Agricultural Support to Azerbaijan Project (ASAP) Implemented by CNFA

AGRICULTUR AL SUPPORT TO AZERBAIJAN PROJECT

(ASAP) YEAR FIVE WORK PLAN

Project Year 5: October 1, 2018-September 17, 2019

Prepared for review by the United States Agency for International Development under USAID Contract No. AID-112- C-14-00001 , Agricultural Support to Azerbaijan Project (ASAP) implemented by CNFA.

Submitted to USAID on September 10, 2018

Table of Contents

I. Executive Summary ...... 4 II. Project Overview ...... 5 III. Year 4 Accomplishments ...... 6 a. Hazelnut Value Chain ...... 7 b. Orchard Value Chain ...... 8 c. Pomegranate Value Chain ...... 10 d. Vegetable Value Chain ...... 12 e. Berry Value Chain ...... 13 f. Access to Finance ...... 14 g. Food Safety and Quality ...... 15 h. U.S. Linkages ...... 15 i. Preventing Violent Extremism ...... 15 IV. Year 5 Work Plan Activities ...... 19 a. Hazelnut Value Chain Strategy ...... 19 b. Orchard Value Chain Strategy ...... 32 c. Pomegranate Value Chain Strategy ...... 45 d. Vegetable Value Chain Strategy ...... 54 e. Berry Value Chain Strategy ...... 61 f. Cross-Cutting Assistance ...... 70 g. Monitoring and Evaluation Plan ...... 92 Annex A: Illustrative Potential Technology Transfer Fund Investments for PY5 ...... 92 Annex D: Anticipated PY5 STTA and Other International Travel ...... 996 Annex E: BSP Technical Assistance Matching Fund ...... 997 Annex F: Demonstration Plots...... 102 Annex G: Training Schedule……………………………………………………………....107

Index of Acronyms

ABGA Azerbaijan Berry Growers Association AHEC Azerbaijan Hazelnut Exporters Consortium AHPEA Azerbaijan Hazelnut Producers and Exporters Association APPEA Azerbaijan Pomegranate Producers and Exporters Association ASAP Agricultural Support to Azerbaijan Project ASAU Azerbaijan State Agricultural University ATDC Azerbaijan Teachers Development Center AZN Azerbaijani manat AzREG Azerbaijan Buy-in to the USAID Regional Economic Growth Project BDS Business Development Services BMSB Brown Marmorated Stink Bug BSP Business Service Provider CKI Countering Kremlin Influence DO Development Objective EOI Expression of Interest GAP Good Agricultural Practices G-HIP Georgia Hazelnut Improvement Project HACCP Hazard Analysis and Critical Control Points IR Intermediate Result ISO International Organization for Standardization MOU Memorandum of Understanding PVE Preventing Violent Extremism REAP Restoring Efficiency to Agricultural Production REG USAID Regional Economic Growth Project SEDA USAID Socio-Economic Development Activity SME Small and Medium-Sized Enterprise STTA Short-Term Technical Assistance TTF Technology Transfer Fund VC Value Chain

I. Executive Summary

This work plan addresses the fifth year of project assistance, from October 1, 2018 through September 17, 2019 under USAID/Azerbaijan’s Agricultural Support to Azerbaijan Project (ASAP) as implemented by CNFA. This work plan lays out the overall strategy for ASAP in Project Year 5, and provides both an operational and programmatic overview of activities for Result 1, Improved quality and quantity of goods produced, and Result 2, Good agricultural practices implemented. It also includes a proposed strategy and activities for $100,000 in incremental funding that the project has been obligated from USAID’s innovation hub, the U.S. Global Development Lab.

In Project Year 5, ASAP will specifically concentrate its efforts on supporting USAID/Azerbaijan Development Objective (DO) 1, Improved Investment Climate in Azerbaijan and Intermediate Result (IR) 1.3 Improved Competitiveness in Target Sectors. In addition, ASAP will complement USAID’s IR 1.2, Development of a More Robust Financial Sector. Through improving the competitiveness of agribusinesses and small and medium-sized farmers through improvements in quality, quantity and other efficiencies, ASAP will improve the Azerbaijan agriculture sector’s ability to compete in local, regional and world markets and contribute to USAID’s goal of a more diversified economy.

To accomplish USAID/Azerbaijan’s goal of increasing the incomes of agribusinesses and agricultural producers through the development of Azerbaijan’s non-oil economy, ASAP will utilize four main program interventions: tailored technical assistance; matching investments to improve the competitiveness of medium and large agribusinesses; practical demand-driven training to improve the production, post-harvest and marketing of agricultural goods; and extensive market research to identify and facilitate access to new products and technologies produced by U.S. agribusinesses that could play a critical role in modernizing Azerbaijani agriculture and making it more efficient and profitable. Driven by its value chain approach since the project’s launch and findings to date, ASAP will continue to target interventions in five high- potential value chains: berries, hazelnuts, pomegranates, orchard crops, and vegetables.

ASAP will support the growth of agribusiness SMEs through delivery of custom technical assistance from its own staff and program-supported local agronomists, conducting group training with the assistance of local business development service (BDS) providers, industry associations, and agricultural service centers, and continued implementation of the Technology Transfer Fund (TTF) to stimulate investment in improved equipment and techniques. The project will also promote improved production practices through capacity-building efforts to increase the

CNFA AID-112-C-14-00001 availability, quality and sustainability of extension services, a series of demonstration plots and outreach activities; efforts to strengthen capacity of input dealers and distributorships; and facilitate support to agribusiness industry groups such as the Azerbaijan Hazelnut Processors and Exporters Association and Azerbaijan Pomegranate Producers and Exporters Association, as well as other efforts aimed at fostering industry collaboration and public dialogue.

II. Project Overview

The Agricultural Support to Azerbaijan Project is a 51-month, $11.6 million USAID initiative to increase the incomes of agribusinesses and agricultural producers, with the purpose of accelerating the development of Azerbaijan’s non-oil economy. Since June 2014, ASAP has supported the growth and expanded exports of agribusiness SMEs through an extensive program of technical assistance by project staff, field-based agronomist assistants, and the utilization of local Business Service Providers (BSPs), facilitation of increased access to finance and financial tools and information, promotion of improved production practices through strengthened extension services, and facilitation of a favorable business enabling environment through expanded dialogue and the use of analytical tools and training.

ASAP is building on the successes of USAID’s support to agricultural producers and processors in Azerbaijan achieved over the last 20 years, which has strengthened the ability of domestic producers to meet international quality standards, increase exports, and better supply domestic market demand, while boosting employment and incomes. ASAP is targeting five value chains with the highest competitive potential, including berries, hazelnuts, pomegranates, orchard crops, and vegetables, through activities designed to:

1. Assist growers and processors to adopt new technologies and techniques to increase the quality and quantity of production; 2. Facilitate increased exports and enhanced domestic marketing through more rigorous food safety systems, packing, and post-harvest methods; 3. Strengthen the linkages among actors in the respective value chains and foster cooperation through strengthened industry associations; 4. Build the availability, quality, capacity, and sustainability of Business Service Providers and private extension services; 5. Increase incomes and strengthen resiliency of rural communities highly dependent on small-scale agricultural production; and 6. Help facilitate the establishment of increased business linkages between U.S. agricultural equipment and input manufacturers and producers and Azerbaijani growers and processors.

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In addition to the project's own resources, ASAP has benefited from the activities and funding provided by a USAID/Azerbaijan buy-in to the USAID Regional Economic Growth Project. While that project has been completed, during PY5 ASAP will continue to tap into other external resources to expand and supplement its activities, including the USAID Socio- Economic Development Activity (SEDA), through which it plans to collaborate on various community-based economic development activities. In addition, in conjunction with Azerbaijani agricultural consultancy AgroCenter, ASAP is implementing a public awareness and monitoring program for the Brown Marmorated Stink Bug (BMSB), an invasive pest that has greatly harmed Georgia’s agricultural sector, and applied to the MASHAV program of the Israeli Ministry of Foreign Affairs to bring two experts in pomegranate production and business management to Azerbaijan on a STTA. If CNFA’s European affiliate is successful in gaining registration in Azerbaijan, ASAP will also coordinate with a new 30-month, EU-funded grant program to provide grower training and build association capacity in the Hazelnut and Pomegranate Value Chains. ASAP will also continue to seek opportunities to collaborate with other USAID and non-USAID-funded activities.

III. Year 4 Accomplishments1

During PY4, ASAP delivered a broad program of assistance to its Result 1 beneficiaries. Thanks to the registration of industry associations and the construction and equipping of training centers in both association and agronomist consultants’ office, the Project was able to roll out group trainings for farmers and other activities that had long been planned for Result 2 clients. In all, significant activities and public outreach were initiated or continued in all five target Value Chains during the year. Project-wide accomplishments included:

• The establishment of 12 new demo plots in the target Value Chains and continued work on 35 existing demo plots, in collaboration with local producers, to increase produce quality and yields through improved production practices and post-harvest handling; • Improved technologies or management practices were implemented on over 373 hectares of land; • Linking and facilitating new or continued negotiations by Azerbaijani hazelnut, vegetable, apple and pomegranate processors and producers with buyers in the EU, Middle East, and Indian markets met at international trade shows in previous years and/or through in-country meetings, resulting in at least $2,888,235 in new sales during PY4;

1 The ASAP M&E annual survey will not be completed until later this fall, so many of these impacts, in particular those related to sales and export, are preliminary figures.

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• Continued implementation of the Technology Transfer Fund (TTF) program, which provides matching funding for investments in improved equipment and modern technologies, including completing implementation of 4 TTF activities, obtaining USAID approval of 5 additional TTF activities that are currently under implementation, and approval by the Technical Evaluation Committee (TEC) of 5 additional TTF applications for upcoming submission to USAID; • Providing 50 instances of training or technical assistance (TA) to beneficiaries on food safety and quality standards or practices and helping clients develop several quality standards and certification documents; • Assisting a local greenhouse tomato and berry grower and exporter to achieve GlobalG.A.P. and ISO 22000 certification in order to ensure its ability to not only maintain exports to existing markets but expand into new advanced markets, as well as supporting a local pomegranate grower to obtain GlobalG.A.P. certificate; • Providing, in all, 3,947 instances of agricultural sector productivity training in 27 regions of Azerbaijan. • Facilitating negotiations between U.S. company Grow More Inc., an L.A.-based specialty fertilizer formulator, and a beneficiary to establish a distributorship in Azerbaijan, Kazakhstan, Uzbekistan, and Georgia, resulting in a sales contract for a minimum annual amount of $235,000. • As a result of the above assistance, improved technologies or management practices implemented on 373.1 new hectares of land; 17 trained agribusinesses have applied new technologies or management practices investing in improved technologies; and assisted firms investing over US $1,658,659 in improved technologies as a result or in support of project implementation. • Organizing three study tours to the U.S. and Georgia for 34 hazelnut, berry and other fruit growers to introduce to more advance practices and technologies, while also facilitating the identification of potential opportunities for sizeable Azerbaijani agribusinesses to export, such as potential dried fruit export opportunities for D. Fruits (DAD) and Agrovilla LLC and potential buyers of processed pomegranate concentrate and juice for Mars LLC.

A detailed overview of accomplishments over PY4 by Value Chain is provided below.

a. Hazelnut Value Chain

In the fourth year, ASAP provided significant assistance to hazelnut value chain project beneficiaries in the application of relevant agricultural practices at the beneficiary demonstration plots, marketing (new export opportunities), improving the quality of processed goods through the introduction of advanced equipment and food safety standards, as well as Preventing Violent

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Extremism (PVE) and Countering Kremlin Influence (CKI). ASAP worked to improve collaboration among value chain stakeholders with the ultimate goal of improving their standing in the international marketplace and initiated a new round of demonstration plot activities so that it now covers a much broader geographic area, assisting clients across the country's entire northwest and the north regions. There has been significant progress in processing facilities, most notably in refurbishing their operations in preparation to meet international food safety standards such as ISO and HACCP. PY4 accomplishments in the hazelnut value chain include: • Increasing the number of demo plots and implementing good agricultural practice-related activities at the 18 beneficiary orchards; • Providing over 1000 participants in 7 regions of Azerbaijan with agricultural sector productivity training; • Improved technologies or management practices were implemented on over 1000 hectares of land; • Refurbishment and equipping of the AHPEA training center in Zagatala and launching of formal grower group trainings at the center; • Supporting a TTF project that supplied hazelnut roasting equipment to a beneficiary’s hazelnut processing facility; • Facilitation of a study tour of 15 Azerbaijani processors, exporters and growers to the U.S. to expose participants to modern agricultural practices and help them establish new trade linkages; • Identification of PVE-affected communities in the north and the northwest and initiation of irrigation and fruit drying projects together with the USAID SEDA project; and • Developing collaboration with AHPEA and drafting a joint plan addressing grower training and servicing large hazelnut plantations in the northwest region through the proposed establishment of a logistics service and agricultural machinery center.

b. Orchard Value Chain

During PY4, ASAP provided 527 Orchard Value Chain beneficiaries with group trainings, 26 with individual technical assistance, including seven agribusiness companies and 19 farmers, and continued to oversee the maintenance of 14 demonstration plots. About 70% of ASAP’s farmer trainees from this VC are from PVE-vulnerable communities. ASAP provided technical assistance to growers in a wide variety of areas, including winter pruning, green pruning, fertilization, irrigation and other agronomic issues. Demos selected and supported by the project included an orchard in Gusar with apples, cherries, nectarines, plums, and table grapes; a fruit nursery in Guba; and an operation in Khachmaz with apples, cherries, and plums.

ASAP also provided support in establishing linkages between service providers and other VC actors. For example, ASAP connected the following beneficiaries with other VC actors:

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• fruit suppliers; • high-quality sandwich panel suppliers in Turkey; and • an irrigation expert to establish an irrigation system in his new orchard and linked him to a supplier for the purchase of an air-blast sprayer.

One particularly noteworthy outcome of project efforts that emerged during the year was the establishment of a tissue culture laboratory by beneficiary ORELAY LLC in Agdash. As a result of the participation of the Executive Director, in an ASAP-supported study tour to Italy in 2016, which included a visit to an in-vitro laboratory, ORELAY decided to invest 1 million AZN in a new laboratory to produce virus-free stone fruit rootstocks through micropropagation. The lab became operational in 2018, making it Azerbaijan’s first tissue culture laboratory.

Also during PY4, in collaboration with the USAID REG Project, ASAP facilitated the participation of 12 ASAP beneficiaries in a study tour to California. As a result, the participants increased their knowledge of advanced horticultural technologies and carried out preliminary negotiations with potential dealers to import some new high-yield fruit and berry varieties, and agricultural inputs such as pesticides and agricultural equipment. Visits to nurseries that use state-of-the-art methods and technologies enabled the participants to learn about various aspects of the development of quality rootstock including tree training, budding fumigation, pest controls, spraying, grading, and harvesting.

In addition to technical assistance, the ASAP project provided matching funding to help beneficiaries upgrade their infrastructure. For example, with ASAP support, a beneficiary established a 500-MT cold storage, which then allowed over 200 local farmers to store their produce and extend its shelf life. ASAP matching financial support enabled the beneficiary to install a drip irrigation system in his 21-hectare intensive and semi-intensive orchard in Gusar. In Guba, ASAP financial matching support supported the establishment of a training center and provided it with furniture and training equipment.

ASAP also supported the region’s farmers to receive more high-quality consultancies and technical trainings. In cooperation with GIZ (the German donor and technical assistance provider), AgroCenter, and the Guba Farmer House, 10 trainings were conducted on orchard management for farmers, representatives of a scientific research institute, and other interested professionals. Among the participants were youth interested in the field and eager to start the own business in this sector.

Based on ASAP recommendations, over 120 hectares of new intensive and semi-intensive orchards were established in the Guba-Khachmaz area. At present, a cold storage facility with a

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capacity of 600 MT is under construction with ASAP TTF matching support as well. This will create an opportunity for hundreds of neighboring farmers to store and sell their products, while directly creating jobs for five permanent and 50 seasonal workers.

In previous years, in order to help establish new marketing linkages, ASAP facilitated beneficiary participation and exhibiting at agricultural trade fairs in Dubai, Germany, and France. As a result, in PY4 beneficiary D. Fruits established new trade contacts, resulting in sales of over 1000 tons of fruit from last year’s harvest. This year, two tons of fruits (one MT each of cherries and apricots) were exported to London on a trial basis. Buyers from Dubai, Saudi Arabia, Iraq, and Malaysia all signed agreements and purchased more than 1,500 tons of produce, expanding D. Fruits’ sales from this year’s harvest.

c. Pomegranate Value Chain

In PY4, ASAP mostly focused on capacity building of pomegranate producers and service providers. In addition to conducting classroom and field-based group trainings for small and medium pomegranate producers, ASAP built the capacity of its local agronomist in the Pomegranate VC and assisted local training provider AgroCenter to educate additional selected trainees using ASAP demo plots in Goychay region. The project continued supporting agribusinesses in various aspects of cultivation, processing, and marketing of pomegranates. ASAP worked to improve the current growing practices through the development of demo plots and by illustrating innovative cultivation practices. ASAP also continued providing technical assistance in pruning for mono-trunk management, mineral fertilization, pest and disease management, and post-harvest handling through its demo plots. Improved irrigation practices were one of the key activities highlighted by ASAP through its seven pomegranate VC demo plots.

Most ASAP Pomegranate VC Demo Plots increased their yields and improved their production quality. Ekinchi BO LLC farm produced 1,300 tons of pomegranates, compared to the previous year’s 200 tons, and was able to export 600 tons, due to comprehensive cultivation improvements based on ASAP training and TA. Antim LLC made continued improvement in its production practices and is expecting to yield 8-10 tons of good quality pomegranates from each hectare of its ASAP-assisted demo plot this year.

In addition, ASAP successfully completed a Technology Transfer Fund (TTF) project that equipped a 16-hectare pomegranate orchard of a beneficiary in Salyan with drip irrigation. In turn, the farmer invested over $30,000 to improve his 5,000-MT-capacity cold storage in accordance with ASAP STTA recommendations that were provided by a STTA in 2015. Due to good prices at the farm gate in PY4, the farmer sold his pomegranates immediately after harvest

CNFA AID-112-C-14-00001 and leased out his cold storage space to other fruits and vegetable growers.

Thanks to improved skills and practices, the executive director of Mars FK LLC decided to establish his own farm and purchased 15 ha of land for this purpose. He then registered the business, named Mabat LLC, and began work on initiating both pomegranate production and plans for a nursery. He successfully applied to ASAP for TTF matching investment to help support irrigation of the nursery.

In PY 4, ASAP started to work with seven new small, medium and large farmers. These farmers typically were introduced to ASAP through pomegranate producers whom the Project had assisted. Several existing beneficiaries made significant improvements in production and sales. Red Valley LLC, although already very successful prior to being linked with ASAP, was linked by the Project to new potential buyers for its high-quality pomegranate saplings.

ASAP obtained very good results from the demo plots it assisted through training as well as the provision of sprayers and rotary disc plows. This helped growers to save time and money by being able to more cheaply conduct these activities, improve spraying and plowing quality, and schedule these works at a more convenient and advantageous time, as they were freed from dependence on the schedules and availability of outside equipment and/or equipment operators in order to conduct this work.

ASAP also assisted Israeli buyer NS Oils to conduct research on potential sources for importing pomegranate seeds from Azerbaijan. NS Oils met with several pomegranate processors and a confectionary factory in Ganja. The Israeli company also expressed interest in making a joint investment if any pomegranate processing company would start marketing pomegranate seeds.

Although ASAP lagged about 10% short of its PY4 target for group trainees in pomegranate production as of July 2018, it still has a good chance to meet the annual target by the end of September. If the Pomegranate VC Local Agronomist Consultant is able to complete the construction of a planned training room in the office that he is currently constructing alongside his newly planted eight hectares of persimmons and pomegranates (four of each), he will use the room for future group trainings and the orchards for field demonstrations.

Persimmon growers in Goychay and Aghdash regions increased the quality of produced products by over 60% and the quantity also increased by 70% with ASAP support. One persimmon grower from Goychay was able to export 90% of his produced 60 tons of persimmons from his three hectares of production. However, his production was only 20 tons (only 40-50% suitable for expert) when ASAP started to work with him in 2015. Another persimmon grower from the Aghdash region became a very important persimmon supplier for fresh market traders to Russia

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because of the adoption of ASAP recommendations. His total production from 6 hectares of persimmons was 150 tons, of which 140 tons was purchased by a single Russian trader.

d. Vegetable Value Chain

During PY4, the ASAP Vegetable VC has achieved some successes, while also encountering some unexpected challenges. Among ASAP’s beneficiaries in Shamkir, where the majority of the VC’s clients are located, is a seedling nursery that was established through TTF support. During the year, it became well known locally and sold out of the 120,000 tomato seedlings it put up for sale, generating 54,000 AZN in increased revenue. More importantly, the operation became self-sufficient and is now no longer dependent on outside seedling suppliers. However, the producer’s vegetable sales to Russia were lower than in previous years due to an oversupply of tomato imports in the country. Nevertheless, the agribusiness moved forward with the business, investing around a million manats to upgrade his nine hectares of soil-based production to coco peat bag culture, a technological improvement that ASAP has repeatedly promoted throughout the life of the project. Hydroponic tomato production will relieve disease and pest pressures, thereby increasing productivity while reducing labor costs.

