Agricultural Value Chains (Avc) Activity

AGRICULTURAL VALUE CHAINS (AVC) ACTIVITY

FY 2015 – QUARTER 4 - REPORT

JUNE 2015 – SEPTEMBER 2015

OCTOBER 2015

This publication was produced for review by the United States Agency for International Development. It was prepared by DAI.

AGRICULTURAL VALUE CHAINES (AVC)

FY 2015 - QUARTER 4 - REPORT

JUNE 2015 – SEPTEMBER 2015

Agricultural Value Chains (AVC) - Uzbekistan #104-A Kichik Beshog’och Street Tashkent, Uzbekistan 100025

For the U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

Contract No. AID-176-C-15-00001

30 October 2015

The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

ACRONYMS 20/20DC 20/20 Development Company AA Acquisitions and Assistance ALP Agricultural Linkages Project Plus (2011-15) (USAID) AMEP Activity Monitoring and Evaluation Plan AVC Agricultural Value Chains Activity (2015-18) (USAID) AWE Association of Women Entrepreneurs (Uzbekistan) BAFO Best and Final Offer BI Biodiversity International (part of CGIAR system) CAR Central Asian Republics CCN Cooperating Country National CE Categorical Exclusion CGB Center for Genomics and Bioinformatics CGIAR Consultative Group for International Agricultural Research CO Contracting Officer COP Chief of Party COR Contracting Officer Representative EC European Commission EPF Small Business and Private Entrepreneurship Export Promotion Fund (Uzbekistan) EU European Union FAS Field Accounting System F&V Fruit and Vegetable FY Fiscal Year GAP Good Agricultural Practices GCCA Global Cold Chain Alliance GIS Geographic Information System GIZ Deutsche Gesellschaft fur Internationale Zusammenarbeit GOU Government of Uzbekistan ha Hectare HACCP Hazard Analysis and Critical Control Points HPLC High Performance Liquid Chromatograph ICARDA International Center for Agricultural Research in the Dry Areas (part of CGIAR system) ICT Information and Communication Technology IFAD International Fund for Agricultural Development IFC International Finance Corporation INIBAP International Network for the Improvement of Bananas and Plantains (part of BI) IPRGI International Plant Genetic Resources Institute (part of BI) IR Intermediate Result ISO International Standards Organization IEE Initial Environmental Examination IT Information Technology JICA Japan International Development Agency KAC Korean Air Cargo KAL Korean Airlines KOICA Korean International Cooperation Agency MAWR Ministry of Agriculture and Water Resources (Uzbekistan) ME&L Monitoring, Evaluation, and Learning MEVA Mobile Extension Value Added application MFERIT Ministry of Foreign Economic Relations, Investment and Trade (Uzbekistan) MOU Memorandum of Understanding mt Metric Ton NEP National Exchange Program ODC Other Direct Costs OH Overhead OSCE Organization for Security and Cooperation in Europe PERSUAP Pesticide Evaluation Report and Safe Use Action Plan (USAID) RDCS Regional Development Cooperation Strategy (USAID) REC Regional Economic Cooperation Project (USAID)(Central Asia Region) RO Reverse Osmosis SOW Scope of Work STTA Short-term Technical Assistance TAP Technical Assistance Project TBD To Be Determined TCTC Tashkent City Center for Testing and Certification TOR Terms of Reference TOT Training of Trainers TSAU Tashkent State Agrarian University (Uzbekistan) UNDP United Nations Development Programme USAID United States Agency for International Development USG United States Government VRI Vegetable Research Institute (Uzbekistan) WFLO World Food Logistics Organization (research and education arm of GCCA)

TABLE OF CONTENTS

A. BACKGROUND 1. Project Goals and Objective 2. Project Components 3. Geographic and Commodity Focus

B. ADMINISTRATIVE 1. Project Start-up 2. Personnel 3. Local Registration

C. PROJECT ACTIVITIES UNDER COMPONENTS 1. Component #1: Improve Quality & Volume of Agricultural Production a. Improve On-Farm Productivity b. Increase the Quality & Availability of Agricultural Inputs

2. Component #2: Improve Post-Harvest Handling & Production a. Facilitate the Advancement of Cold Storage Practices b. Utilize Improved Post-Harvest Production to Reach New Markets

3. Component #3: Facilitate Market Linkages a. Create New Linkages in the Domestic Market b. Create Market Linkages with New Foreign Markets

4. Component #4: Link Educational Institutions with Private Sector Demand

5. Collaboration with Other Donors a. Multilateral b. Bilateral

6. Women in Agriculture

D. MONITORING & EVALUATION 1. Monitoring 2. Communications & Public Outreach

E. ENVIRONMENTAL COMPLIANCE 1. Monitoring 2. Mitigation 3. Issues

F. FINANCE 1. Disbursements 2. Commitments 3. Obligations 4. Issues A. BACKGROUND

1. Project Goals and Objectives. USAID’s Agricultural Value Chain (AVC) Activity supports Development Objective #1 under the Regional Development Cooperation Strategy (RDCS) – Expanded Diverse and Competitive Trade and Markets. Specifically, the Activity contributes to Intermediate Result (IR) 1.1 – A More Diverse Private Sector, and IR 1.2 – Enhanced Agricultural Competitiveness and Food Security. In support of this Development Objective, the AVC Activity seeks to: (1) create employment opportunities; (2) improve incomes; (3) increase fruit yield and quality; (4) increase packed and processed output; (5) increase targeted fruit and vegetable exports; (6) link USAID”s producers and processors to international markets; (7) strengthen relationships between educational institutions and the private sector.

