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3 Achievements

3.1 Performance targets and goal fulfilment

The ABD component more than achieved its targets despite the crisis in the country. Instead of 40 grant projects, 71 were implemented in the dairy and 78 in the fruits and vegetable sector. In the dairy value chain, the average yield per cow was to increase by 15%, it increased by 35%. 15 new dairy value chains were developed instead of two. A 135% increase in farm gate price was achieved compared with neighbouring regions.

In fruit and vegetables, three new value chains were developed, as targeted. The selling period of fruit and vegetables has been extended by 14 %, resulting in 41% higher prices. A total of 224 workshops and seminars (instead of 36 originally planned) took place. Likewise, 312 consultancies (instead of 40 consultancies originally planned) were implemented by local experts.

The indicators related to the programme objectives focused on “increase in economic growth and decrease of unemployment in rural areas”. The interventions demonstrated the potential impact family farming and agro enterprises can have. It is evident that the intervention contributed to economic growth. The average number of employees among the beneficiaries increased by 132% in the dairy sector and 24% in the fruits and vegetable sector. With mechanized harvesting of the vegetables and equipment used for cleaning, sorting and packaging, the increase in employment in the fruit and vegetable value chain was limited. Different interviewees noted that there is a shortage of skilled labour, people to operate machines and implement quality management, as many younger and skilled people have left for urban areas or to work abroad.

A total of 150 beneficiaries in an oblast half the size of Denmark indicate a limited direct impact. The intervention was too small and of a too short duration to expect much more. Out of the 150 beneficiaries, 10-12 dairy and 40-50 fruit and vegetable farmers were considered exemplary farms, good agribusinesses. The real impact is to come when the grantees manage to continue to do their business and expand, encouraging others to copy. However, in the current state of the country it is unlikely that this will happen without external support (technical assistance and grants). Expansion is not going to happen without rural finance in place, ideally coupled with a guarantee facility to cover the bank’s risks. An important impact is that the programme interventions have shown what it takes to get a family farming and medium agribusiness based agriculture sector off the ground. The programme is a model that was studied by officials from the Ministry of Agriculture and Food Policy and this input is used in the new agriculture strategy that was published in the summer of 2015. When this strategy gets implemented, the programme interventions may end up having a large impact on economic growth in rural areas in Ukraine.

3.2 Assessment of key outcome areas for VCD interventions

Below is presented an assessment of the influence of the programme interventions on five outcome areas (“capital assets”) considered of key importance for smallholders and SME’s involved with VCD interventions[2].

Natural Capital: Since the collapse of agriculture 25 years ago, large tracks of land are either not used or used in a very extensive way. More fruits and vegetables are grown. Modern fruit varieties are planted, modern seed potatoes and vegetables seeds are imported. Dairy herds are built up again, with some genetic improvement. Both sectors are dependent on imported energy. There is a total absence of (local) solar water heating, solar energy, biogas, biomass or wind energy.

Human Capital: It was repeatedly mentioned by key stakeholders that companies, even MSMEs, struggle to find and keep qualified motivated staff. There is a shortage of qualified labour. In processing there are better chances for employing unskilled labour. The programme supported trainings, excursions and other capacity building. Most of the grantees visited would benefit from continued coaching. However, they found it difficult to pay. Consultancy/advisory services come when applying for a loan or considering the purchase of certain equipment. Advice on good farming practices is provided by vegetable seed companies and advice on pest and diseases is provided by the pesticides dealer. It is a food safety issue that quite some raw milk is sold off-farm, unrefrigerated, nonpasteurized. In the fruit and vegetable production there can be heavy use of pesticides. Hence, GLOBALG.A.P. certification was demanded by one of the supermarket buyers, who had started to receive production from the programme beneficiaries.

Social Capital: The programme did not invest in organising producers but in building out the network function of Shuvar wholesale market. This market continues to be a great place to meet and exchange information. The Non-Governmental Organisation set up for stimulating that, AgroLviv Forum, has now a digital newsletter (instead of the 5,000 printed hardcopies during the programme implementation). It is continuing with workshops and meetings but it is much less frequent than during the programme implementation period. Value chain actors may pay a participation fee, but the forum needs core funding to continue its activities.

Physical Capital: New stables with milking parlours have been built and farmers have acquired equipment for forage making/transport. There are some milk collection points with small scale processing facilities installed. It is simple technology. In the fruit and vegetable value chain there is now more storage capacity to prolong the selling season. There is some equipment for harvesting, sorting and for drying fruits. There is limited sharing of equipment. One farmer did contract harvesting using his modern European potato harvesting equipment.

Financial Capital: Besides access to finance there is a great need to develop the capacity in the MSMEs to manage finance in agribusinesses, to build up working capital. Those farmers who can provide a sizeable down payment can buy equipment on loan. Without that, without collateral, it is very difficult.

[2] See the ”5Capitals Approach” developed by CATIE.


This page forms part of the publication "Evaluation of Danida Support to Value Chain Development – Ukraine Country Study" as chapter 3 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