RESTORING EFFICIENCY TO AGRICULTURE …pdf.usaid.gov/pdf_docs/PA00N233.pdf · REAP Internship Program ... PERSUAP Pesticide Evaluation Report & Safe Use Action ... farm to develop

1

Restoring Efficiency to Agriculture Production (REAP) Quarterly Progress Report Prepared for review by the United States Agency for International Development under USAID Contract No. AID-114-C-13-00002, Restoring Efficiency to Agriculture Production (REAP) Activity in Georgia implemented by CNFA

RESTORING EFFICIENCY TO AGRICULTURE PRODUCTION (REAP) ACTIVITY IN GEORGIA

Quarterly Progress Report

Year 1. Quarter 3: April 1, 2014-June 30, 2014

RESTORING EFFICIENCY TO AGRICULTURE PRODUCTION (REAP) ACTIVITY IN GEORGIA

Quarterly Progress Report Project Year 4

October 01, 2016 – December 31, 2016

2

Restoring Efficiency to Agriculture Production (REAP) Quarterly Progress Report

Restoring Efficiency to Agriculture Production (REAP) Activity in Georgia

Quarterly Progress Report October 01, 2016 – December 31, 2016

USAID Contract AID-114-C-13-00002 Implemented by CNFA

Submitted to: USAID/Caucasus Ms. Shamenna Gall, COR

Submitted on January 15, 2017

3


Table of Contents

Executive Summary ....................................................................................................................................... 7

Summary of Achievements in Q1 ................................................................................................................. 9

Operations Report ...................................................................................................................................... 10

Operations, Facilities and Equipment ..................................................................................................... 10

Staffing .................................................................................................................................................... 10

REAP Internship Program ....................................................................................................................... 10

Mariam Kutelia Research Grant ............................................................................................................. 10

Document and Deliverable Submission Summary ................................................................................. 10

Overview of Quarter’s Activities ................................................................................................................. 11

Activity 1: Business Management........................................................................................................... 11

Activity 1.1: Food Safety and Quality Management .......................................................................... 11

Activity 1.2: Improved Financial Management .................................................................................. 14

Activity 1.3: Capacity Assessment of Union AgroService ................................................................... 15

Activity 2: Best Agricultural Practices and Improved Technologies ....................................................... 15

Activity 2.1: Demonstration Plot Program ......................................................................................... 15

Activity 2.2: Training of FSC Staff ....................................................................................................... 17

Activity 2.3: Training of Cold Store Operators ................................................................................... 18

Activity 2.4: Individual Consultancies in New Agricultural Technologies........................................... 19

Activity 2.5: Development of Training Cartoons ................................................................................ 21

Activity 2.6: Agriculture Publications ................................................................................................. 21

Activity 3: Marketing .............................................................................................................................. 21

Activity 3.1: Export Support for Grantees .......................................................................................... 22

4


Activity 3.2: Development of Corporate Brand Identities and Marketing Tools ............................... 23

Activity 3.3: Local Market Linkages .................................................................................................... 24

Activity 4: Smallholder Integration ......................................................................................................... 25

Activity 4.1: Supplier Network Development ..................................................................................... 25

Activity 4.2: Cold Storage Financial Planning Tool Support ............................................................... 25

Activity 4.3: Grades and Standards Development ............................................................................. 25

Activity 4.4: Product Traceability System Development .................................................................... 26

Activity 4.5: Supply Chain Management Conference and Group Training......................................... 26

Special Initiatives .................................................................................................................................... 26

FSC Internal Study Tour ...................................................................................................................... 26

REAP Summit ...................................................................................................................................... 26

Future Hazelnut Leaders Program ..................................................................................................... 26

Facilitating Internships with REAP Grantees ...................................................................................... 26

Gender Program ................................................................................................................................. 27

RESP’s response to BMSB outbreak in Georgia .................................................................................. 28

Grantee Cost-Share Procurement ............................................................................................................... 28

Environmental Management and Monitoring ............................................................................................ 28

Communications ......................................................................................................................................... 29

USAID Annual Fair .............................................................................................................................. 29

High Official Visits to REAP Projects ................................................................................................... 29

US Embassy Short Film Production .................................................................................................... 30

REAP Grantee Films ............................................................................................................................ 30

Monitoring and Evaluation ......................................................................................................................... 30

5


Cost Benefit Analysis (CBA) ................................................................................................................ 31

Economic CBA..................................................................................................................................... 32

Non-Grantee Technical Assistance Attribution Methodology ........................................................... 33

Financial and Expenditure Summary .......................................................................................................... 34

Key Constraints ........................................................................................................................................... 35

Annex 1: Updated PMP (Performance management plan) .................................................................... 36

Annex 2: Non-Grantee Questionnaire .................................................................................................... 38

6


Acronyms

APMA Agricultural Projects Management Agency AR Accounts Receivable BMSB Brown Marmorated Stink Bug BRC British Retail Consortium BSPs Business Service Providers CBA Cost Benefit Analysis COR Contracting Officer’s Representative CS Cold Storage DCFTA Deep and Comprehensive Free Trade Area EIB European Investment Bank ENPARD European Neighborhood Programme for Agriculture and Rural Development ERP Enterprise Resource Planning EU European Union FSC Farm Service Center FSSC Food Safety System Certification PY3 Project Year 3 PY4 Project Year 4 Q1 Quarter 1 Q2 Quarter 2 GAP Global Agricultural Practices GHGA Georgia Hazelnut Growers Association GI Geographical Identification HACCP Hazard Analysis and Critical Control Points ICC Information Consultation Centers IFS International Featured Standard ISO International Organization for Standardization MASHAV Israel’s Agency for International Development Cooperation M&E Monitoring & Evaluation MoA Ministry of Agriculture MoESD Ministry of Economy and Sustainable Development MSC Machinery Service Center MSME Micro Small and Medium Enterprise NFA National Food Association PERSUAP Pesticide Evaluation Report & Safe Use Action Plan PHHP Postharvest Handling and Processing PMP Performance Monitoring Plan PP Primary Production PUM Programma Uitzending Managers (Dutch) -Manager Deployment Program Q1 Quarter One Q2 Quarter Two REAP Restoring Efficiency to Agricultural Production TA Technical Assistance ToC Terms of Cooperation USAID United States Agency for International Development USG United States Government

7


Executive Summary

In the first quarter (Q1) of Project Year Four (PY4), REAP’s implementation continued to focus on building the capacity of REAP’s central figure, the entrepreneur, to sustainably grow their enterprise and magnify their development and economic impact throughout Georgia’s rural communities. With more than 51 enterprises fully procured, REAP’s efforts this quarter centered around utilizing proven systems and approaches to provide demand-driven technical assistance to grantees and non-grantee enterprises in four main directions: business management, best agricultural practices, marketing and smallholder integration. This Quarterly Report provides an overview of REAP’s progress in implementing these activities with our network of grantee and non-grantee enterprises.

Within REAP’s business management activity, certification and the implementation of internationally recognized quality standards remains a major activity as Georgian processors are preparing to adhere to DCFTA requirements and compete with international companies locally and abroad. During the quarter, REAP and APMA continued their collaborative certification activity, resulting in ISO 22 000 certifications for eight processing enterprises with an additional five under implementation.

REAP’s demonstration plots program continues to be an important activity for reaching a wide audience of smallholder farmers and public extension agents. During the quarter, REAP launched 14 demonstration plots, including five under a new 0.1 Ha initiative that promotes the production of cash crops on small parcels of land. As a testament to the success of REAP’s demonstration plot program, REAP concluded negotiations with BASF, the world’s largest agrochemical company, and Syngenta to pilot 10 demonstration plots that will combine their technical expertise with REAP’s FSC outreach network. During the course of PY4, REAP expects its demonstration plot program will raise the awareness of and provide trainings to more than 14,000 smallholder farmers in new agricultural technologies, varieties and practices.

Responding directly to one of Georgia’s most prevailing agriculture development challenges, the lack of current agronomists, REAP designed and launched an agronomists training program this quarter to support FSCs, ICC extension agents and local agronomists to upgrade their skills in agronomy. Led by local universities, this program will improve the extension and consultation services provided by REAP-supported FSCs and strengthen the relationship between smallholders and public and private extension providers.

During the quarter, REAP expanded its marketing related activities to support operational grantees and beneficiaries of APMA’s grant program to improve their marketing materials, facilitate business linkages with local and international buyers and prepare for exhibiting at international trade fairs. In close collaboration with the Ministry of Economy and Sustainable Development (MoESD), REAP and MoESD’s Export Development Agency organized a trade mission to the Baltics and Poland where five REAP beneficiaries had more than 100 individual meetings with retailers, wholesalers and importers. For most of these enterprises, this experience represented the first time they had prepared for and participated in a significant trade mission and the mentorship provided in preparing promotional materials and conducting business negotiations will be utilized in their future business operations. Building on this experience, REAP began preparing four REAP grantees to exhibit at GulFood in February, 2017 where the MoESD and the MoA are sponsoring a Produced in Georgia Exhibition Booth.

8


REAP is pleased to see an increased interest in branding and marketing activities from smaller enterprises within REAP’s portfolio. During this quarter, REAP successfully supported Zoreti, a women-owned trout farm to develop a new company logo and labels for their smoked fish and honey producer, Ia Urushadze, to develop a company logo and packaging for her honey. Equipped with these new logos, these two enterprises will be able to compete with more established competitors and reach new potential customers.

Building on a three year track record of successful collaboration, during Q1 REAP continued to partner with and leverage resources of other donors and international organizations. Within the framework of cooperation between REAP and the Netherland’s PUM, three Dutch consultants shared best EU practices with REAP grantees and supported them to improve their operations. Furthermore, to showcase USG’s investments and interventions as replicable business models and discuss joint interventions, REAP arranged a coordination visit for ENPARD and other donor implementing partners that was attended by the Minister of Agriculture.

In Q1, REAP continued the successful joint program with GHGA and AgriGeorgia to train agronomist students on hazelnut cultivation practices and modern technologies. To broaden the program’s impact, REAP added an additional three universities to the program, where more than 20 students are visiting and being trained on AgriGeorgia’s plantation. To strengthen the relationship between GHGA and educational institutions, REAP will work to facilitate the formation of sustainable collaborative framework between these universities and GHGA that will stimulate the development of a qualified workforce within the hazelnut sector.

