004). 
Social responsibility is not only a concept but also a best practise that imposes an entrepreneurial behaviour towards quality understood in a wide sense rather than merely in terms of profit. represents an ethical response to the market, thus responsibility constitutes a way to deal with the market that is reflected also in the internal organisation involving direct participation mechanisms related to economic and productive activities. The strong link between cooperative and territory is an essential component of the cooperative modus operandi at the same time that it constitutes a strong point for enhancing competitiveness.(Checcoli,  E. , L'evoluzione dell'impresa cooperativa nel mercato globale  - Presidente Legacoop in: "Cooperazione Italiana" n.6/2004). 
Bucciarelli’s speech was more general and aimed, on one hand, to describe the concrete activities carried out by the Ancona Province and by the Ancona Chamber of Commerce in the benefit of Balkan countries and, on the other hand, to illustrate the reasons why the former Yugoslavian area represents an interesting opportunity and not merely a land to be conquered. Bucciarelli also emphasized the strength of cross-border cooperation and the importance of establishing relationships able to limit environmental damages caused by the current reconstruction process of areas affected by the war. The cultural aspect is central and economic relationships can be established and flourish only through complex links involving human and social relations as well as respect to common values.
Davide Berloni's speech (Chamber of Commerce) in the following morning was also very interesting since it offered updated information about the recent Mid Term Review of the Common Agricultural Policy,  quality production and the new phase of Structural Funds programme (2007-13), whose contents were very appreciated. In the sequence, two case studies were presented by their respective entrepreneurs: Sebastianelli, President of Terra e Cielo, who illustrated the viability of biological agriculture and Doriano Marchetti, President of  Moncaro and co-ordinator of the Food and Agriculture Committee,  who illustrated the production of high quality wines. 
Both speeches reaffirmed the importance of quality production and the increasing need for measures fostering this kind of production. This seems to be the essential objective to be achieved in different ways by both cooperatives. It represents a fundamental value required by consumers and a distinctive company characteristic. Both entrepreneurs explained the importance of entrepreneurial management oriented towards innovative processes and personnel training. All production stages should be organised  according to adequate standards in order to result in high quality products.
All above elements are in line with the new European policy for economic and social cohesion, in anticipation of the 2007-2013 programmes.
Sebastianelli (Terra e Cielo) mentioned that the company is planning to import coffee from Guatemala to be sold in the Italian market. The coffee is purchased directly in a small autochthon village and stocked, controlled, packaged and manufactured by Terra e Cielo. This cooperative is traditionally involved in this kind of international contacts that allow the sale of quality products at convenient prices, by means of commercial contracts made in loco.
In the afternoon of December 15 and during the next two days farm visits were carried out with the purpose of getting in touch with the modus operandi of some important Marche's cooperatives and enterprises. In the afternoon of December 15 Pieralisi and Cooperalt were visited. The first produces agricultural machines and plays an important role at international level in the sector of oil production; the second is a very important company in the milk production and dairy-farming sector, well-known for the variety of its products. Participants were also very impressed by the visit to the oil producer Rosini because of its typical craftmade oil production.
On December 16 Moncaro and Terra e Cielo were visited under direct guidance of Dr. Marchetti  (Moncaro) and Sebastianelli (Terra e Cielo). The programme also included a brief visit to the "Social Cow-house" which represents an interesting experience of non-intensive and entirely biological breeding. Lunch, partially offered by Terra e Cielo, was served in a splendid cantina of the 15th century in Piticchio, small medieval village close to Arcevia. All served products were biological and participants were very satisfied with both dishes and ambient.
After a short break in the afternoon, the beautiful farm Moroder was visited.  Moroder produces high quality wines and functions also as an agritourism enterprise. In fact, it seemed opportune to visit a multifunctional enterprise, since it constitutes an important type of entrepreneurial organisation also in terms of support by the European Commission.  The entrepreneur Moroder presented his company personally, especially the Cantine of the seventh century where some particular vintages of the best "Rosso Conero" wines are stocked. The visit was concluded with a superb dinner very appreciated by guests, especially the dish-wine combinations suggested by Moroder himself.
The morning of December 17 was dedicated to the visit of Jesi Regional Winery where the best Marche wines were presented with technical descriptions and subsequently tasted in combination with regional cheese and salami. This visit was made possible thanks to the collaboration of Assivip which was  responsible for making preparations and combinations. In the sequence, the group visited the historic centre of Jesi.
Also important was the lunch offered on Friday 17 at Le Busche, an excellent restaurant famous at regional and national level. To the lunch participated Dr. Marchetti, Bucciarelli, executives of the Ancona Chamber of Commerce, the Secretary General Dr. Michele De Vita and representatives of some visited enterprises. On occasion of the farm visits contacts were established among Cooperlat, Pieralisi, Terra e Cielo and Balkan enterprises. During lunch, foreign and Italian delegations exchanged gifts and small objects, confirming thus the ever increasing strong relationship between Marche and the Balkan countries.
The initiative was concluded with the visit to Colonnara, famous for its wines and other products like honey and jams.

DAVIDE BERLONI