1. 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: nramsing@meda.org
2. 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 Activities ............................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 Activities ....................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 i
3. 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 ii
4. 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 iii
5. 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 Environmental
· 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
Figure 1: Gender Fund Survey
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
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 4
6. 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 Zhygaltsova
Administrator
Viktoria Ivanenkova
Project Accountant
Galina Kaufman
Assistant PT
Victor Falko
Farmer Business
Development
Irina Antonovskaya
M&E Manager
Sergiy Timchenko
UHDP Client Manager
Vera Gavrushina
MASHAV Partnership
Coordinator
Sasha Garmash
Women's Business
Development-UWFC
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 5
Vadim Ovcharenko
ICS Specialist
Stanaslav Glushenko
VCD Specialist
Tokmak
Artem Varanista
VCD Specialist
Tokmak
Vladimir Ternovsky
Value Chain Manager
KFP Manager
Mavile Mamutova
Business Development
Assistant PT
Nadia Kompanets
UWFC Director
Ludmila Angelova
UWFC Agronomist
Dasha Karpenko
Rural Women's
Business Development
Andriy Ignatov
Financial Specialist
Vasfiye Mamutova
SME Specialist
Vladimir Yarmilka
Production Specialist
Simferopol Office Manager
Stephen Wright
Field 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.
7. · 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 6
8. · 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 7
9. 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 –
Dneprovskay
a
· 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 8
10. 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
seedstransplants
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 9
11. 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
Figure 3: Omar Zaidan, CINADCO CONSULTANT
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 4: Training events (as of 15 Sept)
Figure 5; Training events (as of 30 Sept)
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 10
12. 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 11
13. 3.1.4 Early Disease Warning System and Web-site Development
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 12
14. 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)
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 13
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-
Greenhouse
210 614 660,84 5741,85
Dneprovsky
vegetables
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
15. 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 14
16. 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
Figure 10: ACM Impact (inception to 31 Aug, 2012)
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.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 15
17. · 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 16
18. 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
Emphasize marketing through
Increased number of leasing
growth amongst the targeted
supplier relationships
applications
market of small farmers?
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 17
19. 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 18
20. 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 19
21. 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 20
22. 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 Plan5 Actual Results Potential Change
Agro Capital Management
Agro Capital Management has
Sales Discounts
been able to disburse the
[allocation: $600,000]
majority of the $600,000 and is
· Hired new CEO, former UDHP
forecasted to consume the
deputy project manager who is
balance by the first week of
familiar with and aligned with
November:
UHDP mandate
The new supplier approach has
· Adopted new approach with
fostered sales growth
marketing and sales initiatives,
The cooperative product
focusing on supplier
enabled several cooperatives to
relationships
increase technology assets
· Created new cooperative
product to support cooperative
asset adoption and
implementation
· Approved tractor leasing with
suppliers from Kherson, but
reaching UHDP clients
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 21
23. 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 22
24. 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 CSU
Zaporizhzhia
· Established presence
Vineyard
Keeper
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 23
25. COOP Capabilities Growth Areas Volume sold thru CSU
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
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 24
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 Tavria · 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
26. 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 25
27. 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 26
28. 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 27
29. 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 28
30. 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 awaiting 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 Activities
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 29
31. assist Umyut with developing new packaging, sales and marketing, regulatory and legal advice,
management development, market penetration and expansion.
Table 8: Packaging improvements
“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
Table 9: Umyut six month plan
cooperative.
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 International 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.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 30
32. 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 31
33. 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
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 32
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.
34. 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.
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 33
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.
35. · 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 34
36. Impact on time management for those that received equipment
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 crops
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 35
37. · 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 36
38. 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 and 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 37
39. 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 demonstrate 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 consultant
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 38
40. 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 39
41. 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
Ukraine Horticulture Development Project – Semi-Annual Progress Report #9
Period of Performance: April 1, 2012 to September 30, 2012 page 40