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Horticulture Opportunities in Ukraine Ukraine Horticulture Business Development Project (UHBDP)

Overview: What is UHBDP?

Market: What is the Challenge?

Services: What do we do?

Practices: How do we work?

Impact & Learning: What results?

Opportunities

Where going today…

Overview: What is UHBDP?Ukraine Horticulture Business Development Project

UHBDP Business Challenge:

Farmers and Small-Medium Enterprises (SMEs) experience market barriers that prevent them from accessing and participating in markets

UHBDP Business Objective:

• Connect small holder farmers with markets – link to opportunities

• Improve supply chain capabilities and performance

• Enable more production volume to reach end markets: Growth!

Key Activities:

• Market Development: Links to Markets

• Improvements to Production, Post-Harvest Handling and Supply Chains

• Small and Medium Enterprise growth: in the supply chain

• Alignment of University experience to Workplace / Industry

• Access to Finance and Investment

Overview: 7 Years: 2014 - 2021

$19 m DFATD + $4 m MEDA + 9 m Private

Regions:

• Kherson

• Zaporizhia

• Mykolaiv

• Odessa

Geographic Focus:

• Agriculture: Key Ukrainian industry (14% of GDP)

• Employs 20% of population

• Horticulture: Opportunity for SMF

• SMF: 60% of land under cultivation

• Grow 70% of total F&V output volume (Horticulture typically less than 3 hectares)

• Lack consistent access to markets

• SMFs isolated from markets; dependent on trader access : most F&V to local market

• Experience low crop yields and productivity; 40-60% Post Harvest Waste

• Price-centric in mindset and business approach

• Promote agri-business models: Move from price-centric mindset

• Promote access to markets: Linkages to multiple market channels : Stimulate opportunities

• Promote new post-harvest handling capacity: Cold Chain Logistics!

• Attract investments in production, supply chain and SME capacity

Market Challenges:

Hypothesis: Theory of Change

Improved production and Post-Harvest Handling practicesImproved Capabilities• Events: Practices & Techniques: Irrigation, Greenhouse, IPM, Grading, Sorting, Packaging, Chain Cold Logistics

• Incentives: Voucher / Coupons with input suppliers

Competencies college-educated entry level workforceAlign Workforce• Curriculum development: Marketing, Agronomy and Agri-business

• Provide short-term work programs/internships to promote connection to agri-businesses

Improved management practices, performance and increased cooperationLinkages to Markets• Business models and networks

• Linkages to Markets through Aggregation Hubs: (1) Informal Hubs (2) Commercial SMEs

Increased capacity amongst Ukrainian enterprises SME Capability• Matching Grants targeting “Market maker” firms

• Upgrade PHH capabilities: Traceability; Food Safety and Quality Assurance

Increased capital investmentAccess Finance• Private Investment entities & Financial Services

• “Agri-business Investment Fund”

Contracted Areas of Focus

Smart Incentives

Small-Medium Farmers; Suppliers

Access improved technologies; Induce new

Services / Products

Matching Grant Fund

Agri-Business SMEs

Spur innovative capabilities; Test new business models

and technologies; Promote SMF-led supply chains

Agri-business Investment Fund

Agri-business SMEs; Investment Firms; Commercial banks

Facilitate/Induce private capital to invest in viable

SMEs

Key Element: Innovation Fund

Key Performance Indicators

• Seeds, fertilizers and

CPP suppliers

• Service providers

• Supermarkets

• Traders

• Processors

• Aggregators

• Agrarian universities

• Higher Educational

Institutions

• Technology companies• IT-companies by activities

of planning and accounting

• Soil, Plant & Water

Analysis Laboratories

• State regional

administrations

• Ministry of Agrarian Policy

and Food of Ukraine

• Project recipients

• Partners

• Financial institutions • Banks • Investment companies

Project Implementation Partners

Market: What is the Challenge?How to promote opportunities in a transitioning market?

How to deliver services with aggressive contractual targets?

