usaid agribusiness project. 5 year project from sept 28, 2007 – sept 27, 2012 implementing...

USAID Agribusiness ProjectUSAID Agribusiness Project

USAID Agribusiness Project

USAID Agribusiness ProjectUSAID Agribusiness Project

5 year project from Sept 28, 2007 – Sept 27, 2012 Implementing Partners: DAI, BAH, IRD, Michigan

State University Total Value $24 million

Grants: $5,2 million

Project Locations: Belgrade – Head office Field offices in Niš, Novi Sad and Čačak-TBD


What Do We Want?What Do We Want?

RapidSustainedBroad Based

Economic GrowthEconomic Growth


Meaning…Meaning…

ROI - at least 25 to 1 - Sales growth of $600 million

Increasing competitiveness Creating a sound enabling environment

- Policy, market information, service providers

USAID Agribusiness ProjectGlobal Enabling Environment

National Enabling Environment

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How?Global Markets

National Markets

Export

Input Supply

ProcessingProcessing

Wholesale

Production

Sector Specific

Cross Cutting

Financial

Supporting Service Markets


CriteriaGrowth potential

- Impact on the economyBroad based development impact

- Reaching a large number of peopleFeasibility

- To get traction and have an impact


Sustainable Impact: Competitiveness

The opportunity: Domestic and export market growth potential

- Replace imports, compete globally Potential for broad value added impact Potential for increase in productivity (yield/ha,

reduced post harvest losses, cold storage improvement, shelf life etc.)

Significant return on investment - Best use of project resources


Broad Based Impact: Broad Based Impact: Development CriteriaDevelopment Criteria

The highest potential to benefit a broad base of the population

A large number of households/employment involved with each commodity

Forward/backward linkages Per capita income increase On and off-farm jobs growth opportunity


Rapid Impact: FeasibilityRapid Impact: Feasibility

The selected commodities yield rapid results Interest of producers and other value chain

actors to participate with the project Ability to produce results within project desired

time frame Private sector involvement Potential to deliver successful Ag Business

Services


Selecting the Sub-sectorsSelecting the Sub-sectors

Supported by hard data for objective comparison

Essential elements:Economic growthReturn on investmentBroad outreach

Be flexible during the analysis – if not able to have impact, drop it!


SELECTED SUB-SECTORSSELECTED SUB-SECTORS

Berry FruitDairyHerbs, Spices &

Mushrooms

LivestockTree FruitVegetables


BerriesBerries



Berries - OverviewBerries - Overview

> 80,000 farms, 250 cold stores, and 100 processing factories

$172 million sales in 2006- $151 million exports

- $21 million local market salesExisting varieties suitable only for processing

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MARKET OPPORTUNTIES

PROPOSED ACTIVITIES

1. Export and domestic demand for fresh berries

2. Shift from frozen bulk export to frozen retail

3. Immediate export opportunities for value added products

Lack of new varieties

Lack of modern production knowledge and technology

Lack of standards

Logistics

Packaging

Lack of associations

Lack of marketing knowledge and activities

Lack of management and negotiations skills

SUPPLY CHAINCONSTRAINTS

Develop projects on growing new varieties

Assist foreign and local nurseries in Serbia

Re-print and distribute SEDP extension materials

Local and foreign production support Study tours of foreign producers and

processors Implementation and education of

standards Assist development of logistical

companies Packaging design and innovation Support existing and new associations Support market information services Assist Serbian companies to participate

in foreign fairs Sales trainings Management and negotiations training Finance and risk management trainings

BerriesBerries

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Processors • Support shift from frozen bulk to frozen retail market• Support developing value added products• Strengthen Marketing & Market Access• Support Intl. Standards Implementation/Certification

•Exports increased by $170 million• Local sales increased by $30 million• 120,000 PM of new jobs created

Produce organizations

• Build management and marketing capacity• Support implementation of new varieties• Support standards implementation• Support Networking & Market Access