2. Project Components AVC is organized in four Components, linked by cross-cutting themes, all targeted to economic actors along targeted fruit and vegetable (F&V) value chains. The mandate of each Component is :  Component 1: improve the quality and volume of agricultural production;  Component 2: improve post-harvest handling and production;  Component 3: facilitate market linkages; and  Component 4: link educational institutions with private sector demand.

3. Geographic and Commodity Focus AVC will work in 32 districts across all 12 provinces of Uzbekistan with activities in at least one district of each province. Initial technical activities are limited to the 26 districts covered under the predecessor project, AgLinks Plus (ALP), until the new Memorandum of Understanding (MOU) regarding AVC is finalized and signed between the U.S. Government (USG) and the Government of Uzbekistan (GOU).

AVC # Province Districts ALP Total (add) 1 Samarkand Taylok Payarik Samarkand Urgut Bulungur 5 0 2 Namangan Pop Turakurgan Uychi Kosonsoy Chortok Yangikurgan 6 0 3 Ferghana Kuvasoy Ferghana Kuva Altyaryk 4 0 4 Tashkent Ohangaran Bustonlik Zangiata Parkent Kibray 5 0 5 Andijan Andijan Bulokboshi Hujaobad Marhamat Jalakuduk 5 0 6 Bukhara Jondor 1 0 7 Karakalpakstan Nukus 0 1 8 Jizzakh Bakhmal 0 1

9 Kashkadarya Kitab 0 1 City Tashkent plus 10 Navoi Khatirchi 0 1 11 Syrdarya Syrdarya 0 1 12 Khorezm Bogot 0 1 TOTAL 26 6 32 Table 1: AVC Geographic Focus by Province, including Tashkent City

The approved AVC crop list includes both fruits and vegetables (F&V). A total of 10 crop types are approved for activities under the project with the majority from the stone fruit family (4) followed by vegetables (2), although tomatoes are biologically classed as fruits. The remaining four crop types include grapes, apples, persimmons and the melon family.

Stone Pome Semi-Tropical Vegetables Grape Curcurbit TOTAL Fruits Fruit Fruits Cherry Tomato Apple Persimmon Table Melon Apricot Onion Peach Plum 4 2 1 1 1 1 10 Table 2: AVC Crop Focus 1

B. ADMINISTRATIVE

1. Project Start-up

A five-person project start-up team, including DAI Home Office (HO) staff, mobilized in June and worked in- country during the month of July. The start-up team consisted of a Start-up and Project Manager (Kat Cooley), Start-Up Operations and Procurement Manager (Rados Dabetic), End Market Specialist and DAI project Technical Liaison (Misha Voronenko), Acting Chief of Party (David Anderson) and Market Linkages and Exports Specialist (Jim Krigbaum). A project office was identified in early June and both the expatriate start-up team and cooperating country nationals (CCNs) installed in the new premises on 1st July. The address of the AVC office is #104-A Kichik Beshag’och Street, Tashkent, Uzbekistan, 100025. The official post-award conference was held at the USAID Tashkent offices on 3rd September.

2. Personnel

Immediately upon contract signature the AVC field team began to reach out to key local personnel to confirm their availability and begin to mobilize the in-country team. Table #3 at right summarizes the timing of mobilization of AVC Key Personnel after the contract st Mobilization was signed on 1 June 2015. DAI’s COP candidate Title Name was in the region at contract signature and made Date contact with the Key Personnel included in the project Chief of Party Dr. Charles May 1-Jun-15* proposal. Of the Key Personnel listed in the project Deputy Chief of Party Dr. Asror Nazirov 8-Jun-15 Ms. Jumagal proposal only one was unavailable, the Senior Monitoring, Evaluation, (Elena) 8-Jun-15 Marketing and Export Advisor, who was unwilling to and Learning Director Abdramanova forego his existing employment and compensation Component 2 Team arrangement with another donor. By the end of the first Mr. Sunnat Leader and 8-Jun-15 Djalalov week of the contract the core field office team was Environmental Officer mobilized and began reflection on how best to fill the Senior Marketing and TBD August, 2015 remaining Senior Marketing and Export position as well Export Advisor as contact additional local staff listed in the proposal. Table 3: AVC Key Personnel Mobilization

Team Name Title Status AVC announced the Senior Marketing and Gholib Mahmudov Team Leader - Component 1 Export Advisor position on UzJobs and the Team Leader - Component 2 & Sunnat Djalalov best available candidate was proposed to Environmental Officer Ulugbek Bekchanov Senior Marketing & Export USAID for Key Personnel approval by mid- (proposed) Advisor/ Component 3 Lead Mobilized August 2015. Additional local staff listed Aror Nazirov Team Leader - Component 4 in the proposal were hired over the course Dmitry Lunev Agricultural Engineer Technical of the quarter corresponding to the needs Aziz Hakimov Cross-Cutting Components 3-4 of project implementation and Sardor Kadyrov ICT Specialist management. Scopes of Work were Educational Institution Linkages Specialist drafted, announced on UzJobs and TBD Cross-Cutting Components 1-2 Recruiting applicants accepted for the other open Marketing Specialist positions under the project design. A Standards Specialist summary of the local staffing positions Communications and Outreach Monitoring, Kamil Yakubov filled and under recruitment at the end of Specialist Evaluation and Mobilized the quarter is presented in Table #4 at left. Monitoring Evaluation & Communication Khurshida Gapirova Learning Assistant By the end of the quarter the only Gafur Berkinov Finance Manager remaining technical position left to recruit Operations and Compliance Mobilized is the “Cross-cutting Components 1-2” Nazokat Yakhyaeva Specialist Finance and while the Finance and Administrative Administrative Assistant Administration positions remain to be recruited as the Accountant TBD Recruiting project awaits the signed MOU and formal Procurement Assistance and Driver Technical Assistance Project approval.