ProductionTransport

Traders

Suppliers &

Inputs

Cold Chain Storage and Transport

Post Harvest

HandlingEnd Market

Private SHF(0.5 – 2 h)

Commercial SMF

[Lead](2 – 10+ h)

Production Inputs

readily available:

• Packaging

• Plastics

• Irrigation supply

companies

• Greenhouse

vendors &

manufacturers

Roadside

Local Village / Town

Retail MarketSmall Trader

(2-5 tons)

[Broker]

Distant City Market(e.g.: Kyiv, Odessa)

HORECA

Supermarket Chain

Export: Russia, CISLarge

Commercial

Aggregators

City Wholesale

Market

Broker /

Trader(5-10 tons)

Export: Europe (EU)

Export: Middle East

Household

ProductionTransport

Traders

Suppliers &

Inputs

Cold Chain Storage and Transport

Wholesale Final Market

Private SHF(0.5 – 2 h)

Commercial SMF

[Lead](2 – 10+ h)

Production Inputs

readily available:

• Packaging

• Plastics

• Irrigation supply

companies

• Greenhouse

vendors &

manufacturers

Issue:

• Validate false

seeds

Roadside

Local Village / Town

Retail MarketSmall Trader

(2-5 tons)

[Broker]

Distant City Market(e.g.: Kyiv, Odessa)

HORECA

Supermarket Chain

Export: Russia, CIS

Large

Commercial

Aggregators

City Wholesale

Market

Broker /

Trader(5-10 tons)

Export: Europe (EU)

Export: Middle East

Household

ProductionTransport

Traders

Suppliers &

Inputs

Cold Chain Storage and Transport

Wholesale Final Market

Private SHF(0.5 – 2 h)

Commercial SMF

[Lead](2 – 10+ h)

Production Inputs

readily available:

• Packaging

• Plastics

• Irrigation supply

companies

• Greenhouse

vendors &

manufacturers

Issue:

• Validate false

seeds

Roadside

Local Village / Town

Retail MarketSmall Trader

(2-5 tons)

[Broker]

Distant City Market(e.g.: Kyiv, Odessa)

HORECA

Supermarket Chain

Export: Russia, CIS

Large

Commercial

Aggregators

City Wholesale

Market

Broker /

Trader(5-10 tons)

Export: Europe (EU)

Export: Middle East

Household

Operational Solutions:1. Lean Startup & Design Thinking approaches

2. Data-driven: Build up data around our clients (all market actors in supply chain)

We need a “multiplier!”

Implementation Challenge:

Services: What do we do?

BUSINESS TOURS“AGRICULTURE INTERNSHIP”

PROGRAM

“AGRO INDUSTRIA” MAGAZINE

“POCHATOK” MARKET

MATCHING GRANTS

WEATHER STATIONS

BUSINESS Models &

Calculations

EVENTS: TRAINING & EXPERTISE

E-VOUCHER PROGRAM

UHBDP WEBSITE

UHBDP Services

Training Events and Consultations

Trainers are the leading Ukrainian and Israeli specialists in crop protection and fertilizer application, modern agrotechnology, mechanization,business management and business psychology

MASHAV - Israel Agency for International DevelopmentCooperation, Ministry of Foreign Affairs - promotes worldeconomic and social progress by training qualified specialistsand transferring modern technologies through advisorymissions or projects in Ukraine or Israel.

МСТС - The Golda Meir Mashav "Carmel" International

Training Center conducts trainings on organization,

management, promotion and business development.

CINADCO - The Center for International AgriculturalDevelopment Cooperation, which organizes consultingmissions on growing agricultural products, packaging,storage, irrigation, CPP and fertilizer applications.

Expertise from Israeli Government

For UHBDP clients - 25% discount for annual

subscribtion!

Specialized edition for those who grow vegetables, fruits,

berries, mushrooms and produce honey

Each issue of the magazine contains a unique

information about the latest technologies for growing

crops, including niche ones, professional advice on

agronomy, fertilizer and CPP application, effective

marketing and business promotion, success stories of

small and medium-sized farmers, production

information, crop data.

