VALUE CHAIN AGROBUSINESS Practical examples and positive experiences in Macedonia Workshop Oteshevo 14-16 May 2018

USAID - SMALL BUSINESS EXPANSION PROJECT CORN PRODUCTION IN PELAGONIJA “Grow More Corn” Initiative 2013 – 2016 Partners: municipalities, RDC, NEA, FFRM, dairy companies, agriculture service companies Output: -drip irrigation systems -grain corn or silage - technical assistance

analyzing-problems-opportunities USAID project designed to strengthen private sector capacity to drive regional economic development and job creation 6 months analysis for identifying opportunities to create new jobs, strengthen value and supply chain linkages Opportunity chosen – corn production as essential for livestock and chicken feed directly effecting egg production and milk and diary products Problems: -climate change -low production yields -import corn -high production costs -low farmers incomes -not using new technology for irrigation -inappropriate seed material

Background Egg producers -import corn -low corn production in region -in need for more suppliers Dairy companies -low milk production in region -import milk and powder -in need for more quantities Farmers -low production yields -buy corn for feed -big production costs

Project goals

Drip irrigation systems on corn I year -30 pilot farmers on 1 ha corn in Pelagonija region II year -35 pilot farmers on 1 ha corn -applications for drip irrigation systems in Program for financial support in rural development 45 ha III year -45 pilot farmers on 1 ha corn in Pelagonija region -20 pilot farmers on 1 ha sunflower in Pelagonija region -applications for drip irrigation systems in Program for financial support in rural development 80 ha

Results FARMERS Increased yields in corn production -grain corn from average 4 t/ha to average 8 t/ha (record 17 t / ha) -silage corn from average 30 t/ha to average 60 t/ha (record 117 t / ha) Increased profit in first year -grain corn average 35% -silage corn 25 % -sunflower 30% Introduced new technology and technical support to farmers and gain knowledge in production and irrigation of corn

Results Diary companies / egg producers -increased corn production and increased milk and egg quality and quantity -substitute corn and powder milk import -increased profit National level - strategic Developed White paper for production of corn -7000 ha of corn with drip irrigation system to substitute corn import with local production -introduced new measure in National program for rural development for procurement of drip irrigation system for corn -improved value and supply chain

VALUE AND SUPPLY CHAIN

VALUE AND SUPPLY CHAIN corn Consumers Retail / distribution Diary / egg production Corn corn consumers farmers Diary / egg Retail / distribution

USAID - SMALL BUSINESS EXPANSION PROJECT Developing value chain for import substitution Tomato puree production 2014 Partners: RDC, NEA, Farmers, tomato puree producers, ketchup producing companies, agriculture service companies Outputs -drip irrigation system -irrigation and fertilizing protocol

Background Analyzing production of ketchup Import of tomato puree Low production of tomato puree Low production of industrial tomatoes Old seed material / no new technology in production

Problems BEFORE used inappropriate seed material lack of protocols and technology 100 cooperants cultivate 200 ha industrial tomato average yield 20-40 t/ha tomato puree company working with 25 % capacity

Results 20+20 pilot farmers -drip irrigation system -new seed material -new irrigation protocol Yields -average 20-40 t/ha to 80 – 100 t/ha Profit -double increasment of profit of farmers Tomato puree import substitution -local production increased -value and supply chain improved

VALUE AND SUPPLY CHAIN Industrial tomato Retail / Consumers consumers Ketchup production Tomato puree production Industrial tomato Industrial tomato consumers farmers Tomato puree producers Ketchup producers

Alternative business models for utilization of apples in Prespa Market research Various final products Added value products Improve value chain

Background PRESPA REGION app. 4000 ha of apples app. 100.000 – 120.000 tones 1/3 production high quality apples 30-50% lower category apples low market price

METHODOLOGY The analysis of the global production trends The analysis of the global processing trends The estimate of the market size and trends The selection of business models Conclusions and recommendations for the most feasible business models

Business models

Conclusions Many processing alternatives in order to utilize and add value to the apple farming and improve value chain Some of the alternatives are complementary and allow execution of combined, i.e. horizontally integrated operations and business models. The presented alternatives have different risks and benefits in terms of marketing context, implementation, production process and required know-how, quantity utilization and adding value to apple farmers.

Thank you for your attention !!!