Service providers • Increase technical capacity• Develop new customer based services• Develop network with local producers

Policy • Becoming Union for Protection of Varieties [UPOV] member

STRATEGY RESULTSTARGET

BerriesBerries


Dairy ProductsDairy Products


Tree FruitTree Fruit


Tree Fruit - OverviewTree Fruit - Overview

Orchards are about 6% of total arable soil (240,000 ha)

150,000 people in fruit production and processing [12% of the total agricultural labor force]

75% farmers have less than 5 ha 5% have more than 10 ha of

orchards

Major fruit crops: plums, 52% of all orchards in Serbia apples 18% and sour cherries 11%

Total farm value of fruit production is US$ 300 million - 16% of total production

Fresh Fruit Export - US$ 21 million in 2006

apples US$ 11 million; stone fruit US$ 9 million; other fruit US$ 1 million

Fresh fruit imports: US$ 4.5 million in 2006

Processed Fruit Export - US$ 80 million in 2006

juices [55%] frozen cherries and plums [37%] preserves [5%] dried [3%]

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MARKET OPPORTUNITIES

SUPPLY CHAIN CONSTRAINTS

PROPOSED ACTIVITIES

1.Fresh fruit for the Russian market

2.Quality fresh fruit on lucrative EU markets

3.Increase growth of processed fruit exports (juices, dried, frozen)

• Introduction of advanced technologies in fruit growing and post-harvest handling

• Improved farm management skills through adequate training programs

• Provide Serbia’s fruit growers with the guidelines for tree fruit production principles and practices and efficient record keeping system

• Facilitate networking of existing and creation of new producer organizations

• Assist implementation of international food safety standards and organic certification of farmers and processors;

• Support domestic production of certified virus-free nursery plants

• Developing domestic production of prunes, and dried fruit• Technical assistance for adequate packaging and labeling

• Conduct research and sales development studies;• Strengthen business linkages and transfer of know-how

through efficient info dissemination, market study tours

• Low productivity

• Poor quality control

• Lack of product variety

• Extension of growing/selling season

• Outdated service providers

• Lack of value-added packaging

• Weak Sales and Marketing Structure


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STRATEGY RESULTSTARGETS

Processors/ Packers

Meeting food safety standards for exportDevelop product diversification and packagingTransition bulk exports to retail packaged opportunityImprove fresh produce quality (post harvest handling)Extend selling season of fresh produceImprove marketing capacities and market access

Exports increased by US $66 million

Increased domestic sales by US $33 million

44,000 PM of new jobs created

Producer Organizations

Implement GLOBALGAP farm standardIntroduce advanced fruit growing techniquesSupport establishment of new producer organizationsImprove management capacity

Service Providers

Shift toward market competitiveness advisory servicesSupport regional networking - improve farmers’ access to

providersSupport advancement of domestic nurseriesIntroduce new varieties - certified virus-free

Policy Redesign subsiding criteria to boost sub-sector developmentLaw on Cooperatives and Associations



Dairy products - OverviewDairy products - Overview

1.6 billion liters/year 50% through formal

channels 25 large and over 200

small/medium dairies 25 largest dairies account

for 75% of production

US $600 million - Total farm value

Main products: Fresh and UHT milk, yogurts, cheese

99% - Domestic sales US $6 million of export

[CEFTA]

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PROPOSED ACTIVITIES

1. EU QUOTA

2. Milk paid by stricter quality standards

3. Meet growing demand for milk and value added products

4. Preferential trade agreement with Russia & CEFTA trade zone

• 50% of milk goes through Gray Market. EU Quota will be based on Formal Economy

• Raw milk quality below EU standards

• Half Milk Supply From Small Dairy Farms – A Part Time Job (<5 Cows)

• Low productivity cow• Low quality and quantity on

breeding stock (only 5-10% of pure Holstein Cows)

