PY1 Third Quarterly Report

Prepared for review by the United States Agency for International Development under USAID Contract No72011418C00001, The USAID Agriculture Program implemented by CNFA

The USAID Agriculture Program

PY1 Third Quarterly Report April 1, 2019 – June 30, 2019

USAID Contract 72011418C00001 Implemented by CNFA

Submitted to: USAID/Caucasus Mr. David Tsiklauri, COR

Submitted on July 15, 2019

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Table of Contents Acronyms ...... 4 Executive Summary ...... 5 Summary of Achievements in the Third Quarter ...... 6 Overview of Quarter’s Activities ...... 7 Value-Chain Prioritization and Gap Assessment ...... 7 Component 1: Cost-Share Grants to MSMEs, Cooperatives, Service-Information Extension Providers and Associations ...... 7 Activity 2.1: Grant Processes and Training ...... 7 Activity 2.2: In-kind Grants to MSMEs and Cooperatives ...... 7 Activity 2.3: Capacity Building Grants to Service-Information-Extension Providers ...... 11 Activity 2.4: Capacity Building Grants to Associations ...... 11 Component 2: Technical Assistance to MSMEs, Cooperatives, Service Information-Extension Providers and Associations ...... 12 Activity 3.1: Select Local Business Service Providers and Build BSP Capacity ...... 12 Activity 3.2: Cross Value-Chain Systems Support ...... 13 Activity 3.3: Selected Value-Chain Assistance Program ...... 14 Cross-Cutting ...... 23 Activity 4.1: Gender and Youth Integration ...... 23 Activity 4.2: Public Information and Outreach ...... 24 Activity 4.3: Donor and Host-Country Coordination ...... 25 Project Management ...... 25 Activity 5.1-5.2: Operations, Facilities, and Equipment and Staffing ...... 25 Activity 5.3: International Subcontracting ...... 25 Activity 5.4: Monitoring and Evaluation ...... 25 Activity 5.5: Environmental Compliance ...... 26 Special Initiatives ...... 26 Financial and Expenditure Summary ...... 27 Key Constraints ...... 27

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Acronyms ACDA Agricultural Cooperatives Development Agency APMA Agriculture Projects Management Agency AR Autonomous Republic ARDA Agricultural and Rural Development Agency BEO Bureau Environmental Officer BRC British Retail Consortium BSP Business Service Provider CNFA Cultivating New Frontiers in Agriculture COR Contract Office Representative DQA Data Quality Assessment EMMP Environmental Mitigation and Monitoring Plan EOI Expression of Interest ERC Environmental Review Checklist FAA Fixed Award Amount FAO Food and Agriculture Organization FSC Farm Service Center F2F Farmer to Farmer ICC Information-Consultation Center IFS International Featured Standards IGF Import Goods Fair MEL Monitoring, Evaluation and Learning MEPA Ministry of Environmental Protection and Agriculture of MoESD Ministry of Economy and Sustainable Development of Georgia MSME Micro, Small and Medium Enterprise NFA National Food Agency NOP National Organic Program PERSUAP Pesticide Evaluation Report and Safer Use Action Plan PMCG Policy and Management Consulting Group PPD Public Private Dialogue PY1 Project Year 1 RFA Request for Applications RFP Request for Proposals SCRA Scientific-Research Center of Agriculture SEEDEV The South-East Europe Development Organization SOW Scope of Work SP Sole Proprietor STTA Short-Term Technical Assistance TA Technical Assistance TOC Terms of Cooperation USAID United States Agency for International Development VC Value-Chain WFLO World Food Logistics Organization

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Executive Summary The full and firm systems and procedures base established in the Second Quarter enabled the USAID Agriculture Program in the Third Quarter to launch a complete and vigorous grant program. This was complemented simultaneously by the introduction of focused Technical Assistance (TA) to a broad range of beneficiaries. Thus, at this early stage of implementation all elements of the program are operating, from selection of grantees to procurement of equipment and provision of technical support. The private sector is fully engaged through grantee and non-grantee beneficiaries. Agriculture service providers also are supporting beneficiaries and contributing to sector development in general.