Table 4: Additional AVC Staff Mobilization 2

3. Local Registration The most significant task associated with project start-up is establishing formal relations with the Government of Uzbekistan and appropriate ministries. In the case of AVC, the project will be legally approved through a Memorandum of Understanding (MOU) between the GOU, represented by the Ministry of Agriculture and Water Resources (MAWR), and the US Government, represented by USAID. Until a new MOU is signed and approved, DAI remains legally limited to only those activities within Uzbekistan which fall within the confines of a Resident Representation Charter of a potential foreign direct investor under the Ministry of Foreign Economic Relations, Investment and Trade (MFERIT).

DAI’s present registration with MFERIT as a Resident Representation in Uzbekistan expires on 26th November 2015. Whether or not the MOU is signed before the start of November, DAI will begin the renewal process for re-registering with MFERIT early in the next quarter. Once DAI re-registration is obtained then the COP’s status as DAI’s Resident Representative will be renewed and subsequently new visas requested.

In addition to the MOU, AVC must be registered as a “Technical Assistance Project” (TAP) with the Special Committee under the Cabinet of Ministers. This registration request is submitted by the MAWR as the GOU recipient of technical assistance provided under the AVC framework. During this quarter AVC staff worked collaboratively with USAID and MAWR to understand the process of, requirements for and prepare all the necessary supporting documentation for TAP registration. Project registration should enable AVC to import needed materials for project implementation duty free and enable the project, not just DAI, to have an official and legal presence in Uzbekistan.

C. PROJECT ACTIVITIES UNDER COMPONENTS

On 28th August 2015 a new decree was issued and became effective on 1st September 2015 banning all horticultural exports by road (i.e., trucks) including melons, potatoes and grapes. This decree was released under the signature of the Prime Minister and limits all horticultural exports to rail and air transport. The bulk of previous year’s horticultural exports were by road and refrigerated trucks so this ban will have far- reaching and long-lasting impacts on the entire sector. AVC will continuously monitor the impacts of this ban and structure its technical assistance to help sector actors adjust to this new reality. As of this writing (mid-October 2015) the decree was postponed until 1st January 2016 and a renewed list of approved exporters was released.

1. Component #1: Improve Quality & Volume of Agricultural Production a. Improve On-Farm Productivity

Pest & Disease. In late August AVC staff members jointly organized a pest and disease trainings for apples with international agricultural input supplier, Syngenta, at their demonstration plots. In Tashkent Province a total of 8 partners attended while 16 of the 30 attendees to a similar training in Samarkand were AVC partners, including all 3 female attendees. In the second week of September, AVC staff again collaborated with Syngenta and local horticultural service provider, “Konsalt Madat Khamkor,” to visit vineyards in Samarkand (Tayloq and Samarkand districts) and Tashkent (Parkent District) provinces to identify prevalent grape pests and diseases to inform production of an appropriate integrated pest & disease control program. Samples of infected leaves were collected by Syngenta for further analysis with preliminary results confirming the existence of powdery mildew, downy mildew, crown gall, and botrytis. Based on the analytical results and taking into account agrochemical availability on the local input supply market, AVC began drafting updated one-page identification and control informational bulletins for use in the upcoming 2016 season. Final production and distribution of these one-pagers awaits the MOU, TAP registration and the USAID approved AVC PERSUAP.

Photo #1 : Syngenta Training – Samarkand – August 2015

b. Increase the Quality & Availability of Agricultural Inputs

Tools. A preferred list of equipment and horticulture tools for targeting by AVC has been drafted and initial contacts with potential local importers and vendors begun. Introductory meetings were held with “Ibrigim Asia Company” (Murat Kurshun) and “Netigo” (Dilshod Akbarov) to determine their interest in establishing a line of horticultural equipment and tool sales in Uzbekistan. Follow-up meetings with these and other potential partners for this activity will be held after the MOU is signed.

Irrigation. AVC staff began the literature review and data collection required to draft a manual on surface furrow irrigation techniques. Furrow irrigation remains the major technique utilized in Uzbek orchards and vineyards to provide water input. The manual will introduce the concept of furrow irrigation, provide examples for calculating the basic requirements for furrow irrigation by fruit crop, integrates plant age and soil conditions and provide optimal furrow lengths, water flow, and timing. The manual envisions presentation of solutions to recurrent problems in surface irrigation, methods for diagnosing moisture content at the root zone, and fertilizer application timing. A section introducing the use of water-saving technologies in Uzbekistan will also be included.

