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USAID Agribusiness Project. 5 year project from Sept 28, 2007 – Sept 27, 2012 Implementing Partners: DAI, BAH, IRD, Michigan State University Total Value.

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Presentation on theme: "USAID Agribusiness Project. 5 year project from Sept 28, 2007 – Sept 27, 2012 Implementing Partners: DAI, BAH, IRD, Michigan State University Total Value."— Presentation transcript:

1 USAID Agribusiness Project

2 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

3 USAID Agribusiness Project What Do We Want? Rapid Sustained Broad Based Economic Growth

4 USAID Agribusiness Project Meaning… ROI - at least 25 to 1 - Sales growth of $600 million Increasing competitiveness Creating a sound enabling environment - Policy, market information, service providers

5 USAID Agribusiness Project Global Enabling Environment National Enabling Environment Embedded Services How? Global Markets National Markets Export Input Supply Processing Wholesale Production Sector Specific Cross Cutting Financial Supporting Service Markets

6 USAID Agribusiness Project Criteria Growth potential - Impact on the economy Broad based development impact - Reaching a large number of people Feasibility - To get traction and have an impact

7 USAID Agribusiness Project 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

8 USAID Agribusiness Project Broad Based Impact: Development 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

9 USAID Agribusiness Project Rapid 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

10 USAID Agribusiness Project Selecting the Sub-sectors Supported by hard data for objective comparison Essential elements: Economic growth Return on investment Broad outreach Be flexible during the analysis – if not able to have impact, drop it!

11 USAID Agribusiness Project SELECTED SUB-SECTORS Berry Fruit Dairy Herbs, Spices & Mushrooms Livestock Tree Fruit Vegetables

12 USAID Agribusiness Project Berries

13 Berries - Overview > 80,000 farms, 250 cold stores, and 100 processing factories $172 million sales in 2006 - $151 million exports - $21 million local market sales Existing varieties suitable only for processing

14 USAID Agribusiness Project 14 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 CHAIN CONSTRAINTS   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 trainingsBerries

15 USAID Agribusiness Project 15 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 STRATEGYRESULTSTARGETBerries

16 USAID Agribusiness Project Dairy Products

17 USAID Agribusiness Project Tree Fruit

18 USAID Agribusiness Project Tree 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%]

19 USAID Agribusiness Project 19 MARKET OPPORTUNITIES SUPPLY CHAIN CONSTRAINTS PROPOSED ACTIVITIES 1. 1.Fresh fruit for the Russian market 2. 2.Quality fresh fruit on lucrative EU markets 3. 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 Tree Fruit

20 USAID Agribusiness Project 20 STRATEGY RESULTS TARGETS Processors/ Packers  Meeting food safety standards for export  Develop product diversification and packaging  Transition bulk exports to retail packaged opportunity  Improve fresh produce quality (post harvest handling)  Extend selling season of fresh produce  Improve 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 standard  Introduce advanced fruit growing techniques  Support establishment of new producer organizations  Improve management capacity Service Providers  Shift toward market competitiveness advisory services  Support regional networking - improve farmers’ access to providers  Support advancement of domestic nurseries  Introduce new varieties - certified virus-free Policy  Redesign subsiding criteria to boost sub-sector development  Law on Cooperatives and Associations Tree Fruit

21 USAID Agribusiness Project Dairy 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]

22 USAID Agribusiness Project 22 MARKET OPPORTUNITIES PROPOSED ACTIVITIES 1. 1.EU QUOTA 2. 2.Milk paid by stricter quality standards 3. 3.Meet growing demand for milk and value added products 4. 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 SUPPLY CHAIN CONSTRAINTS 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 products

23 USAID Agribusiness Project 23 STRATEGYRESULTSTARGET 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 products

24 USAID Agribusiness Project Herbs & Spices, Mushrooms, Forest Fruit Chamomile, Mint, Yarrow, Thyme, Paprika, Parsley… Porcini, Chanterelle, Truffles, Button Mushroom… Wild berries, Rose-hip, Juniper…

25 USAID Agribusiness Project Herbs & Spices, Mushrooms, Forest Fruit - Overview Herbs & Spices, Mushrooms, Forest Fruit - 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

26 USAID Agribusiness Project 26 MARKET OPPORTUNITIES SUPPLY CHAIN CONSTRAINTS PROPOSED ACTIVITIES 1. 1.Shift to Processed Herbs 2. 2.Cultivated Herbs and Mushrooms 3. 3.Value-added processed Mushrooms & Forest Fruit for export and domestic market 4. 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…

27 USAID Agribusiness Project 27 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…

28 USAID Agribusiness Project Vegetables

29 Vegetable - 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

30 USAID Agribusiness Project 30 MARKET OPPORTUNITIES SUPPLY CHAIN CONSTRAINTS PROPOSED ACTIVITIES 1. 1.Extend marketing season [ root crops and cabbage] 2. 2.Processed vegetables (sweet corn, industrial pepper, peas, green beans…) 3. 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 Vegetables

31 USAID Agribusiness Project 31 STRATEGY RESULTS TARGET Processors, 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 Vegetables

32 USAID Agribusiness Project Cattle - Beef Transitioning from Existing “Dual Purpose” Dairy & Beef Cow Businesses

33 USAID Agribusiness Project Cattle 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

34 USAID Agribusiness Project 34 MARKET OPPORTUNTIES PROPOSED ACTIVITIES 1. 1.Unfulfilled Export and Domestic Demand 2. 2.To Export “Baby Beef” to EU and Russia. 3. 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 SUPPLY CHAIN CONSTRAINTS 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 - Beef

35 USAID Agribusiness Project 35 STRATEGYRESULTSTARGET 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 - Beef

36 USAID Agribusiness Project Livestock - Swine Squeezing in Swine

37 USAID Agribusiness Project Swine - 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.

38 USAID Agribusiness Project 38 MARKET OPPORTUNTIES PROPOSED ACTIVITIES 1. 1.Growing domestic per capita pork consumption creates room for expansion 2. 2.Export Niche to Montenegro. 3. 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 SUPPLY CHAIN CONSTRAINTS 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 Swine

39 USAID Agribusiness Project 39 STRATEGYRESULTSTARGET 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 Swine

40 USAID Agribusiness Project Livestock - Sheep and Goat

41 USAID Agribusiness Project Sheep and Goats Overview 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.

42 USAID Agribusiness Project 42 MARKET OPPORTUNTIES PROPOSED ACTIVITIES 1. 1.Unmet domestic and export demand 2. 2.Market demand for rejuvenated sheep cheese production, 3. 3.Goat Cheese Output and Branding to Achieve Higher Prices. 4. 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 SUPPLY CHAIN CONSTRAINTS 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 & Goat

43 USAID Agribusiness Project 43 STRATEGYRESULTSTARGET 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 million Producer Associations  Support Farm Coop’s, ABDS Producer Assn Abattoirs & Processors  Support a Well Recognized EU Level Sheep and Goat Assn. & tie into ABDS Exporters  Expand 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 & Goat

44 USAID Agribusiness Project Cross-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

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