• Lack of milking equipment • Little product diversification • Lack of organic production• Lack of specialty products• Inadequate marketing• Political Risk & Non tariff

barriers


• Develop a network of service providers and support regional demo centers

• Educate and support introduction of high breed Holstein heifers and dairy semen/embryos

• Support the forming and upgrading of regional labs

• Introduce regional milk and breeding recording system

• Support the creation of umbrella Holstein and/or Simmental association

• Link to USA dairy expertise • Establish new Milk Development

council• Support existing SME processor

associations• Help exporters - packaging,

promotion, and exports

Dairy productsDairy products

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Dairy Processors Support end-user products development and diversification

Support establish of milk development council

Exports increased by $5 million

Local sales increased by $120 million

100,000 PM of new jobs created

Service providers Develop a network of service providers

Assist in developing New Customer-oriented Services

Support networking & market access

Small & Medium sized Farmers/PO’s

Transform small and medium sized farmers into viable commercial agribusinesses

Support creation of regional/national dairy association

Policy Feed and milk quality control Harmonization of domestic legislation with EU directives

Dairy productsDairy products


Herbs & Spices, Mushrooms, Herbs & Spices, Mushrooms, Forest FruitForest Fruit

Chamomile, Mint, Yarrow, Thyme, Paprika, Parsley…

Porcini, Chanterelle, Truffles, Button Mushroom…

Wild berries, Rose-hip, Juniper…


Herbs & Spices, Mushrooms, Herbs & Spices, Mushrooms, Forest FruitForest Fruit - Overview - Overview

Total value of the sub-sector: $94

million (2006) 2006 exports:

US $45 million EU and ex YU 38% unprocessed

Number of people involved: 90,000, mostly women, rural poor & unemployed

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PROPOSED ACTIVITIES

1. Shift to Processed Herbs

2. Cultivated Herbs and Mushrooms

3. Value-added processed Mushrooms & Forest Fruit for export and domestic market

4. Organic products

Inadequate handling

• Low prices for collectors

• Low quotas

• Insufficient knowledge about processing and market needs

• Lack of modern processing equipment

• Lack of diversified production

• Lack of growing/ harvesting equipment

• Underdeveloped Supply Chain

• Lack of knowledge about organic production and certification

• Improve harvesting and storing practices through training and technical assistance

• Support value-added processing• Technical assistance to Value Chain

Stakeholders to improve quota system

• Trade fairs and specialized exhibitions

• Strengthen business linkages• Facilitate linkages between

processors and retailers• Facilitate new investments in

cooperation with the financial sector• Assist service providers/nurseries to

introduce new species and services• Specialized training programs in

Organic production

Herbs & Spices…Herbs & Spices…

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Exporters and

Processors

• Support end-user product development• Strengthen marketing & market access• Support Intl. standards implementation /

certification• New Products and Services

Introduced• Exports increased by $30M• Domestic sales increased by

$25M• 10,500PM of New Jobs

Created• 10 Supply/Value Chains

Strengthened

Service Providers • Develop technical capacity• New customer-oriented services

introduction/Development • Support networking & market access

Producer Organizations • Improve Management & Marketing Capacity• Increase commercial growing• Assist Good Agricultural & Collection Practice

development & Implementation• Support organic food production

Policy • Quota System Improvement • Market Information System [MIS] Improvement/Extension • Relaxation of Import Procedures for Agricultural Inputs

TARGETS STRATEGY RESULTS

Herbs & Spices…Herbs & Spices…


VegetablesVegetables


Vegetable - OverviewVegetable - Overview

> 10 % of arable land under vegetable production, cca 500.000 ha, average farm 3-5 ha

> 30 processors involved 50 % achieved standards [HACCP,

Global Gap…]

About 1.8 million tons of fresh vegetable production in 2006 (US $500 million)