During Q1, REAP received a technical directive to support the National Food Agency (NFA) design and implement a State Program to monitor and manage the Brown Marmorated Stink Bug (BMSB). An invasive insect pest, the BMSB significantly reduced the value of Georgia’s hazelnut harvest in 2016 and if left unabated, has the potential to reduce the quality of other key agriculture sub-sectors. Beginning early in Q2, REAP will begin supporting the NFA to design an implementation plan and will assist in the development of an awareness campaign, training of public sector staff and developing monitoring protocols to combat this dangerous pest.

With a clear vision and well defined demand driven activities, REAP begins Q2 with great confidence and enthusiasm in our ability to serve and develop Georgia’s agribusinesses. Based on results to date and our current implementation course, the staff approaches the remaining seven quarters with great optimism that by the end of the program, REAP will have delivered a model program and a transformative impact on Georgian agriculture.

9


Summary of Achievements in Q1

Business Management

•3 REAP/APMA beneficiary companies successfully obtain ISO 22 000 certification

•ISO 22 000 certifications intiatied for five agribusinessses

•3 day GAP analyses accomplished for eight agribusinesses

•119 APMA beneficiaries trained in GlOBAL GAP awareness.

•30 Gender Platform beneficiaries participate in a training on food safety requirements for primary producers and processors, as a result, 8 companies apply for 3-day individual consultancies

•Assesment of the capacity of Union Agroservice is launched

Best Agricultural Practices and Improved Technologies

•Four universities to conduct agromonists training identified

•Agriculture Machinery Service Manual developed and disseminated among FSC operators and Meqanizatori centers

•Two training cartoons on production practices of strawberries and raspberries developed and disseminated through social media channels

•Three farmer field days organized providing training to 80 farmers on modern agricultural practices

•0.1 ha demo plot of strawberries and raspberries launched in five regions of Georgia

•3 PUM experts and one WFLO consultant provided individual consultancies to REAP grant recipients

Marketing

•Five REAP grantee companies and APMA beneficiaries participate in Trade Mission to Baltics and Poland jointly supported by REAP and MoESD's Export Development Agency

•Ten REAP beneficiary companies participate in international Agro+Food+Drink+Tech Expo Georgia Fair to facilitate local market linkages

Smallholder Integration

•Cold storage financial planning tool developed

•Five products for grades and standards development identified

Special Initiatives

•Internal study tour for REAP supported FSCs organized

•Study tours for REAP Gender Platfrom members hosted by Geoflower Ltd and MOA's Scientific-Research Center of Agriculture base in the Village of Jighaura

•24 students from 4 universities participate in the first cycle of the Future Hazelnut Leaders Program

10


Operations Report

Operations, Facilities and Equipment In PY4, REAP continues to operate through its central office in Tbilisi and regional offices in Kutaisi and Telavi housing Regional Coordinators and interns. The regional staff is responsible for day-to-day communication with beneficiaries and monitoring of the implementation of grant projects in their designated regions.

Staffing In early Quarter 1 of PY4, REAP’s FSC Manager was appointed as Deputy Head of the National Food Agency. To ensure a smooth transition of responsibilities, the FSC Manager’s daily tasks were undertaken by REAP’s Agribusiness Director, who now directly supervises the implementation of REAP’s 29 FSC/MSC grant projects. REAP now operates with 26 full-time staff members including one expatriate, the Program Manager.

Throughout PY4 and PY5, major efforts will be dedicated to successfully implementing REAP’s smallholder integration activity which aims to strengthen supply chain relationships between producers, aggregators and retailers. Given the complexity of this activity and the number of staff members involved, REAP may consider hiring a Supply Chain Manager to be responsible for coordinating REAP’s efforts and providing strategic direction in the management and replication of this activity.

REAP Internship Program In PY4, REAP continued its internship program and engaged 26 students through its central and regional offices in 10 different technical directions and at GHGA’s office in Tsalenjikha. The latest class of interns began their six month assignments on October 1, 2016 and will be integrated into REAP’s activities, gaining practical work experience.

Mariam Kutelia Research Grant

In Q1, three winners from Round II of the Mariam Kutelia Grant Program completed their research papers and submitted to REAP. In January, these winners will deliver their presentations to REAP staff on their research’s finding. In Q1, REAP announced Round III of the research grant program and received five applications from interns. In early January, the selection committee will announce the winner of this round.

Document and Deliverable Submission Summary A summary of documents submitted to USAID in Q1 may be found in the table below:

Document USAID Submission Submission Date USAID Approval

Project Reports and Manuals

PY3 Annual Report Submitted October 30, 2016 Approved

TOCs

TOC with BASF on establishing of joint demonstration plots

Submitted December 1, 2016 Approved

Technical Assistance Reports

Brown Marmorated Stink Bug (BMSB) Monitoring and Management Strategy Recommendations

Submitted December 19, 2016 Pending

11


Overview of Quarter’s Activities

Activity 1: Business Management Over the course of Q1, REAP continued its efforts to promote improved business management practices through supporting the implementation of internationally recognized food safety and quality management certifications, introducing Enterprise Resource Planning (ERP) systems for FSCs to more efficiently manage their inventory and finances and improving financial literacy of small women-owned enterprises. Furthermore, REAP launched a needs assessment of FSCs on their demands for an association to represent their interests and support their development after REAP. Details on these activities are outlined below.

Activity 1.1: Food Safety and Quality Management

Activity 1.1.1: ISO 22000 and HACCP Certifications

In the first quarter of PY4, REAP continued the provision of cost-shared technical assistance to its grantees, Agricultural Projects Management Agency (APMA) beneficiaries, and non-grantee enterprises to obtain internationally recognized food safety and quality management certificates. As part of the technical assistance activity, agribusinesses received comprehensive pre-certification consulting services and training from local business service providers (BSPs) to identify and address non-conformities and receive a final audit by a reputable international certification body. Below is an update on completed certifications, newly launched certifications and certification renewals which occurred during the reporting period.

Completed Certifications: In this reporting period, REAP successfully assisted eight companies to pass their international audits and receive ISO 22000 or FSSC certifications. All certification costs were cost-shared between REAP, APMA and the agribusinesses within the framework of the Terms of Cooperation (ToC) signed between REAP and APMA in PY3.

No Company Certified Products Standard Certifying Agency Number of Beneficiary Farmers in

2016

1. KTW-Agro-Chokhatauri Ltd

Jams, compotes, preserves, sauces

ISO 22000 TÜV SÜD Management Service GmbH

500

2. KTW-Agro-Keda Ltd Jams and sauces ISO 22000 TÜV SÜD Management Service GmbH

400

3. GN Company Ltd Processed hazelnut kernels

FSSC 22000 Lloyd’ s Register (LRQA) 55

4. Nutinvest Ltd Natural hazelnut kernels ISO 22000 Lloyd’ s Register (LRQA) 80

5. Kareli Agro Industrial Company Ltd

Dried fruits ISO 22000 Lloyd’ s Register (LRQA) 31

6. Fruit Processing Unit of Anaseuli Tea Factory

Fruit puree ISO 22000 Lloyd’ s Register (LRQA) 300

7. Iberia Fruits Ltd Dried fruits and herbs ISO 22000 Lloyd’ s Register (LRQA) 70

12


8. AER Company Ltd Hazelnuts FSSC 22000:2013

Lloyd’s Register (LRQA) 350

Newly Launched Certifications: During the reporting period, REAP initiated five food safety certification consultancies. Information on the enterprises and anticipated completion date may be found below:

No Company REAP/APMA/Non-grantee

Products Standard Completion Date

1. Agrolane Ltd APMA Blueberries ISO 22000 Anticipated in June, 2017

2. Kartuli Soko Ltd APMA Mushroom compost & fresh mushrooms

HACCP Anticipated in January, 2017

3. Invetfeed Ltd APMA Animal feed HACCP Anticipated in February, 2017

4. Kartuli Dapna Ltd REAP and APMA Dried bay leaf ISO 22000 Anticipated in July, 2017

5. Mziuri Javakheti Cooperative

Non-grantee Cheese HACCP Anticipated in May, 2017

Farconi Certification Renewal: With the support of REAP’s cost-shared technical assistance program, REAP’s grantee processor enterprise Farconi Ltd. successfully introduced food safety management system and obtained ISO 22000 certification issued by Lloyd’s Register LRQA in late December, 2015. Awarded for an initial three-year period, the certificate requires annual surveillance audits to be conducted by the issuing certification body. During the reporting period, Farconi invited Lloyd’s Register LRQA to conduct their annual surveillance audit which re-confirmed full compliance of the firm’s food safety procedures and systems with the requirements of ISO 22 000 standard. The initiative taken by Farconi demonstrates their commitment to maintaining their ISO 22 000 standard and its associated benefits.

BRC Certification: Within the framework of REAP’s 50/50 cost-shared TA program, REAP is providing individual consultancies to hazelnut producer NutsGe Ltd located in Zugdidi, Samegrelo region. Operating a fully equipped, modern hazelnut processing facility, the firm plans to expand their export sales to the UK. To assist the enterprise achieve the necessary certification for exporting to the UK, BRC, REAP is providing a customized consultancy to NutsGe to advise and train them on the requirements for obtaining BRC certification. REAP and NutsGe anticipate a visit by the international auditors in early 2017 to certify their operations, allowing NutsGe to export to the UK during the upcoming harvest season.

Activity 1.1.2: Three Day Gap Analysis

In Q1 of PY4, REAP continued the provision of three-day consultations in food safety norms for agribusinesses that intend to introduce food safety standards into their operations. Provided to agribusinesses during their construction phase, these consultancies are utilized as a precursor for obtaining cost-shared technical assistance through REAP to acquire food safety certifications as well as an assessment tool for enterprises to learn about the necessary infrastructure upgrades and associated costs to comply with international standards. The three-day consultancies provide the enterprises with a GAP analysis of their facility, recommendations on required changes to their physical infrastructure and food safety procedures that are necessary to be in compliance with HACCP and ISO 22000 standard requirements.

