AgroInvest Work Plan: Year 5

AgroInvest is a five-year project (2011-2016) funded by USAID/Ukraine. The purpose of the Project is to provide technical assistance to accelerate and broaden economic recovery in Ukraine through support to the agriculture sector and increase the country’s contribution to global food security efforts. The contract is a Cost Plus Fixed Fee Term-type, Level-of-Effort contract with a ceiling of $18,755,641.

Project Scope of Work and Challenges Encountered During Year 4

AgroInvest will accelerate broad-based economic recovery through a more inclusive and competitive agricultural industry. AgroInvest is designed around three separate but interrelated component objectives, each supported by specific expected results under each component as illustrated below in the Results Framework.

Component 1 activities involve both a supply- and demand-side approach to supporting a stable, market-oriented policy environment. From the supply side, AgroInvest promotes the implementation of less volatile, more market-oriented policies that stimulate increased production and investments in the agricultural sector. On the demand side, Component 1 activities strengthen the capacity of industry associations to shape agricultural policies and provide public education on land rights among rural landowners. Under Component 2, AgroInvest focuses on stimulating access to finance by strengthening partnerships between financial service providers and value chain actors, including input suppliers and buyers, to increase sustainable access to financial services for small and medium sized producers (SMPs). Finally, Component 3 activities focus on creating a more effective market infrastructure for SMPs and increasing the profitability of farming through better access to markets, developing wholesale and regional markets, and capacity building for producer organizations (POs).

During Year 4, AgroInvest encountered numerous challenges. The unexpected political turmoil throughout the country, civil unrest in Kyiv, armed conflict in eastern Ukraine, and the annexation of Crimea all adversely effected AgroInvest activities. The events beginning in late November 2013 and still unfolding at the time of submission of this work plan caused the project to postpone or change locations of trainings, seminars, and mentoring visits to regions. AgroInvest was forced to halt all activities in Crimea in March 2014 at USAID’s direction and all Donetsk and Luhansk based activities, though minimal, have been put on hold until the security situation allows for safe travel to and from the region for project staff, local counterparts, and training participants. In most instances, the project has been able to mitigate the effects of these events through rescheduling or relocating events and activities.

Additionally, the situation has resulted in legislation being passed through the Verkhovna Rada to slow, and at times completely stall, over the past year. This has resulted in certain policy initiatives of the Project being delayed. With new Parliamentary elections set for October 26th , 2014, the Project anticipates additional disruptions in Year 5 in this area, but at this time it remains unclear as to the magnitude. The Project has seen 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.

Project Results Framework

The USAID Ukraine Country Development Cooperation Strategy (CDCS) has set the Mission’s goal for the period from 2012 through 2016 as “A More Stable, Democratic, and Prosperous Ukraine”. AgroInvest is contributing to achievement of that overarching goal and more specifically supports CDCS Development Objective (DO) 2 “Broad-Based, Resilient Economic Development as a Means to Sustain Ukrainian Democracy.” In particular, the Project supports this DO by contributing to achieving IR 2.1: “Increased Investment Availability to the Emerging Middle Class” and IR 2.2 “Strengthened Private Sector Advocacy and Support Institutions.” Attainment of component objectives will allow AgroInvest to contribute to achieving both the Mission’s goal and the AgroInvest Project’s defined purpose of accelerating broad-based economic recovery in Ukraine through support to the agricultural sector.

Broad-based economic growth is dependent upon creating physical and managerial infrastructures and institutions that encourage business activity creation and development, attract investment, and create employment opportunities. AgroInvest is focusing on this growth by working closely with local small and medium sized producers (SMPs) and producer organizations to develop their capacities in the areas of business planning and application of modern agro technological methods that increase productivity and improve the quality of produce. Additionally, the Project works closely with financial institutions to stimulate access to finance so that the SMPs can acquire the funding they require for their agricultural activities.

In addition to economically focused activities, AgroInvest focuses on activities that build citizen and civil society capacity to meaningfully influence the development and monitoring of government polices at the national and local levels. As better governance can only be achieved through active participation of a broad range of diverse Ukrainian citizens, AgroInvest works with non-governmental organizations to build their capacities to be able to better advocate for their and their constituents’ interests. The industry associations with which the Project partners, play a critical role in counterbalancing the influence of elite economic and political forces. Through AgroInvest’s national public education and outreach campaign, even the most rural of citizens are provided valuable information that allows them to protect and understand their property rights.

The Project’s monitoring and evaluation (M&E) system, included in the Performance Monitoring Plan (PMP), is designed to measure and report on progress against established objectives and expected results using 35 indicators. These indicators and their associated annual and life-of-project targets are listed in the table shown in the PMP chart (Annex A). It is noted that the Project’s PMP plan was updated in Year 3 in response to the Office of the Inspector General (OIG) performance audit that took place in September/October 2012.

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