USAID Agribusiness Project

USAID Agribusiness Project

5 year project from Sept 28, 2007 – Sept 27, 2012
 Implementing Partners: DAI, BAH, IRD, Michigan State University
 Total Value $24 million
 Grants: $5,2 million
 Project Locations:
 Belgrade – Head office
 Field offices in Niš, Novi Sad and Čačak-TBD

USAID Agribusiness Project

 What Do We Want?
Economic Growth
 Rapid
 Sustained
 Broad
Based

USAID Agribusiness Project

Meaning…
 ROI - at least 25 to 1
- Sales growth of $600 million
 Increasing competitiveness
 Creating a sound enabling environment

- Policy, market information, service

providers

USAID Agribusiness Project

 How?
Global Markets

National Markets
Supporting
Service Export Wholesale
Markets
Sector Specific
Processing

Embedded
Services
Cross Cutting

Production
Financial

Input Supply
National Enabling Environment

USAID Agribusiness Project

Global Enabling Environment
 Criteria
 Growth potential
- Impact on the economy
 Broad based development impact
- Reaching a large number of people
 Feasibility
- To get traction and have an impact

USAID Agribusiness Project

Sustainable Impact: Competitiveness

The opportunity:
 Domestic and export market growth potential
- Replace imports, compete globally
 Potential for broad value added impact
 Potential for increase in productivity (yield/ha, reduced
post harvest losses, cold storage improvement, shelf life etc.)
 Significant return on investment
- Best use of project resources

USAID Agribusiness Project

 Broad Based Impact:
Development Criteria
The highest potential to benefit a broad base of the
population
 A large number of households/employment involved with each
commodity
 Forward/backward linkages
 Per capita income increase
 On and off-farm jobs growth opportunity

USAID Agribusiness Project

 Rapid Impact: Feasibility
The selected commodities yield rapid results
 Interest of producers and other value chain
actors to participate with the project
 Ability to produce results within project desired
time frame
 Private sector involvement
 Potential to deliver successful Ag Business
Services

USAID Agribusiness Project

 Selecting the Sub-sectors
 Supported by hard data for objective
comparison
 Essential elements:
 Economic growth
 Return on investment
 Broad outreach

 Be flexible during the analysis – if not able

to have impact, drop it!
USAID Agribusiness Project
 SELECTED SUB-SECTORS

Berry Fruit Livestock

Dairy TreeFruit
Herbs,Spices & Vegetables
Mushrooms

USAID Agribusiness Project

 Berries

USAID Agribusiness Project

USAID Agribusiness Project
 Berries - Overview

> 80,000 farms, 250 cold stores, and 100

processing factories
 $172 million sales in 2006

- $151 million exports

- $21 million local market sales
 Existing varieties suitable only for processing

USAID Agribusiness Project

Berries
MARKET SUPPLY CHAIN PROPOSED ACTIVITIES
OPPORTUNTIES CONSTRAINTS

 Develop projects on growing new

1. Export and  Lack of new varieties varieties
domestic  Assist foreign and local nurseries in
demand for  Lack of modern Serbia
fresh berries production knowledge  Re-print and distribute SEDP extension
and technology materials
 Local and foreign production support
2. Shift from  Study tours of foreign producers and
 Lack of standards
frozen bulk processors
export to  Logistics  Implementation and education of
frozen retail standards
 Packaging  Assist development of logistical
3. Immediate companies
export  Lack of associations  Packaging design and innovation
 Support existing and new associations
opportunities
 Lack of marketing  Support market information services
for value knowledge and activities  Assist Serbian companies to participate
added products in foreign fairs
 Lack of management and  Sales trainings
negotiations skills  Management and negotiations training
 Finance and risk management trainings

USAID Agribusiness Project

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Berries

TARGET STRATEGY RESULTS

• Support shift from frozen bulk to frozen retail market

Processors • Support developing value added products
• Strengthen Marketing & Market Access
• Support Intl. Standards Implementation/Certification
•Exports increased by
Produce • Build management and marketing capacity
• Support implementation of new varieties $170 million
organizations • Support standards implementation • Local sales increased
• Support Networking & Market Access by $30 million
• 120,000 PM of new
jobs created
Service providers • Increase technical capacity
• Develop new customer based services
• Develop network with local producers

