Vol. 4 No. 3-4 (2010)

Published October 30, 2010

Welcome to numbers 3 and 4 of the 4th volume of Applied
Studies in Agribusiness and Commerce (APSTRACT). This
Official Periodical of the International MBA Network in
Agribusiness and Commerce (AGRIMBA) has been
established to provide an opportunity for publication of
reviewed papers presenting original research findings,
techniques and comments dealing with all aspects of the
agribusiness and commerce. Subjects considered
appropriate for publication in the APSTRACT include
scientific papers, PhD and MBA dissertation summaries,
MBA international news, interim reports of AGRIMBA and
reviews. The APSTRACT provides timely communication of
results of basic and applied research, as well as reviews and
syntheses of information, principles, conclusions, and
interpretations on key issues of agribusiness and commerce.
It encourages publication of reports and summaries on the
findings and conclusions of PHD and MBA studies
conducted by students of International MBA Network.
In this number selected papers of 113th EAAE Seminar
The well defined mission of the Seminar was to
promote partnerships between research communities and
strengthen the contribution of research to economics growth,
food security, and sustainable development by providing an
international platform for strategic dialogue among
stakeholders. EAAE Seminar was held on 9th – 11th
December 2009 in Belgrade, Serbia and studied territorial
competitiveness, factors of development and the role of
agriculture in rural area. Role of human and social capital in
building up agro-regional identity, institutional reform and
competitiveness were considered and studied the role of
innovations and knowledge infrastructure. The Seminar has
encouraged activities in management and investment in
human capital, extension and agricultural R&D activities
and monitored the progress made in the knowledge triangle -
research, education and innovation - which are core factors
in European efforts to meet the ambitious Lisbon goals in
Balkan region. R&D is particularly important to improve the
ability of countries to address their social, economic,
environmental and management challenges for the future.
In order to create a publication series that is widely read
and cited, board of editors, including guest editors Prof.
Zorica Vasiljevic and Prof. Danilo Tomic have considered
manuscripts of any reasonable length in a range of
categories from brief technical comments to monographs, as
described in the Instructions to Authors. Manuscripts were
judged on the basis of their scientific competence, their
contribution of original data, ideas and interpretation, and
the degree to which new findings are integrated with existing



  • Role of innovations and knowledge – infrastructure and institutions

    There is a well known saying: Research converts money into knowledge, innovation converts knowledge into money. The knowledge-based economy has four pillars: innovation, education, the economic and institutional regime, and information infrastructure. Transformation towards a knowledge-based economy will necessarily shift the proportion and growth of national income derived from knowledge-based industries, the percentage of the workforce employed in knowledge-based jobs and the ratio of firms using technology to innovate. Progress towards a knowledge-based economy will be driven by four elements: human capital development, knowledge generation and exploitation (R&D), knowledge infrastructure. Increased investment in these four areas will certainly have an impact. National experience, however, suggests that an incremental approach will not work. Nations that have achieved accelerated growth in outputs and capabilities have acted decisively, targeting investments in areas of strategic opportunity. The organizational and infrastructural improvement of research requires supranational cooperation and the promotion of the free movement of knowledge. Therefore, the EU decision on the establishment of the European Institute of Innovation and Technology (EIT), which ensures that the GDP proportion for research and development (R&D) shall achieve 3% stipulated by member states in the long run, is particularly welcome.

  • Education, scientific-research and consulting work in agriculture of Serbia

    Serbia has small number of producers2 which have encircled production system (from primaryproduction to processing), which do business successful, introduce marketing strategy and production standards, registered their products' mark of origin, succeed to export on EU market, use internet or has its own internet domain, etc. For creation of such, competitive and modern agricultural producer, there is necessity for production specialization, any kind of cooperation and better organization. In same time, there is more space for bigger financial support of state, as expert and consultative support „created“ through strong partnership between public and private sector, i.e. tough and constructive cooperation of state and farmers sector, like as institutions of education, science, research and consultative work. In the paper was given review of number and territorial dispersion of educational institutions, current scientific-research work and consultative functions in agriculture in Serbia, than was pointed out main problems in their functioning and previous work and also proposed concrete suggestions for overcoming of existing limitations, as for modernization /reorganization of those institutions, in a way to be more useful for agricultural producers.

