uhdp progress report 9 2012-11-15
TRANSCRIPT
UKRAINE HORTICULTURE DEVELOPMENT PROJECT Semi-Annual Narrative Progress Report (#9) April 1, 2012 to September 30, 2012 November 15, 2012 Prepared for: Canadian International Development Agency Prepared by: Mennonite Economic Development Associates
Agriculture Market Linkages 155 Frobisher Drive, Suite I-106 Waterloo, ON N2V 2E1 Tel: (519) 725-1633 Fax: (519) 725-9083 E-mail: [email protected]
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page i
UKRAINE HORTICULTURE DEVELOPMENT PROJECT Semi-Annual Narrative Progress Report (#9)
April 1, 2012 to September 30, 2012
Table of Contents 1.0 EXECUTIVE SUMMARY ................................................................................................ 4
2.0 PROJECT STRUCTURE................................................................................................ 5
2.1.1 Description of UHDP Staff Positions .................................................................................................. 5 2.1.2 Description of UHDP Staff Positions ................................................................................................ 5
2.2 UHDP Staffing Changes ............................. ...................................................... 7
3.0 PROJECT ACTIVITIES AND ACHIEVEMENTS ............... ............................................. 7
3.1 Develop Farmer Support Services (WBS 300) ......... ....................................... 7 3.1.1 Partnership with MASHAV ................................................................................................................ 7 3.1.2 Educational Events ......................................................................................................................... 10 3.1.3 Annual Best Grape Competition ...................................................................................................... 11 3.1.4 Early Disease Warning System and Web-site Development ........................................................... 12
3.2 Value Chain Development (WBS 400) ................. ............................................12 3.2.1 Consolidation Model ....................................................................................................................... 12 3.2.2 Cooperative Business Solutions ....................................................................................................... 14
3.3 Financial Services Development (WBS 500) .......... ........................................14 3.3.1 Agro Capital Management .............................................................................................................. 14 3.3.2 Innovation Fund .............................................................................................................................. 20
3.4 Capacity Building (WBS 600) ....................... ...................................................23 3.4.1 Cooperative Cold Storage Development ......................................................................................... 23 3.4.2 Partner Development ..................................................................................................................... 24
4.0 CONTRIBUTIONS TO MEDIUM AND LONG TERM RESULTS ..... ..............................25
4.1 UHDP Client Growth ................................ ........................................................25 4.2 Capacity Growth in Key Facilitating Partners ...... ..........................................26
5.0 PROJECT VARIANCES AND PLANS ....................... ...................................................27
5.1 Changes to Project Scope .......................... .....................................................27
5.2 Quarterly Financial Report Highlights ............. ...............................................27 5.3 Variances between Planned and Actual Activities ... .....................................28 5.4 Challenges and Risk Management .................... .............................................28 5.4.1 Innovation Fund Draw-down ........................................................................................................... 29 5.4.2 Potential for No-Cost Extension while awaiting Potential Phase II Award ..................................... 29
5.5 Key Planned Activities for Next Period ............ ..............................................29
6.0 CROSS-CUTTING INITIATIVES ...................................................................................29
6.1 Integration of Women in UHDP Objectives and Activit ies ............................29 6.1.1 Umyut .............................................................................................................................................. 29 6.1.2 Ukraine Women Farmer’s Council (UWFC) and International Day of Rural Women ...................... 30 6.1.3 Gender Innovation Fund Survey ...................................................................................................... 32
6.2 Integration of Environment in UHDP Objectives and A ctivities ....................37 6.2.1 GES Review by CIDA local environmental consultant ...................................................................... 38
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page ii
Table of Tables Table 1: CINADCO activities .......................................................................................................................... 7
Table 2: Consolidations Sales Data from cluster locations (as of 15 Sept, 2012) ....................................... 13
Table 3: ACM Sales Volume (2009 through March 2012) ........................................................................... 18
Table 4: ACM UHDP Discounts by Region ................................................................................................... 19
Table 5: ACM UHDP Discounts by Product ................................................................................................. 20
Table 6: Innovation Fund - Cooperative Product ........................................................................................ 23
Table 7: Risks and Risk Mitigation ............................................................................................................... 28
Table 8: Packaging improvements .............................................................................................................. 30
Table 9: Umyut six month plan ................................................................................................................... 30
Table 10: Round table discussion on Challenges and Opportunities facing rural agri-business women ... 31
Table 11: UHDP GES Interventions ............................................................................................................. 38
Table 12: UDHP farmers awareness of GES ................................................................................................ 38
Table 13: GES Observations and Recommendations .................................................................................. 39
Table of Figures Figure 1: Gender Fund Survey ....................................................................................................................... 4
Figure 2: UHDP Organization Chart .............................................................................................................. 5
Figure 3: Omar Zaidan, CINADCO CONSULTANT ........................................................................................ 10
Figure 4: Training events (as of 15 Sept) ..................................................................................................... 10
Figure 5; Training events (as of 30 Sept) ..................................................................................................... 10
Figure 6: Best Annual Table Grape Press Conference ................................................................................. 11
Figure 7: Sample of the 208 grape varieties ............................................................................................... 11
Figure 8: Market Barriers facing SHFs ......................................................................................................... 12
Figure 9: UHDP Market Channels ............................................................................................................... 13
Figure 10: ACM Impact (inception to 31 Aug, 2012)................................................................................... 15
Figure 11: ACM Organizational Structure ................................................................................................... 16
Figure 12: Transactions and Funds flow ..................................................................................................... 17
Figure 13: Financial Overview (US$ 000) as of 31 Aug, 2012...................................................................... 18
Figure 14: Number of ACM clients by Product sales .................................................................................. 19
Figure 15: Number of Contracts with overdue payments (15 Sept, 2012) ................................................. 19
Figure 16: Innovation Burn-down ............................................................................................................... 22
Figure 17: Allocation of Spending ............................................................................................................... 22
Figure 18: UHDP Client Growth (Calendar Year) ......................................................................................... 25
Figure 19: UHDP Client growth ................................................................................................................... 26
Figure 20: Distribution of grant components ............................................................................................. 34
Figure 21: Comparison - Grants for seedlings vs. Equipment ..................................................................... 34
Figure 22: Answers to "Do you currently spend less time working the land?" ......................................... 35
Figure 23: Factors that influenced seedling mortality ................................................................................ 35
Figure 24: Area cultivated before and after grant (Left excludes large farms, Right includes large farms)
.................................................................................................................................................................... 36
Figure 25: Income from grant crops ........................................................................................................... 36
Figure 26: Expansion of area under cultivation .......................................................................................... 37
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page iii
List of Acronyms
ABR Agro Business Representative ACM Agro Capital Management AFLOC Association of Farmers and Land Owners in Crimea AT Agro Tavria BoD Board of Directors CAD Canadian Dollar CIF CIDA Innovation Fund CINADCO Center of International Agricultural Development Cooperation CU Credit Union CSU Cold Storage Unit GES Good Environmental Stewardship GIF Gender Innovation Fund ICS Information Communication Services KFP Key Facilitating Partner MASHAV Center for International Cooperation of the Foreign Ministry of Israel M&E Monitoring and Evaluation MIS Management Information System MEDA Mennonite Economic Development Associates MOC Memorandum of Cooperation NGO Non-Governmental Organization PMF Performance Measurement Framework PSC Project Steering Committee Meeting RBM Results Based Management SHF Small Holder Farmers SME Small to Medium Enterprises SPAN Nizhnigorsk Business Center (SPAN is the Russian acronym) UAFLO Ukrainian Association of Farmers and Land Owners UAH Ukrainian Grivna UHDP Ukraine Horticulture Development Project USAID United States Agency for International Development USD United States Dollar UWFC Ukraine Women Farmers Council VCD Value Chain Development
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 4
UKRAINE HORTICULTURE DEVELOPMENT PROJECT Semi-Annual Narrative Progress Report (#9)
April 1, 2012 to September 30, 2012
1.0 EXECUTIVE SUMMARY
This report constitutes the ninth progress report for the Ukraine Horticulture Development Project (UHDP) and provides a semi-annual progress status for the Year 5 Work Plan1. The document’s reporting period covers April 1, 2012 through September 30, 2012. Project implementation continues according to planned activities presented in the Year 5 Work Plan. Significant milestones and success achieved during the reporting period include:
Long Term performance • 6,567 farmers have registered to participate in the UHDP, exceeding the LOP target
• UHDP conducted the Best annual Table Grape event to highlight accomplishments and promote collaboration amongst farmers. It is expected that a Key Facilitating Partner may take over management of the annual event next year.
Develop Farmer Support Services • The MASHAV partnership continues to provide valued training and extension services to
UHDP clients and staff
• 179 field days and training events were conducted to date during Year 5.
Value Chain Development (VCD) • Probable UHDP clients sales data suggests 2,675 tonnes and UAH 27,956,000
• Market consolidation/clustering practices have shown to be statistically significant activity to raise small holder farmer revenue
Local Capacity-Building • Cooperative development proceeds with technology adoption and management capability
Cross-cutting Initiatives – Gender and Environmenta l • The Ukraine Women Farmers Council and
Umyut continue to improve capacity
• UHDP conducted a survey to understand change in behavior and outcomes associated with grants from the Gender Innovation Fund (See Section 6.1.3)
• Environmental: GES consultant favorably observed UHDP impact with clients and identified recommendations UHDP has already begun implementing
Program Structure and Project Management • UHDP staff positions remained fairly constant since Year 5 began
1 UHDP Year 5 Work Plan for the Year Ending 31st March 2013, dated May 15, 2012
Figure 1: Gender Fund Survey
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 5
2.0 PROJECT STRUCTURE
This section describes the current UHDP project structure and recent staff changes.
