FAO-EBRD Project “Promoting Sustainable Agrifood Value Chains through

Linkages with Tourism”

Proceedings of the National workshop on linking small-scale food

producers to hotels and restaurants

Hotel Aurel, Podgorica

28 November 2018

Table of Contents

1. Background ................................................................................................................... 3

2. Objectives ...................................................................................................................... 4

3. Participants ................................................................................................................... 4

4. Elements discussed......................................................................................................... 5

5. Conclusions and recommendations ............................................................................... 14

Annex 1 ............................................................................................................................... 15

Annex 2 ............................................................................................................................... 17

Annex 3 ............................................................................................................................... 23

Annex 4 ............................................................................................................................... 24

1. Background

Gastronomy and traditional food products play a major role in promoting a country’s national

identity and culture and have become aspects of growing importance in the quality of the

tourist experience. Demand for an authentic food experience is increasing and hotel and

restaurants can promote local cuisine that celebrates their food culture. This can also provide

opportunities for small-scale producers to add value to their traditional and origin-linked

products via direct local sourcing hotel, restaurant and catering (HORECA) buyers. Despite the

important cross-sectoral benefits for tourism and agriculture/food sectors, a number of

mismatched supply and demand factors and the lack of intermediary support that would enable

buyers and sellers to come together limit the inter-sector linkages.

The different factors of mismatch have been identified through a gap review and all

stakeholders and studies converge in recognizing that food safety compliance, registration of

facilities and labelling regulations are the most pressing constraints that prevent most small-

scale producers from linking to the formal market. In order to sell to hotel and restaurants,

producers must be registered and fully comply with the food safety legislation, which has been

harmonized with the European Union as part of the accession process. This also requires

important changes and investment to be made at the production/processing unit.

In this context, under the FAO-EBRD project “Promoting Sustainable Agrifood Value Chains

through Linkages with Tourism”, a national workshop was organized on 28 November 2018 in

Podgorica gathering agricultural and food producers willing to access markets, especially those

related to tourism (boutiques, hotel and restaurants, direct selling to tourists), and

representatives of the Ministry of Agriculture and Rural development (MARD), Ministry of

Sustainable Development and Tourism (MTSD) and representatives of the Food Safety

Directorate, representatives of hotels and supermarkets interested in local sourcing of

traditional products, and a representative from an IT platform for agricultural producers

(Seljak.me).

2. Objectives In view of building a roadmap to link agriculture to tourism, the main objective of this workshop

was to address the regulation issues faced by smallholders for accessing the tourism markets:

food safety and flexibility, activity and ease of registration, and labelling rules. The specific

objectives were to:

Provide a clear picture of the issues and possible solutions, highlighting what remains to

be done;

Raise awareness of small-scale producers on the steps for the registration, as well as the

tools and support available at local and national level;

Identify the activities to increase inter-sectors linkages and their benefits for tourism

and rural development to include in the roadmap.

On this occasion, an information booklet, prepared under the FAO-EBRD project, for producers

and food processors on the existing legislation in Montenegro on food safety and good hygienic

practices and their obligations for placing safe products on the market, was distributed to the

participants.

3. Participants

The workshop had an impressive participant turnout, despite the limiting weather conditions

for producers in some municipalities. A total of 59 participants attended the workshop,

including 25 representatives of MARD, MTSD, FAO and EBRD, retail sector and hotels , and 15

producers of fruit and vegetables, 9 meat and dairy producers and 10 producers of cereal,

herbs and honey coming from the municipalities of Andrijevica, Bijelo Polje, Kolašin, Mojkovac,

Nikšić, Petnjica, Pljevlja and Žabljak.

4. Elements discussed

Opening

Within the opening session, the participants

were addressed by:

Mr Cazim Hodzic, General Director of the

Directorate for Development of Tourist

Destination and Tourism Infrastructure, MTSD,

who explained to the participants how the

tourism offer in Montenegro will be richer with

an increased provision of local products. He

emphasized that the development of tourism

and agriculture is interlinked. The Ministry has

developed strategies to ensure that local

products have their place in the tourism offer,

and has particularly focused on the rural

tourism strategy, which is in its final stages of

development. The Ministry expressed its

continuous support to all initiatives that aim to

incorporate local products and local cuisine in

the offer of hotels and restaurants in

Montenegro.

Mr Enis Gjokaj, Head of the Directorate for

Monitoring and Evaluation of Rural

Development, MARD, stated that his Ministry is

working hard in order to improve the quality

and quantity of local products. He also introduced the numerous financial measures from the

national Agrobudget and the Instrument for Pre-accession Assistance in Rural Development

(IPARD) that are dedicated to this goal.

