The paper presents the results of research of agriculture of the countries of the Western Balkans in the period of 2002–2009. Specifically, general economic (GDP per capita, share of agriculture in GDP, inflation rate, and unemployment rate), resource (share of arable land in the total utilized agricultural land, of employees in agriculture i...n the total number of employees, and of rural population in the total population), and value indicators (value added of agriculture in % of GDP, value added of agriculture per employee in agriculture, producers’ prices of wheat, corn, and bovine milk, share of agriculture in the values of export and import) were compared.
In the paper the changes in agriculture in terms of falling share of agriculture in gross domestic product and decrease in the share of persons employed in agriculture in total employment in Poland and selected countries are discussed.The main driver of these changes is a faster pace of development of non-agricultural activities and continually... deteriorating relations between the costs of production factors and prices of agricultural products. The rate of growth in labor costs and prices of the means of production for agriculture is much faster than the rate of increase in prices of agricultural products.This causes the decline in profitability of agricultural production which increases the size of farms. The pace is dependent on the level of economic development of the country. The study also identified trends in the structure of farms, functions and systems of agriculture in the generational perspective. The polarization of the farms will deepen.A strong group of commodity farms and a group of so-called self – subsistence social farms will emerge. Agriculture in Poland will have a dual nature. In addition to the production function and social services agriculture will expand the scope of service functions for the environment and society.
Agriculture is one of the most important sectors for the Mongolian economy. Also, self-sufficient food is a significant target that has a vital role in the food safety of people in Mongolia. But due to climate change, not proper management, and lack of technology, the Mongolian agricultural sector is facing several issues. So this article aims...to find some potential solutions to improve this situation, especially for the crop production sector in Mongolia. To define the current situation of Mongolian agriculture, we used statistical data and reports and recent scientific articles as well as online sources. The current situation of Mongolian agriculture is defined using SWOT analysis reported by the Ministry of Food, Agriculture, and Light Industry of Mongolia. Based on this research, we discuss the possibility of using a drone to improve the performance of agriculture in Mongolia. As a result, a drone is effective in enhancing the performance of agriculture performed by householders. Also, two effective models that are based on ICTs to address soil erosion and harvest losses issues in Mongolia are defined in this article.
JEL Classification: Q16
In the paper the changes in agriculture in terms of falling share of agriculture in gross domestic product and decrease in the share of persons employed in agriculture in total employment in Poland and selected countries are discussed.The main driver of these changes is a faster pace of development of non-agricultural activities and continually... deteriorating relations between the costs of production factors and prices of agricultural products. The rate of growth in labor costs and prices of the means of production for agriculture is much faster than the rate of increase in prices of agricultural products. This causes the decline in profitability of agricultural production which in creases the size of farms. The pace is dependent on the level of economic development of the country. The study also identified trends in the structure of farms, functions and systems of agriculture in the generational perspective.The polarization of the farms will deepen.A strong group of commodity farms and a group of so-called self – subsistence social farms will emerge. Agriculture in Poland will have a dual nature. In addition to the production function and social services agriculture will expand the scope of service functions for the environment and society.
There are evidences that the climate is changing and the effects on agriculture and wildlife are discernible. Spring is occurring earlier and autumn later, all of which have impacts on agriculture and forestry. Climate change is also predicted to result in more frequent droughts, increased flooding in Hungary, but the relationship between agric...ulture and climate change is more complex. Climate change has physical effects on farming and farm based wildlife. Agriculture needs to adapt to climate change by exploring, which crops and farming systems are best adapted to the changed conditions. Land management also needs to adapt to preserve biodiversity by protecting valuable habitats and species and helping them in the changing environment. With better management, agriculture and forestry can also mitigate climate change by reducing direct greenhouse gas emissions from land use, land use change and forestry, by producing crops as a source of renewable energy and by protecting carbon stored in soils and in manure. The HRDP comprises of a series of funding based on the following overarching priorities: (i) enhance the environment and countryside, (ii) making agriculture and forestry more competitive and sustainable, (iii) enhancing opportunity in rural areas, whether in the farming sector or the broader rural economy. Actions discussed in this paper are based on the New Hungary Rural Development Programme (2007–2013) and focused on reducing the effects of climate change in rural area. Establishment of agro-forestry systems and integrated pest management help mitigation goals and increase climate change adaptation potential. Minimizing unwanted side effects of agriculture by reducing the use of fertilizer and increasing the safety for environment (soil, water, and air) and human health have positive effects on adaptation potential. Restoration of agricultural production though diversification of agriculture and pastures management, improvement in drain age and irrigation equipment are good examples of adaptation for climate change. Integrated production, which is oriented to controlled cultivation of crops, vine, fruits and vegetables, and improvement of animal rearing conditions to increase production standards and overall welfare are preferred and ecologically sound methods of adaptation.
