**2. Literature Overview**

Early research on the consumption of local products emerged after the development of farmers' markets amid growing consumer concerns about food safety and the use of environmentally-friendly products [7–9]. In the United States, Canada, and Europe, smaller-scale localized production has become a part of community and economic development strategies [10,11]. On the other hand, local products have been associated with a social component of sustainable production and community economic development [12]. The term "local" has been associated with many interpretations, encompassing attributes commonly ascribed to locally-grown produce (such as freshness, environmental sustainability, and support of the local economy). However, Born and Purcell [13] have speculated that the "local trap", i.e., the tendency of food activists and researchers to assume that locally-sourced produce is

desirable (for reasons of ecological sustainability, social justice, democracy, better nutrition, and food security, freshness, and quality), and as such should be preferred a priori to larger scales of production, may pose significant risks to food systems research [14]. Karner's [15] findings on local food systems in five countries (Austria, England, Hungary, France, and Poland) have shown that an alternative local food network represents an emerging European sector. The term "local food" can be linked to a concept of natural goods or services produced or provided by different enterprises in rural areas with an established socioeconomic identity [16]. La Trobe [17] points out that in the UK, local food products are regarded as produced and sold within a 30 to 40-mile radius of the market, or more if the market is situated in a large urban area (such as the Islington market in London which has a 100-mile radius). On the other hand, the consumers show great variation in the distance they consider to be local and this distance may differ in case of fresh and processed products [18]. The findings of a survey of 120 food consumers, trying to define the term "local" food on the basis of several meanings (such as distance, physical accessibility, and "specialty" or "uniqueness" criteria) have shown that the most common meaning for the term "local" food was "foods grown locally" [19].

From a demand-side viewpoint, Feldmann and Hamm [20] have analyzed 73 research studies on local food (coming mostly from the USA, UK, Germany, and Italy) revealing some common characteristics of local food shoppers such as being older and wealthier, living in rural areas with the predominant expectation that the local food was tastier and of higher quality and not perceived as expensive. Mirosa and Lawson's [21] findings show that behavior of those consumers who express a strong intention to purchase local food is strongly related to the types of food they eat, how they cook their food, and where and when they eat it. Hu, Batte, Woods, and Ernst's [22] findings on what is local and how important the local production is for different food categories reveal that female consumers have higher demands that the food should be produced nearby, while higher income households and more highly educated consumers are less demanding of shorter food traveling distance. Older consumers, married and with children, also more often tend to value more local production.

Brown's [23] findings on Missouri household interest in purchasing locally produced foods show that quality and freshness followed by price influenced the purchase, although the majority of consumers were not willing to pay a premium for locally grown food products. Carpio and Isengildina-Massa's [24] findings on consumers' willingness to pay for locally branded products show that if food products were equally priced, the majority of consumers (95%) would choose state-grown produce over out-of-state produce. The consumers who purchase local products for the reason of support of local farmers have a higher willingness to pay a premium. Consumers who use direct channels (farmers markets, community supported agriculture outlets, and roadside stands) reported a significantly higher WTP for local produce [25]. Grebitus, Lusk, and Nayga's [26] findings show that that the belief to support the local economy when buying food that traveled fewer miles affects positively not only the consumers' WTP but also the consumers' perceptions that fresh local food has superior attributes compared to food that traveled more miles. Gracia, De Magistris, and Nayga [27], by simultaneous experimental auction, elicited consumers' WTP for a local lamb meat and tackled the issue of social influences ("the importance consumers attach to the purchase of food products produced in the region where they reside using traditional and typical production methods" p. 3) and the effect of consumers' gender on WTP for local food products confirming their hypothesis that social influence indeed affects WTP values and that women get an extra utility from the satisfaction of buying locally produced lamb meat. Nganje et al.'s [7] findings show that local produce bearing the Arizona Grown label had a higher WTP than local produce labeled USDA-certified (U.S. Department of agriculture). In their research on whether local and organic products are complements or substitutes, Gracia, Barreiro-Hurlé, and López-Galán [28] show that consumers are willing to pay a positive premium price for an enhanced method of production as well as for the proximity of production.

Research studies in today's local food markets have tried to reveal not only a consumer behavior perspective on local food but also the perceptions of producers who are selling local food products through established direct marketing channels [29]. Many researchers accredit the success of local food to determining adequate channels of direct marketing such as farmers markets (FMs). Gregoire, Arendt, and Strohbehn's [30] findings show that local producers sold vegetables more frequently than meat items. The findings of Gao, Swisher, and Zhao [31] show that the most important reasons why consumers shop at farmers markets are freshness and locality of production, the availability of organically grown produce, and knowing the farmers. The findings of Feenstra, Lewis, Hinrichs, Gillespie, and Hilchey [32] point out that the majority of vendors that are small-scale enterprises with less market and business experience tend to sell at markets closer to their farms.

