Out of a total of 43,791 agricultural farms, according to MONSTAT, as many as 31,260 have some kind of livestock production, which makes up 71% of all farms. It is similar when we look at the data from the register of agricultural farms, where out of a total of 17,288 registered farms, 7,881 or 46% are engaged in animal husbandry. To this number should be added 1,865 or just over 10% who have mixed production. In some municipalities such as Savnik, Plužine, these percentages are extremely high – 93% and 84%.13 It is obvious that keeping cattle, whether for the needs of milk or meat production, is the most important agricultural activity in Montenegro.
One of the most important criteria of intensity – the presence of livestock is the number of livestock unit (LSU) per unit of utilized agricultural area. In the EU, it amounts to 0.77 LSU per hectare of utilized agricultural area and varies from 0.25 LSU/ha of utilized agricultural area in Bulgaria to 3.6 LSU/ha and 3.9 LSU/ha in Malta. In Serbia, the level of livestock production density is 0.6 LSU/ha. According to the data from the Census of Agriculture, the total number of agricultural farms in Montenegro that use perennial meadows and pastures was 43,142. The latest available data from the Census of Agriculture show that the average area of perennial meadows and pastures per agricultural holding is 4.87 ha, and 1.78 LSU/ ha.14 Of the total used agricultural land, 96% is used for livestock production, of which the largest part is in perennial meadows and pastures, as much as 94%.
The position of the terrain, the quality and cultivation of the land, and other conditions have contributed to the reduction of fertility, and thus to its degradation. Without vegetation cover, the soil is exposed to erosion processes, and degradation is caused by floods, deterioration of the structure and other forms of physical, chemical and biological degradation.15 From the aspect of rural development, livestock and the dairy sector provide continuous employment of the labor force, as well as additional employment of the female labor force, which is especially important in the conditions of high unemployment that affects rural areas. In addition, livestock farms generate more income during the year than in crop production, which has a positive effect on farm liquidity and the living standards of the rural population.
The market chain of the dairy sector is characterized by a fragmented structure of mostly small actors, and thus the difficult task of introducing as much of the supply of raw milk and finished products as possible into safety and quality control. The total production is still dominated by small farms engaged in milk production, which participate in the total supply with about 67% of raw milk.
On the other hand, the processing capacities of the dairy industry and processing on the farm are approximate, but the two chains are significantly different because the processing on the farm has a low degree of dependence on other actors, as well as:
• diversified / hybrid revenue strategy – about 300 farms hand over milk for purchase only in winter, so the seasonality in the offer is conditioned not only by the production cycle but also by other opportunities for placing on the market primarily cheese and milk products
• dependence on demand through tourism, especially for high-value and premium products,
• significant share of direct sales
• High degree of informality of the sector, contracts are rare and the influence of actors who are closer to the end of the chain is dominant, and on the other hand, quality partnerships are built with the largest suppliers of raw milk.
• There is no great concentration in production, and to some extent there is in processing where the two largest dairies buy close to half of the milk in purchase. At the point of sale, retail chains play an important role, but their importance is also overemphasized, except when it comes to industrial dairy products. There is a large number of chains, and then there is a significant share of placements in small shops, markets and even direct sales of manufacturers.
• Interest in professional networking and organization at the sector level appears in the campaign and without continuity, often stimulated by project activities.
Extracted and reworked from the document: “Report on BPs on quality schemes and consumer Health in Montenegro”. The report is one of the deliverables under the activity ” Exchange and knowledge transferring of Best practices on quality schemes and consumer health ” WPT1 ”Improving the coss-border framework conditions for the valorization of the agri-food and fisheries value-chain” .