The modern concept of rural development implies the use of agricultural resources, primarily agricultural land, for other (non-agricultural) activities besides its agricultural purpose. The integral aim of this concept of rural development is the maximization of economic results, besides the sustainable development of rural areas, environmental... protection and the production of strategic (staple) agricultural products. The objective of this paper is to define the general, theoretical, quantitative model for the determination of the size and quality of agricultural land which, considering the above-mentioned demands (criteria), is optimal for the utilization in agricultural production in certain regions. The remaining agricultural land would be available for the non-agricultural purposes. The economic optimal model for the selection of agricultural land in the traditional agriculture is the model of linear programming. The criteria of the land selection for traditional agriculture are the economic effectiveness (measured by net income or by gross national product) and the economic efficiency (measured by the production economy). The maximum economic effectiveness is determined by the standard method of linear programming and the maximum economy by the method of broken linear programming. The solution of compromise can be determined by multi-criteria programming, based on the minimum differences. The limitation groups in the mentioned variations of the model are: limitations of production quotas of agricultural products, minimum quantities of staple agricultural products, limitations of processing plants in a region (minimum and maximum), limitation of crop rotation, limitations of the needs in animal husbandry for bulky for age and limitations of agricultural land according to various types of utilization. By quantitative defining of the structure and size of agricultural land for traditional agriculture, “the surplus” and structure of agricultural land available for non-agricultural purposes is automatically determined.
The main ambition of this paper is to analyse agricultural developments in selected new EU member states with particular emphasis on government expenditures in agriculture. The main objective is to identify the relationship between government expenditures development on one side, and agrarian sector performance (the value of production) in sele...cted member states on the other. The conclusions drawn from this analysis are that the agricultural sector has changed its structure and position within the national economy of selected new EU member states significantly in the 20 years since the early 1990s. Member states included in the analysis reduced both the size of their agricultural sector (number of people working in agriculture, total arable areas, number of animals, etc.), and the value of agricultural output. Despite the significant reduction of the agricultural output, member states became more efficient – and in particular their productivity per farmer increased significantly. Selected country’s agricultural sector, its structure and production value development are closely related to government expenditures. Significant correlation is apparent between agricultural government expenditures and the change in the number of economically active persons in agriculture, development of agricultural production, agricultural area, agricultural GDP and agricultural capital stock. Regarding the elasticity of new EU member states’ agricultural sector in relation to changes in government expenditures, significant elasticity is apparent in the case of the number of economically active persons in agriculture, agricultural production (especially livestock production), area of arable land, agricultural GDP and capital stock.
Serbia is mostly rural country, as three fourth of its territory make rural areas, while almost half population is living in rural areas. Serbian agriculture is the sector which is very important for the total economy of the country in respect of resources, participation in GDP, employment as well as importance for rural areas and population. T...his is the only sector in Serbian economy that shows positive foreign trade balance in the recent several years.There are potentials for development of agrarian entrepreneurship on one hand, but on the other, there are constraints in existence of great number of small family farms whereas the huge share could not have commercial profile and could not live only from agricultural activities. The concept of multifunctional development of agriculture and rural areas is still present mostly in scientific and political sphere without clear explanation or interpretation as well as mechanisms of implementation. Serbia’s rural space is heterogenic and devastated in different extent, and therefore extremely complicated for planning of multifunctional development.
This paper addresses the issue of the role of agriculture in multifunctional rural development in Italy. Italy is characterised by high heterogeneity interms of territorial composition, rural areas and the role of agriculture. The paper reviews the main multifunctionality concerns in Italy, by discussing rural development issues and policies an...d addressing the role of agriculture in such a context.The further development of agriculture and related future issues are then discussed, both in terms of dominant themes and most relevant policy design issues.