  • Regional identity in rural development: Three case studies of regional branding

    Within the globalizing world, regions and their identities are subjected to great pressure. At present, places are engaged in a process of “territorial competition” in an integrated world economy. The identity of the region can be used as a starting point to brand a region and differentiate it from others. In the regional branding process, the region as a whole becomes a product or brand and offers a “basket” of regional products and services. Regional branding is aimed at creating a more distinctive image or reputation, which helps to increase regional competitiveness. This paper discusses the possibility of regional identity as a mobilizing force for rural development, by studying best practice examples of regional branding. Using the grounded theory approach, we conducted interviews in three case regions:West Cork (Ireland), Groene Woud (the Netherlands) and Pajottenland (Belgium). The study of these cases led to the formulation of critical success factors on the organization of regional branding. Comparative analysis of the cases demonstrates the importance of passionate initiators as ambassadors of the region and the advantage of a well-coordinated internal network in the region. Next to that, the internal marketing of the region is considered an important critical success factors.


  • Agricultural cooperatives and their membership in cooperative unions in Serbia

    Goal of this paper is to analyse business of agricultural cooperatives in Serbia and their territorial distribution. Paper also comprehends analyses of premises of directors of agricultural cooperatives towards cooperative associations, based on result of survey conducted on chosen sample. Analysis is based on the hypothesis that reform processes present in the Serbian economy, and completely absent from cooperative sector, have weaken the work of cooperative unions and undermined regular relations between cooperatives and their associations. Paper also analyse premises of directors of agricultural cooperatives on relevant questions on membership and work of 12 regional, provincial and Cooperative union of Serbia, based on result of survey conducted in 148 or 7.2% of 2.055 agricultural cooperatives in Serbia. For cooperatives that are not members of any union, paper gives systematization of reasons why cooperative is not member and motives that could inspire cooperative to become a member. For cooperatives that are members of some union, we give analyses of answers if cooperative is satisfied with work and activities of union conducted for cooperative welfare; and suggestions for activities that cooperative unions should practice in the interests and needs of their members.

  • The climate change and agriculture – dimensions and correlations

    Global climate changes are taking place and its impacts on economy are already occurring in fields like tourism, agriculture, forestry, infrastructure, insurance industry or capital market. Specialists draw attention that climate change has negative effects and positive effects. For example, in some parts of Europe, especially in north, the agricultural may benefit from temperature rise increasing carbon dioxide levels in the atmosphere. The most important part of these changes is due to greenhouse gas (GHG) emissions from human activity. Between greenhouse gases, carbon dioxide (CO2) is the largest contributor with a weight around of 80% of total GHG emissions. The agriculture is the most affected sector by the climate change, but agricultural activities have many negative implications on environment through emissions of methane and nitrous oxide that result from changes in land use. Besides the negative impact, the agriculture may play a positive role to environment protection through the production of bio fuels. Because of the huge implications of climate change on human activities, the public authorities have made important steps in order to control this phenomenon, to reduce and prevent the negative impact.

  • Adjustment of poland’s agriculture and food sector to challenges of agricultural policy of the European Union

    Paper is aimed in assessment of first period of Poland’s membership in EU and covering agriculture and rural areas with the support under the Common Agricultural Policy in the context of future challenges faced by the agricultural policy.Analysis shows that accession to EU became a strong impulse for growth of the Polish food economy, however the main challenge for the Common Agricultural Policy in future, from Poland’s perspective, will be strengthening the multifunctional agriculture, i.e. territorial cohesion and positive effects of agricultural activity on natural environment.