Veidal and Falten's [33] findings reveal that most of the farm entrepreneurs (the majority of them being female) used at least two other direct marketing channels to distribute local products besides FMs, such as their own farm shop or farm gate sales, restaurant and catering outlets, while their main motives for selling at FMs were direct feedback from consumers and the enjoyment of selling directly to consumers. Conner, Colasanti, Ross, and Smalley's [34] findings show that the primary motives for shopping at farmers markets were food quality, safety from foodborne illness, and the ability to support local farmers, while the least important motives were the availability of pesticide-free or hormone-free foods. The findings of the study of Schneider and Francis [35] on consumers' and farmers' opinions have revealed that Nebraska farmer interest in producing for local markets was low, but on the other hand the consumers showed high level of interest in purchasing food from farmers' markets, local grocery stores, local restaurants, and directly from farms, with a willingness to pay a price premium for local foods. The most important factors for purchasing food brands or products was quality and taste followed by nutritious properties/ healthy attributes, price, and environmentally friendly production. Support a local family farm, Nebraska grown, locally produced were also perceived as important factors.

The findings of Hunt [36] on farmers market consumer and vendor data simultaneously, have revealed that female postsecondary educational level consumers with a higher income shop at farmer market. The findings of Hardesty [37] point out that the institutions will rather buy local products if they can bear the higher transaction costs. Gregoire and Strohbehn's [38] findings show that one-third of schools purchase food directly from local producers (in Minnesota, Iowa, Nebraska, and Kansas; and Slovakia [39,40]), mainly as a benefit to maintain good public relations, to support the local economy, to buy fresh foods in smaller quantities, to be familiar with the product sources, and food safety.

The findings of O'Hara and Pirog [41] accentuate the need for establishing better research methods through improving data collection, performing studies on larger geographic scales that also include the recent changes in diet and quantify other economic attributes of local food systems (besides the number of jobs). The findings of Abatekassa and Peterson [42] reveal that local independent retailers (compared to wholesalers and supermarket chains) still tend to consider local foods as a potential source of competitive advantage and for this reason they have better relationships with selected local producers than the large chains. The findings of Matson and Thayer [43] point to the emergence of food hubs, which could be very useful instruments for more efficient local food supply chains with a need for further research on their characteristics and economic impact on food systems.

#### **3. Materials and Methods**

The research in this study covered the producers and consumers of local food products (LFPs) in the country, where there are large differences in educational level, purchasing power, and consumer preferences. The questions that arise are: What is the current perception of local food in the Republic of Serbia? Is there is a difference in the perception of consumers and producers of local food? What is the impact of local food products on sustainable economic development? Drawing on previous research from Memery, Angell, Megicks, and Lindgreen [44] and Megicks, Memery, and Angell [45], and suggestions from representatives of the Baˇcka Development Agency and the Institute of Food Technology in Novi Sad (due to involvement in similar research), the perceptions of two groups of respondents were investigated. By comparing the similarities, i.e., differences in the perception of LFPs, it is possible to examine their views, draw conclusions and recommendations which can be used for

the purpose of local development, overcoming developmental inequality, increasing employment—in short, economic development. A lot of studies have been focused on the analysis of production, on volumes, costs, i.e., quantitative indicators and the analysis conducted so far in Serbia have neglected the perceptions of individuals. Considering that the perception and beliefs on local food products in Serbia have not been researched so far and that in recent years consumers in Serbia have shown an increased interest in value-added food products [6], the subject of research is to provide new insights into producers' and consumers' views on LFPs and their impact on sustainable economic development.

The research was carried out on the territory of Republic of Serbia in several cities and villages, from March 2019 to July 2019. The total number of LFPs consumers investigated was 1000 and the total number of LFPs producers was 500. Of the distributed questionnaires, 834 LFPs consumer questionnaires were returned complete (83.4% response rate). As for LFPs producers, 312 distributed questionnaires were returned complete (62.4%). The first group of questions included data on the socio-demographic characteristics of consumers (gender, age, education). The second group of questions consists of 30 claims, directly or indirectly related to local food product attributes rated on a five-point interval scale (1 is the lowest grade and 5 is the highest). The questions were modeled on a survey by Memery et al. [44] and Megicks et al. [45]. The survey was anonymous, the respondents were selected according to the "snowball" principle, and the distribution and completion of the survey was conducted electronically. The respondents /producers have been selected as follows: The Development Agency Baˇcka and the Institute from Novi Sad have at their disposal a database of LFPs producers. The questionnaire, or link of the questionnaire, has been sent to their email addresses asking them to forward it to the key informants thus ensuring a chain of possible other producers to be included in the study. The authors believe that the technique has been adequate to find as many respondents as possible, especially since the respondents have not been randomly selected from the whole population, but have been selected based on their professional orientation and desire to participate in the research [46].

On the other hand, the snowball method as a random sampling technique has been applied in regard to the LFPs consumers. The researchers, after having identified the initial seed informants within the researchers' professional and personal network, have asked the potential respondents to forward the link to their contacts [47,48]. Based on the experience of other researchers, the snowball method has proven particularly useful in exploring under-researched topics—such as LFPs consumer preferences, where respondents are difficult to locate and when the knowledge and awareness on the product is not sufficiently explored [49,50]. Data processing was performed using the SPSS program for statistical data processing. Descriptive statistics, factor analysis, and standard multiple regression were used to analyze the phenomena in detail. The purpose of our research problem was to find an equation that best predicts the dependent variable as a linear function of the independent variables therefore the multiple regression was applied [51–54].