2.1.1 Description of UHDP Staff Positions
The UHDP team has maintained its general organizational structure while consolidating administrative positions and responding to natural changes in personnel. Figure 2, below, illustrates the organization structure of the project team as of September 30, 2012.
Figure 2: UHDP Organization Chart
Natalia ZhygaltsovaAdministrator
Galina KaufmanAssistant PT
Viktoria IvanenkovaProject Accountant
Victor FalkoFarmer Business
Development
Sergiy TimchenkoUHDP Client Manager
Irina AntonovskayaM&E Manager
Vera GavrushinaMASHAV Partnership
Coordinator
Vadim OvcharenkoICS Specialist
Stanaslav GlushenkoVCD Specialist
Tokmak
Artem VaranistaVCD Specialist
Tokmak
Vladimir TernovskyValue Chain Manager
KFP Manager
Mavile MamutovaBusiness Development
Assistant PT
Nadia KompanetsUWFC Director
Ludmila AngelovaUWFC Agronomist
Sasha GarmashWomen's Business
Development-UWFC
Dasha KarpenkoRural Women's
Business Development
Andriy IgnatovFinancial Specialist
Vasfiye MamutovaSME Specialist
Vladimir YarmilkaProduction Specialist
Simferopol Office Manager
Stephen WrightField Project Manager
2.1.2 Description of UHDP Staff Positions
The following section highlights UHDP staff employed in Ukraine and describes their roles and responsibilities. At MEDA headquarters, Nick Ramsing has assumed Nigel Motts’ previous role and provides UHDP project supervision. • Stephen Wright (MEDA Field Project Manager) stationed in Melitopol.
• Natasha Zhilgaltsova (Project Administrator) stationed in Melitopol. Her duties include administration, tracking of project equipment and human resources.
• Victor Falko (Farmer Development) stationed in Melitopol. Coordinates asset acquisition for UHDP farmers using Innovation funds, issues and monitors tenders from potential suppliers and coordinates legal/tax issues.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 6
• Viktoria Ivanenkova (Project Accountant) stationed in Melitopol. Responsible for all accounting duties which include reporting to MEDA HQ with monthly reports, payroll tracking and distribution and project expenses including monthly reports from Key Facilitating Partners.
• Galina Kaufman (Part Time Accounting assistant) stationed in Melitopol. Assists Project Accountant with the significant increase of work related to field expenses, tracking of Innovation funds and KFP expenditures.
• Vladimir Yarmilka (Production Specialist) stationed in Simferopol. Vladimir provides support to KFPs on production issues, coordinates major events and manages the Simferopol office.
• Vasfiye Mamutova (SME Specialist) stationed in Simferopol. Business plan trainer for project clients. Assists in developing specialized consolidation models for buyers and traders.
• Vladimir Ternovski (Value Chain Manager) stationed in Melitopol. Leads the Information and Communication Services (ICS) team and manages Value Chain activities. Specific duties include website development and support, data collection of field activities (uploading of data from farmer transactions), newsletter development/distribution and netbook training to farmers. Responsible for managing KFPs relationships and monitoring KFPs progress against workplans and budgets.
• Vadim Ovcharenko (ICS specialist) stationed in Melitopol. Newsletter network support, data distribution, farmer communications and toll free phone number maintenance netbook trainer.
• Artiom Varanitsa (Value Chain Technician) stationed in Tokmak. Linking traders and buyers, cell group development and direct support to UHDP Coops in the region.
• Stanislav Gluschenko (Value Chain Technician) stationed in Tokmak. Focusing in the Tokmak region duties include: inking farmers with traders and buyers, cell group development and direct support the Ukraine Women Farmers Council.
• Darya Karpenko (Gender Specialist) stationed in Simferopol. Duties include women’s business development, coordination of gender activities for the project and project partners, development of UWFC capacity and coordination of the Gender Innovation Fund with UHDP partners. Darya is currently on maternity leave.
• Alexsandra Garmash (Women’s Business Development) Stationed in Melitopol. Assists and supervises the UWFC in the Zaporizhzhia Oblast.
• Nadia Kompanets (UWFC Director) Stationed in Tokmak, provides support to UWFC members in the Zaporizhzhia Oblast.
• Ludmila Angelova (UWFC Agronomist) Stationed in Tokmak, provides agronomy support to the UWFC members in the Zaporizhzhia Oblast.
• Mavlie Mamutova (part-time trainer coordinator) stationed in Simferopol. Develops training material and conducts business development training for women in the UWFC.
• Irina Antonovskaya (Monitoring and Evaluation) stationed in Simferopol. Coordinates M&E activities including baseline gathering and systems development.
• Sergiy Timchenko (part-time Monitoring and Evaluation) stationed in Simferopol. Duties include database management, data collection, analysis and coordination of records.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 7
• Andriy Ignatov (Financial Specialist) stationed in Simferopol. His duties include development of banking solutions for UHDP clients, further development of ACM financial and product models.
2.2 UHDP Staffing Changes
Darya Karpenko began maternity leave beginning in June 2012. No other changes exist in the UHDP staffing structure or personnel.
3.0 PROJECT ACTIVITIES AND ACHIEVEMENTS
3.1 Develop Farmer Support Services (WBS 300)
The Farmer Support Services are highlighted by the following activities, further described in the following sub-sections: • Extension services provided by MASHAV through CINADCO
• Training events performed by Key Facilitating Partners
• Annual Best Grape Competition
• Development of Early Disease Warning System and weather stations
3.1.1 Partnership with MASHAV
Israel’s Agency for International Development Cooperation within the Ministry of Foreign Affairs (MASHAV) contracts with The Center for International Agricultural Development Cooperation (CINADCO) to work with the UHDP. The UHDP has been able to utilize CINADCO’s expertise in a wide range of production techniques beneficial to UHDP clients. The chart below highlights major activities between CINADCO and the UHDP for the previous six months.
Table 1: CINADCO activities
Trip Score of Work Regions Visited Outcomes March 2012 Mr. Zeidan
• Prepare farmers for the growing season
• Conducted Farm visits and seminars
• Presented and discussed pollination issues and mulching techniques
• Instructed UDHP staff and agronomists on nursery and soil techniques
UKRAINE • Crimea • Zaporizhzhia
• MASHAV received improved understanding of Ukrainian technique to prepare for the growing season
• Provided individual farmer education with each field visit: o Greenhouse construction o Soil condition o Drip irrigation and heating
systems o Seeding and transplanting
techniques • Identified techniques to improve
strawberry cultivation • Began planning stage:
o MASHAV demo plot o CINADCO to provide plastic to
test in greenhouses o Provide 2 portable soil testing
kits o Provide test seeds for demo
plots
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 8
Trip Score of Work Regions Visited Outcomes May 4-25, 2012 MASHAV / CINADCO course “Innovation technologies in growing” 4 participants from the UHDP and KFP staff – agronomists and key specialists.
• Shared Israel’s knowledge and experience in the effective plant growing innovations and their implementations
• New IPM techniques for vegetable and orchards, safety of agricultural products
• Use of substrate, sewage water, climate control and other issues
• Visits to sorting and packing facilities, seed companies, bioprotection companies, private farms
• Visiting International Exhibition AGRITECH 2012
• Round table with a discussion of the course
ISRAEL • CINADCO
International Training Center
• UHDP agronomists and consultants were introduced to growing under protected conditions and in the open field
• The obtained knowledge will be widely used during consultancies and seminars with the UHDP farmers
• Many new commercial contacts were made during the AGRITECH exhibition
• Plans were discussed for implementation of o water saving technologies for
intensive agriculture o integrated pest management o ecological growing o quality control systems
June 3-8, 2012 Yoram Eisenstadt
• Assessed irrigation and fertilization issues in UHDP regions of activity
• Participated in a Field Day on strawberries
• Visited private and state laboratories for water and soil analyses
• Conducted several farm visits and seminars in each region
• Consulted with Melitopol Agronomical University staff
• Presented and discussed information concerning fertigation under protected conditions and in the open field: irrigation systems and techniques, soil and water measurements, etc.
• Trainings on installing and managing portable soil and water test kits
UKRAINE • Saki • Nizhnegorsk • Kamenka –
Dneprovskaya
• Melitopol
• 3 Seminars • 7 Farm visits • Donated 2 portable test kits for
soil and water analyses to the UHDP
• Much better understanding of the ways and the importance of controlling o fertilizers o irrigation o soil and water condition &
components • Enhanced collaboration with
institutions – University, laboratories, greenhouse complexes, etc.
• Plans: o Using test kits on different
farms o Arranging contacts with
different Israeli manufacturers (drip irrigation, fertilizers, etc.)
o Making soil and water tests a common practice
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 9
Trip Score of Work Regions Visited Outcomes • Instructed UDHP staff
and farmers on different ways of controlling fertigation quality
June 19 – July 3, 2012 MASHAV / CINADCO course for MEDA “Management and Marketing in agriculture” 17 participants from the UHDP including lead farmers, UHDP staff and KFP staff
• Acquaintance with a market chain in Israel – from a farmer to a supermarket
• Meeting the representatives of Israeli Plants Production and Marketing Board, Growers Association, etc.
• Visiting the largest supermarket chain and a wholesale vegetable market
• Visiting sorting and packaging facilities; new marketing ideas for packing
• Lectures on cooperative movement and their modern development
• Introductory lectures on quality standards
ISRAEL • CINADCO
International Training Center
• Better understanding of the farmer-market relationship and its opportunities
• Examples of cooperatives and Growers associations which can be implemented in Ukraine
• The participants will spread the knowledge about cooperatives’ inner structure and effective work among the farmers
• Many contacts were made with the companies producing packages, plastic, etc.