  • Small and medium enterprises as development factor of agribusiness in Republic of Serbia

    Development of strong and competitive sector of small and medium enterprises has very important role in process of total transition in Republic of Serbia. This sector should be one of the guidelines of economical development and future, like in developed countries. Within the Strategy of development of SME and entrepreneurship in Republic of Serbia from 2003 to 2008 government of the Republic of Serbia, not accidentally, placed among many sectors which are expected to contribute and boost economical development, increase the employment rate, and realize increased influx of means deriving from export, the priority is on sector of processing of agricultural products. It can be concluded that significant contribution from agriculture to improvement of total economical situation is expected. Accession to EU should be considered primarily not only as the opportunity but serious task in regard to restructuring of the agriculture. However, impeding circumstance,in regard to export ofagricultural-foodproducts,first ofallto EU countries, isthefact that thismarket is under strict protective measures within the policy of agriculture and measures of agrarian protectionism. In such conditions it is very difficult for producers and processors of food to enter such closed markets. Small and medium enterprises are facing the choice of the business strategy:

    – to place the existing product on current market;

    – to place the existing product on new markets, including export;

    – to sell the new product on existing market;

    – to place the new product on new markets, including export.

    Therefore, based on analysis of domestic market, volume and structure of import and export of agricultural and food products, as well as analysis of food industry and agricultural production in Serbia, it is necessary to define potential programs for small and medium enterprises with production which could be economically efficient and profitable from the aspect of investment.

  • Structural change in Republika Srpska – small farms between subsistence orientation and modernization

    The paper aims to analyze the main barriers and opportunities for the modernization of the agricultural sector of Republika Srpska with a specific focus on the role of small farms.A particular attention has been given to specific elements related to the human, social, and institutional capital. Methodologically the work has been based on an extensive desk research, on the use of a field survey and on a number of personal interviews with national experts and professionals. Overall the investigation has also greatly benefited from the theoretical framework elaborated by R.Yin within the “case study methodology”.

  • Modeling multifunctionality of agriculture at a farm-level: The case of kerkini district, Northern Greece

    Multifuncionality has become a central concern at both conceptual and empirical levels. In this study, a comparative evaluation of the economic performance of conventional and multifunctional farms (mainly organic farms) was conducted for the Lake Kerkini region (North Greece) with the use of mixed integer non-linear programming method. The economic performance of farms was evaluated in terms of farm income, resource allocation, production level and production mix. The results indicate that multifunctional farms have overall better economic performance and young farm managers are keener to adopt multifunctional farming than the older ones. Differences between the model results and the observed facts are attributed to the structural characteristics of the farms, along with the CAP measures and the existence of multiple objectives, beyond maximization of net farm returns.

  • Analysis of production and competitiveness on small beekeeping farms in selected districts of Serbia

    The study researched the costs and returns on typical small beekeeping farms from five districts in Serbia. On the basis of the field research, data on the number of beehives,type of product, volume of production per beehive and values per measurement unit were collected.In order to demonstrate the competitiveness of various apicultural products, analysis of the available data was performed using analytical calculations. According to the analysis, the labour costs comprise about 49.65% to 64.15% of the variable costs on beekeeping farms in the Raška and Šumadija districts, respectively. Production is most economical on the bee farm in the district of Srem, where every dinar spent in production creates a value of 2.22 dinars, while the farm from the district of Raška is the least economical (1.32 din). Bee farms must reduce labour costs and re-direct their business orientation to other bee products, besides honey, such as pollen, which could be significantly more profitable.


  • Who benefits from emotional labour?

    Emotional labour is an essential requisite in most professions. It is present wherever performance of work involves interactions with colleagues and/or customers. Emotional labour produces multiple positive consequences for organizations, such as constant performance by employees, uniform image, and regular, satisfied customers. Of all effects of emotional labour on individuals,literature discusses the negative ones mostly. This study is to demonstrate that emotional labour may as well have positive effects on individuals.