During the year, ASAP continued monitoring the progress of a Demo Plot in Samukh that it had established to help a vegetable grower improve irrigation using a pivot system and travelling gun unit. As was projected, this approach provides more precise irrigation, which, together with ASAP-recommended cultivation improvements, increased the farmer’s yields by up to 20%. Improvements included proper seed selection and soil improvement, as well as pest and disease control through sound IPM techniques and post-harvest handling.

As a result of ASAP’s trainings on GlobalG.A.P. and HACCP for client greenhouse in PY3, Bine Agro, a beneficiary with 40 ha greenhouse production received GlobalG.A.P. certification. During PY4, with its renewed international certification, Bine Agro entered new international markets. The company’s sales to the Baltic countries were approximately 180,000 euros and sales to Dubai reached 300,000 AZN.

Another ASAP achievement was the completion of a training facility in Shamir at the ASAP Local Vegetable VC Agronomist’s input supply store. The training room was furnished and equipped through USAID funding with all necessary facilities to support coordination meetings between local farmers as well hold ASAP group trainings. ASAP also provided an agronomist with agronomy trainings and practical agricultural tools to help build his capacity to provide high-quality trainings and individual consultations to area growers. ASAP also helped hi develop a curriculum on greenhouse crop production, including PowerPoint presentations and printed

CNFA AID-112-C-14-00001 handouts. This helped to facilitate an agreement by which ASAP hosted selected students of Azerbaijan State Agricultural University (ASAU) for a series of trainings on greenhouse production that were delivered in the training room in Shamkir in PY4.

e. Berry/Southern Crops Value Chain

Among the achievements of PY4 was the aforementioned study trip to California, which also included some beneficiary strawberry growers. The study trip provided them with ideas and enthusiasm for improving and developing multiple facets of their operations. A priority for the growers became the establishment of an Association of Azerbaijan Berry Growers. After several meetings and discussions in Baku, and with assistance from ASAP, the growers collected all necessary documents and applied to the Ministry of Justice for legal registration. Another of the VC’s pressing needs has been an improved cold chain facility to reduce initial field heat in strawberries and prevent spoilage of berries prior to market delivery. To address this constraint, ASAP worked on a joint project with a major grower in the Southern region of Jalilabad to establish a cold storage facility to allow the producer to extend product shelf-life and eliminate post-harvest losses, as well as to become one of the biggest wholesalers in the region by purchasing strawberries from community farmers and expanding the market for them beyond Azerbaijan and into Russia. The newly established cold storage assisted the farmer to export 500 tons of strawberries, representing a 100% increase in sales.

One of ASAP’s major achievements was linking an Azerbaijani strawberry producer and farm input supplier, Vatan-AZ LLC, with Grow More, Inc., an American fertilizer formulator that ASAP and the beneficiary visited in California during the aforementioned study trip. As a result of ASAP’s continued facilitation, Grow More and Vatan-AZ signed a distributorship agreement worth an estimated $220,000 in the first year. Soon thereafter, Vatan-AZ submitted its first product order in the amount of $56,000.

Another significant need of strawberry producers that emerged during the California study trip was for high-quality plants that Azerbaijani farmers can’t currently access in a timely manner. ASAP linked the beneficiaries with Viveros California, an American company’s representative in Spain, which offers sought-after U.S.-developed and licensed varieties. As a result of this linkage, the Azerbaijani growers have ordered 278,000 strawberry saplings in the amount of €40,866 that are expected to be delivered to Azerbaijan in early September.

In PY4, ASAP broadened its outreach to the country’s Southern region, as it engaged agronomists in Jalilabad and Lenkaran to provide trainings in the cultivation of strawberry and subtropical fruit (kiwi and feijoa), respectively. In addition, an ASAP study tour to Georgia for kiwi and feijoa growers made a big impact on these growers as it inspired modernization and

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innovation. As a result of this study tour, for the first time in Astara sprinkler and drip irrigation systems were installed in a kiwi orchard, in this case on a small 0.30 ha ASAP demonstration plot, which now serves a model for improved irrigation for other local farmers. These efforts were designed in part to support the project’s new emphases on PVE through economic empowerment in the southern border regions.

f. Access to Finance

During PY4, ASAP assisted selected agribusinesses in business planning, drafting project profiles, and identifying potential banks and investors. The project met with agribusinesses and finance providers in the regions to better understand their needs and capacity, analyze their agricultural lending products, make comparisons, and identify the most affordable and convenient financing solutions for specific agribusiness operations. ASAP also worked with eleven clients to prepare financial statements for Technology Transfer Fund applications, including helping beneficiaries to understand the structure of the financial statements required, and how to properly draft them on their own.

ASAP drafted 11 analytical reports/briefing notes requested by USAID:

1) “Brief overview of Azerbaijan’s economy in 2017” 2) “A brief analysis of Azerbaijan’s draft state budget for 2018” 3) “Credit Guarantee fund of Azerbaijan Republic” 4) “Factors affecting the currency market and forecast for manat's rate in 2018” 5) “Azerbaijan’s Foreign Trade in 2017: Non-Oil Export Products and Destinations” 6) “Impact of the discount rate reduction on the credit market” 7) “Potential impact of Russia and Turkey's economic instability on Azerbaijan” 8) “Are banks lending to business?” 9) “Azerbaijan’s Non-Oil Exports: Progress & Prospects” 10) “Major effects of devaluation on Azerbaijan's banking sector” 11) “Is the Azerbaijani manat under the threat of devaluation as the currencies of neighboring trade partners weaken?”

Several of these were translated into Azerbaijani and disseminated to interested ASAP beneficiaries for their reference.

Previously, the project expected to organize joint fairs/events for agribusinesses and banks during PY4 to facilitate the establishment of greater banking linkages, but this proved impossible due to ASAP's delayed legal registration, which necessitated the project maintaining a low profile and avoiding holding public events. One thing ASAP was able to do during the year was

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to draft the aforementioned document on Azerbaijani banks’ rural lending activities, and their terms and conditions. That document was both provided to selected beneficiaries and the material incorporated into a number of Pomegranate VC group trainings held during PY4.

Nevertheless, because of the challenges in the economy in general and banking sector in particular, facilitating access to finance was extremely difficult during the year. Thus, ASAP does not anticipate its upcoming Monitoring and Evaluation survey for the year to identify significant loans facilitated. However, with recent supportive actions of the government and manat’s stability versus the USD over the past year, ASAP is cautiously optimistic that there will be more commercial lending activity during the PY5.

g. Food Safety and Quality

During PY4, ASAP worked with beneficiary businesses in central, northern, northwestern and southern Azerbaijan to implement food quality and safety policies, procedures, and compliance in the Hazelnut, Orchard, Pomegranate, and Vegetable Value Chains. The project focused its efforts on HACCP, and ISO 22000 Food Safety standards, as well as GlobalG.A.P. for fresh produce. During the year, ASAP conducted one training on HACCP and ISO 22000, and two trainings on GlobalG.A.P. Each training lasted two days.

In PY4, ASAP also provided technical assistance to clients on these topics. Initial recommendations and assistance covered construction and renovation works required to achieve compliance with the ISO 9001 Quality Management Standard and the ISO 22000 Food Safety Standard, and the development of Food Safety prerequisite programs. ASAP provided TA in GlobalG.A.P. procedures for beneficiaries in the Orchard, Pomegranate, and Vegetable Value Chains.

Results of these activities included Mars FK successfully achieving certification in the GlobalG.A.P. standard. There was also significant progress in the Pomegranate VC. Two hazelnut producers are intensively implementing GlobalG.A.P. standards and it is expected that during PY5 they will each obtain certification.

h. U.S. Linkages

In PY4, ASAP’s U.S. linkage initiative had two coordinated approaches. The first was to link Azerbaijani businesses that needed U.S.-manufactured products with the U.S. companies that manufacture them. The second was to link key U.S. academic institutions that could improve the skills of ASAU faculty in Ganja as well as ASAP’s agronomists and beneficiaries. The two U.S. universities that were selected were Texas A&M University (TAMU) and the University of

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California at Davis (UC Davis).

The linkage with TAMU began when ASAP arranged for a tour for the AgroCenter management staff to meet with the cotton agronomy faculty and several cotton input suppliers as well as an independent consultant at the TAMU campus in College Station Center, Texas. This culminated in the signing of a $205,000 one-year agreement between TAMU and AgroCenter to evaluate the economics of Azerbaijan’s cotton production, the status of the technical agronomic capacity of ASAU and the Azerbaijan Cotton Growth Research Institute and then to begin the process of improving both, as well as training several cotton field scouts and developing them into competent agronomists in PY 5 and beyond. Currently, ASAU uses old Soviet-era textbooks for most of its classes. The cotton text was written by one of the instructors based on a study trip to China.

The first year’s activities have been so successful that the Ministry of Agriculture has agreed to provide matching funding to continue the program for an additional year. This work will lead to increased yields, safer growing practices, and the presentation of detailed production recommendations customized to the conditions of Azerbaijan. As a result, this collaboration will improve the lives of the families that depend on cotton for their livelihoods.

The second academic linkage was to the University of California-Davis (UC-Davis), which is the world’s recognized authority in many areas of agriculture, including cold storage management, grape and strawberry production, and other areas. A two-week study tour for 12 Azerbaijani agribusiness people was organized by NGO Uman-Davis Sister Cities Project in partial coordination with the University, and several members of the faculty lectured to the participants.

The second type of linkage, commercial linkages, has been success thus far, in part through linkages made during the California Study Trip. These accomplishments consist of:

• Azerbaijani input dealer Vatan-AZ LLC being linked to Grow More, Inc., an American specialty fertilizer formulator, and signing an exclusive distribution contract for Azerbaijani and three other countries in the region for specialty fertilizers that are specifically suited to local soils, as well as making an initial $52,000 order; • The purchase of $47,000 of strawberry plants by members of the new Azerbaijan Berry Growers Association that were developed at UC-Davis and ordered from a licensed nursery in Spain that pays UC-Davis the appropriate royalties; and • Identifying two local growers in Shamkir who are interested in collaborating with ASAP to run demonstration trials of soil amendments manufactured by Soil Biotics, a U.S. firm with a local distributor in Azerbaijan. To enable Soil Biotics to target the formulations for the specific soil and water characteristics of the hosts’ operations, ASAP obtained and

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sent for laboratory analysis water and soil samples from each demo site. • Baku-based Agrarco is a company that is planning to enter the EU with organic milk, poultry and sheep. ASAP is linking them with an American consulting firm that specializes in achieving organic production. ASAP has vetted over 25 possible firms in the U.S. and has narrowed the search to two candidates. Agrarco will make the final decision. In order to speed the process, ASAP staff have also conducted a preliminary site assessment and consultations on the organic certification process. • Oregon State University: In PY4, ASAP brought a researcher from Oregon State University, to Azerbaijan to gauge the potential for tissue culture-based micropropagation of plant material of several Project beneficiaries. Now that beneficiary Orelay LLC has its tissue culture laboratory up and running, the beneficiary has requested assistance in building its lab staff’s capacity to conduct the entire micropropagation process without relying on outside technical assistance. Tissue culture is a secretive area and the Turkish consultant that assisted with the development of the project refuses to provide the recipes for the solutions needed for these lab processes, thereby limiting Orelay’s independence. ASAP is working with the consultant to obtain recipes for some of the needed solutions as well as to investigate opportunities for Orelay to contract with U.S. institutions or experts to provide training or internships to the lab staff and/or bring a U.S. expert to Azerbaijan to work with the staff directly in the laboratory. • Trece, Inc., During PY4, ASAP coordinated the purchase of additional traps and lures to monitor for Brown Marmorated Stink Bug (BMSB) from the U.S. company Trece, Inc. ASAP is cost sharing 15% of the total cost that Azerbaijani training provider AgroCenter is purchasing. ASAP will conduct trainings in trap installation and monitoring to workers provided by the Ministry of Agriculture.

i. Preventing Violent Extremism (PVE)

Over the life of the project, Preventing Violent Extremism (PVE) has become an increased priority area. The drivers of violent extremism can be divided into “push” and “pull” factors. In ASAP’s target areas in the northwest, north, and south, a lack of training, education, formal employment opportunities, and profitable businesses are “push” factors that have motivated some individuals to leave their communities and seek opportunities elsewhere. The relevant “pull” factors drawing some Azerbaijanis across nearby borders and making them more susceptible to the promises of propagators of extremist ideas include access to resources (payment from extremist groups), a perceived opportunity to gain a sense of purpose and peer respect, as well as increase one’s social status. These areas’ distance from Baku, proximity to the Russian, Georgian and Iranian borders, and the prevalence of minority communities that are less integrated into mainstream Azerbaijan society (and often have ethnic kin across the border), are additional factors that lead to an increased risk of radicalization. Many of these factors have been

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successfully addressed since the project’s inception and are poised to be rapidly accelerated.

Among the largest ethnic minority groups in the north and northwest are the Lezgins (180,000 people) and the Avars (50,000), both of which are of Daghestani origin and the Talysh (350,000) in the south. ASAP continues to work with members of the first two of these groups and began work with the third group during PY4. ASAP provides TA to small orchard and vineyard owners in the north and hazelnut growers in both the north and northwest. During the past year, ASAP conducted trainings targeted specifically to reach VE-vulnerable communities in the northwest such as Mukhakh, Mosul, Gandakh, Yengiyan, and Chobankol, and Khaspoladoba and Gimil Gishlag in the north. ASAP cumulatively trained over 300 growers living in the VE-vulnerable communities. It also works with strawberry growers in the south. ASAP’s solid platform on which to build a robust PVE was scaled up during PY4 to initiate group grower trainings in villages deemed especially susceptible to VE. Of the 1,048 trainings in the North in PY 4, 733 of them (70%) took place within these communities.

Extending that work into additional communities and the development of some community- based projects became one of USAID’s new goals for the Project over the course of PY4. Thus, during the year ASAP worked closely with the USAID SEDA Project to develop a concept for a joint community-based TTF project in Khachmaz rayon in the northeast of the country, as well as a potential concept for a joint fruit-drying project in Zagatala rayon in the northwest. A brief update on the status of these efforts is noted below:

• Khaspoladoba irrigation project: ASAP identified the vulnerable community and, in collaboration with the USAID SEDA project, conducted a needs assessment; conducted initial technical research and decided in principle to support the drilling of two artesian wells to supply water to 60 hectares of local hazelnut orchards; developed a design for the wells, water reservoir, and irrigation channels; assisted the community with the TTF application process; conducted environmental compliance due diligence and submitted an Environmental Review Checklist (ERC) to USAID; and prepared a RFQ and posted an announcement to solicit bids from potential vendors; • Stone-fruit drying project: Identified the vulnerable community and conducted a needs assessment; identified the leaders of the community, future owners, and cost contributors to the project; and began the process of drafting technical specifications and developing a scope of work for the project.

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IV. Year 5 Work Plan Activities

a. Hazelnut Value Chain Strategy

In PY5, ASAP's hazelnut value chain assistance will continue to focus on increasing the quality, quantity, and value of Azerbaijani hazelnuts. Azerbaijan has come a long way in terms of output, even moving up a spot to third place in world hazelnut production this past year, but the country is still characterized by old orchards, many of which are small or consist of fragmented, discrete land plots, and which produce low yields. The opportunity to increase production and exports is limited by factors that ASAP will continue to address throughout the remainder of the project.

To help promote the image of Azerbaijani hazelnuts in the international marketplace, ASAP will take a new approach in PY5. The Project will invest in its partners’ brand and promotional material development. ASAP will also prioritize the establishment of new trade linkages with U.S. and EU companies by seeking international agribusiness manufacturers and suppliers, especially the former, interested in investing in Azerbaijan and/or widening exports to this country.

ASAP will upgrade and improve its educational and training materials, such as the Hazelnut Growing Activity Plan and Hazelnut Producer’s Fact Sheet that it produced in PY4. The Project will also collaborate with area growers and processors to hold in-field demonstrations of improved practices and will disseminate these practices throughout the hazelnut-producing regions.

ASAP will continue to provide intensive field-based training to Demo Plots and other growers throughout the entire growing cycle in accordance with the Hazelnut Growing Activity Plan. In PY4, ASAP facilitated most of its trainings through the Azerbaijan Hazelnut Processors and Producers Association (AHPEA). Having completed equipping and furnishing the AHPEA training room, ASAP will continue to assist the technical staff of the association to develop seven topical brochures aimed at improvement of the most critical growing practices by local farmers.

The project's PY5 activities will include the following tasks:

U.S. Linkages Support and Marketing Assistance

a. Establish new trade linkages between existing local agribusinesses and U.S. and EU

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companies interested in introducing and expanding exports to Azerbaijan. ASAP will research opportunities for linking local businesses serving as dealers for foreign, particularly American, agricultural machineries and products. These could be equipment/machinery dealers, seeds, fertilizers and other input suppliers, commodity products importers and distributors. ASAP will support providing relevant business linkages with these potential foreign partners, will participate in outreach, negotiations and facilitation. One of the more realistic options to bring U.S. brands into Azerbaijan is to link local dealerships with U.S. representatives and field offices in Eastern Europe and former CIS countries (Ukraine, Georgia). Local companies could start on a sub-contract basis and grow their business into a full partnership contract in the future. b. ASAP will research and facilitate the organization of B2B meetings between Azerbaijani and foreign companies to promote mutually advantageous trade activities. Having identified the potential partners and a business opportunity among them, ASAP will facilitate and participate in B2B meetings held in Azerbaijan and abroad, as required. This will serve the purpose of expediting the deal making process and will grant ASAP a certain level of participation and influence in the partnership. c. Facilitation of trade missions to and from Azerbaijan. ASAP will hire international consultants to research and identify American businesses interested in import/export operations with Azerbaijan and the south Caucasus region in general. Upon identification of interest, ASAP will support facilitation of a trade mission from U.S. to Azerbaijan and vice versa, will prepare itineraries, organize and manage meetings and support the partners through further business correspondence. d. ASAP will develop a database of Azerbaijani export-oriented products, brands and producers. ASAP will use this database to gauge interest from the U.S. and other large international companies to buy local commodities. Also, this database will give a broad perception of the products available in the county. ASAP will also make a list of potential agricultural machinery, equipment and inputs needed in Azerbaijan and will target the U.S. producers which are interested in supplying to this region. e. Collaborate with relevant government agencies to promote trade and export. ASAP will make concerted efforts to collaborate with AzPromo and other relevant organizations to improve the promotion portfolio of agribusinesses exporting from Azerbaijan. Brand development, brand awareness and presentability of the Azerbaijani firms will all be supported. ASAP will continue to facilitate marketing directly to large international wholesalers by continuing to encourage exporters to develop marketing and promotional materials using the BSP Technical Assistance Matching Fund.

Industry support service provision

f. Industry support service provision. The agricultural sector in itself is limited by a lack of

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support services. With the government’s recent program to double the country’s hectarage under hazelnut production, a need for good quality saplings arose, which increased the demand for hazelnut nurseries. ASAP will research and seek ways to support beneficiaries interested in establishing transplant nurseries for hazelnuts in Zagatala, Gakh, and Khachmaz. ASAP plans to support the establishment of up to three nurseries in these main hazelnut growing districts. In a one-hectare nursery, some 35,000- 40,000 transplants can be planted, which in two years can be sufficient to plant out 25 hectares of orchard. The nurseries will require irrigation, workers, and a guard (against trespassing and theft). These nurseries would serve all farmer members of the hazelnut association as well as the wider hazelnut growing community in the region. The purpose of the nurseries would be to supply growers with quality saplings with clear identification of the varieties and other biological information. g. Improving irrigation together with USAID partners: In PY4, ASAP together with the USAID SEDA project identified the vulnerable community of Khaspoladoba in Khachmaz region, which although having significant plantations of hazelnut orchards, suffers from a lack of irrigation water, which reduces yields by 20-30% each year. Together with SEDA, ASAP will support the community by drilling two artesian wells (with water volume of 20-25 m3 each) to provide permanent irrigation for over 60 hectares of hazelnut orchards in Khaspoladoba. Another potential collaboration project, which also will reach out to the PVE affected communities in the northwest of Azerbaijan is establishing a stone fruit drying operation in Aliabad, Zagatala.