13


In this reporting period, REAP provided three-day GAP analyses to the below agribusinesses:

No Company REAP/APMA/Non-grantee Products

1. Zoreti Ltd REAP Smoked fish

2. Agroline Ltd REAP Dried bay leaf

3. Royal Dadiani Ltd APMA Processed grape

4. Bio Universal Ltd APMA Herbal teas

5. Ellen and Co Ltd APMA Processed hazelnut kernels

6. Geo-Nuts LLC APMA Processed hazelnut kernels

7. GeoNaturals LLC APMA Roasted tinned meat

8. Toia Ltd Non-grantee Cheese

Activity 1.1.3: Food Safety Awareness Training and Certification

In Georgia, there are currently only a few primary producers that are GLOBAL GAP certified and not many farmers are aware of this international food safety standard. To address these challenges, in the Q1 of PY4, REAP undertook the following actions:

GLOBAL GAP Awareness Training Program for APMA Beneficiaries: On November 7- December 2, within the framework of the ToC signed between REAP and APMA, REAP organized seven, one-day GLOBAL GAP training sessions in Gori, Lagodekhi, Tbilisi, and Zugdidi for beneficiaries of APMA’s Plant the Future and Georgian Tea Rehabilitation Programs. The primary objective of these training sessions was to raise awareness of Georgian primary producers about GLOBAL GAP, to improve food safety, and to raise awareness of Georgian producers on the requirements for accessing EU markets. A total of 119 APMA beneficiaries participated in these training sessions.

Global GAP Individual Consultancy: As a follow-up to the Global GAP awareness training, participant Tirponi Gardens Ltd. requested a cost-shared consultancy in Global GAP. Operating 6haof intensive apple orchards, Tirponi Gardens is seeking to expand to 11 ha, achieving 50 tons in yield per ha. During the quarter, REAP and Tirponi Gardens began the initial consultation process and the consultancy will continue throughout 2017.

Update of Global GAP for Herbia: REAP continues to work with its existing GLOBAL GAP certified beneficiaries to ensure their continuous compliance with the certification standard’s updates. In Q1 of PY4, REAP’s grant recipient Herbia Ltd - one the first Georgian companies to become Global GAP certified, requested a 50/50 cost-shared consultancy to update their existing GLOBAL GAP system from Version 3.0-2 to version 5. Together, REAP and Herbia are working to update their procedures to comply with the updated Global GAP requirements and an international audit is scheduled for mid-January, 2017.

Global GAP awareness training in Gori

14


Activity 1.2: Improved Financial Management

Activity 1.2.1: Enterprise Resource Planning (ERP) for FSCs

In Q1 of PY4, REAP’s local STTA consultants successfully completed their general consultancy to establish ERP solutions for three REAP grant recipient FSCs: Alva Ltd, Agrokartli Ltd and AgroService Ltd. During this process, the ERP systems were adapted to company specific business processes, including establishing a standard for accounting transactions and customizing reporting templates. In addition, to ensure the successful transition from their existing accounting systems to the new ERP, REAP’s consultants trained the FSC’s staff on how to use and maintain the ERP systems. Adopting ERPs will support the FSCs to improve their accounting and inventory management as well as streamline tax, finance, and managerial accounting. Moreover, the ERP system will allow companies to better forecast operations, having real-time access to current income, balance sheet, and cash flow statements.

Activity 1.2.2: Portfolio Management Training for FSCs

To improve grantee FSC’s ability to manage their consignment loans, REAP provided a training presentation to all 29 FSCs in financial management, with a focus on accounts receivable (AR) portfolio management systems. The presentation included the following key areas that need to be considered by FSCs to increase the effectiveness of their operations:

The importance of consideration of financial risk - due to development of different services that FSCs provide and expansion of commercial linkages between smallholders and service providers, FSCs face increased financial risk related to unreliable clients and bad loans. Specifics of retail sales and agriculture sector related risks motivate FSC management to follow best practices of financial management in order to minimize risks associated with overdue assets and bad loans.

Review of the composition of FSCs’ portfolios - current statistics show that FSCs’ bad loans consist of around 20% of their total AR portfolio and consignment based input sales attribute almost 40% of their total sales.

Activity 1.2.3: Group Financial Management Training

As planned, trainings in financial management for REAP and APMA beneficiaries will take place in Q2 of the PY4.

Activity 1.2.4: Agricultural MSME Finance and Investment Literacy

To promote viable business plans that can be replicated by small women-owned businesses, in Q1 of PY4, REAP engaged an Agricultural MSME Finance Expert to support gender platform members in increasing their financial literacy. REAP’s gender team along with the Finance Expert continued the needs assessment activities to create financial models of bee-keeping, dried fruit, intensive orchard establishment, and milk production activities. The Agricultural MSME Finance Expert has finalized the design of a training program for 3 of these directions which includes the development of financial models, training curriculum,

Grantee

Impact

Newly established Iberia

Fruits Ltd has collected

more than 160 tons of

apples, licorice roots, and

rosehip from 90

smallholder farmers from

the mountainous areas of

Kazbegi, Dusheti and

Tianeti municipalities,

providing more than

55,000 GEL in income to

smallholders.

15


presentations, handouts, and post-training assessment form. The milk processing sector was selected based on the demand of the platform members and the training curriculum will be finalized in the Q2.

Activity 1.3: Capacity Assessment of Union AgroService To analyze the needs and demands of FSCs with regards to strengthening an industry association that unites all FSCs, REAP engaged an international association consultant to survey FSCs as well as assess the capacity of a local organization, Union AgroService, as the potential umbrella for FSCs. During the quarter, the consultant visited Georgia and interviewed more than 15 FSCs to understand where their interests align for supporting such an organization and conducted an in-depth assessment of Union AgroService that focused on analyzing their capacity to provide the demanded technical assistance to FSCs in the future. The international consultant will continue their work in early Q2 to form a technical working group of FSC members and to advise Union AgroService on how to restructure their organization to best meet the demands of the FSCs.

Activity 2: Best Agricultural Practices and Improved Technologies Throughout Q1, REAP continued to promote best agricultural practices and improved technologies to its network of grantee and non-grantee enterprises and a wide audience of smallholder farmers to improve yields and incomes. Utilizing a combination of farmer field days, local and international consultancies and innovative publications, REAP is working to improve farmers’ average yield per ha, increase their incomes and implement more environmentally friendly agriculture practices. Furthermore, REAP is working to build the capacity of local private and public sector agronomists through a comprehensive continuing education program that pairs local universities with extension agents multiple times per month for practical training. Below please find details on REAP’s activities in Q1 to promote best agricultural practices and improved technologies.

Activity 2.1: Demonstration Plot Program

Activity 2.1.1: Farmer Field Days

In Q1 of PY4, REAP continued to organize Farmer Field Days through its network of FSCs and private sector partners utilizing knowledge of international input suppliers, leading producers and local agriculture consultants. The following field days were organized during the reporting period.

Kiwi harvesting and postharvest operations: REAP leveraged the technical resources of its partner Nergeta Ltd, a kiwi producer and exporter, to jointly host a kiwi harvesting field day. Held on Nergeta’s orchard, this field day demonstrated best kiwi harvesting practices to an audience of 20 local farmers and potential suppliers of Nergeta. In addition, farmers received a tour of Nergeta’s packhouse and learned about proper postharvest handing practices. REAP and Nergeta will continue to host farmer field days throughout the kiwi production cycle.

Soya harvesting, Senaki: Supported by REAP, FSC Gvaza Ltd., hosted a field day to showcase the harvesting of soya produced with minimum tillage technology versus traditional tillage. As part of REAP’s demo plot development program, Gvaza Ltd. arranged a 1.0 ha demo plot where soya was planted utilizing

16


both traditional and modern technologies. The field day was attended by 40 people including local farmers, regional ICC extension agents and students of Kutaisi State University.

Wheat seeding utilizing minimum tillage technology, Bolnisi: To promote minimum tillage farming, REAP supported FSC Deveplus Ltd., arranged a wheat seeding field day at their demonstration plot located in Bolnisi municipality that seeded Georgian and imported varieties of wheat. Over the course of the next nine months, Deveplus Ltd. will invite the same group of farmers back to the field day to observe the wheat’s progress as well as a harvest-showcasing event where the audience will see the results of the applied technologies and gross margin calculations will be provided to compare the effectiveness of modern versus traditional practices.

Joint Demonstration Plots with BASF and Syngenta: During Q1, REAP negotiated ToCs with leading international input suppliers BASF and Syngenta to launch a series of joint demonstration plots. These demonstration plots will combine the technical resources of the firms with the outreach network of REAP’s FSCs. The approved ToC is with the respective Home Office of BASF for signature and REAP plans on jointly establishing the demo plots beginning in Q2.

Activity 2.1.2: 0.1 ha demonstration program

To promote high value crops that can be grown on small parcels of land, REAP launched a new demonstration plot initiative targeting raspberries, blackberries, blueberries, plums and cherries that vulnerable populations can grow with as little as 0.1 ha of land and generate between 2,000 – 7,000 GEL profit per season. During Q1, REAP utilized their network of FSCs to identify suitable farmers willing to engage in REAP’s initiative and identified five demonstration plot partners in Racha-Lechkhumi, Guria, Shida Kartli, Kvemo Kartli and Kakheti regions. Throughout the year, REAP will arrange farmer field days to bring local farmers to these demonstration plots to showcase the economic viability of selected crops on small parcels of land and to demonstrate best agricultural practices that can be applied by farmers. In addition, REAP is working to facilitate sustainable linkages between local and international nurseries and smallholder farmers to ensure a steady supply of quality planting material for interested farmers. Below please see detailed information on the status of selected 0.1 ha demonstration plots.

Kakheti: Demonstration plot established and hybrid varieties of strawberries and raspberries planted.

Racha-Lechkhumi: Demonstration plot land cultivated and in late February/early March strawberry and raspberry seedlings will be planted.

Guria: Demonstration plot identified and land will be cultivated and planted with strawberry and raspberries in February.

Kvemo Kartli: Demonstration plot identified and land will be cultivated in late January. Berries and stone fruits will be planted in February.

Grantee

Impact

Agrojavakheti Ltd, a newly established FSC/MSC in Ninotsminda Municipality, is providing services to more than 670 local farmers generating more than 300,000 GEL in sales.

17


Shida Kartli: Agreement reached with local farmer to arrange demonstration plot. REAP will assist the farmer to test soil content and based on results, crops for demonstration purposes will be selected.

Activity 2.2: Training of FSC Staff

Activity 2.2.1: FSC Agronomist Training Program

In PY3, REAP conducted a survey to assess the agronomy skills of agronomists employed by REAP-supported FSCs. The survey revealed a broad spectrum of gaps in staff’s knowledge that should be addressed through a comprehensive training program that will reinforce basic, as well as, more advanced agronomy knowledge. To respond to the needs of local agronomists, REAP designed a continuous training course at the regional level that will re-train agronomists in soil fertility management, irrigation and fertigation, crop protection, orchard management and integrated pest management. Led by local universities, this training program will be delivered five times per month in five cities of Georgia (Tbilisi, Kutaisi, Zugdidi, Telavi and Kobuleti) and will utilize FSCs’ training rooms and demonstration plots to conduct theoretical and practical courses. Included in the training group are FSC agronomists, ICC extension agents and local agronomists who responded to local advertisements. It is anticipated that the second phase of the training program, focusing on crop-specific knowledge, will commence in the summer of 2017.

