The purpose of AgroInvest is to provide technical assistance to accelerate and broaden economic recovery in Ukraine and increase the country’s contribution to global food security efforts. AgroInvest is achieving this objective by supporting a stable, market-oriented agricultural policy environment, stimulating access to financial services for small and medium producers (SMPs), and facilitating a more effective market infrastructure for SMPs.
The scope of work identifies three main components, refined into six tasks, as follows:
- Component 1: Support a Stable, Market-Oriented Environment
Task 1-a: Accelerate Market Oriented Reforms
Task 1-b: Strengthen Industry Associations
Task 1-c: Provide Public Education for Land Rights
- Component 2: Stimulate Access to Finance
Task 2-a: Sustainable Access to Financial Services for SMPs Provided
- Component 3: Facilitate Market Infrastructure for Small and Medium Producers
Task 3-a: Producer Organization Development
Task 3-b: Develop Wholesale Markets and Other Market Infrastructure
AgroInvest is a five-year project, extending to an estimated completion date of January 24, 2016. The scope of this Project encompasses the following U.S. Foreign Assistance Framework Program Areas: 4.2 Trade and Investment, 4.5 Agriculture, 4.6 Private Sector Competitiveness, and 4.7 Economic Opportunity.
In April-June 2014 Ukraine continued to experience significant political, social and economic instability which continues to impact AgroInvest’s technical and administrative activities. While the political situation has shown signs of stabilizing this quarter, the eastern territories of Ukraine, primarily Donetsk and Lugansk oblasts, continue to be volatile areas and the Autonomous Republic of Crimea remained a self-declared independent territory. In May, Presidential elections were held and Petro Poroschenko was elected as Ukraine’s new President and early parliamentary elections may take place as early as fall of this year. The impact of the ongoing situation in Ukraine on the Project’s activities is discussed throughout this quarterly report.
Despite the ongoing political instability in Ukraine in April-June 2014, the AgroInvest Project team continued technical implementation. Key activities and accomplishments during this period include the following:
- Analyzed laws and regulations that govern activities of the State Agricultural Inspection Agency and developed proposals, including a draft law to change and streamline the functions of the Agency;
- Finalized the analysis of agricultural land lease agreements, developed proposals and recommendations for the Government and land owners and shared them with stakeholders;
- Executed the Project’s annual policy priority needs assessment;
- Developed a draft Law “On Amendments to the Law of Ukraine “On Farming” and a draft Law “On Amendments to the tax Code of Ukraine (in stimulating the development of family farms)’ aimed at creating conditions for transforming subsidiary household farms into commercial family farms;
- Marked a successful completion of AgroInvest and its partners’ efforts to see a passage of a law that liquidated the State Land Bank of Ukraine;
- The Rada passed several laws that create a better environment for farmers and producers, specifically: mandatory certification of grain silos and grain quality certification have been abolished; obligatory technical inspection of agricultural machinery have been abolished; regional stocks of agricultural commodities have been abolished. Passage of these laws became possible due to the persistent lobbying efforts of AgroInvest and its industry association partners;
- Conducted final three training seminars focused on various crop cultivation techniques and best practices for financial specialists of two partner banks and three credit unions entitled “Agrotechnologies for Financial Analysts”;
- Initiated the introduction of the Development Credit Authority (DCA) loan guarantee instrument to Ukrainian credit unions, including the selection of six candidates for the DCA program, preparation of the draft term sheet for the loan guarantee application and agreement with the DCA Group, as well as the discussion with all candidates on the basic terms of the mechanism;
- Developed recommendations on improving legislation for credit unions in compliance with the EU legislation through engagement of a specialist from Poland;
- Developed and implemented an innovative loan product for agricultural inputs purchase based on promissory notes for partner value-chain actors (VCA);
- Conducted four practical agro-technological training sessions combined with lending offer promotions for farmers (customers of AgroInvest partner credit unions) covering innovations in production technologies of cucumbers and other vegetables;
- Ended grants and activities with agriculture service cooperative (ASC) “Khayal-2009”, ASC “Umyut”, ASC “Frukty Krymu”, ASC “Dzhylek”, ASC “Start-M”, and ASC “Golden Bee” due to the USAID directive to cease activities in the Autonomous Republic of Crimea (ARC) ”;
- Because of the situation in Crimea, AgroInvest and the management of ASC “Golden Bee” agreed to relocate to Ivano-Frankivsk oblast where they are now registered as ASC “Small Golden Bee”;
- Signed a new producer organization grant agreement with the agricultural service cooperative “Molochni Riky” to improve the organization’s capacity to produce animal feed;
- Finalized and started distributing the methodological recommendations for SMPs on post-harvest treatment and storage of agricultural produce.