Tissue Culture Lab. AVC gathered information and established contacts with potential greenhouse construction companies to provide a structure specific to the needs of the tissue culture laboratory at the Mirzaev Horticultural Research Institute. Detailed technical specifications, cost information and timing were 4 obtained in addition to other details. AVC staff kept the US based tissue culture expert apprised of developments with the lab and elicited his guidance and comment. AVC staff continue to monitor the status of the equipment within the tissue culture laboratory with a problem identified with the water filtration and purification system which employs reverse osmosis (RO). A disruption of the main water supply line to Zangiota District, where the lab is located on the confines of the Mirzaev Institute, resulted in an increase of silt and suspended dirt in the public water supply. The resultant higher particle level clogged the reverse osmosis filters, which were not designed to handle such a poor quality input, and led to a failure of the membrane system. AVC contacted the company which services such filters to change the clogged membrane which provides the lowest level of particulate matter in the water supply. To avoid such instances in the future, an additional two pre- filters (to 50 micron particle size) were installed plus the existing water purification filter (up to 5 micron particle size) was replaced.

Photo #2 : Purification Filter Clogged with Dirt & Silt

2. Component #2 : Improve Post-Harvest Handling & Production

The AVC Regional Cold Chain Advisor (Mumin Isamiddinov of Global Cold Chain Alliance - GCCA) started work on 16 June 2015 and began meeting with cold store owner/operators in Andijan, Bukhara, Samarkand, Ferghana and Tashkent provinces. A total of 15 cold stores were visited this quarter which served to initiate, reconnect and otherwise strengthen relationships, as well as provide insight into which locales are most appropriate for AVC demonstration site activities. In addition technical and commercial advice was shared with an emphasis on 2015-16 sector trends and expectations. A draft agenda for a National Exchange Program (NEP) for cold storage participants, planned for December 2015, was also drafted.

a. Facilitate the Advancement of Cold Storage Practices

Cold Chain. AVC subcontractor GCCA developed a discussion document on the preferred approach to establish a pay-for-service cold chain service provider. Implementation of this approach will include a needs assessment, planned study tours and events, and a cold storage strategy launch for the 2016 season.

The World Food Logistics Organization (WFLO), the research and education arm of the Global Cold Chain Alliance (GCCA), is working with GCCA India and Grapage (India producer of sulphur dioxide pads) to plan a cold store exchange visit in February 2016. The program will include visits to grape vineyards and value chain companies as well as those working on grape processing. WFLO also made initial contacts with another GCCA member to develop an exchange visit to Turkey focused on cherries. This visit is tentatively scheduled for June 2016. Because fresh cherries are a high value fresh produce, this visit will not include visits to processing or dehydration centers but focus on handling, storing, packing and shipping to capture maximum value. Photo #3 : Packing Grapes with Pads & Bags - Andijan 5

Polyethylene Bags. AVC procured 18,000 polyethylene bags and began introducing Cold Store Poly Year this technology for grape storage and # First Name Last Name Province District Capacity Bags (est.) shipping techniques to partner cold stores. (mt) (#) Bags were distributed among 12 partner 1 Azamjon Toshboyev Hojabod 200 2012 600 2 Kambarali Nuraliev Marhamat 25 2014 5 cold storage facility owners who agreed to Andijan 3 Habibulla Nazarov 20 2015 3185 Bulokboshi store grapes at their facilities and share 4 Ravshanbek Nosirov 400 2009 10 their results with others and AVC. The bags 5 Utkir Ruziev 200 2014 1000 are food grade quality, recyclable, locally 6 Arslon Shirinov Bukhara Jondor 300 2013 1000 available and specially designed for 7 Olim Dilmurodov 400 2013 1000 prolonged storage and transport of grapes 8 Rahmat Sobirov 100 2011 1000 9 Alisher Karimov Samarkand Samarkand 500 2011 1000 in combination with sulfur dioxide pads. 10 Alam Mahmudov 150 2011 1000 Major fresh grape exporting countries, such 11 Bahrom Kholmonov 200 2012 2000 Tashkent Tashkent as Chile (#1; USDA-2013), South Africa 12 Abdulkhakim Karimov* na na 3000 (#4), Turkey (#5) and India (#10), use this Isakjon Boymatov 225 2011 2400 Isamiddinov Fergana Oltiarik 13 Mumin na na 800 type of polyethylene bag for transportation (Reserve) and storage of packaged fresh grapes. Total 2,720 18,000

Table 5: Distribution of Polyethylene Bags

Prior to introducing these polyethylene bags most cold storage owners in Uzbekistan used either non-food grade bags or cotton gauze. Non-food grade bags are not specifically designed for long-term storage and gauze allows the sulphur dioxide to escape, thereby limiting its impact on fungal infections. Previous demonstrations of new packing materials to prolong shelf-life and quality in grapes, via the sulphur dioxide pads, were enthusiastically adopted by cold store owner/operators after their introduction under the previous project. The polyethylene bags are 3 to 4 times less expensive than the sulphur dioxide pads the implying the prospects for a similar rapid adoption are good.

