AgroInvest Quarterly Report: January – March 2014

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.

Protests in Kyiv began on November 21, 2013, following the Government of Ukraine’s (GoU) announcement that it was suspending preparations to sign an association agreement with the European Union. On February 22, following three months of large protests and violent clashes, former President Viktor Yanukovych departed Kyiv. The Ukrainian Parliament established a new government on February 27 and set new presidential elections for May 25, 2014.

In January-March 2014 this period of major political and social instability Ukraine is facing has continued to have a sizable impact on AgroInvest technical and administrative activities. The most important developments during this period included:

  • Thousands of protesters continuing to demonstrate in the center of Kyiv with demands of the resignation of the government, early elections of the President and signing of the Association agreement with the EU. These demonstrations transformed into violent confrontations between the protesters and police: first in mid-January; and then again at the end of February with more than 100 people killed. During the worst of the confrontations, AgroInvest closed its Kyiv office for a total of four days and operated under its telecommuting policy for an additional ten days in total;
  • Protests and demonstrations also took place in various regions of Ukraine and had an impact on activities of Project partners in the regions. Numerous business trips by both AgroInvest staff and it partners were forced to be postponed or cancelled during this period;
  • On January 16, 2014 the Verkhovna Rada passed the law on “On Amendments to the Law of Ukraine On Court System and the Status of Judges and Regulatory Laws on Additional Measures to Ensure Protection of Citizens” which named all NGOs and other public organizations which receive funding from international or bilateral donors “Foreign Agents.” Under this law such organizations were required to label themselves and as “Foreign Agents”, comply with much tougher reporting requirements and pay taxes on any donor funds; this law was effective for about a month and was repealed by the Parliament at the end of February as a result of tremendous international criticism. This law, while short lived, caused delays in implementation of the capacity building programs for agricultural industry associations due to the uncertainty of how the NGOs could/would continue to operate under the detrimental legislation;
  • Protesters took over the main building of the Ministry of Agrarian Policy and Food on Kherschatyk Street on January 24 and held it until January 29; the Ministry building was taken over again for several days at the end of February;
  • The new Government was appointed on February 27, 2014. In the lead up to this transition, the Cabinet of Ministers and the Parliament of Ukraine have been functioning in a limited capacity this quarter which has delayed progress on AgroInvest and its partners’ agricultural policy activities;
  • In February USAID informed AgroInvest to suspend all planned international short-term technical assistance consultants traveling to Ukraine. As such the Project delayed several international consultant’s engagements during this quarter;
  • In late February and early March, Crimea became occupied by Russian soldiers. As the result of a less than transparent referendum, the Autonomous Republic of Crimea announced its independence from Ukraine and declared itself a part of Russia. On Tuesday March 18th, the Regional Contracting Officer informed all projects with active operations in Crimea to not execute any additional payments nor begin any new activities until further notice. As a result of this directive, and in discussions with USAID, AgroInvest closed its Simferopol office and has indefinitely suspended all of its Crimean activities until final directives are received from USAID;
  • Due to the continuing political and social situation in Ukraine the Project is increasingly hearing from partners that potential investors (foreign and domestic) are increasingly becoming apprehensive to invest in Ukraine due to the instability. This is having an adverse impact on AgroInvest activities, especially those under Component 3 which rely on external investment/funding for the actual contraction of the infrastructure work the Project is supporting.


Despite the ongoing political and technical turmoil in Ukraine, in January-March 2014, the AgroInvest Project team continued technical implementation activities. Key activities and accomplishments during this period included the following:

  • Analyzed a database of agricultural land lease agreements and prepared a draft report which identified the most important issues related to relations between lessors and lessees and developed proposals for addressing these issues;
  • Together with partner agricultural industry associations, developed proposals on simplification of the registration procedure for agricultural land lease agreements;
  • Commenced implementation of a new capacity building program with the National Association of Agricultural Advisory Services “Dorada” to continue building their capacity in agricultural policy analysis and advocacy of member’s interests;
  • Developed and shared with the GoU and partner organizations an analysis of legislative regulations on mandatory crop rotations and proposals on simplifying these regulations;
  • Prepared and shared with the Ministry of Agrarian Policy and Food of Ukraine (MAPF) an analytical report on the international experience on the role of self-regulatory organizations in the formulation and implementation of agricultural policy(s);
  • Based on the organizational capacity needs assessment of partner industry associations, announced a tender and received proposals for implementation of a capacity building training program for agricultural industry associations;
  • Signed an agreement with the “Interns League” to support three interns engaged with the Committee on Agricultural Policy and Land Relations and the Committee on Ecological Policy, Natural Use and Liquidation of Aftermath of Chornobyl Catastrophe of the Verkhovna Rada of Ukraine in 2014;
  • Re-launched the Legal Land Rights Services Program in Chernivtsi, Dnipropetrovsk, Ivano-Frankivsk, Kherson, Mykolaiv, Odesa, Poltava and Ternopil oblasts with an emphasis on training events for village mayors and village-level land managers;
  • Conducted three training seminars for financial specialists of partner banks and credit unions entitled “Agrotechnologies for Financial Analysts” focused on various crop cultivation techniques and best practices;
  • Developed and began distributing a manual for SMP accountants and managers to improve the quality of their loan applications and overall management of their agricultural enterprise’s operations. This manual is the first of its kind developed specifically for accountants in rural areas;
  • Conducted four practical agrotechnological training sessions combined with lending offer promotion to farmers (customers of AgroInvest partner credit unions) covering innovations in production technologies of cucumbers and tomatoes and technological support of cucumber production in greenhouses;
  • Signed two new producer organization grants:
    • Agricultural Service Cooperative Snovyanka to improve the organization’s capacity to produce organic compound feed and oil;
    • Agricultural Service Cooperative Chysta Flora to establish cool storage capabilities for fresh fruits and berries.
  • Finalized and began distribution of the Scientific and Practical Commentary to the Law of Ukraine on Agricultural Cooperation and related legislative texts. This is the first ever comprehensive source pertaining specifically to the development of cooperatives in Ukraine.

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