Final Report evaluation ENPARD Ienpard.ge/en/wp-content/uploads/2015/05/Final-Report...Final Evaluation ENPARD Programme 1 2 “This report has been prepared with the financial assistance

The project is financed by the European Union

Implemented by

Framework Contract Beneficiaries 2013 – Lot 1 –Rural Development EuropeAid/132633/C/SER/multi

Prepared by:

Team Leader – John Channon, with the assistance of Martin Mautner

Markhof, Rubina Devrikyan and Boriana Marinova

Ref: 2017/386933/1

EVALUATION OF ENPARD 1, March 2013 - 2017

FINAL REPORT

December 2017 5

Final Evaluation ENPARD Programme 1 2

“This report has been prepared with the financial assistance of the European Commission. The views expressed herein are those of the consultant and therefore in no way reflect the official

opinion of the Commission”


ABBREVIATIONS & ACRONYMS

ABCO Georgia Association of Business Consulting Organisations, Georgia ACC(s) Agricultural Consultation Centres(s) ACDA Agricultural Cooperative Development Agency ACF Action contre La Faim (ACF) – Action Against Hunger ADS Adjara Development Strategy AMAGI(s) Active Citizen Local Union (s) APMA Agricultural Project Management Agency ASC Agro-Service Centre AUG Agricultural University of Georgia BBI Batumi Business Incubator BDD Basic Data & Directions BS Budget Support CARE CARE International (Humanitarian Aid Agency) CENN Caucasus Environmental NGO Network Association CfP Call for Proposals DCFTA Deep and Comprehensive Free Trade Agreement DoA Description of Action EC European Commission ENPARD European Neighbourhood Programme for Agricultural and Rural Development ETEA Faculty of Economics and Business Sciences at the University of Cordoba, Spain EU European Union EUD European Union Delegation EVOLUXER Spanish consulting company FA Financing Agreement FAO Food and Agricultural Organisation GACA Georgian Agricultural Cooperatives Association GALAG Georgian Association of LAGs GEL Georgian Lari GeoStat National Statistical Office of Georgia GFA Georgian Farmers Association GFC Georgian Farmers Council GIPA Georgian Institute of Public Affairs GoA Government of Ajara GoG Government of Georgia ICC Information & Consultation Centre IFAD International Fund for Agricultural Development IFI International Financial Institutions ISET International School of Economics at TSU Policy Institute JC Judgement Criterion KE Key Expert LAG Local Action Group LDS Local Development Strategy LEADER a bottom-up partnership approach to rural development Logframe Logical Framework MC Mercy Corps M&E Monitoring & Evaluation MoA Ministry of Agriculture MoF Ministry of Finance MoU(s) Memorandum/Memoranda of Understanding MTEF Medium Term Expenditure Framework NFA National Food Agency


NGO Non-Governmental Organisation NSA Non-State Actors OXFAM Oxford Committee for Famine Relief (Aid Agency) PFM Public Financial Management PMC RC Policy & Management Consulting Research Centre PIN People In Need PM Programme Manager PMC - RC Policy & Management Consulting Research Centre RAPDI Rural & Agricultural Policy and Development Institute RCDA Rural Communities Development Agency RDA Regional Development Association RDS Rural Development Strategy RQ Review Question SADG Strategy for Agricultural Development of Georgia SAO State Audit Office SBSP Sector Budget Support Programme SSF Single Support Framework ToR Terms of Reference TL Team Leader TM Task Manager UL University of Limerick, Ireland UNDP United Nations Development Programme USD United States dollar USDA Unites State Department of Agriculture USAID United States Agency for International Development


THANKS

The team would like to thank the Task Manager (TM) at the EUD in Tbilisi, Ms. Cristina Casella, for her help and support from the very initial contact through to the Final Report and preparation for the Stakeholders Workshop, to Mr. Alvaro Ortega Aparicio, Project Manager (PM) for his assistance with specific aspects of the Programme and to Mr. Irakli Khmaladze (PFM specialist) for his update and guidance on recent developments in Public Financial Management. In addition, we should like to thank Ms. Tamar Khuntsaria, the ENPARD Communications Manager, for her assistance in organising the final event. The team would also like to express their gratitude to all those who helped them in their work and, in particular, to the following: Mr. Javier Sanz Alvarez (the FAO Coordinator and Support Officer for Georgia), Mr. Dragan Angelovski (Chief Technical Advisor, FAO) and Mr. Lasha Dolidze (the FAO National Project Manager/Team Leader, based at the Ministry of Agriculture (MoA) and his team for their excellent support and assistance, with materials and in arranging meetings at the MoA and for their patience and thoroughness in dealing with numerous requests, as well as for always providing a warm welcome and refreshments in their offices to sustain our often lengthy discussions; the Ministry of Agriculture for their help in arranging meetings, in providing materials and for facilitating our work by always finding the time to answer questions, and especially to Mr. Nodar Kereselidze, the First Deputy Minister, Ms. Khatia Tsilosani, Head of the International Relations Department, Ms. Ekaterine Zviadadze, Head of the Policy and Analysis Department and to Ms. Tamar Zedginidze, Head of the Financial –Economic Department; Ms. Natia Gulua, the Deputy Head of the Budget Department & Head of the Budget Policy Division at the Ministry of Finance, for providing detailed budget data on the state budget and on the MoA in particular, for the period prior to ENPARD 1, for the ENPARD 1 years and for the MTEF forecasts up to 2021, as well as for assisting with several queries. They were always available to answer questions promptly, despite this being an extremely busy period for them; Mr. George Misheladze, Chairman and Ms. Eleonora Lomineishvili, Advisor, at the Agricultural Cooperative Development Agency (ACDA) for their assistance in providing information and helping with queries and to the TA team at the ACDA (especially to Mr. Manfred Schussel, Team Leader and Ms. Maia Nebieridze, project officer) for their warm welcome and willingness to assist wherever possible with, often, numerous queries. Thanks also should go to Mr. Roman Kakulia, Chair of the Sector Economy and Trade Committee in the Parliament, for discussing various aspects of the importance of the EU aid programme to Georgia. The members of the team are also grateful to the following: Ms. Rusudan Kardava, specialist in Monitoring & Evaluation (M&E) and Mr. Zaza Chelidze, project officer, both with the FAO, MoA; the UNDP (Ms. Natia Natsvlishvili, Assistant Resident Representative and Mr. George Nanobashvili, Economic Development Team Leader) and all the partners and NGOs which participated in the Programme: CARE (Ms. Julia Weber, Programme Officer, Mr. Juba Maruashvili, Project Manager, Mr. George Glonti, Mission Director and Ms. Silvia Sanjuan, Project Director of ENPARD-cooperatives project for CARE); Mercy Corps (Mr. Irakli Kasrashvilil, Country Director, Mr. Giga Sarukhanishvili, Programme Manager, Ms. Lika Margania, Deputy Programme Manager and Mr. Mikheil Lomidze, Project Manager); Oxfam (Ms. Keti Getiashvili, Country Director, Mr. Levan Dadiani, Agriculture and Food Security Policy Programme Manager, Mr. Giorgi Datusani, ENPARD Project Coordinator and Ms. Nino Gvianishvili, Communications Manager); People In Need (PIN) (Ms. Laurianne Gauny, Director, Georgia Country Programme; Mr. Buba Jafarli, Project Manager and Ms. Salome Bakashvili, Project Manager); the Georgian Institute for Public Affairs (GIPA) - Ms. Maka Ioseliani, Rector, Ms. Nana Kashakashvili, Head of the Georgian Rural Development Department, Ms. Ketevan Rukhadze, the Regional Development Coordinator and Ms. Eka Molashkhia, Project Assistant; the Rural and Agricultural Policy Development Institute (RAPDI) - Mr. Shalva Pipia, Executive Director and Ms. Mariam Sisoeva, Project Manager; the Agricultural University of Georgia (AUG); the University of Limerick (Mr. Eamonn McQuade and Mr. Andro Rurua; the International School of Economics at the TSU Policy Institute (ISET) - Mr. Irakli Kochlamazashvili, Deputy Head of the Agricultural Policy Research Centre; the Georgian Farmers Association (GFA) – Ms. Nino Zambakhidze, Chairwoman and Ms Tamar Toria, Executive Director; the National Statistics Office of Georgia (GEOSTAT) - Mr.Vasil Tsakadze, Head of Agricultural and Environmental Statistics Division; ABCO-Georgia (Mr. Konstantin Zhgenti, President); Action contre La


Faim (ACF) – Action Against Hunger (Ms. Maia Gabedava, Programme Manager); the Rural Communities Development Agency (RCDA) - Mr. Rostom Gamisonia, Director; the Regional Development Association (RDA) - Ms. Eliso Tskhadaia, Cooperative Development Coordinator; all in the UNDP who provided assistance in Ajara (especially, Mr. Vakhtang Kontselidze and Mr. Merab Svanidze) and to the MoA in Batumi (especially, Mr. Avtandil Meskhidze) for their continued help and support during the mission. We should also like to express our gratitude to representatives from other donor projects that were complementary to the work of ENPARD 1: IFAD (Ms. Nino Kizikurashvili, Project Coordinator); USAID (Mr. David Tsiklauri, Project Manager); USDA (Mr. Gocha Shainidze, Agricultural Assistant); and the World Bank (Mr. George Kalandadze, Deputy Project Director, GILMDP project), for their continued help and support during the mission.


TABLE OF CONTENTS

ABBREVIATIONS & ACRONYMS .......................................................................................................................... 3

THANKS ........................................................................................................................................................................... 5

EXECUTIVE SUMMARY ........................................................................................................................................... 9

1. INTRODUCTION ................................................................................................................................................ 17

2. BACKGROUND AND CONTEXT: GENERAL OVERVIEW OF THE ENP ARD 1 PROGRAMME .............................................................................................................................................................. 18

3. OBJECTIVES ....................................................................................................................................................... 19

THE MAIN AND SPECIFIC OBJECTIVES OF THE FINAL EVALU ATION .......................................... 19

3.1. THE GLOBAL OBJECTIVE .................................................................................................................................................. 19

3.2. THE SPECIFIC OBJECTIVES .............................................................................................................................................. 19

OF THE EVALUATION ARE: ............................................................................................................................................................. 19

4. KEY QUESTIONS GUIDING THE EVALUATION ................................................................................. 19

5. OVERVIEW OF RATIONALE AND LOGIC OF THE COMBINATION OF AID MODALITIES USED IN ENPARD I .................................................................................................................................................... 20

6. ENPARD 1: CONTEXT TO THE BUDGET SUPPORT COMPONENT ............................................. 22

6.1. GENERAL CONDITIONS: THE MACRO-ECONOMIC FRAMEWORK ................................................................................ 23

6.2. GENERAL CONDITIONS: PUBLIC FINANCIAL MANAGEMENT (INCLUDING ACCOUNTABILITY AND

TRANSPARENCY) ............................................................................................................................................................................. 24

6.3. SPECIFIC CONDITIONS FOR TRANCHES 2, 3, 4 ............................................................................................................. 25

7. COMMENTS ON THE VARIOUS PROGRAMME COMPONENTS: BUDGE T SUPPORT; COMPLEMENTARY SUPPORT (TECHNICAL ASSISTANCE; GRANTS ) ............................................. 26

7.1. BUDGET SUPPORT ............................................................................................................................................................ 26

7.2. COMPLEMENTARY ASSISTANCE: TECHNICAL ASSISTANCE ....................................................................................... 31

7.2.1 Technical Assistance to the MoA .................................................................................................................................. 31

7.3. THE VARIOUS PROGRAMME COMPONENTS: COMPLEMENTARY ASSISTANCE - TA............................................... 36

7.3.1. Technical Assistance to capacity building for ACDA .......................................................................................... 36

7.4. COMPLEMENTARY SUPPORT: GRANTS ......................................................................................................................... 40

7.4.1. Four projects implemented under Small Farmers Cooperation Measures .............................................. 40

7.4.2 Support to projects implemented under the pilot rural development measures: Lagodekhi;

Borjomi; Kazbegi ............................................................................................................................................................................. 47

7.4.3. Projects implemented under the support to agricultural development, including Capacity

Building to the Ministry of Agriculture in the Autonomous Republic of Ajara .................................................. 59

7.4.4. Two projects assisting capacity building of agriculture-related education and research

institutions: Background and objectives .............................................................................................................................. 67

7.4.5. Overall impact of the ENPARD 1 programme in terms of the agricultural sector? ............................. 79

8. LESSONS LEARNED AND RECOMMENDATIONS ............................................................................... 81


ANNEXES Annex 1: ENPARD I Logframe Annex 2: Matrix of suggested Review Questions, judgement criteria and indicators for assessment Annex 3: Bibliography of all materials used Annex 4: Individuals/organisations met Annex 5: Logframe of Evoluxer (ACDA) Annex 6: Appraisal of the work of the NGOs implementing projects under Small Farmers Cooperation measures: programming and implementing modalities to assess accomplishment of the stated results Annex 7: Assessment of the projects’ outputs against the indicators and targets set in the specific Logical Frameworks under Small Farmers Cooperation measures Annex 8: Donor matrix (from FAO) Annex 9: MoA organigram Annex 10: ACDA organigram Annex 11: Budget Calendar of Georgia Annex 12: The budgeting process in brief, Georgia Annex 13: M&E spreadsheet

TABLES Table 1. Ministry of Agriculture budget, 2010 – 2018: actual budget, MTEF forecasts, and as a share of total state expenditure (thousand GEL) Table 2. Ministry of Agriculture: allocations from state budget, 2013-2017(thousand GEL) Table 3. Ministry of Agriculture: total funding, including state budget, forecast, 2018-2021 Table 4. Actual amount received by ACDA from MoA (GEL M) and ACDA share of total MoA budget (%), 2013-2017, and of that forecast for 2018-2021 Table 5. Correlation between resources used and results achieved: four-NGO led consortia Table 6. Budget of the MoA Adjara, including the Agro-service Centre budget Table 7. Gender distribution among the beneficiaries of the Cooperative Support Programme, AR Ajara (UNDP) Table 8. Total value of agricultural output: overall and by sub-sector, 2010-2016 (GEL mln) Table 9. Agriculture share in total GDP, 2010-2017 Table 10. Total income in rural areas (GEL M) and total rural income from selling agricultural products (GEL M)


EXECUTIVE SUMMARY

The aim of the ENPARD I programme is to increase food production and reduce rural poverty in Georgia. ENPARD supports the implementation of the Government’s key sector strategy – the ‘Strategy for the Agricultural Development of Georgia (SADG), 2015-2020’. EU assistance through ENPARD reflects the high priority given to agriculture and rural development as one of the three strategic areas of cooperation within the Single Support Framework (SSF) for EU Support to Georgia (2014-17). The programme is complementary to various other EU funded actions ongoing in the fields of food safety, regional development and vocational education. The following results were expected from ENPARD I: strengthened cooperation amongst small farmers to increase production and achieve economies of scale by establishing business-oriented cooperation forms, such as small farmers’ cooperatives; improved access to capacity building by small farmers via the organisation of an agricultural extension system based on district level consultation & information centres; improved efficiency of institutions involved in agriculture, including capacity building to the Ministry of Agriculture (MoA) and the Cooperative Development Agency (ACDA) and the Ministry of Agriculture of the Autonomous Republic of Ajara; regulated and developed geographical indications; and improved employment and living conditions. Oversight of the programme is entrusted to an ENPARD Steering Committee (the responsibilities, functions, composition and operation is formalised through a ministerial decree), which meets at least three times a year to assess progress in the implementation of the programme. An ENPARD Stakeholders Committee, which was established by the MoA through a ministerial decree, operates as an advisory body. The main objective of this evaluation is to carry out an independent and comprehensive final evaluation of the ENPARD I Georgia programme, implemented throughout the period 2013-2017. The specific objectives were: to analyse the relevance, efficiency, effectiveness, impact and sustainability of the programme; to assess whether the programme’s expected outputs (as listed in the Logframe) have been achieved in full (effectiveness) and if this was done in an efficient manner (efficiency); to assess the extent to which the programme has contributed to the achievement of its stated specific and overall objectives (outcome and impact) and whether the results of the programme (at all levels) are likely to be sustainable (sustainability) ; and to draw conclusions on whether the programme provided the best avenue to address actual needs and priorities in the sector (relevance) and provide concrete recommendations for future initiatives. The original ENPARD I Financing Agreement (FA) signed in March 2013, provided € 40 million overall (consisting of Sector Budget Support of € 18 million and Complementary Support, covering both grants and TA, of € 22 million). ENPARD I was then extended by a year (signed in July 2014), with additional funding of € 12 million (€ 6.5 million of which was extra Budget Support and the remainder, € 5.5M, for Complementary Support), raising the overall total for ENPARD 1 to € 52 million (with 47.1% of this being for Budget Support). The overall implementation period was set at 60 months, plus a 24-month closure period and an increase in the Budget Support period from 36 to 48 months. The indicators remained as before, although new ones were added for the final year, 2016. External independent reviews of ENPARD I were carried out for each year of its operation, i.e. 2013, 2014, 2015 and 2016. It was both timely and appropriate (hence, relevant) for the EU intervention to support the development of the agricultural sector in Georgia, particularly the stratum of middle-income farmers who need support and encouragement to develop more-business oriented market enterprises. It was timely for a new (and larger) EU Budget Support programme to be considered within Georgia, with the positive and stable macro-economic environment that prevailed (supported by an IMF programme) and the success of the Public Financial Management (PFM) Reform Programme, which had been supported through a previous EU Budget Support programme. Important PFM Reforms were implemented in Georgia, especially in budgeting, through the introduction of strategic budgeting (policy-based budgeting), medium term budgeting and programme budgeting – as well as improved budget oversight and transparency – which provided the appropriate conditions, i.e. sound foundations, for a new Budget Support programme. After 2003, agriculture was seen as low priority and priority was given to other sectors, linked to the then government’s strategy of growth and privatisation. From 2010-11, however, more attention was devoted to agriculture (with an increase in the


sector’s share of the state budget) and then, following the election of a new government, from 1st October 2012, following Parliamentary elections (and with ENPARD I announced on 28th August 2012), agriculture was given a higher priority and the share of the total budget allocated to agriculture continued to increase – though to support implementation of the new Agricultural Strategy, rather than for general expenditure. It was also logical to look to agriculture as the sector to be supported under the Sector Budget Support Programme (SBSP) -the rationale for intervention - since the new government showed political will and a commitment to supporting the sector, and prioritising it, after years of ignoring it. In February 2012, the Government finalised its agricultural sector strategy – the ‘Strategy for Agricultural Development in Georgia (SADG), 2012-2022’. The priorities within ENPARD I could thus be aligned to the 7 priorities within the agricultural sector strategy with an SBSP focus on the sector and specific conditions linked to strengthened cooperation amongst small farmers, capacity building for small farmers and capacity building for institutions in agriculture. The SBSP ensured that the agricultural sector – using the Ministry of Agriculture as a proxy for the sector - received a higher priority within the distribution of overall public expenditure than previously and thus an increased allocation within the state budget. It was important, however, that not only more resources were allocated to the sector but that these resources could be absorbed and used efficiently and effectively by the ministry. Thus, Budget Support was complemented by additional EU interventions through the aid modality of complementary support, delivered through two components, one of which was technical assistance (TA). Thus, TA was provided to build up the capacity of the MoA and, in particular, strengthen the institution in specific key areas (e.g. policy, budget, monitoring, donor coordination) so that it was capable of absorbing the increase in funds received through the national budget and of being able to direct them to the agreed priority areas for implementing the agricultural strategy and fulfilling the Budget Support conditions. Improvements in donor coordination were also encouraged to improve the complementarity of action between donors and avoid duplication and overlap of support and thus maximise the overall impact of donor support to the sector. Furthermore, one of the agreed priorities within ENPARD I was to support the recently established Agricultural Cooperative Development Agency (ACDA), under the MoA, which became a legal entity in July 2013. The Agency has a mandate to promote the development of agricultural cooperatives, to provide consultancy services to the cooperatives, to co-ordinate state programmes in support of the cooperatives, to grant (and rescind) registered agricultural cooperative status and to monitor the performance of cooperatives. From 2013, the ACDA would also receive budgetary resources through an MoA programme, so it was important also to provide technical assistance to the ACDA, to build up its capacity and, in particular, strengthen the institution in specific key areas (e.g. policy, budget, monitoring) so that it was capable of absorbing the budgetary funds received and of being able to direct them to the priority areas for implementing the ACDA strategy and fulfilling the Budget Support conditions. The other component of complementary assistance came in the form of grants awarded through a competitive procedure: for cooperative development; for the development of local action groups; and to support agriculture-related education and research institutions in developing more relevant and up-to-date curricula and applied research. For cooperatives, grants were awarded to four NGO-led consortia, with each consortium supporting (i.e. with capacity building and complementary investment support through co-matching grants) the development of agricultural cooperatives and other business-oriented farmers groups in different districts of the country: in fact, only registered cooperatives have been supported, apart from agricultural service providers. At the time of programme design, it was envisaged that at least 100 small farmers’ business-oriented cooperatives would be established. At the same time, the mass of subsistence farmers, as well as rural communities in general, were to be assisted through a rural development programme, which was to be promoted via the establishment of local action groups (LAGs) in pilot municipalities, based on the EU LEADER approach, to encourage local economic and social development initiatives (with a strong focus on ‘inclusion’, i.e. of increased participation and representation of women, youth and ethnic monitory groups), through a system of awarding grants to local projects. Yet other grants were provided to support three regional agriculture-related education and research institutions, to increase their research capacity in accordance with international standards (including improved curricula and applied research, such as demonstration plots), so as to meet the challenges within the agriculture, food processing, environment and rural development sectors.


Thus, the programme was well designed, both in terms of the needs of the country at the time and the manner in which the combination of aid modalities was employed, logically complementing one another to achieve the desired objectives: combining both top-down and bottom-up initiatives. The ENPARD I Programme was also complementary to other interventions, both by the EU and other donors. The EU project on Public Finance reform helped to move forward public financial management reforms and their implementation, which facilitated the fulfilment of part of the Budget Support general conditions and, through programme budgeting and medium-term forecasting, assisted the MoF in its budget allocations to the MoA. In addition, the USAID, IFAD and World Bank agricultural projects provided complementarity and synergy to ENPARD 1. Budget Support was disbursed under four individual tranches between 2013-2016, subject to compliance with the General and Specific Conditions agreed in the Policy Reform Matrix. The General Conditions (the Budget Support eligibility criteria) were fully met: macroeconomic stability; Public Financial Management (PFM); budget transparency; and implementation of the Sector Strategy. The EUD carried out its own assessment of Macroeconomic Stability, PFM and budget transparency and the implementation of the sector strategy. There was satisfactory progress in maintaining stability-oriented macro-economic policy according to discussions with and reports from the IMF, the World Bank and the EC and IFI assessments have been positive to the responses of the Georgian authorities in the face of difficult external circumstances. Satisfactory progress occurred in the implementation of PFM, verified by the EU supported ‘Public Finance Policy Reforms Support Programme’ and Georgia’s budget policies demonstrate an on-going commitment to stabilisation of the economy, promotion of sustainable economic growth, single-digit inflation, a reduction in unemployment and improvement of the investment environment. Furthermore, Georgia’s commitment to European and Euro-Atlantic integration and signature of the Association Agreement and the DDCFTA, provide prospects for substantial economic benefits and opportunities. In addition, the overall direction of change in transparency and budget oversight was deemed to be overwhelmingly positive. Recent international assessments of the accountability and transparency of Georgia’s PFM system place it among the top tier of countries internationally while, with EU support, further measures are being planned and implemented to address areas of identified weakness in the legislative oversight of the budget. It was deemed that the eligibility criterion for on-going and satisfactory progress in transparency and budget oversight had been met. Overall, the review teams found that the General Conditions had been fully met for each of the four tranches.

ENPARD 1 was based on the updated Agricultural Sector Strategy (the SADG) of February 2015, which includes a detailed Action Plan, approved in May 2015, which was satisfactorily implemented. The sector strategy is highly relevant to the needs of the country and the challenges it faces, namely, small farm size, falling agricultural production, dependence on foreign imports, low levels of processing and added value, and higher poverty rates in rural areas and the strategy is in alignment with ENPARD I. The Minutes of the Steering Committee of the Ministry of Agriculture (MoA) reflect the efforts made towards implementation of the Strategy. The increased budgetary resources allocated to the MoA demonstrate the increased fiscal commitment from the Government towards the sector.

The specific conditions which related to the variable tranches were subject to progress being achieved in three results areas: strengthened cooperation amongst small farmers to increase production and reach economies of scale by establishing business-oriented cooperation forms, such as small farmers cooperatives; improved access to capacity building by small farmers via the organisation of an agricultural extension system based on district level consultation and information centres (ICCs); and improved efficiency of institutions involved in agriculture, including capacity building/support to the MoA, ACDA and the MoA, Ajara. The four independent review missions verified compliance with the relevant Policy Reform Matrix conditions prior to the release of each tranche of funding. All conditions were fulfilled 100% and all tranches were released in the agreed amounts and on time.

The Budget Support funds flowed efficiently in accordance with the FA schedule. Each tranche was disbursed on time and in the full amount, since the general conditions were met for the fixed tranche and the specific conditions fulfilled 100% for the variable instalments. However, the specific conditions in this initial programme were not overly ambitious, a fact that might be considered appropriate when testing the


mechanism for the flow of an increased amount of funds in future. The mechanism that is established ensured that there was a timely and efficient flow of funds from the EU to Georgia, to the Treasury in the MoF and then to the State Budget. This was possible due to the advances made in PFM reforms, together with improvements in transparency (all important for good governance). This indicates that as long as such a mechanism operates, it is reliable for future funds to continue to flow under this financial aid modality. This is important in light of the fact that the ENPARD II FA was signed in May 2016 and preparations are currently underway for the finalisation of the ENPARD III Budget Support Policy Matrix, in view of the intention to sign the FA before 31 December 2017. The specific conditions, moreover, in these subsequent programmes, may well be expected to be more rigorous, considering that there has already been capacity building and institutional strengthening for the MoA and that this is being continued under ENPARD II.

Furthermore, for the years of ENPARD I, the agricultural sector (using the Ministry of Agriculture as proxy for the sector) received an increased share of budgetary resources (averaging 3% of the total state budget), in comparison with earlier years. Thus, resources were efficiently allocated from the state budget to the sector, as envisaged, with agriculture being given a higher priority within sectoral allocations. The Ministry received the agreed allocations in full and on time. From 2017, however, budgetary allocations to the sector will be reduced in line with an across-the-board reduction in administrative expenses by the MoF to line ministries. This clearly has implications for ENPARD II where there is still a significant BS component. In consideration of whether the budgetary funds received were used effectively (i.e. for the intended purposes), the final review for the 4th tranche provided figures (from the MoF) to show how the seven Strategic Priorities within the SADG were funded between the years 2013-2015, especially the three most relevant to the 4th tranche (cooperatives, extension and statistics), with an upward trend in expenditure. This current evaluation reviewed the seven MoA programmes funded through the State Budget (i.e. the MoA priority programmes) and confirm that funding for support to cooperatives through the newly established ACDA was one of the priority programmes which received budgetary funding throughout ENPARD 1. This was in line with the priority designated for agricultural cooperatives within both the SADG and ENPARD I. (Budget forecasts for the next four years - i.e. 2018-21- show that such allocations to ACDA are planned to continue, although in reduced amounts.). Thus, budgetary funds, in this instance, were allocated by the MoA for the designated purposes. While it is clear that state budgetary funds were transferred to the MoA and to the ACDA during the ENPARD 1 period - demonstrating allocative efficiency - this tells us nothing about how effectively both the MoA and ACDA are able to manage those funds, often referred to as the operational efficiency. An increase in public funding to agriculture needs to be accompanied by improvements in the efficient and effective management of those funds. Thus, the quality of spending is as important as the additional funding, although the former is notoriously difficult to assess. Any assessment of whether the MoA, as a result of ENPARD 1, was a strengthened institution, capable of absorbing additional resources and using them efficiently and effectively (particularly, to encourage improved agricultural production and productivity), requires an evaluation of the TA that both the MoA and the ACDA received for capacity building support throughout ENPARD 1. The objective of the TA to MoA was to improve the general efficiency of the MoA. providing support through assistance with the preparation of the ‘SADG’ and with its implementation and, in particular, with the elements directly targeted by the BS component. Thus, the TA was complementary and extremely relevant to the BS programme, since it provided assistance to build the appropriate capacity to enable the ministry to improve its management of public expenditure, i.e. its operational efficiency. The FAO TA to the MoA supported: the creation of ACDA; the MoA to be able to fulfil conditions in the BS Policy Reform matrix; structural changes within the MoA, such as the creation of a policy unit and policy group, training, improved staffing with statistical capabilities, monitoring & evaluation (M&E) to track implementation of the strategy and the Action Plan, led by the Policy department; assuming the lead role in coordinating ENPARD stakeholders (through organising Steering and Stakeholder Committee meetings); training based on identified staff needs; and the facilitation of policy dialogue between the MoA and the EUD. While FAO was involved in policy work, it was not directly involved in assisting budgeting and it is


recommended that this should be a task highlighted for future support, particularly in light of the operation within Georgia of programme budgeting within a medium-term budgeting framework. Only through budgets can policy be realised. The TA was well designed since it was complementary and extremely relevant to the Budget Support programme and provided assistance to build the appropriate capacity to enable the ministry to improve its operational efficiency, i.e. its management of the increased public funds that had now been allocated. The TA assisted with the approval of the SADG, 2015-20, and its Action Plan and the Rural Development Strategy for Georgia (RDSG), 2017-20, and its Action Plan for 2017, with preparatory work on the extension strategy, recommended steps for the introduction of a market information system, a data warehouse, an M&E system (for results-oriented monitoring or ROM) and economic modelling tools to improve short & medium term planning. While there was no assistance provided for budgeting, policy was supported. The FAO supported the establishment of a Policy unit (a second tranche condition) and also a Policy Group, which comprises around 25 individuals, mostly heads of departments and main specialists of the MoA, from several key departments of the MoA responsible for different policy directions (e.g. statistics & analysis, land & amelioration, extension policies, relations with international organisations and donors). The Policy Group played a key role in the elaboration of the current version of the SADG and its Action Plan, although a sound monitoring system within the MoA is required to ensure prioritisation of policy programmes and financial resources. An HR review of the MoA structure and organigram was undertaken with support from the Minister of Agriculture in 2013, although another review commenced more recently, and this is still in the process of being worked through. An extension strategy has been drafted, with support from FAO. The strategy has undergone a public consultation and is now in process of being finalised. Approval was expected before the end of 2017. The project supported the creation of a Market Information System (MIS), using an agreed methodology, which is used by the MoA field offices to collect information on agricultural products, which is then sent to the central ministry to improve evidence-based decision making. Thus, the systems and procedures for agricultural statistics collection at district level, which are important for providing an input into agricultural policy development and monitoring (specific condition, 3.5) also received assistance. The FAO handed over responsibility for donor coordination to the MoA in March 2015, although the FAO continues to participate and co-chair, as and when required. It will be important for the TA to continue to encourage the MoA to assume the coordination role and help to build the necessary capacity so that the MoA has the expertise in order to fulfil the role. Overall the FAO has achieved a good working relationship with the staff within the MoA and undoubtedly, location of its office within the ministry is largely responsible for such successful cooperation. The project is well managed and since several agricultural projects funded by different donors work in such a close environment this ensures complementarity and good cooperation. A review of the MoA budget preparation and the submission to the MoF under the MTEF indicates a degree of strategic prioritisation (i.e. allocative efficiency), whereby the programmes of the MoA selected for budget funding are in line with the strategic policy priorities within the SADG (the key policy sector document) and also aligned to the ENPARD I priorities. The TA support to the ACDA was implemented by Evoluxer and was designed to promote the development of cooperatives, provide consultancy services to them, coordinate state programmes to support cooperatives, grant cooperatives status and monitor their performance. Capacity building to ACDA includes: establishment of an efficient registration system; establishment of a cooperatives training system; and development of a cooperative monitoring/auditing system. The Evoluxer project had a well-established office within ACDA and, as part of its capacity building exercise, has undertaken a huge volume of training which has already been detailed in other reports, although the impact of such training has still to be assessed with regard to the ‘Training programme for managers of registered agricultural cooperatives’. A comprehensive training programme was developed by ACDA, with the aid of TA, for managers of registered agricultural cooperatives on such aspects as cooperative organisation & governance, a self-assessment tool kit, monitoring & evaluation and business planning (the latter linked to current accounting and book-keeping practices). The programme's


implementation started in spring 2016 and actual training started in October the same year. The overall list of cooperative managers trained contains 101 names. However, according to ACDA, 387 members of 251 agricultural cooperatives have participated in training in total. An assessment of cooperative training needs was integrated into the training programme, which covers the period 2016 – 2018, is updated on an annual basis, and takes into account new initiatives and strategies introduced within the Agency. A Training of Trainers (ToT) programme was also developed with some 100 individuals shortlisted for the programme in June 2016. On-the-job training in accounting and book-keeping also commenced from August 2016. ACDA plans to finalise the structure of the HR unit in order to provide a greater chance of sustainability of the capacity building activities for registered cooperatives. The ENPARD I programme included a component of EUR 18.6 million, dedicated to the improvement of farmers’ cooperation. This component was implemented through four grant contracts (selected through a competitive process between the EU and four consortia led, respectively, by four NGOs: CARE, Oxfam, Mercy Corps and People In Need (PIN). The specific objective of ENPARD was to improve the agriculture sector by supporting the implementation of the SADG and strengthening small farmers' organizations, i.e. supporting the development of business-oriented small farmers’ groups, while the definition of “small farmers' organisations” at the beginning of the projects, was limited to registered cooperatives. The indicators under Result 1 of the logframe note at least 100 business-oriented farmer groups established and at least 50 business-oriented farmers groups active in operating economic activities. Other ‘complementary’ priority issues to address included: the promotion of sustainable management of the natural resources and environmentally- friendly agriculture practices; the promotion of non-agriculture related activities aiming to improve the quality of life in rural areas and to encourage diversification of the rural economy; and advocacy activities for the rights of small farmers and participation in policy making processes at local and/or regional level. While grant support to the cooperatives complemented the support being provided through the aid modalities of BS and TA for capacity building, a strategy for agricultural cooperatives has yet to be adopted. Under ENPARD I, in addition to grants delivered under the farmers’ cooperation component, grants were also made available to support pilot Rural Development Measures in three municipalities of Georgia: Lagodekhi; Borjomi and Kazbegi. The projects were highly relevant and were aimed at introducing and applying the ‘LEADER’ approach by establishing the required preconditions for participatory local development in rural communities, to address the needs of the targeted local population and deliver improved services, targeted to the identified priority needs of different sectors and of the various social groups for local development planning and implementation. The project is in line with the SADG and was a pilot initiative to support elaboration of the Rural Development Strategy of Georgia. In Lagodekhi, the project initiated and supported the participatory process where the local residents and active members of the community were enabled to address their own problems in a participatory way and apply their resources for the development of the overall municipality. The 89 new jobs which were created increased income of those involved in sub-projects. The role of women and youth was promoted in the local development, socially vulnerable children improved their access to and support for education; the major priority needs were identified in the local development strategy to facilitate their further achievement by the means of the local municipality and other sources. In Borjomi, local action groups (LAGs) were established, with 28 current members from all key sectors. LAG members, applicants of the sub-grants scheme and the Borjomi Municipality were all assisted in improving their skills in a series of topics, which included proposal writing and participatory local development. The project supported the implementation of 27 sub-grants projects in various sectors, including tourism, sport, culture, agriculture and environment, all of which have the potential for improving the quality of life in Borjomi. Several projects serve the needs of the overall community within Borjomi municipality. In Kazbegi, the project’s specific objective is to improve employment, community empowerment and living conditions of the rural population’ and the LAG became a good platform for involving the local residents in the decision-making process with respect to their own development; 40 sub-grants out of total 63 have led to increased income of the local population and created preconditions for tourism development.