• Round table with a workshop on creating one’s own marketing strategies and SWOT analyses; Business planning and simple marketing plan for a cooperative
• Emphasis on the importance of Russian-speaking lecturers and instructors both during courses in Israel, and at consultations in Ukraine
• Plans: o creating more courses
specially designed for MEDA’s needs
o implementing quality standards in Ukraine
o implementing new ways of packaging and branding the produce
July 8 -13, 2012 Omar Zeidan
• Following up with the March visit
• Visiting mostly the same farms to assess the positive changes in technologies used
• Giving on-the-spot lectures about artificial pollination and conditions in the greenhouses in general
• Getting updated information on the main crops, their yields, varieties and the sources of seeds\transplants
UKRAINE • Saki • Nizhnegorsk • Zaporizhzhia
region
• 12 Farm visits • 1 Seminar • A round table to emphasize the
importance of pollination and the spread of knowledge between the farmers
• Determining a further scope of activities regarding vegetable growing; recognizing sufficient progress since the visit at the beginning of the season
• Perspectives: o Creating private nurseries
based on lead farmers’ plots o Making contacts with
companies providing bees for pollination
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 10
Trip Score of Work Regions Visited Outcomes
o Implementing several hives to compare between farms
o Trying more of the Israeli varieties of vegetables
o Diversification of varieties (new forms, colors, shapes etc.)
o Sending an IPM specialist to consult on plant protection issues
Upcoming CINADCO activities for the next six months include: • Integrated Pest Management seminars in the Republic of the Crimea and the Zaporizhzhia
Oblast conducted by a CINADCO consultant in November 2012.
• Intensive training course in Israel regarding honey production, scheduled for December 2012. Four to five UHDP farmers involved in honey production will be selected by MASHAV to participate.
• Greenhouse preparation seminars by CINADCO consultants in February for UHDP clients in the Republic of the Crimea and Zaporizhzhia Oblast.
• ARAVA Exhibition, Israel greenhouse growers in February. 10-12 UHDP clients, partners and staff are expected to participate.
3.1.2 Educational Events
Education and training events remain an important and integral part of client activities provided by the UHDP and KFPs. These events empower project clients with new knowledge and technical information that supports their agri-business development goals. New technology and techniques are passed onto UHDP clients and clients appreciate the opportunity to share experiences and collaborate on new information. The education events are conducted by UHDP consultants with support from international consultants and professional suppliers of farm machinery, pest control products, fertilizers, seedling providers, etc. Farmers are encourage to compare information and pricing with other sources and suppliers. Increased demand from for additional training events resulted in a significant increase in the
number of trainings conducted by KFPs. Another contributor to demand for trainings
is the continued increase in the overall number of UHDP clients.
According to the consolidated KFP work
plan for Year 5, 317 educational events are planned between April 1, 2012 and March 31, 2013 – a doubling of the number of events in 2011. To date, 179 events have been conducted in Year 5 (51% of Year 5 target).
Figure 3: Omar Zaidan, CINADCO CONSULTANT
Figure 5; Training events (as of 30 Sept)
Figure 4: Training events (as of 15 Sept)
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 11
3.1.3 Annual Best Grape Competition
The Golden Bunch of Grapes event for 2012 was held on August 30 in Simferopol. Approximately 800 UHDP clients attended the fourth annual competition, which brings together UHDP table grape growers from all over the region. Joining UHDP clients were other table grape growers from throughout southern Ukraine.
The event began with a press conference with both Ukrainian and International representatives. Discussions by Ukrainian grape experts included: • Continued development of the Table Grape Sector
• Governmental support for local producers
• Barriers for small producers
• Canada and Israel partnership assisting small holder farmers Figure 6: Best Annual Table Grape Press Conference
Participants described the main successes of the event include: • Greater awareness and interest in Table Grape production in Ukraine
• Exchange of ideas and experience in Table Grape production and marketing o Knowledge transfer and sharing experiences between small farmers
• Cooperation between Canada, Israel and Ukraine to further develop the sector
• Creation of client-supplier connections in the following areas: o Equipment acquisitions o Business services o Marketing and trading relations
UHDP anticipates that a KFP partner will continue to conduct this event on an annual basis as a private exhibition. 208 varieties of grapes were on display for the competition, 20 display booths were set up by suppliers and UHDP partners.
Figure 7: Sample of the 208 grape varieties
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 12
3.1.4 Early Disease Warning System and Web-site Dev elopment
In August 2011, the UHDP purchased16 Early Disease Warning System (EDWS) weather stations, nine of which were installed in the Autonomous Republic of Crimea, and seven in the Zaporozhzhia oblast. The Early Disease Warning Systems weather stations were installed on with Coops and ABRs’ farms positioned to allow for maximum geographic coverage, varies from 10 to 20 km. The EDWS data processing interface is integrated with the UHDP web-site, enabling all interested UHDP clients to gain access to plant disease crop models or weather forecasts. The UHDP information department manages access to the web-site and registered users are granted password protected access. The number of registered users connected to the weather stations via the UHDP web-site currently totals over 290. In addition, 72 Agro Business Representatives (ABRs) use netbooks to log market consolidation activity and access information on the website. Nearly 80% of all UHDP web site users log on to the UHDP web-site to leverage its content and services at least once a week. The EDWS provides the following high-value services to UHDP clients: • Potential to reduce crop loss through advance notification of disease
• Reduces pesticide usage as pesticides are applied when needed
• Assist with work and labor planning due to understanding forecasted weather
• Allows for preventative measures, crop protection
• Forecasts a potential spray window increases the effectiveness of the pesticide
• Reduces water irrigation usage.
3.2 Value Chain Development (WBS 400)
3.2.1 Consolidation Model
UDHP continues to leverage the consolidation model via ABR/Lead Farmers and Coops market channels to provide small holder farmers with access to high-value markets. The diagram below provides the market context and barriers facing small holder farmers2.
Figure 8: Market Barriers facing SHFs
2 Progress Report #7 and #8 provide further details concerning market constraints and UHDP actions to créate new opportunities
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 13
UHDP has facilitated the creation of two consolidated market channels: one flows through Agro Business Representative (ABRs – Lead Farmers); the other through new Cooperative agri-businesses (Coops) that have responded to marketing and post-harvest handling market opportunities. UHDP tracks the consolidation of market transaction and sales information via ABRs/Lead Farmers through its Market Information System (MIS).
Figure 9: UHDP Market Channels
Table 2 below displays data that originates from ABR/Lead Farmers from the period 1 April to September 15, 2012. Despite success in obtaining data from ABRs, challenges remain with obtaining accurate sales data from the entire cluster due to: (i) farmers concerns about tax reporting and (ii) increasing disincentive to report sales via netbooks and (iii) the portion of UHDP clients do not live in the cluster areas of UHDP. As a result, data via the ABR channel continues to be under-reported.
Table 2: Consolidations Sales Data from cluster locations (as of 15 Sept, 2012)
Cluster Location
Main crop # of SHFs
# of Sales period
Volume (t) Net value (thousands UAH)
Umut Medicinal herbs 554 973 241,34 728,68
Sadovoe Greenhouse vegetables
452 277 1211,4 10,827,92
Chervonoe Table grapes, vegetables
174 132 474,75 9,123,03
Crimea total 1,180 1,382 1,927,49 20,679,63
Kamenka-Dneprovsky
Greenhouse vegetables
210 614 660,84 5741,85
Melitopol Berries, greenhouse vegetables
36 67 39,28 804,04
Tokmak-Molochansk
Berries, greenhouse vegetables
161 122 47,56 731,16
Zaporizhzhya' total 407 803 747,68 7,277,06
Grand Total 1,587 2,185 2,675,17 27,956,69
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 14
3.2.2 Cooperative Business Solutions
In order to overcome the market barriers identified in Figure 8, UHDP facilitated a legal review in order to understand the varying business registration models and select one that was best suited to allow small farmers access to higher value markets. UHDP also facilitated round table discussions between small farmers and traders to discuss challenges and brainstorm possible solutions. The result was the formation of agribusiness cooperatives, focusing on marketing and consolidation, and providing agri-business services to small farmers3. The following table identifies Coops that were created through UHDP facilitation and supported by UHDP activities. Zaporizhzhia Oblast Republic of the Crimea • Golden Valley, village of Vodina, (Kamin Dnipro region)
• Vineyard Farmers of Zaporizhzhia, city of Tokmak (Tokmak region)
• Mitra, village of Novgorodkovka, (Melitopol region)
• Nika, city of Melitopol, (Melitopol region)
• Fruits of Crimea, village of Chervonoe (Sakski region)
• Umyut, village of Petrovna (Beligorski region)
• Renuk, village of Sodovoe (Nizhnigorski region)
• Jilek, village of Pervomaiski (Pervomaiski region)
• Selhozholod in the village of Roshino (Jonkoiski region)
• Katrin in the village of Kotovskoe (Razdolnenski region)
Unlike the North American model in which cooperatives service a large number of members and are based on the ‘one member one vote’ principle, cooperatives in the Ukrainian context provide the flexibility to allow multiple people to enter into a business partnership without requiring equal asset or equity allocation. This cooperative arrangement provided a legal business entity which united registered and non-registered farmers and other legal entities under one enterprise to engage in market transactions with traders in the high-value, upscale markets as identified in Figure 9.
