Cooperatives and cooperative enterprises constitute an essential part of the European economy. They can contribute to achieving and maintaining the levels of employment, help reduce inequalities, promote fairness and equality and improve the working conditions of their members. However, the potential of cooperatives and joining cooperatives has not been fully used. The “picture” of the cooperatives needs to be improved both on the European and national levels of the member states, especially of those that had a negative experience during the period of the communist regime.
The European post-socialist societies have marked their transition in the previous decade with an orientation towards efficient market management and political democratization. However, the efforts to depoliticize cooperative unions, federations and apex organizations have proved to be a difficult task. Difficulties in changing the entrepreneurs’ mentality towards cooperatives and difficulties in changing the mentality in public administration structures indicate an obvious lack of leaders experienced in managing independent, market-oriented cooperatives. And in the transition process, the cooperatives themselves weakened and became fully disoriented due to the lack of a relevant legislative framework.
The historical experience of common activities in in-house cooperatives and the tradition of operating a business through a cooperative constitute the basis for the development of cooperatives in Croatia. The strengthening and awakening of entrepreneurial initiative in small family agricultural farms resulted from the recognition of the importance of joining forces for more efficient sales, lower costs and business risks, higher competitiveness and distinctiveness of the cooperative products and achieving an economy of scale. The market concentration of scattered agricultural farms in terms of production through cooperatives provides at the same time stability and business cooperation for the farms in areas in which they are weak and more bargaining power. The potential of the cooperatives lies in the
Options to Boost the Development and Sustainability of the Croatian Economy by Creating Cooperatives
creation of common benefits through the cooperative mechanisms to counter low income, insufficiently developed market exchanges and limited social assistance systems.
The overall problems of the development of SME-s in Croatia, including the lack of knowledge and technology, inadequate sources of finance and dysfunctions in the rule of law also affect the cooperatives. Cooperatives are mainly small companies with several varied activities, among which sales and purchasing mainly prevail rather than production and processing. Most cooperatives do not operate on the global market, and the influence of cooperatives on the domestic market also decreases due to the increasingly higher competition of trading companies.
Although there are cooperative aid measures on a national level, funds from aid for this purpose are dislocated and scattered in terms of competences and finance. Such an aid system highlights the need for a systematic approach to cooperatives. The number aid programmes is limited and the activities of the State and local organizations are carried out for the purpose of the foundation, growth and development of cooperatives. Inadequate aid for enterprises cannot be a factor of change. Therefore, it is important to raise awareness of the importance of defining the problems and needs, i.e. defining the demand and shaping the supply in order to develop relevant aid programmes. Aid programmes should, to a great extent, be based on the participation of local self-government authorities. This would be an incentive for small agricultural farms to participate in specific projects, which could motivate and strengthen the agricultural production in the local communities. In other words, emphasis should be placed on the importance of creating cooperatives to achieve a higher level of competitiveness.
Based upon the assessment of the characteristic features and needs of agricultural cooperatives, the following recommendations have been made, which should be of assistance to create a cooperative mentality. The following has been suggested: 1) to adopt a national strategy of development for cooperatives and cooperative associations in the Republic of Croatia, harmonized with the EU key strategic documents; 2) to strengthen the capacity and establish a network of local and national organizations producing a systematic action on the development of cooperatives; 3) to educate and inform the local population and decision-makers at the local and national levels about the advantages of creating cooperatives; 4) to promote cooperatives via examples of good practice, to position the cooperative products and services, to increase the visibility of their activities; 5) to encourage an exchange of experience by organizing conferences, workshops and seminars at the local, regional and national levels; and 6) for the purpose of the development of agricultural cooperatives, it is suggested that they should create a federation of agricultural cooperatives at the national level.
This research was limited in that it was only concerned with the agricultural cooperatives and not with cooperative entrepreneurship in the Republic of Croatia as a whole. Therefore, further surveys of cooperatives in other sectors would help emphasise the social and economic need to create cooperatives, on the one hand, and improve the comprehension and create new aid measures for enterprises, on the other hand.
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