Support Associative Relations

h. During PY5, ASAP will continue to support AHPEA. ASAP envisions reaching a multitude of growers through the hazelnut association. The Project will perform training of AHPEA’s agronomists and together with them will provide training modules to the regional growers. Moreover, ASAP will provide matching funding to help support the procurement of vital agricultural machinery such as tractors, industrial sprayers, flail mowers and a metal detector for handover to and service provision by the association. AHPEA will provide storage, operation, and maintenance of the machinery first at the orchards of the association farmer members, and then to the wider hazelnut community in the region. For sustainability reasons, the service will be fee based. i. Continue supporting existing communities that are growing hazelnuts intensively: This activity will focus on communities that represent a cluster in a specific region with a strong hazelnut planting tradition. ASAP will continue to establish a prototype of microenterprise models and consolidated farmland initiatives that would provide agricultural services in their communities, such as in Findiqli, Danachi Zagatala, Turajli, and Marsan Gakh. ASAP would empower the individuals interested and capable of

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providing technical services through training and provision of tools and necessary equipment. ASAP will work with local growers in Gakh to support the establishment of a farmer cooperative-type organization to a) receive BIO organic certification for 200-300 hectares of hazelnut orchards in order to garner higher sales prices and b) establish a community-based hazelnut drying facility and storage to ensure high quality of the growers’ product. Possible TTF Projects

j. Provide access to new technologies for optimization of hazelnut production and processing. In Azerbaijan, hazelnuts are traditionally sun dried, and may be subject to mold growth and subsequent mycotoxin formation due to prolonged drying time under humid and rainy weather conditions. Drying hazelnuts in a reasonably short period after harvest is necessary to produce mycotoxin-free, high-quality product. Nuts contaminated by toxins pose a serious potential hazard to human health. Proper preharvest practices followed by post-harvest handling (such as drying and safe storage) reduce the hazards associated with contamination. Therefore, ASAP will identify and support TTF funding for beneficiary grower communities interested in improving storage conditions. This will be a community-based drying facility where local growers can dry their crops and store in good condition until they decide to sell. This will add much value to their crops, considering that the price of hazelnuts tends to gradually increase after the harvest and initial processing are completed. Another important initiative coming from the members of AHPEA is supplying growers with fine nets that would be hung between the trees, above the surface level during the harvest time. Aflatoxin can form upon fruits coming into contact with the soil, as hazelnuts in Azerbaijan are harvested manually from the ground. Thus, if the farmers are successful in preventing contact of the hazelnuts with the ground, this will reduce the likelihood of toxin formation. This is a low-cost innovation (recently begun to be practiced in Turkey) that would be efficient and easily replicated by other growers.

Group Trainings

k. Grower Group Training: In the PY4, ASAP rolled out an intensive program of group grower training and exceeded the target number of trainees by reaching hundreds of hazelnut farmers through training and TA. In PY5, ASAP will conduct trainings for at least 750 trainees in the northwestern regions and for 250 in the north. These training events will be held in the AHPEA training room, village community centers, and ASAP demo plots.

Demonstration Plots

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l. Continue oversight of existing Demo Plots. ASAP will continue providing support and supervision to Demo Plots established during PY1-4, but in PY5 more attention will be paid to the supervision of more recently established Demo Plots to ensure that the beneficiary growers are capable of applying the Good Agricultural Practices on their own. This is needed to ensure that the Project demo plots are maintained in good condition and are in a presentable state to be used as knowledge plots for students and other farmers during grower trainings. m. BMSB Monitoring System: AHPEA and ASAP collaborated to design, install and monitor a BMSB monitoring system, which will be continued in PY 5, with funding and implementation support from AgroCenter and, possibly, the Ministry of Agriculture. At the end of the fall season a final report on the program will be prepared for USAID. When the winter training for all Value Chains begins, an awareness campaign will begin with updated Tri-Fold literature that will be distributed throughout the threat zone.

Food Safety

n. Training and TA in international quality and food safety standards: ASAP will continue to provide consulting and audits to hazelnut processing firms interested in obtaining ISO 22000, HACCP, BIO organic, and other relevant certification. Over the past four years, virtually all of ASAP’s processing beneficiaries became interested in adopting food safety standards and four hazelnut processors received certification. The project will continue its efforts into the next year providing technical guidance in renovating facilities and establishing proper documentation in order for more beneficiaries to meet food safety requirements and receive ISO 22000 or other certifications. As mentioned above, communities in Marsan/Turajli, Gakh, and Aliabad Zagatala will be supported to obtain BIO certificates for their hazelnut orchards of about 500 hectares.

Gender Related Development

o. Support woman-managed business operations. ASAP will actively look for opportunities to support woman engaged in business. One of the possible directions is to promote woman-owned jute bag production. Currently, there is no local production of the jute bags, which are vital for safe and healthy hazelnut storage. Jute bags are currently imported from abroad (from Bangladesh and other countries) and are being sold for $1.5- 4 apiece. The bags are not always readily available and can be expensive for many small growers. Establishment of a jute bag operation could address the shortage of storage bags for farmers and lower the cost, while creating a new small-sized business opportunity for a woman to operate.

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The Work Plan below describes these activities for PY5. Under Results 1 and 2, responsible ASAP staff member(s) are indicated along with a timetable of actions.

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Hazelnut Value Chain Work Plan

Result One: Improved quality and quantity of goods produced Responsible Staff Member/ Activity Description Timeframe Additional Resources Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Establish new trade linkages between existing local agribusinesses and US and EU companies interested in widening their 1 exports into Azerbaijan. Research the opportunities of linking local Value Chain 1.1 businesses operating in dealership of foreign Marketing agricultural machineries and products. Specialist research and facilitate the organization of the Value Chain B2B meetings between Azerbaijani and foreign 1.2 Marketing companies to promote mutually advantageous Specialist trade activity. Facilitation of trade missions to and from 1.3 Azerbaijan. Develop a database of Azerbaijani export- 1.4 oriented products, brands and producers 2 Reorient marketing assistance Facilitate marketing directly to large Value Chain 2.1 international wholesalers. Assist beneficiaries Marketing to set up potential B2B deals, take active part Specialist,

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and facilitate their meeting and negotiations. Result 1 clients, AHPEA Value Chain Introduce new modernized packaging and Marketing 2.2 labeling technologies to meet requirements of Specialist, higher-end buyers and extend shelf life of new Result 1 clients, products. AHPEA Value Chain Partner with service providers capable of Marketing enhancing new market linkages and expediting 2.3 Specialist, exports, such as BSPs, brokers, dealers, Result 1 clients, shipping companies and promotional agencies AHPEA Assist industry in activities aimed at Value Chain strengthening branding of individual firms and Marketing 2.4 other promo activities, such as assistance in Specialist, development of websites and advertising Result 1 clients, materials AHPEA 3 Support industry support service provision Identify interested beneficiaries to take Value Chain ownership of the nursery. Identify suitable Marketing location. Together with AHPEA develop Specialist, guidelines for how nursery will serve local Local 3.1 farmers with the emphasis on reaching out to Agronomist the least economically fortunate groups in (LA), remote areas, in accordance with the Project’s Agribusiness new PVE emphasis. Advisor

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Value Chain Encourage establishment of new business and Marketing 3.2 processing lines and support through TTF Specialist, LA, funding. Agribusiness Advisor Value Chain Marketing Introduce mono-trunk plant system to the local 3.3 Specialist, LA, production industry Agribusiness Advisor 4 Continue supporting AHPEA Develop training materials, brochures and Value Chain posters, and hand them over to AHPEA Marketing 4.1 agronomists and staff. Hold training of trainers Specialist, for AHPEA AHPEA, LA Value Chain Support AHPEA in facilitation and conducting Marketing 4.2 of farmer trainings throughout the year. Specialist, AHPEA, LA Value Chain Supply the association with mini-tractors, Marketing 4.3 sprayers and flail mowers to provide service to Specialist, the regional farmers. AHPEA, LA Supply the association with visual training Value Chain 4.4 materials such as jute bags and harvesting nets Marketing to distribute among the trainees Specialist,

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AHPEA, LA

5 Continue seeking TTF opportunities to provide for hazelnut processing and process optimization technology Complete the process of procurement of the Value Chain Metal Detector, Roasting Line and other 5.1 Marketing ongoing TTF projects for preselected Specialist, beneficiaries Identify and assist new beneficiaries with Value Chain 5.2 introduction of advanced processing Marketing technologies such as an aflatoxin lab Specialist, Provide consulting and auditing to hazelnut processing firms interested in obtaining internationally recognized food safety 6 certification Value Chain Marketing Specialist, 6.1 Continue providing HACCP/ISO 22000 Quality training to the quality teams at the Standard & beneficiaries’ processing plants. Provide audit Certification and consulting to the beneficiary firms Specialist Value Chain Marketing Specialist, 6.2 Quality Provide technical assistance on facility Standard & improvements, documentation, and Certification implementation. Specialist

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Value Chain Provide business development training to Marketing 6.3 interested processors Specialist, outsourced firm 7 Continue identification of new area to partner with other USAID partners Improving irrigation together with SEDA at 7.1 ASAP, SEDA Khaspoladoba, Khachmaz Together with SEDA identify and implement 7.2 ASAP, SEDA fruit drying facility in Aliabad, Zagatala

Result Two: Good Agricultural Practices Implemented Responsible Staffer/ Activity Description Timeframe Additional Resources Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 1 Continue providing on-site support to growers Agribusiness Advisor, Measure and document effectiveness of Value Chain 1.1 interventions in demo plots Marketing Specialist, LA Continue developing and upgrading Agribusiness training outline, mobilize grower groups Advisor, 1.2 (trainees), launch learning and training Value Chain program Marketing

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Specialist, LA

Agribusiness Advisor, Organize and facilitate demonstrations and Value Chain 1.3 field training for local agronomists and Marketing regional farmers Specialist, LA Agribusiness Procure and provide training in utilization Advisor, of portable soil testing labs and provision Value Chain 1.4 of fertility recommendations based on test Marketing results Specialist, LA Agribusiness Advisor, Value Chain 1.5 Host farmer field days Marketing Specialist, LA Agribusiness Advisor, Evaluate efficiency of training and assist Value Chain 1.6 extension workers/local experts to improve Marketing as necessary Specialist, LA 2 Continue supporting hazelnut communities working in clusters

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Agribusiness Work with communities that are growing Advisor, hazelnuts intensively, and represent a Value Chain 2.1 cluster in a specific region, while having a Marketing strong hazelnut growing tradition. Specialist, LA Continue to establish a prototype of a Agribusiness micro-enterprise models and consolidated Advisor, farmland initiatives that would provide Value Chain 2.2 agricultural services in their communities, Marketing such as in Findiqli, Danachi Zagatala and Specialist, Turajli and Marsan Gakh. LA Continue monitoring, data collection, and Agribusiness providing training in utilization of portable Advisor, growth stations, weather monitors, and Value Chain 2.3 pheromone traps and lures for BMSB, and Marketing collect, analyze and disseminate data Specialist, obtained LA

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b. Orchard Value Chain Strategy

During PY5, ASAP will continue to work to improve a number of orchard crops, including varieties of apples and other pome fruits, grapes, as well as stone fruits such as cherries, peaches, plums, and persimmons. ASAP previously identified several limiting factors for production opportunities requiring improvement. Multiple beneficiaries in areas near Guba and in the area northwest of Ganja have newly planted orchards with good to excellent technology and good fruit genetics. In these areas, specific improvements to the production and post-harvest system are necessary to conform to food safety and quality standards to prepare products for export. Since many of the elements of production are in place, these agribusinesses require assistance with critical areas where technology is lacking. In addition, as part of the project’s strengthened focus on PVE, potential new beneficiaries from the Orchard VC in the Southern regions of Azerbaijan are planned to be engaged in project activities.

U.S. Linkages Support

• Organic plant growth regulators: The Orchard Value Chain is in need of some biological plant growth regulators, some of which ASAP has demonstrated. As a part of the Commercial Linkage element of the PY5 Work Plan, a partner for the company that manufactures these, Chicago-based Valent Biosciences, should be identified. These biological plant growth regulators are used extensively in apple, pear, cherry orchards and table grape vineyards. • Work with Orelay and Dr. Sugae Wada of the Tissue Culture Lab at Oregon State University to provide the needed recipes, training in the U.S. or a STTA in Azerbaijan to train the Orelay lab technicians in the formulation of the various TC growth media used in tissue culture production of several fruit plants. • Work with AgrarCo LLC to import agricultural inputs including pesticides, fertilizers and agricultural tools (thermometers, irrometers, pH meters etc.) from the USA.

Group Trainings

Group classroom trainings in this area are attended primarily by smaller farmers for whom it is not feasible for the project to provide direct TA through the Demo Plot system. In PY4, ASAP made major changes by increasing the emphasis on trainings and, more specifically, group trainings. To facilitate group training, the local agronomist constructed a training room and ASAP provided the essentials for conducting this training including a projector and copier/printer. For PY5, ASAP plans to provide group trainings to at least 430 growers, with an

CNFA AID-112-C-14-00001 estimated 60% of them being reached through classroom training and the rest in the field. The specific training schedule is included in the last Annex on Training. The specific topics that will be emphasized will include:

• Pruning and Trellis Management for Intensive Apple Production- Training apples to produce on a trellis is essentially farming sunlight. The trees are pruned and tied to the trellises to provide the needed strength to support the fruit load and to absorb as much light as possible; • IPM In the Orchard: IPM, Integrated Pest Management is a year-long process. Some aspect of it occurs each month. In the winter it consists of sanitation pruning that removes dead and any diseases fruit or wood from the orchard. The specific subjects to be taught each month are in the training schedule; • Orchard Floor Management: Traditionally, the grass and weeds on the orchard floor have been disked between the rows and sprayed with glyphosate between the trees. This kills the small feeder roots that absorb water and nutrition so converting to mowing is taking demonstrated. The proper use of glyphosate is also taught; • Fruit Thinning: Farmers can either have a very large number of small apples that are of limited value in the market or fewer larger apples that are far more valuable. Whereas that sounds simple it is a very difficult concept for farmers to adopt. Therefore, it is emphasized throughout the growing season. Chemical and physical thinning are both taught; • Fertility: While local growers understand that modern fertilizers increase yield and quality, knowledge of proper formulations and application procedures is often limited, as is the ability to fully appreciate and determine when increased input costs will be more than compensated by higher productivity and quality. With the high pH soils that are frequently found in our orchards micro-elements are less available to the trees. ASAP trains farmers in foliar fertilization and in the future hopes to be able to import chelated micro-nutrients that are available under these conditions; • Budgeting: There is a big difference between farming and farming profitably. In PY 5 an apple Crop Budget will be developed through the use of the MASHAV provided interactive spreadsheet budget and farmers will be trained in the classroom to use it to guide operational decision making; • Drip irrigation system Maintenance: Many drip irrigation systems have been installed throughout Azerbaijan but, other than short verbal instructions on maintenance, the growers receive no additional training. ASAP is producing a publication on Drip Irrigation Maintenance and this will be used in training in all targeted VCs;

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• Spraying: During PY5, the project will train farmers to use safer, modern pesticides. This is an integral part of IPM but will be emphasized by training in the use of adjuvants, sprayer calibration and the very important topic of always using PPE (personal Protective Equipment) ASAP has emphasizes this in the past but it will be a focus again in PY 5; • Intensive production: In previous years, ASAP supported the introduction of intensive and semi-intensive fruit production, which includes high density planting, trellising, and the use of dwarf trees grafted to root stock that are appropriate for dwarf varieties. The project plans to support further expansion of existing intensive orchards through the training emphasis, as well as to encourage the replacement of traditional orchards with intensive ones. A significant part of this training will be dedicated to the development of crop budgets for both traditional and intensive orchards to further emphasis eths importance of financial analysis in decision making. It plans to purchase new rootstocks from the U.S. and European countries and to use them in expanding intensive fruit production. This is being explored as a possible U.S. Linkage since in the United States many new rootstocks have been introduced that should be demonstrated in Azerbaijan; • Irrigation Timing: Data-driven applications of irrigation water is critical in intensive orchards for high production, fruit uniformity, and high quality. Significant progress has been made through ASAP Demonstrations and TA. This will be expanded through the training of program participants and program staff in the use of irrometers. ASAP agronomists have used them for one complete growing season and it is anticipated that through the Linkages initiative a distributor for this company will be located and farmers can easily buy them in Azerbaijan. ASAP agronomists can provide training in their use; and • Harvest, post-harvest, cold storage, and packaging: As part of its support to Orchard VC producers all of these topics will be taught. On the surface it may seem unnecessary for farmers without their own cold storage facilities, but they should be aware of the principles to prepare for the future when cold storage is more widely available.

Technical Assistance

The provision of individual technical assistance on various topics for Orchard VC actors demo plots will be continued as in previous project years. TA will address:

• Establishment of intensive and semi-intensive orchards; • Implementation of Integrated Pest Management (IPM) Practices to improve pest and weed control, and reduce crop losses;

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• Implementation of Good Agricultural Practices (GAP) to improve soil fertility, and irrigation practices, • Implementation of Pre-Harvest and Post-Harvest Handling Practices. Possible TTF Projects

• Support establishment of one small-scale agricultural service center: Using as its model a private service center in Samukh that provides orchard planting, spraying, cultivation, fertilizing, and other services for more than 100 farms (ASAP was introduced to it by a beneficiary), the project will explore the establishment of new and/or capacity building of existing service centers in the Northern and Southern regions of Azerbaijan. This market- based approach could help fill the gap for small growers that cannot afford or for whom it is not economical to purchase all of their own equipment and machinery, but who recognize that they could boost profitability by modernizing their production practices. Two possible recipients have been identified; and • Women’s grafting project: In Guba and Khachmaz, there are groups of women who graft saplings for local nurseries. With training and modern grafting tools these groups of women would become more efficient and profitable. The women are paid per graft so an increase in efficiency is an important matter for them. ASAP plans to provide recommendations to the women on how to improve grafting techniques and provide improved grafting tools and equipment to increase the quality of their services.

Demonstration Plots

• Continued TA Through Demo Plots: Continued TA will be provided to established Demo Plots. No new Demos will be proposed. Rather, the focus will be shifted to utilization of the Demos for field-based training of area growers so that they can learn improved cultivation methods and see the results for themselves.

Capacity Building

• Develop Orchard Training Materials: During PY5, ASAP will work to develop USAID- branded training modules and materials for fruit production and post-harvest handling, as well as at least one other Orchard VC crop. Immediate emphasis will be placed on winter IPM practices and others will be developed as the season progresses and will be germane to the season. • Guba Apple Festival: ASAP will support apple beneficiaries to better organize their participation in the annual festival, if possible. ASAP will also consider seeking

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permission from the local authorities to rent and equip a USAID stand to provide outreach to festivalgoers on the agency’s agricultural assistance to Azerbaijan.

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Orchard Value Chain Work Plan

Result One: Improved quality and quantity of goods produced Responsible Staff Member/ Activity Description Additional Resources OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP 1 Establishment of modern orchard demonstration plots for participants Supply Chain Continue working with existing and Specialist, adding new partners and draft a Agribusiness 1.1 strategy for implementation of Advisor, Local activities in selected value chain agronomist (LA) Agribusiness Continue to implement specific Advisor, activities in demo plots (regarding Supply Chain 1.2 mineral fertility, pruning, micro Specialist, irrigation and fertigation and weed Result 1 control, etc.) clients, LA Agribusiness Advisor, Measure and document the Supply Chain 1.3 effectiveness of interventions in the Specialist, demo plots Result 1 clients, LA 2 Provide technical assistance (GAP, food safety, etc.) 2.1 Provision of support to the existing Supply Chain

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and new farmers/producers based on Specialist, their training needs in framework of Agribusiness ASAP project Advisor, Quality Standard and Certification Specialist Agribusiness Conduct hands-on practice training Advisor, 2.2 in fertilizer placement, irrigation, Supply Chain pruning, for demo plots Specialist, LA 3 Extend and promote export opportunities for grapes, apples, and persimmons Quality Standard & Certification Specialist, Develop training manuals, training Value Chain modules and continue conducting Marketing 3.1 trainings/TA on standards, Specialist, requirements for export to selected Supply Chain beneficiaries Specialist, Agribusiness Advisor, Result 1 clients, LA Quality Standard & Coaching of exporters to enhance Certification 3.2 knowledge in procedures and Specialist, requirements for product export Value Chain Marketing

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Specialist, Supply Chain Specialist, Agribusiness Advisor, Result 1 clients, LA Quality Standard & Certification Specialist, Perform activities related to Value Chain 3.3 enhancing processing, quality, Marketing packaging, labeling and branding Specialist, Agribusiness Advisor, Result 1 clients, LA Quality Standard & Certification Specialist, Research targeted international food Value Chain industry exhibitions, trade shows Marketing 3.5 and specialized (food safety, Specialist, agribusiness finance and investment) Supply Chain fairs and workshops Specialist, Agribusiness Advisor, Result 1 clients, LA Identify beneficiaries for attendance Quality 3.6 at targeted marketing and Standard &

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networking events Certification Specialist, Value Chain Marketing Specialist, Agribusiness Advisor, Result 1 clients, LA Quality Standard & Certification Assist beneficiaries to set up Specialist, potential deals and facilitate their Value Chain 3.7 participation in trade fairs and Marketing exhibitions Specialist, Agribusiness Advisor, Result 1 clients, LA 4 Initiate study tours, BTB events and workshops for producers regionally Supply Chain Specialist, Quality Standard and 4.1 Certification Identify group of producers and Specialist, processors best placed to benefit Business from regional workshops, BTB Development events and study tours Specialist, LA

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Supply Chain Specialist, Quality Standard and 4.2 Certification Specialist, Plan forward to organize the Business participation of producer groups in Development regional events Specialist, LA Supply Chain Specialist, Quality Monitor and evaluate the results of Standard and 4.3 BTB events, workshops and study Certification tours Specialist, Business Development Specialist, LA 5 Provide technical assistance on access to agribusiness finance Access to Finance 5.1 Specialist, Access to finance analysis and Supply Chain facilitation Specialist

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Result Two: Good Agricultural Practices Implemented Responsible Staff Timeframe Activity Description Member/ Additional Resources OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP

1 Disseminate best practices through field days and trainings on demo plots Supply Chain Specialist, 1.1 Continue conducting demo plot Agribusiness field days Advisor, Result 1

Clients, LA Supply Chain Provide on-site training to private Specialist, 1.2 and public extension workers on Agribusiness selected demo plot premises Advisor, Result 1

clients, LA Promote demo plots' improved practices through preparation of Supply Chain handouts and other materials in an Specialist, easy communicable format to Agribusiness 1.3 provide technical guidance to Advisor, farmers for improved care in their Result 1 orchards, public awareness raising clients, LA efforts in the media and project publications

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2 Capacity building of service providers Supply Chain Providing there’s both interest by 2.1 Specialist, the BSPs and approval by the BSPs Project, identify service providers Procure and provide training in Supply Chain utilization of portable soil testing Specialist, 2.2 labs and provision of fertility Agribusiness recommendations based on test Advisor, LA results Procure and provide training in utilization of portable growth Supply Chain Specialist, 2.4 stations and weather monitors, install on Demo Plots, and collect, Agribusiness analyze and disseminate data Advisor, LA

obtained Conduct trainings to enhance Supply Chain 2.5 capacity and skills development of Specialist, service providers in order to BSPs provide better services 3 Continue providing group training to growers

Supply Chain 3.1 Conduct assessment on training Specialist, needs Agribusiness

Advisor, LA Supply Chain Identification of relevant service 3.2 Specialist, providers for training delivery Agribusiness

Advisor, LA

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Supply Chain 3.3 Develop and delivery training Specialist, modules for selected topics Agribusiness

Advisor, LA 4 Support enhancement of linkages between supply chain and orchard value chain actors

Identification of main suppliers and needs assessment on establishing Supply Chain 4.1 value chain and establishment of Specialist, improved cooperation with value LA

chain actors Supply Chain 4.2 Specialist, Support enhancement of LA cooperation via targeted trainings

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c. Pomegranate/Persimmon Value Chain Strategy

In the Pomegranate VC, the most successful activity to date has been the provision of individual and practical technical assistance. Growers’ implementation of these recommendations has already led to real results. During PY5, ASAP will provide technical and economic resources to mitigate the agronomic limiting factors it has identified through continued group training and technical assistance.