The quick program start has generated valuable experience and given rise to numerous observations and lessons learned. These already are informing program directions and decisions. The benefits of rapid implementation yielding early insights are evident and justify USAID’s support of speed in project organization and launch. While rapidity has been an emphasis it was not frivolous. The operative bywords were: rapid but not reckless.

This quarter will be completed and the final segment of Year One begun with about 30 grants forwarded to USAID for approval and perhaps 25 more to follow in the Fourth Quarter. This will produce a wealth of knowledge about market demand and about sector problems and issues. This, in turn, will encourage technical innovation and suggest new program approaches as the Program enters its intense middle period.

The berry Value-Chain (VC) was engaged early in project life. The other six VCs were identified in the second quarter. Thus, grant application announcements have focused on berries and cross-cutting activities. Though solicitations sought cross-cutting grant applications, they produced a relatively even distribution among the VCs finally selected. This suggests that the Program solicitations generally reflect market demand from new or expanded agricultural enterprises.

The quarter saw the introduction of a new approach to the Program subcontractors. Given their unique technical, as well as local experience they now are asked to take more direct and substantive responsibility for identifying work needed in the seven VCs and for designing the scopes of work guiding that work.

In the current quarter the Program was able to meet several key goals for Year One. These include activating all project components, setting implementation standards, and ensuring its systems produced entrepreneurial grant applicants. Careful grantee selection remains the heart of the grant process. To the extent possible, the same orientation will govern search and selection of non-grantee beneficiaries.

The Program’s rapid launch produced a substantial practical knowledge that already informs our planning and longer-term vision. As we move toward the end of Year One, we will continue to glean guidance from our experience and seek improvements in all aspects of our implementation and in our strategies.

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Summary of Achievements in the Third Quarter

April 2019 May 2019 June 2019 Second RFA focusing on Grant agreements signed with 6 Grant agreements signed with 3 development of cold storage applicants applicants infrastructure, announced by the Program 6 outreach meetings conducted 20 applicants shortlisted under as part of the second RFA the Program’s second RFA 7 outreach meetings conducted as part of the second RFA 46 applications received in Lurji Veli Ltd became the first response to the second RFA company to obtain GRASP The members of the Berry certification in Georgia Growers’ Association, and the Food safety gap analyses Berry Producers’ Association completed for two companies With the Program’s and participated in Soft-Stone Fruits Enterprise Georgia’s support, International Value Chain Horticulture Bio Market Survey Georgian agribusinesses Forum in Kiev developed participated in South Korean trade fair for the first time ToC signed with Enterprise Georgia A matching Capacity Building Grant launched to support ISO Value-Chain Specialist Consulting LLC in obtaining the mobilized by the Program. status of approved consultant in BRC and IFS standards A pilot program launched to provide matching TA in bio certification.

Foreign buyers and local wholesalers linked to 27 berry growers

36 smallholder and medium- size farmers trained in herbs and vegetable production practices

Programmatic Activities and USAID Deliverables ISO 22 000 cost-shared consultancy initiated for a total Project Management of 3 companies by June 2019

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Overview of Quarter’s Activities Value-Chain Prioritization and Gap Assessment In cooperation with its sub-contractor, SEEDEV, the USAID Agriculture Program conducted competitiveness and product analysis for a range of products. This was followed by VC prioritization, selection, and in-depth VC gap analysis. In February 2019, the Program submitted to USAID the “Sector Selection and Value-Chain Analysis” report, and presented it to the USAID Mission Director and other representatives, including the USAID funded projects.

In the Third Quarter, the USAID Agriculture Program and SEEDEV presented the VC selection process and gap analysis to the Ministry of Environment Protection and Agriculture Presentation for the Ministry of Environment of Georgia (MEPA) and the Ministry of Economy and Protection and Agriculture of Georgia sustainable Development of Georgia (MoESD). The Program received positive feedback on the analysis and sector selection from both ministries. Component 1: Cost-Share Grants to MSMEs, Cooperatives, Service-Information Extension Providers and Associations Activity 2.1: Grant Processes and Training In February 2019, USAID approved the Program’s Grants Manual which guides the entire grants making process, including In-Kind Grants targeted at enterprises and cooperatives within the selected VCs and Capacity Building Grants for sectoral and cross-cutting associations, as well as service, information and extension providers.