A privileged subscription for the specialized “Agro

Industria” magazine is still under way!

“Agro Industriia” Magazine

Applicable scope: farms, family budget

Accounting for fixed and variable costs, depreciation, cash flow

Income accounting, crop reports

Graphs, diagrams

Analysis

Business Modeling and Calculation

INTERNATIONAL APICULTURAL

CONGRESS

Istanbul,

September 29 - October 04, 2017

INTERNATIONAL TRADE EXHIBITION

FOR FRESH FRUIT AND VEGETABLES

Berlin,

February 06-09, 2018

INTERNATIONAL TRADE FAIR FOR

ORGANIC PRODUCTS

Nuremberg,

February 13-16, 2018

https://uhbdp.org/ua/our-services/business-trip

Business Market Tours

https://pochatok.od.ua/

UHBDP clients can sell their produce on

“Pochatok” market during weekends FOR FREE

Comfortable and safe conditions for trade,

free, convenient parking for customers’

transport

Trading space can be given to a farmer for 1 or

2 days

Working hours : 24 / 7

Preliminary registration by phone:

097-073-5-777

“POCHATOK” Market test

19 weeks

= 5 months

59821 KG

of fruits

and veg

32 SMF

Participants

340 L of

Honey

2250 PCS

of sweet

corn

TOTAL SMF

REVENUES

668 535 UAH

30 SMF participants

Key Test Results

"... I can take any quantity of

goods. If I do not manage to

sell at retail, I can sell the rest

in bulk ..."

Feedback from UHBDP participants regarding trading on Pochatok market

".... It is really hard to find a place

on the market, you know. Everything

is reserved, but here I was offered a

trading spot... I have the right to go, I

will not look for a trade point as I

come to the market purposefully ..."

"... Earlier we stood on hills, along the

roads and it was bad ... there were

racketeers, but now everything is fine

and free. We are protected and that’s

also great... "

Linking actors in Market Channels

EFFICIENCY

REPORTING AND MONITORING

OF THE PROJECT

• Quarterly monitoring and data

collection

• Evaluation of investment efficiency

• Information about company’s activity

• Performance analysis of working

with small and medium-sized farmers

CONTRACT

CONCEPT, FINANCIAL MODEL AND BUSINESS PLAN DEVELOPMENT

• Consultative planning with applicants

• Selection of potential candidates (SMEs)

• Projects:

- storage

- cooling

- processing

- sorting

- packaging

- other

CONCEPT

SEARCH AND SELECTION

OF THE APPLICANTS

• Obtaining company’s data:

- Shareholders / Management

- Financial indicators

- Sales markets/Competitors

• Business development prognosis:

- Crops

- Area/Yield

- Price forecast/Sales markets

- Evaluation of financial indicators

Matching Grants

Matching Grant: Andrii ChornyiCompany Andrii Chornyi

Problem • Region is in high demand for tomatoes

• Local trading center: asphalt, day traders

• SME: Vision for regional logistics

o Expertise; Connections to export market

Solution • Create a packing house

o Renovate old transport facility

o Temporary cold storage

o Clean environment

• Grading and Sorting

• Packaging and transport logistics

• Opened September, 2017

• Opportunity to aggregate 30+ farmers

Amount Total business plan: US$198,940

MEDA match: US$ 74,400

Matching Grant: Tempori ParseCompany Tempori Parse

Problem • Grow garlic; Connections to export

• Could sell more, but need supply

• How to source garlic from small famers

Solution • Production:

o Support in preparing and growing

o Make inputs and equipment available

• Construct cold storage

o Temporary cold storage supply

o Grading and Sorting

o Packaging and transport logistics

• Multiple stages of implementation

• Opportunity to aggregate 20+ farmers

Amount Total business plan: US$ 347,700

MEDA match: US$ 138,500

Practices: How do we work?Applying Business marketing techniques in the development industry:

• Lean Startup : Design Thinking : Hypothesis Testing

• Client Centricity and Client Experience (UX)

• Data Driven Tools and Management

Leverage our Test Hypothesis strategy to Learn about clients!