U.S. Linkages Support

• Sourcing pest control supplies from the U.S.: There is a need for Azerbaijan to adopt innovative and efficient methods of pest control, especially against carob moth, through the usage of pheromone traps and various IPM methods. Currently there are several potential supply sources, such as India and Turkey, for these traps in Azerbaijan. For better results, ASAP will coordinate with U.S. vendors and manufacturers to facilitate the introduction of these items to Azerbaijan. Organizations like APPEA or input suppliers could potentially become distributors of these products in Azerbaijan.

Group Trainings

During PY4, in order to broaden its outreach, ASAP initiated group trainings of growers. By training multiple growers at the same time on topics of relevance at that point in the growing season, ASAP was able to more efficiently boost knowledge of improved production practices, as well as bring various farmers together to learn from one another and/or seek ways to collaborate. In PY5, ASAP is planning to conduct at least 30 Pomegranate VC group trainings for at least 500 trainees.

These trainings will cover the following topics:

• Improved Irrigation Techniques (Micro-Irrigation): ASAP will focus on recommendations on irrigation methods, especially micro-irrigation and water management techniques to reduce disease infection rates from excess water and root loss from too little irrigation; • Foliar Amendments to Ensure High-Quality Fruit Set: The high pH soils of the pomegranate production areas cause the microelements to be poorly available to plants. Foliar applications at specific timings can assist in supplying the correct microelements and avoiding incipient deficiencies that reduce yield and quality;

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• Improved Orchard Floor Management Training: The project will continue working with growers to raise awareness of the importance of good floor management and provide them with advice on utilizing proper mechanical, chemical and mulch combinations. The use of discs to control weeds in orchards sill be opposed and mowing recommended; • Integrated Pest Management: Science-based Integrated Pest Management is rarely practiced outside of the ASAP’s recipients of TA or training. ASAP will provide training on the importance of on-time monitoring of the orchards by professional specialist(s) equipped with the required tools, following the approved PERSUAP and ASAP’s Pomegranate Production Manual; • Improved control of root rot (phytophthora): ASAP will teach mitigation techniques for high soil and water pH and the resultant root rot problems in poorly drained soils. Important mitigation techniques include transitioning from flood to drip irrigation, drainage system improvement, and forming tree beds to keep roots above the ground water level; • Improve business decision-making: The Project will train beneficiaries in the use of a MASHAV-developed Excel budget spreadsheet for pomegranate production so that they will be empowered to make financially sound business decisions; • Post-Harvest Management: Improved post-harvest handling that includes Fludioxonil dips to control Gray Mold will be taught; • Control of Fruit Splitting: Control of fruit splitting through the use of the proven use of ASAP’s protocol of GA3 (Gibberellic acid) use will be emphasized; • Proper Pruning: Proper pruning techniques will continue to be taught in trainings as well as with the TA of the Demonstration element of the project. These techniques are among the most important in pomegranate production. Proper pruning increases light penetration and photosynthesis which increase yield. It also rids the tree of unproductive wood and foliage that absorbs the energy that should produce fruit; • Integrated Pest Management: Scientific orchard scouting and the use of economic thresholds for pesticide applications. Many times, orchards are sprayed with a broad- spectrum insecticide that kills the bad and the good insects. If many cases the beneficial insects would control the bad insects if they were given the time. This practice increases costs to the grower and adds hazard to the applicator every time a toxic insecticide is used. By allowing the good insects to control the bad (Integrated Pest Management) the farmer saves money and the fruit contains less insecticide; • Improved Herbicide Use: Proper use of glyphosate to improve performance and reduce the development of resistance in the grass and weed population. Currently, glyphosate is the number 1 used herbicide in Azerbaijan and only a small amount is used properly. When used improperly several bad things happen. First, the targeted weeds are not killed

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which wastes the farmer money and keeps the weeds competing with the crop. Second, only the most susceptible plants are killed. Those that have a small amount of natural resistance survive. The result is that over time the only grasses and weeds left in our fields are basically immune to the herbicide. Farmers must then change to herbicides that are more expensive. So, again the farmer loses money; • Modern Spraying and Calibration Techniques: The use of spray adjuvants improves the control of the pesticide. Spray adjuvants are chemicals that lower or raise mix water pH, allow the pesticide to spread over the entire target and not just small droplets and helps the pesticide penetrate into the leaf. These products are relatively cheap and frequently make the difference between a successful application and a failure. For its part, sprayer calibration is important because it ensures the correct amounts of water and pesticide are used. It also makes certain that the pesticide is delivered to the proper location. An un- calibrated sprayer wastes money and yield to the farmer, so trainings will emphasize the importance of applicator safety, re-entry periods and pre-harvest intervals; • Soil Salinity and pH: Saline soil, high soil pH and water testing and mitigation practices. High salinity and pH are estimated to be the two biggest reasons that Azerbaijan’s crops do not have yields that are much higher. There are measures that the farmer can take to reduce salinity and lower pH. However, the first step is to properly test the soil and water. ASAP agronomists have access to this testing equipment and can assist farmers in buying their own as well; • Drip Irrigation System Maintenance: Drip irrigation system maintenance is rarely practiced by the owners of these systems. The result is that problems such as clogged emitters or filters reduce the amount of water that the plant receives. This reduces yields, reduces the life of the irrigation system and costs the farmer yield and therefore profitability. Just a few hours per growing season can make the difference between a profitable and unprofitable farm.

Technical Assistance

The provision of individual technical assistance on various topics for Pomegranate VC actors will be continued as in previous project years. In addition to the ASAP Pomegranate VC Local Agronomist Consultant, Agribusiness Advisor, and Access to Finance Specialist, the Project will tap into MASHAV local agronomists and some advanced level beneficiaries to transfer required skills and knowledges on an individual level. For the transmission of knowledge and experience through seminars, workshops and trainings in larger groups, ASAP will utilize public and business organizations like AgroCenter and others where possible. TA will address:

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• Soil Chemistry and Mineral Fertility: Most crops in Azerbaijan are badly managed. ASAP has introduced basic agronomic practices to farmers that have improved yields and profits versus current practices. ASAP will be continuing to provide TA on many important topics to new beneficiaries located close to areas where the project has been working. The anticipated beneficiaries each have between 5 to 55 hectares and 3-20 workers. The central theme will be managing fertility in high pH and saline soil conditions; • Postharvest handling: ASAP will teach growers who utilize cold storage to extend their produce’s shelf life how to combat grey mold through dipping fruit in fungicides such as Fludioxonil, the use of modified atmosphere bags in cold storage, and other cold storage improvements; • Access to international technical assistance: ASAP, in collaboration with AgroCenter, will organize a visit by two MASHAV consultants to Azerbaijan in late 2018. The assignments will provide training to growers, agronomists, and extension providers, while the ultimate aim will be to complete the development of the aforementioned manual/curriculum for pomegranate production. In addition, ASAP will conduct a training for AgroCenter students on cultivation practices in one of its well managed pomegranate beneficiary orchards. ASAP will also work to link these young agronomists in training to successful pomegranate growers to help the students improve their practical agronomic skills; • Assistance to existing well-positioned nurseries for the improvement of the quality and quantity of saplings produced and on marketing. Current local varieties of pomegranates have sour or sweet and sour characteristics, which are suitable for Post-Soviet markets. The EU, Arabian and other countries, however, seek sweet varieties with soft seeds. Early growing varieties are also demanded by the international market. ASAP would work with Orelay company’s recently established tissue culture laboratory for propagation of virus-free, early growing and sweet varieties such as Wonderful, AKKO and Shani. ASAP would link the laboratory with U.S. experts to develop the required media formulations and stock solutions in which micropropagation takes place or assist ORELAY to identify a U.S. laboratory to which it could send its staff for training or a short-term internship. The goal would be to build the capacity of the staff to independently formulate their own media and stock solutions to support micropropagation of pomegranates; and • International Food Safety Standard Compliance and Certification: Most fresh pomegranate producers lack the required international certification to enter the EU and other advanced markets. To solve this problem, ASAP will focus on certification of advanced growers. ASAP previously was able to successfully assist Mars FK LLC to

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achieve GlobalG.A.P. certification. Beneficiaries Aladdin Fermer LLC, Red Valley LLC, Mabat LLC and Antim LLC have also expressed interest in this certification. ASAP is confident that up to three pomegranate VC beneficiaries will be successfully assisted to comply with and gain certification in GlobalG.A.P. during PY5.

Demonstration Plots

In addition to ongoing general oversight of best practices throughout the growing cycle, selected Pomegranate VC’s 14 Demo Plots may be provided with specific assistance in implementing the following demonstration activities:

• Gibberellic Acid (GA3) Demonstration: Applications made in PY4 will be evaluated and a protocol established for further demonstrations in PY5. This practice virtually eliminates fruit skin splitting which is largest causes of pomegranate loss in Azerbaijan; • Postharvest Demonstrations: ASAP will also assist with one or more of the following demo plots to implement improved cold storage practices, including against dipping fruit in fludioxonil to combat gray mold, the use of modified atmosphere bags, and other cold storage improvements. Potential demo hosts for this activity could include Antim LLC, Aladdin LLC, and/or Ekinchi BO LLC farms.

Marketing, Sales and Finance

• Facilitate co-investment in pomegranate seed production line: In order to build capacity for pomegranate seed drying, ASAP will assist Israeli buyer NS Oils to identify and pursue potential collaboration with Azerbaijani pomegranate processors that could supply the Israeli company’s raw material needs. The Project will assist the NS Oils to explore the possibility of providing up to a 50% investment in a pomegranate seed drying line (at a cost of about $500K) for a local processor such as Antim LLC in exchange for the right to purchase the seeds from the processors. The longer-term strategy for NS Oils would be to begin producing seed oil in Azerbaijan. • Upgrade Beneficiary Skills in and Assistance in Marketing: ASAP will continue supporting trade marketing activities, including linking to new buyers, development of new products, providing information on assisting in preparation for participation in regional and international trade fairs, and organizing B2B meetings. This will be mostly for large pomegranate producing and processing companies. ASAP will invite potential trade missions to Azerbaijan or offer assistance to interested beneficiaries in organizing trade missions to meet identified businesses abroad.

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Capacity Building

• Complete the Pomegranate Production Manual: In collaboration with the MASHAV consultants, ASAP will continue to edit and expand the first edition of the Pomegranate Production Manual, which will be published as a professional training guide, as well as converted into training modules for use in ASAP and non-ASAP trainings with assistance from AgroCenter. • Building Local Agronomist and Training Capacity: The ASAP Pomegranate VC Agronomist is currently constructing a small building on his recently purchased land where he has planted demonstration pomegranate and persimmon plots. He plans to establish an office and training center in the building, which ASAP will consider helping him to equip with furniture and audiovisual equipment for trainings. In addition, ASAP will consider establishing a What’s App community that sends regular technical recommendations, pest alerts and sound IPM practices. • Support Capacity Building of APPEA: The Azerbaijan Pomegranate Producers and Exporters Association is still relatively new and needs organizational support. It is, however, a very independent organization so this assistance is likely to be very limited. In order to motivate the Association to collaboration with ASAP, there should be specific business and marketing tools/deliveries. For PY5, ASAP is considering attracting some U.S. agriculture-related businesses to Azerbaijan. Pheromone traps, lab equipment (for soil and nutrition), and other specific tools and equipment suppliers from the U.S. will be suggested to APPEA for their representation. APPEA also will be used as a conduit for promoting international agribusiness suppliers to pomegranate producers and processors. MASHAV STTA and possibly other international pomegranate experts also will be offered to APPEA for spreading knowledge and practices. • Goychay Pomegranate Festival: ASAP will support pomegranate beneficiaries to better organize their participation in the 13th annual festival. If possible, ASAP will secure permission from the local authorities to rent and equip a USAID stand to provide outreach to festivalgoers on the agency’s agricultural assistance to Azerbaijan.

Technology Transfer Fund

• In addition to providing the assistance noted above, ASAP anticipates utilizing its Technology Transfer Fund for several investments, such as mowers that will replace the practice of disking between tree rows to control grasses and weeds and postharvest dip

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units for washing and dipping in fludioxonil for gray mold control. For more detailed information on anticipated TTF activities during PY5, see Annex D.

The Work Plan below describes these activities for PY5. Under Results 1 and 2, responsible ASAP staff member(s) are indicated along with a timetable of actions.

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Pomegranate Value Chain Work Plan

Result One: Improved quality and quantity of goods produced Responsible Staff Member/ Activity Description Timeframe Additional Resources OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP 1 Group Trainings Local Agronomist (LA), Theoretical and practical training to small and Agribusiness 1.1 medium growers in all aspects of ultivation Advisor, Agricultural Practices Manager Agribusiness Advisor, Mashav STTA training to Agrocenter and 1.2 Agricultural farmers Practices Manager Agribusiness Advisor, 1.3 LA(s) TOT and new technologies in use Agricultural Practices Manager 2 Technical Assistance (TA)

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2.1 Update client recommendation list and start Agricultural development of TA plan Practices Manager, LA Agribusiness Advisor, Provide TA in all aspects of cultivation 2.2 Agricultural practices Practices Manager, LA 3 Marketing, sales and Finance Agricultural Development linkages for pomegranate 3.1 Practices products sales and marketing Manager Agricultural Practices Establishment marketing opportunities and Manager, 2.2 financial management practices for SME Access to Finance Specialist

Result Two: Good Agricultural Practices Implemented Responsible Staff Activity Description Member/ Timeframe Additional Resources OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP 1 Demo Plots 1.1 Demonstration of GA3 (Gibberellic acid) Agricultural

Practices

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Manager, Agribusiness Advisor, LA 1.2 Demonstration of practices against gray mold and Agricultural other post-harvest handling Practices Manager, Agribusiness Advisor, LA 2 Capacity Building 2.1 Pomegranate manual development Agribusiness Advisor, Agricultural Practices Manager 2.2 TOT for farmers and LA(s) Agribusiness Advisor, Agricultural Practices Manager 2.3 Provision certain business linkages to APPEA and Agricultural its management practices development Practices Manager, Access to Finance Specialist, Value Chain Marketing Specialist 2.4 Goychay Pomegranate festival Agricultural

Practices

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Manager

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d. Vegetable Value Chain Strategy

In PY4, the project continued providing its continued assistance to greenhouse producers of tomatoes and cucumbers. In PY5, ASAP will continue focusing on these greenhouse crops. ASAP plans to assist greenhouse growers to diversify and modernize their productive capabilities and to diminish the current over-use of pesticides prevalent on most vegetable crops. Crop rotations, rational use of pesticides, increased use of bio-rational pesticides. ASAP will work with one or two farmers to demonstrate how soil-based greenhouses can be transitioned into hydroponic greenhouses, which are more productive, use much less water and pesticide, are much less susceptible to disease, and do not require soil preparation such as mulching, tilling, changing of soil, and weeding.

The project's PY5 activities will include the following tasks:

a. Establish new trade linkages between existing local agribusinesses and U.S. companies interested in introducing and expanding exports to Azerbaijan. ASAP will research opportunities for linking local businesses serving as dealers for American, agricultural products and services. These could be equipment/machinery dealers, seeds, fertilizers and other input suppliers, commodity products importers and distributors. As an example of this initiative ASAP has already identified a greenhouse producer in Shamkir to test new U.S. produced high-quality fertilizer that may facilitate increases in production of up to 25%. If the new fertilizer-testing project goes well, there will be developed a new U.S. linkage to Azerbaijani farmers. b. Crop diversification through U.S linkages: The project will also promote and facilitate crop diversification, as in PY5, through expansion into eggplants, pepper, strawberry and other high-value crops through U.S linkages. ASAP will identify new crop varieties and organize their shipment to Azerbaijani farmers to test in their fields with the further possibility of long-term business relations establishment between US and Azerbaijani farmers. In addition to continued efforts to diversify vegetable production, ASAP's Agribusiness Advisor and Vegetable VC Agronomist will introduce improved techniques that increase the safety and value of crops within the food system.

Technical Assistance c. Soil fertility and fertilizer use: Current management techniques seem fixated on lowest cost at the expense of any other considerations. Native soil fertility is low, and few fertilizers are used except nitrogen and small amounts of compound fertilizers such as NPK. Expanded use of fertilizers, which can capture and fix atmospheric nitrogen for use by successive crops, will lead to increased yields. Paradoxically, growers tend to spend far too much on questionable amounts of fertilizers and pesticides when markets do emerge, such as the Russian market for fresh tomatoes and cucumbers. ASAP will

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continue implementation of a balanced approach with reasonable practices driven by data. d. Fertilizer Trial demonstration: ASAP in cooperation with Soil Biotics, a U.S. company represented in Azerbaijan by Argus Limited, will test in one open-field and one greenhouse operation in Shamkir the firm’s products to improve soil fertility and increase productivity. ASAP selected the hosts for the demo based on beneficiary availability and interest, as well as proximity to main roads in order to facilitate sharing of the demonstrations results with the wider growing community. Based on test results, ASAP will link beneficiaries to the company and recommend them for purchase and use in production fields. e. Irrigation management: In some cases, during PY4 ASAP improved irrigation of fields adopting the travelling gun irrigation system. Farmers achieved increased production and decreased waste of water resources. Nevertheless, there are still fields with flood irrigation that causes high level of damage to crops and soils. In PY5, ASAP will continue promoting the idea of changing canal irrigation to modern travelling gun irrigation systems, will continue monitoring the usage of improved forms of irrigation in the Demo Plots that would allow others to benefit from increased water supplies and improve the performance of irrigated crops overall. f. Integrated Pest Management (IPM) program: As during PY4, there is still a great need for improved IPM practices in Azerbaijan’s soil-based greenhouses. This would lower production costs and improve the quality and quantity of the vegetables produced. ASAP provided IPM tools and trainings on new practices to various vegetable growers. In PY5, ASAP will continue monitoring the performance of Demo Farms implementing IPM and demonstrate their advantages to other growers. These IPM tools and improved practices included: • Adding screens to all openings to control insects and diseases; • Monitoring humidity, temperature and soil moisture to help control the greenhouse environment to prevent diseases; • Implementation of weed control around the greenhouses to reduce insect and disease pressure; • Improvement of sprayers used inside the greenhouses; • Application of flame burner units to remove diseased vegetation between crops. g. Improve greenhouse ventilation system and techniques: The project will support up to one TTF to a selected greenhouse in Shamkir to adopt an innovative water-based ventilation system that beneficiaries were exposed to during an ASAP study trip to Italy. The system dramatically affects greenhouse vegetables’ productivity and quality and prevents overheating during the late spring and early fall period of greenhouse production. h. Technical assistance to employees/laborers of greenhouse and open-field vegetable operations: ASAP will continue to prioritize intensive trainings on crop handling

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techniques, weed control, sanitary and hygienic procedures, pesticides and insecticides usage norms, temperature and moisture control, and other agricultural production-related topics. These trainings and live demonstrations will be delivered by the ASAP local agronomist in the field during beneficiaries’ actual work and will focus on female employee trainees. It should be noted that classroom-based group trainings for employees of greenhouses were not successful during PY4. Greenhouse owners are unwilling to allow their staff to spend work hours away from their responsibilities in the greenhouse, much less in travelling to the training center in Shamkir. Thus, in line with greenhouse owners’ requests, ASAP began and will continue in PY5 to provide individual TA and practical demonstrations of improved techniques to greenhouse workers as the latter conduct their work in their employer’s greenhouse. This also allows the ASAP Local Agronomist to practically address specific diseases, pests, and other problems that the workers or agronomist identify in the course of this work and demonstrate proper approaches to combat them. Accordingly, group training numbers are low in the Vegetable VC low (see following bullet point for a description of the primary activity accounting for group training in this VC), while TA numbers are high.