To launch the Capacity Building Grants, the USAID Agriculture Program discussed with USAID the need to exclude Environmental Review Checklist (ERC) and Environmental Mitigation and Monitoring Plan (EMMP) requirements. The Program made a corresponding amendment to the Grants Manual and re- submitted the document to USAID for approval. The amended grants manual was approved by USAID in June 2019. Activity 2.2: In-kind Grants to MSMEs and Cooperatives The USAID Agriculture Program announced the first Request for Applications (RFA) on December 11, 2018 and received 55 responses. The Program scored the applications and shortlisted 16 candidates that passed the threshold of 70 points. These applicants were later assessed during the site visits.

After completing the site visits, the USAID Agriculture Program rejected Agricultural Cooperative Elizabeth Garden, as the applicant failed to demonstrate the ability to achieve immediate impact. The cooperative planned to purchase blueberry seedlings a year later. By doing so, the applicant would have achieved impact only in year 4 of the project.

To develop grant packages, the USAID Agriculture Program invited all shorlisted applicants and discussed their investment projects in more details. At this stage, Ecodomus Ltd was also rejected. After more in- depth discussion with the applicant, the Program decided that the proposed matching contribution was insufficient to cover the associated costs.

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As the USAID Agriculture Program began developing grant packages of the remaining 14 applicants, Agricultural Cooperative Teladgori and Stalker Ltd decided to cancel the projects. In case of Cooperative Teladgori, the applicant’s matching contribution was partially dependant on the support from Agricultural and Rural Development Agency (ARDA)1 of MEPA. However, ARDA rejected the cooperative and the applicant had to cancel the project. As for Stalker Ltd, the company was suggesting to prolong the initially agreed project mobilization phase, due to inability to provide matching contribution in the given period. After discussing this issue with the Program, the company decided to cancel the project.

As a result, the USAID Agriculture Program developed and submitted to USAID 12 grant packages of the following agricultural cooperatives and agribusinesses for review and approval:

. Agricultural Cooperative Riversons Agro signed an agreement with the USAID Agriculture Program in May 2019. The cooperative is engaged in primary production of raspberries and blackberries and applied for the Program’s grant to establish a postharvest handling facilty that will include pre-cooling equipment, a packaging line, and short-term cold storage chamber. . Agricultural Cooperative Kartuli Nergebi is a recently registered nursery that plans to produce containerized seedlings of different blueberry and raspberry varieties. The cooperative has requested the USAID Agriculture Program’s support in establishing 2 greenhouses (1,000 square meters each) and a warehouse (180 square meters). . Luri Veli Ltd signed an agreement with the USAID Agriculture Program in May 2019. The company operates 5 hectares of blueberry orchard in municipality and as part of the agreement, the Program will support the grantee in setting up high tunnels over 2 hectares of the plantation. This will help the company to secure part of the plantation from the risks associated with unfavorable weather conditions that can affect the entire production cycle and damage the harvest. . MNK Ltd is a blackberry producer operating in Tskaltubo municipality that signed an agreement with the USAID Agriculture Program in May 2019. The company initiated this project to introduce proper postharvest handling practices and will set up a 472 square meters facility equipped with a berry inspection table, sorting line, packaging machine, pre-cooling equipment, as well as Signing grant agreement with Lurji Veli Ltd equipment for a short-term cold storage chamber. . Sole Proprietor (SP) Mindia Kavtaradze signed an agreement with the USAID Agriculture Program in May 2019 and plans to set up a nursery to introduce modern variety raspberry seedlings. With the support of the Program, the grantee will establish 28 units of 350 square meters greenhouses (covering around 1 hectare of agricultural land). . SP Berdia Silagadze is a primary producer from Tskaltubo municipality who signed an agreement with the USAID Agriculture Program in May 2019. With the support of the Program, the grantee

1 Agricultural and Rural Development Agency is a state institution that unites Agricultural Projects Management Agency (APMA) and Agricultural Cooperatives Development Agency (ACDA) and Information-Consultation Centers (ICCs) of MEPA.