Both the sulphur dioxide pads and polyethylene bags are new grape storage technologies being introduced to Andijan Province in three districts. In Buloqboshi District AVC is collaborating with local partner, Dulanalik Bogbon Mevasi, to demonstrate the impact of these techniques on grape preservation and quality. Testing is also underway with this partner to determine the impact of different packaging container material (wooden, plastic, cardboard) and sizes. Eight fresh grape varieties (Husayni, Andijan Black, Nimrang, Daroyim Toifi, Oktyabr, Ketmon Sopi and Lady Finger) are being stored to determine storage and marketing characteristics of each as the season progresses. Photo #4 : Properly Packed & Cold Stored Grapes - Buloqboshi

Additional sites where this post-harvest technique is being introduced include Ferghana (Oltarik District) and Tashkent Province (Parkent District). In Ferghana AVC is collaborating with a local partner to monitor cold storage conditions, temperature and humidity, using a wireless recording device. This test will allow 6 the team to demonstrate the correlation of proper maintenance of temperature and humidity over time to the resulting quality and shelf-life of the stored grapes. In Tashkent the team is jointly testing with a local partner the efficacy of different sulphur dioxide pads available on the local market. The major sulphur dioxide brand names available on the local market have expanded in recent years with Freska and Proteku (Chile), Grapage (India), Himso (Turkey) and generic versions from China. The Tashkent test is for the two major brands, Chilean and Indian, with the quality of stored grapes compared throughout the selling season beginning with the end of December.

b. Utilize Improved Post-Harvest Production to Reach New Markets

Two post-harvest handling training sessions were designed and drafted in anticipation of MOU signature and subsequent approval to hold group trainings. The first is an introductory level course providing participants the fundamentals of a cold chain, including owning and operating a cold storage facility. This “ABC Training” is targeted to cold store operators and cold chain participants in new regions, not already familiar with cold storage as a business proposition. The second training is an intermediary-level training course building upon knowledge gained in the introductory training. It focuses on business operations and how to develop strategies to meet market changes allowing participants to grow their operations using advanced technologies and a thorough understanding of market trends.

Clam Shells. Table grapes from Oltarik District are well known within Uzbekistan for their unique variety and premium quality. However, fresh grapes are a highly perishable product and require proper handling along the value chain. The majority of Oltarik grapes are not individually packaged with bunches placed directly into wooden or plastic storage crates which reduces quality and increases spoilage due to breakage, shattering, loose berries and moisture loss further reducing the shelf-life. AVC has begun to address this post-harvest packaging issue through the introduction of plastic clam shells for the high value Oltarik table grapes.

Individual grape bunches placed in clam shells will decrease damage, increase shelf life and retain the value of the fresh grapes. During this quarter AVC staff actively sought local suppliers and/or manufacturers of plastic clam shells in Uzbekistan. AVC and GCCA staff attended the “Annual Packaging Trade Show” in Tashkent this quarter to observe the local packaging options and made contact with a local manufacturer of clam shells for fresh produce (“Mahsus Ish Kiyim”).

Photo #5 : Individual grape bunches packaged in plastic clam shells

3. Component #3 : Facilitate Market Linkages a. Create New Linkages in the Domestic Market

TCTC. In August AVC team members met with the chemical and biological testing laboratory of Tashkent City Center for Testing and Certification (TCTC) under the UzStandard Agency. USAID provided this lab a high-performance liquid chromatograph (HPLC) during the Aglinks Project. Currently this equipment is being used to test vitamins, additives and conservatives with a full-time, specially trained technician. The potential for testing and certifying horticultural products for export on a commercial basis to value chain actors was discussed. Required steps to integrate this capability include purchase of mycotoxin reference standards, specialized reagents and specific target market requirements, as well as international accreditation of the Lab. It was agreed that close collaboration would continue once the MOU is signed.

Bukhara Links. In Bukhara Province, Jomboy District AVC staff re-established contact with three partners from the previous project within the cold storage sector. These owner/operators were renting out cold storage space to neighbors as well as buying and storing on their own account. Their buying agents were sent as far as Jizzah (apples) and Navoi (grapes). All three partners reported purchasing sulphur pads for the upcoming grape storage season based upon the positive results achieved in the previous year. A new potential partner was identified and initial contact made in Bukhara. AVC heard mention of a female cold storage owner in Bukhara and will follow up on this lead next quarter. The cold chain sub-sector within the horticulture value chain has clearly launched in this province since the cold chain workshop held in March 2014.

Khorezm Links. In Khorezm Province AVC staff used personal contacts to obtain a list of existing cold stores. Ground-truthing visits were then made to determine the present status of these cold stores. The Bagat District cold store is the second largest in the province, began operations in 2012 and was built by a Turkish company with a 1500 mt capacity. They store on their own account and rent space, usually about 400 mt of space for the latter. Another Bagat District cold store affiliated with the cotton company has a 200 mt capacity and is used primarily to store produce for their workers.

b. Create Market Linkages with New Foreign Markets

Plums. AVC Component #3 staff provided assistance to the consolidator/exporter company “Netigo” to identify plum varieties, evaluate annual plum export production volumes, both fresh and prunes, and current price trends demanded by producers in Namangan Province. (August, 2015). The major plum producing districts identified within Namangan Province were Yangikurgon, Kosonsoy, Torakorgon, and Chortok districts. A total of 7 producers (5 ha or more and 250 mt total production) were contacted and relationships facilitated with Netigo for commercial cooperation.

