Economic Effects of Wine and Dried Plums Production at the Agricultural Holdings in Serbia

Agriculture and food production are among the most common economic activities in Serbia and are primarily carried out on family farms. The small average size of these farms, along with other structural characteristics, affects their productivity, limits their competitiveness in local and regional markets, and poses challenges to their overall sustainability. Consolidation of economic capacity, while maintaining market competitiveness regardless the type of agricultural production, can be achieved through joint investments and coordinated business operations of multiple farms organized under a legal entity such as an association, cooperative, or cluster. This paper presents a positive example of such collaboration, involving several farms engaged in fruit and grape production and processing, united within an agricultural cooperative in the Toplica District of southern Serbia. The study aims to demonstrate that economic barriers preventing individual farms from entering new business ventures can be overcome through joint investment. The methodology applied follows standard approaches for assessing the economic efficiency of investments. The results indicate that joint investment in grape and plum processing can be economically justified, both with and without the use of state subsidies.