100,000 tons of processed vegetable exports 2000-2005

Average export value 2000-2005 US $55 million

Main export partners: EU, ex YU and, recently Russia

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MARKET OPPORTUNITIES SUPPLY CHAIN CONSTRAINTS PROPOSED ACTIVITIES

1. Extend marketing season [ root crops and cabbage]

2. Processed vegetables (sweet corn, industrial pepper, peas, green beans…)

3. Fresh with high profit margin (parsley, celery, parsnip, cauliflower, broccoli and watermelons)

• Inadequate product variety and extension of growing and selling season

• Poor quality control and post harvest management

• Low productivity

• Lack of adequate (cold) storing facilities

• Inadequate extension services

• Value added packaging

• Insufficient use of irrigation system and modern agriculture equipment

• Low level of cooperation between farmers organizations and processors/retail chains

• Lack of marketing knowledge

• Support demonstration plots and trainings on advanced technologies in vegetable production, post harvest handling

• Develop training programs for new (cold) storing technologies

• Develop programs for creation of network of agribusiness service providers providers

• Workshops on packaging and labeling standards

• Facilitate provision of loans and new investments to the producer organizations in cooperation with the financial institutions

• Facilitate linkages between the producers organization and buyers

• Marketing and sales training

• Support industry study tours and trade show participation


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STRATEGY RESULTS TARGETProcessors, Exporters,

Packaging centers

• Technical assistance for processors and exporters• Strengthen Marketing Promotion & Market Access• Support Intl. Standards Implementation/Certification• Develop linkages with PO’s to have contracted prod.

according to buyers specifications•Local sales increased by 25M$

• 60.000PM of New Jobs created

•Exports increased by 45M$

Service providers

• Develop capacity building program for agribusiness service providers using voucher and grants

• Create regional/national network of agribusiness service providers

• Support Networking & Market Access

Producer Organizations

• Develop Management & Marketing Capacity• Trainings: extension of growing season, post harvest

handling and quality control, organic production, improve demonstrations

• Develop/Strengthen Long-term Cooperation with buyers• Improve domestic certified seed production

Policy • Laws on cooperatives and associations• Environmental impacts on agriculture• Encourage adherence to EU laws and regulations• Align Serbian subsidies with EU common agricultural policy



Cattle - Beef Cattle - Beef Transitioning from Existing “Dual Purpose” Dairy & Beef Cow BusinessesTransitioning from Existing “Dual Purpose” Dairy & Beef Cow Businesses


Cattle Beef - OverviewCattle Beef - Overview

• In the 1980’s, most of Yugoslavia’s exports came from Serbia and totaled over 20,000 tons annually, with well over 10,000 tons to the EU and about 10,000 tons to Halal Moslem markets

• 5 EU certified slaughterhouses - Over 100 million Euros in new investments.

• During 2005-07, Serbia’s beef exports amount to about 2,000 tons valued at US $10 Million annually of “Baby Beef” exported mostly to Italy and Greece.

• Annual beef production of 85,000 tons valued at US $350 million mostly comes from young dairy bulls. About 90% of beef is processed, with an ex-factory value of US $700 Million.

• About 150,000 dairy & beef farms exist in Serbia, of which 120,000 are small farms in gray sector.

• All cattle farms must be registered by EU and new GOS laws

• Beef processing plants employee about 10,000 persons and beef sector service jobs amount to 5,000

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MARKET OPPORTUNTIES

PROPOSED ACTIVITIES

1. Unfulfilled Export and Domestic Demand

2. To Export “Baby Beef” to EU and Russia.

3. To Export “Halal Beef” to Middle East, Bosnia, and Albania.

Shortages in Supply chain

International market access

Lack of Technical knowledge

Poor Access to Credit and Rollover Utilization

Insufficient Farmer representation


• Assist export plants• ID/register all cattle• Use/develop Ag. service providers• Trainings in animal husbandry, feeding

and farm management• Adopt EU & international Standards• Support Veterinarian Extension Services

