AgroInvest Quarterly Report: October – December 2011

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 will achieve 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 US Foreign Assistance Framework Program Areas: 4.2 Trade and Investment, 4.5 Agriculture, 4.6 Private Sector Competitiveness, and 4.7 Economic Opportunity.


In the months of October, November and December 2011, the project team continued technical implementation activities in the project focus areas, having completed technical and administrative start-up activities for its offices in Kyiv and Simferopol. Key activities and accomplishments during this period included the following:

  • The project put major effort into monitoring and responding to changes to the draft Law on Land Market. When the first reading in the Verkhovna Rada of the law took place on 17 November, AgroInvest succeeded in two of its key advocacy positions, i.e. delaying implementation of the agricultural land market to 1 January 2013 and removing the GOU preemptive right.
  • The first round of the National Land Rights Media Campaign was conducted during this quarter, consisting of five media training sessions covering 15 oblasts of Ukraine and involving a total of 297 journalists. Eighty-eight pieces of press coverage on the issue of the pending land market and its implications for rural landowners and farmers were registered reaching an estimated 3.8 million Ukrainians.
  • The AgroInvest Land Governance Assessment Framework initiative was launched in December 2011. This work, following the World Bank model, is scheduled to be conducted during the first quarter of 2012 and will provide research and policy recommendations on legislative, regulatory and implementational obstacles to land administration in Ukraine that will feed into ongoing AgroInvest land market development work.
  • AgroInvest supported a key agricultural futures market initiative led by the Ukrainian Futures Exchange and the U.S. CME Group. Two events were conducted to introduce the concept of price risk mitigation to over 50 leading private sector representatives in November. During December, additional events were held to engage GOU representatives and the press. A preliminary futures product was also developed for Ukraine, for finalization with stakeholders during early 2012.
  • AgroInvest submitted a request to proceed with the agreed agricultural policy support and capacity building grant to the Agrarian Markets Development Institute to USAID in mid October 2011. By mid December AgroInvest was informed that the grant would be awarded directly by USAID and a bride subcontract was therefore developed by AgroInvest to run through the first quarter of 2012.
  • A survey of banks involved in lending to SMPs was conducted during the quarter in order to identify AgroInvest parnters in this sphere. As a result, three banks were selected for close cooperation (ProCredit bank, Kredobank and Metabank). Memoranda of Understanding and joint Annual Action Plans were developed with these partners. Credit Agricole also expressed strong interest in engaging with the project on specifc pilots, prior to roll-out and further credit product development.
  • The AgroInvest owner-financing concept for land sale-purchase was presented to a series of potentially interested banks. Of these, four expressed interest in cooperating with the project on concept implementation, including Raiffeisen Aval and Oschadbank, major Ukrainian private and public sector players  respectively.
  • Two AgroInvest SMP Lending Union Task Forces, comprised of the 60 most active credit unions from each of the two national associations of credit unions, were formed during the quarter to act as the primary channels for provision of technical assistance to increasing lending to agricultural SMPs through improved procedures and new credit products. Action plans were developed for 2012. Preliminary capacity building activities were initiated in Cherkassy, Lviv and Kherson oblasts and Crimea.
  • Value chain actors were also surveyed in order to identify partners for agri-credit initiatives in cooperation with financial institutions and SMPs. Agrobonus, Kiev Atlantic Ukraine and Maisadour were selected as the leading national agri-input and feed suppliers and major dairy producer Milkiland has also been engaged as an interested and dynamic value chain partner for SMP credit product development. Memoranda and joint action plans were developed for 2012.
  • The Strategy for Implementing Agriculture Producer Organizations’ Capacity Building Program was approved by USAID and implementation initiated. Implementation involved the conduct of a second phase of three training events on investment and development business planning for producer organizations in the selected target regions of Crimea, Vynnytsya and Dnipropetrovsk. A total of 63 representatives from 28 producer organizations attended. Twenty-six business plan concepts were developed by these organizations and a supporting small grants program was simultaneously developed by project experts.
  • The Strategic Plan for Developing the Agriculture Produce Market Infrastructure was approved by USAID and implementation initiated. At the local level this involved engagement of PPP partners in three Crimean villages and establishment of a preliminary agreement for the development of retail farmers markets. At the regional level, this involved supporting oblast market development initiatives in Rivne and Kherson and organizing SMP organization both as suppliers and future co-managers.
  • During October, three project supported local cold chain developers from sourthern and western Ukraine in attending the USAID RCI and Chemonics FARMA project organized training in post-harvest handling in Sarajevo, Bosnia. Training was conducted by leading US university UC Davis. Trainees have returned to lead project-supported post-harvest and cold chain initiatives in target regions.
  • Policy support to producer organizations focused on working with the Association of Agricultural Cooperatives and inter-ministerial working groups to develop legislative amendments to existing cooperatives and tax legislation in order to facilitate registration and operation of agricultural service cooperatives.

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