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will set up 8 greenhouses for strawberry, raspberry and blackberry production, and purchase pre- cooling equipment, rotary tiller, and a tractor with implements. . SP Aleksandre Sologhashvili applied for the USAID Agriculture Program’s grant to set up greenhouses to produce off-season raspberries and strawberries. Under the agreement signed in May 2019, the Program will support the grantee in establishing greenhouses and introducing necessary equipment. . Agricultural Cooperative Shamatia, a strawberry producer from municipality, signed an agreement with the USAID Agriculture Program in June 2019. As part of the agreement, the Program will support the grantee by renovating the existing greenhouses and purchasing necessary equipment, including pre-cooling equipment. . Agricultural Cooperative Georgian Fruit Growers Association is a nursery operating in Kareli municipality that signed an agreement with the USAID Agriculture Program in June 2019. Under the agreement, the Program will support the grantee in introducing high-quality blackberry seedlings by equipping the 300 square meter greenhouse with a heating system and metal shelves for production of rootstocks. . Agricultural Cooperative Spartaki is a raspberry producer from municipality that signed an agreement with the USAID Agriculture Program in June 2019. With the support of the Program the grantee will purchase and set up modern postharvest handling infrastructure, including pre- cooling equipment, a packaging machine, two feeders, and equipment for two cold chambers. . Mza Chitili Ltd is an experienced nursery that applied to the USAID Agriculture Program’s grants program to start production of strawberry and raspberry seedlings. In order to do so, the applicant is planning to set up a laboratory, cold chamber and rooting room and requested the Program’s support to purchase necessary equipment. . Agricultural Cooperative Chiri is a raspberry producer operating in Vani municipality. The applicant has a total of 7 hectares of raspberry plantation and with the support of the USAID Agriculture Program, the cooperative is planning to set up a postharvest handling facility that will include pre-cooling equipment, a packaging line and cold chamber. On April 13, 2019, the USAID Agriculture Program announced a second RFA to support the development of postharvest and storage infrastructure within the selected VCs, as the lack of cold storages is one of the major challenges within many agricultural sub-sectors. As for the cold storage operators, the Program acknolwedges their need to diversify target sub-sectors in order to remain sustainable, which is why the second RFA was cross-cutting and aimed to attract many applicants that operate in several VCs.

Prior to announcing the RFA, the USAID Agriculture Program discussed with the USAID’s Contract Office Representative (COR) the eligibility of agricultural cooperatives and made corresponding modicfication to the document. As a result, the second RFA includes an additional restriction, according to which: those agricultural cooperatives that were registered after September 23, 2018 will be treated as agribusinesses and will be able to obtain no more than 40% total estimated cost from the Program.

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The RFA was announced on www.jobs.ge and the the USAID Agriculture Program’s Facebook page. Prior to the submission deadline on May 31, 2019, the Program conducted 13 outreach presentations and met 396 potential applicants (see Activity 4.2: Public Information and Outreach). The USAID Agriculture Program received a total of 46 applications in response to the second RFA. The majority of these applicants are based in , and Samegrelo-Zemo Svaneti regions. Most of the applicants operate and/or plan to Applicants by legal status operate in several agricultural sectors. The most frequently represented sectors include berry, stone fruits, pome fruits and vegetables.

Applicants by region Applicants by sectors After receiving the applications, the USAID Agriculture Program started scoring them in accordance with pre-determined criteria. Since this solicitation is dealing with development of postharvest handling and storage infrastructure, the Program was particularly interested in those applicants that proposed to have broader impacts on the VCs, including the other players within these VCs.