Korean Air Cargo. AVC staff made initial contacts with Korean Airlines (KAL) and Cargo to determine interest in and possibilities for air shipments of fruits and vegetables to non-traditional Uzbek export markets. Administrative offices for Korean Air Cargo (KAC) are located in Tashkent with their transit hub at the Navoi International Airport consisting of 100,000 mt cargo capacity, a 400 mt cold storage facility, 2 aircraft freighters with adjustable temperatures to meet needed requirements and travel to 8 destinations including Amsterdam, Dubai, Tokyo, New Delhi, Mumbai and Seoul. KAC is interested in exploring backhaul opportunities on its flights from Korea utilizing Uzbek fruits and vegetables. The most promising produce for air transport were identified as melons, cherries and pomegranates. Next steps include arranging a visit to the Navoi facility, identifying the relevant Korean quarantine issues (especially due to melon fly), ascertaining the through-put capacity of the Navoi hydro-cooler, Korean market exploration visits to understand quality, packing and consumer tastes along with identification of other potential produce for air shipment (e.g., potential for grapes and raisins) and markets (e.g., India, Middle-East).

4. Component #4 : Link Educational Institutions with Private Sector Demand

Agricultural Universities. AVC team members were unable to meet with educational institution management and leading professors due to the limitations of DAI’s current legal status. However, the team elicited information on the various faculties and departments specialized in fruit and vegetable production, processing and marketing through personal contacts. Additional project staff conducted desk research, using publicly available resources, on the organizational and management systems of higher education in Uzbekistan, especially related to horticulture. Uzbekistan has a multi-stage higher education model and fits within the framework of the Laws of the Republic of Uzbekistan "On Education" and "On National Program for Personnel Training". There are a total of 58 higher education institutions in Uzbekistan (2 Academies, 20 Universities and 36 Institutes) with 4 specifically serving the agricultural sector with advanced level specialists. These four are : (1) Tashkent State Agrarian University (TSAU), (2) Samarkand Agrarian Institute, (3) Andijan Agrarian Institute and (4) Tashkent Irrigation and Melioration Institute.

All young agriculturalist professionals with higher-level education graduate from one of these four institutions. These four institutes have dual subordination – reporting to the Ministry of Agriculture and Water Resources, for administration and funding, and to the Ministry of Higher and Specialized Secondary Education, for compliance with educational levels, content and standards requirements as well as quality of professional training. There are a total of 1,552,471 students in 1411 colleges (US secondary school equivalents with added technical specialty) throughout Uzbekistan. These colleges prepare sub-university students for all sectors of the national economy, including agriculture and its subsectors. AVC identified a total of 56 colleges in the targeted 32 districts with an agriculture focus.

In response to a verbal request from AVC, the MAWR organized an introductory meeting held within the confines of the Ministry between university and AVC representatives on 11 September 2015. MAWR officials were represented by the AVC National Coordinator (Mukhammadjon Kasimov), the Horticulture Department Head (Zafar Artiqov), and the Deputy Head of the International Relations Department (Zakhid Salikhov). From the educational and research institutions the meeting was attended by representatives of Tashkent State Agrarian University, Samarkand Agrarian Institute, Andijan Agrarian Institute, Mirzaev Horticultural Research Institute and the Vegetable Research Institute. Mr. Kasimov facilitated the meeting and informed participants of USAID’s previous activities in the horticultural sector (he particularly emphasized the Tissue Culture Laboratory and MEVA app) as well as the goals of the new AVC Activity. He encouraged academia to consider potential avenues for cooperation with the project in order to immediately avail themselves of joint activities once the MOU is signed and TAP status obtained.

AVC staff briefed the meeting participants about the project components and tasks and how universities and institutes play an important role in achieving sustainability of a modern agricultural value chain approach through knowledge development and dissemination. Potential joint activities were brainstormed and professors were particularly keen on the need for demonstration models of the entire chain (production plots, post-harvest handling sites for processing and marketing) within the confines of their respective institutions as well as development of a vegetable analog to the MEVA application. Following the meeting, AVC approached Mr. Kasimov seeking his assistance to arrange introductory visits to each institution to explore their current capacities, ascertain their specific needs and identify where AVC can most efficiently and effectively assist them to improve horticultural related curricula, training, and methodological support. Mr. Kasimov supported the idea and promised to arrange visits at the appropriate time.

Vegetable Research Institute. AVC staff met the director and chief scientist of the national Vegetable Research Institute (VRI) which also covers melons and tomatoes. The Institute’s main activity is breeding new varieties and seed multiplication. It has a main facility in Tashkent and 6 branches which do most all of the seed multiplication work in Andijan, Samarkand, Kashkadarya, Surkhandarya, Khorezm, and Sirdarya. The director mentioned the existing seed multiplication techniques and technologies are outdated and would benefit from upgrading. AVC will explore the opportunity of assisting the VRI, over the life of the project, to introduce modern seed production, processing and packaging technology to improve both the quality and the volume of the targeted vegetable and melon crops.

5. Collaboration with Other Donors

A number of meetings were held this quarter with both multilateral and bilateral donor organizations to identify areas of mutual interest and potential cooperation. A special emphasis was placed on this activity as it remained consistent with the existing legal status of DAI in Uzbekistan as a Resident Representation.

a. Multilateral

World Bank. In July 2015, the World Bank launched its Horticulture Development Project in Uzbekistan ($150 million; $120 million for low-interest agricultural credit and $30 million for technical assistance). The project will work in 7 provinces of Uzbekistan. AVC staff met with local Bank staff and agreed to begin inviting their beneficiaries to AVC training programs to teach them advanced horticulture technologies. In turn, the Bank agreed to include AVC beneficiaries in trainings on obtaining access to their low-interest agricultural loans.

