The Ukraine Country Study leads to the following overall evaluation findings:
Overall, the Agri-Business Development component has been successful in its implementation despite the different crises that befell the country after project formulation and despite the Financial Services component not taking place while both components should have been executed in synergy.
The Agri-Business Development Component did achieve local short-term impact (increasing economic growth and decreasing rural unemployment through 50-60 good farms/ agribusinesses). The opportunity to develop these enterprises further (introducing processing), using them for excursions by copycats in a second phase is not used (not much more impact to be expected). It has influenced national strategic thinking, which may have longer term, national impact.
One success factor was that there was a diverse market for the products, at least for fruits and vegetables, accessible for suppliers who were able to change their market once problems arose. The presence of a wholesale market was important as a venue of information exchange and for producers and buyers to develop relations.
The focus was on value chain actors that had a good potential to produce for the market fairly soon, could quickly become commercially viable therefore ensuring sustainability, i.e. family farms and (in the Ukraine perspective) small corporate farms, and processors.
The demand oriented facilitation proved successful, particularly the combination of grants and training by domestic experts. This was achieved through a pragmatic value chain approach, adjusting itself to the context, to what the target group needed most.
The formula of awareness raising, excursions, business planning, proposal writing, training, granting over a few years worked very well. In a longer-term engagement all parties got to know and trust each other.
The programme did not only provide training to the grant applicant, but also the person behind him/her, like the son that is to take over and/or the daughter doing the finance. The programme undertook a lot of training in rural schools where both parents and children were trained in new techniques and this proved to have a strong impact in terms of changes implemented and likely on the sustainability of the family farm activities and business.
The programme was very prone to external influences. The context became worse. None of the preconditions, assumptions and risks identified when writing the programme document were that important.
The programme undervalued the bottleneck-cost of logistics, which is of critical importance for dairy. A good road network and refrigerated trucks are critical for frequent collection. Logistics is 20% of the price of milk. The spread of beneficiary farmers limits opportunities for efficiency and synergy.
The project did not pay attention to developing the self-financing capacity of each business, when it became clear that loan conditions and interest rates were prohibitive.
The evaluation findings lead to the following lessons learned:
Utilising and promoting the Shuvar fruits and vegetables wholesale market as meeting place between supply and demand, the venue for awareness raising, information exchange, seminars, training etc. was a very good strategy. Unfortunately no such place was available for dairy.
With reasonable agri-lending in place grantees would have been able to invest in their expansion. There were copycats and also they would have advanced much further if agri-lending had been in place.
Training bank staff does not change access to finance in itself. For developing agro (M) SME lending, bank lending needs to be addressed at the national level. Changing a bank’s financial products is a lengthy process.
With a flexible and dynamic programme implementation, it is possible to adjust effectively to the specific VCD context particularly when the context is rapidly changing.
An innovative, ground breaking programme of this nature needs more than one project cycle to become effective. The programme is considered successful and a model of great importance for the country. The grantees need further coaching, to ensure that the investment matures and real impact is achieved.
Access to finance should come along with financial management. Grantees should either have had training or should receive training to give confidence that he/she can handle money.
The combination of grants and training (including multiple study tours) causes mind change. That is the most important achievement.Top