Private Sector Activity

Private Sector Activity

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Overview

The USAID Private Sector Activity (2019-2024) is a five-year, $15 million initiative that utilizes a partnership and co-investment approach to support a more resilient Azerbaijan economy and improve the business enabling environment. Supporting the non-oil sector, by improving the competitiveness of the private sector (with a special emphasis on agriculture and other rural economic activities), reducing the barriers that hinder the development of micro, small, and medium enterprises (MSMEs) and strengthening women-led and women-focused organizations will help contribute to a more secure and sustainable Azerbaijani economy.

In partnership with the Azerbaijani government and the private sector, the Activity helps address their priorities for modernization and improvement of public and private sector support and service delivery. This encourages the diversification of Azerbaijan’s economy, strengthens private sector member-based organizations, particularly those led by and focused on women, and reduces the barriers that hinder MSME development. It is also crucial to having a private sector that is able to respond to improvements in the business enabling environment.

Approach

  1. Support a more diversified non-oil economy: USAID provides assistance that supports the increased diversification of the non-oil economy in Azerbaijan, specifically but not limited to the agricultural sector. The Activity assists small and medium-sized farmers to become commercially viable farmers competing in local or export markets. It also works with processors, traders and cold storage operators to improve their adherence to international standards. Through Component 1, the Activity will support six agricultural value chains and one rural value chain: berry, hazelnut, orchard crops, persimmon/pomegranate, perishable vegetables, wheat and agritourism/ecotourism. The Activity builds capacity in support of developing the agricultural sector and value chains in which the activity works, as well as in support of USAID’s Global Development Alliance (GDA) initiatives.
  2. Improve the business environment for MSMEs: Because businesses face administrative barriers that stifle competition, dissuade investment and constrain trade, the Activity works with associations and MSMEs to identify these barriers, communicate them to the relevant government agencies and target the elimination of these barriers. These efforts help increase the benefits of economic growth and remove obstacles to competition, investment, trade and integration into the global economy. The USAID Private Sector Activity works closely with the Small and Medium Business Development Agency (SMB) to engage other stakeholders, such as agencies in the Ministries of Agriculture and Economy, the Azerbaijan Food Safety Agency, the Center for Municipality Affairs and the State Customs Committee, to remove administrative barriers. The Activity also supports improvements to the ‘Middle Corridor’, and increasingly important trade route that connects Asia to Europe through the Caucasus. As a result, businesses will have increased opportunities to produce, trade, export and earn income.
  3. Support Women in Associations: This component will strengthen women-focused, women-led businesses and professional associations, to increase the access of women entrepreneurs and business owners to market information, markets, digital and business development services, finance, networks, mentorship and other resources that will enable them to overcome the obstacles of starting and/or growing firms. The component will enhance locally driven advocacy by women business associations and women entrepreneurs, improve the business and workplace enabling environment for women and improve livelihoods and income generation in target sectors.

Sector Focus:

  1. Agriculture and agribusiness
  2. Agritourism and ecotourism
  3. Business enabling environment
  4. Women’s organizations

Partners:

  1. Agricultural producers, processors, exporters, input and machinery dealers and other private sector actors
  2. Industry associations, chambers of commerce, educational institutions and other business support organizations
  3. GoAJ Ministries, departments, agencies, institutes and services
  4. Formal and informal women-led and women-focused groups

New Facility Helps Boost Revenues and Expand Market Access for Georgian Farmers

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Georgia is the world’s fourth-largest producer of hazelnuts. Production of the popular nut—one of that nation’s leading agricultural exports—supports the livelihoods of more than 50,000 Georgian growers and processors.

Unfortunately, inadequate post-harvest handling services and outdated Husking, Drying, and Storage (HDS) facilities have hindered many smallholder Georgian farmers from producing crops of consistently high quality—resulting in crop losses, lower prices and reduced profitability.

But now a new hazelnut HDS facility is helping to turn that situation around for one hazelnut-growing community. The facility, established with the help of the United States Agency for International Development (USAID) through its Georgia Hazelnut Improvement Project (G-HIP), opened its doors in September 2019 with a ribbon-cutting ceremony attended by USAID Mission Director Peter Wiebler, local farmers and partners.

Opening of new hazelnut facility

The new hazelnut facility—located in the Koki village, Zugdidi Municipality, Samegrelo Region, and owned and operated by Koki 2014 LLC—is designed to offer farmers husking, drying and storage services that will help them better process their crops and improve product quality in order to boost revenues and expand market access.

The project is part of efforts spearheaded by G-HIP’s Global Development Alliance (GDA), a coalition of USAID, Ferrero and Cultivating New Frontiers in Agriculture (CNFA) which leverages the partners’ technical and financial resources to advance development of the hazelnut industry.

