Agricultural cooperatives in Republika Srpska: founding and what they offer small producers

The Law on Agricultural Cooperatives of Republika Srpska governs how cooperatives are founded and run, including those where small producers pool purchasing, processing and sales. The law described was published in Službeni glasnik RS no. 73/08, with amendments in no. 106/09, 78/11 and 1/24. No official consolidated text has been published, so check the current text with APIF or the Cooperative Union before founding.

In short

• A cooperative can be founded by at least five natural persons who farm (Art. 7).
• Founders cannot be members of the same joint household (Art. 7(3)).
• The registration application goes to the Agencija za posredničke, informatičke i finansijske usluge (APIF, the Agency for Intermediary, IT and Financial Services) within 30 days of the founding assembly; the cooperative becomes a legal entity only on registration (Art. 11).
• No one can belong to two cooperatives with the same holding or the same activity (Art. 21).
• A cooperative must undergo a regular cooperative audit, carried out by the Agricultural Cooperative Union of Republika Srpska. Under the base text of the law it takes place every year (Art. 69(2)). Check with the Union whether the 2024 amendments changed this interval.

Who it applies to

Farmers who want to produce, buy in, store, process or sell together. Domestic and foreign natural persons may found one. A cooperative can be general, specialised (one activity, such as arable, fruit, vine, livestock or beekeeping) or complex, founded by at least two cooperatives (Art. 2a).

What a cooperative can do for small producers

• Buy in, store, process and sell the products of members and other farmers.
• Supply members and agricultural producers with reproductive material (e.g. seed), fuel, equipment, parts for agricultural machinery and other goods.
• Provide expert and advisory services to members and agricultural producers (Art. 2a(2)).
• It trades in its own name and for its own account, in its own name for members' account, or in members' name and for their account; under certain conditions it may also deal with non-members (Art. 15).
• Income from subsidies may be used only for material investment or permanent working capital (Art. 55).
• Voting is one member, one vote by default; the rules may weight votes (Art. 29 and 30).

What to do

1. Gather at least five members who meet the conditions of the future cooperative rules.
2. Sign the founding agreement (name and seat, founders' data, interim director, activity, size and form of contributions, members' liability, payment deadline, convening of the founding assembly) (Art. 8). According to the Agricultural Cooperative Union's guidance, the agreement is drawn up by a notary with certified signatures of all founders, and a temporary bank account is opened for the founders' contributions.
3. Hold the founding assembly: adopt the cooperative rules and elect the bodies by majority vote (Art. 9).
4. Apply to APIF within 30 days with the founding agreement, cooperative rules, assembly minutes and proof of contribution payment (Art. 11). The law also refers to documents required by the registry regulations. The list in the Union's guidance (not in the law) adds: the assembly decision electing the bodies, the director's acceptance of office certified by a notary, the OP form with certified signatures, certified ID copies, a residence certificate, a household declaration certified by the municipality (linked to the rule against founders from one household), a bank confirmation of contributions paid, and certificates of settled tax obligations. Check the current list with APIF before filing. The Union states that the court decides on registration within two days.
5. The name must contain the designation "poljoprivredna zadruga", the cooperative's own name, the full-liability mark (p. o.) and the seat (Art. 14(2)).
6. Keep the register of members (Art. 27) and hold an assembly at least once a year (Art. 34).

Duties and risks

• The cooperative is liable with all its assets; members are jointly liable for unpaid debts, at least up to their contribution (Art. 16).
• Each year at least 5% of the value of members' contributions goes into the mandatory reserve fund from profit (Art. 56). At least 30% of profit not put into funds goes to the cooperative's development (Art. 57).
• A cooperative with fewer than 10 members has no management board; the assembly does its work. The supervisory board has at least three members (Art. 36 and 40).
• A cooperative ends if its membership falls below the founding minimum and is not restored within six months (Art. 60).
• A cooperative that fails to undergo the regular audit is fined 2,000 to 10,000 KM, and the responsible person in it 200 to 1,000 KM (Art. 76(1)(b) and (2)). A name without the designation "poljoprivredna zadruga", or a poorly kept register of members, carries a fine of 1,000 to 5,000 KM (Art. 78).

Where to go

• APIF, Trebinje office: Kralja Petra Karađorđevića 15, Trebinje, tel. 059/220-235. APIF contact page
• Poljoprivredni zadružni savez Republike Srpske (Agricultural Cooperative Union) carries out the cooperative audit and gives founding guidance.

Laws and sources

• Zakon o poljoprivrednim zadrugama (Službeni glasnik RS no. 73/08), base text on the website of the Ministry of Agriculture, Forestry and Water Management of Republika Srpska. Amendments were published in Službeni glasnik RS no. 106/09, 78/11 and 1/24.