IFAD. In 2014, the International Fund for Agricultural Development began a new $30 million project to support horticultural development in Surkhandarya Province only. They will install a tissue culture lab at the local branch of the Mirzaev Institute located in Denov District. IFAD replicated the USAID tissue culture procurement list for their design activity and AVC facilitated contact with lab specialists to the Rural Restructuring Agency of the MAWR tasked with implementing this IFAD-funded activity.

FAO. The Food and Agricultural Organization began a new program in June focused on food security and standards ($0.4 million; 1.5 years), with special emphasis on organic, including a demonstration site, study tours to Turkey, limited technical assistance and laboratory testing capacity support (for organics). Once the AVC recruited Standards Specialist begins work in the next quarter he will be tasked to obtain more details from FAO to determine where best the project can complement FAO efforts. The AVC Standards Specialist is an accredited organic certifier for the Central Asia region.

IFC. The International Finance Corporation is funding training programs on GlobalGap and Hazard Analysis and Critical Control Point (HACCP) in Uzbekistan. The IFC agreed to share their training materials with AVC as well as to invite project participants to their training programs. The IFC is also supporting financial loans to the horticulture sector through Hamkor Commercial Bank.

UNDP. The United Nations Development Program (UNDP) has built an advanced food dryer in Uzbekistan. The AVC Activity will continue to explore how to cooperate with UNDP in our food processing tasks. Other UNDP activities are focused on GOU capacity building and export promotion with minimal collaboration with growers.

OSCE. Two meetings were held with the local representation of the Organization for Security and Cooperation in Europe. AVC will monitor progress on their pilot agricultural cooperative initiative which includes pending legislation, as well as share information on study tours for potential inclusion of OSCE partners and beneficiaries on a cost-share basis.

Biodiversity International. Biodiversity International (BI) performs research in agriculture and tree biodiversity within the Consultative Group for International Agricultural Research (CGIAR) system and has a representative office in Tashkent under the auspices of the International Center for Agricultural Research in the Dry Areas (ICARDA). BI informed AVC staff of their previous work on melons which includes a list of national producers which they agreed to share. AVC and BI further agreed to collaborate in producing reference material on varietal identification and matching appropriate pollinators by crop type. The two teams also discussed the importance of using Molecular Marker Characterization to determine the true-to- type varieties of the most popular fruit and vegetable crops in Uzbekistan for both scientific and commercial uses. BI mentioned that the Center for Genomics and Bioinformatics (CGB) may have the capacity to perform this type of characterization.

b. Bilateral

JICA. The Japan Inernational Development Agency is implementing a new 3 year project: “Enhancement of Uzbek Farmers through Modern Fuji Apple Production”, to be implemented in Samarkand, Tashkent, and Fergana provinces with the three agrarian universities located there. They will also collaborate with the Mirzayev Horticultural Research Institute. It was agreed to invite JICA experts to AVC apple variety contests to inform farmers of good apple production practices, and perhaps one of the contests could be held at a JICA demonstration site (Mirzayev). AVC lead farmers from each region can also participate in JICA training programs for those interested in growing Fuji apples.

KOICA. The Korean International Cooperation Agency has completed 3 high-tech greenhouse installations at different locales (TSAU, the AgroInnovation Center and the VRI) costing $4 million. Their new projects include $7 million (2014-17) to increase information and communication technologies within UzStandart and $2.5 million (2013-16) to provide landscaping at the Navoi Free Industrial Zone. AVC will certainly follow-up on the greenhouses, especially with TSAU and the VRI, plus monitor the ICT investments at UzStandart to assure any AVC activities are consistent with this investment.

GIZ. Germany’s Gesellschaft fur Internationale Zusammenarbeit installed three research quality demonstration sites for high-intensity orchards with one each in Surkhandarya, Khoreazm and 10

Karakalpakstan provinces under their bilateral program. This program will continue into 2017 and represents 10,000 true-to-type trees (apple, plum, cherry and pear) as well as 6,000 grafted rootstocks. AVC and GIZ agreed to share lessons learned from their respective experience. GIZ also intends to complete a horticultural based website for information dissemination and AVC agreed to collaborate on this effort to avoid duplication of effort. GIZ mentioned they will also be the overall implementing partner for the EC-funded rural development program (Euro 9.3 million).

USAID REC. A meeting was held in early August with USAID’s Regional Economic Cooperation Project including the Chief of Party (COP; Viktor Proderovich) and REC Country Manager (Jakhongir Imamnazarov). Areas of collaboration between REC and AVC included attendance at the Central Asia Trade Forum in Almaty, attending REC events within Uzbekistan, participating in REC’s program for organic fruit and vegetable partnerships through Business-to-Business (B2B) forums as well as export certifications and standards compliance.

As a result of these meetings AVC staff participated in USAID REC’s “Development of Production and Export of Horticultural Products” workshop (August 24-25) and Roundtable “Ways to Increase Efficiency of Transport and Logistics” (September 9-11). By the end of the quarter AVC was working to support as many as four GOU participants as well as five of the project staff to attend the REC Central Asia Trade Forum in Almaty.