Koki—which contributed $210,509 of its own cash to cover construction of the HDS facility, as well as expenses for new staff salaries, laboratory tools and marketing—used a $50,000 USAID/G-HIP grant to procure drying silos, heated air blowers, fans and a storage electric pallet stacker to outfit the new 800-square-meter HDS facility, which is expected to employ 17 individuals and serve approximately 300 local farmers. The $50,000 USAID/G-HIP grant was co-financed equally through the Agricultural and Rural Development Agency under the Georgian Ministry of Environmental Protection and Agriculture, and AgriGeorgia/Ferrero for a total project cost of $260,509.

The facility will be capable of drying up to 1,000 tons of hazelnuts per year. With an estimated value of $1,800 per ton, this represents $1.8 million in potential revenue to improve the income and livelihoods of local hazelnut farmers and the 900 members of their families.

Improving the Georgian hazelnut sector’s post-harvest handling through new husking, drying and storing facilities represents just one part of G-HIP’s overall program objectives. Over the next year, G-HIP will also continue to provide training and technical assistance alongside the Georgian Hazelnut Growers’ Association and the Hazelnut Exporters and Processors Association, with the aim of further strengthening capacity, facilitating market linkages and improving growers’ knowledge of market requirements. G-HIP along with AgriGeorgia/Ferrero, will also support the establishment of a certification course in hazelnut cultivation and postharvest handling.

West Africa PRO-Cashew Project

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Overview

Cashews were introduced to West Africa in the 1960s to fight erosion and desertification. Over the past decade, increased demand, expansion of orchards and government prioritization has caused raw cashew nut (RCN) production to become a critical commercial activity for smallholder farmers, and a major revenue stream for governments. West African production is also growing faster than that of any other region—ten percent over the past decade, generating $1.5 billion in export sales for over 1.1 million farmers. Côte d’Ivoire is the world leader in cashew production, followed by Nigeria, Benin, Burkina Faso and Ghana.

The $47.3 million five-year USDA Food for Progress West Africa PRO-Cashew Project (PRO-Cashew) (2019-2024) will work to boost the competitiveness of West African producers by improving efficiency and quality in production and trade, and by working to develop more coherent regional trade and investment policies. In doing so, the project will strengthen producer capacities as well as develop incentives to renovate and rehabilitate cashew farms, improve production and quality and create a more competitive West African RCN for the international market.

Program Approach

Cashew gains made by West African producers face several serious challenges: reduced yields due to aging cashew tree stocks, farmers’ limited technical and financial capacity to rehabilitate and renovate aging orchards and an undeveloped nursery sector unable to provide timely and consistent high-performance seedlings to offset declines in productivity. This is complicated by the fact that the same trade policies that have boosted exports also pit countries against their neighbors, producing uncoordinated regional policies that weaken public and private-sector support for cashew grower/seller advocacy efforts. To combat this, PRO-Cashew:

  1. Builds Capacity: CNFA builds the capacity of farmers through selected farmer organizations and agro-food suppliers over the life of the project in the areas of business and orchard management and service delivery. In collaboration with the Competitive Cashew Initiative (ComCashew) and the African Cashew Alliance (ACA), CNFA works with local ministries of agriculture to review training curriculums, identify gaps and mentor extension teams in Good Agricultural Practices (GAP), renovation and rehabilitation (R&R) and climate-resilience.
  2. Facilitates In-Kind Grants for Equipment & Inputs: CNFA leverages matching contributions of individual grant disbursements from private, public or farmer sources to catalyze private investment, increase stakeholder partners’ and farmers’ profitability and build the capacity of cashew farmers to renovate and rehabilitate their farms.
  3. Develops Agrodealers & Input Suppliers: CNFA supports private sector nurseries (larger than 10,000 cashew trees per year) and potential large processing companies to improve the efficiency and sustainability of seedling production systems by facilitating public-private partnerships, growing cost-effective, high-performance tree seedlings at central nurseries and distributing seedlings close to farms through rural-based seedling retail businesses. CNFA also facilitates agreements between research entities and the central nurseries to ensure long-term public-private partnerships. PRO-Cashew coordinates with existing efforts of the governments, World Bank and research institutes.
  4. Disburses Improved Market Information: CNFA strengthens existing data and fills significant gaps in data coverage and quality. The integrated Cashew-IN platform, a regional database housing information for farmer organizations, policymakers and private sector organizations to understand and monitor the global cashew supply chains, is accessed and used by farmer organizations, policymakers and private sector investors to understand the national, regional and overseas cashew markets in terms of supply and demand. It also monitors the cashew supply chain, supports traceability for quality control and informs evidence-based policies to increase profitability and marketability of cashews in West Africa.
  5. Improves Policy & Regulatory Framework: CNFA engages with national and regional policy makers, private sector stakeholders and development agency partners to facilitate and improve regional trade policy cooperation. With the support of regional research centers, CNFA conducts analyses of trade policies currently deployed by West African cashew-producing countries and produces annual reports on country and regional competitiveness, government policy analysis and foreign direct investment with quantitative and policy analysis.