The project ‘Support to Agricultural Development in Ajara Autonomous Republic’ implemented by UNDP, between May 2013 - June 2016, aimed at facilitating implementation of the national sector strategy and


strengthening small farmers’ organisations in the Autonomous Republic of Ajara (hereafter Ajara). The objective was to: promote improvement and expansion of the existing service centre in Ajara, including outreach activities to target remote rural municipalities; support to business-oriented small farmers groups in the region; and to assist capacity building for the regional MoA (this is the only part of Georgia where agriculture responsibilities are devolved). The project was relevant since it appropriately addressed the needs of the target group: the Autonomous Republic of Ajara, the MoA, Ajara and the Agro-Service Centre (ASC), established by the Government of Ajara (GoA) as a budgetary-funded organisation. The improvement of services and small farmers’ access to them was addressed by supporting the ASC in providing high quality services to farmers. The project pioneered the introduction of agricultural innovations in Ajara, such as green houses and the growing of blueberries and walnuts. Demonstration plots were important since they appeared for the first time in Ajara and enabled farmers to learn practically about new approaches in agriculture. The project also supported farmers by: designing business models and business development services for supporting agriculture cooperatives; facilitating the creation of agriculture cooperatives and the provision of specific business development services to existing cooperatives; and providing technical assistance to develop the capacity of agriculture cooperatives’ capacities, with the aim of improving productivity. Thus, assistance was provided to farmers to promote cooperation and 77 cooperatives were supported within the framework of the Grant Support Component, which provided access to modern technologies, to improve both the quality and quantity of their production, to improve their opportunities related to marketing and to function legitimately, in accordance with the legal and financial requirements of the Law on Cooperatives. Furthermore, the project addressed the needs of the MoA of Ajara, by assisting its institutional development aimed at developing more effective agricultural policy formulation and implementation. The following priorities of the MoA were addressed by the project: study of agriculture sector development, investment and export potential; an assessment of MoA staff capacity development needs; the implementation of an information system for the agricultural sector; elaboration of an MoA Strategic Development Plan in correspondence with the National Agriculture Sector Development Strategy; and the development of an Ajara Rural Development Strategy, with the inclusion of a bottom-up approach, and the intention that this would lead to a more effective policy-making process. Two projects assisting capacity building of agriculture-related education and research institutions related to point 3.1.2 of the SADG, 2015-2020, which aims at improved quality of vocational educational training (VET), university education and research within the food and agricultural sector. Therefore, a thorough reconsideration of vocational training, education and research in Georgian agriculture should be undertaken and special curricula need to be developed to shape a system for retraining, both in theory and practice. Special incentives should be created to encourage young people’s interest towards particular specialisations where currently there is a shortage of technical skills, e.g. veterinary and plant protection. The ‘Capacity Building to Agriculture-related Education and Research Institutions’ project, ran from 1st October 2015 to the end September 2017 (the initial duration being extended by three months) and was implemented by the University of Limerick (Ireland), in conjunction with two Georgian organisations, the Rural and Agricultural Policy and Development Institute (RAPDI) and the Agricultural University of Georgia (AUG). The overall objective was to increase Georgia’s policymaking and implementation capacity in the rural and agricultural sector and the specific objectives were as follows: to strengthen the capacity of civil society to collaborate with the Government of Georgia to make informed policy decisions for the development of the agriculture sector and the rural economy; to strengthen the capacity of the AUG to address the current needs of agribusiness operators to improve competitiveness through tailor-made education and training curriculum development; to address the specific development issues of Georgia’s mountainous areas and trigger a process of inclusive stakeholders’ participation in Government policy for these areas; to raise awareness and knowledge of the sector operators in planned and implemented reforms, including regulatory changes as required by the AA and DCFTA agreements. The research papers and policy recommendations were reported to be well received by the government, donors, agriculture educational institutions and other stakeholders. However, there is no clear evidence yet that policy was directly influenced, although this takes time. RAPDI and AUG were strengthened thanks to the project and that contributed to the overall implementation capacity in the agricultural sector. The project also raised awareness about regulatory changes and requirements resulting from the DCFTA agreement among sector operators. The strengthened capacity of the AUG helped


agricultural education to become more attractive to students and the university managed to increase its position in the ranking of the MES. The AUG climbed in rankings from 37th place in 2011 to 2nd place at present although other factors, of course, such as modern equipment, improved teaching methods and skills of the academic staff, employability of students, etc. also influenced this positive development. The elective in Beekeeping also saw an increased number of students. At the start of the project, there were around 15-20 students who followed it while 65 students took it in the spring semester of the 2016-2017 academic year that coincided with the end of the project. The other project, ‘Empowering Modern Research Practices of the Regional Agriculture-Related Institutions’, ran from 1st October 2015 to the end of March 2017, and was implemented by the Georgian Institute of Public Affairs Foundation (GIPA), in cooperation with the Caucasus Environmental NGO Network Association (CENN) and the PMC Research Centre The overall objective was to increase the capacity of regional agriculture-related education and research institutions to meet the challenges within the agriculture, food processing, environment and rural development sectors according to international standards in response to the identified lack of research capacity existing and being utilised therein and the specific objectives were as follows: to raise the research capacities of the regional agriculture-related education and research institutions; to strengthen the regional agriculture-related education and research institutions in sustainable natural resource management and promote them as actors in agriculture and environment related issues in their region; to increase the demand for their research and educational services and possibilities for cooperation (the number of users of the agriculture and environment related competences of the regional agriculture-related education and research institutions).


1. INTRODUCTION

This final evaluation of the ENPARD I programme has been organised in various phases. The first phase comprised a desk phase where materials received from the European Delegation to Georgia (EUD) and various ENPARD partners (e.g. the FAO and the UNDP, plus other partners and NGOs) were initially reviewed. Some early comments on these were included in the Inception Report, which also included draft review questions, and which was completed prior to the commencement of the next phase, the field mission, and was subsequently approved by Ms. Cristina Casella, the Task Manager (TM) at the EUD. The field mission commenced on Monday 18th September 2017 and the final expert completed work on Friday 3rd November. The evaluation team, comprising Dr. John Channon (Team Leader and KE1), Dr. Martin Mautner Markhof (KE2) and Ms. Rubina Devrikyan (KE3) arrived in Tbilisi on 17th September and, on Monday 18th September, met with Ms. Cristina Casella, the TM, Mr. Alvaro Ortega Aparicio, the Programme Manager (PM) and Ms. Nunu Mosiashvili, at the EUD, for the kick-off meeting. Following the initial introductions, the TM and PM gave some background information on ENPARD I, on the Financing Agreement (FA) for ENPARD II, which was signed in May 2016, and the preparations which are currently underway for ENPARD III, the FA of which was signed at the end of the year. The Team Leader (TL) provided an update on the work plan over the following three weeks. It was agreed that the final member of the team, Ms. Boriana Marinova (KE4), who had fewer days allocated for her assignment and arrived on Sunday 1st October, would be briefed by the TL and would then meet with the TM at the EUD on Monday 2nd October, together with the TL. It was further agreed that the team would provide the TL with brief reports on the outcome of the assessments of their components to date, by the middle of the week commencing 2nd October, so that he was then able to prepare a draft Interim (Progress) Report for the TM and PM, prior to a meeting with them in the EUD on Friday 6th October. It was the purpose of the Interim (Progress) Report to summarise the initial findings and identify any issues that may have arisen in the course of the mission for discussion and possible further review. The purpose of the meeting with the EUD was to present these initial findings and highlight any initial recommendations. During the first three weeks of the mission, discussions with partners and stakeholders took place, which enabled members of the evaluation team to arrange meetings outside of Tbilisi, in the regions. Meetings were held with relevant stakeholders and other partner organisations in Tbilisi to explain the objectives of the final evaluation mission, to arrange meetings in Tbilisi and to organise trips to the regions, including the following: the MoA (the First Deputy Minister, the Head of the International Relations department and the FAO Team Leader of the TA project to support capacity building within the ministry), the ACDA (the Director and the TA project Team Leader and members of his team), the Ministry of Finance (MoF), especially the Budget department, the FAO representative to Georgia, representatives of CARE, GIPA, ISET, Mercy Corps, Oxfam, People in Need (PIN), RAPDI, UNDP and the PFM Reform Project, to explain the objectives of the final evaluation mission and to organise trips to the regions. Trips during the first part of the field phase were made to Ajara region (Batumi, Kobuleti) and to Kakheti. The draft schedule of proposed visits for the other team members was also presented. Following discussions with the MoA and the MoF, it was proposed that the TL should also meet with a number of national and international organisations, including GEOSTAT, IFAD, USAID, USDA and the World Bank, and, where possible, with relevant Heads of Parliamentary Committees and a representative from the Ministry for European and Euro-Atlantic Integration. This was intended to provide a broad perspective on perceptions of the way in which the outcomes of ENPARD I align with the original objectives and on the impact and sustainability of the Programme. The Interim (Progress) Report was subsequently approved by the TM at the EUD. The mission of KE4 was shorter than for the other members and so the TL met with her at the end of her mission to review progress and then both the TL and KE4 met with the TM at the EUD for a de-briefing on Tuesday 17th October. On Wednesday 25th October, the TL was invited to a meeting at the EUD with the TM, the Head of Communications at the EUD and the ENPARD Communication Manager, for an initial discussion


of the stakeholders’ workshop, planned to be held in Tbilisi in December, where the main findings of the evaluation were to be presented together with lessons learnt and recommendations. Following the completion of the second part of the field mission of experts KE2 and KE3, they met with the TL to review progress prior to a final de-briefing at the EUD with the TM and, for part of the meeting, with the PM, on Friday 27th October. The TL then remained for one further week and met with the TM at the EUD for a final de-briefing on Friday 3rd November, and to follow up discussions on preparations for the stakeholders’ workshop. The latter workshop took place at EXPO Georgia, in Tbilisi, on 13th December 2017, under the heading, ‘Four Years Working Together: Improving Rural Lives’, and following introductory speeches by the Prime Minister, the Minister of Agriculture and the EU Ambassador, short presentations were given by a selection of ENPARD stakeholders, before the evaluation team, introduced by the Task Manager, briefly presented their findings and recommendations. A lively discussion then followed with questions being taken from participants, representing various ENPARD stakeholders. A draft Final Report was then prepared and submitted to the TM at the EUD. A shortened version highlighting the main findings of the evaluation, together with lessons learnt and recommendations, was also prepared and, following an initial review by the TM and PM, the draft report was circulated amongst the ENPARD I partners and stakeholders for comments. This was delayed due to the Christmas and New Year holiday period and to enable all stakeholders to have sufficient time for scrutiny of the draft report and to provide detailed comments. The TM provided additional feedback to enable the TL, in cooperation with the team, to incorporate comments into the final version of the Final Report. As to the structure of the Final Report, an Executive Summary will be followed by the Introduction (1), the main and specific objectives of the evaluation (2), the key questions guiding the evaluation as per the ToR (3) and the context to the Budget Support component (4). Each of the components will then be reviewed in turn: Budget Support (5); Complementary Support - Technical Assistance (6): to the MoA (Tbilisi); to ACDA; Complementary Support - Grants (7): projects implemented under Small Farmers Cooperation measures (CARE, Oxfam, Mercy Corps, PIN); projects implemented under the Pilot Rural Development Measures (CARE, Mercy Corps, PIN); the project in the Autonomous Republic of Ajara, implemented by UNDP, to support agricultural development in Ajara, which included three components: services to small farmers (related to Agro-Service Centres), farmers cooperatives and support to institutional development of the MoA Ajara; and projects assisting capacity building of agriculture-related education and research institutions (GIPA, RAPDI, the Agricultural University of Georgia (AUG) and the University of Limerick (UL). The components will be reviewed broadly following the methodology for Review questions, covering design and relevance; efficiency; effectiveness; impact; and sustainability (see Annex 1). A brief section will then provide an overview of the impact of the ENPARD I Programme on the agricultural sector (8) before the report is completed with some concluding remarks and a list of lessons learnt and recommendations covering the entire programme (9). Both a bibliography of all the materials used for the evaluation and in the preparation of this report and a list of all individuals and organisations met, appear at Annex 2 and Annex 3, respectively.

2. BACKGROUND AND CONTEXT: GENERAL OVERVIEW OF THE ENP ARD 1 PROGRAMME

The aim of the ENPARD I programme is to increase food production and reduce rural poverty in Georgia. ENPARD supports the implementation of the Government’s key sector strategy – the ‘Strategy for the Agricultural Development of Georgia (SADG), 2015-2020’. EU assistance through ENPARD reflects the high priority given to agriculture and rural development as one of the three strategic areas of cooperation within the SSF for EU Support to Georgia (2014-17). The programme is complementary to various other EU funded actions ongoing in the fields of food safety, regional development and vocational education.

Results foreseen from ENPARD I:


• Strengthened cooperation amongst small farmers to increase production and achieve economies of scale by establishing business-oriented cooperation forms, such as small farmers’ cooperatives

• Improved access to capacity building by small farmers via the organisation of an agricultural extension system based on district level consultation & information centres

• Improved efficiency of institutions involved in agriculture, including capacity building to the Ministry of Agriculture (MoA) and the Cooperative Development Agency (ACDA) and the Ministry of Agriculture of the Autonomous Republic of Ajara

• Regulated and developed geographical indications • Improved employment and living conditions

Oversight of the programme is entrusted to an ENPARD Steering Committee (the responsibilities, functions, composition and operation is formalised through a ministerial decree), which meets at least three times a year to assess progress in the implementation of the programme. An ENPARD Stakeholders Committee, which was established by the MoA through a ministerial decree, operates as an advisory body. 3. OBJECTIVES

The main and specific objectives of the Final Evaluation

3.1. The global objective

is to carry out an independent and comprehensive final evaluation of the ENPARD 1 Georgia programme, implemented throughout the period 2013-2017

3.2. The specific objectives

of the evaluation are:

� to analyse the relevance, efficiency, effectiveness, impact and sustainability of the programme

� to assess whether the programme’s expected outputs (as listed in the Logframe) have been achieved in full (effectiveness) and of this was done in an efficient manner (efficiency)

� to assess the extent to which the programme has contributed to the achievement of its stated specific and overall objectives (outcome and impact) and whether the results of the programme (at all levels) are likely to be sustainable (sustainability)

� to draw conclusions on whether the programme provided the best avenue to address actual needs and priorities in the sector (relevance) and provide concrete recommendations for future initiatives

4. KEY QUESTIONS GUIDING THE EVALUATION

The following questions from the ToR guide the evaluation team and form the basis for the more detailed framework of Review Questions (RQs), Judgement Criteria (JC) and Indicators that has been developed for the overall Programme and its individual components, to enable consistency through the evaluation process. Indicators for cross cutting issues, such as environment and natural resource management, gender and ethnicity, will also be considered. (These RQs, JC and Indicators are available at Annex 2.) Relevance & design How relevant to meet needs of Georgian agricultural sector? Did various components successfully complement one another? Was programme complementary to other interventions (by EU, other donors)? Efficiency Correlation between resources used and results achieved?


Were resources used efficiently? Effectiveness Have desired results been achieved? What is quality of results? Impact Has programme contributed to stated overall objective? Sustainability Are results likely to be sustainable in short, medium and long run? 5. OVERVIEW OF RATIONALE AND LOGIC OF THE COMBINATION OF AID

MODALITIES USED IN ENPARD I

Relevance & design of the programme (and timeliness and combination of aid modalities) How relevant to meet needs of Georgian agricultural sector? Did various aid modalities and components successfully complement one another? Was the Programme complementary to other interventions (by EU, other donors)? With the positive and stable macro-economic environment that prevailed (supported by an IMF programme) and the success of the Public Financial Management (PFM) Reform Programme, it was timely for a new EU Budget Support programme to be considered within Georgia.1 which had been supported through a previous EU Budget Support programme. Important PFM Reforms were implemented in Georgia, especially in budgeting, through the introduction of strategic budgeting (policy-based budgeting), medium term budgeting and programme budgeting – as well as improved budget oversight and transparency – which provided the appropriate conditions, i.e. sound foundations, for a new Budget Support programme. The first such EU Budget Support programme, the Sector Budget Support Programme (SBSP), had commenced in 2007.2 After 2003, agriculture was seen as low priority and priority was given to other sectors, linked to the then government’s strategy of growth and privatisation. The agricultural sown area fell between 2002-2010 while, between the years 2005-10, the Ministry of Agriculture (MoA) faced a staff reduction of 70%. From 2010-11, however, more attention was devoted to agriculture (with an increase in the sector’s share of the state budget) and then, following the election of a new government, from 1st October 2012, following Parliamentary elections (and with ENPARD I being announced on 28th August 2012), agriculture was given a higher priority and the share of the total budget allocated to agriculture continued to increase – though to support implementation of the new Agricultural Strategy, rather than for general expenses. However, the share of the state budget received by the sector was still not comparable to the contribution of the sector to the economy (e.g. 8-9% of GDP).3 It was also logical to look to agriculture as the sector to be supported under the SBSP (rationale for intervention) since the new government showed political will and a commitment to supporting the sector, and prioritising it, after years of ignoring it. In February 2012, the Government finalised its agricultural sector strategy – the ‘Strategy for Agricultural Development in Georgia (SADG), 2012-2022’. The priorities within ENPARD 1 could thus be aligned to the 7 priorities within the agricultural sector strategy with an SBSP focus on the sector and specific conditions linked to strengthened cooperation amongst small farmers, capacity building for small farmers and capacity building for institutions in agriculture.4 Thus, it was both timely and appropriate (hence, relevant) for the EU intervention to support the development of the agricultural sector

1 The PFM Reform programme had been supported under previous Budget Support programmes 2 Georgia, however, has considerable experience of EU budget support through an earlier targeted budget support programme – the Food Security

Programme - which operated within 6 FSU countries, including the three southern Caucasus ones, from the late 1990s. 3 Assessment of the agricultural and rural development sectors in the Eastern Partnership countries, Georgia, EU/FAO, July-Dec 2012, pp.21, 31 4 Within the follow on programme, ENPARD 2, there is a focus on animal health and food quality, as well as continued support to capacity building, as

well as an increased focus on and rural development.


in Georgia, particularly the stratum of middle-income farmers who need support and encouragement to develop more-business oriented market enterprises. Support to develop cooperatives in agriculture was one possible vehicle for encouraging increases in production and productivity, both for this particular stratum of farmers and for the sector overall and this was the preferred vehicle for the government and hence, the one supported by the EU. The Sector Budget Support Programme (SBSP) ensured that the agricultural sector – using the Ministry of Agriculture as a proxy for the sector - received a higher priority within the distribution of overall public expenditure than previously and thus an increased allocation within the state budget (this having declined to a particularly low level in earlier years). It was important, however, that not only more resources were allocated to the sector but that these resources could be absorbed and used efficiently and effectively by the ministry. Thus, it was decided that Budget Support should be complemented by additional EU interventions through the aid modality of complementary assistance, delivered through two components, one of which was technical assistance (TA). TA was provided to build up the capacity of the MoA and, in particular, strengthen the institution in specific key areas (e.g. policy, budget, monitoring, donor coordination) so that it was capable of absorbing the increase in funds received through the national budget and of being able to direct them to the agreed priority areas for implementing the agricultural strategy and fulfilling the Budget Support conditions. Improvements in donor coordination were also encouraged to improve the complementarity of action between donors and avoid duplication and overlap of support and thus maximise the overall impact of donor support to the sector. TA was additionally provided to the MoA in Adjara to support capacity building. Furthermore, one of the agreed priorities within both the SADG and ENPARD I was also to support the recently established Agricultural Cooperative Development Agency (ACDA), under the MoA which, according to public law, became a legal entity in accordance with the ‘Law on Agricultural Cooperatives’, approved by Parliament in July 2013. The FAO supported the development of an ACDA strategy in 2013 (‘Strategy for the Development of the Agricultural Cooperative Development Agency of Georgia, 2015-2020’), although at the time of writing, it is currently being updated, while the Action Plan requires further elaboration. The Agency’s responsibility is to implement various state measures in support of cooperative development and it has a mandate to promote the development of cooperatives, to provide consultancy services to the cooperatives, to co-ordinate state programmes in support of the cooperatives, to grant (and rescind) cooperative status and to monitor the performance of cooperatives (see ACDA, Annex II: ToR). Since from 2013 the ACDA would also receive budgetary resources through an MoA programme, it was important at the same time to provide technical assistance to the ACDA, to build up its capacity and, in particular, strengthen the institution in specific key areas (e.g. policy, budget, monitoring) so that it was capable of absorbing the budgetary funds received and of being able to direct them to the priority areas for implementing the ACDA strategy and fulfilling the Budget Support conditions, in other words, to make it ‘fit for purpose’. The other component of complementary assistance came in the form of grants awarded through a competitive procedure: for cooperative development; for the development of local action groups (LAGs); and to support agriculture-related education and research institutions in developing more relevant and up-to-date curricula and applied research. For cooperatives, grants were awarded to four NGO-led consortia, with each NGO supporting (i.e. with capacity building and complementary investment support through co-matching grants) the development of agricultural cooperatives and other business-oriented farmers groups in different districts of the country, as well as to the UNDP to assist with the development of cooperatives in Ajara. At the time of programme design, it was envisaged that at least 100 small farmers’ business-oriented cooperatives (plus those in Ajara) would be established. At the same time, the poorer rural groups, including the mass of subsistence farmers (the so-called ‘1 hectare farmers’), as well as rural communities in general, were also to be assisted through a rural development programme, which was to be promoted via the establishment of LAGs in pilot municipalities – based on the EU LEADER approach – to encourage local economic and social development initiatives (with a strong focus on ‘inclusion’, i.e. of increased participation and representation of women, youth and ethnic monitory groups), via a system of awarding grants to local projects. Yet other grants were provided to support three regional agriculture-related education and research institutions, to increase their research capacity in accordance with international standards (in response to the identified lack of such


capacity) so as to meet the challenges within the agriculture, food processing, environment and rural development sectors. The project was relevant to the SADG (measure 3.1.2 - ‘Improved quality of vocational educational training (VET), university education and research within the food and agricultural sector’): improved curricula and applied research (demonstration plots). The programme was well designed, both in terms of the needs of the country at the time and the manner in which the combination of aid modalities was employed, logically complementing one another (including combining both top-down and bottom-up initiatives) to achieve the desired objectives. Was the Programme complementary to other interventions (by EU, other donors)? The EU project on Public Finance reform help to moved forward public financial management reforms and their implementation, which facilitated the fulfilment of part of the BS general conditions and through programme budgeting and medium-term forecasting assisted the MoF in its budget allocations to the MoA. In addition, the USAID, IFAD and World Bank agricultural projects provided complementarity and synergy to ENPARD I.5 It can therefore be said that the ENPARD I Programme was also complementary to other interventions, both by the EU and other donors. 6. ENPARD 1: CONTEXT TO THE BUDGET SUPPORT COMPONENT

ENPARD 1 aims to support the implementation of the agriculture sector strategy and its overall objective is to increase food production in Georgia and reduce rural poverty. The original ENPARD 1 Financing Agreement (FA) signed in March 2013, provided € 40 million overall (consisting of Sector Budget Support of € 18 million and Complementary Support, covering both grants and TA, of € 22 million). ENPARD 1 was then extended by a year, with additional funding. The Addendum to the Financing Agreement signed in July 2014 added € 12 million to the original FA (€ 6.5 million of which was extra Budget Support and the rest – € 5.5M - Complementary Support), raising the total to € 52 million. The overall implementation period was set at 60 months (plus a 24-month closure period) by the first FA and this did not change in the Amended FA, aside from an increase in the Budget Support period from 36 to 48 months. The indicators remained as before (although new ones were added for the final year, 2016). Otherwise, the Technical and Administrative Provisions (TAPs) remained unchanged. Budget Support was disbursed under four individual tranches from 2013-2016 (a 5-year programme), subject to compliance with the General and Specific Conditions agreed in the Policy Reform Matrix. The General Conditions (the Budget Support eligibility criteria) were fully met (according to the 2006 and 2012 Budget Support Guidelines): Macroeconomic stability; Public Financial Management (PFM); Budget transparency; and Implementation of the Sector Strategy. The EUD carried out its own assessment of Macroeconomic Stability, as well as PFM and budget transparency and has examined the implementation of the sector strategy. There has been progress with implementing the Agricultural Sector Strategy (including a detailed Action Plan), which was approved in May 2015, and ENPARD is based on the updated Strategy. The Minutes of the Steering Committee of the Ministry of Agriculture (MoA), together with discussions with the First Deputy Minister of Agriculture, with responsibility for overseeing policy, and the heads of the relevant ministry departments, make it clear that the MoA is committed to realising its objectives with regards to implementation of the Strategy. The 2015 and 2016 Annual Reports of the MoA also demonstrate the increasing fiscal commitment from the Government toward the sector. As noted in the previous independent review for release of the 4th tranche, the Strategy is highly pertinent to the needs of the country and the challenges it faces, i.e. higher poverty rates in rural areas, small farm size, falling agricultural production, dependence on foreign imports and low levels of processing and added value. This also demonstrates the

5 See Annex 7 for the matrix of donor programmes in the agricultural sector. See also ‘Assessment of the agricultural and rural development sectors in

the Eastern Partnership countries’, Georgia, EU/FAO, July-Dec 2012, p.33 for synergy with other donor projects


coherence of ENPARD with the Sector Strategy. Excellent cooperation has been fostered with donors, such as the EU, the United Nations Food and Agricultural Organisation (FAO), the United States Agency for International Development (USAID) and the International Fund for Agricultural Development (IFAD). A Donor Coordination Unit has been established with the purpose of ensuring that aid is demand-driven and aligned with the SADG, thereby helping to reduce the risk that ad hoc projects proposed by different donors are uncoordinated and lack beneficiary ownership. At the present time, however, much of the workload involved in coordination falls to FAO and it is important that the ministry gives priority to assuming this responsibility itself.

The specific conditions related to variable tranches subject to progress in the 3 results areas (the 3 pillars of ENPARD I) as defined below:

- Strengthened cooperation amongst small farmers to increase production and reach economies of scale by establishing business-oriented cooperation forms, such as small farmers cooperatives

- Improved access to capacity building by small farmers via the organisation of an agricultural extension system based on district level consultation and information centres (ICCs)

- Improved efficiency of institutions involved in agriculture, including capacity building/support to the MoA, the ACDA and the MoA (Ajara).

The four independent review missions verified compliance with relevant Policy Reform Matrix conditions. The EU then made its own assessment based on the self-assessment report from the MoA, the results of the independent review missions and its own observations. The EU’s overall positive assessment then enabled the release of each tranche of funding.

Since one of the purposes of budget support is to encourage policy dialogue with the partner country and act as a means of leveraging change, this will be considered in relation to TA to the MoA and the ACDA.6

6.1. General conditions: the macro-economic framework

The release of the fixed tranches under the ENPARD 1 Programme required compliance with conditions related to: the macro-economic framework, PFM and sector policy:

• satisfactory progress in maintaining stability-orientated macroeconomic policy, as evidenced inter alia by continued implementation of a macroeconomic programme supported by the International Monetary Fund (IMF);

• satisfactory progress in the implementation of its programme to improve and reform public financial management (PFM) as evidenced inter alia by public expenditure and financial accountability (PEFA) assessments or other dedicated reviews carried out by the EU, the World Bank or the IMF;

• satisfactory progress in the implementation of the partner country sector policy and strategy, as evidenced inter alia by: o “satisfactory implementation” (for the 4th tranche) of the Agricultural Sector Action Plan, to be

aligned with the adopted Sector Strategy and to include specific objectives and results, measurable indicators and budget plans for the different activities

o The meeting of the ENPARD Steering Committee, at least three times a year (for the 4th tranche), composed of representatives of the EUD and MoA, and of the ENPARD Stakeholders’ Committee, composed of all entities relevant to the implementation of ENPARD Georgia (including the MoA, the EUD, FAO, the Ajara MoA and UNDP grantees of the small farmers’ cooperation component).

There was satisfactory progress in maintaining stability-oriented macro-economic policy according to reports from the IMF, the World Bank and the EC (including the IMF reviews and reports under the Stand-by arrangement). Satisfactory progress occurred in the implementation of PFM, verified by the Policy Reform Matrix of the Public Finance policy reforms support programme to the Republic of Georgia. IFI assessments of Georgia’s macroeconomic and fiscal position have been positive about the appropriateness of the responses of the Georgian authorities in the face of difficult external circumstances. Georgia’s budget policies

6 For budget support and policy dialogue see https://ec.europa.eu/methodology-budget-support-guidelines-201209-en-2pdf


demonstrate an on-going commitment to macro-economic stability, stabilisation of the economy, promotion of sustainable economic growth, single-digit inflation, a reduction in unemployment and improvement of the investment environment. Its commitment to European and Euro-Atlantic integration and signature of the Association Agreement and the Deep and Comprehensive Free Trade Agreement (DCFTA) provide opportunities for considerable economic benefits.