Activity 2.2.2: Agricultural Machinery and Maintenance

In Q1 of PY4, REAP continued the provision of individual consultancies to its network of FSCs to support them in the proper maintenance and utilization of newly purchased equipment. Through Q1 of PY4, REAP has purchased modern mechanization equipment for 26 FSCs in order to advance their operational capacity and increase efficiency of their mechanization services. During the reporting period, REAP’s local short-term mechanization expert visited four FSCs: Gvaza Ltd., Agroservice Kareli Ltd, Agrokartli Ltd., and Agrovita Ltd. to check on the status of procured equipment and to provide specific technical advice on their use and maintenance.

Activity 2.2.3: Veterinary Training Program

During Q1, REAP met with FSC representatives that expressed an interest in receiving tailored training on modern veterinary practices. The purpose of these meetings was to receive in-depth information on training needs and to find out grantees’ preferences regarding the timing and format of these trainings. Based on feedback received, REAP postponed this planned activity to Q2 of PY4 and will focus the training on practical sessions to be held at regional cattle farmers and slaughterhouses.

Activity 2.2.4: Support to FSC Gvaza

At the request of REAP’s FSC grantee, Gvaza Ltd., REAP is supporting the firm with the development of a three-month training course for farm machinery operators and service technicians. Focusing on improving the productivity of the machinery, this course will provide training on safe operating practices in tilling, seeding, spraying and harvesting and the training program for technicians will build their capacity to

Grantee

Impact

REAP’s Citrus Fruit Processing Enterprises have collected more than 640 tons of tangerines and persimmons from more than 270 local farmers, providing more than 470,000 GEL in income to smallholders and generating more than 1M GEL in export sales.

18


troubleshoot, service and repair various types of farm machinery. During the reporting period, REAP’s local short term Mechanization Expert assisted Gvaza Ltd. with the development of training modules and updating their training materials and handouts. Utilizing these training modules, Gvaza Ltd. will launch their training program in late Q2.

Activity 2.2.5: Accreditation Support to FSC AgroSakhli

In Q1, REAP continued to support grantee AgroSakhli to develop an agricultural laboratory within their FSC. During the reporting period, REAP’s local consultant finished the development of the laboratory’s sketches, drawings, and the procurement plan. The list of needed goods is identified, written specifications for purchasing items and requests for quotations are developed, and the relevant suppliers of goods of adequate quality with the necessary warranty have been identified. In addition, REAP’s local accreditation consultant finalized the development of job descriptions for the lab’s quality management systems personnel and assisted the company to design personnel assessments and personnel development plans. REAP’s assistance to AgroSakhli will last throughout PY4 and full accreditation of the laboratory is expected in late PY4/early PY5.

Activity 2.2.6: PERSUAP Training

Per REAP’s approved Work Plan, this activity will take place in Q2 where REAP will invite an international Environmental Expert to update USAID’s PERSUAP. REAP will combine this expert’s visit with trainings to the NFA on chemical storage and spraying practices for combatting the BMSB. REAP’s Environmental and Food Safety Specialist will follow-up the international consultant’s visit with in-person trainings to FSCs on the updated PERSUAP.

Activity 2.3: Training of Cold Store Operators

Activity 2.3.1: Cooperative Program with MASHAV

To build on REAP’s existing cooperative relationship with the Government of Israel’s MASHAV Center, REAP met with the Israeli Ambassador to Georgia and the Director of the MASHAV Center of Georgia to discuss further collaboration in regards to postharvest handling technologies and practices. During the meeting it was agreed that MASHAV would send cold storage and postharvest handling experts to consult REAP’s grantees and that REAP would send selected operators to Israel for postharvest handling training.

Activity 2.3.2: Individual Consultancies

In Q1 of PY4, REAP continued to provide intensive consultations to its network of cold storage operators to improve their cold storage management practices and to monitor the storage of fresh fruits and vegetables. During the harvesting season, REAP’s local consultant and Agriculture Technologies Specialist provided tailored strategies for each cold store in proper handling and storage of products, proper equipment usage and maintenance and proper record keeping of daily temperature, humidity and volume. REAP continued monitoring of the implementation of recommendations and provided troubleshooting consultations to beneficiaries. Below are some highlights on cold stores’ activities during the quarter.

Company Product(s) Volume Stored Sale Destination

Marina Akolashvili Persimmon 30 MT Ukraine

GFC Ltd. Persimmon, Grapes, Chestnuts

580 MT, 60 MT, 50 MT Ukraine, Russia, Belarus

19


Viniphera Ltd. Grapes 21 MT Local market

Iveria Apples 200 MT Local market

GFC Cooperative Apples 70 MT Local market

AgroInvestService Mandarin 200 MT Ukraine, Belarus

Activity 2.3.3: Harvesting and Cold Storage Demonstration Days

Per REAP’s approved PY4 Work Plan no activities were performed in this direction during Q1.

Activity 2.4: Individual Consultancies in New Agricultural Technologies In the first quarter of PY4, REAP continued to provide demand-driven individual consultancies to grantee and beneficiary enterprises in new and improved agricultural technologies to upgrade their knowledge of and ability to integrate modern food processing technologies into their businesses.

In the reporting period, REAP utilized a combination of local, international and volunteer experts to provide onsite consultancies to the below grant recipients and beneficiaries:

Zoreti Ltd. is a small start-up business located in Borjomi district. Under REAP’s agreement with Netherlands-PUM, a Dutch expert visited Zoreti to provide practical advice and demonstrations in modern production technologies of smoking fish including trout, mackerel, sturgeon, and capelin. In addition, the expert advised Zoreti on the proper arrangement of their processing facility to comply with European food safety standards. Equipped with improved knowledge and skills, Zoreti will begin smoking their fish in accordance with modern industry standards that will ensure higher quality and longer shelf life.

Located in Aspindza municipality, MTP Ltd. is engaged in potato production and postharvest handling. In Q1, MTP hosted an international consultant from PUM to provide an on-site consultancy to the company’s staff and local farmers in seed potato production and postharvest handling practices. As a result of this consultancy, MTP Ltd. improved their technical skills to reduce spoilage and provide better quality seed potatoes to local consumers. Additionally, the PUM expert delivered a lecture on modern mechanization and disease management practices for potatoes to students from Agrarian Faculty of Samtskhe-Javakheti State University and visited the university’s potato demo plot during harvesting.

Located in Kareli municipality, Kareli Agro Industrial Company Ltd was established in 2015 with APMA’s financial support. The company produces dried fruits under the brand name Kareli Fruits from fresh produce collected from local farmers. Within the framework of the ToC signed between REAP and APMA, REAP supported PUM’s consultancy to Kareli Agro Industrial Company in modern fruit drying technologies to further refine their processing of dried apples, prunes, and pears. The PUM consultant provided valuable practical insights and recommendations that will help the company improve their quality and successfully compete with international brands present on the Georgian market.

Grantee

Impact

MTP Ltd collected more 550 tons of potatoes from more than 120 local farmers. The company has already sold 25 tons of potatoes valued at 7,000 GEL, and created 8 jobs, including 3 jobs for women.

20


In November, 2016 REAP contracted a local consultant to assist REAP’s grantee, Cooperative Dioknisi, to introduce modern drying technologies for wild apples and blueberries. The consultant provided theoretical and practical training for the cooperative’s designated staff and developed internal technological standards for final products including size, grade, weight, and moisture content that will be used as a guiding document in Dioknisi’s operations.

REAP’s contracted local strawberry production consultant continued to provide customized technical assistance to REAP-supported SP Alexander Nadareishvili, who operates a strawberry greenhouse and nursery in Samegrelo region. The individual consultancy focused on heating, water management, pest identification and management, seedling propagation and production techniques and will improve the efficiency of the greenhouse’s operations.

Vinephera Ltd. is a table grape producer and a cold storage operator in Mtskheta-Mtianeti region. Despite Georgia’s long history of wine grape growing, table grape production is limited in Georgia and there is limited knowledge of production and storage technologies and practices. To deepen the knowledge and increase the technical skills of Viniphera Ltd., REAP deployed an international table grape storage expert that provided hands on consultations to Viniphera on proper cultivation, harvesting and storing technologies for table grapes. As a follow up to this consultancy and with REAP’s intention to contribute to the substitution of imports with locally produced table grapes, in Q2 REAP may consider the deployment of this consultant to support Viniphera and REAP to establish a modern demonstration plot that illustrates the most current practices in table grape cultivation to nearby farmers.

REAP contracted a local advertising company to provide 50/50 cost shared technical assistance to non-grantee beneficiary Taplikatsi Ltd. to develop a website to market their products. Located on the territory of Alaverdi Monastery in Kakheti, the firm operates a beekeeping facility equipped with modern technologies and equipment to support honey production by local farmers. This functional and interactive website will help Taplikatsi Ltd. to actively market their new and existing products, expanding their reach locally and in the region.

Activity 2.4.5: Nursery Consultancy Nergeta

During Q1, REAP met the Director of REAP’s non-grantee partner Nergeta, a leading kiwi producer in Georgia, to discuss their plans for establishing an open field kiwi nursery. Once operational, this nursery will be able to provide high quality, locally produced kiwi plant material to smallholder farmers at approximately 50% of the total cost of equivalent imports. Using financing from the European Investment Bank (EIB) and APMA’s Plant the Future Program, Nergeta plans to begin construction of their nursery in February and REAP will look to provide a tailored consultancy to Nergeta to advise on properly establishing and maintaining the nursery so that in future years the nursery can provide kiwi seedlings to hundreds of farmers each year.

21


Activity 2.5: Development of Training Cartoons During the quarter, REAP launched its animation cartoon that showcases best production practices through a 3-minute animated cartoon series. Each animation cartoon serves as a training guide for the audience of farmers, students and agronomists to teach them new production practices for various crops. In total, REAP intends to produce 12 cartoons, releasing them monthly. To date, REAP has published training cartoons on strawberry and raspberry production, which have been watched more than 11,000 times.