U.S.-Pakistan Partnership for Agricultural Market Development

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Overview:

The U.S.-Pakistan Partnership for Agricultural Market Development (AMD) activity in Pakistan was a USAID-funded program (2014-2019) implemented by CNFA with the goal of supporting the development of Pakistan’s commercial agriculture and livestock sectors. AMD aimed to improve Pakistan’s ability to meet both international and domestic demand and efficiency requirements as well as increase competitiveness through private sector engagement.

Approach:

  1. Increased Competitiveness of Targeted Product Lines: Through the adoption of improved production, marketing, and business organization management practices, AMD facilitated increased demand in citrus, mango, high-value off-season vegetables, and livestock product lines;
  2. Improved Market Linkages and Developed Institutional Capacity: AMD worked with processors, traders, retailers, and ancillary service providers that supported the targeted product lines;
  3. Engaged with Private Sector: Through targeted training, matching grants, and technical assistance, AMD leveraged private sector investment and encouraged innovation.

Feed the Future Nigeria Agribusiness Investment Activity

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Overview: 

The five-year USAID Feed the Future Nigeria Agribusiness Investment Activity aims to strengthen the enabling environment for agribusiness finance and investment. To achieve this goal, the Activity focuses on four interrelated components: improving the enabling environment for agricultural sector growth; broadening access to finance by mitigating the credit risks of agribusinesses; promoting and facilitating investment opportunities for agribusinesses to expand and scale up operations; and sustainably enhancing the performance of agribusiness micro, small and medium enterprises (MSMEs). In line with the U.S. and Nigerian governments’ commitment to grow the non-oil-based economy, these efforts will increase the depth, breadth, dynamism and competitiveness of Nigeria’s agribusiness sector.

Beginning in December 2018 and closing in December 2023, the $15.7 million Agribusiness Investment Activity, with Cultivating New Frontiers in Agriculture (CNFA) as the prime implementing partner, aims to viably and sustainably link thousands of MSMEs and producer organizations with high-performing commercial actors in the rice, maize, soybean, aquaculture and cowpea value chains. As a result of streamlined regulations, more effective policies, improved production and processing practices, and significantly increased finance and investment flows, the Activity increases the competitiveness and returns of large, medium and small-scale agricultural enterprises. The overall objective of the Activity is to measurably improve the agribusiness investment climate in Nigeria, which plays a pivotal role in attracting foreign direct and domestic investment, leading to food security and improved nutrition.

Click the link here to learn more about improving the agriculture enabling environment from our Policy and Learning Brief developed during our state summits.

Methodology

The Agribusiness Investment Activity’s four main components are:

  1. Improving the Agribusiness Enabling Environment: The policy, legal and regulatory burdens faced by agribusinesses – whether farmers, processors or traders – constrain their productivity and growth. This initiative seeks to implement reforms to improve Nigeria’s agricultural and agribusiness enabling environment. This component focuses on making relevant policies, laws and regulations less cumbersome, to lower the cost of compliance; reducing tariff and non-tariff barriers to promote more exports and import substitution; addressing infrastructure, land ownership and logistical constraints; minimizing the time it takes to perform statutory business functions; and limiting the scope for bureaucratic discretion.
  2. Broadening Access to Finance: The infrastructure and market reach of both formal and informal banking services remain inadequate in many regions, presenting a significant barrier for rural agricultural smallholder farmers and MSMEs. The Activity works to expand access to financial services across the value chains through informal, community-based savings plans; formal and informal credit; guarantee programs; insurance offerings and more. Working with both lenders and borrowers, this component also supports initiatives that facilitate new and innovative funding approaches that expand access to capital and facilitate greater lending to the agriculture sector.
  3. Facilitating Investment: To catalyze new agribusiness investments, the Activity works with both investors and investees to create commercially viable linkages. This includes building investors’ understanding and appetite to invest in the agribusiness sector, improving the investment readiness of agribusinesses and supporting enterprises desiring to scale-up operations. Through a demand-driven, private sector-led value chain approach, this component directly supports agribusinesses with technical assistance in areas such as identifying investment opportunities and helping firms meet investors’ selection criteria. By providing business development services and supporting strategic partnerships, the Activity strengthens market linkages and the competitiveness of smallholder farmers and agribusiness MSMEs to take advantage of emerging investment opportunities.
  4. Enhancing Agribusiness MSME Performance: Improving the performance of agribusinesses is a process that requires behavioral change. Most agribusinesses need direct technical assistance to adopt best practices and meet the minimum assessment criteria of financial institutions and investment groups. This component works directly with agribusinesses to improve financial, managerial and operational efficiency to enable them to become more competitive and able to access finance and investment opportunities.