Mr Jaap Sprey, Head of the EBRD Resident Office in Montenegro, EBRD, stated that EBRD works

with various businesses of different scales in Montenegro, and has supported different

initiatives related to linking tourism and agriculture. He highlighted that tourism represents

25% of the GDP and that tourism provides continuous impulses to the economy not just during

construction. In this regard, with EBRD loans to big hotels and other tourism businesses,

specific strings can be attached to further support the successful linkages between local food

producers and the tourism industry. He stated that local producers need to produce enough

food and aggregate this production, for example through cooperatives, as well as meet hotel

and EU standards.

Emilie Vandecandelaere, FAO Agribusiness Economist and team leader of the FAO-EBRD

project, stated the importance of linking smallholders to the tourism market opportunities in

Montenegro. This would not only maximize the benefits of the new geographical indications in

their territories, for which a previous FAO-EBRD project has also provided support, but more

generally to make concrete steps in the shared vision of linking agriculture and tourism.

Addressing the issue of smallholders’ access to market, through formal registration of their

activity and compliance to food safety is one of the major steps in this direction. This conclusion

comes directly from the findings of the gap analysis report that has been produced under the

FAO-EBRD project. Building on the presentation of these most significant findings during this

opening remark session, the goals of the workshop were well introduced, and producers were

encouraged to be active in the discussions and to take to the opportunity to raise all the issues

that policymakers could potentially resolve.

Panel: Linking agriculture to tourism: opportunities for smallholders

Ms Jelena Krivcevic, director of the Regional Development Agency for Bjelasica, Komovi and

Prokletije, project contributor, moderated this session.

Mr Nemanja Kuljic, Hotel Bianca

Mr Kuljic gave a very interesting presentation of Bianca Hotel and the relationship with small-

scale producers, and explained how the hotel had serious problems with inspections when local

Kolasinski cheese produced by small-scale producers has been offered in the hotel. The hotel

has many requests for

local products from the

local population and from

tourists, especially for the

typical Kolasinski cheese.

However, there are not

many producers who have

fulfilled the criteria and

legal requirements to sell their products to hotels, particularly in food safety, and food safety

regulations for hotels are stringent. HACCP has been implemented in the hotel for the past 4

years. Hotel Bianca is trying to purchase local products that are compliant, and currently these

represent around 15 percent of their total product supply, but this is proving to be quite

difficult. For any hotel procurement office, it is hard and time consuming to work with large

number of small producers. A recommendation to small-scale producers is to join forces and

have one representative who would communicate with the buyer, and this, aside from

compliance with legal requirements, is a recipe for success in linking producers with hotels and

restaurants. In this respect, the issue of supply distribution/transport logistics for small

producers was also raised; therefore, producers’ aggregation could also contribute to improve

this aspect.

Ms Jelena Doderovic, Director of Marketing, IDEA Supermarkets

Ms Doderovic presented the

experience of Ukusi kraja

moga campaign that they

have implemented, with the

aim to include and promote

local products. IDEA has

invested 200,000 euros in the

promotional campaign, using

their own finances, which is a

clear sign of the importance

of this subject to them. In terms of criteria that they have used for selection of products and

producers, they had several: typical products, minimum 50% processing in Montenegro,

compliance with regulations, but also the capacity to supply IDEA retail chain of 119 shops in

Montenegro, which was really a significant obstacle for small holders. For this reason, IDEA is

planning to implement a regional concept, through which small-scale producers would supply

only the shops in specific regions to address the limitation of quantity and logistics.

After the two presentations, the question of payment policy/arrangements to suppliers was

raised, and if there is any flexibility for payments to smallholders (i.e., any reduction of

timeframe between product delivery and payment). Hotel Bianca usually applies a payment

timeframe of 30 days from the date of delivery, but this time range can be flexible based on

previous cooperation with the suppliers. IDEA stated that in some cases the company issues

pre-payments, when a good delivery is guaranteed.

A general suggestion from a producer was to eventually issue the payment of a product batch

before the next batch is delivered.

Mr Marko Maras, Web Developer and Founder of www.seljak.me portal

Mr Maras presented the concept of the portal, which has already been

recognized as very useful tool for people from rural areas and consumers

throughout Montenegro. The portal has good potential for being an

instrument to directly link agricultural producers to tourism and the HORECA

sector.

Currently the benefits of online sales through this portal are numerous – any producer can

register on the platform and use it, for any product (livestock, fruit and vegetables, machinery

etc.). As an example, in 2018, around 7,000 large cattle were sold through the portal. The

communication between farmer and the consumer is direct, and they agree on how the

product will be delivered, or if the buyer will pick it up. This allows a wide range of producers to

find the buyers for their products anywhere in Montenegro. The producers present their

product however they want, and can upload all product information. Thus, an informed

consumer can choose what type of product to buy. Sales through this portal allows also for

non-registered and non-compliant products to be sold, however the portal itself does not

perform any type of control, which represents some risk for the consumers.