6.2. General conditions: public financial management (including accountability and transparency)

While the analysis carried out by the EUD indicates satisfactory progress with PFM reform and implementation, this can be confirmed by the recent report on PFM reform in Georgia, with introductions by the First Vice-Prime Minister, the Minister of Finance and the Ambassador of the EU reviewing developments over the past decade since the first PEFA in 2007 (published in 2008) to the second PEFA in 2012 (published 2013), which showed significant progress, through the ‘PFM Reform Policy Vision, 2009-13’ to the current ‘PFM Reform Strategy, 2014-17’. The EU has continued to provide assistance to PFM, most recently through its Budget Support programme, ‘Public Finance Policy Reform Programme, January 2015 – September 2017’. A further PEFA has been undertaken (2017), through an internal assessment although, unfortunately, this was not available for review since it remains ‘unofficial’.

A number of positive developments should be noted in respect of these PFM reforms: substantial progress can be noted in all relevant areas of PFM, including important initiatives in the following: budget preparation - linked to strategic (policy-based) budgeting, programme budgeting and medium term financial planning, budget comprehensiveness and transparency; internal and external monitoring and auditing - accounting and reporting, external scrutiny and audit, public internal financial control; procurement; and the fight against corruption. Many of these initiatives have been undertaken with the support of the EU via the provision of PFM sector support (in previous and current Budget Support programmes), especially the recent PFM Reform Support Programme, 2015-17, and the complementary TA. Importantly, where challenges have been identified, measures or actions are in place (or are under discussion) to address them. Nevertheless, certain areas of PFM have been noted as requiring particular strengthening: the Agency for Monitoring Political Party Financing continues to function under the State Audit Office (SAO) with a highly political mandate and absorbing considerable resources, although discussions are under way between the Parliament and the SAO about moving this monitoring to another agency; public debt increased substantially in 2015 and this led the MoF to develop a draft debt management strategy with IFI support, in an attempt to protect the country against its vulnerability to high total external debt. Results of the assessment of indicators relating to these areas under the recent unofficial PEFA are unknown, as noted above. More recently, international assessments of the accountability and transparency of Georgia’s PFM system place it among the top tier of countries internationally. Since 2005, the Government of Georgia (GoG) has regularly published its annual State Budget laws and quarterly/annual budget execution reports on the MoF website (www.mof.ge). The published material contains not only general budgetary data but also detailed information on revenue sources and budget appropriations by spending agencies. The annual Budget Law also contains information on state transfers allocated to local self-governments, as well as (in the case of the 2016 Budget) a Fiscal Risk and Debt Sustainability Analysis. From 2015, the budget information was substantially improved following the integration of self-governments, legal entities of public law and non-business and non-commercial Legal Entities into the Treasury Single Account. By the end of 2015, the MoF had produced and made publicly available a ‘Citizen’s Guide to the 2016 State Budget’, supported by EU Budget Support under the current PFM Sector Support programme. The 2017 ‘Citizen’s Guide to the State Budget’ is available to download from the MoF website in English and Georgian. In 2015, the MoF also introduced a revised methodology for programme budgeting (Order No 265 of 14th August 2015) to improve the costing of programmes and advance a programme performance system. The programme budgeting approach was now to be integrated with the Basic Data & Directions (BDD) document and medium-term planning. The 2016 State Budget set the format for future budget presentations and was presented in accordance with the revised methodology and contained programme budgets for all line


Ministries. The GoG also prepares a Medium-Term Expenditure Framework (MTEF) that contains multi-annual fiscal targets and expenditure ceilings for the next four years. The MTEF and the BDD documents are also available to the public through the Ministry of Finance website. The transparency requirement has clearly been met, as the Executive’s budget proposal and the enacted budget are published on 1 October of each year on the website www.mof.ge. To summarise, the overall direction of change in transparency and budget oversight from2015 is overwhelmingly positive. As noted, recent international assessments of the accountability and transparency of Georgia’s PFM system place it among the top tier of countries internationally. In addition, with EU budget and TA support, measures are being planned and implemented to address areas of identified weakness in the legislative oversight of the budget. It was therefore assessed that the eligibility criterion for on-going and satisfactory progress in transparency and budget oversight had been met. The review team for the tranches found that the General Conditions had been fully met. Following its own assessment of macroeconomic stability, PFM, budget transparency and oversight and the implementation of the sector strategy, the EUD agreed that the Budget Support eligibility criteria were met, according to the 2006 and 2012 Budget Support Guidelines.

The specific conditions related to variable tranches subject to progress in the three results areas (the three pillars of ENPARD I) as defined below:

- Strengthened cooperation amongst small farmers to increase production and reach economies of scale by establishing business-oriented cooperation forms, such as small farmers cooperatives

- Improved access to capacity building by small farmers via the organisation of an agricultural extension system based on district level consultation and information centres (CICs)

- Improved efficiency of institutions involved in agriculture, including capacity building/support to the MoA, ACDA and the MoA (Ajara)

6.3. Specific conditions for tranches 2, 3, 4

Tranche 2 1.Strengthened farmers cooperation 1.1. Legislation to promote a business-oriented small farmers group which is approximated with international and European criteria and standards and which removes disincentives and establish incentives is adopted 1.2. A 30% increase in percentage of small farms in targeted areas who are aware about business-oriented cooperation 2.Capacity building for small farmers 2.1 At least three district level MoA centres to provide consultation and advice to small farmers are officially established and staffed 3.Capacity building of institutions involved in agriculture 3.1 Policy unit established in the MoA and individual responsibilities in the unit defined and staff recruited and working according to its mandate 3.2 HR appraisal, training and development programme approved and funds for its implementation allocated Tranche 3 1.Strengthened farmers cooperation At least 50 agricultural cooperatives officially registered 2.Capacity building for small farmers At least 30 district level MoA centres already providing consultation and advice to small farmers, based on international standards and proven models as reflected, inter alia, in FAO’s extension manuals


3.Capacity building of institutions involved in agriculture Annual agricultural statistics reports produced according to international standards set in the system of integrated agricultural censuses and surveys Tranche 4 1.Strengthened farmers cooperation 1.4 The roles and procedures granting and terminating status of an agricultural cooperative finalised and operational 1.5 Registry of agricultural cooperatives granted status is listed on public website of the ACDA plus a related database containing activity details of registered coops updated on a regular basis 2.Capacity building for small farmers 2.3 Training programme for agricultural cooperatives managers provided to managers of already registered coops 2.4 State budget provisions for ACDA are included in successive state budget laws 2.5 Financing scheme to support agricultural cooperatives is adopted by the government 3.Capacity building of institutions involved in agriculture 3.4 Extension information packages disseminated through the ICCs 3.5 System and procedures for agricultural statistics collection at district level providing input into agricultural policy, development and monitoring 7. COMMENTS ON THE VARIOUS PROGRAMME COMPONENTS: BUDGE T

SUPPORT; COMPLEMENTARY SUPPORT (TECHNICAL ASSISTANC E; GRANTS)

7.1. Budget Support

How efficient was the flow of Budget Support funds? The total amount of Budget Support provided under ENPARD I was € 24.5 (comprising 47.1% of the total programme funding). External independent reviews of ENPARD 1 were carried out for each year (i.e. 2013, 2014, 2015 and 2016). The funds flowed efficiently (for the intended purposes) and in accordance with the FA schedule. Each tranche was disbursed on time and in the full amount, since the general conditions were met for the fixed tranche and the specific conditions fulfilled 100% for the variable instalments. This latter fact also meant that a portion of funds was not withheld. However, the specific conditions in this initial programme were not overly ambitious, a fact that might be considered appropriate when testing the mechanism for the flow of an increased amount of funds. The mechanism that is established ensured that there was a timely and efficient flow of funds from the EU to the NBG, to the Treasury in the MoF and then to the state budget. This was possible due to the positive macroeconomic environment and the advances made in PFM reforms, together with improvements in transparency (all important for good governance).7 The mechanism confirms that it is reliable for future funds to continue to flow under this financial aid modality. Indeed, the ENPARD II FA was signed in May 2016 and preparations are currently underway for the finalisation of the ENPARD III Budget Support Policy Matrix, in view of the intention to sign the FA before 31 December 2017. Both ENPARD II and ENPARD III include budget support components. The specific conditions, moreover, in these subsequent programmes, may well be expected to be more ambitious, considering that there has already been capacity building and institutional strengthening for the MoA and this continued within ENPARD II.

7 The 10 years of EU support to PFM reforms in Georgia (2007-2017) are well documented in ‘Public Finance Management Reforms in Georgia’,

Tbilisi, 2017, (in English and in Georgian), prepared under the EU supported TA project, ‘Supporting Public Finance Policy and Management Reforms in Georgia’, Louis Berger in association with PMCG, SAFEGE & BDO. A meeting with PMCG in Tbilisi provided further details in relation to programme budgeting and medium term forecasting.


How effectively were Budget Support funds used? The state budget then allocated funds to the agricultural sector. Within budget allocations to sectors, agriculture was given a higher priority than in previous years in terms of the share of the overall state budget (see Table 1 below). From a low point in 2010, when the share of the MoA budget was under 0.5% of total state expenditure, this share jumped to more than twice that level the following year and increased again in 2012, to just under 3.0%, where it remained until 2015 and 2016. It then rose again, to 3.2%, before falling back to 2.3% in the current year (2017) with 2.2% planned for 2018 (see Table 2 below). The reason for the decrease in the budget allocation to 2.3% in 2017 is that the MoF introduced an across-the-board cut for administration expenses for line ministries, in line with a policy decision to curtail expenditures. This clearly has implications for ENPARD II where there is still a significant BS component. However, for the years of ENPARD 1, the agricultural sector – where the MoA acts as a proxy for the sector - was clearly awarded a higher priority than in earlier years and resources were efficiently allocated from the state budget to the sector, as envisaged. Table 1. Ministry of Agriculture budget, 2010 – 2018: actual budget, MTEF forecasts, and as a share of total state expenditure (thousand GEL) 2009 2010 2011 2012 2013 2014 2015 2016 2017

(plan)

2018

(draft)

1

.

75,160.0 30,640.5 85,112.4 228,360.

1

227,429.

7

265,756.

0

314,332.

1

330,255.5 257,995.0 266,000.0

2

.

6,649,80

0.0

6,972,34

3.8

7,459,27

9.5

7,806,80

1.8

8,104,21

7.6

9,009,81

2.2

9,703,12

7.1

10,292,23

4.1

11,415,47

5.0

12,364,50

0.0

3

.

1.1% 0.4% 1.1% 2.9% 2.8% 2.9% 3.2% 3.2% 2.3% 2.2%

(source: Ministry of Finance, Budget department, Tbilisi, October 2017)

Notes:

1. Ministry of Agriculture actual budget, planned budget and forecast

2. Total state expenditure

3. MoA actual budget as % of total state expenditure

4. 2009 total expenditure figure obtained from total public expenditure by function (MoF)

5. The years covered by ENPARD 1 appear in bold

In terms of regional comparison within the southern Caucasus, the share of agriculture in Azerbaijan public expenditure, for example, shows an overall rising trend (both in nominal and real terms), both in terms of the share of total public expenditure and as a share of GDP, with 2.0% and 0.6% respectively in 2011, rising to 2.6% and 0.7%, respectively, in 2015. For comparison with Georgia, the 2016 agriculture sector share of total public expenditure in 2016 was expected to be 3.7%.8 Distribution of the total MoA budget between its seven programmes was as follows. Table 2. Ministry of Agriculture, allocations from the state budget, 2013-2017 (thousand GEL) Actual Plan

Year 2013 2014 2015 2016 2017

8 See N Hajizada, T. Alizada, R Jamalov, Azerbaijan State Budget in 2016: Perspectives and Challenges, Centre for Economic & Social Development

(CSED), Baku, 23 September 2015, pp.23-24. Between 2011-13, the average annual rate of growth of spending in the sector was 25% although this slowed to 7.3% between 2014 and 2016.


Ministry

code

3700 227,429.7 265,756.0 314,332.1 330,255.5 257,995.0

Programme

Code Name

37 01 Agriculture development Programme 11,397.3 10,699.9 12,584.6 14,201.2 11,610.0

37 02 Food safety, plant protection and epizootic

measures

16,987.4 24,943.3 30,053.5 26,730.4 20,175.0

37 03 Development of viticulture 35,537.4 39,711.6 44,205.5 43,582.2 43,070.0

37 04 Scientific research in agriculture sector 0.0 3,105.0 8,279.9 9,340.5 4,970.0

37 05 Preferential (cheap) agro-credit 98,370.8 126,800.0 146,314.5 165,059.9 95,190.0

37 06 Support of agricultural cooperatives 227.9 801.5 2,570.1 2,500.1 4,870.0

37 07 Amelioration 64,908.7 59,395.0 70,324.0 68,841.1 781,110.0

(source: Ministry of Finance, Budget department, Tbilisi, October 2017) The final review for the 4th tranche provided figures (from the MoF) to show how the seven Strategic Priorities (within the SADG) were funded between the years 2013-2015, with an upward trend in expenditure. The development of value chains was the largest component in terms of expenditure, while the three most relevant areas of the Strategy which correspond to ENPARD support for the 4th variable tranche fell under Priorities 1 (Enhanced Competitiveness of Rural Entrepreneurs) and 2 (Institutional Development). These three areas are: cooperatives (measure 3.1.6: Supporting the Development of Cooperation in Agriculture); extension (measure 3.1.1: Improved Farmer Knowledge and Information and the delivery of Efficient Agricultural Extension Support); and statistics (measure 3.2.1: Supporting Efficient Market Information Collection, Processing and Dissemination among the different Stakeholders Actively Engaged in the Agricultural Sector; and Measure 3.2.3: Creating a Farm Registry). While the cited table claims to show the budget in GEL for the Agricultural Strategy by priority, it does not relate this to the MoA budget, where the seven programmes within the MoA funded by the state budget are directly linked to the implementation of the sector strategy (SADG), as shown below. Table 3. Ministry of Agriculture: total funding, in cluding state budget, forecast, 2018-2021 Programmes 2018 2019 2020 2021

Code Name total budget total budget total Budget total budget

345,645 209,935 319,365 213,145 310,190 210,890 226,350 210,890

37.01 Development of

agricultural

programmes

11,280 11,280 11,280 11,280 11,280 11,280 11,280 11,280

37.02 Food security, Plant

protection & Epizootic

measures

32,060 25,760 32,340 26,040 32,660 26,060 32,960 26,360

37.03 Development of

viticulture

25,710 25,110 24,710 24,110 24,770 24,070 24,780 24,080

37.04 Scientific research

centre in agriculture

6,000 6,000 7,000 7,000 6,150 6,150 6,150 6,150

37.05 United agricultural

project

158,400 72,400 154,500 69,500 154,000 69,000 68,500 68,500

37.06 Activities supporting

agricultural

cooperatives

9,450 9,450 8,700 8,700 7,400 7,400 6,400 6,400


37.07 Modernisation of

amelioration systems

102,745 59,935 80,835 66,515 73,930 66,930 76,280 69,280

(source: Ministry of Finance, Budget department, Tbilisi, October 2017)

Note: see also the agricultural sector share of total state expenditure between 2018-2021 ACDA Similarly, while the independent review mission to assess the 4th tranche disbursement confirmed that a budget allocation for ACDA was included in the Budget Laws of 2014, 2015, 2016 and 2017 (condition 2.4), they noted that they could not review the actual ACDA budget in the Basic Data & Directions (BDD) document since this was only available in Georgian. However, for the present evaluation we have been able to analyse the MoA budgets before and during ENPARD 1, as well as the medium-term forecasts prepared for 2018-21 (see Table 2 above). Within the increased share of total state budget resources being allocated to the agricultural sector, resources were also used efficiently (i.e. allocative efficiency), in the sense that they were allocated to the newly established ACDA - as one of the priority programmes within the MoA (see Tables 3 and 4). ACDA received budgetary funding throughout ENPARD I and budget forecasts for the next four years (i.e. 2018-21) show that such allocations are planned to continue. This was in line with the priority designated for agricultural cooperatives within both the SADG and ENPARD I. While it is clear that state budgetary funds were transferred to the MoA and to the ACDA during the ENPARD I period and that funds have been allocated for the next four years under the medium-term forecast - demonstrating allocative efficiency - this tells us nothing about how effectively both the MoA and ACDA are able to manage those funds, often referred to as the operational efficiency.


Table 4. Actual amount received by ACDA from MoA (GEL M) and ACDA share of total MoA budget (%), 2013-2017, and of that forecast for 2018-2021 Year

2013 2014 2015 2016 2017 2018 2019 2020 2021

Alloc

from

MoA

(‘000

GEL)

227.9

801.5

2,570.1

2,500.1

4,870.0

7,750.0*

8,700.0

7,400.0

6,400.0

Share of

total

MoA

budget

(%)

01.%

0.3%

0.8%

0.8%

1.9%

2.9%

4.1%

3.5%

3.0%

(Calculated on the basis of date provided by the Budget department, Ministry of Finance, Tbilisi, October 2017)

*ACDA applied for GEL 9,450.0M but the bulk of the reduction in the amount received was due to the fact that under sub-programme

37.06.04, ACDA in the previous year did not spend all of its allocation, and so the amount allocated for this sub-programme was

reduced from GEL 7.5M to GEL 5.0M. More details on this can be found under ACDA section 6.2.2 below)

The government also adopted a financing scheme making funds available through the budget, to support agricultural cooperatives (see MoA sub-programme, 37.6.04, ‘Development of agricultural cooperatives infrastructure’), which was a BS specific condition, 2.5. However, funds from this sub-programme were left unused in 2017 due to problems with procurement, where cooperatives applied for grants for small agricultural equipment under a co-financing scheme (e.g. the government provides 70% and the applicant contributes 30%). According to the ACDA Director, 14 cooperatives applied for grants but two of them failed to meet the criteria and so funds were left unused. Building capacity of ACDA, especially strengthening these areas, should enable improvements in the management of funds allocated to each sub-programme and thus enhance the effectiveness in the use of public funds.

Some of the other MoA sub-programmes, such as those through the APM Agency (APMA) potentially seem appropriate for cooperatives but, in practice, they are directed at much larger commercially-oriented farming businesses. Only one sub-programme concerning agro-insurance appears to have had any impact on cooperatives (and even then, relatively small) and it has been difficult to obtain hard data to show the uptake. What was the impact of the use of these funds: what was the outcome of these increased inputs (financial resources and TA) into the MoA and ACDA? Since it is the recipient of budgetary funds, it would be prudent in the future to assist ACDA by undertaking a functional review to assess its current capacity to use those funds efficiently and effectively so as to achieve the stated aims and objectives in the ACDA strategy and within the terms by which it was established. It has an enthusiastic, committed and hard-working chairman, although more delegation of day-to-day tasks is recommended so that the focus is more on developing an institution that is ‘fit for purpose’. It will be important to assess the appropriate areas that require strengthening (although policy, budgeting and monitoring are clearly relevant, as is procurement) to enable it to better manage its expenditure. At the moment, the outcomes can best be described as ‘mixed’: a considerable amount of training has been carried out with the excellent support of the TA team but less attention was given to supporting the development of ACDA as an institution. That, of course, requires the development of an open policy dialogue so as to try and make better use of the TA in this respect.


7.2. Complementary Assistance: Technical Assistance

7.2.1 Technical Assistance to the MoA

An increase in public funding to agriculture needs to be accompanied by improvements in the efficient and effective management of those funds. Thus, the quality of spending is as important as the additional funding, although the former is notoriously difficult to assess. Any assessment of whether the MoA, as a result of ENPARD I, was a strengthened institution, capable of absorbing additional resources and using them efficiently and effectively (particularly, to encourage improved agricultural production and productivity), requires an evaluation of the TA that the MoA received for capacity building support throughout ENPARD I. (This TA support for capacity building has continued into ENPARD II). FAO Technical Assistance to the MoA Objective The objective of the TA was to improve the general efficiency of the MoA. Design Through its office within the MoA, FAO has been providing support through assistance with the preparation of the ‘SAGD’ and with its implementation and, in particular, with the elements directly targeted by the BS component. Thus, the TA was well designed since it was complementary and extremely relevant to the Budget Support programme, since it provided assistance to build the appropriate capacity to enable the ministry to improve its operational efficiency, i.e. its management of the increased public funds that had now been allocated. The FAO project supported the following:9

- approval of the SADG, 2015-20, and the work plan (latter revised every semester) - creation of ACDA - MoA to be able to fulfil conditions in the Policy reform matrix - structural changes within the MoA, e.g. creation of a policy unit and policy group; training; improved

staffing with statistical capabilities; ROM to track implementation of the strategy and the action plan – led by the Policy department

- led the process of coordinating ENPARD stakeholders (through organising Steering and Stakeholder Committee meetings)

- training based on identified staff needs - facilitated policy dialogue between the MoA and the EUD

How efficiently and effectively were resources used? The key results and outcomes are assessed by the FAO, according to the expected outputs, and are noted below, following the format of the Final Report of the FAO.10 Output 1: to improve the efficiency of the MoA: to enable it to implement the SADG 1.1 Medium term & annual programmes and budgets are in in place

Results: Evidence based policy making was supported by the TA. The TA assisted with the approval of the SADG, 2015-20, and its Action Plan and the Rural Development Strategy for Georgia (RDSG), 2017-20, and its Action Plan for 2017, with preparatory work on the extension strategy, recommended steps for the introduction of a market information system, a data warehouse, an M&E system (for results-oriented monitoring) and economic modelling tools to improve short & medium term planning.

9 ENPARD, TA – Capacity Development of the Ministry of Agriculture, Georgia, Project Findings and Recommendations, FAO, Rome, 2017 10 ENPARD, TA – Capacity Development of the Ministry of Agriculture, Georgia, Project Findings and Recommendations, FAO, Rome, 2017


However, there was no assistance provided for budgeting, as noted in the Final Report: 11 “The project did not engage in elaboration of MoA budgets in a formal sense, although advice was provided with regard to the sufficiency, efficiency and desirability of the allocation of financial resources to certain policy directions. Given that all the policy recommendations formally presented by the project contained indicative medium-term budgets, FAO is constantly engaged in the MoA budgeting process. This notwithstanding, it is not formally a part of the budget preparation process.” Comment: Support to budgeting should be an important part of future assistance since only through budgets can we translate policy into reality. 1.2 Effective system in place for monitoring and evaluating the Strategy of the MoA (output indicators for APMA, ACDA and NFA and an outcome indicator selection process) Results: An M&E (Results-oriented Monitoring or ROM) system was first introduced to the MoA by the project, late in 2015, the first line ministry in Georgia to receive such a system. This was considered important since the MoA was the only ministry in the country to operate on the basis of a long-term strategy (the SADG), agreed between the GoG and donors, and progress in achieving the strategic objectives requires regular monitoring (see FAO report). Indicators are incorporated into the software provided by the FAO and the M&E expert (FAO) is currently working closely with relevant members of staff in the MoA, explaining and illustrating the operation of the M&E system. While monitoring of the SAGD was undertaken twice a year by FAO, the M&E system that is being introduced into the MoA will need to be reviewed to assess its operational effectiveness for continuing to monitor and evaluate the strategy. Since the beginning of 2017, FAO has provided support to monitoring through an excellent M&E expert, though the M&E system has still to be integrated and institutionalised within the MoA. The system needs to become fully accepted and integrated and institutionalised, as part of normal day-to-day working practices. It is important that relevant staff and departments understand that it is a tool that facilitates their work and not an additional task that serves only as a hindrance. It will also be important to ensure that the M&E (ROM) system is linked as a management information system to the various agricultural agencies - APMA, ACDA, NFA (National Food Agency). 1.3 Policy unit established with individual responsibilities defined – build capacity and assist identification of priority policies Results: The FAO supported the establishment of a Policy unit (a second tranche condition) and also a Policy Group, which comprises around twenty-five individuals, mostly heads of departments and main specialists of the MoA, from several key departments of the MoA responsible for different policy directions (e.g. statistics & analysis, land & amelioration, extension policies, relations with international organisations and donors). The Policy Group played a key role in the elaboration of the current version of the SADG and its Action Plan, although a sound monitoring system within the MoA is required to ensure prioritisation of policy programmes and financial resources. 1.4 Development and implementation of a human resources appraisal, training & development programme

Under FAO guidance, a detailed training programme was undertaken to strengthen human resources (HR) within the context of the required institutional development. An HR review of the MoA structure and organigram was undertaken with support from the Minister of Agriculture in 2013, although another review commenced more recently and this is still in the process of being worked through.12 In accordance with the earlier review, some restructuring of the MoA took place in line with TA support for capacity building and

11 ENPARD, TA – Capacity Development of the Ministry of Agriculture, Georgia, Project Findings and Recommendations, FAO, Rome, 2017, p.15 12 See Annex 8 for MoA organigram


institutional strengthening. The reviews have examined the structure of the MoA and focused on developing a strong policy unit (and the development of a Policy Group), as noted above, with strengthened analytical capacity – for implementing the SADG and for undertaking analytical work on sub-sector studies. TA was also given with analytical studies for sub-sectors (particularly with respect to methodology), where the emphasis was on the value chain approach. The FAO project also advised on re-arranging the departmental charters, redefining ToRs for individual personnel and establishing performance criteria. It will be important in future work to review the most recent MoA organigram, to assess whether the staffing – number of staff and their qualifications – as well as individual responsibilities, are adequate for the allotted tasks. It will also be necessary to ensure that such changes are reflected in the budgets requested and to liaise with the MoF, in terms of justification and rationale for any additional staff costs that result from this. 1.5 Environment, natural resource management, disaster risk management, gender and minority issues, mainstreamed across all activities Results: The project supported the MoA so that policy documents produced by the ministry and the projects mainstreamed these cross-cutting issues. In respect of environment and natural resource management, the project supported the MoA to mainstream CSA (Climate SMART Agriculture) into ENPARD II. The project also made recommendations to mainstream gender and minority issues into the SADG and ACDA. Output 2: Effective implementation of EU agricultural & rural development support programmes in Georgia 2.1 Effective system in place for monitoring & evaluating MoA Strategy and progress in relation to EU funded SPSP See discussion on M&E above (Output 1, point 1.2). 2.2 Build up the capacities of the MoA regarding Rural Development The FAO initially (to May 2010) helped to build up MoA capacities in rural development and then responsibility for this passed to the UNDP (see FAO report). The project supported several drafts of the Rural Development Strategy including the final draft which led to the approval in December 2016, of both the RDSG, 2017-20, and the Action Plan for 2017. Output 3: To assist the MoA in implementing specific components of the SADG which are directly targeted by ENPARD 3.1 Strengthening Farmer Cooperation The project supported the baseline survey which served to provide information for the EU when designing a programme aimed at promoting cooperation and supported the newly established ACDA, including through the provision of training to ACDA staff.13 The FAO also assisted with preparing a Strategy for the Development of Agricultural Cooperation and an updated draft has recently been prepared. However, it should be noted that ACDA accepted few of the project recommendations. 3.2 Improved extension service provision Funds were also made available for extension packages to be channelled through the ICCs (condition 4.3:1 ‘Improved Farmer Knowledge and Information and the delivery of Efficient Agricultural Extension Support’)

13 The baseline survey was not contained within the documentation reviewed by the evaluation team.


and the efficiency and effectiveness of the ICCs in terms of the extension service is discussed below. FAO also supported extension services through the provision of assistance with the development of a draft Agricultural Extension Strategy, 2016-2018. The strategy has undergone a public consultation and is now in process of being finalised. Approval is expected before the end of 2017. This has been due largely to changes in key management, coinciding with preparation of the document as well as the ‘sensitivity of a decentralised body that was responsible for human resources’. 14 The most recent draft of the Strategy was presented on 7th November 2017, by the Deputy Minister of Agriculture, Mr. Revaz Asatiani. An extension strategy has been drafted, with support from FAO. The strategy has undergone a public consultation and is now in process of being finalised. Approval is expected before the end of 2017.

14 ENPARD, TA – Capacity Development of the Ministry of Agriculture, Georgia, Project Findings and Recommendations, FAO, Rome, 2017, p.22


3.3 Strengthening institutions for agricultural information The project supported the creation of a Market Information System (MIS), using an agreed methodology, which is used by the MoA field offices to collect information on agricultural products, which is then sent to the central ministry to improve evidence-based decision making. Thus, the systems and procedures for agricultural statistics collection at district level, which are important for providing an input into agricultural policy development and monitoring (specific condition, 3.5) also received assistance. The project also supported the Agricultural Census which was completed in the autumn, 2014, supporting GEOSTAT in developing the questionnaire, methodology and presentation of the results in the spring 2016. Hence, support was provided to strengthening the statistical base and creating a database from the 2014 census for a farm registry. Even though some difficulties remain, the concern noted in the Final Review for the release of the 4th tranche, that there was duplication in the collection and production of agricultural statistics between the MoA and GEOSTAT (condition 4.3.2), appears to have been addressed and there are now excellent links between the Statistics Department in the MoA (with former GEOSTAT staff) and GEOSTAT. 3.4 On demand consultancy facility to support the implementation of the strategy FAO TA is available to provide consultancy support on an ‘as and when’ required basis to the MoA in regard to the implementation of the SADG. Output 4. Improved overall donor coordination in relation to the development and implementation of agricultural and rural development programmes across Georgia. The FAO handed over responsibility for donor coordination to the MoA in March 2015, although the FAO continues to participate and co-chair, as and when required. It will be important for the TA to continue to encourage the MoA to assume the coordination role and help to build the necessary capacity so that the MoA has the expertise in order to fulfil the role. The TA, moreover, will still be available to support and advise. In practice, it would appear that the ENPARD Stakeholders Meeting acts a forum for such donor coordination, although the stimulus for such meetings seems to stem from the FAO. Overall the FAO has achieved a good working relationship with the staff within the MoA and undoubtedly, location of its office within the ministry is largely responsible for such successful cooperation. The project is well managed and since several agricultural projects funded by different donors work in such a close environment this ensures complementarity and good cooperation. However, while progress has been made with some of the outputs, the outcomes are mixed since resources are directed at some of the right places (e.g. ACDA, policy, monitoring, statistics, analytical work, extension and the ICCs) but a greater focus is required in future on others (e.g. budgeting). It is recognised by the FAO, however, that future TA will need to concentrate on this aspect of support. What is required from the MoA for the MTEF and Programme Budgeting? Three departments in particular - Policy, Budget and M&E - all need to work together to ensure that programmes proposed for budget funding (within the programme budget format) are only those that are aligned with priorities in the SADG (i.e. policy-based budgeting) and are properly costed (especially the balance between operational and other costs – recurrent and capital expenditures and, within recurrent, between operational and other costs). An M&E system is important to measure progress with achieving the objectives of each programme at regular intervals – quarterly, half yearly, annually – to assess whether the expected achievements (outputs, outcomes) are likely to be made within the stated timeframe, whether the proposed budget was sufficient (or whether increased efficiency has left resources unused and available for re-allocation if approved). This then allows for adjustments to be made at the end of each year within the medium-term budgeting framework.


A review of the MoA budget preparation and the submission to the MoF under the MTEF indicates a degree of strategic prioritisation (i.e. allocative efficiency), whereby the programmes of the MoA selected for budget funding are in line with the strategic policy priorities within the SADG (the key policy sector document) and also aligned to the ENPARD I priorities. Thus, in broad terms, policy-based budgeting occurs, although it is difficult to assess the degree to which the MoA scrutinises and prioritises activities against sector objectives. All line ministries, including the MoA, need to adhere to the timetable within the budget calendar (see Annex10) for submission of their proposed budgets (prepared by the Budget department using the programme budget format, although a more traditional version is also prepared, including a narrative justification for the programmes chosen and for the spending within them). The BDD sets out the broad guidelines for sector allocations and ceilings although, undoubtedly, a key influence on the manner of budget formulation in the sector - the programmes prioritised for funding and the budget allocations approved, between the years 2013-16 and for 2017-21 - is the Budget Support programme and the conditions that need to be fulfilled within its Policy Reform initiatives.15 Considering how understaffed it is for such an exercise, the Budget department (one Head plus one other person) does an excellent job and should be congratulated on the quality of its work, particularly in light of the f act that this is an area which has yet to receive TA support.