Group Training i. Trainings to students of Azerbaijan State Agricultural University: ASAP in cooperation with AgroCenter (Azerbaijan Agriculture Training and Development Center) will continue to organize and conduct a series of trainings on greenhouse crop production techniques to selected students of the Azerbaijan State Agricultural University (ASAU). Trainings will be delivered by ASAP’s local agronomist in his training center in Shamkir that was established with ASAP’s assistance during PY4 and practical lessons will be delivered in ASAP beneficiaries’ greenhouses/fields.

The Work Plan below describes these activities for PY5. Under Results 1 and 2, responsible ASAP staff member(s) are indicated along with a timetable of actions.

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Vegetable Value Chain Work Plan

Result One: Improved quality and quantity of goods produced Responsible Activity Description Staff Timeframe Member/ Additional Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Resources 1 Continue work with existing and new beneficiaries Agribusiness Advisor, Business Continue providing assistance to identified Development 1.1 beneficiaries with high potential for growing Specialist, greenhouse and open-field vegetables Local Agronomist (LA) Agribusiness Advisor, Agree with the newly identified beneficiaries on 1.2 Business VC development and form of cooperation Development Specialist 2 Establish new trade linkages Agribusiness Advisor, Business Identify local and U.S companies willing for long Development 2.1 term cooperation as of establishment of U.S. Specialist, representation in Azerbaijan Quality Standard & Certification

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Specialist

Agribusiness Advisor, Business Provide facilitation between regarding Development 2.2 documentations between companies ready for Specialist, cooperation Quality Standard & Certification Specialist 3 Crop diversification through U.S linkages Agribusiness Advisor, Business Facilitate local farmers to identify high-value Development 3.1 crops for diversification of tomatoes and Specialist, cucumber production through U.S. business links Quality Standard & Certification Specialist 4 Technical assistance in specific areas Agribusiness Advisor, Business Development Provide recommendations on application of 4.1 Specialist, relevant irrigation techniques Quality Standard & Certification Specialist

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Agribusiness Advisor, Business Provide recommendations on application of Development relevant fertilizers, on soil fertility checkup and 4.2 Specialist, application of proper chemicals for pest and Quality disease control Standard & Certification Specialist Agribusiness Advisor, Business Provide technical assistance on proper vegetable Development growing (tomato, cucumber, pepper, eggplants, 4.3 Specialist, etc.) aiming to improve productivity, quality and Quality harvesting Standard & Certification Specialist

Result Two: Good Agricultural Practices Implemented Responsible Staff Timeframe Activity Description Member/ Additional Resources Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 5 Technical assistance to employees/laborers of greenhouse and open-field vegetable operations

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Crop handling techniques, weeds control, sanitary and hygienic procedures, pesticides and 5.1 insecticides usage norms, LA temperature and moisture control, disease control, and other related topics 6 Trainings to Azerbaijan State Agricultural University students Develop PP presentations and Business handout materials on greenhouse Development 6.1 production of tomatoes and Specialist and cucumbers LA Organize and conduct practical Business visits of students to a selected Development 6.2 greenhouses of ASAP Specialist and beneficiaries LA 7 Continues monitoring of IPM and Improved Irrigation Demo Plots Contacting and visiting IPM Agribusiness greenhouses and demo plots with Advisor, the improved irrigation system to Business 7.1 collect information on progress, Development changes and provide consultancy Specialist and if necessary LA

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e. Berry/Southern Crops Value Chain Strategy

One of the major results of the ASAP/REG Study Trip to California was the establishment and initiation of registration of a new Azerbaijan Berry Growers Association (ABGA), for which ASAP has provided extensive assistance. Having elected a chairman and Board Members, it drafted all required documents for submission to the Ministry of Agriculture. Now the Ministry of Agriculture will issue a recommendation letter for submission to the Ministry of Justice.

In PY5, ASAP will concentrate activities in the Berry/Southern Crops VC on the two largest berry-producing areas in the country: from Shamkir to Samukh in the west, and from Jalilabad to Absheron regions in the east, as well in the Southern Regions of Astara and Lenkaran. Some of the more important proposed interventions will be to:

Establishing Commercial Linkages

Like all of ASAP’s Value Chains, the Berry VC offers several opportunities to develop commercial linkages. Two were realized in PY4 through the purchase of UC-Davis-developed strawberry varieties and the distribution contract between Grow More, Inc. in California and Vatan-AZ. In PY5, accessing more US berry varieties and a strawberry bedding and mulching machine are being discussed.

1. Facilitate strawberry production through provision of technical assistance and training to value chain stakeholders: a. Support to Azerbaijan Berry Growers Association: ASAP will provide full support to the newly registered Association with possible provision of equipment and agricultural tools for its office in order to help make the association fully functional for provision of berry sector-related trainings and holding leadership and member meetings. ASAP will also facilitate U.S. linkages with members of the Berry Association to ease access of berry growers to international input suppliers and markets. b. Trainings to strawberry growers: Few strawberry growers have any formal training in horticulture, much less a specialization in berry production. At the same time, private extension agents/freelance agronomists focused on strawberry production are limited mostly to Turkish agronomists who periodically travel to farmers’ sites and/or provide long-distance consultancies (via telephone or email). A qualified local berry agronomist whom ASAP hired in PY4 for the South region will continue to provide classroom trainings as well as ongoing field-based consultations and production assistance to farmers to increase productivity and mitigate production hindrances. Based on demand and logistical feasibility, ASAP will consider providing limited TA and training to growers in western Azerbaijan as well. c. Complete the development of strawberry production manual: At present, there is no access to academic training in berry production in Azerbaijan nor the availability of any CNFA AID-112-C-14-00001 63

production manual in the local language or suited to the local conditions under which berry producers operate. During PY5, ASAP staff and the Project’s local berry agronomist will work with Dr. Momirovic to finalize the drafting of a strawberry production manual providing a comprehensive overview of the main topics related to strawberry cultivation in Azerbaijani conditions. d. Nursery and intensive production: Per consultant’s recommendation, ASAP will provide intensive technical assistance to a newly established high-productivity strawberry seedling production facility in Shamkir. After receiving nuclear stock material (super- super elite), ASAP will support the farmer to launch production of its own mother plants inside a greenhouse that is fully protected with insect-proof nets. It is expected that ASAP will engage the consultant for one or more additional STTA assignments during PY5 to follow-up on his recommendations and provide additional group trainings. 2. Model innovative new technologies and support infrastructure improvement of strawberry growers: a. Flash chilling and cold storage TTFs: In PY5, ASAP will finalize establishment of the last two flash-chilling and cold-storage facilities in Lenkaran (for kiwi and feijoa production) and Samukh (for strawberry production). Flash chilling, also known as pre- cooling, removes field heat in order to improve shelf life, transportability, and profitability. ASAP will continue to monitor progress of two existing flash-chilling and cold-storage systems for strawberry production (and, upon completion, of the two new one) on site in order to disseminate knowledge and build capacity of berry storage for more export-oriented farmers, thus boosting the international competitiveness of the Berry VC so that it can break into new export markets. b. Feijoa and kiwi Demo Plot(s): In PY4, ASAP established feijoa and kiwi demo plots with improved irrigation system. In PY5, ASAP will continue supporting these demo plots with technical assistance and consultancies, as well as necessary tools, in order to ensure their adherence to international production techniques and provide demonstrations to outside growers. 3. Broaden berry sector beyond strawberries to new crops: a. Identity new Berry VC crops and beneficiaries: In PY5, ASAP will broaden its activities and assistance to the berry sector by identifying new growers in the western and southern regions. One or more new crops, such as raspberries, blackberries, and blueberries, will likely be added to the project assistance package due to the fact that there is some existing, if basic, production of these crops to build on and that the crops demonstrate high potential for export. A potential beneficiary, who has 8 hectares of raspberry and blackberry production, was identified during the international berry consultant’s training in Shamkir. The producer showed interest in establishing a nursery. In PY5, ASAP will prioritize TTF support to the Berry sector, particularly for the establishment of professional and high-quality berry nurseries in Shamkir, where the soil and climatic conditions are the most favorable for this activity. This TTF support and other

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Berry/Southern Crop VC activities will be conducted under strong supervision of the international berry consultant.

An overview of the proposed PY5 activities under Results 1 and 2, responsible ASAP staff, and their timing is provided below.

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Berry Value Chain Work Plan

Result One: Improved quality and quantity of goods produced Responsible Staff Member/ Timeframe Activity Description Additional Resources Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

1 Continue work with existing and new beneficiaries Agribusiness Advisor, Business Development Continue providing assistance to Specialist, 1.1 identified beneficiaries with high Quality potential for growing berries Standard & Certification Specialist, Local Agronomist Agribusiness Advisor, Business Agree with the newly identified Development 1.2 beneficiaries on VC development and Specialist, form of cooperation Quality Standard & Certification Specialist, 2 Assist existing and establish new modern berry demonstration plots Continue identifying and selecting Agribusiness 2.1 berry growers who can best support Advisor, demonstration plot requirements Business

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focusing on the Southern Regions Development Specialist, Quality Standard & Certification Specialist, Local Agronomist Agribusiness Advisor, Business Development Agree with the owner of the land and Specialist, 2.2 begin the design and implementation Quality of necessary works at the selected site Standard & Certification Specialist, Local Agronomist Agribusiness Advisor, Business Development Advise clients to order necessary Specialist, 2.3 seedlings, and provide Quality recommendations on proper planting Standard & Certification Specialist, Local Agronomist Provide agricultural technical support to the demonstration plot, including Local 2.4 training and TA on mineral fertility, Agronomist fertilizer use, improved irrigation and fertigation. 3 Nursery and intensive production

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STTA, Business Development Provide ongoing assistance and Specialist, 3.1 consultancy to the biggest nursery in Quality Shamkir Standard & Certification Specialist Business Development Identify new beneficiaries ready for Specialist, 3.2 establishment of strawberry or other Quality berry production seedling nurseries Standard & Certification Specialist STTA, Business Development Provide consultancy on raspberry and Specialist, 3.3 blackberry nursery and intensive Quality production Standard & Certification Specialist

4 Strawberry Production Manual Involve strawberry STTA Dr. Agribusiness 4.1 Momirovic to finalize the drafting of a Advisor, STTA strawberry production manual 5 Provide technical assistance on access to agribusiness finance Access to Finance Access to finance analysis and Specialist, 5.1 facilitation Business Development Specialist,

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Quality Standard & Certification Specialist

Result Two: Good Agricultural Practices Implemented Responsible Timeframe Staff Member/ Activity Description Additional Oc No De Ja Fe Ma Ap Ma Ju Ju Au Se Resources t v c n b r r y n l g p 6 Training to strawberry growers in the South Quality Standard Identify new strawberry growers and & Certification invite them to classroom trainings on 6.1 Specialist and best international practices of Local strawberry growing Agronomist Quality Standard Organize and conduct trainings on & Certification 6.2 best international practices of Specialist and strawberry growing Local Agronomist

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f. Cross-Cutting Assistance

ASAP staff-provided assistance, as indicated under each of the value chain descriptions above, will be supplemented by partially subsidized Technical Assistance from Azerbaijani Business Service Providers, investments from the project's Technology Transfer Fund, and Demonstration Plots. Additional information on how these aspects of project assistance will be implemented is provided below.

Facilitating Linkages with U.S. Agribusinesses

Since its launch in June 2014, ASAP has benefited not only Azerbaijani agribusinesses, but U.S. agribusinesses as well. By introducing American technologies, purchasing U.S. goods and services, engaging American experts, facilitating trips to the U.S. that have led to purchases by Azerbaijani agribusinesses from American companies or the establishment of other types of linkages, agriculture in both countries has benefited from these new ties and exposure. While U.S. agribusiness manufacturers and suppliers have gained new markets, Azerbaijani agribusiness have gained access to innovative new technologies that were previously unavailable or unknown to local producers and processors. These efforts will continue during PY5 of the project through work to build the capacity of local dealers and representatives to identify local needs that U.S. agribusinesses can supply and support their efforts to raise awareness among local growers and processors that could benefit.

The U.S. linkages that ASAP will continue to facilitate will include both academic and commercial linkages between Azerbaijan and the United States. Academic linkages can serve several purposes, including expanding the scope and experience of U.S. institutions, while orienting overseas partners toward U.S. technologies, which can help create demand for American educational and research institutions as well as commercial technologies. This can increase, through “soft power,” goodwill toward the U.S. and counter malign foreign influence in line with the USAID objective of Countering Kremlin Influence (CKI).

Commercial linkages in turn open new markets for American businesses, thereby increasing their revenues and creating jobs. Second, they can help increase the profitability of Azerbaijani businesses through distribution contracts for Azerbaijan and even Central Asia, creating jobs in Azerbaijan. Third, helping make new and innovative products and technologies available to Azerbaijani agribusiness improves the quantity and quality of their agricultural production. This in turn improves the revenues and profitability of farmers and in turn creates jobs in such areas as harvesting as well as second and third-tier jobs in processing, packaging, and transportation. With the additional revenues farmers are better positioned to gain the certifications needed to access higher value markets of the EU and the Gulf states. This reduces dependence on lower priced markets in Russia and dependence on the political decisions of the Kremlin.

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PY 5 will bring a significant acceleration of the U.S. Linkages area of ASAP’s programing. A list of U.S. companies has been identified and is based on several factors, foremost among them specific expressed interest by ASAP’s recipients and other partners and contacts. Many of these prospective linkages will require some complex negotiations. In order to expedite these efforts, USAID has arranged for the U.S. Embassy’s Commercial Attaché and staff to assist ASAP in reaching out to selected U.S firms.

Another particular resource that ASAP plans to utilize is the consultant who assisted the project previously through the USAID REG project. ASAP anticipates bringing the consultant to Azerbaijan on a STTA assignment to help identify opportunities for new exports markets in the U.S., Europe, and the Gulf, as well as to set up B2B meetings in Europe or the Gulf with potential American, EU, and Gulf partners. This consultant has been identified as having some unique contacts and long-term relationships that would be extremely useful in establishing linkages for Azerbaijani agricultural companies.

While new U.S. linkage interests and opportunities are likely to arise throughout the coming year, at present the linkages that ASAP is working on establishing or strengthening fall into three categories: Active Ongoing Linkages, Linkages in Progress, and Prospective Linkages.

Active Ongoing Linkages

• Soil Biotics: This is an American company that currently has a distributor in Azerbaijan and has asked ASAP to identify and oversee demonstration plots to validate the value of their products in the soils here. It is expected that these products will help mitigate the saline, high pH and calcium carbonate-filled soils; • Agrarco: This Azerbaijani company has engaged ASAP to identify an American consulting firm that can guide them through the planning and budgeting phases of an organic dairy and poultry/sheep project near Baku. Two prospective companies have been identified and ASAP is awaiting their proposals. In the interim, ASAP program staff are conducting a site review and discussing the issues of entering the EU market with organic foods; • Oregon State University Tissue Culture Lab: ASAP is facilitating the ability of Azerbaijan’s only tissue culture (TC) lab at Orelay in Aghdash to formulate its own growth medium so that it can operate independently without dependence on foreign consultants. Dr. Sugae Wade, who previously assisted ASAP in evaluating the capacity of Baku companies to implement a TC lab is assisting ASAP in this effort; • UC-Davis Strawberry Purchase: The newly forming Azerbaijan Berry Producers Association has purchased approximately $54,000 of a University of California-Davis- developed strawberry variety from Viveros California, an American company’s licensed representative in Spain. The appropriate licensing fees are paid to UC-Davis; and • Grow More: This American specialty fertilizer company has signed a distribution CNFA AID-112-C-14-00001 71

contract with Azerbaijani crop input supplier Vatan LLC for Azerbaijan, Georgia, Kazakhstan, and Uzbekistan. The first purchase of $52,000 has been made and Grow Moore has sent samples of the fertilizers to Baku for registration. The samples have been shipped via FedEx and the air bill states that they will arrive on September 18th.

While preliminary results have been achieved in establishing these linkages, both the Azerbaijani and U.S. partners have limited experience working with counterparts in the other country and thus are not familiar with the respective markets’ legal regulations and standard business practices, in addition to dealing with linguistic barriers. Therefore, ASAP will continue to work closely to facilitate successful ongoing maintenance and, hopefully, expansion of these newly formed linkages.

Linkages in Progress

The following linkages are at an earlier stage in their development. While ASAP has made initial contacts with the U.S. partners, and in the first two cases has procured some of their items for project implementation purposes, work to establish active linkages directly with Azerbaijani partners ins ongoing:

• The Irrometer Company: This U.S. company manufactures some of the world’s most accurate equipment for measuring soil moisture for irrigation timing purposes. ASAP has purchased some of these instruments and, having seen them work, some ASAP partners have purchased their own through the nearest distributor in Israel. ASAP has been in touch with the firm’s owner who is now planning a tour of the region in late October. The owner has committed to coming to Baku to locate a regional distributor. ASAP will schedule meetings with prospective distributors who can help penetrate the Azerbaijan market (and, possibly, Central Asian markets via Azerbaijan as well); • Spectrum Technologies: This American company produces many highly valuable and rare field instruments for measuring soil and water pH, salinity, weather stations and many more instruments that ASAP has introduced to the farmers of Azerbaijan. ASAP is now in touch with the Sales Manager for eastern Europe and other areas. The company is very interested in establishing distribution in Azerbaijan that would also include other regional countries; and • IFG Grape Nursery: This U.S. company based in Bakersfield, California is an international grape nursery that has distribution rights for a very unique table grape variety. One of ASAP’s recipients wishes to purchase approximately 30,000 cuttings that would allow him to produce this rare grape primarily for the high-value export market. Currently, the company dedicates the majority of its production to long-time California customers. Due to intellectual property concerns, the company has been reluctant to agree to sales to Azerbaijan. ASAP has been in touch with the U.S. Embassy’s Commercial Section for assistance in addressing IFG’s concerns. CNFA AID-112-C-14-00001 72

Prospective Linkages

The following U.S. linkage prospects have been identified as of great need for the successful further development of Azerbaijani agriculture. ASAP will expend major effort in establishing contact with decisionmakers in these firms, identifying Azerbaijani agribusinesses and input dealers that might be appropriate local partners, and working to initiate collaboration between these prospective partners:

• Lorenzo Manufacturing: This firm manufactures a “furrow-diking” implement that is pulled behind a tractor and creates small dikes that store water, thereby giving water time to infiltrate the soil, thus improving irrigation efficiency and crop yields on uneven row crop land. It reduces soil erosion and reduces salinity problems. Agrotexnika/John Deere is the targeted distributor. This has been discussed with the company and it is interested; • Nidec Company (U.S. Motors): This firm produces vertical irrigation motors and vertical pumps for these motors. There are two parts involved in getting water to the surface of an irrigation well. The vertical pump is in the ground and the motor provides the power. Those units in use in Azerbaijan today are of low quality and short working life. While in California, ASAP’s participants discussed this with several farmers who recommended this company for vertical irrigation motors. ASAP has submitted an application on the part of a beneficiary’s company, Uzum Baglari LLC; • Pioneer Seeds: Several Azerbaijani grain producers require some of Pioneer’s non-GMO hybrid seeds; • Providers of non-GMO cotton, small grain, and corn seed: Texas A&M University (TAMU) is advising on this linkage need. Most seed used in Azerbaijan is older and, in many cases, mislabeled and carries a destructive fungal disease in corn. Both Gilan and PMD are working with TAMU to recommend the varieties that best fit Azerbaijan’s growing conditions; • Providers of Strawberry raised bed and plastic mulch application units: There are several manufacturers of these units in the U.S. They simultaneously build a raised bed and apply plastic mulch for open field strawberry producers. The practice is being done in Azerbaijan, but currently requires a great deal of hand labor. This innovation will allow a single farmer to plant faster, build a more uniform raised bed, and apply mulch in a single operation. Strawberry farmers are interested in acquiring the unit. ASAP will also seek candidates for becoming a distributor of this equipment; • Valent Biosciences: This firm manufactures several very special plant growth regulators that are badly needed in Azerbaijan’s orchard and vineyard sectors. These products control several key metabolic functions in fruit. For apples, some thin the fruit without hand labor, while another stops maturity on the tree so that the fruit can be harvested without risk of over-ripening. In cherries, the product makes fruit larger and prevents splitting. In grapes, the fruit is larger and separated on the cluster, which reduces CNFA AID-112-C-14-00001 73

diseases. Valent BioSciences Corporation (VBC) is one of the best agrochemical manufacturers in the world. It has a thorough and extensive process for acquiring a distributorship. Therefore, the selection of the company to represent VBC is extremely important. Several Azerbaijani individuals and companies have expressed interest in the distributorship; • Valley Irrigation: This Nebraska-based manufacturer of low-energy precise application (LEPA) irrigation systems has representation in Azerbaijan but has not introduced this system yet. The system is designed for use in areas with high winds and limited irrigation water, which would make it ideal for the Azerbaijani market; and • WinField Solutions: This subsidiary of Land O’Lakes is a distributor of many badly needed herbicides, insecticides, and fungicides especially oriented for cotton and grains from wheat to corn and soybeans. The lack of access to several of these products is very high because they pass through several brokers and wholesalers before arriving in Azerbaijan. Many of these products are diluted, re-labeled or out of date. All of these issues cause trouble for both farmers and input suppliers. Others are simply not available, even though they are registered for use in Azerbaijan. Several groups have approached ASAP to request help in securing a distribution agreement for these products. AgroCenter and AzTexnika are currently the most credible prospective partners. This is a negotiation that will require the support of the U.S. Embassy’s Commercial Section and the Ministry of Agriculture.