Program Approach:

The Agribusiness Investment Activity employs a unique strategy by focusing on larger agribusinesses (called “Lead Firms”) as the central engine of its work. Through supporting the Lead Firms’ growth and expansion objectives, the Activity assists out-growers, financiers, investors, input suppliers, agrodealers and service providers within their value chains. While the primary focus is on facilitating finance and investment, the Activity does not directly offer finance, investment, grants or any other cash-based incentives. Rather, it identifies the best sources of financial and non-financial resources and supports it partners in accessing them. This includes identifying and advocating for the reform of the most pivotal legal and regulatory constraints.

The Activity strictly focuses on the following five value chains: rice, maize, soybean, cowpea and aquaculture. Furthermore, it has a geographic concentration on the following seven states: Benue, Cross River, Delta, Ebonyi, Kaduna, Kebbi and Niger.

The Activity’s strategy includes but is not limited to the following key pillars:

  1. Establishes Public-Private Partnerships: The Activity works with public and private sector partners, including agribusinesses, financial institutions, investment groups and business development service providers to facilitate greater engagement with MSMEs and potential agro-entrepreneurs in their value chains.
  2. Elevating Business Development Services: The Activity connects agribusiness MSMEs to business development services (e.g., business plans and loan applications) that support them from inception to the formation of profitable, sustainable enterprises. Special emphasis is given to MSMEs that are women- and youth-owned or have the potential to hire significant numbers of women and youth.
  3. Facilitating Innovation: The Activity supports the development of new financial products suitable for agribusiness MSMEs and building public awareness as to where and how to access existing financial facilities.
  4. Enhancing Business-to-Business Linkages: The Activity links MSMEs with larger firms in the selected value chains to facilitate viable and sustainable business linkages.
  5. Supporting Policy Enabling Environment: The Activity addresses policies that restrict or constrain the ease of doing business, including registration, licensing, obtaining land, collateral restrictions and access to finance and investment.

Citrus Sector Overview

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AMD Sector Overview Videos

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Response to Brown Marmorated Stink Bug

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Overview:

With $176 million in exports in 2015, the hazelnut is Georgia’s highest earning agricultural export and supports the livelihoods of over 40,000 families. However, the stability and profitability of the hazelnut sector, as well as the incomes of the smallholder farmers who depend upon it, are being threatened by the rapid growth of a pest known as the Brown Marmorated Stink Bug (BMSB).

Originating in China, the BMSB is devastating the hazelnut sector by reducing the quality and quantity of hazelnut kernels. Left uncontrolled, the BMSB could set the country back years of agricultural growth and development in other sectors including apples, corn, grapes, peaches, and vegetables.

To address these challenges, the USAID Restoring Efficiency to Agriculture Production (REAP) project received an additional $3 million to provide technical assistance and equipment to Georgia’s National Food Agency (NFA) between April 2017 and September 2018. By working closely with the Government of Georgia to develop a State Program with a focus on monitoring and managing the BMSB’s growth, REAP strengthened the capacity of local institutions to limit the agricultural losses caused by the pest. REAP’s efforts also helped the Government of Georgia better understand the BMSB’s biology to better inform management of the infestation.

Program Approach:

  1. State Program Development Support: In partnership with local and U.S.-based entomologists, REAP managed the design and oversight of the Government of Georgia’s action plan through its local Working Group, spearheaded by the NFA. The Working Group was used to develop an implementation strategy, define the monitored area, and calculate the budget of the State Program to combat the infestation;
  2. Communications and Outreach: Because the BMSB was new to Georgia, it was crucial to increase awareness and understanding amongst Georgian farmers, citizens, and extension agents before any monitoring and management strategies could be implemented. In cooperation with the NFA, REAP developed communications materials to educate citizens, District Task Force staff, and other public and private extension agents about BMSB management. A Geographic Information System (GIS) mapping platform augmented the approach, visualizing data for the NFA and general public to track BMSB and other pests;
  3. Training: To prepare Georgia’s Ministry of Agriculture for the monitoring and management the BMSB, REAP delivered a multi-faceted training program on BMSB identification, trap establishment and maintenance, and the safe use and application of pesticides;
  4. Local Capacity Building: Experience in the U.S. and Europe indicated that the invasive BMSB will be present in Georgia for an extended period of time. To ensure that the Government of Georgia is able to manage the BMSB in the present and future, REAP worked with the Ministry of Agriculture to outfit local NFA staff and entomologists with awareness, monitoring and management through local research and a capacity-building trip to the United States;
  5. Procurement Support: To equip the Ministry of Agriculture with the tools necessary to monitor and manage the BMSB, REAP worked with the NFA to procure the required equipment to implement the State Program, such as traps, lures, and spraying equipment.
  6. Private Sector Engagement: In order to manage the infestation, CNFA partnered with Trécé Inc, a US-based leading-edge research and development provide latest solutions in insect population monitoring and control.

Leveraging Digital Solutions to Improve Farmers’ Yields in Egypt

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Across Egypt, many farmers struggle with low productivity, poor quality of produce, and post-harvest losses, resulting in a significant loss in income. Even when crops are healthy, pests can destroy a large part of the harvest, incorrect harvesting techniques can bruise fruits and vegetables and packaging can impact the quality of the produce.

Shaaban Mohamed Ghallab, a farmer in Esna Village, Egypt, previously grew onions solely for his family’s consumption at home. Despite having an interest in expanding his production and selling beyond his home, he lacked the know-how in post-harvest handling to make the change.

The ICT platform sent daily text messages to farmers on agriculture best practices in Arabic

Shaaban is just one of 132 onion farmers participating in the Feed the Future Egypt Food Security and Agribusiness Support (FAS) project that received hands-on technical training to acquire the knowledge and skills on post-harvest handling techniques as well as daily SMS text messages that serve as a timely reminder to follow through on practices learned during training.

Over the course of four weeks, participants were trained on best practices for the harvesting, sorting, and packing of onions and tomatoes for local and export markets. Key messages included; ensuring good hygiene during harvest and handling, minimizing irrigation directly prior to harvest to ensure strong stalks and prevent new root germination, integrated pest management to minimize damage from rats and crows, and proper drying of onions post-harvest. Shaaban was selected as a lead farmer, meaning he applied the best practices from the training and provided advice to farmers both in the program as well as in the broader community. As a trusted voice, farmers often looked to Shaaban for recommendations and reassurance regarding agricultural practices. “Farmers would call me and say, ‘Do we add this amount of fertilizer? Or, do we follow this practice? Yes or no?’” he said.

The FAS project also developed an information and communications technology (ICT) platform with the support of Souktel Digital Solutions to send follow-up text messages to all participating farmers. These messages were sent to remind farmers of best practices to follow leading up to harvest time as well as during harvest time to prompt farmers on how to maintain quality produce and how to correctly package produce for the markets. “Since most everyone has a phone and we do not have the ability to visit each farmer in-person daily, because of the distance in rural areas, this is an easy way to reach the farmer with key knowledge,” said Mahmoud El-Rady, the FAS Post-harvest Coordinator responsible for queuing up the messages in the system. “The SMS messages are written step by step as if someone is sitting right by the farmers side in the field,” he said.

In Shaaban’s case, one of the important reminders he received was right at harvest time, when the onion was ripe and ready to be picked. “They sent messages about how to look at the fruit and understand whether it is the right time to pick it and what is the right amount of water to give it at a specific time around harvest so it is not damaged. This is sensitive timing when every minute counts and we can’t always wait for someone to come to the field,” said Shaaban. As a lead farmer, Shaaban also encouraged other farmers to open the messages since they contained helpful information.

Since the launch of the platform, more than 4,800 messages have been sent to participating farmers that produce tomatoes, onions, and grapes. Recently, the FAS project began creating content surrounding post-harvest best practices for the cultivation of mangos. Since the platform has proven to be an effective method for communicating with farmers, this tool is being expanded to send messages on agricultural best practices during production as well as to share lessons on nutrition, particularly with women in the agro-processing workforce.

In his first year of working with the FAS project and producing onions for market sale, Shaaban sold 45 tons of onion, making a profit of 27,000 Egyptian pounds (~1,511 USD). Since Shaaban and his family were living with two other families, he used the profit from his onion sales to help purchase a new home for his own family. “I was very happy because my first goal was to just get the training on onion [production]. I did not expect that I would also get this profit,” he said. Shaaban is now looking to take the skills he’s learned and expand his farm to plant other crops that reap high profits, such as hibiscus, in addition to continuing with the production of onion.