• Work with processors in marketing and sales

• Credit facilitation• Promote foreign direct investment (FDI)• Market information systems• Institutional building• Trade policy discussions

Cattle - BeefCattle - Beef

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Farmers & Producers

•Transition real jobs by moving small gray sector farmers into legal registered business

•Support farm coop’s & assn’s and include small cattle farmers in associations

• Increase service providers to EU Levels

• 100,000 PM of new jobs• Domestic sales and exports

increased by US $200 million

Cattle Farmers Associations

•Expand existing beef and dairy cattle assn’s to cover all cattle in Serbia

•Establish a separate beef cattle sector

Abattoirs, Processors and Exporters

•Turn the newly formed “Baby Beef” processors assn. into a strong industry group like in EU countries.

• Boost EU beef exports to 10,000 tons• Regain Halal beef exports to Middle East at 10,000 ton average for former Yugoslavia

• Start up exports to Russia

Policy • Implement EU standards, EU and Halal certification for Serbian slaughter houses• ID and track all cattle from farm to consumers via meet processing plants

Cattle - BeefCattle - Beef


Livestock - Swine Squeezing in Swine


Swine - OverviewSwine - Overview

• Pork has the highest per capita consumption rate for meat in Serbia, but is about 30% to 40% below EU levels.

• In 2006, Serbia produced about 1.7 million head of pigs, yielding 255,000 tons of pork, valued at about US $400 million.

• For international trade, Serbia imports and exports less than 5% of its supply of pork.

• Pig numbers grew rapidly after the Balkan wars because of high reproduction rates and growing consumption based on low priced corn and soybean meals.

• About 50,000 swine farms exist in Serbia, of which 45,000 are small farms in gray sector.

• All swine farms must be registered by EU and new GOS laws and shift to formal sector.

• Pork processing plants employee about 10,000 persons and pork sector service jobs amount to 7,000.

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MARKET OPPORTUNTIES

PROPOSED ACTIVITIES

1. Growing domestic per capita pork consumption creates room for expansion

2. Export Niche to Montenegro.

3. Exports of Canned Pork to Russia and Neighboring Balkan Countries have large Potential.

• Inconsistent Supply and Quality Issues

• Low Farmer Representation in National Livestock Associations

• Lack of Technical Knowledge.

• Low Credit Utilization.

• Loan Facilitation is Constrained by Lack of GOS WHR Law.

• Canned Pork plants Not Yet Certified to Export to Russia or Other Countries


• Training farm management and animal husbandry

• Market Information Systems (MIS) Price & Market situation Information

• Support adoption of international Standards

• Support Producer Associations

• Promote Foreign Direct Investment (FDI)

• Credit Facilitation

• Serbian Agricultural Ministry & Vojvodina Agricultural Secretariat Work

• Support Extension & Veterinarian Services• Work with processors to facilitate access to loans• Strengthen and expand service providers

SwineSwine

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Farmers and producers

•Transition Real Jobs by Moving Small Grey Sector Pig Farmers into Legal Registered Business

•Support Farm Coop’s & Assn’s & Include Small Pig Producers in Livestock Assn’s

•Boost service providers to EU Levels

•12,000 PM of new jobs•Domestic sales and exports increased by US $40 million

Pig Farmers Assn’s

•Expand Existing Beef and Dairy Cattle Assn’s to Cover All Cattle in Serbia

•Establish a national Pork Producers Association

Abattoirs, Processors,

•Move Almost 100% of Swine Slaughterhouses into Legal Formal Businesses

• Bring Whole Industry Up to EU Standards.