Activity 2.6: Agriculture Publications

Activity 2.6.1: Crop One-Pagers for FSCs

In early December, REAP contracted local consulting companies to develop user friendly informational one-pagers for widely grown crops in Georgia. Uniform in design, the crop cards will contain information on planting, soil maintenance, seeding, mulching, pest/disease control, irrigation, and harvesting best practices. Crops cards for 47 crops will be finalized by early January and will be disseminated among REAP-supported FSC/MSCs, MOA’s Information Consultation Centers (ICCs) and other relevant stakeholders to equip them with modern knowledge and practices.

Activity 2.6.2: Agriculture Machinery Service Manual

In Q1 of PY4, REAP’s local short-term mechanization expert designed a user friendly Agricultural Machinery Service Manual which provides machinery operators with important information and instructions on equipment operation and maintenance for the most utilized types of tractors and implements. The manual was distributed to REAP grantee FSCs, the network of state-owned MSCs under Mechanizatori and regional ICCs. The Agriculture Machinery Service Manual will be utilized to improve maintenance practices and increase services offered to more than 150,000 smallholders countrywide.

Activity 2.6.3: Small Scale Farm Machinery Manual


Activity 2.6.4: Reproduction of Postharvest Handling and Cold Storage Materials


Activity 3: Marketing During Q1, REAP continued to support grantee and APMA beneficiaries to develop solid functional brand identities, identify target markets and their entry requirements and to market their products locally and abroad. Q1 marked the launch of a cooperative effort between REAP and the MoESD to facilitate business linkages between Georgian agribusinesses and international retailers, wholesalers and importers. REAP’s cooperative efforts will continue throughout PY4 and in early Q2, REAP, MoESD and the MoA will support

REAP Crop Card

Mr. and Mrs. REAP

22


a trade mission of Georgian agribusinesses to exhibit their products at GulFood in Dubai. Below please find information on REAP’s activities in marketing during Q1.

Activity 3.1: Export Support for Grantees

Activity 3.1.1: Trade Mission to Baltic States and Poland

In late November- early December, REAP and Enterprise Georgia of the Georgian Ministry of Economic and Sustainable Development co-funded a trade mission for eight Georgian agribusinesses to identify new export opportunities and to facilitate market linkages. The trade mission was held in Riga, Latvia (November 29-30) and Warsaw, Poland (December 1-2) and provided business-to-business (B2B) meetings between Latvian and Polish importers, wholesalers, and retailers and Georgian agribusinesses that produce fresh fruits and herbs, tea, spices, dried medicinal herbs, freeze dried fruits and berries, soft drinks, and jams. In total, approximately 120 one-on-one meetings took place and the feedback from the participants showed that this event was very successful in creating linkages and laying the foundation for future collaboration. REAP will continue to support participants in follow-up communications with interested buyers.

Activity 3.1.2: Exhibiting at Gulfood 2017

To facilitate export sales and raise the visibility of Georgian products, REAP is supporting grantees and APMA beneficiaries to exhibit their products at the international Gulfood trade show in Dubai. Identified by Enterprise Georgia of the Ministry of Economy and the MoA as priority international trade fairs, Gulfood brings together leading buyers and traders of fresh fruits and vegetables from the Gulf States and Europe. The associated exhibition costs will be cost-shared by the Ministry of Economy, MoA, REAP and the exhibition participants. During Q1, REAP and APMA finalized the selection of participants, which will include:

Gemuani Ltd: a freeze dried foods business established with REAP and APMA’s financial support;

Kartuli Dapna Ltd: a bay leaf processing enterprise established with REAP and APMA’s financial support;

Kareli Agro Industrial Company Ltd.: a dried fruits company established with APMA’s financial support; and,

Agrolane: a blueberry processor established with APMA’s financial support.

Over the next reporting period, REAP will develop promotional/marketing materials and assist the selected businesses to ensure the competitive presentation of their products at the exhibition.

Activity 3.1.3: Preparing for Anuga 2017


REAP's grantee, Herbia, participating in B2B Meeting in Poland

23


Activity 3.1.4: Export Audit and Go-to Market Strategies

In Q1, REAP continued its support of export audits for beneficiary firms to support their market strategy development. In November 2016, REAP announced a RFP to conduct a survey on the export potential of Georgian bay leaf and to provide a current overview of the bay leaf sector, identifying target markets and assessing the individual export capacity of REAP grant recipients and APMA beneficiaries, including Kartuli Dapna Ltd, Gemuani Ltd, and Agroline Ltd. Beginning in early Q2, the consultancy will advise these companies on their potential to export and will provide information on future actions needed to enter the identified markets. In addition, the survey will provide information on how to register a geographical indication (GI) for Colchis bay leaf at the National Intellectual Property Center and other relevant international organizations to further promote and increase the visibility of local bay leaf production. Once the GI is registered, REAP plans to develop a logo so that all agribusinesses engaged in bay leaf production in Georgia can benefit from the brand name.

Activity 3.2: Development of Corporate Brand Identities and Marketing Tools

Activity 3.2.1: Corporate Brochure Development

REAP continued to work with its grantees and beneficiaries to develop corporate brochures and marketing handouts that showcase their products and assist them in selling goods on local and international markets. In Q1, REAP, with support of its international Agricultural Marketing Specialist, assisted the following grant recipient agribusinesses to develop promotional materials to support their participation in trade mission to Baltics and Poland:

Farconi Ltd: During PY3, REAP’s grantee Farconi began the production of packed Georgian spices, seasonings, medicinal plants and herbal tea, for domestic and foreign markets under a new brand name- Khomli. To support Farconi’s new brand, REAP assisted the company to develop logo, labels, and packages for these spices.

Herbia Ltd: A new brochure was created to provide detailed information on harvested fresh herbs and vegetables to customers and potential importers.

Gemuani Ltd: REAP assisted Gemuani to develop a corporate brochure that introduces the company’s history and operations and provides a snapshot of their products.

Anaseuli Experimental Tea Factory Ltd: A newly developed leaflet provides information on black and green premium loose tea, for which logo, labels, and packaging were developed with REAP’s assistance in PY3.

Activity 3.2.2: Logo and label development

To support REAP’s grantees and beneficiaries with competitive brand imagery, REAP provides demand-driven assistance to design innovative, emotionally charged and memorable logos and labels. During this reporting period, REAP initiated logo and label development for the following beneficiaries:

Ia Urushadze: a Guria-based microenterprise engaged in honey production;

Farconi Brochure

24


Zoreti Ltd: a Borjomi-based small women owned enterprise engaged in smoked fish production; and,

Kartuli Dapna Ltd.: an Imereti-based start-up enterprise engaged in bay leaf production that was established as a joint grant project between REAP and APMA.

Activity 3.2.3: Informational leaflets for FSCs

Per REAP’s approved PY4 Work Plan no activities were performed in this direction during Q1. Selection of a service provider will commence in early Q2.

Activity 3.2.4: Corporate websites for FSCs


Activity 3.3: Local Market Linkages

Activity 3.3.1: Agro+Food+Drink+Tech Expo Georgia

On November 30 – December 2, REAP supported the participation of ten project beneficiaries: Eleniksta Ltd, Herbia Ltd, Anaseuli Tea Factory Ltd, Viniphera Ltd, Santa Ltd, Farconi Ltd, Laboratory Dr. George Ltd, Chirifruit Ltd, SP Ketevan Natsvaladze, Mtis Surneli Ltd, in the 16th International Exhibition for Agro, Food, Drink, Tech Expo 2016 held on Expo Georgia premises. During the event, representatives from the Georgian government, donor agencies, and buyers from Eastern Europe and the Caucasus got to try and purchase goods produced by REAP beneficiary.

Activity 3.3.2: Agri-Products and Technology Fair


Activity 3.3.3: Access to Markets In PY4, REAP continues to provide assistance to its grantee enterprises to link them with main retailer chains in Georgia. In Q1 of PY4, REAP held introductory meetings between grantee enterprises and retail chain representatives, where grantees were informed about the retailers’ quality and packaging requirements and terms of delivery. During the reporting period, REAP facilitated initial negotiations between Viniphera Ltd, LNXTA Ltd, GFC cooperative and the retail chains: Nikora LLC - with 250 convenience stores in Tbilisi, Ori Nabiji LLC – with 85 convenience stores in Tbilisi and with Carrefour Georgia – with 2 Hypermarkets and 4 Supermarkets in Tbilisi.

REAP grantees participating at Agro+Food+Drink+Tech Expo Georgia

Grantee Impact

Farconi Ltd has provided more than $644,208 in new cash markets to 442 smallholder growers. This enterprise has created 38 new rural jobs, including 19 jobs for women. Company’s new sales amount to more than 1,8M GEL.

25


Activity 3.3.4: Retailer Training During the quarter, REAP negotiated with retailer Nikora LLC that starting from January of 2017, Nikora will provide three store locations where REAP can introduce, test and observe different selling practices for fruits and vegetables. Based on their existing practices, REAP will provide specific recommendations, guidelines and procedures for fresh fruit and vegetable shelving, facing, waste minimization, and promotion of locally produced products. Utilizing this knowledge and experience, REAP will offer such partnership to other retailer chains to reduce losses and improve marketability of locally produced products.

Activity 4: Smallholder Integration

In Q1, REAP launched a new initiative to improve the integration of smallholders into more structured and developed supply chains. Under this new initiative, REAP developed a financial planning tool for cold storage operators, selected products to develop grades and standards for and developed a database for cold storage operators to more effectively track their suppliers. Details on activities under this initiative may be found below.

Activity 4.1: Supplier Network Development In PY4 REAP continued to provide firm-level TA to assist REAP cold storage grantees to substantially increase raw material sourced from outside producers. REAP developed supplier network databases for cold storage grantees to more effectively track and communicate with their suppliers. In addition, to support cold storage’s outreach to farmers, REAP engaged a local consultant to work with cold storage enterprise’s to streamline their procurement of raw material. Working with REAP’s grantee Eleniksta, this local consultant increased their procurement of apples from local farmers by more than 50 MT, providing an additional 43,000 GEL in income to local farmers.

Activity 4.2: Cold Storage Financial Planning Tool Support Under this sub-activity, REAP developed a practical financial planning tool for cold storage operators that calculates key financial ratios including average storage costs per season, gross margins, profitability of leasing versus storing own products, break-even points and profitability at different capacity utilization levels. During Q2, REAP will test this model with grantee enterprises and will begin to provide training to cold storage operators on utilizing the model.

