AGRICULTURE

USAID rehabilitates water infrastructure systems
USAID rehabilitates water infrastructure systems and improves the water supply for rural residents for both individual use and for agricultural production in Kherson oblast.

THE CHALLENGE:

Ukraine’s capacity for sustainable, broad-based growth is stalled by:

  • Agricultural SMEs’ lack of productivity;
  • Limited access to markets for SMEs;  
  • Deficient supporting infrastructure; and,
  • Poor enabling environment for investment.

According to the Food and Agricultural Organization of the United Nations, Ukraine’s agriculture is performing at one-third of its production capability and one-half of its potential for contributing to GDP.

Ukraine requires assistance to tap its vast potential in agriculture, which would diversify the economy and lead to economic recovery, better wealth distribution, and reducing poverty among the rural population.

PROGRAM OBJECTIVE:

To accelerate broad-based economic recovery through a more inclusive and competitive agricultural industry.

OVERVIEW:

Agriculture is one of the few sectors that continued to grow during the economic crisis. With its 11% contribution to Ukraine’s GDP and the largest share in the country’s export revenue (37%), the sector is central to Ukraine’s economy and can play an even larger role if policy reforms and institutional changes succeed. Ukraine is one of the few areas in the world where substantial increases of agricultural productivity and overall output are possible. This growth would be especially beneficial for the 14 million inhabitants of rural Ukraine, which suffers from high levels of unemployment, widespread poverty, and poor logistical and social infrastructure. Those factors force young people to leave, robbing rural communities of the human resource most able to lead a process of revitalization.  The agriculture sector requires reforms to stimulate private sector investments and technical innovation as well as reduce the regulatory burden on business. Critical reforms include introducing a full-fledged and transparent farm land market, irrigation policy reform, implementation of international food safety standards to diversify exports, and institutional strengthening of the Ministry of Agrarian Policy and Food. 

ONGOING PROGRAMS:

USAID supports resilient economic growth through more inclusive, competitive, and better governed agriculture that provides attractive livelihoods for rural residents. Alongside private sector partners, financial institutions, other donors, and the Government of Ukraine, USAID promotes agricultural development that contributes to inclusive and sustainable broad-based economic growth and facilitates Ukraine’s integration into the EU.

Agriculture and Rural Development Support

The USAID Agriculture and Rural Development Support reinforces broad-based, resilient economic growth through a more inclusive, competitive, and better governed agriculture sector that provides attractive livelihoods in Ukraine’s rural areas. Program objectives are: 1) improved agricultural sector governance and enabling environment, 2) increased investment, productivity, employment, and incomes in the agricultural sector, and 3) improved welfare of rural communities and vulnerable producers.

Credit for Agricultural Producers

CAP will strength capacity of Ukrainian credit unions to expand agricultural lending which will increase employment and income opportunities in rural communities of Ukraine.

Development Credit Authority (DCA) Loan Portfolio Guarantee with ProCredit Bank

Launched in September 2015, a DCA loan guarantee program with ProCredit Bank encourages more long-term financing for agriculture and clean energy while demonstrating the viability of financing in both sectors. The program provides $9.5 million in loans over eight years.

DCA Loan Portfolio Guarantee with OikoCredit

OIKOCREDIT Ukraine will provide $900,000 in loans through a USAID development credit authority loan portfolio guarantee to a group of selected credit unions to increase their ability to make more lending available to agricultural borrowers. The OIKOCREDIT Ecumenical Development Co-operative Society U.A. will provide loans to agricultural small and medium enterprises operating in the fruit, vegetables, meat, and dairy value chains.

Agribusiness Partnership Initiative

Agriculture Partnership Initiative (API) is a part of the Feed the Future Partnering for Innovation program. API works with the private sector to co-finance and co-design activities that address long-standing agricultural development challenges in Ukraine and addresses the Mission’s objective of increasing the productivity of agricultural small and medium enterprises. API leveraged a $4.1 million dollar USAID investment into an additional $10 million by awarding 4 grants to private sector partners: Bayer/IFC, Danone/ICF, Agrobonus and Agrico.

PROGRAM HIGHLIGHTS:

Agriculture and Rural Development Support

  • Reform Support Team established under the Ministry of Agrarian Policy and Food
  • Established supply chain that will use river cargo shipping and reduce transportation cost by 25%
  • Partnered with IFC to increase access to credit through innovative financial instruments
  • Rural economic strategies developed in 12 consolidated territorial communities

Credit for Agricultural Producers

  • Landmark draft law “On Credit Unions” drafted and registered in Rada

Water for Agri-Sector

  • Six water supply improvement sites put into operation (1,925 hectares of land are irrigated now benefiting 9,161 local people);
  • Three water supply management cooperatives created and registered;
  • Training Center established to spread best practice in the region.

Agribusiness Partnership Initiative

  • API partner signed two new potato supply agreements to Novus chain for 4,300 tons

Last updated: November 14, 2017

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