7.3. The various Programme components: Complementary Assistance - TA

7.3.1. Technical Assistance to capacity building for ACDA

The TA was implemented by Evoluxer and was designed to promote the development of cooperatives, provide consultancy services to them, coordinate state programmes to support cooperatives, grant cooperatives status and monitor their performance.16 The capacity building includes: establishment of an efficient registration system; establishment of a cooperatives training system; and development of a cooperative monitoring/auditing system.17 The Evoluxer project had a well-established office within ACDA and, as part of its capacity building exercise, has undertaken a huge volume of training which has already been detailed in other reports, although the impact of such training has still to be assessed.18

The purposes of the TA contract to support ACDA were: � To strengthen institutional capacity and skills of ACDA � To institutionalize continued training programme for registered cooperative managers and

management leaders � To strengthen the management capacity and install proper governance at registered cooperatives � To improve understanding among cooperative members of the meaning and purpose of cooperative

enterprises, and an increased sense of ownership of their cooperatives Thus, the focus of the TA was to support: (i) institutional strengthening of ACDA and its employee capacity and skill improvement to fulfil its mandate using trainings addressing the full range of cooperative enterprise relevant to subject matters and technical assistance service to develop policies, norms, and standards for cooperative development (ii) the newly registered agriculture cooperatives to develop effective and efficient management and proper governance systems through training and development programmes for managers and management leaders (iii) ETIs training of trainers (ToT) programme and institutionalization of training and development programmes

15 See Annex 11 for a brief explanation of the budgeting process in Georgia provided by the MoF 16 The project commenced in September 2015 and ran for 24months (with a brief extension) with a contract value of €2.190,000. See Annex 4 for the

Evoluxer Logframe 17 See Annex 9 for the ACDA organigram 18 For details of all the training undertaken with the assistance of the project see the various annexes on training in M Schuessel et. al., Final Report,

Capacity Building to the Agricultural Cooperative Development Agency (ACDA), ENPARD, Europe Aid/136454/DH/SER/GE, project implemented by Evoluxer/Sarga/Avensa, December 2017


(iv) cooperative members to understand their rights and duties and participate actively in organizational and business activities of their cooperatives by means of awareness raising and delivery of training and development programmes (v) GoG successfully to fulfil relevant budget support conditionalities

The main results expected to be achieved by the TA project were: � To strengthen the institutional capacity of ACDA and the competencies of its employees (as well as

the relevant employees of the Information and Consultation Centres of the Ministry of Agriculture) to fulfil ACDA's mandate effectively and efficiently

� To develop a well informed and knowledgeable cadre of trainers and training programmes at local education and training institutions (ETI) and individual expertise to provide continued training and development services to cooperative enterprise managers and management leaders

� To develop an adequately trained cadre of managers and management leaders to create value for members without compromising on the principles, values and ethics of cooperation

� To increase the participation of cooperative members in their cooperative organisational and business matters.

It was anticipated that at least 70% of the budget would be used to attain the last three results. ACDA and Budget Support special conditions Part of the 4th instalment of variable tranches to be disbursed in 2016, amounting to € 4 million, was conditional upon the fulfilment of specific conditions related to cooperative development, to be assisted by the TA, with verifiable indicators and the respective amounts of budgetary support (see section 6 above):

� The rules and procedures granting and terminating status of an agricultural cooperative finalised and operational (2.1)

� Registry of agricultural cooperatives granted status is listed on the public website of the ACDA, plus a related database containing the activity details of registered cooperatives, updated on a regular (2.2)

� A training programme for agriculture cooperatives managers is developed and managers of registered cooperatives are already participating on it (2.3)

� Budget provisions for ACDA are included in successive State Budget Laws (2.4)

� A financing scheme to support agricultural cooperatives is developed by the Government (2.4) In relation to 2.2, the 4th tranche review (June 2016) confirmed that ACDA had established a database of registered cooperatives, which satisfied the specific condition. This database includes profiles of registered cooperatives and is available on the Agency website.19 The registry at this time included approximately 1,600 cooperatives and the TA surveyed them to establish in which sectors they operate. ACDA also finalised a contract with an IT Company (IT-FORCE), to upgrade the cooperative registry on the website in order to identify cooperatives according to their profiles, activities and municipalities. This will allow cooperatives, farmers and businesses to access information more easily. With regard to 2.3, Training, the target groups for training, with the indicative targets in parentheses, were as follows: ACDA -approximately 25 staff; relevant staff of the Ministry of Agriculture Information and Consultation Centres (ICCs) – approximately 60 staff (at least one per centre); registered agricultural cooperative members – 2,500 cooperative members; Education and Training Institutions (ETIs) individual experts/trainers (at least 100 ETIs and/or individual experts/trainers)20

The indicators to be used for monitoring and evaluating the training included, but were not limited to, the following:

19 http://acda.gov.ge/index.php/eng/cooperative 20 Capacity Building to the Agricultural Cooperative and Development Agency (ACDA), ENPARD, Evoluxer/Sarga/Avensa, Final Report, December

2017, on training see specifically, annexes 15, 16, 19, 20, 28, 33; ACDA, Terms of Reference


• The training of all ACDA staff • Relevant staff (at least one per centre) of the ICC (approx. 60 staff) • The training of at least 2,500 cooperative members • The training of at least 50 ETIs and/or individual experts/trainers • The number of training programmes and materials for ACDA staff, registered cooperative managers,

management leaders, and members developed • The number of registered cooperatives adopt effective and efficient management practices and install

proper governance practice • The number of registered cooperative members actively participate in organisational and business

activities of their cooperatives • A number of well-informed and knowledgeable trainers established • ACDA strengthens institutional capacity and performs its duties efficiently and effectively with

reference to its mandate and internationally accepted norms • The fulfilment by ACDA of the conditions for disbursement of budget support, namely: - The rules and procedures granting and terminating status of an agricultural cooperative

finalised and operational - Registry of agricultural cooperatives granted status is listed on the public website of the

ACDA, plus a related database containing the activity details of registered cooperatives, updated on a regular basis

- A training programme for agriculture cooperative managers is developed and managers of registered cooperatives are already participating in it

- State Budget provisions for ACDA are included in successive State Budget Laws - A financing scheme to support agricultural cooperatives is developed by the Government

With regard to the ‘Training programme for managers of registered agricultural cooperatives’, a comprehensive training programme was developed by ACDA, with TA, for managers of registered agricultural cooperatives on such aspects as cooperative organisation & governance, a self-assessment tool kit, monitoring & evaluation and business planning (the latter linked to current accounting and book-keeping practices). The programme's implementation started in spring 2016 and actual training started in October the same year. Two training modules of five days’ duration each were developed, covering the basics of agricultural cooperatives (four sub-modules) and business planning, with four sub modules: I. Basics of agricultural cooperatives; II. Agricultural cooperatives' organisation development cycle; III. Methodology of organizational audit of agricultural cooperatives; IV. Legal regulations and internal administration rules of agricultural cooperatives. Training sessions were organized in West and East Georgia, and 57 different groups (with a maximum 18 participants per group) were trained in different regions. According to the signed attendance sheets, the total number of participants was 928. The second training took place in December 2016 (in West Georgia) and in February 2017 (in East Georgia). The course was designed to cover all essential steps for drafting a business plan. Overall, 949 participants in 55 different groups attended the training on business planning. In total, however, some 2,988 cooperative managers/members were trained: 1,877 in the 5 basic modules; and 1,111 in specific technical training. The training programme aimed to strengthen the capacity of the registered cooperatives by equipping them with the knowledge and the ability to organize and develop their business. In parallel, agricultural cooperative managers have also received training, since 2014, from other ENPARD I partners (e.g. CARE, Mercy Corps and OXFAM). An assessment of cooperative training needs was integrated into the training programme, which covers the period 2016 – 2018, is updated on an annual basis, and takes into account new initiatives and strategies introduced within the Agency. A Training of Trainers (ToT) programme was also developed with some 100 individuals shortlisted for the programme in June 2016. On-the-job training in accounting and book-keeping also commenced from August 2016. ACDA plans to finalise the structure of the HR unit in order to provide a greater chance of sustainability of the capacity building activities for registered cooperatives (to include budget provisions for training within the State Budget Law). ACDA organises specific training courses for its staff members in different disciplines (i.e. business plan development, project management, financial management and monitoring and evaluation) in order to improve the objective selection of sectors for support (e.g. adopting a value chain approach) and better implementation of the current and future programmes. This should also enable the members to be more


effective in accessing finance from the various schemes available. The training plan indicates a wide range of capacity development planned for the future. The review mission for the 4th tranche payment concluded in relation to condition 2.4 (the “State Budget provisions for ACDA are included in the successive State Budget Laws for 2014-2017) that an assessment of the BDD, which is only available in Georgian, showed that “it is still not fully clear what is the actual ACDA budget”.21 This was carried forward to their recommendations. However, this final evaluation provides evidence of the budgetary allocation for ACDA for the ENPARD 1 years (the actual ACDA budget is now shown) plus the forecasted budgets for the next four years (see Tables 2 and 3 above). Thus, it can now be confirmed that state budget provisions for ACDA were included in state Budget allocations for 2013 – 2017 (inclusive), as well as in the forecasts for the next medium-term period (2018-2021). This evaluation confirms the importance of the recommendation of the 4th tranche review that “the TA should assist ACDA to upgrade the budget needs related to the agency’s capacity building and training needs those of the registered cooperatives for 2017-2019”. With regard to condition 2.5 that a “Financing scheme to support agricultural cooperatives is adopted by the Government”, the government approved, and ACDA implemented, four financing support programmes for the registered cooperatives in dairy (March 29, 2016), hazelnut (undated), beekeeping (September 7, 2015), processing and storage (March 2016); and tea (April 2016). ACDA also developed a business plan for the dairy cooperatives and the intention is to use this template to evaluate and assess sectoral needs of the cooperatives and introduce better financial and technical support schemes for the future. This included a contract with AgroSystems Georgia Ltd., to develop detailed specification for a cheese factory and milk consolidation centre (included in the dairy support programme). In addition to the four above-mentioned ACDA financing schemes, the Agriculture Projects Management Agency (APMA) has special conditions for cooperatives to increase production and build processing, post-harvest and storage infrastructure in the regions. APMA offers a range of support in agriculture and processing in Georgia which potentially may be of assistance to cooperatives. The APMA deals only with preferential agro-credits for a number of different agricultural areas (e.g. agricultural insurance, tea rehabilitation, subsidised credit, free land preparation), where own sources of income are used as well and shown to the Treasury, under the ‘Agro-projects’ programme, which are run through the MoA. As the 4th review mission noted and the present evaluation reiterates, these programmes are all relatively new and this evaluation confirms that it is too early to expect any lessons from the experience so far, although it will be important to continue to review this in future . The government also adopted a financing scheme using funds made available through the budget, under programme 37.6.04 (‘Development of agricultural cooperatives infrastructure’). Some funds were left unused, however, in 2017, due to problems with procurement where cooperatives make applications for small agricultural equipment under a co-financing scheme (e.g. government gives 70% and they contribute 30%) and grants are awarded. Thus, the allocation was reduced in 2018. The main reason why the various ACDA grant schemes are being implemented outside of the APMA – the main manager of financing schemes – a concern of the last Review mission, is that both the APMA and the ACDA are separate agencies under the MoA. While integration of the two should enable more efficient and effective use of ministry resources (e.g. generate administrative cost savings) and provide improved impact on the farming community (e.g. providing financial clarity for applicants), this would require structural reorganisation within the MoA and would be an issue to be considered within the current/future restructuring review supported by the FAO. One of the MoA programme (37.06: activities supporting agricultural cooperatives) is targeted at the ACDA (37.06: activities supporting agricultural cooperatives) and, as with all agencies, the budget funds allocated for this programme are transferred directly from the Treasury to the ACDA account, although the MoA is responsible for monitoring the programme and receives monthly and quarterly reports. For the next FY (2018),

21 The source cited was: http://mof.ge/en/4890


the funds allocated for this programme have been reduced by the MoF, on the grounds that ACDA failed to spend the full amount allocated for the grant scheme for the present year, due to procurement difficulties as a result of the bidding process. Grants are allocated to bidding agricultural cooperatives for small machinery and equipment, on the basis of a co-financing agreement, whereby ACDA provides, for instance, 70% of the funds and the cooperative 30%. ACDA monitors what is happening with cooperatives in each region but does not produce written reports on the monitoring exercise. It is recommended that written reports are produced following each monitoring visit, to enable follow up and action being taken. ACDA has two databases: one in the House of Justice (which registers companies) where ACDA proposes a cooperative for registered status (providing a data source on registered cooperatives); while ACDA has its own database on production by cooperatives. IT support is required to merge the two databases to make the information more easily acceptable and user-friendly, ensuring a more efficient and effective use of resources. Was TA used efficiently and effectively? Certainly, the budget was used as intended (efficiently) to assist in the development of a database of registered cooperatives and for the training programme for managers of registered agricultural cooperatives. How effective this was in terms of providing support to an agency that was beneficial to farming cooperatives is a moot point. Future questions for consideration will include: what is the impact of this ACDA cooperation with farmers? How have farmers absorbed and benefited from the training, which will be especially important in the context of the focus of ENPARD II and III on rural development, which will require competencies not only in agricultural production but other skills as, for example, in services and marketing? It is also important in future to give consideration to the framework proposed for developing financial support to cooperatives, by an independent consultant, working under ACDA.22 ACDA needs to have a degree of independence (both from the MoA and from Parliament) and needs to have people in the field. It was timely to provide support to agricultural cooperatives through ENPARD 1 because the stratum of farmers that has now developed requires support to encourage them to become successful business-oriented farmers. However, support to agricultural cooperatives needs to continue until a ‘critical mass’ is reached – similar to the LAGs – and that support has to be highly targeted. Out of the 1,500 cooperatives at present, it is possible according to current estimates that some 800 may fail.23 Thus, support needs to be targeted on the 700 that remain, to assist them to become efficient commercial entities.

7.4. Complementary Support: Grants

7.4.1. Four projects implemented under Small Farmers Cooperation Measures

Objectives and other complementary priority issues The ENPARD programme included a component of EUR 18.6 million, dedicated to the improvement of farmers’ cooperation. This component was implemented through 4 grant contracts (selected through a competitive process between the EU and four consortia led, respectively, by four NGOs: CARE, Oxfam, Mercy Corps and People In Need (PIN). The specific objective of ENPARD was to improve the agriculture sector by supporting the implementation of the SADG and strengthening small farmers' organizations, i.e. supporting the development of business-oriented small farmers’ groups, either formal cooperatives or informal groups; in the event that informal groups have been selected, they were requested to obtain the legal status of an agricultural cooperative, in accordance with Georgian legislation.

22 See C. Gannon, ‘Development of financial support schemes to support sustainable long-term cooperative development’, Final Report, MEDEN, June

2015 23 See section 6.3.1 below


The indicators under Result 1 of the logframe note that, at least 100 business-oriented farmer groups should be established and at least 50 business-oriented farmers groups, active in operating economic activities. Other ‘complementary’ priority issues to address included: the promotion of sustainable management of the natural resources and environmentally friendly agriculture practices; the promotion of non-agriculture related activities aiming to improve the quality of life in rural areas and to encourage diversification of the rural economy; and advocacy activities for the rights of small farmers and participation in policy making processes at local and/or regional level. Relevance Thus, improving the organisation of farmers through the establishment of cooperatives was very relevant to the objectives of ENPARD I since it can improve farmers performance, benefiting from (limited) economies of scale (e.g. managing better input procurement/supply, financing, increased production (quantity), processing (quality) and marketing), and thus have a real impact on the agricultural sector, contributing to an increase in overall food production and rural incomes. The three other (complementary) priority issues are important issues and contribute to the global priorities, i.e. improvements in agriculture as well as to rural development. Design In terms of measuring the project outcomes, the indicators that were selected by the NGOs and included in their Proposals (see Annex) are moving in the right direction but still leave room for improvement. In future, the EU Delegation may assist in sharpening these indicators further, especially with respect to the overall objective of increased food production and reduced rural poverty. The indicators put forward have been, for example: cooperatives report improved access to inputs and increased linkages to output markets (sex-disaggregated); business-oriented farmers groups have increased operational capacity (e.g. fertilizers applied); and members increase business transactions or co-operative members increase production, revenues and sales by the end of the project. While all activities were implemented, some of the quantitative criteria were not met or the criteria did not allow an assessment that provided the necessary insight. In other words, weak or inappropriate indicators do not allow an assessment of the overall efficiency of the Programme. Furthermore, many data, especially the ones regarding turnover and profit based on audited reports, are missing and are unlikely to be provided by the forthcoming end-line survey. In terms of selecting agricultural cooperatives as the focus, with interventions concentrated on technical assistance and investment support to around 280 agricultural cooperatives (if the UNDP supported ones in Ajara are also considered), the design was appropriate and the beneficiaries well chosen, although the design could have better reflected how the grants should be spent. For instance, grants were often used for processing equipment, enabling processes that added value and thus increasing the revenues of cooperative members. However, if more emphasis initially had been placed on increasing production (i.e. without a focus on adding further value), the targets of both increased food production and increased revenues for cooperative members might have been achieved, as more production would result in higher revenues and, hopefully, higher profits. Since other donors did not focus their support directly on agricultural cooperatives, the four NGO-led consortia, the MoA, the ACDA and the ICCs, have been the main bodies dealing with cooperatives, although several donors did offer training, market studies and support to farmers’ councils. Complementarity with other relevant interventions by the EU and other donors and underlying strategic rationale and design of the various aid modalities While grant support to the cooperatives complemented the support being provided through the aid modalities of BS and TA for capacity building, a strategy for agricultural cooperatives has still not been adopted and the ACDA’s work might have been better focused, in the sense that the ACDA is dealing with too many activities (promotion of agricultural cooperatives, training, special support project and a kind of auditing) in relation to its current staffing. Stricter financial auditing would show immediately the performance of the audited cooperatives and if the ACDA had had a clear mandate for the financial auditing of cooperatives, this would have allowed the MoA and the ICCs to provide more targeted training. The ACDA mainly assisted farmers in fulfilling the legal


requirements to obtain registration as an agricultural cooperative, through arranging training and some cooperatives were assisted with grants within special support projects.24 Interactions between cooperatives, ACDA and the ICCs The interaction between ENPARD-supported agricultural cooperatives, the ACDA and the ICCs was fruitful, and although there were frequent meetings between the ACDA, Evoluxer and the four lead NGOs to coordinate support to cooperatives, there were occasions of complementary support for already supported cooperatives.25 In reality, many of the 1,500 agricultural cooperatives would still benefit from support. The ICCs at regional and municipal level either provide technical expertise themselves or, in the event that they lack the appropriate competence, seek suitable experts within governmental organisations. There is a huge consulting need from farmers and agricultural cooperatives but ICCs are often hampered by tasks of data collection and/or other administrative work for the MoA such as to provide information on ministry policy and programmes, legal and tax liabilities, modern agricultural crop technologies and advise on harvest technologies, post-harvest storage and on the rational use of pastures. ICCs are poorly equipped with cars so that ICC staff cannot always go into the field, even if they wish to do so. Anecdotal evidence revealed that ICCs have only some 25% of their time available for actual consulting. Efficiency - sound management and value for money Approximately, 280 agricultural cooperatives have been created in total supported by the four NGO consortia and the UNDP in Ajara, with a budget of €18.6 m over four years. (see Table 5 below) Out of this budget, a high percentage (almost €8.8 M) was invested in TA and equipment, showing that the resources were used efficiently, i.e. with expenditure on training and equipment and less on overheads. The four NGOs provided sound management and value for money, involving very few (relatively expensive) international consultants and involved very few HQ staff and, where the latter groups did participate, this was principally for monitoring. Table 5. Correlation between resources used and results achieved

Costs CARE MERCY

CORPS OXFAM PIN

1. Human Resources: 1,333,210.13 1,881,777.09 1,726,605.00 767,640.00

2. Travel: 28,688.00 19,152.00 11,800.00 30,720.00

3. Equipment: 80,096.00 251,420.00 96,570.00 41,320.00

4. Local Office: 377,230.02 444,787.00 321,160.00 178,080.00

5. Other Costs: 503,779.35 219,041.00 142,800.00 122,360.00

6. Other: 1,524,020.00 2,665,656.34 3,091,918.00 1,713,020.00

8. Contingency 0.00 0.00 57,335.00 0.00

10. Administrative: 248,291.64 383,728.31 381,373.00 0.00

11. TOTAL: 4,095,315.14 5,865,561.31 5,829,561.00 2,853,140.00

Percentage of TA and

equipment compared to the

total costs

49.52 49.18 55.49 64.33

Supported cooperatives 50 74 52 32

ASPs 65

ISET 1

GFA 1 (Source: Logframes – partially revised - of the four offers by the NGOs; in GEL)

24 For financial training provided by the ACDA see above. 25 In the large hazelnut processing cooperative, "Darchelis Tkhili", for example, Oxfam provided the co-investment to ACDA’s input.


Cost-effective and cost-efficient results The projects were run in a cost-effective way since the available funds were used to produce tangible benefits, e.g. processing facilities, greenhouses, small machinery parks and elsewhere money was spent judiciously. There are few alternative ways to achieve the results with less funding, especially with respect to technical equipment, Theoretically, the EU could have reduced costs by either decreasing the grant contributions (e.g. financing around 50% - rather than 70% - of the investments would have been an option or retaining the percentage split of 70:30 but decreasing the value of each grant). This focus may have encouraged the exploration of more know-how driven investments rather than merely choosing capital-intensive ones, primarily investing in equipment. Anecdotal evidence, gathered mainly during field visits to thirty cooperatives and agricultural service providers, shows that ENPARD I started changing the mind-set of the involved farmers which is important for impact and future sustainability. The newly created cooperatives attract the more ambitious small farmers and the Programme gave them the chance to become part of the middle stratum in rural communities. Complex project management While, overall, the projects were well managed, starting from the carefully selected business ideas to the training and demonstration plots and, finally, to the support provided in administrative and management issues, a number of issues should be highlighted. When reviewing the staff composition of the implementing partners, possibly there were too many specialists involved and not enough generalists. For instance, within the four NGOs, monitoring was the task of the M&E teams but it seems that they were not directed to focus on the overall objectives, i.e. increased output and increased incomes. Monitoring parameters were often not well selected and the basic questions about an increase in food production by agricultural cooperatives and increased revenues of cooperative members were often not answered satisfactorily because of missing data. It was also assumed that more data could be provided by GEOSTAT and other official reports but, as soon as it became evident that this was not the case, the NGOs could have started to monitor specific production and sales data, regardless of whether this information came from official audit reports or from observations during the frequent field visits. One point to note is that the individuals dealing with the cooperatives on a daily basis were not necessarily the same ones who collected the data. In addition, procurement of equipment that was funded through the grants was a lengthy process and time consuming. The management of 25–50 agricultural cooperatives was quite complex and, besides in-house staff (used for administration, procurement and monitoring), all four NGOs involved other experts, almost exclusively local ones for capacity building. This training was outsourced, partially to local associations, such as the Association of Young Economists of Georgia (AYEG), the International School of Economics at Tbilisi State University (ISET) and the Association of Business Consulting Organizations of Georgia (ABCO). The organisations are built as matrix-organisations where, for example, one person is responsible for monitoring all the beneficiaries, another for procurement and a third for training and this allows for intensive sector know-how. The negative side of this structure is that so many organisational layers require specialists yet the evaluators felt that there was a shortage of generalists. In one instance, evaluators were surprised to note that, within a four-year project with a maximum of 50 beneficiaries, a manager (i.e. a key decision maker) of an NGO had not been able to visit all the projects. While, due to obligations stemming from the donor side, NGOs are often overloaded with administrative and reporting issues, in such a case it would be important to focus more attention on project implementation. Effectiveness - achievement of purpose Has the expectation that cooperatives will contribute to increased overall Georgian agricultural output and increased revenue of cooperatives’ members been met? Both purposes have been partially achieved. Apart from inclement weather and droughts over consecutive years, as well as the impact of the invasive brown marmorated stink bug (Halyomorpha halys), overall nominal food production value within surveyed cooperatives has increased by 37%.26 In addition, new vineyards have been planted, dairy cows are better 26 ISET: EU-SUPPORTED AGRICULTURAL COOPERATIVES: A CASE OF GEORGIA (Agricultural cooperatives Survey) (draft); December 2017


cared for and consequently produce more milk and hazelnuts have been newly planted. Finally, cooperatives which took advantage of mechanisation saw an increase in the volume harvested since, prior to ENPARD 1, machinery services were either unavailable or not available at the right time. While all of these factors led to an increase in the output by the agricultural cooperatives, the added volumes are modest and have a negligible impact on the overall country production, although they point to a vehicle for potential growth in the future.27 Additionally, it would have been useful to have a comparison of the total production value of the individual cooperative members at the start of ENPARD I and the total value of these farmers at the end of the Programme, including their individual contributions to the cooperative production value. This could have helped to assess whether the additional production within the cooperative was paralleled by reduced production on individual farms. It is most likely that the majority of support measures and grants have focused on the processing of raw products in various sub-sectors (e.g. hazelnuts, tea, milk) and therefore on adding value. However, the increase in farmers’ revenues was expected to come through productivity (efficiency) gains, i.e. increased yields per hectare, for instance, where flour mills were set up and achieved good results, while more effort is required on encouraging increased yields, e.g. output of maize per hectare. This should be possible since some NGOs provided value-chain training to farmers and, when dealing with maize, for example, the use of fertilizers and hybrids was discussed. This focus on processing technology may have been a consequence of the lack of a holistic approach, limited agricultural skills within the four NGO-consortia and time constraints. Achievements by ENPARD in total and within individual components When considering the increase of farmers’ incomes as an objective, the impact is by definition bound to be limited since agricultural cooperatives cover a maximum of 20,000 members out of more than 700,000 farmers in the country. However, progress was clearly made in strengthening small farmers' organizations since approximately 280 agricultural cooperatives have been strengthened and new ones partially established; ENPARD cooperatives demonstrate significantly better performance than the already existing ones, which often suffered from a lack of inputs and/or supplies, e.g. processing equipment. (If the cooperatives supported by the UNDP in Ajara are also included, then there are around 280 ENPARD 1-supported cooperatives out of the 1,500 cooperatives that are currently estimated to exist.) Even though the failure rate may be as high as 50%, as mentioned by Mr. Giorgi Khanishvili, Deputy Minister of Agriculture, ENPARD 1-supported cooperatives are likely to be more successful because of the stricter selection process and greater technical and financial support.28 Commitment of the beneficiary administrations and partner organisations and impact on Programme results There was a strong commitment from the stakeholders (e.g. NGOs, cooperatives) and engagement of all four NGOs was witnessed in the field, especially those who were in close contact with farmers. Nevertheless, the vast majority of members of agricultural cooperatives showed more concern to increase their individual revenues (i.e. on their own farms) than the revenues of their agricultural cooperatives. If more upfront investment had been required from beneficiaries (including ‘in kind contributions) might have countered this tendency in an attempt to increase their commitment towards their cooperatives. Some NGOs provided equipment to the cooperatives after a short probation period, others waited until the end of the project duration before doing so. Providing equipment earlier may have persuaded hesitant cooperatives to become more committed. The agricultural cooperatives were not in a position to participate in the planning process and the call for proposals came from the EUD with proposals being prepared by the four NGOs. From the cooperatives’ side, involvement in planning started with the development of a business plan and then its implementation although, when it came to the procurement of technical equipment, the agricultural cooperatives were more involved

27 One recent review27 of agriculture showed a slight decline in overall agricultural production in Georgia in the first half of 2017, compared to the same period in 2016, full data for the year will not be available until later. (‘Development of the agricultural sector, January-June 2017’, Publications: 98, PMCG, Tbilisi, 7 September 2017) 28 Cooperatives will lose the status of cooperatives if they do not fulfil the administrative requirements; and if they become bankrupt, which is more

likely when tougher accounting is introduced


However, while the procurement of equipment was time consuming and carried out by the four NGOs (there was limited cooperation in the procurement process itself as this requires skills that are lacked by newly established cooperatives), cooperation did exist in the selection of the equipment where the beneficiaries were strongly involved. In retrospect, in most cases the selection process of the beneficiaries took longer than expected and there were two to three cycles of recruiting new cooperatives. Therefore, the last cycle faces time constraints and, in some cases, the beneficiaries received the co-financed equipment only shortly before the project ended (i.e. by October 2017), so that technical advice and management support could not be given on the installed machines in the course of daily work. Impact – the long-term achievements Within the grant component, a project baseline would have been useful to measure progress and success and to assess impact. Relevant data, which were not available through GEOSTAT, could have been collected by NGOs, while the agricultural cooperatives, at such an early stage of doing business, often do not realise the importance of such data, even for shadow-accounting. Thus, many cooperatives focused on increasing their output, such as with beekeepers who wished to have more beehives, though few of them looked to increase the yield per beehive which, generally, is very low by international standards. Similarly, projects dealing with maize flour mills focused on the processing of maize, while the use of outdated seeds and low productivity per hectare were not targeted. In one case where funds were lacking for fertilizers, farmers reduced the seed density and consequently did not make use of the crop potential. Encouragement to adopt a more holistic approach, focusing on the entire value chain, should be envisaged in any future interventions. For surviving cooperative members, there will be an impact in increased rural revenues, since their activities will ‘add value’ to hazelnuts, honey, milk and maize. Some cooperatives are working along the entire value chain, such as in the case of a dairy cooperative which is working on improving fodder quality and introducing artificial insemination and this will have an impact on food production and, consequently, revenues. While there is anecdotal evidence that cooperatives and mainly registered agricultural cooperatives have had a positive impact on food production and rural incomes, this impact is hard to prove. It is likely that raising awareness regarding environmental issues and promotion of sustainable management of the natural resources will have some impact, though it will not contribute to food production and rural incomes. Without doubt, support to non-agriculture related activities aiming to improve the quality of life in rural areas and to encourage diversification of the rural economy has seen some practical impact, as for instance, the rehabilitation of the road infrastructure to enable local cooperatives to access their crop-fields, production of a textbook on apiculture distributed to municipality schools to promote beekeeping and planting nectariferous plants and trees (e.g. chestnut) to improve honey production. Thus, some outputs generated by the Programme have been translated into results; farm machinery services have been established that increased production, while processing plants for milk, honey and hazelnuts have been built that create, or soon will create, additional value and, consequently, increase the revenues of cooperative members. Sustainability A project is considered to be sustainable when the initiated activities continue after the withdrawal of external support and financing. A change of the mind-set (to a more business-oriented enterprise) of those farmers organised in agricultural cooperatives needs time but clearly contributes to sustainability although for cooperatives, which need to operate as commercial enterprises, sustainability will be attained only through continuous profit. In 2016, 148 ENPARD I-supported cooperatives reported an average turnover of GEL 59,115 and an average profit of GEL 16,145 data. The limitation of this survey lies mainly in the fact that the cooperatives provide the data themselves and so it cannot be externally verified: financial auditing of cooperatives is at a very early stage and further support is strongly recommended, and this could be undertaken by the current NGOs rather than by government. Most important is practical training, possibly by sending retired specialists to rural areas. Also, if the ICCs and the RICCs have responsibility and the resources for providing further support, i.e. to intervene where they see farmers’ needs, there is also a chance for a sustainable extension service.


Gaps in structures, systems and capacities for future institutional capacity building Whereas government institutions will continue their work with cooperatives, the work of some NGOs is coming to an end, without the opportunity for a follow-up, and that will result in losing the “institutional memory”. These active and knowledgeable partners need to be available to provide support in the future. While the focus of the MoA and the ACDA seems to be on setting up more cooperatives, it is recommended that the MoA focus should be on fewer, but financially strong, agricultural cooperatives: support to establishing new cooperatives should be put on hold, although the difficulty inherent in such a move is well appreciated. The government has widely promoted cooperatives and tens of thousands of farmers are waiting for grant-financed tools and machinery through the cooperatives. In addition to budget support and TA to the MoA and the ACDA for capacity building, the Georgian Agricultural Cooperatives Association (GACA), set up through the Georgian Farmers Association (GFA), is also an institution that benefits agricultural cooperatives. Whereas GACA is purely dedicated to agricultural cooperatives, the GFA works with all farmers, including cooperatives. In practice, the GFA is becoming increasingly important and GACA will play a more important role, as the cooperatives become financially stronger and look to a body to lobby on their behalf. 29 As the current NGO support to cooperatives is coming to an end, government institutions have to step up their support to continue and consolidate what has been established. To create a good business environment for cooperatives the MoA should focus primarily on extension services and applied research (e.g. the damage caused by failing to treat the stink bug in time – see p.43 above), access to machinery services and access to finance. At the moment, extension services are operated through the ICCs but they are understaffed, sometimes important skill sets and qualifications are missing from the local teams and there is a lack of financing, especially for transport facilities, with often five persons having to share one car. The ICCs also need to become more client-oriented and have less responsibility for undertaking other tasks (such as data collection, which could be obtained by improved coordination with GEOSTAT) for the MoA.30 The new extension strategy might assist in improving the current ICCs, especially when more budget and skilled people become involved. In parallel to the ICCs, the GFA has also begun to provide extension services and market price information gratis, via a smartphone app, although payment will be required for the service in the long term. Despite the setting up of some mechanization agricultural cooperatives, most support comes from the government Machinery Service Centres, though farmers complain that the required machinery is not available on time and that it requires bribes to receive the services. On the other hand, the private sector is complaining about the heavily subsidised government machinery services which, it is argued, interfere with the market. One solution would be to let governmental and private machinery service providers ask the market price (at least covering costs) and provide the farmers with vouchers which can be used for paying part of the bills at government or private machinery service providers. Finally, access to finance remains an issue. Most agricultural cooperatives do not show sufficient profit and assets to satisfy loan criteria and are therefore rejected as potential borrowers by banks. Besides the existing governmental support in the form of subsidized interest rates, a risk sharing mechanism between government and commercial banks, might also be envisaged and definitely some agricultural training for bank staff might be useful, to make farmers bankable.