Exporters

•Boost Processed Pork Exports to 1,000 tons•Start Up Exports to Russia

Policy•Implement EU standards and EU certification for Serbian slaughter houses•ID and track all pigs from farm to consumers via meet processing plants

SwineSwine


Livestock - Sheep and GoatLivestock - Sheep and Goat


Sheep and Goats Sheep and Goats OverviewOverview

• Serbia exported most of Yugoslavia’s sheep meat and cheese before 1990’s, over 2,000 tons annually, valued at US $5 million. 50% of herd decimated during Yugoslav Wars and sanctions

• In 2006, Serbia produced over 20,000 tons of young lamb and old mutton sheep meat valued at US $50 million.

• About 1.6 million head of sheep are currently raised In Serbia, of which only about 350,000 head are milking sheep and most go for meat production. Yields of sheep meat and milk are 50% of EU average.

• Recent Investments in sheep farms have greatly expanded with electric fencing and imports of better Heavier meat breeds from the UK and elsewhere in Europe.

• Sheep cheese from Pirot branded as “Kackavalj” was traditionally 80% sheep milk cheese and 20% cow milk, but now is 80% cow milk and 20% sheep milk because of the lack of sheep milk

• In 2006 about 10,000 tons of goat cheese was produced Valued at US $50 Million. Goat cheese production is rising rapidly as French alpine dairy goat are being Imported and reproduced in large numbers.

• Roughly 250,000 head of milking goats are raised in Serbia, but most all the young male kid goats are slaughtered right after birth to save on milk usage, but could be used for raising meat for export to Switzerland, nearby Halal Moslem, and other markets.

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MARKET OPPORTUNTIES

PROPOSED ACTIVITIES

1. Unmet domestic and export demand

2. Market demand for rejuvenated sheep cheese production,

3. Goat Cheese Output and Branding to Achieve Higher Prices.

4. Young male kid goat exports

• Inconsistent Supply and Quality Issues

• Lack of Technical Knowledge

• Low Credit Utilization• Low Farmer

Representation• Inefficient Low Yields in

Sheep & Goat Farms • Market Access

• Small Farms Have Low Rate of Use of New Breeds

• Low Public Awareness of Subsector and Brands of Sheep & Goat Products


• Processed Goat Cheese Sales & Niche Exports

• Improve Wool Clipping and Exports to UK Market

• Young Lamb Exports to Greece & Halal Markets

• Promoting the Kaĉkavalj Pirot Yellow Sheep Cheese Brand

• Promoting Lamb from Zlatibor, Tara, Homolje,

• Encourage better sheep genetics

• Concentrate on sales of high value young lamb meat and live lambs

• Support the introduction of high yielding heavier EU breeds

• Promote Foreign Direct Investment (FDI)

• Credit Facilitation

Expand producer associations

Leverage funds from Serbian Agricultural Ministry and Vojvodina Agricultural Secretariat

Support Agribusiness Development Services (ABDS)

Market Information Systems (MIS)

Sheep & GoatSheep & Goat

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Farmers and producers •Support development of Farm Coop’s, service providers & Producer Associations

•Transfer Small Farmers into Legal Registered Business

• 12,000 PM of new jobs• Domestic sales and exports

increased by US $100 millionProducer Associations Support Farm Coop’s, ABDS Producer Assn

Abattoirs & ProcessorsSupport a Well Recognized EU Level Sheep and Goat Assn. & tie into ABDS

ExportersExpand Exports of Lamb Meat. Boost Production of Hall Lamb and Exports to Former Yugoslavia’s levels

Policy • Implement EU standards, EU and Halal certification for Serbian slaughter houses• ID and track from farm to consumers via meet processing plants

Sheep & GoatSheep & Goat


Cross-cutting ActivitiesCross-cutting Activities

Marketing & export promotion

Policy Extension services Micro finance/loan

officers training Study/sales missions

Grants- Investment Incentive - Enabling

Youth enterprise- Business plan competition - 4H

usaid agribusiness project. 5 year project from sept 28, 2007 – sept 27, 2012 implementing...

Documents

development impact

export market growth

broad value

sales growth

frozen bulk export

market information

development criteria

highest potential