After scoring the applications, the Program shortlisted 20 candidates that will be assessed during the site visits. The majority of these applicants are based in Shida Kartli and Kakheti, followed by Samegrelo-Zemo Svaneti and regions, and operate and/or plan to operate in several sectors. Berries comprise the most frequently represented sector among the shortlisted applicants, and are followed by pome and stone fruits. Shortlisted applicants by legal status

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Shortlisted applicants by region Shortlisted applicants by sectors

Activity 2.3: Capacity Building Grants to Service-Information-Extension Providers The USAID Agriculture Program selected two projects as part of the RFA CBG-001/0219 aimed at strengthening the capacity of Georgian companies that offer consultancy and audit services in international food safety, organic and social responsibility standards, and submitted them to USAID for review and approval:

. The USAID Agriculture Program will provide a matching Capacity Building Grant to Caucascert LLC, which is the only local organic certification body with international accreditation. With the Program’s support, the company plans to obtain accreditation to introduce USDA’s National Organic Program (NOP) certification in Georgia, and provide local organic producers with an access to the US organic market, which is one of the fastest growing organic markets in the world. Once Caucascert LLC becomes certified, Georgian operators that are willing to sell organic products in the EU and US will not have to pay for two separate inspections, nor abide to two separate organic production standards. . The USAID Agriculture Program will provide a matching capacity building grant to ISO Consulting LLC, which is one of the leading Georgian consulting companies specialized in various management system standards. With the Program’s support, the company plans to obtain the first official status of an approved consultant in Georgia for British Retail Consortium (BRC) and International Featured Standards (IFS). These standards are the most demanded food safety standards in the EU. The availability of a certified local company, that provides pre-certification consultancies, will significantly reduce certification consultancy costs for Georgian exporters and facilitate their entry into new premium markets. Activity 2.4: Capacity Building Grants to Associations The USAID Agriculture Program engages sectoral and cross-cutting associations in a wide range of programmatic interventions to facilitate their integration in the target VCs, ensure access to more beneficiaries and achieve broader impacts. In addition to contracting associations for delivery of trainings and consultancies, the Program plans to offer capacity building grants and provide TA to further strengthen their technical expertise and institutional capacity to better service their members.

Organizational Capacity Assessment of Selected Business Associations: In the reporting period, the USAID Agriculture Program completed the organizational capacity assessment of sectoral and cross- cutting associations engaged in the horticultural sector. The assessment was conducted by the Program’s

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Business Service Provider (BSP) – Policy and Management Consulting Group (PMCG) which assessed a total of 16 business associations, including the Association of Berry Producers, Georgian Berry Growers’ Association, Biological Association Elkana, Association of Horticulture and Berry Development, Export Development Association, Georgian Association of Retailers and Georgian Association of Herbs Producers, Georgian Association Women in Business and Union Agroservice. Based on the report’s findings, the targeted associations are advised to:

. pay more attention to the issues related to basic organizational structure and various aspects of management, including human resources, financial management, membership policy, annual meetings and accountability; . elaborate an effective mechanism for communicating with the members and receiving feedback, and define measurable indicators of success to monitor and evaluate the activities; . develop proper marketing strategies to reach more businesses and raise visibility of association; . upgrade technical expertise of the staff and invited consultants to provide the members with the needed services. These are broad recommendations for all 16 business associations. The USAID Agricultural Program plans to address them through a specially designed training program that will be tentatively conducted in the second half of September 2019. The Program will focus on building the capacity of business associations in four main areas: (1) adopting a strategic approach to organizational development and management; (2) improving services in order to provide value to the existing and potential members; (3) financial management; and (4) marketing strategies. The Program may engage an international consultant to facilitate the abovementioned capacity building activities.

Capacity Building Grants to Business Associations: Based on priorities in line with the VC analysis and action plans, as well as discussions with the VC beneficiaries, the USAID Agriculture Program plans to announce Capacity Building Grants in the next reporting period. These grants will cover the following areas:

. Improved access to modern inputs in horticultural VCs; . Modern approaches and mechanisms to facilitate export of horticultural commodities; . Enhanced competitiveness of organic horticulture in Georgia.