These three experiences representing different market channels (online platform, retailer and

hotel) for Montenegrin traditional quality products provided a concrete vision of how

producers can benefit once they access the formal market, opening the discussion for working

on the “how to do it”.

How can small-scale and traditional producers comply with Food

safety rules and engage in food business?

Ms Aleksandra Martinovic, FAO national consultant for the project, moderated the following

sessions.

Eight participants from the Food Safety Directorate attended this event, which clearly

demonstrates the commitment of the directorate towards the highest possible number of

hygiene and food safety compliant producers.

Ms Biljana Blecic, Director of the Food Safety Directorate, explained to the producers the

changes that happened in legislation in food safety sector in past years, with particular focus on

changes required for EU approximation process. She explained how EU food safety rules have

been introduced in Montenegrin laws, and how specific flexibility measures have been

introduced to allow small-scale traditional producers to be compliant. She also reiterated how

there is misconception among producers that it is expensive and complex to be compliant, but

in reality only those who do not get fully informed have this opinion. The Food Safety

Directorate regularly organizes workshops and information sessions to explain to producers

how to register, and this has demonstrated successful results as Montenegro has already

registered significant number of compliant producers. The Directorate is continuously

communicating with the producers in order to understand specific needs and problems on the

ground, and to adjust the regulations whenever it is possible and fix the problems in those

regulations that can be more practical and better suited to the needs of the producers. Ms

Blecic gave an overview of where the producers can get the information they might need, and

stated that the Directorate is continuously uploading guidelines and information material on

their website.

Constraints and needs vs lessons learned and solutions

After the presentations, three working groups divided by production sector aimed to tackle

constraints and needs in food safety compliance and flexibility, producers’ registration and

labelling rules, and discuss related lessons learned and solutions.

Fruits and vegetable sector – This group was moderated by FAO national consultant Mr Ben

Toric and organized in synergy with the other FAO-EBRD project on supporting sustainable

value chain integration in the

fruit and vegetable sector.

Topics discussed were food

safety compliance and

flexibility, registration (activity,

facility) and labelling rules. It

was stated that this group has

easier tasks ahead of them than

for example meat and dairy

sector. The farmers were

explained the procedures that need to be followed, and where to find more detailed

information about compliance measures. However, the conclusion of this group was that it

would be highly beneficial for the producers to have more practical guidelines where all

procedures would be explained in simple words, step by step, specifically tailored to the fruit

and vegetable sector, in less technical language and tailored to their needs. For example,

farmers need a simpler explanation of the type of registration required considering their

production, what type of laboratory analysis is required and where and when it should be

undertaken, and a clearer definition of labeling and declarations and exactly what needs to be

included in these. In addition, the group reiterated the need for support to establish farmer

groups e.g. cooperatives.

Herbs/honey/cereals sector – this group was moderated by Ms Jelena Krivcevic and discussed

all the topics as the previous group. The most significant obstacles for the producers are

laboratory tests, especially in the herbs

sector, where instructions received from

food safety directorate were not clear and

doubts persist on whether all types of

herbs should be tested, or only the

dominant types if they are collected in

same areas, and whether herbs collected

on household level should only be sold to

the factories that are processing herbs. It

was clear to the group that the regulations

in this sector need to be further detailed

and tailored to the real circumstances on the ground. The same conclusion was drawn for the

rural tourism sector. In the case of a family offering tourism services, and food in particular, the

instructions varied from i) all products need to be tested, ii) only those products that have

highest sales should be tested, and iii) food being offered in rural households is extremely risky

and should be strictly controlled. It was agreed to research what are the practices in countries

where rural tourism is more developed to then compare Montenegro and develop specific

guidelines for rural tourism households.

Dairy sector

Similar issues have been discussed in the group gathering dairy producers. Ms Aleksandra

Martinovic moderated the discussion, and the focus was on food safety regulations and

adopted flexibility measures. The producers have mainly shown concern about the high

financial investments for processing, but the food safety directorate insisted that for processing

of 50 liters and more of milk a separate space should be dedicated. In terms of quality schemes,

dairy producers should be working on simpler national schemes that are not yet used. In terms

of declaration, the Food Safety Directorate will be making a sample declaration, to assist

farmers in preparing their own. Producers would also need some sort of guidelines from hotels

and restaurants in order to know what requirements they need to fulfill. More experienced

producers have claimed that flexibility measures have brought great benefits for small-scale

producers and have advised others to follow them.