USAID Agribusiness Project

• Becoming Union for Protection of Varieties [UPOV] member
Policy 15
Dairy Products

USAID Agribusiness Project

 Tree Fruit

USAID Agribusiness Project

 Tree Fruit - Overview
 Orchards are about 6% of total arable soil
(240,000 ha)
 150,000 people in fruit production and
processing [12% of the total agricultural
labor force]
 75% farmers have less than 5 ha
 5% have more than 10 ha of orchards
 Major fruit crops:
 plums, 52% of all orchards in Serbia
 apples 18% and
 sour cherries 11%
 Total farm value of fruit production is US$
300 million - 16% of total production
USAID Agribusiness Project
 Fresh Fruit Export - US$ 21 million in 2006
 apples US$ 11 million;
 stone fruit US$ 9 million;
 other fruit US$ 1 million
 Fresh fruit imports: US$ 4.5 million in 2006
 Processed Fruit Export - US$ 80 million in
2006
 juices [55%]
 frozen cherries and plums [37%]
 preserves [5%]
 dried [3%]
Tree Fruit
MARKET SUPPLY CHAIN PROPOSED
OPPORTUNITIES CONSTRAINTS ACTIVITIES

1.Fresh fruit • Low productivity • Introduction of advanced technologies in fruit growing and
for the post-harvest handling
Russian • Improved farm management skills through adequate
market • Poor quality control training programs
• Provide Serbia’s fruit growers with the guidelines for tree
• Lack of product fruit production principles and practices and efficient record
keeping system
variety
2.Quality • Facilitate networking of existing and creation of new
fresh fruit producer organizations
on lucrative • Extension of
EU markets growing/selling • Assist implementation of international food safety standards
season and organic certification of farmers and processors;
• Support domestic production of certified virus-free nursery
plants
3.Increase • Outdated service
growth of providers
• Developing domestic production of prunes, and dried fruit
processed • Technical assistance for adequate packaging and labeling
fruit • Lack of value-added
exports packaging
(juices, • Conduct research and sales development studies;
dried, • Strengthen business linkages and transfer of know-how
frozen) • Weak Sales and through efficient info dissemination, market study tours
Marketing Structure

USAID Agribusiness Project

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Tree Fruit

TARGETS STRATEGY RESULTS

Processors/ Meeting food safety standards for export
Develop product diversification and packaging
Packers Transition bulk exports to retail packaged opportunity
Improve fresh produce quality (post harvest handling)
Extend selling season of fresh produce
Improve marketing capacities and market access

Implement GLOBALGAP farm standard

Producer Introduce advanced fruit growing techniques
 Exports increased by US $66
million
Organizations Support establishment of new producer organizations
 Increased domestic sales by
Improve management capacity
US $33 million
Shift toward market competitiveness advisory services
 44,000 PM of new jobs created
Service Support regional networking - improve farmers’ access to
Providers providers
Support advancement of domestic nurseries
Introduce new varieties - certified virus-free

Policy Redesign subsiding criteria to boost sub-sector development

USAID and
Law on Cooperatives Agribusiness Project
Associations
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 Dairy products - Overview

 1.6 billion liters/year  US $600 million - Total farm

 50% through formal
channels
 25 large and over 200
small/medium dairies
 25 largest dairies account
for 75% of production
value
 Main products: Fresh and
UHT milk, yogurts, cheese
 99% - Domestic sales
 US $6 million of export
[CEFTA]