29 The ACDA is supported through the MoA, whereas GACA might become the voice of the cooperatives 30 The existing information-consultancy services will be responsible for the following administrative functions:

• creation of unified information databases • pre-assessment- prognosis of harvest volumes • collection of weekly prices on agricultural goods • participation in elaboration of state programs • Issuing and preparing relevant documentation with regard to implementation of state targeted programs • Timely supply of information to farmers on state targeted programs and support; • support to cooperation


ENPARD I, through the four NGO-led consortia, provided added value to the supported agricultural cooperatives primarily in the form of technical equipment which, in most cases, served to improve processing. Machinery has been purchased, which has often – for the first time - enabled groups of smallholders to move up the value chain through processing. This was the most visible evidence of added value; invisible, but no less important, is all the training that was provided since it not only provided practical skills but also initiated a different way of thinking which encouraged farmers to join together to achieve objectives which they could not realise individually. Agricultural service providers have also been supported as, for example, in the case of the chicken abattoir, which was owned by an individual and not by a group of farmers, justified on the grounds that poultry production by the five surrounding villages requires an abattoir nearby to process and market the chickens. In the case of farm machinery services, cooperatives were supported as service providers, starting with simple tractor services but sometimes offering not only tractors, but also ploughing or harvesting activities. These services enabled farmers to cultivate and harvest their fields on time and to make use of the crop potential. (A limiting factor, however, was that the cooperative can offer services only to their members plus a 30% mark-up for additional clients, and this proved to be insufficient to achieve the best results from using the machinery.) In addition, a number of small vans were purchased with grant funds, to transport input supplies to the farms, agricultural products from the farms to both the processing facility and finally, the clients. The cooperative model is one of several options and it is especially a generous co-financing programme targeting groups of farmers. The model has demonstrated some initial success, started a mind-changing process towards more entrepreneurship and to collective initiatives and should be continued; however, the future focus might shift from generous co-financing towards a more know-how driven approach, assisted by people with private agri-business and sector experience.

7.4.2 Support to projects implemented under the pilot rural development measures: Lagodekhi; Borjomi; Kazbegi

Under ENPARD 1, in addition to grants delivered under the farmers’ cooperation component, grants were also made available to support pilot Rural Development Measures in three municipalities of Georgia: a) Lagodekhi; b) Borjomi and c) Kazbegi

(a) Lagodekhi31

The project’s overall objective is to contribute to poverty reduction and improved employment and living conditions in rural areas of Georgia, and the specific objective is to create an enabling environment for sustainable pro-poor socio-economic development in the district of Lagodekhi. The intervention logic includes four expected results: (i) a replicable system of cooperation among local stakeholders (LAG) to promote local development is operational and sustainable; (ii) an environmentally sustainable, gender sensitive local development strategy (LDS) integrating local players and sectors is developed by the LAG; (iii) local stakeholders are empowered and capacitated to implement innovative off-farming, farming and non-economic initiatives orientated to the priorities of the Local Development Strategy (LDS); (iv) local development players build links with other LAGs, policy makers and other donor programs to boost local activities and to lobby for the scale-up of bottom-up approaches to rural development. Relevance: The project is highly relevant and is aimed at introducing and applying the ‘LEADER’ approach by establishing the required preconditions for participatory local development in rural communities, to address the needs of the targeted local population and deliver improved services, targeted to the identified priority needs of different sectors and of the various social groups for local development planning and implementation. The project is in line with the Georgian Agriculture Development Strategy and was a pilot initiative to support elaboration of the Rural Development Strategy of Georgia.

31 ‘Participatory Rural Development in Georgia’ Project, Lagodekhi Municipality, Kakheti Region, implemented by CARE Österreich Verein fur

Entwicklungszusammenarbeit und Humanitäre Hilfe (Total Budget € 1,249,391)


Efficiency: The project efficiency is assessed as satisfactory. The resources have been managed in a transparent way, and the envisaged distribution of inputs per type (e.g. consultancies, travel, workshops, pilot projects) and across outputs, is assessed as adequate for the implementation of the project activities. Lagodekhi Municipality contributed GEL 180. 000 or 20% of the total budget for the implementation of the nine selected sub-projects. Effectiveness: The project initiated and supported the participatory process where the local residents and active members of the community were enabled to address their own problems in a participatory way and apply their resources for the development of the overall municipality. The project held 27 one-day meetings in 15 communities of Lagodekhi municipality to provide information on the LEADER approach. The LAG includes 125 members from all 15 administrative units of the municipality and is assessed as an adequate tool for effectively addressing local needs and priorities. The project provided funding to 31 grant projects, which created 177new jobs (including on both a permanent and temporary/seasonal basis) and provided services to 15,093beneficiaries in total. A total of 158 participants (69 women and 89 men) attended the special training courses on project planning and management, finances, accounting, drafting business plans. 132 participants (49 women and 83 men) attended workshops related to the drafting the local development plan. Impact: The created 177new jobs (both permanent and seasonal) increased income of those involved in sub-projects. The role of women and youth was promoted in the local development, the socially vulnerable children improved their access to education and the necessary support; the major priority identified needs have been listed in the local development strategy to enable their further achievement by the means of the local municipality and other sources. Sustainability: The LAG Board has prepared the LAG statute and the project has planned to register LAG as a non-governmental organization, to contribute to the sustainability of the action after the end of the project. In total, 158 participants have improved their capacities on project related and sectoral themes, which will be applied for new initiatives, some of which will be implemented in cooperation with Spanish LAGs, since the Lagodekhi LAG has signed Memoranda of Understanding (MoUs) for future cooperation and information sharing in the rural development area. The project has supported formation of a ‘Friends of Lagodekhi’ group to support the activities of the Lagoekhi LAG. Goal and purpose The goal was to introduce and apply the ‘LEADER’ approach with the aim of involving local partners in steering the future development of their area and delivering improved services and support in local rural communities by means of a bottom-up approach. In Lagodekhi, implemented by the consortium led by CARE, the project aimed to create an enabling environment for sustainable pro-poor socio-economic development in the district. The project was supported by the ETEA Foundation, which introduced the ‘LEADER’ approach to the project and provided considerable assistance with adapting the approach and preparing the local population for involvement in the process. The project target groups include the members of the established LAGand the final beneficiaries, which include some 600 households that will benefit from environmental, social, tourism and cultural initiatives, as well as the total population of Lagodekhi Municipality (41,678 people), which will benefit from a diversified local economy and improved living conditions. The LAG formed within the framework of the project includes 125 members from all 15 administrative units of the municipality. 57.6 % of the members represent the private sector, 22.4% the public sector and 20% civil society sector of the municipality. The LAG structure consists of a General Assembly (GA), which includes around 125 local residents interested in joining the LAG, the LAG Board (comprising 15 selected members) and an elected president, vice-president and executive secretary. To ensure that it is responsive to the needs of the local population, the members of the LAG and its Board represent different priority sectors within the municipality, including tourism, agriculture, infrastructure development and youth groups.


Design The project design is based on the LEADER model and includes a sub-grant scheme, which was supported by a comprehensive mobilisation of the population within communities and a series of capacity building initiatives aimed at improving the capacities of the project applicants and members of the LAG working groups. The project supported the development of a LDS, the priorities of which were considered during the selection process of the submitted applications. Efforts were taken by the project to ensure coordination with the other pilot projects, which was mainly realised through exchange visits to other rural areas where these projects were being implemented by PIN and Mercy Corps. Complementary activities from other donor interventions include the Caucasus Nature Fund (CNF) project related to the conservation of the Lagodekhi Protected Area national park and respective capacity development of the staff, as well as UNDP projects related to gender and eco-clubs and eco-camps implemented by youth groups. The project did not experience lengthy delays, except for the completion of a few of the sub-grant projects due to the delayed contribution by some of the project applicants. It should be noted that the delays occurred mostly among the projects which required a financial contribution from the municipal administration, where the procedures for budget allocation and the formal municipal tendering procedures took more time than initially anticipated. Cost efficiency The project carried out a cost-benefit analysis for each of the sub-grants to assess the cost efficiency and procurement was implemented in accordance with CARE regulations. As a result of the efficient procurement processes, more supplies were provided to the applicants than anticipated. A monthly budget analysis was also undertaken which helped to provide effective financial management of the project. The overall project objective was to contribute to poverty reduction and improved employment and living conditions in rural areas, by creating an enabling environment for sustainable pro-poor socio-economic development in Lagodekhi. The project incorporated both private and public-sector representatives in the LAG, which was important for the identification of priority needs and by addressing them through the provision of funding to the selected sub-projects. Capacity development Education, information and capacity development events, including training sessions, seminars and round table discussions, improved the skills of the LAG members with respect to the selected sectors and innovative approaches regarding their development. The participants of the capacity development activities provided ideas as well as project proposals for further consideration, to be able to draft the local development plan. The thematic groups on agriculture, tourism, social (covering youth, gender and those suffering from disabilities) and infrastructure, proved to be effective in addressing the main needs and priorities of the targeted population. The project was implemented in close cooperation with the governing bodies of the local municipality, which ensured overall synergy and good cooperation in addressing the local problems. Number of projects and sector breakdown The Project provided training sessions on project planning and management, finances, accounting, drafting business plans to the applicants of the sub-grant scheme and those members of the LAG, who were involved in the management of the sub-grants. As a result of the two grant competitions, a total of 31 projects were funded, covering the following spheres (with the number per sphere in parenthesis): agriculture (13); tourism (4); youth (3); social/health (2); social/women (2); environmental (1); social infrastructure (1); and social entrepreneurship (1). The grant projects were professionally managed and were of high quality. While the sub-grants were broad in scope and covered several priority areas, clearly, agriculture was the main priority concern. The funded sub-projects underwent comprehensive feasibility studies and were designed to meet the goals and objectives of the respective sub-projects, of the local development strategy and of the project. Through the sub-grant scheme, project activities led to the creation of 89 new jobs, with the total number of direct beneficiaries standing at 8,900, which includes applicants, their family members, and others benefiting from the project. The other beneficiaries include: (i) the farmers who were enabled to develop their farms due to the provided electricity and irrigation water in Shroma, Mshvidobiani and Areshperani communities; (ii) children benefitting from the renovation of the culture house in Leliani community; (iv) the overall population of Lagodekhi and tourists benefitting from the established close terrace in ‘Wald’ Hotel in Lagodekhi, and many others. The social sub-projects, including one related to supporting the ‘Psycho-Social Centre for children with special needs’, were both relevant and effective, since there are no other donors in Lagodekhi


municipality supporting such initiatives, even though this is a priority for a municipality which has 1,397 disabled children out of a total number of 7,000 children. The Centre provides psychological assistance, special teaching options and basic check-ups to more than 50 children with special needs. Another good example of a social sub-project is the Social Entrepreneurship Project related to the ‘Establishment of a Green-House for the Social House’, hosting more than 10 children left by their families. A social-cultural sub-project supported a ‘music group’, which mobilised local musicians who play at local events, generating income by performing in the neighbouring municipalities or at private events. Such a small initiative became an important tool for a cultural revival of the overall municipality. One of the sub-projects related to tourism promotion, envisaged funding ‘CAFÉ’, which necessitated building a closed terrace and pavilion within a hotel situated inside the Protected Area administration, and which undoubtedly increased the number of tourists and became a favourite place in Lagodekhi for both the local population and tourists. Commitment of beneficiary administrations and partner organisations From the very start, the project established close cooperation with the local municipality, which contributed GEL 200.000 – some 20% of the total project budget - to co-fund the sub-grant projects, which were then implemented jointly between the project and the municipality. Members of the local municipality were also actively involved as members of the LAG and facilitated dialogue with both civil society and the private sector. Out of the 16 board members of the LAG, 5 were from the municipality, including the mayor. The Protected Area, which is another key partner of the project, developed a tourism strategy for Lagodekhi, and 80% of the strategy was based on an analysis of tourism and the environment, carried out by the project for the LDS. Impact Although the project finished at the end of October 2017, several changes were already noticeable: the increased income of those involved in sub-projects; the social assistance provided to children in need; the promotion of the role of women in local development; and the focus on addressing the major priority needs listed in the LDS. The grant component had been initiated to improve the lives of the local population, through creating an income-generating environment and supporting both small and medium sized businesses, as well as some social/youth projects. Out of the total of 31 projects in receipt of sub-grants, there were 15,093beneficiaries in total, 177of whom were employees in the target area. Interventions and capacity building The project has provided assistance with building capacity of the targeted population. In total, 158 participants (out of whom 69 were females and 89 males) attended the special training courses regarding project planning and management, finance & accounting, and the development of business plans. Two study visits were paid to the Spanish LAGs by the Lagodekhi LAG members, which enabled them to observe how the LAGs had been formed in Spain and learn best practice. In addition, several visits from Spanish LAGs were made to Lagodekhi municipality. Further meetings and information-sharing sessions were also planned during the project lifetime. The exchanges enabled LAG members to establish new contacts, share information and best practice and strengthen ties with similar groups within the EU. The project has signed MoUs with two LAGs in Andalusia (Spain), and cooperates with them for the implementation of joint projects on environment and tourism in Lagodekhi. A group called ‘Friends of Lagodekhi’ (which currently includes both local and international representatives) has been established within the framework of the project and is a platform for those interested in the development of the municipality. However, it should be noted that, despite the efforts of the project in relation to capacity development of the LAG members, the establishment of youth groups and exchange visits, the sustainability of the established LAG cannot be fully ensured without government support and government policies at the national level. Sustainability The project continues its activities within the framework of ENPARD II within a consortium, which comprises CARE, Mercy Corps and PIN, led by Mercy Corps, which aims at building the capacities of the LAGs, contributing to their institutional strengthening, improving coordination with other LAGs and lobbying through the formation of a Georgian Association of LAGs (GALAG).


The capacity development events (e.g. training, seminars and consultations with respective experts), feasibility studies and technical assessments conducted for each of the sub-projects was designed to create the foundations for future sustainability. The sub-grant scheme was enlarged due to the contribution of resources both of the Lagodekhi municipality and the sub-grant applicants. The LAG Board is actively working on the statute and strategies to ensure the sustainability of the LAG presence in Lagodekhi, to enable LAG to apply for grants and other opportunities. The established platform ‘Friends of Lagodekhi’ will also contribute to the sustainability if the LAG. Project signs were available in all the sub-projects. Gender, environment and visibility The project does not contain any sex disaggregated indicators, although efforts were made to ensure the inclusion of women in project activities. For instance, out of the 31 grant sub-projects, 12 are headed by women (and the target of ‘at least 30% of initiatives funded by the project are headed by women’ was met). The project funded an important initiative related to raising awareness about early marriages in ethnic minorities, with a total number of 600 beneficiaries. The initiative was highly relevant since many ethnic minorities reside in the municipality, and many still practice early marriages. A number of environmentally-friendly projects were selected, with the application of modern technologies, including two energy-efficient green-houses. One environmental project was implemented in the Dendrological park, and a publication was aimed at raising awareness about the Lagodekhi Protected Area. The national park is one of the key partners of the project and the Director of the park is a member of the LAG Board and was actively involved in the elaboration of the local development strategy. The EU visibility guidelines have been followed, and the EU logo is displayed on all publications, and on sub-project supplies and sites and project cars and in the office. The Project published information regarding the activities and events on Facebook.32 A number of videos have been shot about the project and one of them was broadcast on the ‘NO time to sleep’ TV show, which featured EU support to Lagodekhi development. In conclusion: the project was highly responsive to the needs of the target groups and applied a transparent participatory approach in accomplishing its interventions; it succeeded in establishing an effective LAG structure which enabled participation of all the interested population; it had only one sub-project directly related to environment, and there is a need to boost environmental awareness among the target groups; it conducted professional feasibility studies and technical assessments of the sub-grants which, overall, resulted in an effective implementation of the grant scheme component.

(b) Borjomi33

The project’s overall objective is to contribute to the reduction of rural poverty in Georgia. The specific objective of the project is ‘to successfully promote and develop a bottom-up, community-driven rural development approach that supports socio-economic development within Borjomi Municipality and facilitates future replication throughout Georgia’. The intervention logic includes three expected results: (i) a LAG constituted and supported to develop a LDS and oversee delivery of a rural development programme; (ii) a minimum of 20 community-driven development sub-projects are financed and supported; (iii) conditions for replication and future policy development enhanced at the regional and national level. Relevance: The Project has a high relevance and has introduced the ‘LEADER’ approach, by tailoring the project actions to the reality of the Borjomi municipality and the capacities of the main stakeholders. The Project established an effective cooperation with the Borjomi Municipality. The Project is in line with the SADG and was a pilot initiative to support elaboration of the RDS of Georgia.

32 https://www.facebook.com/lagodekhi.LAG/ 33 ‘A New Approach for Rural Development in Georgia, Samtskhe-Javakheti Region’, Borjomi Municipality, implemented by Mercy Corps with a total budget of €1,250,000


Efficiency: The Project was implemented in a cost-efficient manner, and received a contribution of approximately one-third of the total amount spent for the sub-grant scheme, by the Local Municipality and other applicants, including the Borjomi Mineral Water Factory. Savings were achieved with respect to the envisaged administration costs, and were expended for the sub-grants component. Effectiveness: A LAG has been established with 28 current members from all key sectors in Borjomi. Both LAG members, applicants of the sub-grants scheme and the Borjomi Municipality were enabled to improve their skills in a series of topics related to proposal writing, participatory local development and many others. The project supported implementation of 27 sub-grants projects in various sectors, including tourism, sports, culture, agriculture and environment, all of which have good prospects for the improving the quality of life in Borjomi. Impact: The sub-grant scheme has a high importance with respect to the improvement of the quality of life of the local population in Borjomi. Several projects serve the needs of the overall municipality, including the Culture House, the Sport Ground and the Eternal Flame Square, while others aimed at developing tourism via establishing a tourism information centre, which should have a positive impact on the municipality. Several of the sub-grant initiatives focused on youth, including the sports and music sub-projects, which are well tailored to the local reality, since a large number of young people leave Borjomi due to the lack of jobs, as well as sports and entertainment opportunities. Sustainability: The contribution to the sub-grant scheme provided by the local municipality and other stakeholders is important for the overall sustainability of the project. That said, it should be noted that the Borjomi LAG is not yet sufficiently institutionally strong to continue effective operation following the end of the project. Thus, the LAG members need technical assistance related to the improvement of their institutional capacities and to develop an exit strategy. Objective and relevance A further grant project to promote and develop a bottom-up, community-driven approach to rural socio-economic development was supported in Borjomi Municipality by Mercy Corps. Many of the points that appeared under the previous section for the LAGs in Lagodekhi are relevant here too. The LEADER model was applied to three pilot projects in the rural regions of Georgia, including this one in Borjomi municipality, which is located within the mountain ranges of the Lesser Caucasus Mountains, with limited arable resources of about 4,000 ha. 55% of the population live in rural areas and 66 % of the district villages are eligible for additional income benefits under the Georgian Law “Development of High Mountainous Regions" (2015). The project closely cooperated with the local municipality and signed an MoU with the Borjomi Council, which contributed to the cooperation and ownership. Design The project formed a LAG and supported development of the LDS, which was discussed with the local municipality and NGOs, and around 100 people were involved in the development of the document, while 1,300 inhabitants were covered during an information campaign conducted in the rural communities aimed at identification of main needs and priorities relevant for the local population. In terms of complementarity and synergies with other donor projects, the USAID funded project implemented in Akhaltsikhe, with a focus on tourism, closely cooperated with the project and actually funded the participation of one of the LAG members on their study trip to Germany. In addition, UNDP implemented a number of environmental projects. The project applied an online application system for the implementation of the grant component, and received 171 applications. It should be noted that 16 applicants withdrew from the selection process after learning about their responsibilities during proposal development over a two-day training event held in Borjomi and Bakuriani. 104 applications were selected for the second stage evaluation and 27 initiatives were eventually funded through sub-grants, in accordance with the LDS priority areas. The breakdown of the sub-projects with respect to the prioritised directions is as follows: sport & culture (12); tourism (10); agriculture (4); and environment (2). The project did not experience considerable delays, except for a one-month delay for technical assessment of the sub-grant scheme projects conducted by the LAG and the completion of some of


the sub-grant projects due to the delayed contribution by some of the project applicants. It should be noted that the sub-projects which included a construction component started later than planned, since the technical assessment of those sub-projects took longer than initially anticipated, Efficiency The project gave considerable importance to the cost efficiency of its operations and requested a contribution of roughly one-third of the total from the grant applicants. While the total amount spent for grant projects was €600,000 the project provided €421,000 (or just over 70% of the total) and the remainder was contributed by the applicants and the municipality. In the case of one of the sub-projects, the Borjomi Mineral Water Factory contributed 50% of the total budget for construction of a sports ground, while the Municipality took the responsibility for its overall maintenance. The project made savings with respect to administration costs, while the procurement also followed the NGO regulations. Most supplies for the grant scheme were procured locally, if available and of the appropriate quality, to save on transportation costs. Effectiveness The LAG has been established following 31 meetings related to awareness raising regarding the LEADER approach in all the communities of Borjomi Municipality. The LAG comprises 28 members from all key sectors (governance, civil society, culture, sport, agriculture, tourism, private businesses and conservation) in Borjomi. 56% of the membership is from the private sector and 44% from the public sector, out of whom 43% are female and 57% male. LAG members participated in various capacity development events to learn about the bottom-up participatory approaches and to identify and address local development priorities, including training for sub-grants applicants on proposal writing, sessions for LAG members on technical assessment of the sub-grant projects, and exchange visits of the LAG members to Scotland and the Czech Republic. The project respected the needs of the targeted population, including the final beneficiaries, such as the grant recipients and the communities of the municipality benefiting from the grant sub-projects. Several projects of the sub-grant scheme address the needs and interest of the population of Borjomi Municipality at large, since they refer to the rehabilitation of the Borjomi Culture House, establishment of a Square, Sports Ground, and many others. The capacity building activities covered mainly the members of the LAG and the Borjomi Municipality. The LDS developed by the LAG members, with the support of the project, aims to improve the quality of life of Borjomi residents and create a more attractive destination for visitors. The selected projects were related to several priority areas, including agriculture, sport and culture. The selection of projects was in line with the LDS, thus: priority one was tourism (10 projects); priority two was sports and culture (with 11 projects selected); priority three were agriculture (with 3 projects selected) and environment (with 3 projects selected). Thus, the rehabilitated culture house created better conditions for schoolchildren attending music lessons as well as for children visiting the puppet theatre. The ‘Intellectual Club’ grant project helps to build educational capacities of 200 schoolchildren (from 9-12 grades) from all schools in Borjomi on various topics important for their development, and holds regular competitions among schoolchildren. The ‘baby fish incubator’ is a good example of income generation, where the grant support helped to construct new pools for the fry and the provision of the necessary equipment for the truck for the transportation of the fish. It should be noted that six applicants for environmental projects withdraw from the selection process; most of the applicants expressed interest in income-generation projects, but withdrew after learning that the projects related to tree nurseries with the aim of reforestation of the damaged forest, rather than selling the seedlings. The applicants to the sub-grant scheme should be informed that environmental projects have a high potential to promote income generation, including tourism, which is one of the priority sectors for Borjomi. Commitment of the beneficiary administrations and partner organisations According to the Partnership Agreement with the Borjomi Municipality, it was envisaged that a minimum of 40% of the total budget of the sub-grant scheme should be contributed by the Borjomi municipality. Based on the Partnership Agreement, the project signed a sub-grant agreement with Borjomi Municipality, which included 6 projects with an overall municipality contribution of 40%. The project signed another MoU with both the Borjomi Mineral Water Factory and Borjomi Municipality, where the municipality is stated to be responsible for maintaining the sports ground, which was built with an equal contribution from the project and the Borjomi Mineral Water Factory.


Impact The grant projects contributed to an overall improvement in the quality of life of the target population. Contribution of training to capacity building A series of training sessions related to bottom-up participatory approaches, the LAG, grant selection rules, and technical assessment etc., were organised within the framework of the project. The LDS was discussed with the municipality, local NGOs and the population, including 100 representatives, while the information campaign covered 1,300 people in all the communities of the municipality. The information session regarding the sub-grant scheme covered 516 people from 17 settlements in Borjomi. Study tours were organised to Scotland with the involvement of 17 representatives of the LAG and the local Municipality. One of the Borjomi LAG members attended the People in Need (PIN) Study Tour to the Czech Republic and another LAG member (the Borjomi-Kharagauli National Park Director) took part in the CARE International Study Tour to Spain. Upon their return these LAG members made a presentation to all the other LAG members sharing their experiences. Sustainability Many of the points made under the section for Lagodekhi are also relevant in relation to potential sustainability. The LAG members participated in a series of capacity development events, although LAG sustainability requires institutional strengthening of the LAG, developing an action plan for its regular activities and elaborating an exit strategy. The provision of the recipient’s own contribution is an important factor for the sustainability of the grant projects. In some cases, the project made available the required funds for the implementation of the grant project, although the contribution from the applicant was not provided. It was identified during the evaluation mission, that several applicants of the sub-grants scheme had delayed provision of their own contribution, which in turn has delayed implementation of the sub-grants scheme, thus delaying the completion of the overall project. The LAG is not institutionally strong yet to ensure sustainability after the end of EU funding, the LAG members need a clear vision regarding the further activities of the LAG and this vision is currently unclear, and an exit strategy is missing. The LAG representatives need tailored technical assistance related to the development of a sustainability strategy to ensure that the LAG will be able to operate in a sustainable manner and project beneficiaries will have access to the initiated services following the end of the project funding. The indicators are not specifically sex-disaggregated in the LFM, although the project applied efforts to ensure gender balance and promoted the involvement of women in project interventions. Women constitute 45% of the LAG members. Two environmental sub-projects were implemented by the project, including the establishment of a pine trees greenhouse and planting of Pavlonia. However, the project lacks the necessary mechanisms to ensure that the environmental initiatives will not be used for income generation (e.g. trees planted following de-forestation will not subsequently be felled for income). It should be noted that the applicants to the sub-projects lacked awareness and capacities related to environmental problems and resource management and did not fully realise the potential of environment-related sub-projects in contributing to the overall development of their communities. That said, only six applicants submitted environmental projects during the Expression of Interest phase, from which one was rejected by the LAG, due to an unrealistic proposal, while the remaining five applicants submitted full applications. It is noteworthy that although four of the five received high scores, two of those subsequently withdrew their proposals, as they could not meet the co-financing requirements and, in the end, two environment projects were funded. The EU visibility guidelines have been followed, and the EU logo is displayed on all publications, and on sub-project supplies and sites and project cars and in the office. The project published information regarding the activities and events on Facebook. A number of videos have been shot about the project, which feature EU support to Borjomi. In conclusion: the project managed to establish good cooperation with the local municipality and received a 40% contribution for 7 out of 28 projects within the sub-grant scheme; the project applied the approach of Corporate Social Responsibility and received a 50% contribution for the establishment of one of the grant projects (the establishment of a football stadium from the Borjomi Mineral Water Factory); the number of LAG members is fixed at 29. More recent information, provided by the NGO-led consortium, subsequent to


our in-country mission, and following the final presentation of the evaluation team’s findings and recommendations, is cited below in relation to the apparent ‘closed’ membership of the LAG, although this cannot be verified by the team: 34 “Every community member of Borjomi municipality can contact the LAG Technical Coordinator to request to join the LAG and be mentioned in the reserve list. The reason why the maximum number was agreed is that some people would like to join the LAG only when there is the sub-grant competition to influence the decision-making process. The project cannot allow this. If the LAG members see that people are really enthusiastic and are willing to join the LAG to contribute to local development, the maximum number of members can be increased by a LAG decision.” The project will continue its activities within the framework of ENPARD II through funding of a 2nd phase of the three pilot projects for another 24 months, through a single contract in a consortium led by Mercy Corps, which comprises CARE, Mercy Corps and PIN. Project signs were visible on all the sub-project sites. c) Kazbegi35 The project’s overall objective is to contribute to the reduction of poverty through integrated, sustainable and participatory rural development in Georgia. The project’s specific objective is to improve employment, community empowerment and living conditions of rural population in Kazbegi by introducing the LEADER approach to community-led local development as a pilot for national scale up. The intervention logic is then further articulated in four expected results: (i) a functioning Kazbegi LAG with the active involvement of public, private and civic actors; (ii) a RDS reflecting the potential of the rural economy and environmental protection for local development is produced by the LAG; (iii) the growth potential of Kazbegi has been enhanced through environmentally sustainable, innovative and more competitive agricultural practices and non-agricultural activities; (iv) lessons are learnt and best practices for community-led local development using the LEADER approach have been identified and disseminated amongst stakeholders. Relevance: The relevance of the project is high as it is well tailored to the reality of the targeted Kazbegi municipality. The project ensured responsiveness to the major needs, priorities and capacities of the targeted population by conducting a baseline study. The action has facilitated the empowerment of the local population to become active agents of their own development. Efficiency: The efficiency of the project is assessed as satisfactory. Most activities have been implemented without major delays, with the exception of a few sub-projects of the sub-grant scheme, which were delayed due to the delayed provision of the own contribution by the project applicant. Effectiveness: The LAG has been established and its general assembly is composed of 71 members. The LDS has been developed with the active involvement of the LAG members and covered the priority areas of the Kazbegi Municipality. The Project provided significant training support related a project assessment, local development and participatory local development approaches. The LAG has been registered as an NGO and was awarded several grants. From the larger group of sub-project ideas, 63 initiatives have been selected and funded within the framework of the sub-grant scheme, aimed at eliciting strong sub-project applications that will assist the economic, social and cultural development of Kazbegi communities. The majority of the sub-projects (40) are in support of the business sector; 12 projects are in the community/non-profit sector and 11 in the public sector.

34 Communication from: 35 ‘Local Action Group Kazbegi’, Mtskheta-Mtianeti region, Kazbegi district (Stepantsminda), implemented by People in Need (PIN), with a total budget of €1,198,802


Impact: The LAG became an effective platform for the local population to have a chance to communicate and exchange experiences and advocate for their own development. The LAG members have developed several local development initiatives, which have been very important for the overall empowerment of the local population. The created 133jobs, which provide employment for 77 men and 56 women, out of which 81 jobs are seasonal and provide employment for between six to nine months, have led to improved income for the direct beneficiaries and enabled access to improved services for the end-beneficiaries. Sustainability: The results achieved by the project have created strong preconditions and potential for further sustainability, including registering the LAG, strengthening the institutional capacities of the LAG members, and supporting them in submitting project proposals which resulted in the award of several grants. The project has played an important role in mobilising the local population to address the priority needs of their municipality. The majority of sub-grant projects are related to the business sector, including tourism, which is a priority area for Kazbegi. Objective and approach The final grant project to promote and develop a bottom-up, community-driven approach to rural socio-economic development was supported in Kazbegi municipality and implemented by People in Need (PIN). The project is in line with the SADG (2012-2022) and the RDS (2017-2020) - and the respective Action Plan 2017. The project is highly relevant both in terms of the applied bottom-up approach with respect to rural development and the support that is provided for the establishment of the LAG and the implementation of the grant scheme (the latter has enabled the community to benefit from the project in accordance with the identified priorities). The project aims to improve employment, community empowerment and living conditions of the rural population in Kazbegi by introducing the LEADER approach to community-led local development as a pilot for national scale up. The project has supported the development of a LDS for Kazbegi, aimed at increasing the productivity and efficiency of the existing directions of agriculture and introducing new promising directions, supporting the development of tourism services and establishing more diverse income sources in the villages and facilitating improvement of the quality of life of Kazbegi population. The project encouraged and facilitated involvement of the local population in the planning process of their own development, something which has not happened prior to its start. The participation of people in the needs assessment, engaging the local population in the decision-making process linked to their own socio-economic development, was practised in Kazbegi for the first time. The KfW project implemented by GFA, related to the expansion of the Kazbegi National Park, supports individual economic or communal sub-projects in Kazbegi communities, adjacent to the National Park territories, with a grant scheme of about EUR 160,000 annually, and is complementary to the project component related to the sub-grant scheme Design The project had to employ a three-stage application process for the grants scheme, since the second stage applications neither met the announced requirements, nor satisfied the criteria of the selection committee. The project experienced some delays, one of which is related to the development of the branding strategy and the other delay occurred due to the broad scope of recommendations of the environmental report. Thus, the activities initially planned for the first year, were delayed and implemented in the Y2. Efficiency The project applied many efforts to achieve cost efficiency, including employing mainly local experts, and conducting training for the LAG members regarding the collection of data to assess the well-being of the local population and to track their satisfaction with their situation. As a result of the training, the LAG members managed to conduct information collection on their own, without the need to spend additional resources. All procurement was carried out from Georgia in accordance with the PIN regulations.