Activity 4.3: Grades and Standards Development During Q1, REAP selected 17 products for which grades and standards will be developed. The selection criteria included: seasonality, production volumes, sales/demand volumes and number of varieties of the product produced. To implement these standards, REAP has negotiated with retail chains Nikora, Ori Nabiji, and Carrefour to establish trials of the grades and standards system. REAP will also establish the grades and standards with its packinghouse grantee BPH Trans.

Local Market Purchases Facilitated in Q1

Enterprise Retailer Product Volume

Viniphera Carrefour Grapes Received advance payment for 18 MT

Agrokartli BPH Trans Tomatoes 48 MT

Eleniksta Corner shops Apples 52 MT

26


Activity 4.4: Product Traceability System Development Per REAP’s approved PY4 Work Plan no activities were performed in this direction during Q1.

Activity 4.5: Supply Chain Management Conference and Group Training Per REAP’s approved PY4 Work Plan no activities were performed in this direction during Q1.

Special Initiatives

FSC Internal Study Tour To promote cooperation between REAP’s network of FSCs, on December 2-3, REAP organized a two-day study tour that included visits to AgroVita and AgroService FSCs and the strawberry demonstration plot established by Mindia 2010. The site visits were followed by a training/informational session on the importance of ERP systems, discount cards for FSCs, management of overdue assets, demonstration plots, training program for FSCs’ agronomists, and the safe utilization and storage of pesticides. The NFA representatives also participated in the training session and introduced to participants the upcoming amendments on the regulations of pesticides use and storage which will be enforced starting in January 2017.

REAP Summit Per REAP’s approved PY4 Work Plan no activities were performed in this direction during Q1.

Future Hazelnut Leaders Program Building on PY3’s successful cooperative training program with GHGA and AgriGeorgia of Agrarian University students in hazelnut production and postharvest handling practices, in PY4 Q1 REAP facilitated the selection and training of 24 students from four universities in Georgia (Agrarian, Akaki Tsereteli State University, Shota Meskhia State University and Batumi Shota Rustaveli University). Comprised of Masters and undergraduates in their final year of studies, the training program provides students who express a willingness and commitment to be employed in the hazelnut sector in West Georgia a unique practical and theoretical training opportunity. During Q1, the selected students participated in the first of three training programs on the plantation of AgriGeorgia, where students received practical instruction in orchard set-up, pruning and plant formation.

Facilitating Internships with REAP Grantees To provide opportunities for university students studying agriculture to learn about private sector agribusiness and to gain practical experience, REAP organized a study tour and introductory meeting

FSC Study Tour

Young agronomists at Pruning Practice Lesson

27


between students of Akhaltsikhe University and REAP’s grant recipients Zoreti and MTP. During the meeting, students received tours of the enterprises’ facilities and discuss potential internship opportunities. In the Spring, REAP will arrange a similar tour for these students to REAP-supported enterprises in Shida Kartli. In addition, REAP received a similar request from the Batumi University to organize a study tour and introductory meetings for students to REAP-supported companies in Adjara and nearby Regions.

Gender Program In PY4 REAP continues to employ its gender programming to facilitate the development of female owned and operated enterprises, to promote business matchmaking opportunities and to support the transition from subsistence to commercial farming by women and young agricultural entrepreneurs. As part of this initiative, in Q1 of PY4 REAP carried out several activities:

Study Tours for Gender Strategic Platform Members Geoflower Ltd.: In Q1 of PY4, a study tour to the industrial drying facility of REAP’s grantee, Geoflower Ltd., was organized for 11 representatives of 9 women- and youth-owned agribusinesses. During the tour, participants were given a training and demonstration of dehydration processes of apples and licorice roots.

Jighaura Nursery: In the reporting period, 27 strategic platform members, representing young agricultural professionals & entrepreneurs and women agricultural entrepreneurs, participated in a study tour to the Scientific-Research Center of Agriculture at the Ministry of Agriculture in village Jighaura. The Center is famous for its fruit tree nursery. The visit was led by Dr. Zviad Bobokashvili, a horticulture expert who provided information on fruit varieties cultivated in the nursery. In addition, participants were provided with information on procurement procedures for the Research Center.

Information Session for Gender Strategic Platform Members from Shida Kartli In Cooperation with REAP’s Gender and Youth Team, USAID’s ZRDA project conducted an informational session on ZRDA’s activities for members of REAP’s strategic platform from Shida Kartli Region. In total, seven women agricultural entrepreneurs attended the informational meeting, where attendees discussed several areas of interest including intensive nursery systems, berry fruits production, and dried fruit processing. REAP and ZRDA will continue to cooperate so that women agricultural entrepreneurs have more information and time to prepare for ZRDA’s activities. Training During Q1, REAP provided training to gender platform members in food safety and agribusiness marketing and greenhouse production of strawberries. Food Safety: To raise awareness of emerging agribusiness owners in modern food safety practices, REAP’s local subcontractor, GDCI, provided two training sessions to 17 agribusiness owners and their employees on basic food safety requirements for primary production and food safety requirements for food

Gender Platform Members visit to Jighaura Nursery

28


processors. These training sessions serve as a precursor for the 3-day food safety trainings provided individually to business operators. As a result of this initiative, 9 enterprises have requested individual consultancies. Agribusiness Marketing: During the quarter, REAP received 9 applications for assistance in agricultural marketing from women-owned agribusinesses. Utilizing a short-term local consultant, REAP is assisting these start-up women owned enterprises to develop functional brand identities, labels and logos.

RESP’s response to BMSB outbreak in Georgia

At the request of the National Food Agency (NFA), REAP deployed an international entomologist to serve as a BMSB Advisor and to participate in and advise the NFA on the BMSB. In late November, the NFA, in cooperation with USAID and the world’s leading buyer of hazelnuts, organized an international technical committee to analyze the BMSB problem in Georgia and to advise the MoA on appropriate mitigating actions. Led by the BMSB Advisor, this technical working committee prepared a draft plan of action for consideration by the NFA which is serving as the basis for their State program. To further refine the State program and support in its implementation, the NFA requested support from USAID and on December 23, REAP received a technical directive from USAID instructing REAP to support the NFA in the development and implementation of a State program. REAP quickly mobilized a team to support the NFA design and budget their State program and will submit early in Q2 an addendum to REAP’s work plan outlining interventions that REAP will undertake in the quarter to support the NFA.

Grantee Cost-Share Procurement

As of the end of PY4 Q1, REAP's grantees spent more than $21M through cost-sharing activities, exceeding their committed amount by 21%. In this reporting quarter, REAP procured $344,556 worth of new equipment, which now totals more than $5.3M or 88.5% of its total grant fund since the project began. 51 REAP’s grant projects are fully procured and 17 are undergoing procurement.

Below is a table that illustrates cost-share and grant funds disbursed by priority direction.

FSC/MSC PHHP PP ISP Total

Cost-Share Committed $8,806,602 $8,209,549 $159,350 $151,585 $17,327,086

Cost-Share Spent $12,382,671 $8,426,119 $176,283 $65,527 $21,050,600

Grant Funds Committed $3,246,380 $2,634,325 $55,050 $64,245 $6,000,000

Grant Funds Disbursed $2,705,068 $2,490,409 $50,458 $64,180 $5,310,115

Environmental Management and Monitoring During Q1, REAP’s Environmental Management and Monitoring focused on implementing cooperative activities with REAP’s TA component on food safety, sanitary issues, HACCP, and ISO requirements for beneficiary agribusinesses. In addition, REAP’s grantees were continuously monitored in accordance with their respective EMMPs. In total, 10 monitoring visits were conducted by REAP’s Environmental Specialist covering Shida Kartli, and Samegrelo regions to the following grantees: Eleniksta, Gejeti, Gvaza,

29


Agrosakhli, Agroline, and Gemuani. Furthermore, to improve FSCs’ knowledge in environmental issues, REAP’s Environmental Specialist conducted a training on safe pesticide application and use during the FSC Study Tour in Kakheti, where common mistakes made by grantees and gaps observed during monitoring visits were discussed.

Communications

USAID Annual Fair On October 26th REAP was pleased to organize the participation of 20 supported enterprises to participate in USAID’s Annual Fair where USAID and US Embassy workers had the opportunity to meet beneficiaries and purchase fresh products. REAP supported companies sold cheese, hazelnuts, juice, fruits, vegetables, tea and the favorite Georgian snacks Churchkhela and dried fruits. The income generated by REAP beneficiaries during this event exceeded 5,000 GEL.

High Official Visits to REAP Projects During Q1, REAP’s grantees hosted numerous public officials. Details on these visits may be found below.

Minister of Agriculture visits REAP/APMA Supported Drying Facility: Ministry of Agriculture of Georgia visited USAID/REAP and APMA co-funded Drying Facility – Iberia Fruits, Ltd in Dusheti District. Iberia Fruits is operating in one of the most vulnerable mountainous areas of Georgia and is providing the local population with additional sources of income and contributing to employment growth in the region. As of today, more than 80 local farmers of Tianeti, Kazbegi and Dusheti Municipalities as well as farmers from the Kvemo Kartli region have supplied Iberia Fruits with apples, sea-buckthorn, rosehip and licorice roots. Iberia Fruits has already employed 12 individuals, including 5 women.

State Department Director of Caucasus and Regional Conflicts Visits West Georgia Grantees: On December 7-8, Director of Caucasus and Regional Conflicts, US Department of State, visited three REAP-supported enterprises: Farconi Ltd., Herbia Ltd., and AgroInvestService Ltd. These visits served to inform the Director about the impact of USAID interventions in rural areas of Georgia.

Minister of Agriculture, Mission Director and EU Delegation Visit REAP Grantees in Shida Kartli: A delegation of representatives from the Ministry of Agriculture, USAID, EU, Other Donors, and ENPARD partners visited agribusinesses supported by the REAP activity. The fieldtrip focused on three types of businesses, farm service center, cold storage, and fruit

Minister of Agriculture and USAID Mission Director at REAP’s grantee Agrokartli

REAP beneficiaries’ produce at USAID annual fair

30


drying facilities. In addition, participants briefed the Minister on REAP and ZRDA’s planned activities for the next 12 months.

US Embassy Short Film Production US Embassy developed a short film (https://youtu.be/mfc5cazQ7Dc) describing the whole value chain of USAID/REAP funded Geoflower, LTD, from collecting wild apples in the high mountains of the Racha Region to producing the final dried product that is ready to be exported to the European Market. With their hard work and a little help from USAID they are making a living by connecting with Europe, the US, and the world.

