Land, labor, capital, and knowledge are the building blocks of economic development. Key systemic issues inhibit the efficient use of the basic blocks for market development.
1. Low milk productivity, quality, absence of linkages between rural households and larger processors in the dairy value chain (VC) reduce income potential for small farms
2.Massive migration from rural areas for young people seeking jobs and the dearth of appropriate education in agribusiness constrain growth and productivity
3.Decentralization reform created 650 consolidated territorial communities (CTC) with limited knowledge of resources and ability to manage
Understanding that achieving results depends on improved performance and interrelations of multiple actors ARDS focuses on local systems for rural development. ARDS identified a key private sector partner in the dairy VC: Association of Milk Producers (AMP) to:
1. Foster behavior change and linkages in the dairy VC. ARDS co-invested with AMP to create a laboratory to control milk quality and identify issues that affect quality like cow diseases and poor feed rations affecting quantity and quality of milk; developed guidelines on applying food safety legislation at raw milk processing facilities. AMP rolls out the guidelines to help dairy SMEs comply with international standards, which also catalyzes development of AMP as a SRO; established new role of collector of milk from farmers and that ell to large processor buyers; improves enabling environment through sector advocacy
2.Develop labor force. UAC is starting with high school-aged youth by introducing business and leadership skills using the U.S.’s Future Farmers of America model. It is also launching the industry-led Ukrainian Agrarian Lyceum (UAL) to prepare college-age youth for agribusiness careers
3.Manage land. Apply a participatory approach to develop GIS Land Management Systems for CTCs, with economic profiles and investment projects
As newly created CTCs have limited capacity to manage change, it was critical to identify key private sector partner, who would take the leading role ensuring program’s implementation and further expansion beyond ARDS support. AMP became the key partner for implementing the initiative in dairy VC, co-investing in the laboratory over 45% of its cost, working down the supply chain with its member farms to ensure behavior change, taking leadership in establishing the Future Farmers of Ukraine initiative and the Lyceum. ARDS facilitated AMP and CTCs partnership, co-investing in Land Management System (LMS) development. Investments vary: up to 30% from private sector and 20% from local communities; CTCs also provide political leadership, carry-out maintenance of LMS, and ensure inclusive participatory approach (community members take active role in LMS development, revision of strategic plans and identification of investment priorities for the community). The initiative has long-lasting result and is sustainable: it has commitment from all parties, each taking responsibility for its share (leadership/financial support) of carrying changes, replicating and spreading knowledge. ARDS only undertakes “light touch” efforts that facilitate sustainable market development and leverage market actor relationships.
As model started less than a year ago and will continue for another 3, ARDS and AMP are in the process of measuring the financial impact and evaluating the lessons. An important lesson is that it is critical to involve private sector partners together with the local leadership, and build the program around cooperation of key stakeholders. A key challenge is absence of know-how in local systems is often more critical for development. While funds are scarce, they can be found by local partners, while innovation is something the project should take care of. Thus, an important lesson is to promote co-investing together with local government and private sector, while funding directly critical innovation baring elements of the program, which later would be retained by the community and replicated by others. The Lab can serve as a reference for confirmation of raw milk quality, basis for settlements and arbitrage between producers and processing factories: soon after launching it detected bacterial pollution of containers that milk processing plants used to purchase raw material from farms. The processor admitted its guilt, and agreed on increasing the price. Before, Ukrainian milk industry lacked independent laboratories to determine milk quality and provide their impartial conclusions.
As program places local systems in the center of development, the impacts vary and include direct benefits to SMEs and rural population through business located in the communities as well as more long-term results from economic development efforts undertaken by CTCs
1.Dairy VC
• 4000 households and 150 farms access quality lab services
• Milk analysis enables producers to comply with international standards, monitor animal welfare and health, maximize livestock productivity, adjust feeding rations, optimize costs and sales, and increase cost efficiency and competitiveness of Ukrainian cattle breeding
•+15-20% in productivity,+50% in share of milk produced and sold under international standards, and ≥+10% of top quality milk
• AMP emerges as a unique center of excellence, sharing knowledge among members and their supply chains
2.HR
46 students in UAL in 2017
10 new agri- schools by 2019
Future Farmers program expanded to 5 regions in 2019 with private sector support
3. Rural development
• 100 CTCs with 700000 population covered with assistance
• LMS toolkit presented to 200 CTCs; USAID will replicate the model in 6 other regions
• 15 CTCs will have GIS land management ініеуьі, 80 trained to prepare projects; 24 projects are expected to receive external funding (private sector / budget)
Programs description with selection criteria, costs and assistance models available
• LMS toolkit and Kipti (first CTC pilot) GIS-based Land Management System with strategic investment projects available
• Forms for local economic profiles and investment projects available
• Guidelines on Compliance with Food Safety Legislation at Facilities for Raw Milk Processing and its Pasteurization developed in partnership with AMP and is being rolled out to AMP members and through the Ministry of Health further to all dairy enterprises in Ukraine
• Curricula for Agrarian Lyceum developed and will be replicated in other agrarian schools
University of Missouri assisted with development of curriculum, and replicating Future Farmers of Amerika experience
• BLOM – contractor that developed initial pilot – the first GIS-based land management system in Kipti CTC
• Ministry of Health of Ukraine – is approving the Guidelines on implementation of safety standards in dairy industry. It is expected that the Ministry will approve the guidelines for the obligatory use by all dairy farms-enterprises in Ukraine