  • Renewable energy resources in Hungary – solid biomass utilization in terms of necessity and opportunity

    In the 21st century a country’s success significantly depends on how it can solve the problems (supply safety, growing prices, climate change, etc.) induced by the application structure of the fossil energy sources with the means of energy saving, energy efficiency and the utilization of renewable energy resources. The utilization of renewable energy sources has positive effects on five key areas: environment protection, energy policies, fulfilment of EU expectations, agriculture and rural development and on the whole of the national economy. The bioenergy – beside fulfilling the national economic aims – it is putting up the value of the role of agriculture and rural development. The role of agriculture is multi-functional in the process. The agricultural sector has an important task in the area of bioenergy to ensure the proper quality and quantity of raw materials for the increase of bioenergy utilization. This also means new sales perspectives and opportunities for the producers. Above all this, the agricultural policy aims for the agriculture and the rural development segment to be the unambiguous winner of the new bioenergy sector and for most of the available profit to stay with the agricultural sector, with the rural players. For this reason encouraging the raw material production it wishes to encourage the producer their primary process and their local utilization. One of the fundamental objectives of the measures is that agriculture should go beyond the raw material production and take steps towards processing and utilization. The multifunctional role in the product chain might mean extra income and more added value for the producers and the active players in the process. The other objective is to promote the local utilization, the scatter of the environmentally friendly energy sources in rural areas, to change the energy is “lying on the ground unutilized” principle while local processing and promoting the utilization, to achieve a lower energy dependency and to optimize and disseminate cost efficient solutions. To realize all this means a great task and a huge challenge for the agricultural government as well as the rural societies and micro regions but might lead to a successful rural development. The range of the tools and measures to fulfil the aims might be very broad, from the regulating instruments to the various subsidies, coordination and dissemination tools. Part of the subsidy schemes are direct production-type of subsidies (the so called direct payments, for example the area based subsidies) and the other main forms are the investment-type subsidies which are for technology development, promotion of competitive production and local processing and for establishing a green energy industry. In the period of 2007-2013 the key elements of the development schemes were drafted in the frame of the New Hungary Rural Development Programme (ÚMVP) and the Environmental Energy Operational Program (KEOP). The available raw materials and the conditions are taken into consideration while designing the development schemes because a successful realization of a product chain means the assurance of the inputs and outputs. The starting point of determining the development direction is the principle of an operation which is sustainable and economical on the long run. In addition such developments are considered reasonable which are viable on medium and long term and bring numerous rural development, environmental and societal returns.

  • The role of chamber system in development of agricommerce in Serbia

    This research is carried out in order to be determined the role of Chamber system in development of agricommerce along with successful preparation of Serbia for EU accession. On February 28, 1857 Prince Aleksandar Karaðorðeviæ signed the Decree, called THE CONSTITUTION OF THE TRADE. By this Decree, the first BusinessAssociation in Serbia was constituted. Under the Law on retail stores passed in June 1910, the first chambers were established. Those were the following:
    • The Chamber of TRADE
    • The Chamber of CRAFTS
    • The Chamber of INDUSTRY
    • The Chamber ofWORKERS

    Today, in conditions of economic and social reforms and transfer toward market oriented economy, chambers in Serbia chose to reconsider their role, by using experiences of chambers in countries with developed market economy.The chamber strives to be organized as independent, business oriented and expert association of economic operators. The structure of economy, from the aspect of important economic indicators (total revenue, profit), shows dominant share of manufacturing andagro-industry, trade, financial and other services sectors, transport, telecommunication, and construction industries. By generating over 30% of GDP and employment, Belgrade plays vital role in the economy of the whole Serbia. That is an advantage, but also the responsibility to constantly stimulate faster development and higher living standards by inciting the positive changes in economic and overall environment.