3.3 Financial Services Development (WBS 500)
No significant changes occurred in the agriculture financial sector during the reporting period. Although two commercial banks continue to expression some interest in learning more about UHDP farmers and ACM, most financial institutions demonstrated disinterest in offering financial solutions to small holder farmers. UHDP maintained communication channels with two specific financial institutions – Credit Agricole and ProCredit Bank – but interest in ACM leasing activities and UHDP clients has yet to translate into substantial business transactions.
3.3.1 Agro Capital Management
This section provides business and financial information describing Agro Capital Management’s (ACM) role as an agri-business leasing provider that may not have been commonly understood from previous semi-annual reports. The section covers ACM’s background, organization structure, business model and financial performance. Agro Capital Management is a Ukrainian Limited Liability Company that was created by MEDA in response to the lack of financial institutions meeting small farmer financing needs. At the start of the UHDP, MEDA intended to work with financial institutions to extend financial products to small farmers, thereby facilitating adoption of equipment for production and post-harvest handling activities. With the advent of the world-wide financial crisis, Ukrainian financial
3 Progress Report #8 provides more detail about Coop development and their value to market consolidation.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 15
institutions pulled back from the agricultural lending market, creating project risk that MEDA attempted to fill through the creation of a agro-leasing company. MEDA partnered with Sarona Capital and CIDA to seed the company which is located in Simferopol. MEDA does not have a long-term interest in owning the company, but does have a desire to see ACM persist as a viable on-going business entity. MEDA desires that ACM persist as a model for sustainable agri-lending practices, providing agri-business financial leasing solutions to smallholder farmers and small agribusinesses. ACM selects and partners with high quality and reliable suppliers, organizing its activities around providing production and post-harvest handling equipment via lease financing for small farmers. ACM’s partner suppliers also provide basic agribusiness and equipment training to clients. ACM earns revenue through interest and fees derived from equipment financing sold to farmers and agribusinesses purchasing equipment in the following product ranges: • Table Grape production
• Strawberry production
• Greenhouse production
• Alternative Energy
• Small cold storage facilities
• Roto-tiller machinery
• Farming Tractors
3.3.1.1 ACM Organizational Structure The graphic in Figure 11 depicts Agro Capital Management’s organizational structure as divided into the following five components: • Board of Directors: ACM’s current Board membership is composed of four members: two
from MEDA and two investors who own and operate agribusinesses in North America
• CEO: Oleg Osaulyuk became the new CEO of ACM on April 1, 2012. From his former role as UHDP’s Value Chain Manager, Oleg is well versed in ACM’s mandate and target market. In his first six months, he has instituted a number of operational cost-cutting steps and re-oriented sales strategies to focus on supplier relationships.
• Accounting and Finance: Two personnel perform key tasks such as: capture and maintain business transaction data, prepare tax and financial reports, validate and audit credit and financial documents to ensure they comply accounting law and ACM procedures, and facilitate financial payments. The accounts department maintains operational independence from the administrative department due to its banking signatory role as well as its audit role.
• Administrative: The ACM Credit Committee is composed from this department, consisting of three staff: Client manager, Supplier manager, and the KIVA manager. Further capacity development of this area may include adding in-house resources for legal and information technology domains.
Figure 10: ACM Impact (inception to 31 Aug, 2012)
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 16
• Sales: Sales markets and promotes the ACM product lines in geographic territories and therefore drive company growth. In a move to control costs, ACM is migrating its sales staff from an employee relationship to a contracted sales agent role. Sales agents will be registered as a private entrepreneur, responsible for their own operational and sales costs as well as their own income tax liabilities Compensation will be based on a sales commission rather than salary or allowances.
Figure 11: ACM Organizational Structure
3.3.1.2 ACM Flows of Funds and Business Model ACM’s leasing portfolio has reflected a variety of business strategies as the company has prototyped viable products and services. Currently, ACM is experiencing rapid sales growth amongst its target market, particularly small equipment sales, by emphasizing its relationships with retail equipment suppliers and targeted advertising. Most recently, suppliers of rotor tillers and similar equipment have entered in to agreement with ACM which allow for UHDP clients to acquire equipment from the retailer through ACM financing. The diagram and the steps below highlight key transactions in the business model as well as flows of funds between ACM and suppliers:
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 17
1. Farmer indicates interest in ACM products 2. ACM works with suppliers to develop quote 3. ACM and Farmer negotiate and close the lease deal 4. Supplier delivers equipment 5. Farmer begins lease payments 6. ACM submits claim for UHDP client discounts 7. UHDP validates claim and facilitates payment 8. Approved Discount amount sent to ACM
Figure 12: Transactions and Funds flow
As ACM has experimented with its business model, the following issues have impacted its sustainability and growth as an on-going concern: Issue Resolution Impact How to promote sustainable growth amongst the targeted market of small farmers?
Emphasize marketing through supplier relationships
Increased number of leasing applications
To what extent do UHDP discounts impact sales growth?
UHPD discounts do impact sales decisions, but main factors are seasonality and farmer cashflow
Constraint may not be price, but the amount of capital ACM can access to sustain growth
How to manage portfolio at risk with small farmer
Maintain communication Leverage technology (SMS) to remind of payment obligation
Portfolio at Risk varies, but is typically around 2-3%
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 18
3.3.1.3 ACM Financial Performance Figure 13 provides an overview of financial performance based on actuals from 2009 to 2012 and forecasts through 2014. Income statement and balance sheet lines demonstrate solid revenue growth and controlled costs resulting in trends towards profitability (net income). Assets grow as lease sales increase the size of the lease portfolio. Equity continues to grow as investors provide more capital to leverage for cost of goods and sales.
Figure 13: Financial Overview (US$ 000) as of 31 Aug, 2012
As of March 2012, ACM achieved 23,814,117 UAH in sales based on 629 clients and a total of 748 contracts. Roughly 96% of ACM products were sold to UHDP clients. In 2011 alone, ACM sold products to 105 clients with a total sales value of 9,540,192 UAH, displayed in Table 3 below.
Table 3: ACM Sales Volume (2009 through March 2012)
Year Clients Contracts Sales (UAH) Sales (USD)
2009 115 115 2,892,345 361,543
2010 362 438 8,479,100 1,059,888
2011 105 137 9,540,192 1,192,524 2012
(thru 31 March) 47 58 2,902,480 362,810
Total 629 748 23,814,117 2,976,765
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 19
Figure 14: Number of ACM clients by Product sales
Figure 15: Number of Contracts with overdue payments (15 Sept, 2012)
Table 4: ACM UHDP Discounts by Region
Year / Month Crimea Kherson N/A Zaporizhia Grand Total
2011 101,007
243,150 93,564 437,721
6
243,150
243,150
7 3,290
12,211 15,501
8 12,562
11,782 24,344
9 7,500
1,621 9,121
10 8,776
24,357 33,133
11 41,096
7,829 48,925
12 27,784
35,764 63,547
2012 213,228 2,543
296,634 512,406
1 3,681
8,914 12,595
2 9,257
18,909 28,165
3 32,005
12,320 44,325
4 15,342
19,322 34,664
5 28,159
23,784 51,943
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 20
Year / Month Crimea Kherson N/A Zaporizhia Grand Total
6 8,795
24,928 33,723
7 69,175
44,799 113,974
8 10,602
86,173 96,774
9 36,213 2,543
57,487 96,244
Grand Total 314,236 2,543 243,150 390,198 950,127
Table 5: ACM UHDP Discounts by Product
Year / Month AME BPP CSU Greenhouse N/A
Table Grapes Tractor Grand Total
2011 25,923 3,503 28,929 86,662 243,150 48,555
437,721
6
243,150
243,150
7 3,747 102
10,000
1,653
15,501
8 3,166 401 10,000 10,777
24,344
9 1,621
7,500
9,121
10 6,742 3,000 3,929 19,050
412
33,133
11 1,828
6,008
41,089
48,925
12 9,820
7,500 40,826
5,402
63,547
2012 131,493 14,468 60,999 112,991
44,729 148,726 512,406
1 3,003
9,592
12,595
2 23,841 4,324
28,165
3 29,822 1,758
7,005
5,741
44,325
4 19,491 931
5,970
8,272
34,664
5 26,460
3,316 15,000
7,168
51,943
6 13,435
12,528
260 7,500 33,723
7 4,034 3,378 57,683 7,379
23,289 18,211 113,974
8 3,223
48,552
45,000 96,774
9 7,186 4,078
6,965
78,015 96,244
Totals 157,416 89,928 199,653 243,150 93,284 148,726 950,127
3.3.2 Innovation Fund
Year 4 witnessed a slowing spend rate of Innovation Funds, particularly from a drop in ACM discounts. In particular, an accounting adjustment4 recording ACM discounts (February 2012) resulted in a downward adjustment that brought the Innovation Fund balance up to a higher than projected balance, identified at $1.361 million as of 30 June, 2012.. Concerns were raised by MEDA as to whether UHDP would be able to effectively distribute the remaining Innovation Fund balance (1,205,000 as of 31 March, 2012) by the end of project date. After dialoging with CIDA and understanding the need to distribute all the remaining Innovation
4 As reported in previous reports, MEDA discovered found that the claims being sent by ACM each month were cumulative claims from the beginning of the year, not monthly claims. These claims had been booked as monthly claims and needed to be reserved as they were overbook. The corresponding accounting correction resulted in a reduction of $280,310 and eroded progress on drawing down funds.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 21
Funds with appropriate stewardship and according to the mandate, MEDA identified the following plans to leverage remaining funds in the Year 5 budget narrative. These budget plans were approved by CIDA in August, 2012. The table below identifies the Innovation Fund spending plan and current progress. Year 5 Plan 5 Actual Results Potential Change Agro Capital Management Sales Discounts [allocation: $600,000] • Hired new CEO, former UDHP
deputy project manager who is familiar with and aligned with UHDP mandate
• Adopted new approach with marketing and sales initiatives, focusing on supplier relationships
• Created new cooperative product to support cooperative asset adoption and implementation
• Approved tractor leasing with suppliers from Kherson, but reaching UHDP clients
Agro Capital Management has been able to disburse the majority of the $600,000 and is forecasted to consume the balance by the first week of November: The new supplier approach has fostered sales growth The cooperative product enabled several cooperatives to increase technology assets
Previously UHDP team management was concerned that ACM would not be able to drawdown additional funds by 31 March, 2013. Given progress since June 2012, UHDP may re-allocate Innovation Funds to direct at ACM discounts. No further discounts will be allocated after 31 March, 2013. Potential first loss claims exist: Grivna devaluation will likely occur November/December 2012.