During the group sessions, the participants were given a simple survey to fill in (in Annex 4), but

only twenty-two producers have done so.

The response rate was 65%. Of the respondents, eight are registered (36%). Eleven respondents

intend to register in very near future, and seven among them are clear about registration while

four are not.

Five respondents need additional information on the following aspects: a) registration

procedures; b) labelling of dairy products; c) product packaging and laboratory testing; d)

necessary equipment for F&V processing; e) regulation on Non-Timber-Forest products. Twelve

respondents indicated their obstacles for selling, and these mainly concern, to labelling

regulation, cost of laboratory analysis and financing for processing facilities. Markets of interest

for the respondents are mostly hotels &restaurants and direct selling to tourists, followed by

small shops, online sales and supermarkets.

5. Conclusions and recommendations

The event enabled a fruitful exchange between producers, HORECA representatives and public authorities. The presentations and group discussions have confirmed how crucial is the first step of compliance to regulations to link small producers to the tourism market. Producers provided positive feedback on the workshop and appreciated the opportunity to discuss in detail the aspects of registration, food safety and labelling with specialists from the Food Safety Directorate, and are now more willing to register. Building on these exchanges, key recommendations were identified, namely:

- the need to better regulate some grey zones in registration procedures as well in some sectoral regulations (e.g. herbs);

- the need to better communicate to farmers procedures and steps, including costs, frequency and type of laboratory tests, where those tests can be done etc;

- the need for rural tourism households to have specific set of rules regarding food safety, as it was unclear during the session which rules apply and which not, and if the strictest scenario is taken in consideration, it would mean that literally each ingredient for a meal needs to be certified and tested which would mean no households could be involved in this activity as it would be too expensive;

- the need to understand best practices in rural tourism hygiene and food safety compliance from similar experiences in the European Union;

- the need to ensure communication/informative exchanges between the Food Safety Directorate and producers on the steps to be taken for registration, implementation of food safety standards and labelling. A practical suggestion was to make a calendar of informative sessions/events covering all the municipalities to gather producers (divided by production sector) and the Food Safety Directorate personnel;

- in relation to the above point, the development of practical guidelines for producers to connect to market embracing all the above-mentioned aspects;

- the need to support associations/cooperatives and build linkages with quality labels. - the need to provide support to farmers to establish farmer groups such as cooperatives.

These recommendations can be integrated in the mentioned roadmap as well as in some planned project activities, ensuring a continuous exchange between public and private stakeholders.

Annex 1 Agenda of the workshop

9.30 Welcome coffee

10.00 Opening

Mr Ćazim Hodžić, General Director of the Directorate for Development of Tourist Destination

and Tourism Infrastructure, MTSD

Mr Enis Gjokaj, Head of Directorate for monitoring and evaluation of rural development,

MARD

Mr Jaap Sprey, Head of the EBRD Resident Office in Montenegro ,EBRD

10.15

Panel : Linking agriculture to tourism: opportunities for smallholders

- Introduction to the current situation, FAO, Ms Emilie Vandecandelaere (moderator)

- Experience from Hotel Bianca, Mr Nemanja Kuljić; Hotel Dvor, Mr Nedjeljko Jeremic

- Experience from iDEA, Ms Jelena Doderovic

- Experience from Seljak.me Mr Marko Maras

10.45

How can small-scale and traditional producers comply with Food safety rules and engage in

food business?

Representatives of MARD, Directorate for Food Safety:

- Food safety and flexibility requirements and legal aspects

- Current status of the on farm registration

- Labelling rules

11.30 Coffee Break

11.45

Constraints and needs vs lessons learned and solutions

3 round tables to inform on the topic, discuss issues and draft recommendations for the

roadmap:

WG1: food safety compliance, and flexibility

WG2:registration (activity, facility)

WG3:labelling rules

13.30

Presentation of results (3X10’ )

Discussion 15’

14.15 Wrap up and way forward (findings/recommendations for the roadmap)

Jelena Krivcevic RDA BKP,

Milena Kotlica, MARD

Anka Kujovic, MTSD,

Nemanja Grgic , EBRD (TBC)

Emilie Vandecandelaere FAO

14.30 Closing

Lunch Buffet

Annex 2

Participants list

Annex 3

Photos from the event

Annex 4

National workshop on linking small-scale producers to HORECA

Exit questionnaire

1) Name:

2) Sector/ Type of Production:

3) Are you registered as a processor?

4) Do you have the intention to register?

5) Are you clear about the registration process?

6) Do you need additional information, and if so, what information?

7) What are the obstacles for selling to formal market channels?

8) What are the key markets you would like to access?