  • Generalized coefficients of goods quality and satisfying of consumers demand

    In process of work the problems are set and solved. There are problems of social welfare research in conditions of nonhomogeneity of objects and subjects of management, of revealing and substantiating insuperable difficulties in rising of social welfare by approaches, worked out before. Also there developed a new direction in implementation of the most important aim of any socially-oriented economy.


  • Farm-retail price transmission in Malaysian pork sector

    This study intends to determine the farm-retail price transmission behaviors of pork in Malaysia to serve as a good implication for pork pricing system in Malaysia. Using monthly data from January 1997 to December 2008, markup pricing model, Houck, and ECM approaches were estimated. While many previous studies found that farm-retail price transmission is asymmetric, this study encountered different result where the findings in both the Houck and ECM approaches suggested that the Malaysian pork farm-retail price transmission is symmetric. A change in farm price of pork is likely to have similar direction in change of retail price of pork in Malaysia. The pricing system of pork can therefore be further described by the estimated price transmission elasticities (that derived from the symmetric mark-up pricing model) where retail price is very sensitive to the changes in farm price. A change in farm price is expected to result in a bigger change in retail price of pork while other things remain unchanged.

  • Brief overview of the international flower market, its state and development under present-day economic conditions

    The research of international flower market was conducted in this article.A big attention was paid to the main countries which are suppliers and importers of flowers and plants including their shares in the world flower production. The impact of financial crisis on this economic sector and inequality in consumption level of different countries were observed.

  • Price risk management using by a specified futures model

    The principal achievement of this paper is to introduce the operation of a specified ‘Futures’ model and it’s practice for decision makers of financial institutes through an example based on the price data’s of grain futures market from EU assessment 2004 to these days in Hungary. Based on a theoretical foundation, the calculation model was developed in order to assist short and long-term marketing decisions. The economical basis of the model is the combinative use of two market institutions: public warehousing and futures market. This electronically developed and working model ‘using excel background ‘allows all of the participants of the market: producers, consumers,banks and traders, to use this model in immediate calculations. In addition it helps in order to establish the own business strategy. The model can be used to analyze price influencing factors therefore; it can also be used for policy-making decisions for market participants as well as banks dealing with trade financing activity.

  • Competiveness of the Hungarian pig sector

    The number of Hungarian pig population was 3.2 million in February 2010, 150 thousand less than in the previous year. This included 226 thousand brood sows, 54 thousand less than in the previous year, and this number is expected to fall further next year. In the past two years the number of brood sows decreased to a larger extent in economic organizations than in private farms (KSH, 2010). Despite the rising costs of feedingstuffs, producer prices for slaughter pigs have decreased, therefore private farms with small herds of brood sows haves old their breeding animals for slaughter houses. However, economic organizations mostly tried to restructure their production and place emphasis on plant production, thus improving their situation. These market changes indicate that the sector continues to scale down, production shrinks, market losses are continuous within the sector and vulnerability threaten the players of the product cycle increasingly.


  • Green house gas mitigation and headline targets of Europe 2020 strategy

    Climate change is considered as one of the biggest challenges of XXI century and global action is needed to mitigate greenhouse gases (GHG) and adapt to changing water levels and temperatures, which affect food supply and ecosystem integrity. Climate change will have significant economic and social impacts in many regions of EU and sectors like agriculture is considered to bear greater adverse affects. Less developed regions and certain sections of society (the elderly and/or low-income households) are expected to suffer more from climate change. Climate change policy of EU, adopted in December 2008, includes ambitious targets for 2020. The policy is focused on a sustainable future with an energy-efficient economy by (i) cutting greenhouse gases by 20% (30% if international agreement is reached), (ii) reducing energy consumption by 20% through increased energy efficiency and iii) meeting 20% of energy needs from renewable sources. In the frame of the headline targets of Europe 2020 Strategy, this paper discusses most important greenhouse gas-emitting activities in agriculture, emphasizes the importance structural changes through the modernisation of infrastructure particularly in developing regions of EU and calls for enhancing the competitiveness of economy to promote energy efficiency.

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