Deploy additional weather stations and early disease warning systems [allocation: $100,000]
UHDP purchased 14 additional weather stations, thereby increasing the coverage and bringing the total number of EDWS enabled stations to 30. 24 are currently deployed, 6 awaiting installation.
No change
Allocated funds for potential three month extension based on CIDA’s request [allocation: $380,000]
Not utilized to date. If implemented, will be leveraged in April, 2013
No change
Close out reserve [allocation: $125,000]
Not utilized to date. If implemented, will be leveraged in April, 2013
Based on ACM sales experience since June 2012, UHDP may allocate these funds towards AMC sales discounts
Potentially fund the study to consider legally feasible methods to transfer residual amounts to a local entity (e.g.: as an equity share in ACM, broadening ownership in ACM)
No utilized. Based on ACM sales growth, UHDP will likely not pursue this option to drawdown the Innovation Fund balance.
3.3.2.1 Innovation Fund Burn-down Statistics The charts and tables below (Figure 16) provide quarterly balances since June 2011 and demonstrate progress at fully utilizing the Innovation Fund. The chart below compares the Innovation Fund actual quarterly balance with a straight-line burn rate. The impact of the
5 As expressed in the approved Year 5 Annual Budget
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 22
February 2012 accounting adjustment mentioned can be seen as the actual quarterly balance exceeds the straight-line burn rate. Progress by Agro Capital Management in stimulating sales growth has brought the actual balance back on line with the straight-line burn.
Figure 16: Innovation Burn-down
Figure 17 identifies the category of Innovation Fund expenditures: • ACM discounts: discounts to UHDP clients who purchased equipment from ACM
• Gender Innovation: subsidies to female farmers for equipment (e.g.: Umyut) and strawberry pilots with UWFC
• Cold Storage: prototyping, and piloting cold storage units to demonstrate cold storage technology
• Technology expenses: covering a range of items from weather stations/early disease warning systems (EDWS) and ABR/lead farmer netbooks to production and post-harvest handling technologies.
Figure 17: Allocation of Spending
3.3.2.2 Innovation Fund Cooperative product Cooperatives responded positively to a new mechanism enabling UHDP registered Coops to receive a 50% discount on agricultural assets. The discount provides opportunities to registered Coops to obtain further productive assets and new technologies with funds disbursed directly to the Coop as a grant from the Innovation Fund. Depending on their tax status, Coops may incur
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 23
a tax liability, but they have the flexibility to approach Agro Capital Management or other financing entities to purchase the desired technologies. The process to obtain and utilize the new mechanism is summarized below: • Coop approaches ACM to identify product options and to obtain an estimated quote
• Coop submits project to UHDP with quoted estimate
• UHDP reviews project and provides discount directly to the Coop
• The Coop is eligible to use discount at ACM or at any financial entity Table 6 below provides a list of the Coops that have received the direct discount as well as the technology product that was purchased.
Table 6: Innovation Fund - Cooperative Product
Cooperative Product Month Amount
(UAH)
Amount
(USD)
Golden Valley Cold Storage Jul-12 163,262.00 20,407.75
Umyut Cold Storage Aug-12 87,750.00 10,968.75
Village Farm Cold Cold Storage Sep-12 225,000.00 28,125.00
Fruits of Crimea Tractor and plow (5
meters) for seeding and
soil preparation for
strawberries beds
Aug/Sept -12 283,439.00 35,429.88
Katrin-2009 Tractor and seeder Sep-12 240,000.00 30,000.00
Nika-2012 Greenhouse and drip
irrigation technology
Oct-12 188,387.50 23,548.44
Total 1,187,838.50 148,479.81
3.4 Capacity Building (WBS 600)
3.4.1 Cooperative Cold Storage Development
The following table consists of registered cooperatives created with the assistance of the UHDP which are in various stages of developing cold storage services for their members. Traders and buyers continue to drive demand for quality chilled produce. Premium prices are paid for produced chilled and packed according to buyer specifications. COOP cold storage development allows greater access to share assets and shared risk for financial investment. COOP Capabilities Growth Areas Volume sold thru CS U Zaporizhzhia Vineyard Keeper
• Established presence and reputation
• Developing a training center for table grape growers and post-harvest needs
• Cold Storage Services
• Table Grape seedlings development
• 6.5 tons of chilled produce
• Value 53,750 UAH, $6,700 USD
Mitra • Established presence and reputation
• Recognized leader in
• Cold Storage Services
• Strawberry seedling
• 50 tons of chilled produce
• Value 957,243 UAH, $119,655 USD
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 24
COOP Capabilities Growth Areas Volume sold thru CS U Strawberry production development
• Consolidation point for small producers
UWFC • Membership driven organization of over 350 small Horticulture producers
• Cold Storage Services
• Consolidation points for small producers
• 6.2 tons of chilled produce
• Value 90,400 UAH, $11,300 USD
Fruits of Crimea
• Links with large regional distribution center
• Cold storage expansion
• Wholesale market
• 98.5 tons of chilled produce
• Value 606,000 UAH, $75,750 USD
Golden Valley
• High concentration of Horticulture farmers
• Collection and storage services
• Reputation for high quality
• Sorting and packaging solutions
• Greenhouse supplier
• Cold Storage expansion
• 89 tons of chilled produce
• Value 575,000 UAH, $66,750 USD
Reno (Soave village)
• Large consolidation territory
• Well established links with buyers and traders
• Continued development of territory.
• Additional collection, and sorting services
• 173 tons of chilled produce
• Value 1,000,000 UAH, $125,000 USD [Estimate based on total volume]
3.4.2 Partner Development
Agro Tavria, AFLOC and Nizhnigorsk Small Business Center (SPAN continue to grow in their capacity to offer professional extension services to UHDP client farmers. In particular, the SPAN partnership tests the concept to determine whether teaming with small business centers in regions throughout the Crimea offers small holder farmers viable services through organizations that can perpetuate feasible on-going concerns. Additionally, the partnership with the Ukraine Women Farmers Council (UWFC) tests the ability of a cooperative model to provide services to small holder farmers. UHDP continues to work with the leadership team, facilitating discussions on organizational strategy, sustainable business services, budgets, and business models. The table below describes capacity building focus with each of the UHDP partners as they managed their Year 5 workplans and focus on delivering their planned targets.
Table: KFP Capacity Building
KFP Capabilities Growth Areas Capacity Building Focus Agro Tav ria • Established presence
and reputation
• Access to consultants
• Academic experience
• Cooperative support
• Early Disease Warning System and support, model for sustainability
• Academic reputation
• Training and accounting support to COOPs
• Develop sustainable business model for EDWS
• Build on relationship with local university, curriculum development
AFLOC • Established presence and reputation
• Member driven
• Extension services to a wider base of clients
• Identify private sector opportunities
• Continue developing member
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 25
KFP Capabilities Growth Areas Capacity Building Focus organization
• Training, agronomy services
• Additional contracts with private sector
• Add new members
services
• A viable fee based membership
SPAN • Network of small business centers
• Extends reach in Crimea
• Reputation
• Expanded services
• Buyer partnerships
• COOP support
• Additional consultants and or staff for expansion
• Broader SME reach
• Wholesale market support
UWFC • Strong network of members
• Member driven organization
• Reputation
• Provide valuable services to members
• Expand geographic reach
• Market solutions for members
• Expand membership
• Continue to develop professional extension services to members
• Management development
4.0 CONTRIBUTIONS TO MEDIUM AND LONG TERM RESULTS
UHDP continues to exceed project targets – for both Year 4 and Length of Project (Lop). This section identifies key performance areas against the Performance Management Framework (PMF) and highlights experiences with client growth, market consolidation, and capacity building of local partners.
4.1 UHDP Client Growth
Client growth continues in UHDP Project Year 5, as highlighted the chart below. UHDP obtained 6,199 clients as of 30 September and 6,567 as of 15 November, 6,567. Of the 6,57 UHDP clients, 2,471 exist in the Zaporizhzhia oblast, 3,860 in the Republic of the Crimea and an additional 236 clients in neighboring oblasts.
Figure 18: UHDP Client Growth (Calendar Year)
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 26
While absolute numbers continue to grow, and in fact exceed Length of Project targets, the growth of clients over the previous quarter has decreased. The percentage decrease is caused by: • Function of mathematics (e.g.: percentage growth reduced with larger numbers)
• Crop cycles and growing seasons as client growth occurs in spring and slows over winter months
• Potential “chasm6” between adopter segments. If indeed UHDP is approaching the “technology adopters chasm”, UHDP will need to consider other marketing techniques to reach the “Early Majority” and achieve next levels of additional scale.