Proposed U.S. Linkages Implementation Strategy

There is clearly cause for optimism for ASAP’s U.S. Linkages initiative, just as there are significant obstacles to be overcome. When potential partners are considering contractual obligations, there are concerns on their part for:

• Intellectual property protection • Contract enforcement guarantees • Market size • High shipping costs • Demurrage fees during busy shipping seasons • Banking arrangements • Adherence to the FCPA (Foreign Corrupt Practices Act) • The legal registration of crop inputs ranging from seed varieties to formulations of fertilizers and new biological and organically certified crop inputs

ASAP shares these concerns and is actively engaged in assisting several companies in navigating these issues. Now that the U.S. Embassy’s Commercial Attaché is assisting these efforts, resolving these issues may be quicker. A list of potential US companies has been sent to the

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Commercial Section and the process for rapidly completing the profiles of these companies as well as the due diligence process for potential Azerbaijani companies is being developed.

In order to accomplish these aggressive goals in PY5, staff re-alignments have been made and a process for moving all of these potential linkages has been designed. First, each VC Manager will actively solicit ideas from their contacts in the field. These requests will be processed by a team that will devote approximately 40% of their time to these activities. That team will consist of the Agribusiness Advisor, the Quality Standards and Certification Specialist, the Berry, Hazelnut, Pomegranate, and Vegetable VC Managers, as well as the Monitoring and Evaluation Specialist, as her time permits.

The process broadly consists of:

• The identification of U.S. companies that are interested in expanding operations into Azerbaijan; • The identification of appropriate Azerbaijani companies that are interested in distribution contracts with these U.S. firms; • Providing the Commercial Section of the U.S. Embassy with the Due Diligence information that the section has specified; • Providing the Commercial Section with a profile and contact information of the U.S. company; • The Commercial Section making contact with the U.S. company to provide assurances that the U.S. Embassy and USAID supporting the business discussion; • Mapping the approval process within Azerbaijan for new products, such as fertilizers; • Securing a minimum of six distributorships between Azerbaijani and US companies during the PY 5 period; • Developing training materials for the new products that will be distributed from the U.S. companies. Assisting in training of new distributors where needed; and • Promoting the new products through the field work of ASAP’s agronomists and program staff.

U.S. Linkages International Short-Term Technical Assistance (STTA) Component

In addition to utilizing ASAP’s in-country staff resources, ASAP will also tap into resources from the U.S. Global Development Lab to facilitate the establishment of U.S. linkages and the reorientation of Azerbaijani exports away from Russia and toward the European Union, Gulf Countries, and other alternative markets. With its $100,000 in funding from the U.S. Global Development Lab, USAID’s “innovation hub,” ASAP will bring at least four international experts to Azerbaijan for short-term technical assistance (STTA) assignments to share their technical expertise and international networks with ASAP staff, implementation partners, and

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beneficiaries alike. In so doing, these experts will help ASAP to address the Global Development Lab’s five core objectives: Science, Technology, Innovation, Partnership, and Cross-Cutting Activities.

ASAP will seek leading international experts to conduct the four following STTA assignments:

• U.S. Agribusiness Technologies Expert: This consultant will have a strong background in innovative new U.S. agribusiness technologies, as well as an extensive network of contacts with U.S. agribusiness equipment, machinery, inputs, and ICT manufacturers and dealers. The role of the expert will be to meet with project staff as well as input dealers and leading producers and processors to gain insight into Azerbaijani agribusiness’s perceived needs for innovation in their operations, inform them about relevant technologies and their U.S. manufacturers and dealers, as well as facilitate introductions between the prospective Azerbaijani and American business partners. Through both individual meetings and focus groups held in Azerbaijan, the expert will try to gain a broad understanding of Azerbaijani agribusiness needs and assist individual ASAP beneficiaries with their specific interests. The consultant will also support ASAP’s program staff to refine its strategy for facilitating the establishment of new U.S. agribusiness linkages with the country’s needs more broadly. • U.S.-Azerbaijan Trade Facilitation Expert: As ASAP has discovered through its work in this area to date, establishing a linkage between a U.S. supplier and an interested prospective Azerbaijani buyer, whether for the latter’s own needs or onward distribution, is only the first step in facilitating a successful ongoing business relationship. Administrative, economic, intellectual-property-related, logistical, phytosanitary, and other official and unofficial trade barriers all complicate the ability of Azerbaijani agribusinesses to access innovative American technologies. Although the U.S. Commercial Service and the Economic Section of the U.S. Embassy in Baku can and do provide an array of services to American exporters and their prospective foreign customers, this proposed STTA would enable the develop of a manual oriented toward both of these audiences to help them, first, better understand the landscape that the respective parties must navigate in order to successfully export from the U.S. and import machinery, equipment, plant material, and other agribusiness-related goods and technologies into Azerbaijan. Second, because Azerbaijan is an unfamiliar market to many U.S. agribusinesses, this manual would help educate them on the intellectual property protections in place and the existing U.S. agribusiness firms that are already active there, thus demonstrating that some major U.S. agribusiness players have completed due diligence and concluded that it is possible to do business and manage such risks in the country. Through individual meetings and focus groups held in Azerbaijan with project staff, beneficiaries, partners, and, if possible, Azerbaijani government officials, the expert will try to gain a broad understanding of obstacles to successful trade

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linkages. The consultant will also support ASAP’s program staff to refine its strategy for assisting in the ongoing maintenance of newly established U.S. agribusiness linkages. • European Union Agricultural Markets Expert: The traditional Azerbaijani markets of Russia and other countries of the former Soviet Union (FSU) have long provided a key destination for the country’s produce exports. The size and relative accessibility of these markets, however, are a two-edged sword in the sense that they have made Azerbaijani overly reliant on a low-paying market to which access sometimes depends on political factors rather than issues that producers can control, such as quality. By helping Azerbaijani agribusiness reduce this reliance on regional markets, particularly that of Russia, ASAP can reduce the overwhelming economic and political leverage and thus potentially malign influence that the Kremlin can have on those countries it still considers to be in its own sphere of influence rather than full-fledged independent states. While ASAP has facilitated significant results to date in helping Azerbaijani exporters diversify away from Russia and other FSU markets, particularly in the Hazelnut VC, there remains great untapped potential for exports of berries, pomegranates, and other Azerbaijani produce. The proposed expert would help 1) identify the Azerbaijani produce that offers the greatest potential for breaking into EU markets or expanding existing exports, 2) provide ASAP and its beneficiaries with practical information on the quality and logistical requirements of reaching those markets and recommendations on the improvements that beneficiary producers would need to implement to do so, and 3) introduce select ASAP beneficiaries to real potential wholesalers and other potential buyers in the EU. • Gulf Agricultural Markets Expert: The developed countries of the Gulf, as well as their closest regional trade partners, also offer Azerbaijan real prospects for diversifying exports away from Russia and elsewhere in the FSU. The size and relative accessibility of these markets, however, are a two-edged sword in the sense that they have made Azerbaijani overly reliant on a low-paying market to which access sometimes depends on political factors rather than issues that producers can control, such as quality. As with the EU market, ASAP has facilitated significant results to date in Azerbaijani exporters penetrating the Gulf markets, there remains great untapped potential. Likewise, the proposed expert would help 1) identify the Azerbaijani produce that offers the greatest potential for breaking into Gulf markets or expanding existing exports, 2) provide ASAP and its beneficiaries with practical information on the quality and logistical requirements of reaching those markets and recommendations on the improvements that beneficiary producers would need to implement to do so, and 3) introduce select ASAP beneficiaries to real potential wholesalers and other potential buyers in the Gulf.

As indicated in the proposed Global Development Lab budget provided in Annex H, the level of effort (LOE) for the aforementioned STTA assignments would average 14 days, including 11 days in country, 2 travel days, and 1 day for report writing. In addition to covering the consulting and costs of travel to and inside Azerbaijan for the consultants, ASAP’s Global CNFA AID-112-C-14-00001 77

Development Lab funding would cover some limited costs for hosting group discussions with Azerbaijani agribusiness stakeholders to solicit their input and, at the end of the assignments, to present the findings and recommendations.

As a result of these efforts, ASAP anticipates achieving the following deliverables and targets:

• New U.S. Linkages Agreements Signed: Purchase and distributorship agreements worth at least $500,000 will be signed between U.S. agribusiness manufacturers and suppliers on one side and Azerbaijani buyers and dealers on the other side; • Exporting/Importing Manual Developed: A manual will be developed and distributed with information on navigating U.S. export and Azerbaijani import regulations for American-manufactured or branded agribusiness machinery, equipment, plant materials and other inputs, as well as overview of Azerbaijani intellectual property protections in place and list of existing U.S. agribusiness firms and distributorships already active in the country; • Presentations of Export Findings Held: At least four presentations will be held for interested stakeholders on the findings of the international experts fielded in Azerbaijan through this program component; • Introduction of New Azerbaijani Exports to the EU Markets: At least three Azerbaijani agribusinesses will export new products to EU markets for the first time; and • Introduction of New Azerbaijani Exports to Gulf Markets: At least three Azerbaijani agribusinesses will export new products to Gulf markets for the first time.

Preventing Violent Extremism (PVE)

The overall objectives of ASAP’s PVE element of the PY5 Workplan are to mitigate the “push” factors and thereby supersede the “pull” factors that may make VE seem attractive. The push factors are those associated with problems such as poverty, unemployment, corruption, and an inability to participate with the mainstream national society. (The “pull” factors, which ASAP is not in a position to directly address, are more complex and often in the hands of foreign actors that seek to gain influence over vulnerable individuals by offering them apparent economic opportunities abroad or a sense of meaning or purpose at odds with the interests of a safe, secure, and harmonious society.)

During PY5, ASAP will expand its activities into and within the northern, northwestern, and southern regions deemed most vulnerable to the pull of VE. While ASAP does not implement PVE activities per se, its economic development activities all address PVE “push” factors, CNFA AID-112-C-14-00001 78

specifically by helping to increase incomes, expand employment opportunities, and integrate individuals into the formal economy. As small landholders are empowered to increase their incomes through higher farm yields and/or employment in other farming or processing operations, work together with fellow community members on joint economic activities, or to integrate into the regional or national economy through accessing markets, communities are brought closer to mainstream society and gain respect without endangering family and community. Thus, economic and social empowerment can lead to strengthened community resiliency.

Proposed PY5 activities that are most likely to also serve a PVE purpose include:

• Demo Plots: ASAP has already established Demo Plots in all of the aforementioned regions. Currently, the main technologies in the north and northwest are of Russian origin while in the south the Iranian influence is strong. By utilizing existing ASAP Demo Plots as training sites for growers of the same crops from vulnerable communities, the Project will help empower agronomic improvement and potentially establish new linkages with more mainstream economic actors that host existing demos and, in many cases, also are engaged in procurement, processing, and/or exporting of other growers’ production. ASAP will also consider establishing new demonstrations in vulnerable communities and supplementing the TA with the provision of appropriate tools to help implement the improved cultivation methods being demonstrated. • Group Trainings: Trainings in modern cultivation practices for groups of local growers will be increasingly targeted at growers in vulnerable communities, and may be supplemented by the provision of appropriate tools to help implement the improved cultivation methods being taught. In all, ASAP plans to train at least 2,000 growers in these regions from among the vegetable, berry and orchard value chains; • Technology Transfer Fund (TTF) Assistance: Matching funding for the acquisition of new U.S. or other modern US machinery, equipment, or inputs. In some cases, establishing community-based flash coolers or collection and packing centers could be particularly effective interventions. This concept has several advantages. First, these are very profitable and could raise the standard of living of the community members much more quickly than could other horticultural interventions. Second, the joint aspect of such activities can bring community members together into a mainstream economic activity, ideally around a respected member of the community rather than a disenfranchised actor or foreign national. Because of the limited economic resources in such communities, however, ASAP would require a substantially lower level of matching investment on behalf of the beneficiaries than in typical TTF projects; • Business Service Provider (BSP) Assistance: Work could include both building capacity of local BSPs and supporting their assistance to local growers. During PY4, ASAP began working with two BSPs in the Southern Region which have experience in working with farmer groups, communities and international projects. ASAP will continue utilizing the CNFA AID-112-C-14-00001 79

BSPs’ local credibility to reach vulnerable populations in the South and provide alternatives to potentially malign influence from across the border in these regions; • International STTA: ASAP plans to reengage an internationally recognized expert in strawberry production, on at least one STTA assignment during PY5, which will include training and TA provision in the country’s southern region;

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Result One: Improved Commercial Linkages Between US and Azerbaijani Businesses Responsible Activity Description Staff Member/ Timeframe Additional Resources Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 1 John Deere, Azerbaijan Increase sales of John Deere, Azerbaijan Agribusiness 1.1 through technical training by US Agronomist Advisor / STTA of JD staff and customers agronomists Agribusiness Support the Azerbaijan State University and 1.2 Advisor / STTA the Cotton Growth Research Institute agronomists Agribusiness Engage a water salinity expert to develop 1.3 Advisor / STTA national mitigation strategy agronomists 2 US/Azerbaijani Partnership Agreements Connect US manufacturers of products ASAP Staff 2.1 needed in Azerbaijan with AZ businesses Identified needed Products: ASAP Staff • Cotton gins • Seed cotton, grain and vegetable seeds 2.2 • Specialty fertilizers • Adjuvants • Specialty equipment

Cotton STTA to US for John Deere staff and 2.3 ASAP Staff key customers

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BSP Technical Assistance Matching Fund

During PY5, ASAP will continue to offer its beneficiaries the opportunity to apply for assistance from the Business Service Providers Technical Assistance Matching Fund. Through the program, BSPs are selected on a competitive basis to provide technical assistance (TA) to the project's beneficiary agribusinesses for specific assignments proposed by client agribusinesses in ASAP's value chains. The selected BSPs are contracted by ASAP for a specific assignment and paid in installments based on concrete deliverables. In order to facilitate the selection of the best local technical specialists to provide the TA and ensure that they represent the best value for money, both BSPs and individual consultants are eligible to submit bids to provide the requested technical assistance through the program.

While demand for BSP TA Matching Fund assistance has been more limited than previously anticipated, several potential BSP assignments for support by the TA Matching Fund in PY5 are indicated in Annex E of the present Work Plan. They include possible requests for support for the development of hazelnut branding and marketing promotional materials and for auditing hazelnut growers for international organic certification.

The table below indicates the proposed ASAP matching subsidy for various categories of TA assignments.

Technical Assistance Matching Fund Table:

Type of assistance ASAP Benefic Female cost iary beneficiary share cost cost share share Website development, business cards, brochures, 40-50% 60% 50% information leaflets Packaging, Label development 40-50% 60% 50% Business/marketing plan development, audit reports 50-60% 50% 40% Field study, market analysis, feasibility study 60-70% 40% 30% Pre-certification audit (food safety and quality management) 40-50% 60% 50% Year 1 certification (food safety and quality management) 60-70% 40% 30% Finding new buyers, new export markets 50-60% 50% 40% Environmental assessments (Azerbaijani government- 60-70% 40% 30% mandated)

Technology Transfer Fund

Agricultural equipment and technology are expensive capital items and there are many internal 82 CNFA AID-112-C-14-00001

barriers to increased use of technology that ASAP wishes to address. Processing equipment, equipment for standardization of product and packaging, cold chain installations and use, and modern irrigation equipment are some of the potential need that could be met under ASAP’s Grants-Under-Contract mechanism, the Technology Transfer Fund (TTF). During PY5, the Program will continue to catalyze investments that will both improve production and processing in recipient operations and serve as a wider demonstration of the economic, environmental, and other benefits that can be leveraged from the adoption of technical and technological innovations. The Fund will assist growers, processors, and exporters to identify and finance the procurement of improved technology that will increase and improve production, with a particular emphasis on expanding exports of Azerbaijani agricultural goods.

Technology Transfer Fund investments match a beneficiary’s investment in a new technology package or upgrade, with ASAP’s contribution representing up to 1/3 of the total costs, up to a maximum average project contribution of $65,000 per investment. Unlike a traditional grants program, ASAP provides direct matching financial support to make payment to vendors for modern equipment and machinery procurement, rather than provide funds directly to beneficiaries. ASAP determines the actions with the most positive probable return and focuses on the root cause of failures in the agricultural export chains. These determinations are made in each case by project staff, bolstered when appropriate by local consultants and BSP firms dedicated to work in specific areas.

ASAP investments are awarded on a competitive basis. Although it was anticipated early on that calls for applications would be issued publicly at regular intervals to solicit the development and submission of proposals, this has not been possible in the absence of legal registration for the project and given the enabling environment for grant-making. Instead, in order to maintain its low profile, ASAP has drafted calls for applications that it has disseminated directly and privately to multiple project beneficiaries. Priorities for calls for applications include specific technologies that are lacking in Azerbaijan that could help agribusinesses either exploit high- potential opportunities or address common constraints. ASAP is especially, but not exclusively, interested in supporting applications from agribusiness beneficiaries meeting the following requirements:

• The business is viable as evidenced by financial analysis; • The agribusiness has sufficient resources and experience; this is reflected in the preference that the beneficiary have 1 million AZN in annual sales prior to assistance (high-potential businesses with sound expansion plans may also be considered, even if they have not yet achieved this level of revenue); • ASAP will analyze and choose the most viable proponents with experience and resources to bring their production and export technologies up to international standards. ASAP 83 CNFA AID-112-C-14-00001

will not be engaged in new product development or green-field operations, but will focus on assisting existing agribusiness with hurdles that prevent them from self-help as well as reducing the time it takes for new technology to become familiar and widely used.

During PY5, ASAP will complete implementation of ongoing TTF projects and review for approval a limited number of new applications for matching support from the remaining balance of the project’s $1.15 million Tech Transfer Fund. ASAP will endeavor to complete implementation of all TTF projects by March 31, 2019. A list of anticipated new TTF projects for PY5 is provided in Annex A of this Work Plan.

As ASAP conducts its final full year of implementation, it will also complete the formal closeout of all active TTF projects. This closeout effort began in PY 4 and will be completed by May 31, 2019. All grant closeouts are conducted in accordance with 2 CFR 200 and the requirements in ADS 302sat, Guidance on Closeout procedures for A&A awards. The ASAP team visits all TTF beneficiaries to ensure that equipment purchased under TTF agreements is used properly and the beneficiaries have fulfilled their obligations under the agreements, including submitting TTF Completion Reports. After these field visits, ASAP prepares an Action Memo for submission to USAID requesting approval for property disposition. After gaining approval, ASAP signs a Deed of Donation Certificate with the beneficiaries and finalizes all required paperwork to complete the projects.

Access to Finance

Azerbaijan underwent two sharp devaluations of the national currency in 2015, leading to an overall 100% decrease in the exchange rate of the Azerbaijani manat (AZN) against the U.S. dollar (USD), from 0.78 AZN/USD to 1.55 AZN/USD. Later, the Central Bank of Azerbaijan announced a move from a fixed exchange rate to a floating exchange rate and the soft devaluation of the manat continued. Since April 2017, the actual exchange rate has stabilized at around 1.7 AZN/USD.

The devaluation had a negative impact, above all, on the financial sector. Difficulties in paying back foreign currency loans depleted assets in the banking sector. Every third bank operating in the country was closed by the regulator and left the market. The International Bank of Azerbaijan (IBAR), the country’s largest bank, which accounts for 40% of the banking sector, faced the danger of bankruptcy. The state was required to spend billions of manats to improve a significant share of the bank's assets and took over the bank's foreign debt obligations. Although the state provided some support to other banks, it did not help banks and borrowers to pay off foreign currency loans. As a result, banks' problem loan portfolios grew quickly, destabilizing the financial sector.

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According to official statistics, major economic indicators in the banking sector worsened over the first half of 2018. As bank lending decreases, it is reflected in banks’ income from lending. According to the Central Bank of Azerbaijan, the amount of bank loans to customers decreased by 3.8 million manats (28%) in the first quarter of 2018 compared to the same period of last year. This was accompanied by a 30% decrease in banks’ income from lending. Banks’ non-interest income also decreased by 2.4 times (150 million AZN). This is related to the fact that banks’ currency exchange operations have decreased since the manat’s rate has been stable.

During PY5, ASAP will continue providing assistance to selected agribusinesses in business planning, drafting brief project profiles, identifying potential lenders and investors, and applying for loans as well as trade finance products. At the same time, the project will work with beneficiaries to help ensure that the debt that they do take on will be manageable and not put them at a dangerous risk of default.

