Bosnia-Herzegovina and Montenegro - Venturing a new beginning

With support from the BMZ, the DGRV has been promoting the development of the cooperative dairy industry in Bosnia-Herzegovina and Montenegro since the year 2001. The local population is still suffering from the after-effects of the disintegration of the Yugoslav state and the armed conflicts that ensued. By implementing this project, the DGRV seeks to support a decentralized form of economic development in structurally weak regions and to make an important contribution to poverty reduction and the integration of the various ethnicities in so doing.
Several small cheese-producing cooperatives have been set up primarily in the mountainous regions of these two countries during the last years; they produce high-quality cheeses (hard cheese, sliced cheese) with a flavour typical of this region. The families of many smallholders make a living out of processing milk for the production of cheese to be sold.
During the initial phase, cooperative pilot projects were supported in the partner countries; in the meantime, they are used as a model by others. Since the conclusion of the start-up phase in 2006, the pilot projects have gone through a phase of consolidation. Production yields are stable and product quality is excellent. A central trading cooperative has been established in Sarajevo in order to facilitate product marketing. It reduces the distance to consumers or customers, respectively, and thus makes it easier to market the products at considerably lower costs.
The pilot cooperatives are primarily supported by providing short-term consultancy and financial assistance for investments, for example in plant technology. This is done in cooperation with local banks: the cooperatives obtain long-term investment loans through the DGRV and repay into a fund, which is used in turn by the intermediary banks for future small-scale lending. Some of the newly-established cooperatives have become "bankable" only as a result of this procedure. In the meantime, banks already provide loans from their own portfolio.
A particularly positive result of these project activities are the close contacts which have been developing between the cooperatives in Bosnia-Herzegovina and Montenegro. For example, numerous seminars and practical work programmes have been held jointly either locally or in Germany. Such an international transfer of know-how and exchange of experience is particularly helpful for multiplying the pilot concepts.