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1 Background/Introduction

1.1 The evaluation

Danida has supported Value Chain Development (VCD) in different forms since 2002. In order to assess Danida VCD support and to provide recommendations for the future, Danida’s evaluation department (EVAL) has commissioned Orbicon A/S and the Centre for Development Innovation (CDI), Wageningen UR to undertake an external evaluation.

The purpose of the valuation is to contribute to improving the design and implementation of Danida’s bilateral programme cooperation. The evaluation will primarily focus on the learning aspects, thereby providing an opportunity to enhance Danida’s capability in the area of VCD support.

The evaluation focuses on Danida VCD intervention within 11 countries: Burkina Faso, Ghana, Kenya, Mozambique, Tanzania, Uganda, Zimbabwe, Central America (Regional Programme, covering Honduras and Nicaragua), Albania, Serbia and Ukraine. Three countries have been selected as primary case countries (Serbia, Uganda and Burkina Faso) and two countries as secondary case countries (Ukraine and Kenya). The primary case countries have included two-weeks fieldwork missions while the secondary case countries have included three-four days visits.

This report contains the evaluation case study for Ukraine. This evaluation is not a traditional programme evaluation but is particularly focusing on the VCD perspective.

1.2 Evaluation methodology

For this country study a number of documents have been studied. The town and immediate surroundings of Lviv were visited for three days during which 14 key stakeholder and key informant interviews were carried out.

1.3 Some background to the value chains

The VCD interventions were implemented in one oblast in Ukraine, with an area half the size of Denmark. In 2008, private farms produced 1% and village households[1] (1-3 cows) 82% of the milk. Most of this milk was consumed in the village. 17% the milk was produced by large farms and this milk mainly went for processing at two dairies.

In 2008, 95% of vegetables and 98% of fruits were grown by households growing small acreages. There was no or little storage, sorting or packaging. 80% of the product was sold at harvest for a minimal price. There were three fruit and no vegetable processors in the oblast. Fruit processors and shops had difficulties in finding marketable quantities of quality product. The only place where marketing visibly happened was in Shuvar wholesale market in Lviv (at that time the only modern-type wholesale market in Ukraine).

1.4 The VCD intervention studied

Ukraine is one of the six European Neighbourhood countries where Danida support rural development. This Rural Private Sector Development (RPSD) programme was the first one in Ukraine. The RPSD programme had two components, the Agri-Business Development (ABD) and the Financial Services (FS) components. The overall objective of the programme was: “Increased livelihoods through creation of Micro, Small and Medium Enterprises based employment in rural areas of Ukraine”. The immediate objective of the ABD component was: “Increased productivity and profitability in the agricultural and processing sector in Lviv Oblast”.

Programme Component 1 addressed low productivity and efficiency in dairy products and in fruit & vegetable production. There was low production on small family farms or broken up large scale farms, a weak remaining infrastructure and an undeveloped private agri-business and banking sector. The intervention focused on building storage capacity in the fruit and vegetable sub-sector and on production and processing in the dairy sub-sector. The interventions used a mix of seminars, study tours, match making forum, business planning, a 40% grant, training/coaching and direct marketing to achieve better prices and increasing volumes. This was expected to lead to viable businesses.

Programme Component 2 addressed the lack of access to rural financing. Due to the economic crisis this component did never take off. Halfway through the programme, a small Access to Finance activity was attached to Component 1 instead. The facilitation of the programme was contracted to a Danish consultancy firm with base in Lviv. The budget for the ABD component was originally DKK 24.7 million for the period 2010 to 2012. Actual funding became in the end DKK 30 million for the period 2010 to mid 2015 (extended).

[1] The households are on average 0.4 ha with two cows which operate on a subsistence level although excess production is sold off. They are the main producer of fruits, vegetables and milk.


This page forms part of the publication "Evaluation of Danida Support to Value Chain Development – Ukraine Country Study" as chapter 1 of 8.
Version no. 1.0, 2016-07-05
Publication may be found at the address http://www.netpublikationer.dk/um/evaluation_value_chain_development_ukraine/index.html