Agricultural education and training in the former Czechoslovakia has traditionally focused on fostering the position of cooperatives and state farms. The destruction of socialist agriculture and the reduction of commuting opportunities in the urban space during the transition have resulted in the handicapped socio-economic position of the Slova...k countryside and its population. The role of education and training in fostering agribusiness growth and rural development could therefore become a crucial strategy. The aim of this article is to analyse the current state of education and training for agribusiness and for rural development in Slovakia using the methods of literature research and document analysis. The article interprets general trends in the development of adult education in Slovakia during the transition period. The main priorities and perspectives formulated in the national strategy for education in agriculture (for the period 2007-2013) are discussed in the mentioned context. With a focus on the leading role of the Slovak University of Agriculture in Nitra, the paper assesses the current status of formal and further agricultural education and training offered in academic and other educational institutions. The paper concludes by discussing implications, recommendations and challenges for developing education and training initiatives for agribusiness and rural development.
Agricultural reform resulted a shift from collective farming to small-scale production in China. This reform also has resulted a strong increase in gross agricultural output, which coincides with a slower increase in labour productivity. At the beginning of the reforms, agriculture accounted for 70 percent of total employment in China and still... employs more than 50%. As a result of these reforms, China has undergone impressive economic growth also in the agriculture; the country has become one of the world’s top exporters and is attracting record amounts of foreign investment. The government has also stepped up investments in rural areas to meet the market demand for agricultural products. Results are very competitive compared to Central and Eastern European countries, where agriculture accounted for only 15 percent of total employment, but agricultural reform resulted a strong decline in gross agricultural output, which coincides with a similarly strong decline in employment. When approaching the issue of sustainable agriculture, we have to take into consideration, which China and India feed the largest populations in the world and both countries have had its own agricultural successes in the past 50 years. China has used land far more efficiently than many developed countries. With nine percent of the world’s arable land, China is responsible for the greatest share of agricultural production worldwide. Volume of produced pork, eggs, wheat, cotton, tobacco, and rice has increased and China exports an increasing amount of product each year. China has opened his borders, but do not expose food consumers to price shocks and producers to risks and disincentives. In this paper, the land-tenure system and the trends of agricultural developments are analysed in China and selected countries of EU.
Eastern part of Croatia is agricultural region according to natural resource (fertile soil, first of all), as well as human potential (long experience in traditional agriculture). Besides agriculture as traditional activity, a characteristic of rurality is also added to this region. Rural area is dominant in Eastern Croatia and it effects on re...latively small urban areas. This paper represents new possibilities of rural economic activities on family farms in Eastern Croatia. Role and significant of rural economic activities is analyzed through indicators overview (land structure, GDP, population, population density, TEA index, unemployment ect.). Challenges through diversification of rural economic activities in this paper includes added economic activities realized on family farms through tourism, crafts, handy work, processing, renewable energyetc. Added economic activities on family farms in Eastern Croatia participate with only 3.9%. Suggestions and possibilities measures of rural economic activities diversification are reflected through two main streams. First stream is diversification of activities through added value of agricultural products as vertical connection (organic food, autochthony products, functional food, renewable energy sources etc.). Other one economic activity diversification indicates distribution function of final products through different services on the family farm (direct sale, specialized shops, rural tourism and many other services).
This paper addresses the issue of the role of agriculture in multifunctional rural development in Italy. Italy is characterised by high heterogeneity in terms of territorial composition, rural areas and the role of agriculture. The paper reviews the main multifunctionality concerns in Italy, by discussing rural development issues and policies a...nd addressing the role of agriculture in such a context. The further development of agriculture and related future issues are then discussed, both in terms of dominant themes and most relevant policy design issues.
Ever since 2012, the EU ETS (European Union’s Emission Trading Scheme), which is the EU’s climate policy was extended to include the ESD (Effort Sharing Decision) sectors’ (agriculture, transport, building) regulations. As its name implies, this mechanism is based off of shared interests and efforts, all in order to reach the climate goal...s. Therefore, analysing the agriculture sector from an environmental viewpoint requires the analysis of related sectors as well, since their performances will have an impact on determining the requirements to be met by the agriculture. Seeing that those primarily present in said sectors are not various firms, but people and public utility management institutions instead, the level of regulations draws from the economic state of the various countries in question (GDP per capita). Therefore, member states like ours did not receive difficult goals until 2020, due to our performance being lower than the average of the EU. However, during the program phase between 2021 and 2030, all nations are to lower their GHG (greenhouse gases) emission, and have to make developments to restrict GHG emission level growth within the ESD, which means we already have to estimate our future possibilities. During the analyses, we will see that analysing agriculture from an environmental viewpoint, without doing the same to their related sectors and their various related influences is impossible. The GHG emission goals determined by the EU have to be cleared by the agriculture sector, but the inputs from transport, waste management and building are required nonetheless.
