USAID Sustainable Local Development Project: Value Chain in Dairy Production

The Project assists selected municipalities to overcome development challenges, improve public services, and strengthen local economies through intermunicipal cooperation. The fifth component of this Project, Improving the business enabling environment, aims at creating more favorable conditions for employment, primarily of young people, and increasing the inflow of investments both on the local and on the intermunicipal/regional level. The Pešter Development Center (PDC) is a priority project within the intermunicipal cooperation of the city of Novi Pazar and municipalities of Sjenica and Tutin. The Project's goal is to provide more balanced socio-economic development of Southwest Serbia through building human, technical, and institutional capacities at the Pešter Plain. The Project consortium consists of the city of Novi Pazar and municipalities of Sjenica and Tutin, and is being implemented by the Sandžak Regional Development Agency (SEDA). The project implementation is supported by the Czech Development Agency, the Ministry without Portfolio of the Republic of Serbia, EU PROGRES, and USAID Sustainable Local Development Project. The document "Value chain in dairy production" aims to conduct an analysis of the dairy sector in the Pešter region. The analysis includes horizontal and vertical connections to identify unused potentials and current problems in the Pešter dairy production. The change in methodology was caused by numerous problems and dangers that exist in the primary livestock production part of the dairy chain, making a direct impact on the other parts of the dairy chain. When it comes to dairy processing, there is a huge variety and number of variations. Most of the dairies were not willing to present the data, which made it impossible to set up the value chain in accordance with theoretical models. The analysis revealed that the Pešter region has a significant number of dairy farms, with a total of 1,500 farms in the region. The majority of these farms are small-scale, with an average herd size of 10-20 heads. The breeding composition of the dairy farms in the region is dominated by local breeds, with a small percentage of crossbred animals. The feeding of dairy animals in the region is mainly based on hay and silage, with a small percentage of concentrates. The health and veterinarian care of dairy animals in the region is inadequate, with a lack of veterinary services and equipment. The milk production in the Pešter region is mainly based on small-scale dairy farms, with an average milk yield of 1,500 liters per year. The milk consumption in the region is mainly based on local demand, with a small percentage of milk being sold to neighboring regions. The milk purchase in the region is mainly based on direct sales from dairy farms to dairies, with a small percentage of milk being sold to other buyers. The dairies in the region are mainly small-scale, with an average production capacity of 1,000 liters per day. The support to the dairy sector in the Pešter region is mainly based on institutional framework, state subsidies and programs, professional organizations, laboratories for testing milk quality, school system, research, Chamber of Commerce, municipalities, and Sandžak Regional Development Agency - SEDA. The institutional framework in the region is mainly based on the Ministry of Agriculture, Trade, Water Management and Forestry, which is responsible for the development of the dairy sector. The state subsidies and programs in the region are mainly based on the Instrument of Pre-Accession Assistance for Rural Development (IPARD) and the Program of European Partnership with Municipalities (EU PROGRES).