Results achieved: outputs against planned objectives The Project has overall and within individual components, produced the planned outputs and achieved the planned objectives. The target of 30 jobs has been exceeded with a total of 133jobs actually created, which includes both permanent and seasonal jobs. Also, more grants were provided than were envisaged and with less expenditure. The project decided not to support big business and that enabled it to provide more grants than planned. A total of 63 grants were awarded, out of which 40 relate to the business sector, 12 to community/non-profit sector and 11 are related to the public sector. The sub-grant projects covered agriculture, tourism, education, culture and infrastructure, and were in line with the developed Local Development Strategy. The training benefitted all the applicants and not just those who were awarded grants, which enabled the applicants who were not selected to apply for other initiatives, which is a noteworthy achievement. Thus, some of the participants from the training session on ‘Proposal Writing’ have approached the state fund, ‘Enterprise Georgia’, and three applicants who failed to receive grants by the project were awarded grants from the fund. The Project has ensured participation of the local population in all the related activities and enabled their attendance at meetings by organizing transportation for those from the remote areas to travel to Kazbegi, since there is no public transport in the area. With respect to the perception of people regarding the improvements of their well-being, in accordance with the results of the conducted survey, women identified fewer opportunities for them in remote areas, although this was not identified in the baseline assessment. It should be noted that the two other sister projects have conducted surveys with respect to the importance of the LAG, although these did not include information relating to the perception of the targeted population regarding improvements to their well-being. This finding is an indication that the project contributed to raising awareness of the local population in regard to the different opportunities that exist in terms of local development. The LAG was formed after conducting a number of meetings, introducing the LEADER approach and identifying local needs and priorities. This formed the basis for the LDS which was developed by the established LAG with support from the project. More than 200 individuals were registered in the LAG at the start of the initiative and some people, it was discovered, wished to become LAG members since they believed it would be advantageous in the competition for grants. However, after realising that this was not the case, many members left the LAG and at present, the core membership stands at 91. The LAG structure also includes the evaluation committee of the grant projects which comprises 11 people, the youth group which includes 16 young people and the Board which consists of 20 people. The LAG members have an elected Chair, Vice-Chair and Project Evaluation Committee. Since there have not been many donors in Kazbegi, the project has largely promoted dialogue between the local authorities and the private sector, and enable peopled to approach local authorities and present their daily problems. Commitment of beneficiary administrations and partner organisations The beneficiary administrations and partner organisations expressed commitment to the project. That said, the local municipality has supported the LAG activities and made provisions in the annual budget to contribute to the seven sub-projects focused on ‘Equipping of the kindergartens’ playgrounds. The municipality has also supported the LAG in providing electricity to the farmer’s market in Kazbegi and the New Year Celebration, which was one of the initiatives of the Kazbegi LAG. Co-financing by the local municipality includes provision of 20% of the total costs of furniture for all seven kindergarten playgrounds and for 7 similar projects, 2 sports playgrounds and 2 stadia.36 Impact The outputs generated by the project have been translated into results. That said, it is still premature to evaluate the possible impact of the project, although some preconditions have been identified, based on the preliminary effects achieved so far with respect both to the LAG and the sub-grant projects. Kazbegi LAG became an effective platform for the local population to have a chance to communicate and exchange experiences. The target population learned to take part in the development of their regions and build their

36 No figures were provided for the percentage of co-financing by the municipality.


skills in fundraising, business plan trainings, communication, etc. The 40 full time jobs that were created have already led to improved incomes for those with jobs and their family members. Some of the projects, such as that related to the ‘Pre-cooked food production’, were important for the target families and those employed in food production. The impact of such initiatives is not only on the improved social welfare of the target local people, but also on development of tourism, since most of the clients are guest-houses and hotels, which are able to take advantage of such opportunities in Kazbegi for the first time. Another good example is support to a ‘car repair service’ (sub-project), which provided an opportunity for the owner of the service to improve his income and repair the 4x4 jeeps and vans, which was not possible prior to the project’s support. Considering that Kazbegi is a mountainous area, where mostly 4x4 vehicles are in operation, and the road to Tbilisi is often closed during winter time, it was an extremely important local initiative to support. Also, schoolchildren who did not have many leisure opportunities were able to take excursions to the mountains, together with LAG members, as a result of the project. LAG volunteers, using their own vehicles, collected 30 schoolchildren on a regular basis, and took them on various excursions in Kazbegi and Dusheti. It is worth mentioning that the LAG has been awarded some grants, which is unique for the LAG of Kazbegi, since the LAGs in the sister projects in Borjomi and Lagodekhi, are not yet registered and so could not participate in many of the announced tenders. Capacity development 1,058 out of 3,800 inhabitants of Kazbegi have participated in the meetings dedicated to the development of the LDS. The project has provided a series of capacity development opportunities to the LAG members, including training sessions on non-profit management and operations, basic practices of the grant scheme, LAG operations and the project evaluation process. The LAG members have also made several visits to the sister projects in Lagodekhi and Borjomi, as well as with European LAGs in the Czech Republic and elsewhere, in relation to an exchange of experiences. Some members of the LAG have visited the EU Rural Parliament and the Kazbegi LAG is currently considering the possibility of inviting European LAGs to Kazbegi for a conference and promotion of joint projects. Observation of the second and third stages of the sub-projects identified an improvement in the quality of the applications, after participation in the training sessions conducted by the project.

Currently, the LAG General Assembly has 71 members. As the result of targeted meetings for youth mobilization in the reporting period, a total of 22 new members under the age of 30 years (15 women and 7 men) of age joined the LAG.

Sustainability The results achieved by the project have created strong preconditions and potential for further sustainability. The project had a precondition for the provision of sub-grants, according to which the applicants had to make their own contribution: 30% in the case of business projects; 20% for municipal projects; and in-kind for some specific ones. The provision of contributions on behalf of the applicants was one of the mechanisms employed by the project to ensure sustainability. However, in some cases, the applicant’s own contribution was delayed, thus resulting in an overall delay in the implementation of some of the grant-projects. To ensure sustainability of the LAG and its possible fundraising after the end of the project, the LAG was registered as an NGO, which enabled it to apply for many tenders and receive awards. The LAG is open for new members, which is important since they can also be involved in local development. The LAG has also started initial steps with respect to the branding of the restaurants and guest houses in Kazbegi, which will define several standards for those willing to be involved in the branding process. The project has identified that the main problem in Kazbegi is the lack of qualified personnel, therefore the LAG members have made efforts to link the applicants to the VET College in Dusheti. The LAG is planning to contact the German Adult Education Association (IIZ/DVV) to establish a small training centre in Kazbegi with the support of local businesses. The LAG succeeded in receiving the following support during the project period: the Austrian Development Agency awarded a grant of €9,000 for agro-marketing, which enabled the LAG to procure scales, refrigerators, tents for the farmers’ market and the local municipality supported with a rubbish bin for cleaning the area after the market. This initiative greatly helped the farmers to bring their own production and sell it during the week-end. The project supported provision of music to create a pleasant atmosphere and attract the tourists residing in the area. This project was identified by the agricultural group of the Kazbegi LAG; the Youth Development Fund of Georgia organized training for the management of guest houses and agriculture for young people aged 18-30 years; and the Orbelyani Foundation supported the LAG with tents and other required equipment


necessary for the organisation of excursions for schoolchildren. The LAG has also organised events, without any financial resources, via mobilization of community resources, e. g. the New Year celebration in Kazbegi, with the involvement of the local population and tourists. There is a lack of clarity, including the role and function of the LAGs in the context of rural development in Georgia and the financial sustainability schemes. The RDS lacks a description of comprehensive implementation mechanisms with respect to the LAGs, their institutionalisation at the national level and their recognition as important players in rural development in Georgia. The project lacks sex disaggregated indicators, but it ensured the involvement of women in the LAG and project-related activities and the evaluation committee, for the evaluation of grant projects, and comprises 9 women and 7 men. An environmental assessment has been conducted and one initiative related to solar energy implemented. With respect to communication/visibility, the LAG is known among the population of Kazbegi, although due to the overlapping of several activities of the LAG and the project, the local population considers the grants to be provided by LAG funds and are not aware that the sub-projects have been funded by the EU. Project signs were missing in the case of some of the sub-grant projects, as identified during the visits of the evaluation mission, e.g. provision of kitchen equipment to the restaurant of the ‘Green Sheep’ Guesthouse, which did not enable one to identify that the sub-grant projects are funded within the framework of the project. More recent information has been provided by the NGO consortium, subsequent to our in-country mission, and following the final presentation of the evaluation team’s findings and recommendations, as follows:37 “Visibility boards have been placed immediately after the beneficiary organisations started operations.” In conclusion: the LAG became a good platform for involving the local residents in the decision-making process with respect to their own development; 40 sub-grants out of total 63 have led to the increased income of the local population and created preconditions for tourism development. Delays were encountered regarding provision of the local contributions from the applicants of the sub-grant scheme in the case of all three projects, that said, the applicants of the sub-projects delayed own contribution, thus causing the delay of the overall projects. The project will continue its activities within the framework of ENPARD II through funding of a 2nd phase of the three pilot projects for another 24 months, through a single contract in a consortium led by Mercy Corps, which comprises CARE, Mercy Corps and PIN, and aims to build the capacities of the LAGs, contributing to their institutional strengthening, improving coordination with other LAGs and lobbying on their behalf through the formation of a Georgian Association of the LAGs (GALAG).

7.4.3. Projects implemented under the support to agricultural development, including Capacity Building to the Ministry of Agriculture in the Autonomous Republic of Ajara

Objectives and relevance The project ‘Support to Agricultural Development in Ajara Autonomous Republic’ implemented by UNDP, between May 2013 - June 2016, aimed at facilitating implementation of the national sector strategy and strengthening small farmers’ organizations in the Autonomous Republic of Ajara (hereafter Ajara).38 The objective was to: promote improvement and expansion of the existing service centre in Ajara, including outreach activities to target remote rural municipalities; support to business-oriented small farmers groups in the region; and capacity building to the regional MoA (only part of the country where agriculture responsibilities are devolved). The project was relevant since it appropriately addressed the needs of the target group: the Autonomous Republic of Ajara, the Ministry of Agriculture of Ajara (MoA) and the Agro-Service Centre (ASC), established by the Government of Ajara (GoA) as a budgetary-funded organisation The improvement of services and small farmers’ access to them was addressed by supporting the ASC in providing high quality services to address the needs of farmers. The project pioneered the introduction of agricultural innovations in Ajara, such as green houses, the growing of blueberries and walnuts. Demonstration plots were

37 Source: We are grateful for this information although it cannot be verified by the evaluation team. 38 The total project budget totalled USD 4,324,579.55, comprising USD 3,926,701.57 from the EU with USD 397,877.98 co-financed by the Ajara Government AR.


important since they appeared for the first time in Ajara and enabled farmers to learn practically about new approaches in agriculture. The project also supported farmers by: designing business models and business development services for supporting agriculture cooperatives; facilitating the creation of agriculture cooperatives and the provision of specific business development services to existing cooperatives; and providing technical assistance to develop the capacity of agriculture cooperatives’ capacities, with the aim of improving productivity. Thus, assistance was provided to farmers to promote cooperation and 77 cooperatives were supported within the framework of the Grant Support Component, which provided access to modern technologies, to improve both the quality and quantity of their production, to improve their opportunities related to marketing and to function legitimately, in accordance with the legal and financial requirements of the Law on Cooperatives. Furthermore, the project addressed the needs of the MoA of Ajara, by assisting with institutional development aimed at developing more effective agricultural policy formulation and implementation. The following priorities of the MoA were addressed by the project: study of the agriculture sector development, investment and export potential; an assessment of MoA staff capacity development needs; the implementation of an information system for the agricultural sector; elaboration of an MoA Strategic Development Plan in correspondence with the National Agriculture Sector Development Strategy; and the development of an Ajara Rural Development Strategy, with the inclusion of a bottom-up approach, and the intention that this would lead to a more effective policy making process. Complementarity with other donor projects There were a number of actions that were complementary to the ENPARD 1 supported project, such as: a USAID initiative linked to supporting the establishment of cooperatives related to milk collection and processing. The ENPARD 1 supported project provided the required equipment and implemented the initiative jointly with USAID; ‘Restoring Efficiency to Agriculture Production (REAP)’, which is another USAID programme; the ‘Alliances Lesser Caucasus’ project, funded by the Swiss Agency for Development and Cooperation; and projects by IFAD and Mercy Corps. Efficiency Since the project was cost efficient in its operations, saving on some activities, it was thus able to allocate more resources for the support of the 77 agricultural cooperatives than envisaged (a maximum of 15 cooperatives during the three years of the project cycle, based on the DoA support to 3-5 cooperatives per year.), with a total number of 435 members. EUR700,000 were allocated to procure machinery and other equipment for the cooperatives, while the contribution by the cooperatives was in excess of €130, 000. The project supported three categories of grants: less than USD 10,000; USD 10,000 - 30,000; USD 30,000-50,000; and the contribution of the cooperatives was between 20-30%, depending on the amount that was allocated. The project provided a Micro-Capital Grant Agreement to 8 NGOs, following UNDP rules and the procedures, to help develop cooperatives and provide the necessary inputs. With the cost savings that were achieved, the project managed to implement the following activities: support to the development of an ASC exit strategy; support to the elaboration of the Ajara Rural Development Strategy, including providing technical support to establishment of the Rural Development Policy Coordination mechanism; support to local approaches – Active Citizen Local Unions (AMAGIs), and a two-months no-cost extension of the project. Component 1: Increasing and improving services to small farmers – the Agro-Service Centre (ASC) The Strategic Development Plan of the Agro-Service Centre (ASC) has been developed and adopted with the technical support of the project, and the Centre develops the annual Action Plan accordingly. The project has supported the establishment of ASCs under the MoA, Ajara in Batumi, Keda, Khelavchauri, Shuakheri, and two in Khulo. The branches have been equipped with seven vehicles to reach the farmers, portable soil laboratories, which enabled provision of free extension services to the farmers related to advisory services, soil checking, artificial insemination equipment, and other services. At present, some services (e.g. soil checking and artificial insemination) are paid for by farmers, although at a lower cost in comparison with other private extension services. Due to project support, the ASC reached 16,597 farmers during implementation, including: (i) provision of free artificial insemination services to 5,000 (applied for the first time in Ajara), out of which 65-70% of the cases were successful, (ii) introduction of modern production systems and new varieties to 1,200 farmers from various villages via their visits to demonstration sites; (iii) introduction of the new


technologies of green-house cultivation; and (iv) new varieties of citrus, grapes and berries. According to the anecdotal evidence of some farmers, their productivity has increased, especially related to citrus production, due to ASC consultations. However, it should be noted that the capacity of ASC staff related to green-house cultivation is insufficient, despite training that was carried out within the framework of the project, including the ‘training of trainers’ of the agriculture extension consultants and plant protection. There are a lack of professionals with expertise in this area to address the problems that might arise, especially in relation to greenhouse pest and disease problems, which are changing over time. The ASC staff does not have any opportunity to learn about the new approaches to be able to assist the local farmers, e.g. one of the cooperatives involved in strawberry production in a green-house faced serious problems regarding pests and diseases, and requested assistance from the ASC in Kobuleti. However, assistance could not be provided because the only specialist on green-houses (whose knowledge in the area is limited in any case) was unavailable, and so a specialist from Turkey was invited. The project has assisted with the development and installation of an information system within the ASC to track activities, quality control of the services provided to farmers and to monitor the results. The software has been replicated at the national level, and has greatly assisted the ASC in tracking the number of farmers that were reached and services provided. The ultimate objective of the software is to monitor the extension services, whether they were undertaken effectively, how many farmers applied for extension on artificial insemination, and other services. The software alerts the agricultural agents to check the status of the service, for instance, artificial insemination. The evaluators were unable to identify evidence, however, to prove that the software system tracks farm performance (e.g. farm efficiency, increased profit and extent), monitors the effectiveness of the services and provides feedback from farmers, and so on. Component 2: Development of and support to business-oriented farmers groups In relation to the development and support of business-oriented farmers groups, the 77 cooperatives supported by ENPARD 1 grants represent the following sub-sectors: beekeeping-22; green-houses -14; grape production and winery - 9; hazelnut production - 9; blueberry production - 5; trout farming - 4; cattle and milk production - 3; vegetable production - 3; hay-baling -2; poultry - 2; strawberry production – 2; citrus production - 2.The cooperatives have been assisted with registration, legal and financial expertise and several capacity development activities undertaken in cooperation with the BBI. The grants provided ranged from USD 10.000 to 50.000. The profit of some cooperatives has significantly increased due to project support, ranging from 20-100%, depending on the activities, e.g. having received a tractor to transport beehives, some cooperative procured additional accessories for the tractor which enabled them to better cultivate land, resulting in increased profit. The support provided to fish farms with respect to specially equipped trucks to transport fish to the market, led to an increase in profit, since 20% of the cooperative’s transported fish is no longer wasted due to the lack of well-ventilated and well-equipped trucks as was previously the case. According to ASC financial data, the total profit of the 77 cooperatives supported by the project was, in 2014 – GEL 722,700; 2015 – GEL 1,160,410; and in 2016 – GEL 1,200,032, which shows a considerable increase in profit. The production value of the 77 cooperatives also shows a respectable increase: in 2014 – GEL 1,098,700; 2015 – GEL 1,670,800 and in 2016 – GEL 2,109,449.It should be noted that the cooperation promoted by the project encountered suspicion and scepticism from many in rural areas, remembering the Soviet experience with kolkhozes (collective farms) and that was one of the reasons why the local population was not motivated to join together with others to form cooperatives. The evaluator noted that most of the cooperatives are run by family members or relatives, which is allowed by the Law on Cooperatives. Most cooperative members interviewed were dissatisfied with the requirement for financial reporting, some of whom do not mention their profit in the final reporting, even though it is less than GEL 200,000, the level where they would have to start paying tax. However, farmers throughout the world are always sceptical about declaring income, fearing that the information will be used by government (national and local) to tax them and/or to reduce social benefits (see the social vouchers in the section above). The ACDA under the MoA of Georgia withdrew the status of 20 cooperatives from the total number of 138 that were registered in Ajara, and 5 from the 77 cooperatives supported by the project. The cooperatives do not conduct their own financial operations and very few use the cooperative’s bank account, due both to lack of experience with financial transactions and lack of trust of the tax authorities, fearing that they would ask them to pay tax. This was the case with most of the cooperatives interviewed, despite them having been informed during training sessions and individual consultations with the


BBI, regarding the provisions related to tax payments in the Law on Cooperatives. This also results in challenges when marketing and selling due to the cooperative members’ mistrust of the clients, and the clients, such as supermarkets, mistrust themselves, preferring to deal with a physical person rather than with a cooperative. The cooperatives where members had a small business prior to the establishment of the cooperative and have financial resources to make their own contribution when necessary are more sustainable. Such cooperatives may join with other cooperatives in addressing issues related to, for instance, marketing of large quantities of honey, land consolidation for increasing crop productivity. Naturally, such members claim that they are satisfied with the cooperation with other members. For others, the main motivation to retain the status of a registered cooperative is to be able to access agricultural credits and state support projects funded by the MoA of Ajara, which is in the process of establishing green-houses and handing them over to successful cooperatives. The mission identified that the value chain approach was not fully applied in the case of the supported cooperatives, which might have been due to the innovative concept of cooperatives in Ajara and a lack of motivation on behalf of the local population. It should also be mentioned that the project conducted awareness raising campaigns in Ajara related to the benefits of cooperatives, ENPARD, government support and the Law on Cooperatives. This was undertaken among the local population and farmers with similar profiles to enable the project to try and identify the main challenges and potential related to applying the value chain approach. The Government of Ajara made several efforts to ensure a sound follow up to ENPARD I, including funding the ‘Sustainable Agriculture in Ajara AR’ project, which provided financial support to a total of 51 agricultural cooperatives, 11 of which were funded by ENPARD I. However, the project was not sufficient in itself to meet the needs of all of the cooperatives that were supported under ENPARD I. Component 3: Institutional Development of the MoA of Ajara The project also provided technical assistance to the MoA of Ajara for capacity development, e.g. training and exchange visits of the staff of the MoA. According to project reports, up to 15 staff members have participated in each of the trainings related to, for instance, policy development (and the development of policy briefs), programme budgeting, and animal breeding. With the support of the project, several policy studies were undertaken, including the following: ‘Ajara Agriculture Sector Competitiveness and Export Promotion’; ‘Ajara Investment Profile and Investment Promotion Study’; and ‘Structural Issues of Agriculture’, the latter focusing on evidence-based policy development and preparation of the new Agriculture Development Strategy. The documents that were developed became the basis for the MoA’s development of diversified agricultural programmes, funded by the Government of Ajara. The MoA, Ajara, has also developed the ‘Ajara Development Strategy’. The project also provided considerable support in establishing the Ajara Rural Development Council where the MoA of Ajara is the coordinating agency, led by the Chairman of the Government of Ajara, and the development and adoption of the ‘Ajara Rural Development Strategy 2016-2020’. It is worth noting that the MoA of Ajara has undergone several structural changes, and new departments and sub-structures of the MoA have been established as a follow-up of the project’s recommendations together with the active involvement of the project manager, who became the Minister of Agriculture of Ajara, after the end of ENPARD I. The newly established departments include: the Policy, Strategy and Planning Department; the Rural Development Department; the Agro Project Management Centre, which is the financial body of the MoA Ajara, responsible for the overall planning, implementation and monitoring of state support programmes. However, the evaluation has identified that, despite the training undertaken by the project and the establishment of new departments, the MoA, Ajara, requires targeted capacity development and institutional strengthening measures to be able to implement both the Agricultural Development Strategy and the Ajara Rural Development Strategy.39 It should be further noted that the MoA faces serious challenges with respect to monitoring and evaluation and despite the announced tender, did not manage to recruit specialists on M&E due to the lack of such specialists

39 Thus, the Department on Policy, Strategy and Planning needs technical support to update the policies and strategies of the MoA when necessary and the Department on Rural Development requires technical support for the implementation of the Rural Development Strategy.


in Ajara. This weakness hinders the MoA from measuring the indicators and results of state and donor supported programmes. The only monitoring is accomplished by the Agro Project Management Centre with respect to potato and honey production, but is not related to the M&E of the overall programmes, policies and strategies implemented by the MoA, Ajara. Although an M&E Guide has been developed for the MoA, Ajara, this is insufficient to support the MoA in conducting M&E activities, due to the lack of an M&E system and staff capacities on M&E.40 The lack of an M&E system within the MoA, Ajara, has been identified as the main reason for the MoA’s and the ASCs’ lack of comprehensive information regarding: the implementation of the strategies on Agriculture Development and Rural Development; the sustainability and profitability of the cooperatives; the increased profit of the farmers supported by the ASC; and the profitability of various sub-sectors of agriculture in Ajara. However, the needs related to the M&E capacity of the MoA, Ajara, identified during ENPARD I, are to be addressed within the framework of ENPARD II, with respect to improving the organisational process, strengthening human resource management systems and developing a Performance & Appraisal system for staff monitoring, within the MoA. Support to farmers, including from the MoA, Ajara In many cases the MoA of Ajara supports farmers’ needs, support which is critical for sustainability, such as with seedlings and drip irrigation for farmers interested in growing hazelnuts and berries. The initiatives related to local participatory development were continued within the framework of ENPARD II by two NGOs, which established and support two LAGs in Ajara, out of a total of 7 throughout Georgia. The support was possible since the Ajara Rural Development Strategy had already been developed and adopted, and the respective council and working group had been formed and were functioning, with considerable support from the project. The Black Sea College which was sub-contracted by the Project to provide training to farmers, focusing on bee-keeping, land-cultivation, and many others, launched two new courses related to agriculture. The GoA provides GEL 70,000 on an annual basis to support cooperatives and start up new ones. The MoA funded the establishment of fruit nurseries in Keda and vegetables nurseries in Shuakheri municipalities. Despite the training undertaken by the project, the mission identified that the MoA needs targeted capacity development and institutional strengthening measures to be able to implement both the Agricultural Development Strategy of the MoA, Ajara, and the Ajara Rural Development Strategy. Thus, the Department on Policy, Strategy and Planning will need technical support to update the policies and strategies of the MoA in due course and the Department on Rural Development will require technical support for the implementation of the Rural Development Strategy. The cooperatives need institutional strengthening and better access to finance and markets. The MoA, Ajara needs capacity building to enable staff to be able to function effectively in the newly established departments and entities of the MoA. The mission identified the lack of staff capacity in the MoA in relation to policy development, M&E, as well as lack of knowledge of Russian or English languages. The project provided added value to a few cooperatives by providing packaging for honey and wine. Pottery was provided for wine production and, in another case, the project supported a fruit drier. To what extent are the beneficiary administrations and partner organisations committed to the Programme? The MoA, Ajara, has displayed a strong commitment to the project and, following the end of ENPARD I, allocated a budget of around €300.000, to continue the support of the cooperatives for 1.5 years, to be implemented by UNDP. The MoA established veterinary centres in Kobuleti, and two more are in the stage of construction to continue the provision of artificial insemination services initiated within the framework of the project. New sorts of berries are being tested in the demonstration green-house as per the project recommendations. A number of agricultural programmes have been initiated by the MoA, Ajara, based on the sectoral studies produced in the framework of the project, including the establishment of greenhouses and post-harvest consolidation centres, which should help to facilitate the adoption of value-chain approaches by farmers.

40 Project documents, however, note that a monitoring & evaluation system has been developed,


To what extent have outputs generated by the Programme been translated into results? According to information received on mission, most of the agricultural cooperatives have already achieved profit by using equipment which was purchased with grants. Some of the cooperatives improved product quality and increased productivity while others reduced production costs and made savings. According to the interviews and the data provided regarding the financial performance of the cooperatives, the ENPARD 1 supported cooperatives registered an increased income from between 10% - 100%. The agricultural sector became more attractive for the local population of Ajara, and the concept of cooperation was promoted due to the efforts of the project. The mission found evidence that, in some cases, cooperative members were from Batumi but applied to the project to start a small business in one of the villages. This was possible due to the overall communication and visibility provided by the Project interventions, including a series of TV programmes, SMS information messages, and other approaches applied at different stages of project implementation. Table 6 below provides information on the budget of the MoA, Adjara, for the ENPARD 1 years plus the budget for 2017. This shows a gradual growth in expenditure over the five-year period. The 2017 budget (a 60% increase on the previous year) reflects the launch of new programmes (based on AMAGI consultations to support mediation with farmers) and contains costs related to infrastructure. Two such latter initiatives of the MoA, Ajara, relate to the development of a chain of post-harvest Consolidation Centres, which are to be established in each of the municipalities and to be equipped with the latest technologies, and a 2.5 ha greenhouse programme in Kobuleti. According to the evidence of the MoA, Ajara, 50 green houses will be established in Ajara, each one measuring 500 square metres, which will be used for demonstration sites in order to promote green-house cultivation and these will be rented out (at low rents) to cooperatives. The falling trend for the Agro-Service Centre (ASC) budget (and its share in the overall MoA budget) was due to the completion of some infrastructural projects between 2013-2015, such as, the construction of nurseries for fruit and citrus, the refurbishment of the ASC branch in Kobuleti, the construction of a wine factory and greenhouses, as well as the development of an agro-market in Kobuleti. Ministry of Agriculture, Adjara Table 6. Budget of the MoA Adjara, including the Agro-service Centre budget

2013 2014 2015 2016 2017

Total Budget of the Ministry of Agriculture of Ajara (GEL)

5,821,516.00 6,387,461.00 6,811,641.00 7,500,000.00 12,029,128.00

o/w Budget of AgroService centre (GEL)

2,343,386.00 1,907,868.00 1,624,264.00 1,113,054.00 1,886,414.00

(source: Vakhtang Kontselidze, UNDP) Rural Development Strategy The implementation of the Rural Development Strategy and establishment of AMAGIs in each community in Ajara is another important outcome of the project. It is worth mentioning that, at the national level, the establishment of LAGs in municipalities was made possible due to the funding from the EU while, in the case of Ajara, the MoA initiated the establishment of AMAGIs at the community level, with technical support from the project, to generate local needs and priorities and this may prove a better way of ensuring sustainability. Evidence shows a regularly updated database of the Rural Development Department at the MoA of Ajara, regularly updates its database of needs and important projects from AMAGIs and coordinates the submission of these to the respective ministries and agencies. There is also evidence that some of the key priorities identified by the AMAGIs in relation to agriculture have been taken into account by the MoA of Ajara when preparing their plans for implementation.