USAID Agribusiness Project

Dairy products

MARKET SUPPLY CHAIN CONSTRAINTS PROPOSED ACTIVITIES

OPPORTUNITIES

• 50% of milk goes through • Develop a network of service

1. EU QUOTA Gray Market. EU Quota will providers and support regional
be based on Formal demo centers
2. Milk paid by Economy • Educate and support introduction
stricter quality • Raw milk quality below EU of high breed Holstein heifers and
standards dairy semen/embryos
standards
• Half Milk Supply From • Support the forming and
Small Dairy Farms – A Part upgrading of regional labs
3. Meet growing Time Job (<5 Cows) • Introduce regional milk and
demand for • Low productivity cow breeding recording system
milk and value • Low quality and quantity on • Support the creation of umbrella
added breeding stock (only 5-10% Holstein and/or Simmental
products of pure Holstein Cows) association
• Lack of milking equipment • Link to USA dairy expertise
• Little product diversification • Establish new Milk Development
4. Preferential • Lack of organic production council
trade • Lack of specialty products • Support existing SME processor
agreement • Inadequate marketing associations
with Russia & • Political Risk & Non tariff • Help exporters - packaging,
CEFTA trade barriers promotion, and exports
zone

USAID Agribusiness Project

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Dairy products

TARGET STRATEGY RESULTS

Dairy Processors  Support end-user products
development and diversification
 Support establish of milk development
council
 Exports increased by $5 million
Service providers  Develop a network of service
providers
 Assist in developing New Customer-  Local sales increased by $120
oriented Services million
 Support networking & market access
 100,000 PM of new jobs created
Small & Medium sized  Transform small and medium sized
farmers into viable commercial
Farmers/PO’s agribusinesses
 Support creation of regional/national
dairy association

USAID Agribusiness Project

Policy  Feed and milk quality control
 Harmonization of domestic legislation with EU directives 23
 Herbs & Spices, Mushrooms,
Forest Fruit
 Chamomile, Mint,
Yarrow, Thyme, Paprika,
Parsley…
 Porcini, Chanterelle,
Truffles, Button
Mushroom…
 Wild berries, Rose-hip,
Juniper…

USAID Agribusiness Project

 Herbs & Spices, Mushrooms,
Forest Fruit - Overview
 Total value of the sub-sector: $94
million (2006)
 2006 exports:
 US $45 million
 EU and ex YU
 38% unprocessed
 Number of people involved: 90,000,
mostly women, rural poor &
unemployed

USAID Agribusiness Project

Herbs & Spices…

MARKET SUPPLY CHAIN PROPOSED

OPPORTUNITIES CONSTRAINTS ACTIVITIES

 Inadequate handling • Improve harvesting and storing

1. Shift to • Low prices for
practices through training and
Processed Herbs technical assistance
collectors • Support value-added processing
• Low quotas • Technical assistance to Value Chain
• Insufficient knowledge Stakeholders to improve quota
2. Cultivated Herbs system
about processing and
and Mushrooms market needs • Trade fairs and specialized
exhibitions
• Lack of modern • Strengthen business linkages
processing equipment • Facilitate linkages between
3. Value-added • Lack of diversified processors and retailers
processed production • Facilitate new investments in
Mushrooms & • Lack of growing/ cooperation with the financial sector
Forest Fruit for harvesting equipment • Assist service providers/nurseries to
export and introduce new species and services
domestic market • Underdeveloped • Specialized training programs in
Supply Chain Organic production
• Lack of knowledge
about organic
4. Organic products production and
certification

USAID Agribusiness Project

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Herbs & Spices…

TARGETS STRATEGY RESULTS

Exporters and • Support end-user product development
• Strengthen marketing & market access
Processors • Support Intl. standards implementation / • New Products and Services
certification Introduced
• Exports increased by $30M
Service Providers • Develop technical capacity
• Domestic sales increased by
• New customer-oriented services $25M
introduction/Development • 10,500PM of New Jobs
• Support networking & market access Created
• Improve Management & Marketing Capacity • 10 Supply/Value Chains
Producer Organizations Strengthened
• Increase commercial growing
• Assist Good Agricultural & Collection Practice
development & Implementation
• Support organic food production

Policy • Quota System Improvement

• Market Information System [MIS] Improvement/Extension
USAID Agribusiness Project
• Relaxation of Import Procedures for Agricultural Inputs
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Vegetables

USAID Agribusiness Project

 Vegetable - Overview

 > 10 % of arable land under  100,000 tons of processed

vegetable production, cca 500.000 vegetable exports 2000-2005
ha, average farm 3-5 ha
 Average export value 2000-
 > 30 processors involved 2005 US $55 million
 50 % achieved standards [HACCP, Global
Gap…]

