Contact Us
Published on March 30th, 2023

How Localization and a Market Systems Approach Improved Competitiveness in Serbia

DT Global recently completed the USAID Competitiveness Systems Strengthening (CSS) Activity in Serbia, which was designed to strengthen Serbia’s agriculture processing sector. Our work had extensive reach—supporting more than 890 organizations from 114 municipalities, including 580 SMEs—and used growth of sales as a key metric for performance.

The Activity used market systems development approach, focusing on competitiveness constraints that are systemic—rather than particular to individual firms—while testing and proving collaborative methodologies to resolve these constraints. We relied on experimentation and extensive piloting— drawing on our robust Collaboration, Learning, and Adaptation processes—to guide decisions.

We applied the market systems development approach to a prominent set of value chains within the fruits and vegetables subsector, strengthening Serbia’s overall competitiveness along the way. As a result of our work, the Serbian firms we supported increased their sales by 32% more than the control group.

To celebrate our project close, we’re rounding up key successes from the five and a half years of implementation:

Credit: Piotr Nyga
  • Facilitated over $42.9M in investments in agriculture and agribusiness firms and producers: CSS supported firms to attract investment by providing financial technical assistance, and piloting new financing models. The project provided financial technical assistance to 84 clients, SMEs, and farmers to secure financing for 90 investments worth $41.5M.
  • Supported key donor financing instruments: CSS supported Development Finance Corporation to establish and launch a loan portfolio guarantee program in Serbia. CSS provided financial technical assistance to 17 companies to acquire loans backed by Development Finance Corporation guarantees with a total value of nearly $13M.
  • Expanded market penetration: In partnership with the Serbian Chamber of Commerce, the Development Agency of Serbia, the Ministry of Agriculture, and industry associations, CSS supported 93 companies to participate in international trade fairs in Europe, the US, and the Middle East. CSS enabled an additional 662 companies to exhibit at project-supported trade shows in Serbia, including the Belgrade Food Shows and Agro Belgrade fair. As a result of these events, CSS-supported companies signed 540 sales contracts with international purchasers that had a total value of $40 million.
  • Strengthened value chains and industry linkages: In partnership with industry leading companies and industry/trade associations, CSS helped 164 SMEs and 3,231 fruit and vegetable growers integrate into high value export supply chains. In 2020 and 2021, seven of these companies generated $12 million in additional sales and negotiated 52 new contracts, providing new market opportunities for over 880 small farms, primarily from underdeveloped parts of Serbia.

  • Designed a business support hub model: The project designed and helped establish hubs that supported more than 37 premium food producers to upgrade their products and place 90 new premium products on the shelves of major domestic retail chains. CSS supported a German retailer to help 19 local SMEs develop 79 new products for sale in shops across Serbia.
  • Raised the profile of Serbian wines in Europe: Focusing on indigenous grape varieties, such as Prokupac, CSS supported local actors to raise awareness of Serbian wines in both domestic and international markets. CSS supported the Prokupac Days events, during which winery sales and hotel, restaurant, and catering (HoReCa) sales increased. CSS facilitated the participation of European wine industry experts and food and wine journalists, and partnered with a renowned, international wine glass producer, Riedel, to create a suitable glass specifically for the Serbian Prokupac wine variety. Prokupac is now positioned globally alongside other global premium wine varieties.
  • Built partnerships for improved food quality: In cooperation with University of California Davis, CSS helped the Belgrade Faculty of Agriculture introduce specialized food industry certification courses to improve workforce skills and increase competitiveness. Participants from 99 local companies completed the courses.
  • Introduced innovative financing model for micro producers: To support financing for micro agribusiness producers, CSS partnered with the Divac Foundation and 9 municipalities to establish sustainable revolving funds through which local farmers receive interest-free financing to invest in small machinery, hail protection systems, and seeds. The total value of all established funds is more than $270,000 and the funds supported 105 farmers, one-third of whom were women.

Key to our implementation success was our facilitative, localized approach to implementation, partnering with local actors to design, test, and scale up technical and capacity building interventions. In doing so, CSS leveraged local knowledge, ensured local ownership over activities, and built the capacity of both activity implementers and beneficiaries at the same time—thus strengthening the broader market system and building the sustainability of project initiatives for years to come.