Sustainability The project has put in place some of the prerequisites necessary for the sustainability of the activities. Thus, according to a study conducted by the Batumi Business Incubator (BBI), regarding the capacity of the supported cooperatives, at least 80% of the cooperatives which were granted registered status are successfully developing their businesses while the other 20% show promise in expanding their businesses in future years.41 However, it should be mentioned that the lack of both a value-chain approach to activities and skills of cooperative members in relation to marketing, are limiting factors for the overall development and sustainability of cooperatives. To what extent will sustainability be achieved through use of outputs by beneficiaries and partner

organisations? Difficulties related to access to finance, marketing and financial management/accountancy, as well as lack of knowledge regarding added value crops, are the main challenges of the agricultural cooperatives related to sustainability. The project had good communications with most cooperatives and, where possible, attempted to address their problems, even after the end of ENPARD 1. This was possible due to the funds provided by the MoA for cooperatives and the personal commitment of the UNDP staff in Ajara. In many cases the MoA of Ajara supports farmers’ needs, following on from earlier project interventions (support critical for sustainability), such as with seedlings and drip irrigation for farmers interested in growing hazelnuts and berries. The initiatives related to local participatory development were continued within the framework of ENPARD II by two NGOs, which established and support two LAGs in Ajara, out of a total of 7 throughout Georgia. The support was possible since the Ajara Rural Development Strategy had already been developed and adopted, and the respective council and working group had been formed and were functioning, with considerable support from the project. The Black Sea College which was sub-contracted by the Project to provide training to farmers, focusing on bee-keeping, land-cultivation, and many others, launched two new courses related to agriculture. The GoA provides GEL 70,000 on an annual basis to support cooperatives and start up new ones. The MoA funded the establishment of fruit nurseries in Keda and vegetables nurseries in Shuakheri municipalities. To what extent have the various interventions contributed to capacity building, legal approximation (EU

acquis) and institutional modernisation? While FAO TA assisted the MoA at the national level with work on legal approximation, the project in Ajara was implemented in parallel to the agricultural reforms at the national level. The adopted ASC Strategic Development Plan, the MoA Ajara Development Strategy and the Ajara Rural Development Strategy should all aid institutional sustainability. Several extension services are presently outsourced to third parties, namely private companies which, according to the evidence from farmers’ interviews, currently provide extension services for only three months per year: for the rest of the year, farmers have to apply to those companies which request payment for services. Due to the delays in tendering, many small farmers have been left without access to proper extension services. To what extent are there significant gaps in structures, systems and capacities for future institutional and

capacity building that undermine sustainability of assistance? Despite the training undertaken by the project, the mission identified that the MoA needs targeted capacity development and institutional strengthening measures to be able to implement both the Agricultural Development Strategy of the MoA, Ajara, and the Ajara Rural Development Strategy. Thus, the Department on Policy, Strategy and Planning will need technical support to update the policies and strategies of the MoA in due course and the Department on Rural Development will require technical support for the implementation of the Rural Development Strategy. The cooperatives need institutional strengthening and better access to finance and markets. The MoA, Ajara needs capacity building to enable staff to be able to function effectively in the newly established departments and entities of the MoA. The mission identified the lack of staff capacity

41 Batumi Business Incubator


in the MoA in relation to policy development, M&E, as well as lack of knowledge of Russian or English languages. To what extent have the partner organisations provided added value to agricultural cooperatives and small

farmers? The project provided added value to a few cooperatives by providing packaging for honey and wine. Pottery was provided for wine production and, in another case, the project supported a fruit drier. Gender, Environment & Visibility The project lacks any gender-disaggregated indicators to enable the mission to measure the extent of the involvement of women. In the case of the cooperatives, the project did not require a gender-balance, on the assumption that it might become a hindering factor for those who wanted to apply for support to establish a cooperative. However, in the event that the head of a cooperative was a woman, the applicant had an advantage to be selected: thus, two cooperatives were advantaged in being awarded a grant because the head of the nominated cooperative was female. The total number of females who were selected for receiving a Cooperative Support Grant comprised 65 out of 435, or 15% of the total, while men comprised 370, or 85% of the total (see Table 7 below). Table 7. Gender distribution among the beneficiaries of the Cooperative Support Programme

Beneficiaries of the Cooperative Grant Support Programme per year

Female Male

Total Number

% Total Number

%

Beneficiaries 2014 8 8.80 83 91.20

Beneficiaries 2015 49 16.70 244 83.30

Beneficiaries 2016 8 15.70 43 84.30

Total 65 15 370 85 (source: UNDP)

The support provided to the MoA and the ASC with respect to the application of modern production technologies and machinery for the demonstration plots and extension services, including promoting integrated pest management techniques among farmers and cooperatives, were environmentally friendly. Most of those technologies, including soil testing, strictly controlled the volumes of plant protection chemicals and fertilizers. It should be noted, however, that the applications for cooperative support did not include any environmental requirements. The project implemented the following visibility activities: meetings; demonstration projects; educational and informational materials, including media products (e.g. TV, Facebook, YouTube and radio), that provide high visibility for the project and its stakeholders; media visibility tours. The visibility events and materials produced in the framework of the project include: the TV show Agrorchevebi (Agriculture Advice) and Agribusiness; ENPARD Success Stories - Cooperatives; launching of the ENPARD Ajara Project; consultations to farmers about cooperatives; opening new branches of the Extension Service Centre; demonstrating projects development; presentation of the Cooperative Support Programme; support to cooperatives; media tours; Kobuleti Agroservice Centre, and others. All of the materials and events are posted either in you-tube, on the websites of news agencies and TV channels; the Ajara government website, the UNDP website, the ENPARD Georgia website and social networks. The objective was to: promote improvement and expansion of the existing service centre in Ajara, including outreach activities to target remote rural municipalities; support to business-oriented small farmers groups in the region; and capacity building to the regional MoA (only part of the country where agriculture responsibilities are devolved). TA to the Ministry of Agriculture (MoA) Ajara for capacity building The project has provided TA to the MoA of Ajara in support of capacity development, e.g. training and exchange visits of MoA staff. According to project reports, some 15 staff has participated in training related to such areas as policy development, programme budgeting and animal breeding. With project support the ministry has developed the ‘MoA of Ajara Development Strategy (ADS) and Ajara Rural Development Strategy(RDS)’, together with several policy studies, including the ‘Ajara Agriculture Sector Competitiveness and Export Promotion’. The MoA of Ajara has undergone several structural changes, and new departments


and sub-structures of the MoA have been established as a follow-up to the project’s recommendations as well as the active involvement of the former project manager, who became the Minister of the MoA of Ajara, following the completion of ENPARD I. 42 The mission has identified that, despite training undertaken by the project and the establishment of new departments, the MoA still requires targeted capacity development and institutional strengthening measures to be able to implement both the ADS and the RDS.43 The final assessment includes an assessment of the different extension models used in Georgia and Ajara: namely, the ICCs versus the service centres. While the development of ICCs has been supported under ENPARD 1, as part of the EU support to extension, it will be important to consider the effectiveness of ICCs in delivering the required services to farmers and how best to support them. On the assumption that the MoA approves the Extension Strategy before the end of 2017, it is likely that extension will continue to be supported through Complementary Measures under ENPARD III. Whether ICCs are the appropriate model to support extension services in Georgia and whether they should receive further government support are key questions to be addressed in relation to this.

7.4.4. Two projects assisting capacity building of agriculture-related education and research institutions: Background and objectives

The main objective of the SADG, 2015-2020, is the development of agriculture through strengthening of small households and the formation of profitable production chains: measure 3.1.2 of the SADG, 2015-2020, aims at improved quality of vocational educational training (VET), university education and research within the food and agricultural sector. Therefore, a thorough reconsideration of vocational training, education and research in Georgian agriculture should be undertaken and special curricula need to be developed to shape a system for retraining, both in theory and practice. Special incentives should be created to induce young people’s interest towards particular specialisations where currently there is a shortage of technical skills, e.g. veterinary and plant protection.

In the past, agricultural education was organised as a multi-step system and comprised vocational schools, higher education and research institutions, all of which trained highly qualified specialists. Currently, the system is not functioning properly and there is an acute shortage of agricultural specialists. The problem is worsened by the lack of interest from youth towards the sector. Additionally, access to vocational education and training (VET) is poor in rural areas, especially for farmers while, at the same time, most farmers are not farming out of choice and have little or no education in farming practices.

In terms of general education in rural communities, especially the communities populated with ethnic minorities, dropout rates are relatively high. Access to education is partly problematic in the mountainous regions and the average number of students from the high mountainous regions participating in the national examinations is low compared to those living in urban areas. In addition, school-aged students from the high mountainous regions also have financial problems when continuing their studies at the higher education level.

The Ministry of Education and Science of Georgia (MES) has created social support programmes, aimed to improve the access to higher education for different categories of students, including those from the high mountainous areas and areas with an increased risk of migration. Furthermore, the Ministry of Agriculture intends to cooperate closely with the Ministry of Education and Science of Georgia, the Georgian National and Agricultural Academies of Sciences, vocational education institutions, and Georgian and international education and research service providers, including relevant NGOs, for the purpose of strengthening agricultural education, research and science both within Georgia, as well as regionally and internationally.

42 The newly established departments include: (I) Policy, Strategy and Planning Department; (ii) Rural Development Department; (iii) Agro Project Management Centre, which is the financial body of the MoA Ajara, responsible for the overall planning, implementation and monitoring of the state support programmes. 43 Thus, the Department on Policy, Strategy and Planning department will need technical support to update the policies and strategies of the MoA and the Department on Rural Development will require technical support for the implementation of the Rural Development Strategy.


One of the main expected results of ENPARD 1 is the improved efficiency of institutions involved in agriculture by providing capacity building to agriculture-related education and research institutions in curricula development, applied research, internship programmes for students to help the small farmers’ groups, business-oriented themes and subjects, etc. Ultimately, the idea is to engage education and research institutions in the overall implementation of all components of ENPARD 1. In order to achieve this, two grant contracts were awarded to NSA in a competitive procedure (call for proposals). The two projects are evaluated in detail below.

The ‘Capacity Building to Agriculture-related Education and Research Institutions’ project, ran from 1st October 2015 to end September 2017 (the initial duration being extended by three months) and was implemented by the University of Limerick (Ireland), in conjunction with two Georgian organisations, the Rural and Agricultural Policy and Development Institute (RAPDI) and the Agricultural University of Georgia (AUG).44

Objectives The overall objective was to increase Georgia’s policymaking and implementation capacity in rural and agricultural sectors and the specific objectives were as follows:

� To strengthen the capacity of the civil society to collaborate with the Government of Georgia to make informed policy decisions for the development of the agriculture sector and the rural economy

� To strengthen the capacity of the Agricultural University of Georgia (AUG) to address the current needs of agribusiness operators to improve competitiveness through tailor-made education and training curriculum development

� To address the specific development issues of Georgia’s mountainous areas and trigger a process of inclusive stakeholders’ participation in Government policy for these areas

� To raise awareness and knowledge of the sector operators in planned and implemented reforms, including regulatory changes as required by the AA and DCFTA agreements

Relevance The project was relevant to measure 3.1.2 of the SADG, 2015-2020 (‘Improved quality of vocational educational training (VET), university education and research within the food and agricultural sector’) and corresponds to the ENPARD specific objective: ‘To improve the agriculture sector in Georgia by supporting the implementation of the Agriculture Strategy and strengthening small farmers’ organisations’. The project was perceived by the Rural and Agricultural Policy and Development Institute (RAPDI) as particularly appropriate for their capacity building since it had been recently established by former senior government officials with responsibility for agriculture, food and rural affairs, with the long-term ambition of it becoming a think-tank, focusing on EU approximation.

While key stakeholders and target groups were identified, a proper needs analysis was not undertaken to justify the selection of subject areas for the implemented research and awareness building. Final beneficiaries were neither involved in the preparatory phase of the project activities, nor did they have the opportunity to provide feedback and evaluation. As such, the relevance of individual outcomes is very difficult to assess.

Efficiency The project was coordinated by the University of Limerick (UL), an Irish based Higher Education Institution, that was responsible for the day-to-day management of the project activities and budget. The communication between the coordinator and the Georgian partners was facilitated by regular Skype conferences, complemented by three visits to Georgia and two study tours for the Georgian partners in Ireland. The proximity factor played an important role, with the cooperation between the two Georgian partners being smoother than between the Georgian partners and the Irish coordinator, resulting in some delays at the start of the project, which impacted the overall project timeliness and performance.

44 The total budget was €437.508,00 (GEL 1.196.628,13) and the EU contribution comprised 80.00% of the total.


In Georgia, the MoA was the main counterpart and was very helpful and cooperative, for instance, in providing statistical data. Representatives of the MoA attended the kick-off meeting and participated in different events. In addition, RAPDI is very well connected with stakeholders at various levels. That is not only important for networking but helped to involve appropriate institutions and experts to implement activities for which internal capacity was not available. However, as already mentioned, the final beneficiaries, such as farmers or students, were not directly involved and did not have the opportunity to contribute to the design of activities and study programmes.

The cooperation with the EUD and with the ENPARD Communication Unit in particular was considered to be very good. All details concerning visibility were discussed with the unit in advance.

The two projects funded under the Capacity Building to Agriculture-related Education and Research Institutions component of ENPARD 1 were launched together, with a conference organised at the AUG that increased their visibility among stakeholders, on the one hand, and was cost-efficient, on the other. However, closer and more regular contacts with the ENPARD Communication Unit during the project implementation could have contributed to better visibility of the project results and enhanced use of the research reports by stakeholders.

Cost-efficiency was demonstrated in the organisation of the workshops on DCFTA, where eleven were organised instead of the planned six. One expert conducted all of them and presented the results at the final conference. The format of the workshops was the same, a one-day event with the same agenda, starting similarly but with a different focus depending on the region. Central places were selected to host the workshops in order to ensure better accessibility. This guaranteed consistency and added value. However, there is no evidence of coherence and coordination with other DCFTA training events such as the EU-funded project ‘Capacity Building to the Agricultural Cooperatives Development Agency (ACDA)’ with Evoluxer as implementing partner. This project organised a Regional Forum of Agricultural Cooperatives in Gori and while the same expert was engaged to deliver presentations on the topic of DCFTA and the opportunities to access the EU market, it is not clear whether there were attempts to ensure complementarity.

More thorough supervision and flexibility from the project coordinator as well as building the capacity in project management of the Georgian partners, in particular RAPDI, could have improved the efficiency of the project. As a newly established institution, RAPDI did not have much experience in managing EU-funded projects. Building their capacity in this direction could have helped the project to better manage time and resources.

Effectiveness The project was supposed to deliver four results by implementing various activities. All activities were implemented, although some of the quantitative criteria were not met.

Expected results: 1. RAPDI capacity is strengthened to conduct robust research and analysis of the key challenges in the

Georgian agricultural and rural development sector

RAPDI was created in 2014 but its operational capacity was built with the project funding. Two technical experts, a financial manager and an administrative assistant were recruited and their wages supported by the project. An office was rented and equipped to provide good working conditions for the team. A RAPDI website (http://www.rapdi.org/), was developed and is well maintained with all the research publications which were produced during the project available for download in both Georgian and English. There is a problem of compatibility of the website with certain web-browsers, i.e. Firefox, so an IT specialist should be consulted to resolve this.

The following research reports were published: o Agriculture review, 2006-2015 o Analysis of Preferential Agro Credit Project


o Honey Value Chain o Overview of the Agricultural Trade Policy in Georgia, 2014 o Overview of the Agricultural Trade Policy in Georgia, 2015

All reports are available online through the RAPDI website. The first three are also available on the official ENPARD website and printed as booklets thus satisfying requirements for visibility of the EU funding. However, the ‘Overview of the Agricultural Trade Policy in Georgia, 2014’ and the ‘Overview of the Agricultural Trade Policy in Georgia, 2015’, do not make reference to EU support and, as such, it is not obvious that they were developed within the framework of the project.

In addition, as already mentioned, stakeholders were not consulted at any phase of the research. The selection of the research topics relied solely on the expertise and professional experience of the RAPDI team. The research methodology included only desk research implemented by contracted experts. As such, it is not clear if the studies correspond to particular needs or fill any gaps. The audience and potential use of the findings are also not specified. In addition, RAPDI was involved in two other studies that contributed to its capacity building. These studies were conducted within the framework of the project “Improving Regional Food Security in the South Caucasus through National Strategies and Smallholder Production”, implemented by Oxfam. These are:

o Evaluation of Preferential Agro Credit Program o Food Security and Nutrition Challenges in the High Mountains of Georgia

The research findings were widely disseminated during conferences and events and presented to government representatives, donors, agriculture educational institutions and other stakeholders.

Two study tours were organised to Ireland to share experience and best practice and to create new contacts for future cooperation. A noteworthy element of the study tours was that the Georgian partners could also learn from the Irish mistakes.

2. Strengthen the capacity of the AUG to improve agricultural education

The curricula of the seven academic programmes offered at the School of Agricultural and Nature Sciences were translated and submitted to the UL for initial screening and revision. One of them, Food Technology, was then reviewed in detail and that resulted in changes to the curriculum which entered into force from the autumn semester of the 2017-2018 academic year.

Based on the Irish example, the programme now has two main directions: Food Science and Food Technology. While Food Science did not exist previously at AUG, in LU it is taught at a very high level. Thanks to the project this is now improved and presents an extra appeal to students. Another change in the programme is the introduction of industrial practice that was already introduced last year. LU shared their experience and templates about the way to evaluate this practice.

Changes were also introduced into the students’ assessment in Food Biochemistry. Based on example questions from LU, AUG introduced multiple choice questions for the exam and has already created a database of questions.

AUG developed a very practical certificate course for professionals in Beekeeping. The course was tested in a 5-day pilot training with 45 selected beekeepers and honey producers from different regions of Georgia. As more and more students are interested in the topic, it is also offered to students taking the Bachelor’s degree in all seven programmes of the school as an elective. The spring semester is chosen for the elective, so the students can combine theory and practice during their compulsory practical exercises.

AUG also sent delegates to Ireland for a study tour. In addition, the professor who developed the vocational course in Beekeeping spent two weeks in Ireland and got involved in workshops to get a hands-


on experience and new knowledge in the field. While developing the curriculum he was provided with mentoring and advice.

One of the most important results for AUG is the joint research in Biotechnology and Biochemistry they conduct with UL. This should lead to joint scientific publications in highly ranked journals, which is very important for building research capacity.

3. Raising knowledge and awareness of stakeholders and the public in general regarding Georgian policies and best EU practices on mountainous and least developed areas

Considerable support is being provided for the development of the mountainous regions although time is needed for the changes (and policy) to show their impact. RAPDI conducted desk assessments of all policies and research on mountainous and least favourable agricultural areas of Georgia, although the work was undertaken within the framework of the project, “Improving Regional Food Security in the South Caucasus through National Strategies and Small Holder Production”, implemented by Oxfam, and so cannot be attributed to the ENPARD 1 project under evaluation.

Internationally, there are a number of similar problems in the high mountains, as for example, a similar initiative for the Himalayas may offer inspiration for all of the Caucasus countries to work together. In this respect, RAPDI is interested in becoming involved and has already made contact with counterparts in Armenia and Azerbaijan. However, communication between potential partners is at a very initial stage and, as such, it is too early to assess the feasibility of any possible action.

4. Increased awareness of Georgian farmers and small-scale processors regarding the benefits and challenges of the EU approximation process

Eleven workshops were organised to inform farmers about the Deep and Comprehensive Free Trade Agreement (DCFTA), its benefits, the obligations it imposes on Georgia and the requirements for exporting agricultural products to the EU. The workshops were organised with the assistance of Agroservice, an umbrella organisation of farmers’ service centres, that provides training and other services to farmers. Zura Zurashvili, Head of the International Relations Department of the National Food Agency and a member of the team that negotiated the DCFTA, led all the workshops. Initially, explaining what FTA means in general, he presented the agreement in straightforward terms, highlighting its benefits, showcasing success stories and providing examples with specific products. For the workshops, brochures were printed, containing brief points and sources of additional information, in both Georgian and Russian, in order to accommodate minority groups. (In Samstkhe-Javakheti, the presentation was translated into Russian and there was an interpreter in order to accommodate the Armenian minority.) The leaflets were left at the workshop locations and also further disseminated. Information to broader audiences was shared during meetings with NGOs, universities, etc. In order to disseminate the information more widely, the electronic version of the presentation was sent to all farmers who were interested but were unable to participate. However, it was not possible for the evaluator to verify whether all these additional recipients were reached and thus whether they became aware about the planned regulations and requirements, as intended.

Impact The project did not manage to achieve its goals completely. The research papers and policy recommendations were reported to be well received by the government, donors, agriculture educational institutions and other stakeholders. However, there is no clear evidence that policy was directly influenced. RAPDI and AUG were strengthened thanks to the project (project specific objectives 1 and 2) and that contributed to the overall implementation capacity in the agricultural sector. The project also raised awareness about regulatory changes and requirements resulting from the DCFTA agreement among sector operators. However, the specific issues and policies of Georgia’s mountainous areas were barely affected by the project, partially due to delays of policy making and legislation at governmental level.


The strengthened capacity of the AUG helped agricultural education to become more attractive to students and the university managed to increase its position in the ranking of the MES. AUG climbed in rankings from 37th place in 2011 to 2nd place at present. Of course, other factors such as modern equipment, improved teaching methods and skills of the academic staff, employability of students, etc. also influenced this positive development.

The elective in Beekeeping also saw an increased number of students. At the start of the project there were around 15-20 students who followed it while 65 students took it in the spring semester of the 2016-2017 academic year that coincided with the end of the project.

Sustainability The project increased the institutional capacity of RAPDI and facilitated its relations with relevant actors in the agriculture sector both nationally and internationally: RAPDI staff is committed to continuing the work. However, the institution should pay particular attention to its financial sustainability. While ensuring new projects should be able to support operations, the sources of funding should be diversified in order to ensure sufficient cash-flow to finance overheads and fixed costs. It could be beneficial if RAPDI devotes a particular heading in their budget on staff development. This will force them to devote money for networking and study tours and like this provide them with extra opportunities for project work and cooperation.

In this respect, Teagasc, the National Economic and Social Council of Ireland can be used as an example for RAPDI on how to ensure its sustainability. Teagasc is a governmentally-supported body providing integrated research, advisory and training services to the agriculture and food industry and rural communities in cooperation with educational institutions.

In terms of sustainability of the produced results, all studies are available for download in both English and Georgian on the RAPDI website. The ‘Agriculture review, 2006-2015’, ‘Analysis of Preferential Agro Credit Project’ and the ‘Honey Value Chain’ are also available on the ENPARD website. Agroservice is prepared to organise training on DCFTA again or a Question and Answer session in the event that it is requested by their members. The trainer is also willing to lead such training in the future. In this respect, it is recommended to consult farmers in advance, so the training answers their actual needs. Account should be also taken with other initiatives organising training on the topic in order to ensure coherence and coordination.

The sustainability of the programme in Food Technology and the course in Beekeeping are guaranteed as they are embedded in the educational offer of AUG. In addition, UNDP confirmed their interest in offering the course to farmers and so AUG will seek cooperation with UNDP in order to take advantage of this interest.

AUG will continue the close cooperation with the MoA for directly advising farmers in soil testing and soil management and training the staff of the extension services (ICCs). They will also continue to work directly with farmers and conduct soil tests in their laboratories.

The project thus set the scene for a fruitful cooperation between AUG and UL and the two universities are working on an Erasmus+ proposal and making arrangements for Erasmus exchanges. The AUG management would also like to widen this cooperation to fields beyond natural science and agriculture. The joint research initiated during the project is expected to result in a couple of joint publications already next year. The management of joint PhD students is another opportunity for the future but this will take some time to realise. This cooperation is expected to further strengthen the capacity of the AUG to develop curricula and conduct research, following up-to-date practices and tendencies.

The other project, ‘Empowering Modern Research Practices of the Regional Agriculture-Related Institutions’, ran from 1st October 2015 to the end of March 2017, and was implemented by the Georgian Institute of Public


Affairs Foundation (GIPA), in cooperation with the Caucasus Environmental NGO Network Association (CENN) and the PMC Research Centre.45

Objectives The overall objective was to increase the capacity of regional agriculture-related education and research institutions to meet the challenges within the agriculture, food processing, environment and rural development sectors according to international standards in response to the identified lack of research capacity existing and being utilised therein and the specific objectives were as follows:

1. To raise the research capacities of the regional agriculture-related education and research institutions

2. To strengthen the regional agriculture-related education and research institutions in sustainable natural resource management and promote them as actors in agriculture and environment related issues in their region

3. To increase the demand for their research and educational services and possibilities for cooperation (the number of users of the agriculture and environment related competences of the regional agriculture-related education and research institutions)

Relevance The project was relevant to measure 3.1.2 of the SADG, 2015-2020 (‘Improved quality of vocational educational training (VET), university education and research within the food and agricultural sector’) and corresponds to the ENPARD specific objective: ‘To improve the agriculture sector in Georgia by supporting the implementation of the Agriculture Strategy and strengthening small farmers’ organisations’.

Three regional agriculture-related education and research institutions were identified as final beneficiaries, namely Batumi Shota Rustaveli State University (Adjara Autonomous Republic), Iakob Gogebashvili Telavi State University (Kakheti Region) and Samtskhe-Javakheti State University (Samtskhe-Javakheti Region). The Tbilisi based universities have more opportunities to participate in projects, capacity building initiatives and exchanges. This is to a lesser extent at regional level justifying the focus of the capacity building and supply of equipment to regional universities. In addition, the three universities share the objective of making agricultural studies more attractive to students. They were actively involved in the design, implementation and evaluation of the project that effectively promoted local ownership. Key stakeholders worked together with the regional universities to solve clearly identified problems. All interviewed beneficiaries and stakeholders praised the project for the timely response to actual needs.

Coherence with other on-going initiatives was ensured. For example, Batumi Shota Rustaveli State University’s academic staff was among the active participants at the Prospects of Developing Ajara’s Coastal Zone in the Context of Climate Change conference organised by CENN in close cooperation with the Promoting Environmental and Social Accountability in the Mining Sector in the Caucasus project funded by Bread for the World. In the framework of the United Nations initiative, environmental clean-up actions were held in the three target regions in commemoration of the World Environment Day.

Efficiency With regard to efficiency, there was sound project management and value for money. In most cases, the quantitative objectively verifiable indicators have been surpassed and deadlines have been respected. The project was coordinated by the Georgian Institute of Public Affairs Foundation (GIPA) which worked together with the Caucasus Environmental NGO Network Association (CENN) and the Policy & Management Consulting (PMC) Research Centre and managed to successfully lead a consortium of different organisations with different management and different cultures. Local capacity and coordination was ensured by the GIPA regional offices that worked directly with the final beneficiaries and stakeholders. This proved to be a very appropriate coordination decision, as the regional coordinators are well equipped with local information, contacts and knowledge.

45 The total budget was €437.502,00 (GEL 1.196.611,72) with the EU contributing 80%.


There has been good coordination with project co-beneficiaries, final beneficiaries, local authorities, other donors and stakeholders. The partnership demonstrated an effective collaboration and complementarity in the triangle - agronomy, research and environment. Regular coordination meetings were held with the project implementing team to enhance sharing and exchanging of information and monitoring of achievements, on-going activities and future plans. Openness and availability of the project coordinator led to transparency and trust. The beneficiary universities were chosen based on good working relationships in the past, although cooperation with farmers remains difficult, mainly because of mentality. Time and effort is needed to train them and change this mentality. The universities have a role to play in this and can complement the more business-oriented services of the ICCs.

The responsibility of the final results was shared among all parties. The universities did the research, the governmental institutions and private agriculture actors provided information. On their side, farmers reacted positively to the cooperation. Group work of this type gives opportunities for different actors to complement one another and all actors displayed an enthusiasm to be involved.

Financial contributions have been provided from local institutions and government. For example, additional materials were needed to make the in-vitro laboratory in Batumi operational and the university funded their purchase. They also confirmed their willingness to finance further development and investments that are needed. Very good contacts were established with and support received from the MoA of Adjara, FAO, the local governments and the local extension services in the three regions. Demonstration plots and farmers’ land were made available for the research. In Akhaltsikhe, the local administration donated plants for the demonstration plot.

The training session on climate change and sustainable agriculture was organised in coordination with the Ministry of Environment and Natural Resources Protection of Georgia and Minister Gigla Agulashvili, delivered the training.

The services of the EUD were effective, especially in terms of coordination and through ENPARD stakeholder meetings and all awareness raising and visibility actions were coordinated with ENPARD’s Communication Unit.

Effectiveness The project has been effective in that all project results were achieved. The responsibilities between all project parties and the various stakeholders were balanced. A special logo was created and placed on all promotional materials that increased the project visibility.

The project increased the capacity of the regional universities to conduct research using modern practices, to participate in the decision making at local level and to upgrade their educational offer in terms of improved curricula and vocational training.

Expected results 1. Increased capacity of regional agriculture-related education and research institutions leading to

institutional sustainability. Academic and administrative staff, doctoral students and other students, were all engaged in the project activities and received training on research methodology, agriculture and environment. They also participated in a practical training seminar and study visits. The training enabled participants to improve their technical skills, develop new skills and increase their individual capacities in modern research methodology and practices which they can immediately use in their work. The people involved in the project were highly motivated and are now equipped to undertake modern research and to look for contacts and information at local level. In addition, they also acquired new skills to organise, conduct and promote environmental and Climate Smart Agriculture awareness raising campaigns.

A wide range of literature including hand-outs, written, published and other electronic materials were delivered to the beneficiaries. Books, publications and computers with installed software for data analysis


were donated to the three universities. This helped to compensate for the lack of up-to-date literature in agribusiness and agriculture that is in high demand. In addition, demonstration plots were developed in Telavi and Akhaltsikhe while in Batumi, in-vitro laboratory equipment was identified as a priority and purchased.

With the active participation of different stakeholders, the research methodology based on Value Chain Analysis was prepared and region-specific topics were selected. Kakheti region chose peach production and its value chain as a research topic. Samtskhe-Javakheti selected onions while in Ajara they opted for walnuts (especially chandler walnuts). Professors and students, participating in the project, collected and analysed information from suppliers, producers (individual farmers and cooperatives), traders, consumers, representatives of relevant public institutions (MoA, extension centres, etc.), members of the international community and independent experts. The research results were presented in separate papers, namely the Onion Value Chain Analysis in Samtskhe- Javakheti Region of Georgia, the Peach Value Chain Analysis in Kakheti Region and the Walnut Value Chain Analysis in Ajara Region and disseminated among interested parties. The papers are also available for download from the CENN website and the individual university websites.

2. Regional agriculture-related education and research institutions become advisors for regional policymakers in developing and establishing regional development plans leading to policy-level sustainability. A database of local stakeholders was created that included the contact information of the representatives from the participating universities, local government actors related to agriculture, regional extension centres and agribusiness actors (e.g., local farmers, product/service suppliers). The involvement of the central and local governments as well as extension services to identify problems and clarify needs was promoted. To this end, a great number of roundtable discussions, consultation meetings, workshops and steering group meetings were conducted to identify mutually beneficial interests and grounds for cooperation and to debate over region-specific issues, activities and results.

The collaborations between research institutions and other stakeholders enabled them to speak with one voice to the farmers and convince them to use new crops instead of relying only on traditional ones, to open to new practices and have more trust. In Adjara, the research report was perceived as a scientific support to continue subsidising walnut production and 145 hectares of demonstration plots are already available for walnuts.

3. Increased fundraising opportunities for regional agriculture-related education and research institutions and a demand for their services leading to financial sustainability The administrative staff of the three universities received training in searching for grant opportunities, proposal writing, project development and management, leadership, communication, negotiation and marketing. During the project, this knowledge was put into practice and with the support of GIPA, the Kakheti Iakob Gogebashvili State University prepared a grant proposal on holding agronomy-training courses in the Kakheti Region. The proposal was submitted and selected for funding by CNFA Georgia in the framework of the USAID funded REAP (Restoring Efficiency to Agriculture Production) programme.

The three beneficiary universities are also considering the introduction of courses in English in order to attract international students that will bring additional financial resources. They are trying to engage in more Erasmus+ and other projects and international exchanges. In order to achieve this, they are actively looking for grant opportunities and partnerships.

4. Increased information sharing and improved communication among regional agriculture-related education and research institutions and regional agriculture stakeholders. This was the first time that the beneficiaries participated in a project that brings together different regional stakeholders. It also changed the usually passive role of students and farmers into active engagement in the project research. The partnership built linkages between the three target universities as well as with the central and local governments and agribusiness actors. Special collaboration has been formed with the


extension centres (ICCs) through joint activities and with agribusiness actors through on-field activities and research work. Some examples of this improved communication are presented below for the three regions.

The practice was established for the universities to organise open days and conferences together with the local government in order to attract potential students from the region and beyond.

In Telavi, the deputy governor of the municipality took part in the project as a task force member. He was also involved as a trainer and gave his advice regarding the location of the demonstration plot. Initially, the university wanted to set the demonstration plot far away from the main building but was advised to locate it on the university terrain. Like this, it is close to water supply, students can easily access it, is cost efficient and practical, and can be guarded together with the university.

In Akhaltsikhe, cooperation was launched with a service provider for farmers who is himself a farmer to come to the university to share his experience and give lectures to the students. As part of the task force, he also influenced the choice of onions for the research topic.

In Ajara, the MoA of Ajara was actively engaged in the inception phase of the project when the research topic was selected. After that they were kept informed about the research results. The NFA of Ajara was engaged in the project through the training on the research methodology, consultations, round table discussions and research implementation. For the joint training session on improved communication and leadership, organised in Batumi, the regional MES and MoA of Ajara were invited. The MoA was represented by the Minister and the MES was represented by a Deputy Minister.

5. Increased credibility of the regional agriculture-related education and research institutions and increase in their competitive advantages The region-specific research reports improved the credibility of the three universities in their regions. The materials were actively distributed in electronic format to various stakeholders including farmers. Stakeholders were impressed by the research results and with the professionalism of the work. The findings are perceived as important both for further convincing farmers to start diversifying their production and for developing recommendations to farmers on how to improve their practices.

Different stakeholders suggested that further research is needed for other crops. Knowledge about storage is also needed and the universities have a role to play in the research phase. The use of demonstration plots also contributed to the increased credibility and trust among the local actors and farmers.

6. Increased awareness of the environment and agriculture in tandem as an important component of successful rural development A strong point of the project was that, for the first time, rural development was complemented by environmental matters through the Climate Smart Agriculture topic. Consultation meetings with farmers and other interested parties were organised with the support of the local extension centres to discuss modern agriculture species and their cultivation.

Awareness raising campaigns were organised and implemented in each of the three target regions. Three separate clean-up campaigns were also organised in the framework of the World Environment Day initiative of the UN. The aim of the events was to reduce environmental damage and support active public involvement in environmental protection issues. Citizens, students, representatives of the local governments, the Information and Consultation Centres (ICCs) and other regional organisations were among the participants. The clean-up actions featured a visibility component consisting of promotional items, t-shirts, caps, note pads, pens and coffee mugs with a specially designed logo. The enthusiasm of the participants was captured in a video that was placed on YouTube.46 Further, a video, entitled

46 https://www.youtube.com/watch?v=5rPMl1MyGgE


Understanding Climate Smart Agriculture was disseminated via the universities’ websites and during consultation meetings with local governments and farmers with the idea of promoting, and advocating for, the Climate Smart Agriculture approaches.