REAP Grantee Films USAID/REAP continues to work with two video production companies to document project activities. Production agencies completed and submitted two films one on FSC/MSC and another on Cold Storages’ activities. The films cover the progress of grantees from their initial construction through initial operations. These videos are produced in English with Georgian subtitles and both documents REAP’s story and promotes USAID’s work in Georgia.

Below is a list of representative companies being filmed to tell the REAP story:

REAP Grantees Filmed

Processing Enterprises

Women Owned Enterprises

FSC/MSC Cold Storage Facilities

Internship Program

AgroPharm + LTD Agroexport LTD AgroInvestService LTD Geoflower LTD Herbia LTD AromaProduct LTD Campa LTD Farconi LTD

Santa LTD SP Marina Akolashvili Gile Cooperative Dr. George Lab LTD SP Ia Urushadze Zoreti LTD

AgroSakhli LTD Agrokartli LTD SP Omanashvili Agroservice LTD RAS LTD SP Zurab Tetvadze SP Ambrosi Macharashvili

Cooperative GFC GFC LTD Eleniksta LTD Iveria LTD

Mariam Kutelia Grant Award

Establishment of Intern Program and Future Hazelnut Leaders’ 2015-2016 Program

Monitoring and Evaluation

In PY4, REAP’s M&E Manager continued to track the performance of all 48 operational grant projects against their established targets. Regional coordinators worked closely with the grantees to gather M&E data, however due to harvest season the seasonality of grantees’ production processes, REAP does not have full data from all operational businesses. The remaining 22 grant projects are still in their mobilization phase and their full scale activities are anticipated to roll out later in PY4.

For this year REAP has updated its PMP indicator list per USAID’s request, which resulted in 35 indicators instead of 31. The updated PMP is attached to this report in Annex 1.

During the Q1 of PY4 REAP’s M&E Manager concentrated on carrying out Cost Benefit Analysis (CBA) and non-grantee TA evaluation. This report reflects the activities and results of these directions.

https://youtu.be/mfc5cazQ7Dc

31


Cost Benefit Analysis (CBA) A full Cost-Benefit Analyses (CBA) was conducted for 17 projects for years 2015-2016 and the CBA of 8 more projects are planned to be finalized in the PY4 and PY5.

Per REAP’s CBA methodology, a financial CBA framework for 12 businesses were updated based on the actual annual financial data collected by REAP’s M&E team and 6 will be finalized soon. This allows REAP to collect information from the projected CBA Net Cash Flow Statement and to substitute it with the actual numbers. The financial data collected annually from current 17 projects under CBA is as follows:

Total Annual Revenue

Change in Accounts Receivable

Cost Of Goods Sold

General Administrative Costs

Sales and Marketing Costs

Change in Accounts Payable

CBA prediction is done for 8 years while 9th year is a liquidation year. Up to date, REAP has received the beneficiaries’ actual financial data for 2 years. In upcoming years, the actual data will keep replacing projections bringing the whole picture of beneficiaries’ financial performance closer to reality. The possession of actual data is very useful as it gives a possibility to compare projected performance figures to the actual outcomes and to adjust the future projections accordingly.

The collection of actual financial performance data for the first 2 years the beneficiaries’ performance shows the following results (all values are provided in GEL):

Existing + New1

Existing2 Incremental3 Incremental (weighted)

Actual (after 2 years of

operation)

1 FSC Alva Ltd NPV 59,699 296,651 (236,952) (39,453.43) (110,397.55)

IRR 16.2% 33.9% 8.1% 1.3% 12%

2 FSC Agrokartli Ltd NPV 4,356,317 3,395,272 637,690 129,643.48 1,611,879.12

IRR 43.8% 82.0% 20.8% 4.2% 23%

3 FSC Farmer's House Ltd NPV 2,070,818 618,423 1,452,394 117,581.25 2,031,935.84

IRR 57.1% 40.9% 85.9% 7.0% 88%

4 FSC SP Tsikoridze NPV 645,807 912,426 (357,920) (58,255.58) 393,841.73

IRR 34.9% 441.4% 4.7% 0.8% 25%

1 performance scenario with REAP’s assistance

2 performance scenario without REAP’s assistance

3 Incremental = the difference between Existing+New and Existing. In fact for the final analyses program should use Incremental and weighted incremental only, however in order to have a more informative judgment all these figures have been demonstrated side by side.

32


5 FSC Akhali Fermeri XXI Ltd

NPV (90,217) 14,247 (104,464) (2,786.06) (21,724.21)

IRR 8.5% 17.0% 0.5% 0.0% 11%

6 FSC Agroservice Ltd NPV 1,248,829 911,940 336,889 67,214.25 -

IRR 31.9% 43.9% 22.4% 4.5% 0%

7 FSC Gvaza Ltd NPV 2,340,717 2,269,741 70,975 11,376.72 -

IRR 122.5% 222.4% 17.5% 2.8% 0%

Average for FSCs NPV 1,518,853 1,202,672 256,945 32,189 -

IRR 45.0% 125.9% 22.8% 2.9% 0%

8 PHHP Iveria Ltd NPV (250,391)

(48,085) (202,307) (39,309.76) (1,009,306.32)

IRR 10.5% 12.9% 8.9% 1.7% -9%

9 PHHP Geoflower Ltd NPV (835,480) (328,155) (577,946) (91,997.54) (110,950.52)

IRR 3.7% 7.8% -10.8% -1.7% 6%

10 PHHP Herbia Ltd NPV 1,734,110 1,543,502 190,608 20,727.85 1,658,750.22

IRR 37.0% 41.9% 22.7% 2.5% 62%

11 PHHP GBZ Ltd NPV 316,436 519,140 (202,704) (24,989.65) 858,734.17

IRR 22.5% 33.9% 2.1% 0.3% 220%

12 PHHP Agroexport Ltd NPV 12,698 286,589 (273,891) (55,713.83) (295,232.21)

IRR 15.3% 79.9% 7.3% 1.5% 6%

13 PHHP Agroinvestservice Ltd

NPV (282,324.6) (2,485,225.0) 2,202,900.4 387,627.48 -

IRR 11.6% 0.0% 84.1% 14.8% 0%

14 PHHP Anaseuli Tea Factory Ltd

NPV 36,865.76 (26,182.52) 63,048.28 2,213.38 -

IRR 16.4% 13.4% 21.7% 0.8% 0%

Average for PHHPs NPV 104,559 (76,917) 171,387 28,365 -

IRR 16.7% 27.1% 19.4% 3% 0%

15 pp SP G. Tediashvili NPV 73,682 (50,762) 124,444 39,960.75 161,352.84

IRR 18.6% 11.7% 45.0% 14.4% 51%

16 PP SP Valerian Mgeladze

NPV (16,730.65) (53,015.49) 36,284.83 10,626.61 -

IRR 12% -2% 35% 10% 0%

17 PP SP Nugzar Papunashvili

NPV 41,349.15 (12,175.73) 53,524.88 20,661.57 -

IRR 18% 13% 29% 11% 0%

Average for PPs NPV 32,767 (38,651) 71,418 23,750 -

IRR 16.2% 7.7% 36.0% 11.9% 0%

Economic CBA Economic Cost-Benefit Analysis (CBA) takes the broader perspective of society. It has various implications for calculating costs and benefits of the company. For years 2015-2016, for CBA purposes REAP conducted mini surveys for 17 projects and consequently, the following projected values for Economic Net Present Value (NPV) and Economic Internal Rate of Return (IRR) were obtained.

Companies Incremental NPV Incremental IRR

1. Alva Ltd 12,448,644 116%

2. Agrokartli Ltd 42,101,704 208%

3. Farmer’s House Ltd 2,095,350 61.1 %

4. SP Tsikoridze 32,599,608 203.1 %

5. New Farmer XXI Ltd 8,345,343 222 %

33


6. Agroservice Ltd 84,690,291 267.4%

7. Gvaza Ltd 2,643,054 57.5 %

8. Iveria Ltd 5,974,558 75.1 %

9. Herbia Ltd 10,757,420 144.1%

10. GBZ Ltd 462,247 29.7%

11. Agroexport Ltd 519,117 26.2%

12. Agroinvestservice Ltd 1,466,691 41.3%

13. Anaseuli Tea Factory Ltd 338,410 44.1%

14. Geoflower Ltd N/A N/A

15. SP G. Tediashvili 1,691,619 141.9%

16. SP Valerian Mgeladze 596,824 95.6%

17. SP Nugzar Papunashvili 13,450,002 392.8 %

The incremental NPV shows what benefit (in GEL) the clients and supplier farmers will receive as a result of business activities of REAP-assisted grantees over 8 years. Unlike Financial CBA framework, where updated financial data is used over the period of the project implementation, in Economic CBA model, only one variable – number of beneficiary farmers gets modified. Other factors, such as: total average wage per year, percentage increase in crop yield, average gross profit margin (GEL), estimated average value for trainings received, and estimated value of saved time per year, remain the same, as the values for these indicators were identified from the beginning of the Project, in PY1.

Non-Grantee Technical Assistance Attribution Methodology

REAP developed an impact methodology to assign the attribution of improved performance of non-grantee companies which received technical assistance from REAP. As non-grantees are fully functional businesses, only a portion of improved performance can and should be attributed to REAP. The proposed methodology (submitted with the PY3 annual report) utilizes two questionnaires for the attribution analysis. The first questionnaire is relevant for and should be completed by all non-grantees, while the second questionnaire is further analysis designed for those enterprises which received technical assistance in food safety. The majority of assisted 24 enterprises received TA in food safety and quality assurance areas including support to implementation of ISO 22000, BRC, IFS, Global GAP, and green standards. The other four enterprises received TA in improved agricultural technologies and business management practices.

To test and adjust the methodology, REAP conducted trial survey of non-grantee enterprise WESTNUT Ltd. Results of this survey were presented in PY3 annual report. During PY4 REAP will roll-out this methodology across its 28 existing non-grantee beneficiaries and all future enterprises to ensure impact data is being properly attributed and can be included in REAP’s PMP. For this purpose, in Q1 of PY4 M&E team conducted another survey with Stimor Associates LTD – REAP’s non-grantee beneficiary.

Stimor Associates Ltd Stimor Associates has received the Business Plan Development technical assistance from REAP in order to start a greenhouse farm. The company does not have a baseline information and therefore, in the questionnaire (Annex 2), we are giving the detailed description of impact indicators after the project implementation.