JEL classification: Q58
Many farmers, in addition to normal farming activity, have already turned to agritourism as a source of additional farm income and opportunities. There are numerous benefits from the development of agritourism: it may strengthen local economy, create job opportunities and new businesses; develop and promote training and certification programs t...o introduce young people to agriculture and environment. Agritourism helps preserve rural lifestyles and landscape and also offers the opportunity to provide "sustainable" or "green" tourism. Organic agriculture is a cultural evolution that finds its origins in a environmentalist culture. Furthermore the focus on these products is due to demand on healthy foods with high quality standard limiting chemical substances usage. It’s clear the link of the organic agriculture with agritourism and tourism services. They have a considerable role in the future development of rural areas. The purpose of this paper was to identify and examine those factors that have helped rural communities successfully develop agritourism, in particular organic agritourism and its entrepreneurship opportunities. Several focus groups were conducted with local business persons and leaders about a applicative case of South Italy area.
When viewed from the perspective of climate policy, agriculture as a separate sector is one of the most difficult development areas to assess. One of the reasons for this is the problem of the localization of greenhouse gas emitters, caused by the fact that production takes place in small or dispersed production units. The special circumstance...that unit production takes place in complex interactive systems (food, feed, energy sources, main products, by-products, etc.) is yet another special factor, which in addition makes it significantly more difficult to measure and identify the GHGs they emit than if they were a uniform production plant. Additionally, there are few sectors outside agriculture where decision-makers encounter such strong opposition and lobby interests when developing limiting regulations. This stems from the fact that following World War II, European decision-makers and the Common Agricultural Policy elevated agriculture to a prominent role whose importance was indisputable. As a result, both climate policy and other measures that would result in any reduction of the priority of the sector are very difficult to implement, since the players involved always reason that limitations would restrict their competiveness and the security of their production. In addition, the uncertain nature of regulatory elements also poses a grave problem. As an example, the name of the sector itself – the LULUCF (Land Use, Land Use Change and Forestry) sector – shows that the strategy for reducing the greenhouse gasses emitted by the whole sector would be significantly different if these units were treated separately (agricultural land use, forest, not-cultivated areas). Taking the above into account, the present study aims to identify development directions that in turn allow those low-carbon development directions to be pinpointed within animal husbandry and plant production that have the greatest feasibility and can contribute to decreasing the GHG environmental load exerted by agriculture.
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 renewabl...e 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.
Agricultural produce certification is synonymous to farm assurance of which cocoa certification is an example; dealing with issues of Good Agricultural, Environmental and Social Practices (GAP, GEP and GSP) in cocoa production. Essentially, GAP, GEP and GSP packages had in-built mechanism that can aid farmers mitigate factors that could lead to... farm income risks in cocoa production. Consequently, this study examined the influence of cocoa certification on income risks of cocoa farming households in South-west Nigeria. A multistage sampling technique was used to select 180 cocoa farming households from whose heads data were obtained with interview schedule in Southwest Nigeria. Data were analyzed with Chi-square Statistic, Income Risk Management Diversification Index (IRD) and Mann-Whitney-U Test Statistic. Chi-square analysis shows that (52.3%) certified cocoa farming households employed more risk management strategies than (94.2%) uncertified cocoa farming households (p<0.01). The Mann-Whitney-U test revealed a significant difference (p>0.05) between the income risk management practices of certified and uncertified cocoa farming households. Therefore, produce certification has been helping cocoa farming households in mitigating farm income risk in cocoa production through the employment of diverse (risk) management strategies. Hence, stakeholders should intensify efforts in encouraging farming households to embrace (cocoa) produce certification.
Serbia is mostly rural country, as three fourth of its territory make rural areas, while almost half population is living in rural areas. Serbian agriculture is the sector which is very important for the total economy of the country in respect of resources, participation in GDP, employment as well as importance for rural areas and population. T...his is the only sector in Serbian economy that shows positive foreign trade balance in the recent several years.There are potentials for development of agrarian entrepreneurship on one hand, but on the other, there are constraints in existence of great number of small family farms whereas the huge share could not have commercial profile and could not live only from agricultural activities. The concept of multifunctional development of agriculture and rural areas is still present mostly inscientific and political sphere without clear explanation or interpretation as well as mechanisms of implementation. Serbia’s rural space is heterogenic and devastated in different extent, and therefore extremely complicated for planning of multifunctional development.