Figure 19: UHDP Client growth
Period Clients Growth previous
quarter
Mar-11 3,226 60.3%
Jun-11 3,851 19.4%
Sep-11 4,748 23.3%
Dec-11 5,096 7.3%
Mar-12 5,421 6.4%
Jun-12 5,765 6.3%
Sep-12 6,198 7.5%
Nov-12 6,567 6.0%
4.2 Capacity Growth in Key Facilitating Partners
UHDP continues to expand and promote long-term, local capacity and capabilities by extending its relationship and activities with its Key Facilitating Partners (KFPs). Of particular interest has been UHDP’s work with UWFC which has focused on long-term institutional sustainability and improve organizational capabilities, particularly in regards to meeting clients’ needs and maintaining organization discipline. Recent activities with UWFC is highlighted in Section 6.1.2 KFP Issue/ Objective and Current Focus UWFC • Issue: Absorb rapid growth of their membership
• Focus: o Build management capacity o Consider strategic direction and orientation of organization o Objective clarification, Work plan and budget alignment
6 Based on Crossing the Chasm, Geoffrey A. Moore, Harper Business Essentials, 1991, 1999, 2002
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 27
5.0 PROJECT VARIANCES AND PLANS
5.1 Changes to Project Scope
No changes in project scope occurred during the period of performance. The project direction continues to follow objectives described in Year 4 Work Plan as well as the upcoming Year 5 Work Plan. The Year 5 initiatives to focus on supporting cooperative business entities to further the Market Consolidation objectives represents an extension of methodology to achieve objectives in the Value Chain development (PMF - WBS 400 Output 4 indicator 4a). They represent UHDP’s attempts to be flexible and adaptive with its methodology and to continually innovate project delivery to meet the needs of the UHDP targeted client population.
5.2 Quarterly Financial Report Highlights
The highlights in this section focus on the Year 5 Summary tab in the CIDA Ukraine Financial Report7 as of 30 September, 2012. In general, the Year 5 actual overall spend rate is running at expected runs against the approved Year 5 budget. UHDP has been managing the spend rate of the Innovation Fund (as mentioned in Section 3.3.2) and expects the Fund components to be fully consumed by project end. (This include prospects for a three-month no cost extension.) The re-allocations approved in the Year 5 budget have enabled UHDP to operate within summary budget variance tolerances, particularly with local partner costs. UHDP management expects that maintaining the current rate of spend can be expected to consume the balance of the LOP budget. The budget may experience potential variances between planned and actual expenses in some summary budget categories. Potential variances were identified and planned for in the approved Year 5 Budget, but may include the following summary budget categories: • Canadian Office expenses
• Capital expenditures
• Professional services
• Local office expenses
• Facilitation and local partner costs o UHDP will likely take steps to reduce local partner expenses by 20% over the next
three months to ensure the categories stays with budget targets. UHDP management will continue to focus on the following two key Year 5 budget management areas: • Innovation Fund draw-down
• Potential for no-cost extension, requiring UHDP to find methods to sustain momentum of project activities, (ii) maintain key personnel, and (iii) continue activities and relationships with KFPs
7 The budget analysis focuses on the Quarterly Financial report as of 30 September, 2012
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 28
5.3 Variances between Planned and Actual Activities
No major variances occurred between planned activities and actual activities during the period of performance. The project activities remain aligned to the detailed Work Plans identified in the Annex of the Year 5 Work Plan.
5.4 Challenges and Risk Management
This section highlights specific challenges and project risks that have been identified and actively mitigated to minimize interruption to project objectives and activities. Project risk management methods are leveraged to identify and mitigate events that would hinder project activities and limit project objectives. In September 2011, project management practices were updated to follow Project Management Institute (PMI)8 risk management principles, resulting in updating the manner in which risks are identified, quantified, and mitigated. The update resulting in tracking risks according to the risk ledger summarized in the following table.
Table 7: Risks and Risk Mitigation
Risk Description Status Risk Mitigation
Rating
The legal framework governing cooperatives does not provide clarity for local governing officials. If lack of clarity continues and creates additional burdens to operating a COOP, then small holder farmers may be less inclined to form business entities
OPEN • Dialogue with other CIDA projects in Ukraine concerning the need to coordinate efforts to address the challenges and short-comings in the current legal framework
MEDIUM
If the external evaluation is delayed and CIDA is unable to process the potential Phase II contract before Year 5 ends, then a no-cost extension may be implemented. What impact exists on the remaining funds to maintain relationships and continue work? If CIDA decides to award a Phase II but the start is delayed and a no cost extension is allowed, then how will UHDP (i) continue momentum, (ii) keep key personnel, and (iii) maintain relationship with KFPs
OPEN • Consider potential impact on Year 5 budget Determine whether UHDP can utilize some Innovation Funds (other than CAD1.6 million) for operations
• Provide reserve for continuing operations • Update in Year 5 Progress report - 15 Oct
2012
HIGH
If key UHDP staff and KFP staff lack confidence that a Phase II project will occur, then they may leave the project early, creating knowledge and staffing gaps if Phase II is approved. As a result, UHDP may to spend more upfront time training staff
OPEN • Identify potential Phase II start date • Work with key staff • Attempt to identify annual work plans for KFPs
in 2013
MEDIUM
If MASHAV perceive slow movement with starting Phase II, they may be unwilling to commit resources. (Note: MASHAV has already held off on support for greenhouse development, sending materials from suppliers sighting they wanted to wait for a CIDA commitment because of the time needed to evaluate the impact several seasons needed
• Work with CIDA to • Attempt to craft potential long term work plan • Sign new MOU for upcoming period
MEDIUM
8 PMI is an international organization that sets best practice standards and certifies project management expertise (.www.pmi.org)
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 29
5.4.1 Innovation Fund Draw-down
MEDA and UHDP management continue to monitor the spend rate of the Innovation Fund to ensure drawdown meets CIDA’s desired impact and expectations. MEDA and UHDP management will maintain communication with CIDA management concerning Innovation Fund options and plans in order to maintain the desired spend rate as well as ensure funds are utilized appropriately and with optimal impact.
5.4.2 Potential for No-Cost Extension while awaitin g Potential Phase II Award
The potential for a No-Cost Extension may exist if there are delays in processing the potential Phase II Award. If the event does occur, UHDP will need to (i) retain key personnel, and (ii) maintain relationship with KFPs. MEDA has performed initial analysis of the CIDA requested extension consideration on the Year 5 budget, leveraging historical spend rates, planned activities and remaining funds. A full description of the impact is provided in the Year 5 Work Plan (15 May, 2012) and the approved Year 5 Budget Narrative (8 August, 2012).
5.5 Key Planned Activities for Next Period
The following planned activities will receive focused attention during the final quarters of performance: • MASHAV consultant to Ukraine in November, Integrated Pest Management
• UHDP client farmers, staff and partners to Israel for the February 2013 Avara event
• Cooperative development, particularly accounting training and business plan development
• Annual M&E survey execution, analysis and report writing in December to February o Performance Management Framework reporting
• Budget monitoring and analysis o Managing planned burn on Innovation Fund expenditures o Reducing activities and planning for a no-cost extension (April to June)
• Scheduled completion of project activities March 31, 2013 o Asset registry and distribution (in dialog with CIDA Kiev) o Manage potential budget re-allocations.
6.0 CROSS-CUTTING INITIATIVES
6.1 Integration of Women in UHDP Objectives and Act ivities
UHDP focuses some of its activities specifically on the market segment of women engaged in small business development, seeking to transition women who farm into productive agri-businesses that are linked to markets, traders and input suppliers. The section below describes specific UHDP efforts to extend the market to small business women who farm: (i) partner development with Umyut and UWFC and (ii) Gender Innovation Fund survey results.
6.1.1 Umyut
Umyut experienced a major milestone in the history of the cooperative. After a long licensing process, Umyut was granted permits by Crimean authorities to sell herbal teas for medicinal use. Previously, Umyut mainly supplied raw materials to upscale producers of medicinal teas and products. The new licensing enables Umyut to operate as a processor and market its own brand. The UHDP continues to
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 30
assist Umyut with developing new packaging, sales and marketing, regulatory and legal advice, management development, market penetration and expansion.
Table 8: Packaging improvements
Table 9: Umyut six month plan
Challenges Six month plan Progress
• New licenses for additional products
• Encouraging membership participation
• Increase volume to pharmaceutical companies
• Lack of local governmental support
• Increased member financial investment into Umyut
• Continued product development • Retail outlets expanded • Acquire additional ACM
products, dryers and cold storage
• Finalize pharmaceutical contracts 3 in the works
• Expansion of forward contracts with raw material suppliers
• Increase raw material production
• Major compound renovations completed
• Several new products developed with packaging
• Management training on going
• Forward contracts with producers implemented
6.1.2 Ukraine Women Farmer’s Council (UWFC) and Int ernational Day of Rural Women
The UHDP and the Ukraine Women Farmers Council (UWFC) conducted an open, public exhibition on 15 October, 2012 commemorating the United Nations International Day of Rural Women (IDRW). The event was held in the Dniprestal Cultural Center in the City of Zaporizhzhia. Over 500 people registered for the event, with total estimated actual attendance exceeding 750.
“Today we have finally been allowed to register four varieties of tea out of the 68 compounds that we have available. We
have finalized the technical specifications for all the varieties, but only four have been officially approved for sale in Ukraine. Now we can market our products under our own brand name and provide consumers with a high-quality health product. The Tatarsky,
Khansky, Krymsky Dry Balsamiс and Koktebel teas are designed for a wide
range of consumers. They are delicious, invigorating, and can be classified as a green tonic tea. The original recipe was
developed in collaboration with the Institute of Medicinal Plants in the city of Lubny.”