7. Increased number of users of the regional agriculture-related education and research institutions Thanks to the increased credibility and improved capacity, the universities are better equipped to extend their services beyond their traditional role in education and scientific research. For example, the university laboratories are used to test different crops and soils in order to advise farmers. In addition, the laboratories are used by secondary schools. The computers purchased through the project were provided with software for statistical analysis which makes it possible for students to conduct agriculture analysis that can be shared with stakeholders. A modular training course was developed at Samtskhe-Javakheti State University in cooperation with the local ICC: a short version of the programme is being tested to train the ICC staff while a longer version will be delivered by the university starting in January 2018.

8. Improved methodologies and innovative approaches to modernise agricultural practices and improve the efficiency of the sector The project activities and results were used to improve methodologies and offer innovative approaches. As a result of the training, new knowledge was received and the curricula in the beneficiary universities were updated. Pre- and post-evaluation of the training seminars was undertaken so as to understand what worked well and what not so well. The project promoted combining theory with practice and that was highly appreciated by both students and professors. The direct connection with farmers was particularly beneficial for learning through practice and demonstrated the value of the practical work.

The Value Chain Analysis approach was greatly appreciated since this is a relatively new methodology and was not used for academic research but was seen as a policy and economic tool. Before the project, it was not included in universities while now it is already embedded in the curriculum.

Impact The training delivered during the project had an impact on the training and education that was offered to the project final beneficiaries. Their curricula were updated and their capacity as VET providers was strengthened. The video material used to demonstrate soil cultivation deserves to be highlighted and these videos are already used in class.

As already mentioned, the training in organisational development and fund raising helped Iakob Gogebashvili Telavi State University to receive international funding from the USAID/REAP programme and at Samtskhe-Javakheti State University, students and professors wrote a proposal together.

The practical side of studies was also boosted. The one-day field visits for students and professors to local farmers was an important innovation for the universities and, in addition to the short visits, internships are organised for the students, so that they can practice in farms and greenhouses.

Thanks to the project the Samtskhe-Javakheti State University introduced PhD studies and can now offer education gratis to regional students entering agricultural programmes. Tuition fees for students are covered by the Ministry of Education and Science in universities offering three levels of higher education. The introduction of doctoral studies will also permit the university to develop its own academic capacity instead of relying on invited lecturers.

Some academics feel that they have been transformed from educators into advisors to farmers. They are well equipped to advise local farmers and through such means the universities have turned into a great technical resource at regional level.

The demonstration plots increased the attractiveness of agriculture to students from other faculties as well as to potential students. In Akhalstikhe, it is situated next to the main road and this attracts the attention of both students and local people. The demonstration plots also had an impact on farmers since they could see


examples of crops not traditional for their region. The involvement of both students and professors in creating the demonstration plots increased the feeling of ownership. In Telavi, they were so enthusiastic about the opportunity to build the demonstration plot that they volunteered to clean the piece of land allocated for the plot themselves.

Young people were previously not particularly interested in studying agriculture but since agriculture became a priority at national level, interest is increasing. The project and its results boosted this interest further. For example, in Telavi the timing of the project was just right and contributed to an increased number of applicants (120 for 50 available places) and only the Faculty of Agriculture saw an increase in applications.

The research results already had an immediate impact. In Samtskhe-Javakheti more farmers started growing onions and output increased. In addition, two demonstration plots for onions were funded by UNDP. In Batumi, the research convinced the MoA of Ajara that it is important to support the university to extend the value chain analysis to other crops.

The project also impacted on cooperation and relationships at different levels. The links between government, private sector and academia are generally weak but the project helped them to collaborate. For most professors, this project was the first time they were at the same side of the classroom as their students and they appeared to enjoy the experience. Project participants were invited as guest lecturers and were happy to share their experiences with students and professors. During the research, links were made with international producers from Turkey and a Turkish expert was invited to meet with students and professors and promote walnut production in Ajara. The project also improved contacts with local farmers and agri-actors, resulting in placing students for practice and using land for trials.

The MoA of Ajara signed a Memorandum of Understanding with the university ensuring the annual placement of ten students for a one-year paid internship at the Agro-Service Centre. In a competition, ten students have been already selected for the next year. The MoA also employed one student as an agrarian specialist and makes sure that the university provides the training for the local ICC. The ministry is certain to continue the consultation and information sharing with the university. The support of an open-door meeting for all stakeholders, including students and professors, to discuss subsidies for certain crops will be sustained. The ministry is also planning to translate a prominent agriculture book and donate some copies to the university.

The project also strengthened inter-regional cooperation, establishing contacts between the universities, developing new connections and triggering future collaboration. Students had the opportunity to meet professors from other universities and are now looking forward to participation in in-country student exchanges that can be facilitated by social media. In the final workshop organised in Kakheti, it was decided that five students would change university for one week.

Within the project, CENN worked for the first time with the beneficiary universities and developed very good links with them. Based on this relationship, the project idea was replicated in the forestry sector and funded by UNEP. Other cooperation that is continuing is a USAID funded project that developed Green Hubs in Batumi Shota Rustaveli State University and in Iakob Gogebashvili State University in Telavi, which aims to build environmental awareness among the students and stimulate group work.

The project introduced some innovations as well, such as dripping irrigation and mulching technology. The novelty for CENN is that they became aware of the rural development concept and added rural development to their Caucasus website.

Through the practical work of the students with farmers and the introduction of a PhD programme in Telavi, the project indirectly contributed to increased employability in the regions.

Sustainability There were encouraging signs in terms of potential sustainability. The university leadership is very supportive because in all three universities the project fits with their priority of focusing on agricultural education. All


stakeholders (in the form of task forces or round tables) were consulted when important choices were made, (e.g. location of demonstration plots, choice of research topics, etc.) and share the ownership of the project results. All efforts are made to sustain the universities as regional hubs that cooperate with all agriculture actors and the support of the local governments is ensured.

As a result of the training received during the project the curricula in the three universities were updated and embedded in their educational offer. Moreover, GIPA signed a Memorandum of Cooperation with the participating universities, committing to support their educational programme development for at least four years. In Batumi, all agrarian studies have to be re-accredited this academic year (2017-2018). This is the right moment to introduce innovations and the process will be used to ensure that all improvements in the curricula are ratified. Programme accreditation is valid for five years.

The universities were actively involved in the creation of the demonstration plots and the equipment of the in-vitro laboratory that corresponded to an identified need and they provide both professors and students with the opportunity of putting theory into practice.

Financial and in-kind contributions were already provided by beneficiaries and stakeholders during the project and further commitments were made to sustain the project results. All stakeholders seemed positive about further strengthening the connections built during the project and extending them to collaboration in other areas. For example, the universities can help with the stink bug problem (see above) and they can also help to re-train staff of the extension services who then go to the rural areas to disseminate the information to farmers.

The project could be also replicated to other regions. However, account should be taken of the regional specificities, such as traditional crops and new crops to be introduced.

Cross-cutting issues were also taken into account. The project was mindful of gender equality and data for the participation of women are provided per action. In terms of democracy and good governance, the project was a good example of involving different stakeholders, including students, in the decision-making process: volunteer practices were promoted. A broad range of issues in regard to environmental sustainability were covered such as training in Climate Smart Agriculture and Integrated Natural Resource Management. Environmental awareness raising campaigns were also organised.

7.4.5. Overall impact of the ENPARD 1 programme in terms of the agricultural sector?

It was illustrated above that there was a significant increase in the share of budgetary resources allocated to the agricultural sector (using the Ministry of Agriculture as a proxy for the sector) throughout the ENPARD 1 years and within this allocation a programme was funded to support the development of the ACDA. Estimates forecast for the next four years indicate that the sector will continue to receive a higher share of state budgetary resources than prior to the commencement of ENPARD, albeit at a lower level than during the year 2013-2016, in line with cuts to administrative expenditures in all line ministries. There was also an increase in the total value of overall agricultural output over the ENPARD 1 period (2013-2016), although there is no measure of the contribution to this the total from the newly created cooperatives. (Table 8) As noted above, the latter share will be negligible considering the relatively small number of cooperatives and it will take a considerable period of time before it is possible to gauge any likely future impact in terms of a contribution to substantial increases in output and productivity. Table 8. Total value of agricultural output: overall and by sub-sector, 2010-2016 (GEL mln)

Sub-sectors: 2010 2011 2012 2013 2014 2015 2016 Grain and other crops not incl. elsewhere 287 471 415 485 515 497 504

Production of fruit, walnuts, beverages, spices 329 476 396 598 689 722 618

Vegetables, specialised gardening and nursery production 316 290 276 322 410 403 376 Animal husbandry 1,240 1,337 1,610 1,666 1,613 1,837 2,195

Agricultural services 69 99 110 139 161 194 249


Value of total agricultural output 2,242 2,674 2,807 3,210 3,387 3,653 3,942 (Source: Ministry of Agriculture of Georgia, Annual Report, 2016, p.9)

N.B. the GeoStat data for 2016 were only preliminary The value of total agricultural output over the period, 2010-16, shows a consistently rising trend, while the biggest sub-sector contributor throughout the period to the sector is animal husbandry, with fruits, walnuts, beverages and spices consistently coming second over the past four years. With respect to agriculture’s contribution to GDP, in the first half of 2017, the agricultural sector contributed 9% (GEL 635.1 mln) of GDP, compared to the corresponding period in 2016, representing a decrease of 0.5% (GEL -25.6 mln). (Table 9) Throughout the last eight years (2010-17), however, the agricultural sector’s contribution to GDP has fluctuated between 7.8% and 10.3%.47 It is interesting that GeoStat data show that income levels in rural areas are rising (see Table 10 below), though data are not available to measure the share of cooperatives - or ENPARD-supported cooperatives - in this. Moreover, ISET data from the end of 2017, based on surveyed cooperatives, showed a 37% increase in the value of nominal food production (see above, p.43). Table 9. Agriculture share in total GDP, 2010-2017

Source: National Statistics Office of Georgia

1Growing of cereals and other crops n.e.c; Growing of fruit, nuts, beverage and spice crops; Growing of vegetables, horticultural specialities and nursery products; Farming of animals; Agricultural service activities; Forestry and logging; Fishing and fish farming.

*Preliminary Data

(Source: ‘Development of the agricultural sector, January-June 2017’, Publications: 98, PMCG, Tbilisi, 7 September

2017)

Table 10. Total income in rural areas (GEL M) and total rural income from selling agricultural products (GEL M )

Year

47 ‘Development of the agricultural sector, January-June 2017’, Publications: 98, PMCG, Tbilisi, 7 September 2017


2013 2014 2015 2016

Total income in

rural areas (GEL

M)

353.4

392.7

400.1

418.5

Total rural income

from selling agricultural

products

47.3 67.3 78.2 74.9

(Source: ‘Distribution of average monthly incomes of the total population by urban and rural areas’, GeoStat, Tbilisi, 2017)

8. LESSONS LEARNED AND RECOMMENDATIONS

� It is useful to build on previous EU Budget Support programmes where a key focus has been on strengthening PFM Reforms and their implementation, since this facilitates the fulfilment of part of the General Conditions for Budget Support.

� Success of sector Budget Support is more likely when there are favourable government conditions,

such as the election of a new government with a commitment to supporting the sector (i.e. where a new BS programme is both timely and appropriate)

� Success of Budget Support is facilitated when there is a favourable macro-economic environment

� Implementing a Budget Support programme with a single-sector focus over several years is facilitated by ensuring that the initial conditions are realistic and achievable, enabling experience to be achieved by counterparts with results-oriented conditions, so that conditions can then become progressively more challenging with a move to subsequent programmes (e.g. ENPARD I to II and then III)

TA to the MoA and ACDA

� Since FAO is continuing TA support for capacity building to the MoA, it is suggested that the focus of the on-going review by the FAO should be on further re-configurating the ministry organigram, where certain areas are strengthened and better linked to facilitate the implementation of policy (programme) priorities, e.g. policy, budgeting and M&E (for prioritisation) sections plus donor coordination, by ensuring that each of these sections has the appropriate number of staff, with the appropriate qualifications and experience, and are well coordinated. It will also be important to cost the revised organigram so that when the ministry submits the new organisational chart, it is fully justified in terms of the tasks it is now expected to perform and also costed. This should assist the MoA with developing the required capacity to absorb funds and use them effectively. It will also be important to clarify with the ministry the precise process for submitting this new organigram for government approval (e.g. Ministerial Decree, Public Service law, Parliament)

� It will be important to ensure that TA support is used efficiently and effectively to achieve the desired practical and tangible outcomes and so the future task will be to assist the implementation of organisational changes so that they become institutionalised, thus achieving greater impact with likely sustainability

� One clear recommendation is for both the MoA and the TA to give the budget department a much higher priority with adequate and experienced staff. Thus, important TA work for the future will be to provide support to strengthening the budgeting department, which is critical for developing a MoA that is a line ministry within an MTEF system. Considering that capacity building to line ministries under the MTEF framework has to date been fairly limited, it is important to consider the possibility of training for the MoA, as well as for ACDA, under such future TA


� Support to budgeting by the FAO should be an important part of future assistance since only through

budgets can we translate policy into reality

� It is also important that future FAO TA supports the results-oriented monitoring & evaluation system (ROM) to become integrated and fully institutionalised within the MoA so that key departments (e.g. policy, finance & budget, monitoring) use the new system on a day-to-day basis. It is recognised that this poses a number of challenges but the close working relationship between the FAO and the MoA should help to facilitate this. It will also be important to ensure that the M&E (ROM) system is linked as a management information system to the various agricultural agencies - APMA, ACDA, NFA

� For ENPARD II, FAO needs to work to encourage the above-mentioned organisational and system changes to be fully integrated and institutionalised if these are to have real impact and to stand a chance of becoming sustainable

� It will be important for the TA to continue to encourage the MoA to assume the primary role in coordination of donor activities within the sector and help to build the necessary capacity so that the MoA has the expertise in order to fulfil the role

� The TA should assist ACDA to upgrade the budget needs related to the Agency’s capacity building and training needs in relation to those of the registered cooperatives for 2017-2019

� Consideration should be given by the FAO TA to assisting the MoA to orientate the ‘Agro-projects’ programme (through APMA) more towards supporting the needs of the nascent agricultural cooperatives rather than large agricultural enterprises

� Although ACDA monitors what is happening with cooperatives in each region, it does not at present produce written reports on the monitoring exercise. It is recommended that, in future, written reports are produced following each monitoring visit, to enable follow up and action being taken

� IT support is required to merge the two databases (the data source on registered cooperatives in the House of Justice, which registers companies, where ACDA proposes a cooperative for registered status, and the ACDA database on production by cooperatives) so as to make the information more easily acceptable and user-friendly, ensuring a more efficient and effective use of resources.

� It is also important in future to give consideration to the framework proposed for developing financial support to cooperatives, by an independent consultant, working under ACDA

Small farmers’ cooperation measures:

� Emphasise quality rather than quantity: While the EU promoted agricultural cooperatives under ENPARD 1, the direction of on-going and future support has moved more to rural development, though still including agriculture. The ACDA still strongly supports the establishment of cooperatives although, given the limited assistance and, assuming that many of the current 1,500 cooperatives will not be sustainable in the long run, it might be useful to focus future support on existing agricultural cooperatives, rather than on creating new ones. If there is a chance to assist three cooperatives in each sub-sector, such as hazelnuts, forest fruits and so on, these few could serve as success stories, demonstrating what can be achieved, and could be used for promotion and for training.

� Monitoring: While considerable efforts have been given to monitoring, most of the evidence comes

from interviews with farmers, yet their answers are only externally verifiable if notes, copies and photos are retained. Performance monitoring of the cooperatives as businesses requires commercial information to be available which can then be cross-checked. In future, both the MOA and the ACDA will assume responsibility for the monitoring of cooperatives.

� Visibility: Although visibility is an important element in every EU project, it is always better to focus

attention on promoting good examples of project work.


� Value chains: There are positive examples where the value-chain approach was well understood. For instance, a dairy cooperative dealing with cheese production decided that the best way of involving all farmers involved in milk production was by promoting artificial insemination (ND) and by training one of the members to utilise this service, primarily to the members. It was observed on several occasions, however, that a value chain approach was not followed as, for instance, in the case of a flour mill project. When the cooperative and the supporting NGO were planning an improvement in the milling technology, by purchasing the technical equipment needed, improvements in the production of cereals was not reflected in the project. In other words, the milling process added value and increased farmers’ revenues but the use of modern seeds and more fertilizers could have contributed substantially to the overall revenues. Similar points can be made regarding honey making where it would be helpful to demonstrate increased yield per beehive on cooperatives where better centrifuges and cleaning techniques were used. Such positive examples could then serve to promote the value chain approach.

� Entrepreneurship: Many beekeepers in a region formed a cooperative specialising in honey production

and made improvements to the buildings and assembled machinery and connected it to a power supply (electricity). ENPARD 1 financed the purchase of the technical equipment to enable this honey preparation and packaging to be carried out more professionally. However, in addition to the equipment supplied through the grant, a honey exporter had installed his equipment in the same building. Thus, the cooperative joined together with a private businessman, to acquire the total funds required in order to collect and processes the honey (the cooperative) and then market it (the business man). This is an example of an ideal division of labour, as cooperatives are good in organising farmers and collecting agricultural products, whereas businessmen often have better market linkages. Commercially, this appears as a win-win situation as well as providing a transfer of know-how. Having a commercial partner, the cooperative can learn quickly what the market is looking for and how to sell the product in the market. As each party has its advantages, it makes sense to cooperate. Another cooperative was active in hazelnut cultivation and processing and is supported by ACDA and with only eleven members, it processed 29 tons of fresh hazelnuts in 2016 (another cooperative for comparison with more than 500 members processed just 84 tons). The difference can partly be explained by the entrepreneurial spirit of the management where the manager of the cooperative was also the owner of a nearby restaurant, using his entrepreneurial know-how to run a hazelnut processing plant. This is clear evidence of the advantage to smallholders of having a cooperative managed by an experienced businessman.

� The agricultural cooperative "Kolkheti" in Tsalenjikha is active in hazelnut cultivation and processing.

It is a relatively small cooperative with 11 cooperative members but it processed in 2016, 29 tons of fresh hazelnuts and – for comparison – the heavily supported agricultural cooperative "Darchelis Tkhili" in Darcheli, with more than 500 members, managed just 84 tons. The difference can also partly be explained by the entrepreneurial spirit of the management at Kolkheti, where a positive attitude abounded. The lunch, following the visit, was not as is customary, on a nearby farm, but was held in a new but modest restaurant in the village, which turned out to be owned by the manager of the cooperative. This demonstrates that a good manager of a restaurant possessed the entrepreneurial know-how to also run a hazelnut processing plant. This is yet further evidence of the advantage to small farmers of having a cooperative managed by an experienced businessman.

� Ownership of agricultural cooperatives: While cooperative members generally possess an

understanding of the basis of cooperatives, due to the limited investment they are able to make, the notion of ownership is underdeveloped or missing. Cooperatives do not make use of their full potential since farmers think primarily of their own advantages (focusing on their farm and family) and only after that, on the cooperatives. Limited ownership results in reduced investment and low re-investment from any profits that accrue and, consequently, the new cooperatives lack a sound asset base and are thus not bankable. A likely contributory factor to this situation is the tax system since, if the farm turnover is higher than GEL 200,000, the farmer incurs a tax liability. Therefore, the ACDA would be well advised to look to different taxation models since provision of a temporary tax heaven does not solve the fundamental problem. Consideration should be given to whether larger cooperatives should be promoted and the consolidation of smaller ones.

� Social vouchers: Under the previous government, when agriculture was not considered a priority, rural

poverty was combatted by the social voucher system. This approach is changing with more support to


agriculture and rural development and social vouchers are being reduced. For the cooperatives, however, these vouchers have led to difficulties for farmers, since: they lose the vouchers immediately on becoming a cooperative member, regardless of whether the cooperative is profitable; and they cannot apply to take officially paid seasonal jobs, as agricultural cooperatives are moving quickly to payment by bank transfers, to increase the transparency. A recipient of a social voucher would be excluded from further vouchers, once he is deemed to be in receipt of income. Thus, consideration should be given to enable rural citizens in receipt of vouchers to earn limited additional income, which keeps them in employment. While there is no doubt that social security nets are needed, they should not act to hinder the development of commercial activities by beneficiaries.

� End line survey: Although the practical challenges are well appreciated, it would be useful for a final

evaluation to have the end-line surveys carried out before the evaluation since this would allow the end-line findings to be integrated in to the Final Evaluation Report. Since the survey preparation was only taking place in mid-October, there was no opportunity for the evaluation team to obtain the initial data. It would be helpful if, in future interventions, end-line surveys (as well as baseline surveys) commence sooner, to enable data to be available for the final evaluation.

� Private business experience of staff: While, overall, the four NGO-led consortia have performed well, especially bearing in mind the relatively small budget of €18.6 million over four years, covering 200 cooperatives (plus other activities) and there have been a number of positive results, although, for future interventions, it is recommended that more staff have working experience in non-governmental and non-donor driven organisations.

� Share of total turnover from non-cooperative members: In interviews, many of the cooperatives

declared their concern with the limited opportunities possible when only a maximum of 30% of their turnover can be realised from non-members. Within honey cooperatives, a member can easily purchase honey from non-members and then it becomes the property of a cooperative member so that it will no longer be considered a non-cooperative product. Theoretically, this could also be done with milk and hazelnuts, although it is unclear whether this is in fact the case in practice. The situation is more complex in the case of machinery cooperatives since they may have, for instance, 10 members, but using their machines and equipment, they could work on land for 50 members. One solution would be to accept each client as a member since each member could easily pay the minimum entrance fee for membership. It becomes more complicated when it comes to the distribution of the profit, since members who have invested in the equipment through grant co-financing, will wish to receive a larger share of the cooperative’s profit. The ‘30% rule’ has meant that some cooperatives decided not to become registered agricultural cooperatives while others are considering whether to transform the cooperative into a limited company.

� Revolving fund: Many cooperatives will not pay back the ‘credits’ as there is no redress for failure to

do so. The NGO involved will no longer be active in the field and therefore cannot follow up the repayment plan, although there is no intention to bring such cases of non-repayment to court since this would run the risk of ruining all previous efforts. However, since no collateral was required, commercial banks will not be interested in taking over the credit portfolio and so, in the future, it might be better to have larger co-financing requirements than is contained within the financial agreements under ENPARD.

� It would be useful to continue the practice of holding regular reviews to assess project progress and

the usefulness of the indicators for measuring this progress

� It might be worthwhile in forthcoming projects to allocate three persons to provide the full range of assistance to ten or even twenty cooperatives; these three persons would have a broad understanding of the needs of their supported beneficiaries, could assist in management and business plan writing, training, accounting, procurement, data collection and so on. Of course, they would have to stay in the neighbourhood of their clients and not in Tbilisi and would then act more as generalists than specialists. The advantage is that they would have an overview, a ‘helicopter perspective’, of the daily problems of the supported cooperatives.

� When undertaking field visits, the evaluator was sometimes driven by someone who was also an

expert. Knowing that drivers who speak English and understand the development issue might be more


expensive, it would be worthwhile to consider reducing the number of passengers: a car with one less passenger allows either for more farmers on board or to be less heavy, an important consideration when moving on poor roads and tracks

� It is extremely important that the ENPARD I- supported agricultural cooperatives will get further

support, especially on technical and management issues, since they need to become more profitable. This is the best chance of increasing overall food production which, in turn, will contribute to increased revenues for cooperatives’ members and guarantee the sustainability of ENPARD I. Successful agricultural cooperatives can then serve as models for less profitable ones but this also requires good cooperation among cooperatives. While continued support is planned through ACDA, consideration may also be given to making more of the support programmes funded through APMA appropriate and accessible to cooperatives since, at present, most of these programmes are designed for large enterprises.

� It might be helpful in future interventions for commercial banks to be involved from the outset so that financial matters could be better explained and maybe some bank financing could have been agreed right from the start

� Since the procurement process appeared to be quite time consuming, it may be considered for future

interventions to use more external specialists to provide advice and assistance on procurement matters, thus giving more time and resources for the consortia to concentrate on other key tasks.

� Encouragement to adopt a more holistic approach, focusing on the entire value chain, should be envisaged in any future interventions

� Maybe better results could have been achieved if the additional priority issues had not been included and if the setting up of new agricultural cooperatives had been time-bound. The fact that there were several cycles of applications for new cooperatives, the last ones are now receiving their equipment at the end of the Programme when there is no time left for management support (e.g. coaching), which is critical if production has already started. A more hands-on training approach might be more successful in enabling cooperatives’ members to better manage their technical equipment

� It is suggested that up to 25 current staff of the four NGOs continue to work on “their” cooperatives (meaning that 1 person will be in charge of 10 ENPARD-cooperatives, a realistic figure.), since providing technical know-how and management advice should increase the chances of these cooperatives retaining momentum and operating profitably, starting from a low level but growing continuously. However, it is fully appreciated that this recommendation probably depends on the availability of donor funding.

� To develop specific criteria related to environmental safety in a future Call for Proposals, to ensure that cooperatives members are aware of the issue and will apply environmentally-friendly activities, which is key to agriculture and rural development

Pilot Rural Development measures LAGs in general

� The LAGs should be institutionalised at the national level within the framework of respective policies

� To conduct capacity development with respect to environmental management both for the staff and the targeted population, and promote funding and implementation of environmental projects

� To strengthen the institutional and fundraising capacities of the LAGs to develop an exit strategy and promote the active involvement of youth groups in fundraising and decision-making

� To strengthen the cooperation of the LAGs with local authorities and identify synergies among the local development plans of the Municipality and the local development strategy of the LAG (might be applied to all other LAGs in the framework of ENPARD II).


� LAGs should exchange experience with other LAGs, including those starting within the framework of ENPARD II, and share the lessons learned and best practices for further replication

� To require a contribution from the project applicants prior to provision of the project funding to ensure more ownership and improved sustainability. This can be applied in the framework of the sub-grants funding mechanism within ENPARD II

� A technical assessment or feasibility study should be undertaken for all the selected sub-grant projects

prior to provision of the awards. This can be applied in the framework of the sub-grants funding mechanism within ENPARD II Lagodekhi

� The youth group of the LAG (Lagodekhi) has a promising potential for ensuring sustainability and further follow-up of the LAG, thus the group’s involvement should be encouraged, links with other youth organisations built and capacity development provided with respect to fundraising

� More projects should be encouraged for communal use since such initiatives are likely to have a

considerable impact on the overall target population. Kazbegi

� The activities of the LAG (Kazbegi) related to the organization of local events without any financial resources from the project, serve as good examples for replication to other LAGs.

� Own contribution should be requested from the sub- project applicants prior to provision of the project funding, to ensure more ownership and improved sustainability.

� A technical assessment or feasibility study should be undertaken for all the selected sub-grant projects.

� To improve the visibility of the project in Kazbegi, with respect to both the sub-grants and raising awareness among the local population.

Ajara UNDP project

� To develop a cluster of cooperatives based on their production and apply the value chain approach to facilitate their improved cooperation, access to markets and sustainability and use as a demonstration model

� The technical capacities of the ASC staff should be strengthened, in particular with respect to the new approaches introduced by the project and which are currently being applied by the MoA of Ajara, including green-house cultivation and pest and disease control

� The best cooperatives might become demonstration ones for the others, and the exchange of experience among the cooperatives might lead to the acquiring of new technologies, ideas and contacts by other cooperatives. For example, one of the fish-farming cooperatives supported, has established a small dining area and produces house wine. The information regarding this possibility has been shared with the tourism information centre of Batumi, and many tourists come to the fish-farm cooperative to enjoy fish with a house wine, which has become an alternative source of income for the cooperative

� To conduct a functional assessment of the newly established departments within the MoA, Ajara, including Policy, Strategy and Planning, Rural Development and the Agro Project Management Centre, and provide the required TA to ensure effective implementation of the strategies and programmes, including the Ajara Strategy on Rural Development.

� To support the MoA, Ajara and the ASC in establishing an M&E System and building the capacities of the respective staff to enable them to use the system and conduct regular M&E activities with regard to the implementation of the respective strategies and programmes.


� To provide the necessary legal and policy framework to ensure timely and targeted provision of extension services to the farmers during the year

� To develop specific criteria related to environmental safety in the applications, to ensure that the members of cooperatives are aware and will apply environmentally-friendly activities, in relation to agriculture

Agriculture related education and research institutions � During the interviews and meetings, the project beneficiaries shared their opinions and

recommendations on the further development of ENPARD and some important points can be highlighted as lessons learned (ENPARD is important for Georgia as a symbol of the relationship between the EU and Georgia)

� Proper preparation and needs analysis before the actual start is essential for a project to reach its objectives within the defined timeframe. Combining cross-disciplinary actors, i.e. environment, economy, research, education, etc. ensures complementarity of expertise and brings additional advantages to the beneficiaries. Involving stakeholders and beneficiaries in key phases builds trust, increases ownership of results and guarantees impact and added value

� Appropriate documentation of project activities and processes enhances the identification of lessons learned and the transferability of knowledge and good practice to people who were not directly involved in the project

� Donor institutions should be careful not to create in beneficiary organisations dependence only on project funding and dictate their course of action. Beneficiary organisations should serve the interests of their constituencies first and reflect this within the project work and not vice versa

� Infrastructure still remains a challenge for the regional universities, e.g. greenhouses, laboratory facilities, equipment and demonstration plots for veterinary studies, winemaking, beekeeping, etc. and donor support is needed to fund such investments

� New infrastructure and equipment are important but in order to have an impact the mentality of people should be changed as well. This can be achieved through regular training and re-training, hence the importance of education and vocational training as an essential element of ENPARD

� The concept of involving think tanks and educational institutions should be further expanded in ENPARD. Universities are in the centre of the Georgian agriculture and an important part of the regional agriculture hubs. In addition, for graduates it is important to focus on the needs of industry while continuous education or vocational training is vital for the agriculture sector. The Higher Education Institutions and their infrastructure can answer a need here especially in the current situation of underutilising their technical capacity

� An apprenticeship type approach should be introduced and further developed in education. More practical work and study visits to farmers should be also encouraged. Students can work with cooperatives rather than with individual farmers and like this produce a bigger impact .

� Study tours and exchanges are perceived as very positive for the educational process and for improving the skill-set of both students and academics. The students involved in the project suggested student exchanges within Georgia can be organised and virtually facilitated by social media. While funding for international exchanges is available through Erasmus+, though more limited for agriculture education, and other programmes, funding for inter-regional exchanges in the country is difficult to find


� The stakeholders, involved in the project, can be used as champions and invited as guest lecturers in

the universities. Some of them are already committed and share their knowledge and experience with students and professors or host students for internship or practical exercises while others confirmed their willingness to do so. At the same time the scientific knowledge and academic experience should be better utilised to advise local governments, ICCs and other agriculture actors. The momentum should be maintained and further cooperation built. Regional branding requires broad stakeholder involvement and can benefit from this type of collaboration at regional level.

� Research using the value chain analysis was perceived as very useful and results of this had an impact on crop diversification in the regions. The idea is that, through diversification of crops, food production will be increased, dependence on imports for some crops will decrease and the soil will not become exhausted though growing the same crop each year. In this respect, research should be undertaken into other crops and complemented by a marketing component on marketing. The value chain analysis can be also used to reveal bottlenecks especially in terms of storage facilities that are lacking in Georgia

� Value chain analysis is used in ENPARD II but implemented by NGOs, not universities. As such, the capacity built in the universities is not exploited. At the same time when research is concerned it is better to partner with universities than with NGOs

� Agriculture related education and research should focus more on food science, food safety, business and economics of food, and food processing and technology. Using modern technology and engineering in food production is a new opportunity. Collecting good examples of how to manage big farms and turning them into case studies is another element that can be developed

� Programmes and projects that attract people with technical skills and prevent empty villages should be supported. Providing quality higher education and VET is important to build regional capacity and reduce the risk of young people emigrating to the capital or abroad

� Much of the training in accountancy that was provided to farmers did not prove to be particularly useful since farmers do not need to become accountants. They do need to understand how to collect and interpret financial information, while leaving actual accountancy to professional accountants. It is here where more work is needed in order to attract accountants to the rural areas and provide them with continuous training. ENPARD can help in this by maintaining resources for education and training and opening this to more actors rather than just to cooperatives and farmers

� Further training on DCFTA is needed and should be funded. In this respect, it is important that both extension services and farmers are trained. The extension services can be used as trainers while farmers ask very specific questions that have to be answered directly. In addition, farmers are conservative people and it is important to remind them regularly especially about new things such as DCFTA.

Documents

Final Report evaluation ENPARD Ienpard.ge/en/wp-content/uploads/2015/05/Final-Report...Final Evaluation ENPARD Programme 1 2 “This report has been prepared with the financial assistance