• Purpose: Why we use Hypothesis testing

• Understand clients perspectives and responses to our ideas

• Test Assumptions: Prototype!

• Purpose: Learn Quickly!!

• Based on Lean Strategy and Agile

• Fail Quickly; Fail Small Learn

• Based on Hypothesis Testing

• Test scenario

• Result Learning

• We have a series of ICT tools to help us

UX : Small Farmer – Open Market

UX : SME – Niche Market

Track performance indicatorsContract Reporting

• Fulfill contractual obligation reporting requirements to demonstrate project success

• Reduce time to know whether on target

Track Operational PerformanceManage Operations

• Manage key partners targets, activities and performance with operational data

• Enable key partners to leverage their own data to manage performance => Capacity Building

Profiles, Client Segmentation and OpportunitiesUnderstand Clients

• Gain insight into client experience (UX) and perception

• Understand adoption models: Why change what currently doing?

Induce potential market actors to act in the marketShare Data

Leveraging a data-driven strategy to enable:

Impact & Learning: What results?

Locus of Control

Statement:

“I have access to training and information on how to sell”

Ba

selin

e2

01

7

Locus of Control

Statement:

“I feel confident about

opportunities to sell

my produce”

Ba

selin

e2

01

7

Locus of Control:Women’s Perspective

Comparison of Baseline and 2017 responses: Percentage responding to “AGREE”

Observations:

• Large increase from Baseline to AS2017

• Women feel more confident about opportunities to sell produce

• They believe they have more access to information:

• How to grow

• How to sell

• They have a better understanding of which markets they sell to

Question Baseline AS2017 Change

“I know exactly which

markets my produce

goes”

19% 39% +20

“I feel confident about

opportunities to sell my

produce”

10% 41% +31

“I have access to training

and information on how

to grow”

14% 58% +44

“I have access to training

and information on how

to sell”

13% 39% +26

Client Reach:

28,000 of 44,000 clients

(achieved 63% of Target by Year 3)

Sales Volume: “Top Ten” Aggregation Hubs

22,000 of

50,000 MTs

[conservative]

Achieved 44%

of Target in

Year 3

OpportunitiesImport Fruits & Vegetables?!

Expertise with Cold Chain Logistics?

Prayer: Staff, Clients and Markets

Questions

Thank YouCreating business solutions to poverty

meda.org

Resource slidesNot used in the presentation

Contract ReportingPurpose: Capture data to track and report progress on achieving contract-related performance indicators – usually expressed in our Performance Management Framework indicators (GAC)

We capture data from a variety of sources to report on KFPs / PMF indicators: periodic targets and actual results

Examples:

• # Clients

• # Events

• Sales volume and Sales Value

Manage OperationsPurpose: Capture data to (1) tracking of performance with more frequency, enabling pivots and changes in programming (2) make management decisions

We capture data from a variety of sources and use it to actively manage project activities and operations

1. Key Facilitating Partners

• Performance of Actual against Targets

• Delivering as contracted and agreed?

2. Service offerings

• What seems to be successful?

• What should we stop doing?

• Where do we need to pivot?

3. Clients and Client segments

• Are we targeting the right market segment?

• Are they adopting our “services” and services of partner firms? Why / Why not?

• Are we delivering the right services?

Understand clients

Purpose: Capture data to enable segmentation, profiling and better understanding of how UHBDP provides value

We capture data from a variety of sources and desire to associate them to the client (Dynamics Contac)

1. Surveys• Annual surveys• Matching Grant surveys• Market and business model surveys

2. Events• Participation at Events• Feedback from Events

3. Web site• What did they find useful/valuable?• How are they responding to communication?

4. Communication

• SMS• Email• Call Center

Clients: Market actors in supply chain

• Input Distributors and retailers

• Small and Medium Farmer

• Traders & W/H

• SME: niche ‘sellers’

Share DataPurpose: Demonstrate market opportunities to other market actors who are not actively considering horticulture a viable market

We have connections with over 25,000 market actors

Area under production Sales Volume