-Esma Khalilov, Chairperson of the Umyut
cooperative.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 31
The IDRW event was designed to: • Raise awareness of the challenges rural women experience engaging in business
development and economic activity in rural Ukraine o Discuss obstacles facing small business development for rural women
• Develop business linkages and relationships between the rural communities
• Share knowledge and experience of UWFC members
• Raise awareness of the UHDP and the UWFC. The IDRW event was attended by Governor Plekushenko of the Zaporizhzhia Oblast. Following a brief speech expressing support for the UHDP, Governor Plekushenko participated in an award presentation program honoring UHDP UWFC cell group leaders and woman farmers in the Zaporizhzhia Oblast. Cell groups from eight different regions within the Zaporizhzhia oblast actively marketed their goods in booths where produce and products representing their region were on display. Cultural activities included traditional food and produce and demonstrations of Ukrainian folk song and dance, performed by UWFC members. A round table discussion9 was conducted by the UHDP to highlight and discuss major issues impacting business development and economic opportunities for rural women in Ukraine. The table below documents the panel participants’ discussion and proposed solutions.
Table 10: Round table discussion on Challenges and Opportunities facing rural agri-business women
Issue Discussion Proposed Solutions
Challenges for rural women farmers in business development
Education Transition out of USSR left farmers unfamiliar with elements of business other than production Poor understanding of financial services, wariness of favourable rates offered by ACM Distribution of agricultural information to remote areas difficult, but the Project is making progress in this area
Local government should play a role in knowledge-sharing, identifying which business models work
Meeting market requirements
A legal business is the only way to ensure sustained development Produce must be traceable to a registered seller Consolidation is a critical component to access large-scale markets in Ukraine and abroad
Support cooperatives that engage in consolidation of produce of multiple farmers and sell under one brand name Initiate programs to educate farmers about the necessary documentation and procedures required to legitimize their business
9 Round table participants included: 1. Stephen Wright (Field Project Manager of the Ukraine Horticulture Development Project), 2. Stephen Potter (Counselor of the Embassy of Canada, CIDA Country Program Director for Ukraine), 3. Vladimir Senyuk (CIDA Lead Project Manager), 4. Irina Lekh (Chair of the Regional Council of Entrepreneurs in the Zaporozhye Oblast), 5. Alexandra Garmash (UHDP Specialist in Rural Women’s Business Development, 6. Vladimir Lakhno (Representative of Agro Capital Management in the Zaporozhye Oblast), 7. Nadezhda Kompaniyets (Head of the NGO Ukrainian Women Farmers Council in the Zaporizhskaya Oblast), 8. Lyudmila Klebanova (Head of the NGO Ukrainian Women Farmers Council), 9. Aleksander Koval’ (First Deputy of the Central Office of the Zaporozhye Oblast State Administration), 10. Sofiya Burtak (Specialist in Gender Policy and Co-op Development).
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 32
Issue Discussion Proposed Solutions Ability to evaluate one’s business
Farmers lack business skills and perspective to evaluate their own performance and opportunities Existing knowledge gap makes farmers look to the future with distrust
Develop and support organizations such as cooperatives that enable co-development of small holder-farmers, so that they can advance their goals and feel motivated to grow
Access to financial services
Is there discrimination toward women in financial services or does low use come from other factors? Most women are small holder farmers and do not have official documents to be eligible for credit Women are more risk-averse due to responsibility for the wellbeing of the household Farmers are discouraged from taking credit due to high interest rates
Agro Capital Management should collaborate with the Ministry of Agriculture and Food Policy as this agency has programs to reimburse interest costs Farmers should take advantage of the equipment leasing services provided by Agro Capital Management, e.g. 20% discount on products for project clients, 2 year loan pay-back period
Significance of gender equality in the sphere of agro-business
The business environment should evolve to consider the issues faced by rural women and provide extension and education services
Women should form associations and communicate their issues to local government, to equalize gender representation
Opportunities for rural women farmers in business development
Supplying local markets
Interest exists from retailers and women farmers in Zaporozhye to join a growing ‘Buy Local’ Project Requires product documentation and certification
Creation and support of cooperative agri-business entities is a step toward an organized marketing and sales model
Supplying foreign markets
Interest in Ukrainian produce exists from many foreign markets Requires documentation, certification, traceability, post-harvest handling logistics and large wholesale quantities
Efforts should be dedicated to consolidation so that wholesale quantities can be reached
Collaboration with Ukrainian government
Developing the agricultural sector in Ukraine has been identified by respondents across the country as a top priority There are state sponsored and oblast-level programs that exist to support the agricultural sector
More programs to serve farmers should be created in the Zaporozhye oblast if currently insufficient The Ukrainian government should collaborate with MEDA for Phase 2 of the Project if it occurs, and commit to co-financing
Sustainable development after the project
The level of progress toward indicator targets ensures that the work of the project will continue regardless of the project’s involvement
[None]
6.1.3 Gender Innovation Fund Survey
This section highlights findings and results from a monitoring and evaluation survey conducted on the grant activities of the Gender Innovation Fund (GIF)10. The survey was performed and analyzed between July and September 2012 and included all female grant recipients – totaling 298 women – who received technology and start-up grants from the Gender Innovation Fund, part of the Innovation Fund. As only part of the grantees had previous experience cultivating GIF-supported crops, it can be stated with confidence that the grant program has provided a unique opportunity for project clients to start a small farming business of their own growing strawberries and blackberries. The same is also the case with at least half of the grantees who have been provided with table grapes, raspberry and garlic seedlings under the grant. 10 The complete UHDP Gender Innovation Fund Survey is available upon request.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 33
Purpose : Evaluate and determine changes that have occurred in the farming operations of female grant
recipients (growing table grapes, berries, and garlic) and their attitudes toward this business. Objectives : • Evaluate grant recipients’ personal efforts (in addition to the grant) contributed toward
starting / expanding their farming operations growing crops supported by the grant .
• Evaluate yields and returns obtained on grant recipients’ farms growing crops supported by the grant.
• Find out if grant recipients are planning to expand their farming businesses in the next season.
• Obtain feedback from grant recipients about the grants.
Coverage :
Participants : The target crops covered under the grant program were relatively new to the grantees.
Particularly, this was the case with strawberries and blackberries: only 4-8% of the female farmers who were provided with such seedlings had had previous experience growing these crops. The remarkable fact is that strawberries appeared the “main” crop od the GIF campaign – as mentioned above, 148 women received strawberries seedlings (61% of all grantees) and only few of them had previous experience with growing. They had to learn the art of strawberries planting almost from zero.
6.1.3.1 Survey of Key Findings The following points highlight key findings of the survey: • As seen through open-ended answers, most of women keep positive view regarding GIF
crops even despite challenges they faced during the first year. Grantees obtained faith, inspiration and motivation and look forward the new season.
• The great majority of the female recipients of farm machinery and equipment highly rate the relevant part of the grant. 93% of those interviewed point out that with the use of rototillers, as well as other farm machinery and equipment, they spend less time tending to the land.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 34
• Smallholder grantees by themselves bought 1 strawberry seedlings per each 2 granted by the Project.
• An average of 35% of the seedlings perished. According to the grant recipients, in more than half cases, seedling mortality is due to adverse weather conditions: severely cold winter and extremely hot summer, as well as too little water (a total of 62%)
• Nearly a third of the harvests of strawberries and grapes were sold, primarily by the female farmers with previous experience growing these crops. Despite the difficulties involved, 60 grantees, which can be categorized as small farmers in terms of the size of area under cultivation, succeeded in selling part of their strawberry crops. They sold nearly a third of their harvests (29%), earning roughly UAH 2,000 per grantee ($250) in sales at an average price of UAH 25 for each kilogram of strawberries
• It is noteworthy that the grantees’ plans for the next year show a change in business perspective and approach. If compared to the previous year: there is a 13 % decrease in the percentage of women who are planning to seek loans from relatives or banks, and, conversely, the number of women planning to use the services offered by ACM is up 13%.
• In the next season grantees plan to increase the cultivated area under table grapes – in 2.5 times, strawberries – in 2 times, raspberries – in 1.5 times.
6.1.3.2 Survey Results from specific areas of interest This section highlights results for specific areas of the survey. The chart below provides an overview of how grant recipients demanded specific grant components.
Figure 20: Distribution of grant components
Equipment and Rototiller grants The great majority of the female recipients of farm machinery and equipment highly rated the opportunity to obtain equipment. The chart below demonstrates the high demand for equipment and rototillers.
Figure 21: Comparison - Grants for seedlings vs. Equipment
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 35
Impact on time management for those that received e quipment 93% of those interviewed point out that with the use of rototillers, as well as other farm machinery and equipment, they spend less time tending to the land. Two thirds of those interviewed spend the saved time focusing on other tasks and activities, such as working with other crops, or dealing with other chores on the farm. 34 women currently devote more time to the family, while only 7 prefer to rest and relax.
Figure 22: Answers to "Do you currently spend less time working the land?"
Reasons for seedling mortality According to the grant recipients, in more than half cases, seedling mortality is due to adverse weather conditions: severely cold winter and extremely hot summer, as well as too little water (a total of 62%). Nearly 20% of the mortality cases can be tentatively attributed to the causes associated with the UHDP, its partners and suppliers: the seedlings were of poor quality, too young, or delivered too late (during early frosts). The grant recipients admitted that 7% of seedling and plant mortality was caused by their lack of experience or failure to follow procedures.