In this difficult economic environment, both clients and investors need guidance on financing options and ASAP will continue to provide this assistance. Besides linking agribusinesses to finance providers and helping them plan and apply for credit, the project will pay special attention to the building of clients' technical capability and increase their practical knowledge in the areas of business planning and cost/benefit analysis.

Agribusiness must make choices every day in a such a changing economic environment. Some decisions have vital consequences for the farm business, while others are not as crucial. The choices made today may have an immediate impact on the business, or they may take much longer to have an effect. These decisions may involve any facet of the farm business, including such items as production, personnel, or financing. To do this, agribusiness managers need decision frameworks to analyze the relevant tradeoffs and determine the viability of enterprises. During PY5, ASAP will provide agribusiness with a basis for analyzing a wide range of financial data for effective management of their own as well as borrowed funds. Also, the project will begin translating into Azerbaijani and distributing to interested beneficiaries the periodic reports it drafts on the Azerbaijani economy, currency forecasts, the finance and lending environment, as well as the availability of noncommercial financial resources.

Finally, during the PY5 ASAP will have more focus on ICT (Information and communication technology) application in agriculture by taking the information on interesting and potentially relevant technologies to medium to large-scale agribusinesses that might consider adopting these technologies. The advancement in ICT can be utilized for providing accurate, timely, relevant information and services to the farmers, thereby facilitating an environment for more remunerative agriculture. Many ICT interventions have been developed and tested around the

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world, with varied degrees of success, to help agriculturists improve their livelihoods through increased agricultural productivity and incomes, and reduction in risks, e.g. smartphone technology is ideal for farm applications, since cellular connections are the easiest and most cost- effective way to provide data access in the field. Using cloud-based agricultural services gives farmers access to vital information anywhere at any time. ASAP will examine relevant products of ag-startups and companies for introducing to Project beneficiaries and making linkages.

Food Safety and Quality Standards and Certification

Increased awareness of and adherence to internationally recognized Quality and Food Safety Standards is essential from the standpoint of both health and sales. Modern consumers and developed markets increasingly demand assurance not only that specific products meet those standards, but that management systems for the entire production, processing, and handling chains are in place to prevent product contamination and deterioration, and to detect and rectify problems when unexpected events occur. ASAP’s Quality Standards and Certification Specialist will follow up on previous efforts to assist interested beneficiaries to modify existing facilities to bring them closer to being, or design new facilities to be, in compliance with HAACP, ISO, GlobalG.A.P., SA8000, and other standards. One quite promising new standard type for Azerbaijani growers is organic certification, as this certification is in increased demand in international markets, particularly in Europe. Therefore, ASAP will utilize its in-house capacity to provide initial training and consultations in meeting organic standards during PY5. Late in PY4, ASAP began assisting a local agribusiness holding that is planning to initiate organic meat and dairy production to examine the feasibility of the proposed site for this operation, as well as to identify an appropriate international organic consultant and develop a scope of work for the initial assignment, which would be financed fully by the Azerbaijani agribusiness. In all of its food safety and quality activities, ASAP’s focus will be on practical improvements in facilities and operations that will have a positive impact on product safety and quality, not simply on formal certification. Below, divided by value chain, are the enterprises to which ASAP anticipates providing continued or new assistance in quality and food safety standards:

Berry VC: In PY5, ASAP plans to expand its efforts to include at least one new beneficiary (Vatan-AZ LLC) to provide with food quality and safety assistance, specifically in the GlobalG.A.P. standard.

Orchard VC: In PY4, a beneficiary with a large orchard near Ganja was provided with GlobalG.A.P. training and an initial audit of the site’s compliance with GlobalG.A.P. requirements. During PY5, ASAP will continue its TA and training for this enterprise. His goal is final certification.

Hazelnut VC: In PY4, ASAP worked intensively with hazelnut processors that 86 CNFA AID-112-C-14-00001

overhauled their facilities, including major reconstruction and renovation works, to comply with ASAP recommendations. In PY5, ASAP plans to expand its efforts to include at least two more hazelnut processors.

Pomegranate VC: ASAP conducted a group training with Red Valley LLC and developed procedures for implementation of GlobalG.A.P. In PY5, ASAP plans to expand its efforts to include at least two new beneficiaries (pomegranate growers Ekinchi LLC and Mabat LLC) to provide food quality and safety assistance.

Other Cross-Cutting Considerations

Microenterprise Assistance & Reporting: Since 1996, USAID has been required to report to Congress on assistance to micro-enterprises. For its part, ASAP is responsible for providing assistance and reporting on it for a current microenterprise assistance earmark of $289,331, which is the same as it has been in recent years. According to the USAID definition, “a microenterprise is one that has 10 or fewer workers, including the micro-entrepreneur and any unpaid family workers.” ASAP reports as required through the USAID microenterprise reporting system. In December 2017, ASAP submitted its latest USAID Microenterprise Results Report (MRR) for 2017, which details its assistance to microenterprises. ASAP assistance to microenterprises is focused primarily on its work with farmers under Result 2 of its activity, which reached at least 1800 microenterprises during PY4 through the end of August 2018. Under the training plan for PY5 that ASAP has included in Annex G of the present Work Plan, the project plans to provide group trainings to at least 2445 individuals.

Gender: Although the majority of agricultural workers in Azerbaijan are female, ownership and management are predominantly male. In order to encourage inclusive enterprise development, ASAP invites men and women to participate in all program activities. All agribusinesses in Result 1 are required to outline in their TTF and BSP Matching Fund applications how female owners, managers, or employees will benefit from the requested assistance and receive additional points in the scoring process for enterprises owned by, managed by, or benefiting women. Due to difficulties in achieving its desired minimum of 25% women among its direct Result 2 program beneficiaries (employees and farmers trained), during PY4 ASAP began holding some women- only trainings to encourage more female participation. This effort will continue in PY5. In addition, one possible new activity during PY5 will be specifically targeted toward women:

• Jute Bag Sewing Project. ASAP will actively look for opportunities to support woman engaged in business. One possible direction is to promote woman-owned jute bag production. Currently, there is no local production of the jute bags, which are vital for safe and healthy hazelnut storage, but currently imported from abroad. Establishment of a

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jute bag operation could address the shortage of storage bags for farmers and lower costs, while creating a new small-sized business opportunity for one or more women to operate. (See section IV.a. of the present Work Plan for more details.) • Women’s Grafting Project- Currently the fruit nursery industry relies on groups of women who travel to the nurseries and conduct thousands of grafts each season. Their equipment is badly outdated and many of their methods are as well. Improving their skills and providing modern grafting equipment with training in their use would increase their profitability since they can work more quickly, and they are paid per graft. This would also improve the rate of successful grafts which will in turn benefit the nursery owners.

Youth: In its programming, ASAP places a special emphasis on providing support to youth, which suffer from particularly high levels of unemployment in rural parts of Azerbaijan and can be particularly vulnerable to the lure of Violent Extremism. During PY4, to help monitor the degree to which the Project was reaching this target group, ASAP developed a database of its training and technical assistance recipients to better measure, among other factors, the composition of youth among beneficiaries. It has also developed one actual and two potential activities to specifically target this population:

• Student Training: As Azerbaijan becomes increasingly urbanized and rural populations fall, it will become ever harder for agribusinesses to identify and engage qualified workers. As it is, agronomic knowledge in the sector is low, and even those with formal agricultural qualification from the country’s only agrarian institute of higher learning, Azerbaijan State Agricultural University (ASAU), often lack practical skills. To help address this problem, in PY4 began to collaborate with ASAU and local training provider AgroCenter to host both field days and classroom trainings in the facilities of its agronomist to help provide more practical, hands-on training to complement the more formal theoretical knowledge that ASAU imparts to its students. In PY5, it will continue these efforts. • Agronomy Youth Education Program: Preparing young people to work in an industry is crucial for its sustainability and long-term development, especially in agriculture. ASAP’s existing Student Training could be expanded to incorporate new capacity- building activities, such as a) collaborating with large international agricultural corporations like AgriGeorgia/Ferrero to provide hands-on training or internships to Azerbaijani students; b) facilitating regional trips to Turkey and Georgia to hold classroom and field- based trainings from the sector; and c) engaging young trainees in AHPEA or other agricultural associations’ activities to expose them to and educate them on the dynamics of the industry in which its members are active. Over the long term, participants could even be supported through training and equipment support to provide private agronomic machinery services to small enterprises that cannot afford their own 88 CNFA AID-112-C-14-00001

full-time agronomist or to purchase their own cultivation equipment. The deliverable of such an activity could be a group of young agronomists who would be positioned to offer quality services to players in an industry in which agronomic expertise is so lacking and often dependent on foreign experts. While this activity is no likely to be feasible given ASAP’s limited remaining duration and funding, the Project will nevertheless seek opportunities to expand on the aforementioned Student Training assistance where it can for particularly bright and motivated ASAU students. • Supporting Youth Engagement: ASAP is well positioned to involve youth into an income generating project. Project recipients tend to have young family members who could be supplied with “starter project” ranging from training and the materials for a back yard strawberry plot to a short grape vineyard or young hazelnut or fruit trees with tools and plants. This technique has been used with great success in the rural US under the title of “The 4-H Club”. These are frequently made competitive with community awards and recognition for the best project. The ASAP Certifications and PVE manager will go into these communities and discuss the concept within the communities. Based on the crops that they grow and their interests the project will be designed that is specific to that community. Then, various topics will be taught such as budgeting, soil science etc. as the year progresses. He will naturally be assisted by the local agronomist and other ASAP staff as appropriate.

ICT: ASAP continues to seek opportunities to utilize and introduce ICT innovations in its operations and programming. In PY5, the Project will continue monitoring the previously procured portable plant growth stations and weather monitors to measure and record production at selected Demo Plot as well as weather conditions. ASAP will train its newest agronomist consultants in the installation and use of these devices to alert growers of potential problems, as well as record and collect growth and meteorological data, which can be downloaded to a computer or smartphone for analysis and combining with data from other devices to generate climate data that is not currently available to growers in order to help them improve their decision making.

One of the challenges resulting from the project’s lack of legal registration has been the reduced ability to expand public awareness of ASAP’s activities and accomplishments. Although ASAP remains unregistered at the end of PY4, there has been increasingly active interaction with the Ministry of Justice as the year draws to a close and increasing optimism that registration may be granted in PY5. Once it is legally registered and able to raise its profile, ASAP will begin utilizing ICT in its operations and promotional efforts as well. Potential efforts include the use of a program website to disseminate application forms and calls for EOIs, production of television or radio content to provide vital agricultural cultivation and marketing information to a wider audience, and the development of smartphone or other computerized applications for widespread

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dissemination of information on identification of pests, management of cold storage equipment, and online publication of directories of business and extension service providers.

Some steps in this direction on a limited private basis were taken during PY4. In November 2017, ASAP facilitated a study tour to visit the U.S. hazelnut industry in Oregon for a group of 13 hazelnut producers, two agronomists, and three ASAP staff. To make communications for travel and logistics preparations more efficient, ASAP created a WhatsApp group called “Oregon” for all of the participants. Due to its usefulness and popularity, upon return to Azerbaijan ASAP gave administrator rights to three participants of the group and they decided to rename the group “AHPEA,” the initials of the hazelnut association. Six months later, the group is still very active, and the platform is used to exchange news, ideas, latest world prices, new equipment, and available technology. Building on this success, ASAP will consider creating similar groups for its other targeted value chains, likely starting with the Pomegranate VC, which would focus on sharing regular technical recommendations, pest alerts, and recommendations on sound IPM practices.

Environment: CNFA will continue to ensure that it continues to adhere to USAID environmental regulations contained in 22 CFR 216 and ADS Parts 201.5.10g and 204 while implementing its agricultural assistance activities. ASAP will continue to design, implement, and monitor environmental safeguards in all aspects of project implementation, and will comply with both USAID and host country environmental regulations.

Per the approved IEE (DCN:2013-AZB-002), prior to initiating activities that have the potential to result in significant environmental, social, health and safety impact, ASAP completes an Environmental Review Checklist to Identify Potential Environmental Impacts of Project Activities and Processes (ERC) for USAID approval. Early in the project, ASAP developed an Environmental Review (ER) checklist to screen and gain approvals for grant proposals, develop mitigation measures, and specify monitoring and reporting, including progress on environmental compliance.

The ERC preparation process is valuable from beneficiaries’ environmental awareness point of view as well. During the implementation process, beneficiaries consider the situation from health, safety, environmental, and social perspectives. During PY5, at the end of each project, the Environmental Compliance Expert will continue to draft and submit activity-specific Records of Compliance (ROC), based on field visits to beneficiaries, to certify that the organization met all conditions of the ERC and Environmental Management and Monitoring Plan (EMMP). Comprehensive updates on the status of ERCs and ROCs are included in every monthly, quarterly, and annual report. ASAP also submits a standalone biweekly status report to the USAID/Azerbaijan environmental compliance focal point.

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Internally, ASAP will also emphasize during PY5 implementation of office waste management processes like recycling and/or proper disposal of paper and printer cartridge wastes. Waste paper that cannot be reused further internally will be transported to local a recycling company and cartridges will be sent to a local repair company that reuses them to repair or refill other cartridges for continued use.

Finally, in PY5 the ASAP will update, as required, the existing Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP). The PERSUAP was initially submitted to USAID in PY1, but updated each year and formally amended in September 2017.

Collaboration with Other Assistance Efforts: In order to avoid overlap and better utilize its resources, ASAP will continue to coordinate with other relevant USAID activities, as well as those funded by other donors.

ASAP and the USAID Socio Economic Development Activity (SEDA) will continue to meet periodically to update one another on developments within the projects, as well as to work on specific joint projects in the North, Northwest, and South of the country, such as the irrigation project in Khaspoladoba, Khachmaz rayon and the potential fruit drying project in Aliabad, Zagatala rayon. In other areas it will also work to identify communities that could benefit from an integrated agricultural development activity to be implemented on a community level. Each project will bring its own resources to the activity, as SEDA will focus on community mobilization and basic infrastructure engineering and ASAP will focus on technical agricultural challenges and ongoing implementation. By combining their respective grant resources, the two projects will be able to scale up the scope of their projects in each community and provide more comprehensive assistance.

ASAP will also coordinate closely with the anticipated new CNFA Europe-implemented and EU-funded, Azerbaijan Hazelnut and Pomegranate Initiative (AHPI). Once CNFA Europe is successfully registered in Azerbaijan, the 30-month intensive agricultural project will begin. It will directly address the challenges that smallholder farmers face, while simultaneously building upon the existing opportunities so that they become successful agricultural entrepreneurs. The two projects’ combined efforts will both strengthen the curriculum for improving hazelnut and pomegranate production practices and expand access to such training and small grants to an expanded audience of growers and communities. Coordination between the projects will be overseen by weekly meetings in Baku between the respective projects’ program teams, as well as field-based coordination and collaboration.

In PY4, ASAP also made specific efforts to identify ways to collaborate with other USAID-

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funded activities, such as those implemented by IOM and UNDP as a result of the USAID field- based Portfolio Review that took place from October 30-November 2, 2017 in Ganja. During the upcoming fall 2018 USAID field-based Portfolio Review in Guba, ASAP will continue exploring opportunities for collaboration with these and other active USAID projects.

Collaboration with AgroCenter will continue in PY 5. In the early part of the year, AgroCenter will be sending six specially selected students from The Azerbaijan State Agricultural University to study for two weeks at the campus of Texas A&M University. In addition, ASAP has met with the management team of AgroCenter and their donors have agreed to serve as distribution partners for relevant U.S. agricultural products. They will remain ASAP’s training partners in greenhouse vegetable production, pomegranates and hazelnuts.

Finally, additional coordination and/or collaboration with other projects in Azerbaijan should be possible if legal registration of the project if finally achieved. In that case, ASAP will resume attending the NGO Quarterly Stakeholders Meetings and Agricultural Coordination Meetings in Baku.

g. Monitoring and Evaluation Plan

To measure its effort and impact, ASAP has developed a monitoring and evaluation (M&E) system that includes selected performance indicators and targets. This system delineates precisely what each indicator is designed to measure, how the data is collected and reported, and targets to be achieved over distinct periods over the life of the project. The M&E system then measures project progress and enables results achieved over time to be compared with anticipated outcomes and impact. As a means for tracking development of the activities implemented through the Demo Plots, TTF activities, a Demo Plot Status Update and TTF Status Update Table were created, as was a Client Overview Table, which briefly outlines each current and potential Result 1 client and the Project's planned assistance. As the majority of results in the agribusiness sector appear seasonally, many of the indicators are collected and reported on an annual basis, whereas updated information on project activities and selected performance impacts is reported in both the monthly and quarterly reports. For the purpose of having the complete list of the beneficiary farmers reached by the Project since the start of the Project Year 4, ASAP develop a database of the training and technical assistance participants. The complete list will enable the Project to conduct various types of data quality checks and other monitoring activities to determine:

• the complete beneficiary composition of the Project; • a representative sample of all Project beneficiaries for the annual surveys; • the level of outreach to a new audience on a monthly basis; 92 CNFA AID-112-C-14-00001

• the level of outreach on the level of an individual beneficiary; • the composition of youth among Project beneficiaries; and • the respective training numbers for each of the individual Value Chains.

As previously noted, the project is on track to achieve many but not all of its indicator targets by September 30th, the end of PY4. The anticipated shortfalls for the finance-related indicators are due largely to the unstable financial situation in the country, making it difficult for enterprises to access loans. Based on project implementation and results to date, during the PY4 ASAP proposed a number of adjustments to the Project's Monitoring and Evaluation Plan to reflect some USAID requests. Updates to the MEP included:

• Adding a new indicator on Preventing Violent Extremism (PVE); • Updating targets for Year 4; • Adding targets for all the indicators for Year 5; • Broadening the definition of the indicator #13 to capture more of ASAP’s access-to- finance related activities; and • Combining the indicator on the value of loans facilitated with the indicators on beneficiary investments facilitated.

ASAP has still not received any feedback on the MEP, which was submitted to USAID on June 22nd.

Tentative timing of M&E tasks for PY5 is outlined in the table below:

Performance Monitoring and Evaluation Project Month OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Update data collection tools for the annual survey and implement annual data collection Provide guidance to the technical staff on required data and

collections methods; verifying the data validity Facilitate the communication

material development Provide progress data for any ad hoc documentation required by the USAID Maintain M&E database system,

collect data files Conduct informal monitoring

activities (data collection)

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Support and coordinate quarterly

report development Coordinate drafting of monthly

reports Coordinate drafting of annual

report

Work Plan Annexes

Annex A: Illustrative Potential Technology Transfer Fund Investments for PY5 Annex D: Anticipated PY5 STTA and Other International Travel Annex E: BSP Technical Assistance Matching Fund Annex F: Demonstration Plots Annex G: PY5 Training Schedule Table Annex H: Global Development Lab Proposed Budget

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Annex A: Illustrative Potential Technology Transfer Fund Investments for PY5

The proposed TTF projects for PY4 are designed to accomplish multiple goals. The cold storage projects increase profitability by allowing produce to be stored until seasonal prices increase and to improve the quality of the product. Berry drying and jam producing creates jobs and builds additional revenue streams for fresh fruit producers by using product that would have otherwise been wasted.

Both the hazelnut and pomegranate nurseries will increase the production capacity for individual farms as well as building Azerbaijan’s export potential. Jobs are also created in the form of skilled and semi-skilled workers to care for the operation.

Flash-cooling facilities provide new jobs for workers to consolidate, package and manage the logistics of moving produce in and out of the operation. They also benefit the community by improving the quality of shipped product which improves prices and profitability.

Orchard management equipment such as mowers and air-blast orchard sprayers improve yields and help to move farmers away from old traditional practices that were ineffective or detrimental to production.

In many cases the projects are easily adapted to community ownership and management. This is particularly the case for the ethnic minorities that are of interest in ASAP’s PVE initiative.