 About 1.8 million tons of fresh

 Main export partners: EU, ex
vegetable production in 2006 (US YU and, recently Russia
$500 million)

USAID Agribusiness Project

Vegetables
MARKET
OPPORTUNITIES SUPPLY CHAIN CONSTRAINTS PROPOSED ACTIVITIES

• Inadequate product variety • Support demonstration plots and

and extension of growing trainings on advanced technologies in
1. Extend
marketing and selling season vegetable production, post harvest
season [ root • Poor quality control and handling
crops and post harvest management • Develop training programs for new
cabbage]
• Low productivity (cold) storing technologies
2. Processed • Lack of adequate (cold) • Develop programs for creation of
vegetables storing facilities network of agribusiness service
(sweet corn, providers providers
industrial • Inadequate extension
pepper, peas, services • Workshops on packaging and
green • labeling standards
beans…) Value added packaging
• Facilitate provision of loans and new
• Insufficient use of irrigation
investments to the producer
system and modern
organizations in cooperation with the
agriculture equipment
3. Fresh with financial institutions
high profit • Low level of cooperation
margin • Facilitate linkages between the
between farmers
(parsley, producers organization and buyers
organizations and
celery, • Marketing and sales training
parsnip, processors/retail chains
cauliflower, • Lack of marketing • Support industry study tours and
broccoli and knowledge trade show participation
watermelons)

USAID Agribusiness Project

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Vegetables
TARGET STRATEGY RESULTS
Processors, • Technical assistance for processors and exporters
• Strengthen Marketing Promotion & Market Access
Exporters, • Support Intl. Standards Implementation/Certification

Packaging centers • Develop linkages with PO’s to have contracted prod.

according to buyers specifications
•Local sales increased by 25M$
• 60.000PM of New Jobs created
•Exports increased by 45M$

Service providers • Develop capacity building program for agribusiness service

providers using voucher and grants
• Create regional/national network of agribusiness service
providers
• Support Networking & Market Access

Producer • Develop Management & Marketing Capacity

• Trainings: extension of growing season, post harvest handling
Organizations and quality control, organic production, improve demonstrations
• Develop/Strengthen Long-term Cooperation with buyers
• Improve domestic certified seed production

•
Policy •
Laws on cooperatives and associations
Environmental impacts on agriculture
• Encourage adherence to EU laws and regulations
• Align Serbian subsidies with EU common agricultural policy
USAID Agribusiness Project

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 Cattle - Beef
Transitioning from Existing “Dual Purpose” Dairy & Beef Cow Businesses

USAID Agribusiness Project

 Cattle Beef - Overview
• In the 1980’s, most of Yugoslavia’s exports came from Serbia and totaled over 20,000 tons
annually, with well over 10,000 tons to the EU and about 10,000 tons to Halal Moslem
markets
• 5 EU certified slaughterhouses - Over 100 million Euros in new investments.
• During 2005-07, Serbia’s beef exports amount to about 2,000 tons valued at US $10
Million annually of “Baby Beef” exported mostly to Italy and Greece.
• Annual beef production of 85,000 tons valued at US $350 million mostly comes from young
dairy bulls. About 90% of beef is processed, with an ex-factory value of US $700 Million.
• About 150,000 dairy & beef farms exist in Serbia, of which 120,000 are small farms in gray
sector.
• All cattle farms must be registered by EU and new GOS laws
• Beef processing plants employee about 10,000 persons and beef sector service jobs
amount to 5,000

USAID Agribusiness Project

Cattle - Beef

MARKET SUPPLY CHAIN PROPOSED ACTIVITIES

OPPORTUNTIES CONSTRAINTS

1. Unfulfilled  Shortages in Supply • Assist export plants

Export and chain • ID/register all cattle
Domestic • Use/develop Ag. service providers
 International market • Trainings in animal husbandry, feeding
Demand
access and farm management
• Adopt EU & international Standards
2. To Export  Lack of Technical • Support Veterinarian Extension Services
“Baby Beef” knowledge
to EU and
Russia.
 Poor Access to Credit • Work with processors in marketing and
and Rollover sales
3. To Export
Utilization • Credit facilitation
“Halal Beef” • Promote foreign direct investment (FDI)
to Middle East,  Insufficient Farmer • Market information systems
Bosnia, and representation • Institutional building
Albania. • Trade policy discussions

