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USAID CSS Annual Report 2 ANNUAL REPORT: APRIL 20, 2019–APRIL 19, 2020 SERBIA COMPETITIVENESS SYSTEMS STRENGTHENING (CSS) ACTIVITY May 20, 2020 This report is made possible by the support of the American People through the United States Agency for Interna- tional Development (USAID). The contents of this report are the sole responsibility of Cardno Emerging Markets USA, Ltd. and do not necessarily reflect the views of USAID or the United States Government. ANNUAL REPORT: APRIL 20, 2019–APRIL 19, 2020 SERBIA COMPETITIVENESS SYSTEMS STRENGTHENING (CSS) ACTIVITY Submitted by: Cardno Emerging Markets USA, Ltd. Submitted to: USAID Serbia Contract No.: AID-169-C-17-00003 Competitiveness Systems Strengthening Activity DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. Serbia Competetiveness Systems Strengthening (CSS) Activity Table of Contents ACRONYMS ......................................................................................................................................................... 2 EXECUTIVE SUMMARY .................................................................................................................................... 1 ABOUT THE ACTIVITY ...................................................................................................................................... 3 SUMMARY OF SURVEY RESULTS ....................................................................................................................... 3 PROJECT ANALYSIS AND CONCLUSIONS ................................................................................................................. 5 Design and Effectiveness of Activities ..................................................................................................... 5 Objective-specific Performance Indicators .............................................................................................. 5 Sustainability ................................................................................................................................................ 6 Conclusion .................................................................................................................................................... 7 COLLABORATION, LEARNING AND ADAPTATION (CLA) ..................................................................................... 7 CLA Approach to Project Management ................................................................................................... 7 CLA Mid-Term Event and Report ............................................................................................................. 7 TECHNICAL ACTIVITIES Y3 ................................................................................................................................. 8 Access to Markets ....................................................................................................................................... 8 Access to Finance ..................................................................................................................................... 22 Workforce development ........................................................................................................................... 28 STRATEGIC COMMUNICATIONS ........................................................................................................................ 33 Promotional events ................................................................................................................................... 34 International PR activities ........................................................................................................................ 36 Svet Hoće Domaće (I2-12) ...................................................................................................................... 36 CSS Communication Channels............................................................................................................... 37 ANNEX A: PMP TABLE ..................................................................................................................................... 1 ANNEX B: PROGRESS AGAINST YEAR 3 WORKPLAN .......................................................................... 2 ANNEX C: SUCCESS STORIES .................................................................................................................... 10 ANNEX D: SELF ASSESSMENT ON PROGRESS ................................................................................... 13 ANNEX E – KEY FINDINGS OF THE YEAR 3 CLA MID-TERM EVENT ................................................ 14 ANNEX F – ANNUAL ASSESSMENT METHODOLOGY .......................................................................... 17 ANNEX G – ADDITIONAL COMMUNICATION HIGHLIGHTS .................................................................. 21 ATTACHMENT A: ORGANIZATIONAL CHART ......................................................................................... 24 ATTACHMENT B: CSS GRANTS AND SUBCONTRACTS UPDATE .................................................... 25 ATTACHMENT C: PRESS CLIPPING ........................................................................................................... 35 Annual Report Y2 Page ii Serbia Competetiveness Systems Strengthening (CSS) Activity ACRONYMS APSF Association for the Promotion of Serbian Food B2B Business-to-Business BFS Belgrade Food Show BSO Business Support Organization CLA Collaboration, Learning, and Adaptation CSS Competitiveness Systems Strengthening DCA USAID’s Development Credit Authority FDI Foreign Direct Investment FoA Faculty of Agriculture, University of Belgrade FON Faculty of Organizational Sciences, University of Belgrade FP Facilitation Partner F&V Fruits and Vegetables FY Fiscal Year GHP / GMP Good Hygiene Practices / Good Manufacturing Practices GG Global Gap (Quality Standard) HoReCa Hotel/Restaurant/Café ILC Industry Leader Company IQF Individually Quick Frozen IPARD Instrument for Pre-Accession Assistance in Rural Development MENA Middle East and Northern Africa MIS Marketing Intelligence System MoA Ministry of Agriculture, Forestry and Water Management MoE Ministry of Economy NBS National Bank of Serbia NAPP National Association of Serbian Prune Producers PFDH Premium Food Design Hub PKS Chamber of Commerce and Industry (“Privredna komora Srbije”) RAS Serbian Development Agency RF Results Framework SME Small and Medium Enterprise VC Value Chain VCRA Value Chain Readiness Assessment YFI Association Youth for Impact Annual Report Y2 Page ii Serbia Competetiveness Systems Strengthening (CSS) Activity Executive Summary This is the third Annual Report for the Competitiveness Systems Strengthening Activity (CSS/Project) market systems development initiative funded by USAID in Serbia. During this reporting year, the Project took important steps towards finalizing models that can bring Serbian SMEs closer to higher value markets, while improving the system in which they operate and producing unique achievements in Serbia’s fruit and vegetables (F&V) sectors. These include: Cooperation with Retail: The DM Incubator (dm drogeriemarkt) has been an important catalyst for encouraging the retail sector in Serbia to support local SMEs. This approach allows for market-driven changes in SMEs as a result of improved network coordination and communication. Most of the 18 companies that went through the DM incubator in 2019 have reported upgrades or improvements in manufacturing and lab equipment, innovations, packaging, and/or operations. Interviewees from DM stated that more than 60 products have been introduced so far through the initiative and that the first- year results are far better than expected. We have also witnessed market replication of this model, Coca Cola HBC Serbia and Roda Market have implemented similar interventions (“We are coming from the South” and “Serbia’s Super”) after the CSS pilot. Supply Chain Consolidation and Quality Improvements: In cooperation with SMEs who are indus- try leaders, CSS has expanded on successful pilots and is now working on (1) consolidating frozen high- value supply chains around best performing exporters (Sirogojno Co, Van Drunen Farms, Lukowa, Fortis and others), integrating substantial numbers of smallholders and local cold storages into their supply chain, driving down the chain new standards (such as organic) and practices (2) expanding fresh export trade by opening new markets (biggest EU buyers) and developing effective hub-and-spoke models on the ground allowing producers to make necessary technology improvements (Delta Agrar, Brestovik, Pureberry, AgroBel), Loan Guarantees: CSS supported the USAID Serbia DCA initiative to introduce a new guarantee scheme worth approximately $90 million through three selected commercial banks. The loan guarantee scheme is set as a risk-sharing tool between the Bank, on one hand, and USAID including MoA on the other. The purpose is to facilitate access to bank loans through 60% of collateral coverage for food processing SMEs. The entire initiative is supported by CSS’ technical assistance. Knowledge Transfer and Pragmatic Cooperation with Academia: Partnership with the UC Davis Postharvest Technology Center (PTC) and AgroNET has produced a sustainable model of certified courses for Serbian industry, allowing for transfer of best practices and new technologies to smaller firms, while building stronger linkages
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