Figure 23: Factors that influenced seedling mortality
Expanded cultivated area under grant-supported crop s In general, each typical grantee had around 100 sq.meters (0.1 ha) of land under strawberries, 500 (0.5 ha) under table grapes . • There has been an increase in the area under cultivation planted with target crops
accordingly. The data on smallholder farmers who were not involved in growing relevant crops before the award of the grant reveal further trend: the total area under raspberries and grapes has increased seven times, and that under strawberries – five times compared to baseline.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 36
• There has been a 40-fold increase in the size of area under blackberries and 17-fold – under garlic. However, it is noted that almost none of the clients had previous experience growing blackberries before the grant).
Figure 24: Area cultivated before and after grant (Left excludes large farms, Right includes large farms)
Income from crops Only few grantees had been able to grow through the entire crops cycle by the time of the survey – from receiving the grant to selling their harvests11. Of note, as of the time of the survey, the grapes were still young and only the crops planted before the grants were offered for sale. The garlic was harvested but the grant recipients were delaying sales, waiting for a good price to be offered. Despite the difficulties involved, 60 small farmer grantees succeeded in selling part of their strawberry crops. They sold nearly a third of their harvests (29%), earning roughly UAH 2,000 per grantee ($250) in sales at an average price of UAH 25 for each kilogram of strawberries.
Figure 25: Income from grant crops
Planned expansion of cultivation In preparation for next year, grant recipients are planning to use the already prepared soil for planting, and even increase the area to be planted with target crops. In general, they are planning a 1.5-fold increase in the size of area under grapes; a 2.5-fold increase in the size of area under blackberries; and they are aiming to double the area under strawberry cultivation.
11 - 1 woman was able to sell her blackberries, 3 –women grapes, 8 women garlic, and 14 women raspberries.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 37
Figure 26: Expansion of area under cultivation
Samples quotes from grant recipients • “My life now is much more inspiring and fulfilling, I feel motivated; also, this is a great
financial help. I used to do my own watering, but now all I do is walk around as an officer and check that everything is OK and in place.”
• “Now we read a lot about farming and attend seminars; life has become more interesting and meaningful; I like everything a lot.”
• “We had been cherishing the dream and saving money to purchase a rototiller for three years. Without the grant funding, who knows when we would be able to buy it. We are not giving up and currently growing our own seedlings - 800 strawberry plants (not cutting runners off from the mother plant); this is how we get ready for the new planting season. At first, we felt discouraged, everything looked hopeless, and we felt no desire to even pursue it. But then we decided to give it a try on our own. Of course, there is still some ground to be covered. We’re constantly learning from our own mistakes.”
• “Everyone has a life philosophy to be guided by; I personally believe that it’s never too late to learn. I started out growing berries - strawberries, raspberries, and blackberries at 60. I always liked going to my dacha, but now I love it even better! The grant was a great help, I used to do all the work with my own hands, and now I have the equipment to take care of it. I can devote more time to my flower beds.”
6.2 Integration of Environment in UHDP Objectives a nd Activities
As part of its Farmer Support Services, UHDP focuses efforts on promoting Good Environmental Stewardship (GES). GES practices are integrated and mainstreamed within the extension services, training, and information sharing activities. At the training events focusing on agricultural techniques, specialists from UHDP and the KFPs pay particular attention to the implementation of innovative and environmentally safe practices in Ukraine’s agriculture. Agricultural input usages, such as watering practices and fertilizer application, factor as key topics of GES discussion. Additionally, UHDP worked in conjunction with pesticide companies, such as Bayer, Symgenta and BASF, to developed crop protection schemes suitable for small holder farmers. The practices continue to be disseminated to farmers through the regular extension visits by UHDP staff, seminars conducted in clusters, and articles in the UHDP Newsletter.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 38
Table 11 describes UHDP interventions impact on promoting GES practices Table 11: UHDP GES Interventions
Intervention Impact on GES practices Improved Greenhouses
o Promotes targeted optimal growing climates and utilizes solar heating
o Facilitates efficient water management by reducing waste and minimizing erosion
o Reduces the need to rely on pesticides; in many cases pesticide usage is eliminated
Drip irrigation o Promotes efficient and targeted water usage and minimizes run-off
Weather stations and Early Disease Warning System
o Facilitates timely application of inputs, such as fertilizers and pest control, optimizing their usage
Mashav technologies o Plastics with specially designed UV light spectrum filter o Prohibits the reproduction and movement of certain disease
carrying vector insects o Anti-fog feature that prohibits the development of water
droplets on the plastic which are responsible for transmitting leaf fungus diseases
o Anti-Insect nets to further reduce pesticides usage in a greenhouse
UHDP measured GES Adoption in the Year 4 survey. According to the survey findings, 83% of the clients claim to have learned about environmentally sound agricultural practices from the Project’s seminars and workshops. Of those who responded in the survey recalled the following practices in the table below, demonstrating increased awareness of environmental practices.
Table 12: UDHP farmers awareness of GES
Environmental practices in which UHDP farmers demon strate awareness % 1. Greenhouses and drip irrigation: Greenhouse heating system - the use of
biological heat; use of greenhouses as more ecological production; drip irrigation systems
71%
2. Fertilizers and protection: The use of technological and biological plant protection products; use of organic fertilizers
71%
3. Selection: The use of varieties resistant to diseases; use of more productive sorts of cultures
63%
4. Soil Analysis: Analysis of the soil – reducing chemical concentration 62% 5. Biotechnologies: Preparation of vermicompost/compost; use of earthworms 44%
6.2.1 GES Review by CIDA local environmental consul tant
On August 15-16, 2012, a CIDA GES consultant visited the following three farms in Zaporizhzhia Region associated with UHDP. The objective of the field visit was to observe farming activities and to understand how UHDP clients employ steps to address environmental issues. Owners of the farms have participated in different training events and activities organized and supported by UDHP.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 39
Farm Characteristics
Kostiantynivka Village • Cluster Melitopol; Owned by Vitaly Ukolov family
• Focused on open ground and greenhouse vegetables and strawberry production;
Chapaivka Village • Cluster Tokmak-Molochansk; Multi-functional farm owned by Yuriy Rodin family
• Focused mainly on table grape production.
Dniprovka Village • Cluster Kamianka-Dniprovska; Owned by Volodymyr Prokhorov family
• Deals with greenhouse vegetables (mainly cucumbers and tomatoes) production
The GES consultant provided the following general observations:12 • “In general, farming activities do not cause sufficient negative impact on the environment and farmers
are running their business in a way that do not exhaust fertility of soil, destroy underground water sources, pollute soil and water with agrochemicals and cause problems with wastes of agricultural production. The only exception I may emphasize relates to quite extensive consumption of coal for heating purposes at one of visited farm. However, even in this case, farm owner is understand the problem and is looking for its solution.”
• “All counterparts of the HD Projects informed about satisfaction with the Project contributions into their agricultural business development. Seminars and advisory support helped them to get to know about best available agricultural practices as well as to apply new technologies and approaches in their personal farming activities.”
The table below captures the GES consultant’s specific observations and recommendations and provides UHDP responses and actions performed.
Table 13: GES Observations and Recommendations
Observation and Recommendation UHDP Comment and Action
Observation:
Misunderstanding among farmers of available applications of weather station information. Recommendation:
Provide more detailed information about practical uses of weather station data would benefit farmers.
• Some farmers demonstrate understanding of the system and incorporate the information in their farm planning.
• Other farmers need to have more training and demonstration to understand how to incorporate weather and EWDS data into their decision-making.
Action:
• Latest newsletters (Sept. and Oct. 2012) of the project Dobra Agronovina, had articles explaining features (e.g. Spray window, Disease forecast, and Leaf wetness time) and how farmers can apply the information:
o Newsletter October 2012 p. 9
o Newsletter September 2012 p. 11-12
• During seminars and trainings farmers receive information about EDWS and methods to utilize data from the KFPs
Observation:
Extraction of underground water regulated by Water Code, Code on Entrails and many sub-acts. There are restrictions regarding well depth and amount of water extracted for personal use and irrigation. Recommendation:
• Some farmers who dig wells themselves as well as some well-digging firms violate the current legislation.
• Errors mainly exist in terms of well depth and location.
Action:
• Article explaining water usage legislation published with
12 Consultant’s report, received by UHDP on 1 November, 2012
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9 Period of Performance: April 1, 2012 to September 30, 2012 page 40
Observation and Recommendation UHDP Comment and Action Re-check restrictions and ensure full compliance to avoid
problems with environmental control governmental bodies
positive feedback from farmers and government authorities responsible for controlling process of water usage:
o Newsletter July 2012 p. 14-15
• UHDP will follow up with farmers on well digging practices that conform to current legislation
Observation:
All farmers expressed interest in chemical control of soil and water used for agricultural production. Recommendation:
Provide relevant information and demonstration of simple analytical equipment to be used for express analysis of most important soil and water elements
• Numerous monitoring activities done by Project staff and KFPs show that prior to UHDP involvement many farmers did not understand the importance of chemical analyzes of soil and water. UHDP considers the observation a good indication that farmers are starting to show interest in such analyses
Action:
• UHDP plans numerous articles conveying importance of water and soil control to productiveness and environmental protection issues.
• UHDP will continue to facilitate farmer contacts with firms offering analyses
• KFPs will continue to investigate farmers’ adoption of chemical and soil analysis
Observation:
Energy efficiency is a main issue of any agricultural practice Recommendation:
Thoroughly analyze situation and opportunities for
incorporating energy efficiency principles into business
solutions for farmers
• -This issue became very relevant in the last 3-4 years after the price increase of natural gas, the main source of heating for some greenhouse producers.
Action
• Thorough analysis may be performed in phase 2 to provide information about energy efficient, economically advantageous technologies for the farmers
• Possibility exists to incorporate energy efficiency principles in greenhouses and their heating systems