The survey results are the following:

34


Job Creation A 180 permanent and 36 seasonal jobs were recorded after the TA was provided. The three factors were impacted by the TA: the construction of greenhouse, employed to serve in greenhouse and employed to prepare products for export. These factors got scores 30%, 35% and 35% respectively out of 100% of the relative importance which can be attributed to REAP’s intervention.

Output per Unit Output per unit after TA was 2,000,146 kg. This can be explained with the following TA factors: increase in the quantity demanded, which gets the score of 40%, the quality of raw materials - 30%, and finally, an experienced agronomist from Holland - 30%.

Sales The amount of total sales for Stimor Associates is 3,000,949 Gel. The following are given as the main influencing factors: Exported products with the score of 50%, and customer service – also 50%.

Unit Production Cost Unit production cost after TA is 2.1 Gel. The main characteristics that determine the price are the following project TA factors: quality of raw materials - 40%, skilled labor - 30%, and production processes - 30%.

Number of Customers Number of customers after TA is 4. The main project TA factors influencing the number of customers for this case are: high product quality - 30%, demand for Georgian produce abroad - 30%, and relatively high volume of exports - 40%.

Capacity Strengthening Training of Personnel As a result of TA provided to Stimor Associates, a total of 180 persons were trained, out of which 125 were women and 55 were men.

Unlike other TA recipients, non-grantee company Stimor Associates Ltd’s greenhouse activity was a startup business, therefore all improvements made since the assistance are attributable to REAP.

Financial and Expenditure Summary

USAID Contract No.: AID-114-C-13-00002

Date of Issuance: October 1, 2013

Total Potential Amount: $19,589,463

Total Funds Expended through 12/31/16 $14,232,143

Total Funds Expended in Quarter 1, Year 4: $1,087,576

Total Projected Funds to be Expended in Quarter 2, Year 4: $1,116,652

35


Key Constraints During Q1, the GEL’s value against the dollar depreciated rapidly and reached its lowest level in the past four years. Since the start of REAP’s grant program in 2014, the national currency has weakened by almost 60% against the dollar. As REAP’s grantees co-investment funds are mobilized through loans that are mainly dollar denominated or private risk capital, the devaluation of the GEL has increased the real interest rate of grantee’s loans and devalued their assets in real economic terms. Furthermore, the instability caused by the currency’s fluctuation has increased economic uncertainty, increasing entrepreneur’s investment risk. Input suppliers such as REAP’s FSCs face the greatest economic risk as their inventory is imported and priced in reserve currencies such as the USD or EUR, while their sales are conducted in GEL. While inflationary pressure will increase the cost of goods, the appreciation will not be adjusted in-line with the USD towards the GEL. Coupled with weakening real incomes of their clients, FSCs are the most unsheltered of all REAP-supported businesses from the negative effects of the USD’s appreciation. Primary producers face similar headwinds as they sell almost exclusively in local currency, but prices for almost all of their inputs, small tools and fuels are formed and based on costs in USD. Those REAP-supported processors that export their products stand to slightly benefit from the USD’s appreciation as any inflationary pressure on raw material costs will be offset by a higher real income when converted back to local currency. However, those REAP-supported processing grantees that sell on the local market face margin pressure as the costs of raw material may rise and their equipment, machinery, fuel and interest payments will become more expensive.

During Q1 and moving forward, REAP will closely monitor the USD’s appreciation on the financial health of grantees and in some instances, project assistance may be required to support enterprises deal with this financial constraint.

36


Annex 1: Updated PMP (Performance management plan)

1Value of additional financing obtained by the private sector as a result of

USG assistance$1,950,000 $2,848,368 $2,500,000 $10,397,029 $2,300,000 $1,802,975 $15,048,372 $500,000 $250,000 $7,500,000 201%

2Value of new private sector investment in the agriculture sector or food

chain leveraged by FTF implementation $1,700,000 $1,798,722 $6,800,000 $7,649,177 $6,500,000 $9,801,562 $19,249,461 $1,000,000 $500,000 $16,500,000 117%

3 New FSC/MSCs or hybrids established 16 16 14 13 0 0 29 0 0 30 97%

4 Gross incremental sales by USG assisted SMEs (all type) $1,290,000 $1,401,616 $8,110,000 $17,555,152 $14,500,000 $27,510,870 $46,467,638 $32,000,000 $35,000,000 $60,900,000 76%

5 Gross incremental sales by USG assisted post-harvest SMEs $890,000 $942,857 $3,110,000 $7,240,708 $5,750,000 $10,895,666 $19,079,231 $6,500,000 $8,000,000 $ 24,250,000 79%

6Gross incremental sales of inputs and and services by USG assisted

FSCs/MSCs$0 $0 $4,000,000 $8,667,299 $5,750,000 $13,391,408 $22,058,707 $6,500,000 $8,000,000 $24,250,000 91%

7Value of incremental sales (collected at farm-level) attributed to FTF

implementation$400,000 $458,759 $1,000,000 $1,554,343 $3,000,000 $3,082,409 $5,095,511 $3,500,000 $4,500,000 $12,400,000 41%

8% Increase in average crop yields of targeted agricultural products as a

result of USG assistance30% 10% 30% 50% 40% 50% 50% 50% 50% 50% 100%

9 Number of rural households benefiting directly from USG interventions 270 276 55,233 44,046 107,921 137,253 181,575 236,780 337,338 164,505 110%

10 Number of jobs created with USG assistance 40 46 360 435 200 487 968 1,118 1,168 800 121%

11Number of individuals who have received USG supported short-term

agricultural sector productivity or food security training130 130 54,533 43,763 52,458 92,863 136,756 99,438 100,478 163,485 84%

12Number of individuals who have received USG supported long-term

agricultural sector productivity or food security training3 3 3 7 3 5 15 3 3 15 100%

13

Number of food security private enterprises (for profit), producers

organizations, water users associations, women's groups receiving USG

assistance

100 100 70 384 484 658 658 678 688 220 299%

14Number of distinct clients purchased products or services from USG

assisted SMEs 30 30 53,333 40,769 50,958 65,739 106,538 147,151 156,185 156,185 68%

90% 90% 90% 90% 100% 100% 90% 100% 100% 100% 90%

40% 40% 40% 90% 45% 45% 90% 45% 45% 45% 200%

16 Number of farmers utilizing or supplying primary agricultural products to

USG assisted SMEs 100 100 1,200 1,135 1,500 2,116 3,351 3,500 3,600 2,500 134%

17 Number of hectars under improved technologies or management

practices as a result of USG assistance150 163 68,166 323,778 65,573 410,263 410,263 463,529 480,718 204,344 201%

15% of USG assisted entrepreneurs and farmers who demonstrate improved

business practices

Total to

date

Year 4

targetsYear 5 targets LOP Targets

Progress

against

LOP

PY3 results

(2016)Indicator

Year 1

targets

PY1 results

(2014 )

Year 2

targets

PY2 results

(2015 )

Year 3

targets

37


18 Number of primary production enterprises established or strengthened 4 4 11 2 0 0 6 0 0 15 40%

19 Number of Information and support service providers strengthened 1 1 0 0 0 0 1 0 0 1 100%

20Number of Small & medium-scale post-harvest processing enterprises

established or strengthened16 16 14 7 0 11 34 0 0 30 113%

16/1 to

women

16/1 to

women

14/2 to

women

13/2 to

women0 0

29/ 3 to

women0 0

30/3+to

women96%

$1,878,514 $1,878,414 $1,400,000 $1,367,966 $0 $0 $3,246,380 $0 $0 $3,278,514 99%

21/1+to

women

20/1+to

women

25/10+to

women

9 / 9 to

women$0.00

12/2 to

women

41 /12 to

women0 0

46/11+to

women65%

$1,928,382 $1,807,383 $800,882 $500,246 $445,991 $445,991 $2,753,620 $0 $0 $2,729,264 101%

23Additional pieces of agricultural machinery (including tractors and related

equipment) available as a result of USG assistance26 26 64 211 20 55 292 0 0 110 265%

24Number of MSMEs receiving business development services from USG

assisted sources100 100 70 384 484 658 658 678 688 220 299%

25 Number of firms receiving capacity building assistance to export 10 10 30 40 30 40 90 10 10 90 100%

26

Number of private enterprises (for profit), producers organizations, water

users associations, women's groups that applied new technologies or

management practices as a result of USG assistance

90 90 63 350 440 597 597 687 767 203 294%

27 Number of MSMEs receiving USG assistance to access loans 25 25 45 46 55 49 120 59 64 105 114%

28Number of farmers and others who have applied new technologies or

management practices as a result of USG assistance200 200 22,173 38,149 23,606 64,209 102,558 112,364 160,887 160,887 64%

29 Value of agriculture and rural loans made as a result of USG assistance $1,950,000 $2,848,368 $2,500,000 $10,397,029 $2,300,000 $1,802,975 15,048,372 $500,000 $250,000 $7,500,000 177%

30 Value of business development services from USG assisted sources

provided to MSMEs including farmersN/A $180,000 N/A $253,080 N/A $292,300 $433,080 TBD TBD TBD TBD

31 Total increase in installed storage capacity (m3) N/A 10,954 TBD 8,860 TBD 1,823 21,637 TBD TBD N/A N/A

32Number of MSMEs, including farmers, receiving agriculture-related credit

as a result of USG assistanceN/A N/A N/A N/A N/A 45,606 45,606 48,724 22,978 N/A N/A

33Number of public-private partnerships formed as a result of USG

assistanceN/A N/A N/A N/A N/A 1 1 2 0 N/A N/A

34

Number of firms (excluding farms) or civil society organizations (CSOs)

engaged in agricultural and food security-related manufacturing and

services that have increased profits or became financially self-sufficient

N/A N/A N/A N/A N/A 86 86 131 0 N/A N/A

35 Value of targeted agricultural commodities exported with USG assistance N/A N/A N/A N/A N/A $21,835,000 $21,835,000 $25,072,000 $5,600,000 N/A N/A

22Grants approved to primary producers, service/information providers,

small or medium-scale consolidation/ storage/processing enterprises

21 Grants approved to FSC, MSCs or hybrids


Annex 2: Non-Grantee Questionnaire

The survey data is presented in the table below:


Documents

RESTORING EFFICIENCY TO AGRICULTURE …pdf.usaid.gov/pdf_docs/PA00N233.pdf · REAP Internship Program ... PERSUAP Pesticide Evaluation Report & Safe Use Action ... farm to develop