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Illustrative Potential Technology Transfer Fund Investments for PY5

Anticipated Anticipated Anticipated Value Chain Type Recipient Purpose Client TTF Timing Match Investment Establishment of a Seedlings production with November, Berry blueberry and raspberry Beneficiary $120,000 $50,000 improved quality 2019 nursery in Shamkir Hazelnut Agricultural Machinery AHPEA To provide GAP practices applied $150,000 $50,000 December (mini tractors, industrial in the hazelnut orchards throughout 2018 sprayers, tillers and the northwest and north regions. harvesting machines) Hazelnuts Fruit drying facility Aliabad, To establish a fruit-drying facility $50,000 $35,000 March 2019 Zagatala to process fruits (especially plums) community in the northwest regions Hazelnuts Hazelnut drying facility Turajli, Gakh To establish a hazelnut drying $50,000 $35,000 April 2019 community facility to provide farmers an opportunity to dry and store their crops Hazelnuts Hazelnut transplant Beneficiary To produce certified hazelnut $15,000 $7,000 October 2018 nursery seedlings and dissemination of pollinators Hazelnuts Hazelnut transplant Beneficiary To produce certified hazelnut $15,000 $7,000 October 2018 nursery seedlings and dissemination of pollinators Hazelnuts Hazelnut transplant Beneficiary To produce certified hazelnut $15,000 $7,000 October 2018 nursery seedlings and dissemination of pollinators Cold storage and flash December Orchard Beneficiary Assist local orchard growers to $150,000 $50,000 cooling of orchard fruits extend shelf life of apples, cherries, 2018 96 CNFA AID-112-C-14-00001

nectarines, and plums

Establish small agricultural service (10 active centers and provide them with Support establishment and framers and all agricultural technology to increase improvement of Orchard together 150 the quality of their services to fruit $150,000 $65,000 January 2019 agricultural services or farmers from producing communities or Assist cold storage in Guba community). local orchard growers to extend shelf life of apples, cherries, nectarines, and plums Establish small agricultural service Support improvement of centers and provide them with Orchard grafting services for Beneficiary agricultural technology to increase $30,000 $15,000 January 2019 women group in Guba the quality of their grafting services to fruit nursery producing. Support establishment and Establish one small agricultural (8 active improvement of service center and provide it with Orchard neighbor $40,000 $20,000 January 2019 agricultural services in agricultural technology to increase framers) Khachmaz the quality of their services to fruit producing communities Orchard mower and sprayer and Pomegranate Production Beneficiary $105,000 $35,000 March 2019 packaging improvement Pomegranate Production Antim LLC Orchard mower and sprayer $60,000 $20,000 March 2019

Capacity building and Training room equipment and Pomegranate Beneficiary $40,000 $20,000 April 2019 cultivation practices micro-irrigation system Persimmon Production TBD Mower and orchard sprayer $45,000 $15,000 May 2019 Azerbaijan To produce certified berry February Berry Strawberry nursery Berry $100,000 $50,000 seedlings 2019 Association

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To support better quality and Berry sorting and packing February Berry Beneficiary export to Europe throughout the $100,000 $50,000 line 2019 South region.

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Annex D: Anticipated PY5 STTA and Other International Travel

Participants # of (international study trips) Consultants/ Purpose of STTA/Study Trip Timing or Functional Area of Travelers Expertise (STTA) Pomegranate Production, Business Training, 2 MASHAV January Completion of Pomegranate Production Manual

October- 1 Berry Production Expert Berry Production Manual November 2018

B2B and Trade Mission Facilitation with U.S., November 1 Consultant European, and Gulf buyers 2018 U.S. Agribusiness 1 Global Development Lab Fall 2018 Technologies Expert U.S.-Azerbaijan Trade 1 Global Development Lab Fall 2018 Facilitation Expert European Union Fall 2018- 1 Agricultural Markets Global Development Lab Winter 2019 Expert

Gulf Agricultural Markets Fall 2018- 1 Global Development Lab Expert Winter 2019

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Annex E: BSP Technical Assistance Matching Fund

# Value Chain Client Rayon Name of Assignment Anticipated Implement- Anticipated Name, the BSP/ Description Client/ ation Status Completion Date Company Consultant ASAP Matching Contribution (USD) 1 Pomegranate Various Various TBD Development of 40-60% Pending Ongoing Azerbaijan pomegranate brand and promotional strategy 2 Hazelnuts Various Various TBD Pre-auditing, 40-60% Pending Ongoing auditing for ISO 9000, ISO 22000, GlobalG.A.P., BIO organic or other international food safety or quality certification 3 Various Various Various TBD Provision of soil 40-60% Pending Ongoing testing services 4 Hazelnuts AHEC Zagatala Creative Development of 40-60% Pending February 2019 Innovations a promotional approval (proposed materials to based on participate at the

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# Value Chain Client Rayon Name of Assignment Anticipated Implement- Anticipated Name, the BSP/ Description Client/ ation Status Completion Date Company Consultant ASAP Matching Contribution (USD) successful international past trade fairs experience) 5 Hazelnuts Beneficiar Zagatala Creative Development of 40-60% Pending February 2019 y Innovations a company name approval (proposed and a brand based on image (product successful category names, past logo, slogan, experience) label, packaging design, web and print promo materials)

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Annex F: Demonstration Plots

# Value Client Name, Region Demo Plot Activities, Planned PY 5 Activities Anticipated Chain, Contact Assistance Elements Completion Demo Type Person, Phone Date 1. Hazelnut Beneficiary Gakh Good Agricultural Practices Oversight, technical assistance when June 2019 Demo Plot on older 2.7 ha needed, training to the demo plot and 3.2 ha orchard (pruning, fertilization, integrated pest management, irrigation, green pruning, harvest, postharvest handling) 2. Hazelnut Beneficiary Zagatala GAP Demo Plot on 10.5 ha Oversight, technical assistance when June 2019 young orchard (pruning, needed, training to the demo plot fertilization, integrated pest management, irrigation, green pruning, harvest, postharvest handling) 3. Hazelnut Beneficiary Oghuz Providing technical Oversight, technical assistance when June 2019 assistance on fertilization, needed, training to the demo plot spraying, and irrigation on 3 ha of the hazelnut orchard 4. Hazelnut Beneficiary Zagatala Providing technical Oversight, technical assistance when June 2019 assistance on GAP needed, training to the demo plot implementation on 2.5 hectares of new hazelnut demo plot 5. Hazelnut Beneficiary Zagatala Providing technical Oversight, technical assistance when June 2019 assistance on GAP needed, training to the demo plot implementation on 2 hectares of new hazelnut demo plot

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6. Hazelnut Beneficiary Gabala Providing technical Oversight, technical assistance when June 2019 assistance on GAP needed, training to the demo plot implementation on 2 hectares of 15 years old hazelnut demo plot 7. Hazelnut Beneficiary Gakh Good Agricultural Practices Oversight, technical assistance when June 2019 Demo Plot on older 3.2 ha needed, training to the demo plot (pruning, fertilization, integrated pest management, irrigation, green pruning, harvest, postharvest handling) 8. Hazelnut Beneficiary Balakan Providing technical Oversight, technical assistance when June 2019 assistance on GAP needed, training to the demo plot implementation on 2 hectares of 15-year-old hazelnut demo plot 9. Hazelnut Beneficiary Khachmaz Providing technical Provide training and TA, continue June 2019 assistance on GAP assisting with demo plot activities implementation on 15 hectares of 10-year-old hazelnut demo plot 10. Hazelnut Beneficiary Khachmaz Providing technical Provide training and TA, continue June 2019 assistance on GAP assisting with demo plot activities. implementation on 6 Complete the irrigation project for hectares of 15-year-old 60 ha community orchards in hazelnut demo plot partnership with SEDA 11. Hazelnut Beneficiary Khachmaz Providing technical Provide training and TA, continue June 2019 assistance on GAP assisting with demo plot activities implementation on 5 hectares of 20-year-old hazelnut demo plot

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12. Hazelnut Beneficiary Khachmaz Providing technical Provide training and TA, continue June 2019 assistance on GAP assisting with demo plot activities implementation on 2 hectares of 20-year-old hazelnut demo plot 13. Hazelnut Beneficiary Zagatala Good Agricultural Practices Oversight, technical assistance when June 2019 Demo Plot on 16-year-old needed, training to the demo plot 1.5 ha (pruning, fertilization, integrated pest management, irrigation, green pruning, harvest, postharvest handling) 14. Hazelnut Beneficiary Bilejik Good Agricultural Practices Oversight, technical assistance when June 2019 Demo Plot on older 0.5 ha needed, training to the demo plot (pruning, fertilization, integrated pest management, irrigation, green pruning, harvest, postharvest handling) 15. Hazelnut Beneficiary Zagatala Good Agricultural Practices Oversight, technical assistance when June 2019 Demo Plot on older 3 ha needed, training to the demo plot (pruning, fertilization, integrated pest management, irrigation, green pruning, harvest, postharvest handling) 16. Orchard Beneficiary Gusar Pest management, IPM continue on apple, cherry, August 2019 (Apple, pruning, fertilization, nectarine, peach, plum orchards. TA Cherry, irrigation, green pruning, on pest management, fertilization, Nectarine, harvest, postharvest green pruning and irrigation of peach, plum) handling young intensive and semi-intensive orchards.

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17. Orchard Beneficiary Guba Pest management, pruning, IPM continue on apple, pear and August 2019 (Apple, pear fertilization, irrigation, green cherry orchards. and fruit pruning, harvest, postharvest nursery) handling and fruits saplings growing. 18. Orchard Beneficiary Khachmaz Recommendation on TA on pest management, August 2019 (Apple, pruning, planting new fertilization, green pruning and cherry) orchards, fertilization and irrigation of apple and stone fruit pest management on plum, orchards continues. pear, peach, etc. orchards. 19. Orchard Beneficiary Guba Pest management, Green pruning, banding and IPM August 2019 (Apple, pruning, fertilization, continue on apple, pear and stone cherry) irrigation, green pruning, fruits orchards. harvest, postharvest handling 20. Orchard Beneficiary Guba Pest management, TA and trainings on pruning, pest August 2019 (Apple, pear, pruning, fertilization, management, fertilization, and cherry) irrigation, green pruning, irrigation of apple and stone fruit harvest, postharvest orchards continues. handling 21. Orchard Beneficiary Guba Pest management, TA and trainings on pest August 2019 (Apple, pruning, fertilization, management, fertilization, and cherry) irrigation, green pruning, irrigation of apple and stone fruit harvest, postharvest orchards continues. handling 22. Orchard Beneficiary Guba Pest management, pruning, TA and trainings on pest August 2019 (Apple, fertilization, irrigation, green management, fertilization, and cherry) pruning, harvest, postharvest irrigation of apple and stone fruit handling orchards continues. 23. Orchard Beneficiary Gusar Pest management, pruning, TA and trainings on pest August 2019 (apple, quince fertilization, irrigation, green management, fertilization, and and stone pruning, harvest, postharvest irrigation of apple and stone fruit fruits) handling, extending new orchards continues.

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intensive and semi-intensive orchards area. 24. Orchard Beneficiary Aghdash Pest and disease control, Training and TA conducted on Fall 2019 (Persimmon) weed control and irrigation required fertilization, pest management will continue. 25. Orchard Beneficiary Aghdash To support all aspects of Continue to provide recommendation Fall 2019 (Persimmon) cultivation focused on on all aspects of cultivation, orchard increasing the productivity development and restoration.

26. Orchard Beneficiary Aghdash To support all aspects of Continue to provide recommendation Fall 2019 (Persimmon) cultivation focused on on all aspects of cultivation, orchard increasing the productivity development and restoration.

27. Orchard Beneficiary Aghdash To support all aspects of Continue to provide recommendation Fall 2019 (Persimmon) cultivation focused on on all aspects of cultivation, orchard increasing the productivity development and restoration.

28. Orchard Beneficiary Goychay Pest and disease control, Training and TA conducted on Fall 2019 (Persimmon) weed control and irrigation required fertilization, pest management will continue. 29. Orchard Beneficiary Astara Sprinkler Irrigation demo ASAP will continue monitoring the Fall 2019 (Kiwi) Plot use and advantages of sprinkler irrigation 30. Vegetable Beneficiary Tovuz Potato: Irrigation, soil Planted alfalfa to rotate the crop in June 2019 (Potato and fertilization, post-harvest the potato Demo Plot to restore the Onion) handling, and storage; soil. ASAP will continue to monitor Onion: crop mix, planting the soil enrichment process till potato or other vegetables are planted in the Demo Plot 31. Vegetable ATA LLC Samukh Irrigation Travelling Gun for Planted barley that irrigated with June 2019 open field vegetable irrigation travelling gun. ASAP will production continue to monitor this Demo Plot for soil enrichment till any vegetable crop is planted. 32. Berry ATA LLC Samukh Berry production in a Demo Plot has been expanded from May 2019

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greenhouse facility 0.03 ha to 0.10 ha. ASAP will monitor the progress of expanded demo plot for strawberry production and sales. 33. Vegetable Beneficiary Shamkir Integrated Pest Management ASAP will continue monitoring the February 2019 tools use and advantages of IPM tools 34. Vegetable Beneficiary Shamkir Integrated Pest Management ASAP will continue monitoring the February 2019 tools use and advantages of IPM tools 35. Pomegranate Beneficiary Goychay To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 36. Pomegranate Beneficiary Goychay To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 37. Pomegranate Beneficiary Goychay To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 38. Pomegranate Beneficiary Goychay To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 39. Pomegranate Beneficiary Barda To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity , handling. Packaging, labeling and Global GAP quality standards application including IPM

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40. Pomegranate Beneficiary Barda To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 41. Pomegranate Ekinchi BO LLC Beylagan To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity, handling. Packaging, labeling and Global GAP quality standards application including IPM 42. Pomegranate Antim LLC Goranboy To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 43. Pomegranate Aladdin Fermer Salyan To support all aspects of Continue to support with all aspects Fall 2019 LLC cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 44. Pomegranate Mars FK LLC Kurdamir To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM 45. Pomegranate Beneficiary Hajiqabul To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity, handling. Packaging, labeling and Global GAP quality standards application including IPM 46. Pomegranate Balakan Food Salyan To support all aspects of Continue to support with all aspects Fall 2019 LLC cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM

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47. Pomegranate Beneficiary Goranboy To support all aspects of Continue to support with all aspects Fall 2019 cultivation focused on of cultivation and post-harvest increasing the productivity handling. Packaging, labeling and quality standards application including IPM

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Annex G: PY5 Training Schedule

The training schedule that begins on the following page is divided into six sections:

• Berry Value Chain • Hazelnut Value Chain • Orchard Value Chain • Pomegranate Value Chain • Persimmon, which is an element of the Pomegranate Value Chain • Southern Region which includes elements of the Berry, Vegetable and Orchard Value Chains

In addition to the training in the following table, ASAP will support the provision of training related to developing linkage with U.S. agribusinesses. This training will take place at the Azerbaijan State Agricultural University in Ganja. This training is itemized under the Linkages portion of this document, but those numbers are not listed in the following table.

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ASAP PY5 Group Training Table

Berry Hazelnut Orchard Pomegranate Persimmon Vegetable October Preparation of the fields Green pruning (20) Conduct first Post-harvest Post-harvest 1. Control of 2018 for planting; ______pruning handling, handling, root-rot Strawberry planting Post-harvesting techniques, trellis fertilization fertilization 2. Cucumber methods (25) handling, drying & training in (phosphorus & pest & hanging process; ______storage intensive orchards & nitrogen disease cutting new Kiwi and feijoa harvest Rodent control (20) (15) depended on control (20) flowers & and post-harvest ______need) & pest application of techniques; cold storage Disease & insect Control & disease insecticides management, packaging control using overwintering control (3 3. Application of and marketing (25) continuous monitoring pests & diseases in trainings @ fungicides against & scouting for disease, orchards (10) 16-17 trainees powdery mildew insects & mites (20) ______per training) & grey mold rot Main principles of (50) (30) * planting of grape in new fields (Group trainings (Jalilabad one will be made in training (15) cooperation with AgroCenter) Novembe Hand Weed control in Pruning, shaping & Train trees by Post-harvest Post-harvest 1. Preparations r 2018 strawberry; Pruning in thinning trees, tying branches to handling & handling, for new growing strawberry production removal of pruned trellis wire in pest control fertilization season of tomato fields (30) branches from field young intensive (3 trainings @ & pest & plants; ______(25) orchards (20) 16-17 trainees disease 2. Disinfection of Kiwi and feijoa harvest ______per training) control (20) greenhouses & and post-harvest Orchard planting, Cover over- (50) soil; techniques, cold storage orchard design, wintering pests & 3. Check macro management, packaging application of orchard floor & micro elements and marketing (25) Bordeaux mix to management in in soil through prevent disease & pest intensive & semi- lab analysis & Fertilization: intensive orchards later enrichment 111 CNFA AID-112-C-14-00001

application of NPK (15) of soil (30) (35) ______Pruning of grapes (15) December Intensive cultivation Pruning, shaping & Prepare &, select Winter Winter 1. Application of 2018 methods of strawberry thinning trees, varieties, preparation of preparation chemicals against production removal of pruned determine tree & orchard of orchard, nematodes; (30) branches from field spacing for restoration restoration 2. Heating, ______(20) establishment of New orchard initiation, ventilation, Winter pruning on the ______intensive & semi- development new orchard moisture control kiwi and feijoa orchards Nursery Establishment intensive orchards (3 trainings @ developmen 3. Mow soil & and its importance for the (20) (30) 16-17 trainees t (20) application of improvement of ______per training) gypsum powder; production (20) Fertilization: Winter irrigation (50) 4. Seedlings application of NPK on grape orchard handling, planting (30) (15) & first days’ care ______& nutrient control Application of (30) mineral fertilizers into soil (Phosphorus, potassium), or organic fertilizer (30)

January Winter cultivation on Continuation of Winter pruning Pruning and Pruning and Disease, pest and 2019 strawberry production pruning & sanitation techniques in shaping (3 shaping (20) insect control; (15) (25) intensive apple and trainings @ Greenhouse ______pear orchards (16) 16-17 trainees winter ______Winter irrigation ______per training) management (30) Winter pruning on the management (25) Pruning techniques (50) kiwi and feijoa orchards ______in traditional apple Drip irrigation and its importance for the Orchard design (25) and pear orchards system improvement of (10) maintenance (30) production (20) ______112 CNFA AID-112-C-14-00001

Agro-technical measurements in grape orchards (12)

February Winter cultivation on Continuation of Establishing of Pruning and Pruning and Macro and 2019 strawberry production pruning & sanitation intensive and shaping, shaping (20) microelements (15) (30) semi-intensive disease elements ______orchards (20) control (3 deficiency Proper storage of kiwi and Rodent control (35) ______trainings @ prevention and feijoa in a cold storage Shaping up in 16-17 trainees control; facility (25) grape orchard (14) per training) Nematode (50) prevention (30) March Fertilizer application in Using hay to provide Conduct winter Pruning and Pruning and Proper pruning, 2019 strawberry fields (15) smoke in low pruning and tree shaping, shaping, spraying, and ______temperatures (-5C) to training techniques disease disease weeds control; Weeds identification and prevent buds from in stone fruit control (3 control (20) Greenhouse control, early spring freezing (25) orchards (20) trainings @ temperature, herbicides application ______16-17 trainees moisture and (25) Orchard design (25) Combat certain per training) irrigation ______diseases like apple (50) management (30) Drip irrigation system Application of scab, moniliasis maintenance(20) Nitrogen, according to coccomyces, etc. results of soil analysis in stone fruit (25) orchards (20) ______Selection of new Drip irrigation system grape area and maintenance (20) preparation for planting (15) ______Train in complete use of GA 3 for 113 CNFA AID-112-C-14-00001

table grapes( 25) April Pest and disease Disease & insect Combat powdery Pest and Pest and Disease 2019 management in strawberry control based on mildew and apple disease disease prevention; production fields (15) continuous monitoring scab in orchards control, control, Tomato harvest & scouting especially (20) fertilization, fertilization, and post-harvest ______for Big Bud Mite ______weed control weed techniques (30) Weeds identification and which migrates in Train trees and (3 trainings @ control (20) control, early spring April and May (20) bend and tie lateral 16-17 trainees herbicides application ______branches to the per training) (25) Using hay to provide trellis wire in (50) smoke in low intensive orchards temperatures (-5C) to (20) Drip prevent buds from ______Irrigation freezing (30) Biology of grape System ______diseases (10) Maintenance ( IPM, disease control 20) & use of pesticides Drip irrigation (25) system maintenance (20) May 2019 Weeds, disease and pest Foliar application of Combat and Pest and Pest and IPM, disease control in strawberry micro-elements (iron, control red spider disease disease prevention; production fields (15) boron, manganese, mites and mealy control, weed control, Tomato harvest zinc, magnesium) bugs in orchards control (3 weed and post-harvest ______depending on (30) trainings @ control (20) techniques (30) Training about innovative development observed ______16-17 trainees drip and sprinkler in trees (20) Early fruit thinning per training) irrigation systems and its ______in apple and pear (50) advantage on the kiwi and IPM, disease control orchards (20) feijoa orchards (20) & use of pesticides ______(25) Pest management ______in grape (14) Proper irrigation practices (20) 114 CNFA AID-112-C-14-00001

______

Disease & insect control based on continuous monitoring & scouting (30) ______Orchard floor care; Second application of Nitrogen, per soil analysis results (20)

June 2019 Strawberry harvest and Foliar micro-nutrient Train trees and Pest and Pest and Greenhouse clean post-harvest techniques application (iron, bend and tie lateral disease disease up, disinfection, (15) boron, manganese, branches to the control, weed control, soil preparation zinc, magnesium) trellis wire in control, green weed and enrichment ______depending on intensive orchards pruning (3 control, for the next Summer pruning on the development observed (20) trainings @ green planting season; kiwi and feijoa orchards in trees (35) ______16-17 trainees pruning (20) Seedlings and its importance for ______Control weeds in per training) selection and improvement of the Orchard floor care; orchards (20) (50) growing production (20) Second application of ______techniques (30) Nitrogen, per soil Role of nutritional analysis results (30) element in grape ______Using Crop Budgets for ______(14) Using Crop ______Decision Making (30) Proper use of Budgets for Using Crop Using Crop irrigation in hazel-nut Decision Budgets for Budgets for orchards (20) ______Making (30) Decision Decision Making ______Using Crop Making (30) IPM, disease control Budgets for (30) & use of pesticides Decision Making (25) (30) ______115 CNFA AID-112-C-14-00001

Using Crop Budgets for Decision Making (30)

Total 430 785 480 510 210 330 Projected Trainees (October 2018-June 2019) 2,745 GRAND TOTAL

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