6. Women in Agriculture AVC staff drafted a terms of reference and released a recruitment announcement for a short-term technical assistance (STTA) Gender Specialist. Applicants will be reviewed early next quarter with work scheduled to begin shortly thereafter in performing a literature review and strategy document for the project on how best to integrate gender activities within the project, as well as provide training to AVC staff. Additionally, project staff were tasked to re-double efforts to identify female cold store owner/operators and exporters during their field trips within the previous project and AVC districts.

D. MONITORING AND EVALUATION

1. Monitoring The AVC Activity Monitoring and Evaluation Plan (AMEP) was developed and submitted to USAID for review during this quarter. USAID approval of the AMEP was obtained on 21 September after the AVC indicators included in the project proposal were reviewed, discussed and critically evaluated for their relevance to local conditions and credibility of the data to be collected. As a result, the following 5 indicators were eliminated in the final approved version of the AMEP: # 3 – Production volume, #5 – Number of jobs, #10 – Number of Contracts, #13 – Number of Rural Households and #15 - Educational Institutions offering internships. One indicator was added: Value of Investments; and other indicators were reorganized to meet USAID requirements. Design parameters were established and a draft partners’ database was created with reporting forms for field testing. The retained indicators with targets are presented in Table #6 below.

USAID Base- EOP # Indicator Variable Indi- 2016 2017 2018 2019 line Target cator Income 1 Change in income for the AVC-assisted value chain Impact na 0 10% 20% 30% 40% 50% actors, as measured by sales Farm Yield Percent difference in annual farm yields for all 2 Impact na 0 10% 20% 30% 40% 50% targeted crop commodities between AVC producer clients and a control group; yield per hectare Export Value (international Competitiveness) 3 Change in share of total production that is exported Impact na 0 10% 20% 30% 40% 50% for targeted commodities from AVC clients Consulting Services 4 # of private sector service providers offer consulting Outcome na 0 5 10 20 30 40 services as result of AVC implementation Hectares Under Improved Technologies # of hectares under improved technologies or 4.5.2.- 5 Outcome 0 2,000 4,000 5,000 6,000 7,000 management practices as a result of U.S. 2 Government assistance Investment Value Value in USD (million) of new private sector 4.5.2.- 6 Outcome 0 1 2 3 4 5 investment in the value chain leveraged by AVC 38 implementation Number Adopting Improved Technology # of producers, processors and others who have 4.5.2.- 7 Outcome 0 2,000 4,000 5,000 6,000 7,000 adopted new technologies or management practices 5 as a result of U.S. Government assistance Improved Education 8 # of institutions that integrated and are using project Output na 0 2 3 4 5 6 materials and tools in education process Organizations Assisted # of producers' organizations, cooperatives, trade 4.5.2.- 9 Output 0 50 100 150 175 200 and business associations & community-based 11 organizations receiving USG assistance Person-hours of Training 4.6.2.- 10 Person hours of training completed in private sector Output 0 8,000 15,000 20,000 40,000 50,000 11 productive capacity supported by USG assistance Table #6 : AVC Approved Indicators and Targets

Progress toward achievement of the project purpose will be measured by the above indicators with the following notes : 1. Increased incomes of farmers in target value chains (measured by change in value and percent change in sales) (AMEP Indicator #1)

2. Increased productivity of farmers in target value chains (measured by change in yield per hectare) (AMEP Indicator #2) 3. Increased value and share of processed produce against total output of farmers in target value chains (measured by percent change in value and by percent change in share of total output) (This indicator was eliminated because producers receive most of their income from fresh produce as the quality and prices are higher. What is processed is usually the leftovers from fresh sales. Increased processed in relation to fresh sales would have the negative impact on farm income). 4. Improved marketing channel efficiency (measured by number and value of concluded contracts). (Goal is increased income in multiple value chain channels, including marketing. Therefore, AVC will collect and monitor change of income of different value chain actors with the appropriate disaggregation through AMEP Indicator #1) 5. Increased international competitiveness (measured by percent change in total value of exports of fresh and processed grape and horticultural products by target farmers and compared to the overall change in value of fresh exports and processed grape and horticulture nationally) (AMEP Indicator #3 will capture through disaggregated comparison with the appropriate baseline) 6. Increased capacity of national and local organizations and beneficiaries to sustain the USG investments (measured by number of firms newly certified to export to WTO and Customs Union; number of people trained who report and/or are observed to be applying skills and teaching others on good agricultural practices and use of modern agricultural technology, etc.). (Covered by AMEP Indicators #5, 6, 7, 8, 9 and 10) 7. Improved cooperation mechanism among actors along the value chain (measured by the number of existing contracting arrangements between producers and customers that have been improved using USG funds and the number and type of quality control measures put in place, and by responses to satisfaction surveys from producers and customers). (Covered by AMEP Indicators #5, 6, 7, 8, 9 and 10).

2. Communications and Outreach

AVC staff held interviews for the Communication and Outreach position with the candidate proposed at the Best and Final Offer (BAFO) stage of the project procurement. The candidate was deemed appropriate for the position, was made an offer and will join the team at the start of FY2016. AVC staff also participated in the Quarterly USAID Partners’ Meeting focused on Public Outreach strategies and obtained a copy of UNDP’s Power Point Presentation to learn from their experience and integrate optimal approaches as the project designs its Communication and Outreach strategy beginning next quarter.