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 November of this reporting period, protests began in central Kyiv in response to the GoU’s last minute decision not to sign the European Union Deep and Comprehensive Free Trade Zone Agreement (DCFTA). Thousands of protesters have taken to the streets and been demonstrating 24 hours, seven days a week, blocking Kyiv’s main downtown road. On November 25, and then again on December 11, police attempted to use force to disburse the protesters using tear gas and violence. This use of violence merely heightened the political and social instability. As of December 31, the demonstrations and protests are continuing in central Kyiv.
This situation has resulted in multiple disruptions to AgroInvest and its partners’ activities this quarter. Those most worthy of note include:
- On Monday, December 2nd, the Director of the Department of Foreign Economic Relations within the Ministry of Agrarian Policy and Food of Ukraine, resigned citing political differences of opinion with Ministry staff. This individual was AgroInvest’s main point of contact within the Ministry. At this time it remains unclear as to what affect this will have on AgroInvest activities as it is not known when a replacement will be named and confirmed.
- The fact that the Parliament of Ukraine has been functioning in a limited capacity since late November is impacting progress related to AgroInvest’s partners’ policy activities.
- Numerous meetings and Project events were cancelled or postponed by either AgroInvest directly or its partners as a result of safety and security concerns, as well as difficulty moving around the city and accessing certain buildings, including the Ministry of Justice of Ukraine.
- On several occasions during the month of December, the AgroInvest Project invoked flexible scheduling, meaning that those staff members faced with difficulty getting to the office or that felt it was unsafe to do so were allowed to telecommute/work at home. This decision was made based on ensuring staff safety, the closing of several metro stations, and worsened traffic conditions due to police check-points set to limit vehicles entering the center of the city.
In October-December 2013, the AgroInvest project team continued technical implementation activities despite the political and social situation unfolding in Ukraine. Key activities and accomplishments during this period included the following:
- Jointly with partner industry associations, assisted with preparation of an international investment forum of Kirovograd oblast (Elisavetgrad Investment Day) which served as a national level platform for discussion of agricultural land related issues with participation from the President of Ukraine and other key government officials;
- Prepared comments to the 2015-2020 Strategy for the Agrarian Sector Development and presented and discussed them with members of a working group set up by the Ministry of Agricultural Policy and Food of Ukraine (MAPF) to draft a new detailed Sector Program for the period until 2020;
- Analyzed the estimated impact of potential trade restrictions on the export of Ukrainian dairy products by Ukraine’s largest importer of these products – the Russian Federation;
- Provided support to two national level conferences organized by agricultural industry associations: Fourth Ukrainian Grain Congress organized by the Ukrainian Grain Association on October 23-24th and the Fifth National Conference “Agribusiness in Ukraine-2014” organized by the Ukrainian Agribusiness Club on December 5th;
- Commenced implementation of the capacity building programs with three agricultural industry associations selected through a competitive process for grant awards to build their capacity in advocacy and agricultural policy analysis: the Ukrainian Agricultural Confederation, the Ukrainian Grain Association and the Ukrainian Agribusiness Club;
- Continued implementing a large-scale training campaign for state registrars and notaries on new registration procedures in cooperation with the Ministry of Justice and State Registration Service; conducted training events in nine regions with a total of 3009 participants, thus covering 57% of the total number of state registrars in Ukraine and approximately 2 public notaries per rural raion;
- Conducted three training seminars entitled “Basics of effective communications with borrowers from among agriculture producers” for credit union officers and members of the Agrilending Task Force. The seminars were particularly useful for rural credit officers who served SMPs on a regular basis but did not have access to such training in the past;
- Conducted three internal audits/on-site monitoring in Agrilending Task Force member credit unions;
- Conducted four practical agrotechnological training sessions combined with lending offer promotion to farmers (customers of AgroInvest partner credit unions) covering innovations in horticulture, modern approaches in rabbit breeding, production technologies of cucumbers and tomatoes in greenhouses, and drought-tolerant crops for the Southern region.
- Finalized the economic feasibility study for the modification and amendments to the Tax Code of Ukraine regarding VAT taxation on agricultural produce sold by agricultural service cooperatives. The proposed changes will improve the legal and economic framework of agriculture servicing cooperatives’ operations and encourage small producer associations to unite efforts in processing and marketing their produce;
- Prepared a feasibility study for the “Green Markets” National Program and the Draft Law of Ukraine “On amending the Law of Ukraine ‘On Wholesale Agriculture Markets'”. This work was carried out at the request of the MAPF and the State Agency for Investments and National Project Management. It is a component of the National Action Plan for 2013 with regard to implementing the Economic Reform Program for 2010-2014 titled “Prosperous Society, Competitive Economy, Efficient State” as approved by Presidential Decree #128/2013 dated March 12, 2013;
- Selected six new agriculture service cooperatives for grant awards to build their capacity and demonstrate the benefits from added value chain development when processing agriculture produce;
- The Model Internal Regulations of an Agriculture Servicing Cooperatives, which had been developed with technical assistance from AgroInvest, were approved by MAPF Order #643 dated October 30, 2013;
- Completed market studies and feasibility studies for the development of two wholesale-and-retail markets in the Crimea (Krasnogvardeyske and Kukushkino) and wholesale livestock market Charodiy (Cherkasy oblast). The said documents will enable the construction of the market infrastructure facilities to begin according to international standards.