The purpose of this paper is to explore recent trends in the Croatian agriculture and forestry business sector and compare it with the Croatian economy as a whole. This topic is considered interesting because recent business years have been heavily influenced by the global financial crisis. Many authors would say that agriculture, as a specific... branch of the economy, does not follow general trends, but is affected rather by other factors, especially such as environmental ones. The global financial crisis had the most negative impact on the Croatian economy in the 2008/2009 period, when the GDP growth rate tumbled from 2.4% to -5.8%. Although some positive movements have been recorded since 2009, a recession is still going on. Based on information from the National Financial Agency (FINA) database we found that during the period 2007-2011, agricultural firms experienced the same trends as the whole economy, except in terms of average monthly salaries and employment. However, due to the impact of / on? agricultural products prices and yields, in two year period from 2008 to 2010, agricultural firms recorded an almost linear fall in revenues, while the national business sector on the whole experienced a sharp fall in revenues in 2009 and then only a modest fall in 2010.
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 Se...rbia 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.
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 agr...icultural 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.
International competitiveness, being a key objective of each economic entity, is at the same time significantly determined by the level of risk the entity is coping. Based on the assumption that risk management is directly linked to competitiveness in agribusiness, the scope of this paper is predominantly focused on the wine agribusiness in Cro...atia. The aim of this paper is to encompass available literature and transfer findings to interested parties, about risks and competitiveness in agriculture, with particular reference to the wine sector. Qualitative analysis of secondary data, descriptive i.e. monographic method, deductive method and comparison of available papers from the world and Croatia were applied in the paper. There are very few companies in general, however, that tend to use their abilities to manage risks as a source of competitive advantage. These companies go beyond compliance or cost-controlling defensive approaches and take a more aggressive stance toward risk. They have realized that their risk management capabilities can be leveraged as a source of competitive advantage (Elahi, 2013). Current literature showed that such companies indirectly exist within global agribusiness. Examples of such companies in the wine sector could be found in Old World and New World wine countries. In regards with the mentioned, further research in the wine sector that would more directly link competitiveness and risk management and benefits that could be drawn from such “linkage” is needed.
Albania is considered one of the most important countries where olives are cultivated due to its geographical position and climate conditions. The country is facing many problems with the quality of olive oil which is related to cultivation methods and agronomic techniques. The economic value of the sector is calculated almost €20 million per... year. For years the cultivation of olives and associated products have been considered an important sector within agriculture and are an integral part of the Albanian diet. The current study aims to analyze the factors influencing consumer preferences for a standardized olive oil. The data collection was conducted through a socio-economic survey. The survey was an important element which provided general and specific information linked to the study area. The interviewees were selected randomly. Descriptive and multinomial logistic regression analyses were used to evaluate the survey data. As a result, we conclude that Albanian consumers prefer domestic olive oil because they are familiar with the taste and believe in its qualities. Usually, Albanian consumers choose the quality of olive oil at the purchase moment, due to their close relationship with the seller.
JEL CODE: D12
Serbian honey producers are exposed to the increased international competition of recent years. To face up to the new changes, producers are progressively using diversification strategies, such as direct sales and production diversification. The direct sales strategy allows the producers to increase the product added value, while diversificatio...n aims to offer new products to the consumers. The aim of this paper is to analyse the honey marketing strategy of Serbian honey producers. The first part of the paper analyses the structure of production costs, production performances as well as the determinants of the honey supply. In the second part of the paper, analysis is focused on the determinants of direct sales. Finally, in the third part of the paper, diversification strategies are discussed. The data for this research has been obtained on the basis of a representative sample consisting of 84 Serbian honey producers interviewed in 2011 and 2012. The results show that the Serbian honey producers operate with more or less similar production costs and with production performances that do not differ significantly. They use direct marketing for two reasons: firstly, it affords personal contact with consumers, and secondly, they aim to decrease the transaction costs, thereby keeping a higher share of the product’s final value. Offering new products to consumers is an attempt to create additional product demand.