USAID Agribusiness Project

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Cattle - Beef
TARGET STRATEGY RESULTS
•Transition real jobs by moving small gray
sector farmers into legal registered business
Farmers & Producers •Support farm coop’s & assn’s and include small
cattle farmers in associations
• Increase service providers to EU Levels

Cattle Farmers •Expand existing beef and dairy cattle assn’s to

cover all cattle in Serbia
Associations
•Establish a separate beef cattle sector • 100,000 PM of new jobs
• Domestic sales and exports
Abattoirs, Processors •Turn the newly formed “Baby Beef” processors increased by US $200 million
assn. into a strong industry group like in EU
and Exporters countries.
• Boost EU beef exports to 10,000 tons
• Regain Halal beef exports to Middle East at
10,000 ton average for former Yugoslavia
• Start up exports to Russia

Policy • Implement EU standards, EU and Halal certification for Serbian slaughter houses
• ID and track all cattle from farm to consumers via meet processing plants

USAID Agribusiness Project

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Livestock - Swine
Squeezing in Swine

USAID Agribusiness Project

 Swine - Overview

• Pork has the highest per capita consumption rate for meat in Serbia, but is about 30% to
40% below EU levels.
• In 2006, Serbia produced about 1.7 million head of pigs, yielding 255,000 tons of pork,
valued at about US $400 million.
• For international trade, Serbia imports and exports less than 5% of its supply of pork.
• Pig numbers grew rapidly after the Balkan wars because of high reproduction rates and
growing consumption based on low priced corn and soybean meals.
• About 50,000 swine farms exist in Serbia, of which 45,000 are small farms in gray sector.
• All swine farms must be registered by EU and new GOS laws and shift to formal sector.
• Pork processing plants employee about 10,000 persons and pork sector service jobs
amount to 7,000.

USAID Agribusiness Project

Swine

MARKET SUPPLY CHAIN

PROPOSED ACTIVITIES
OPPORTUNTIES CONSTRAINTS

• Inconsistent Supply and • Training farm management and animal husbandry

1. Growing Quality Issues
domestic per • Market Information Systems (MIS) Price & Market
• Low Farmer
capita pork situation Information
Representation in
consumption National Livestock
creates room for Associations • Support adoption of international Standards
expansion
• Lack of Technical • Support Producer Associations
2. Export Niche to Knowledge.
Montenegro. • Low Credit Utilization. • Promote Foreign Direct Investment (FDI)

• Loan Facilitation is • Credit Facilitation

3. Exports of Constrained by Lack of
Canned Pork to GOS WHR Law. • Serbian Agricultural Ministry & Vojvodina
Russia and Agricultural Secretariat Work
• Canned Pork plants Not
Neighboring Yet Certified to Export to
Balkan Countries Russia or Other Countries • Support Extension & Veterinarian Services
have large • Work with processors to facilitate access to loans
Potential. • Strengthen and expand service providers

USAID Agribusiness Project

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Swine

TARGET STRATEGY RESULTS

•Transition Real Jobs by Moving Small Grey Sector
Pig Farmers into Legal Registered Business
Farmers and •Support Farm Coop’s & Assn’s & Include Small Pig
Producers in Livestock Assn’s
producers
•Boost service providers to EU Levels

•Expand Existing Beef and Dairy Cattle Assn’s to

Cover All Cattle in Serbia •12,000 PM of new jobs
Pig Farmers Assn’s •Establish a national Pork Producers Association •Domestic sales and exports increased
by US $40 million
Abattoirs, •Move Almost 100% of Swine Slaughterhouses into
Legal Formal Businesses
Processors, • Bring Whole Industry Up to EU Standards.

Exporters •Boost Processed Pork Exports to 1,000 tons

•Start Up Exports to Russia

•ImplementUSAID Agribusiness Project

Policy EU standards and EU certification for Serbian slaughter houses
•ID and track all pigs from farm to consumers via meet processing plants 39
Livestock - Sheep and Goat

USAID Agribusiness Project

 Sheep and Goats
Overview
• Serbia exported most of Yugoslavia’s sheep meat and cheese before 1990’s, over 2,000 tons annually,
valued at US $5 million. 50% of herd decimated during Yugoslav Wars and sanctions
• In 2006, Serbia produced over 20,000 tons of young lamb and old mutton sheep meat valued at US $50
million.
• About 1.6 million head of sheep are currently raised In Serbia, of which only about 350,000 head are milking
sheep and most go for meat production. Yields of sheep meat and milk are 50% of EU average.
• Recent Investments in sheep farms have greatly expanded with electric fencing and imports of better
Heavier meat breeds from the UK and elsewhere in Europe.
• Sheep cheese from Pirot branded as “Kackavalj” was traditionally 80% sheep milk cheese and 20% cow
milk, but now is 80% cow milk and 20% sheep milk because of the lack of sheep milk

• In 2006 about 10,000 tons of goat cheese was produced Valued at US $50 Million. Goat cheese production
is rising rapidly as French alpine dairy goat are being Imported and reproduced in large numbers.
• Roughly 250,000 head of milking goats are raised in Serbia, but most all the young male kid goats are
slaughtered right after birth to save on milk usage, but could be used for raising meat for export to
Switzerland, nearby Halal Moslem, and other markets.

USAID Agribusiness Project

Sheep & Goat
MARKET SUPPLY CHAIN PROPOSED ACTIVITIES
OPPORTUNTIES CONSTRAINTS

• Processed Goat Cheese Sales & Niche Exports

• Inconsistent Supply and
Quality Issues
• Lack of Technical
1. Unmet domestic and
export demand Knowledge
• Low Credit Utilization
• Low Farmer
2. Market demand for Representation
rejuvenated sheep
• Inefficient Low Yields in
cheese production,
Sheep & Goat Farms
3. Goat Cheese Output • Market Access
and Branding to
Achieve Higher
Prices.
• Small Farms Have Low
4. Young male kid goat
Rate of Use of New
exports
Breeds
• Low Public Awareness
of Subsector and Brands
of Sheep & Goat
Products
• Improve Wool Clipping and Exports to UK Market
• Young Lamb Exports to Greece & Halal Markets
• Promoting the Kaĉkavalj Pirot Yellow Sheep
Cheese Brand
• Promoting Lamb from Zlatibor, Tara, Homolje,
• Encourage better sheep genetics
• Concentrate on sales of high value young lamb
meat and live lambs
• Support the introduction of high yielding heavier
EU breeds
• Promote Foreign Direct Investment (FDI)
• Credit Facilitation
 Expand producer associations
 Leverage funds from Serbian Agricultural Ministry
and Vojvodina Agricultural Secretariat
 Support Agribusiness Development Services
(ABDS)
 Market Information Systems (MIS)

USAID Agribusiness Project

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Sheep & Goat

TARGET STRATEGY RESULTS

Farmers and producers •Support development of Farm Coop’s, service • 12,000 PM of new jobs
providers & Producer Associations • Domestic sales and exports
•Transfer Small Farmers into Legal Registered increased by US $100 million
Business

Producer Associations Support Farm Coop’s, ABDS Producer Assn

Abattoirs & Processors Support a Well Recognized EU Level Sheep and

Goat Assn. & tie into ABDS

Exporters Expand Exports of Lamb Meat. Boost Production

of Hall Lamb and Exports to Former Yugoslavia’s
levels

Policy • Implement EU standards, EU and Halal certification for Serbian slaughter houses
• ID and track from farm to consumers via meet processing plants

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 Cross-cutting Activities

 Marketing & export promotion  Grants

 Policy - Investment Incentive
 Extension services - Enabling
 Micro finance/loan officers
training
 Youth enterprise
 Study/sales missions
- Business plan competition
- 4H

USAID Agribusiness Project