These grants are anticipated to strengthen the capacity of the relevant business associations to expand provision of services, introduce new and highly-demanded consultation packages, conduct Public Private Dialogue (PPD) events, promote modern practices and technologies, facilitate market linkages and provide other support to the members, customers and other sector stakeholders on a sustainable basis.

Component 2: Technical Assistance to MSMEs, Cooperatives, Service Information- Extension Providers and Associations Activity 3.1: Select Local Business Service Providers and Build BSP Capacity To increase the competitiveness of agricultural produce, the USAID Agriculture Program considers it essential to assist more agribusinesses in pursuing good agricultural practices, introducing food safety management standards and obtaining international certifications. To be able to assist agribusinesses in diverse areas, the Program decided to expand the existing pool of BSPs and engage more organizations

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that specialize in food safety. In coordination with ARDA, the Program reached out to those organizations that did not respond to the Expression of Interest (EOI) that was announced in the First Quarter. Three companies that specialize in food safety consultations submitted their applications in accordance with the established procedures and became the Program’s partner BSPs. As of today, the list of BSPs includes 31 partner organizations, that are available to provide consulting services in a number of technical areas. Activity 3.2: Cross Value-Chain Systems Support Agronomic Expertise: The USAID Agriculture Program held several discussions both internally and with the representatives of the Agrarian University to identify the most effective design of the capacity building program that will help innovative farmers to increase their agronomic knowledge and adopt modern technologies and practices. The meeting produced agreement on general approaches and participation required. A program component will be finalized in time for the commencement in the Fourth Quarter and inclusion in the Year Two Work Plan. It envisions “field-based education” at select knowledge plots through a series of 2-3 days sessions, integrating theoretical and practical aspects of specific phases of crop production cycle.

Agricultural Cooperatives: As part of the Terms of Cooperation (TOC) signed with Agricultural Cooperatives Development Agency (ACDA), the USAID Agriculture Program’s partner BSP – GEC finalized its assessment of agricultural cooperatives operating in the horticulture VCs. GEC submitted a draft final report that highlights gaps existing in the functionality of 38 pre-selected agricultural cooperatives and suggested specific recommendations for their capacity building program. The report will be submitted to USAID in the beginning of July 2019. The findings and recommendations will help the Program design tailored capacity building activities that will be included the Year Two Work plan.

Supply Chain (Cold Chain) Management: In the reporting period, the USAID Agriculture Program mapped the existing cold storages in Georgia and held meetings with relevant stakeholders. The meetings were aimed at discussing the Supply Chain Management Model, integration of primary producers in the chain, and the main technical limitations and logistic issues faced by the cold chains.

Based on these meetings, the USAID Agriculture Program, in cooperation with the Georgian Cold Storage Visiting cold storage in Agara, Kareli municipality, and Logistics Association, developed a brief assessment Shida Kartli region of the country’s cold chain and identified key barriers and gaps in the sector. The Program shared the assessment with its subcontractor – World Food Logistics Organization (WFLO) for revision. WFLO will then propose a logistics strategy for local Micro, Small and Medium Enterprises (MSMEs), including basic technical specifications, that can be supported by the Program’s grants and TA.

Access to Finance: The USAID Agriculture Program held several meetings with a number of financial institutions and the representatives of ARDA. Based on the findings from the meetings and the desk study, the Program’s Access to Finance Specialist conducted an assessment of the financial instruments available in Georgia, including the state programs, such as “Preferential Agro-credit”, “Preferential Agro-leasing”, “Plant the Future”, the commercial agricultural credit products and donor funded projects.

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Under this assessment, the USAID Agriculture Program paid a special emphasis on the financial instruments that represent potential sources of matching contribution for the Program’s grant applicants. The Program uses this assessment to consult potential grantees in order to raise their awareness about the available financial products and ensure their access to finance.

Environmental Solutions: Following a recently conducted horticultural bio market survey, the USAID Agriculture Program issued a Request for Proposals (RFP) to facilitate organic certification and provide a matching 50/50 financial support to the primary producers and processors that are engaged in organic production but are not certified and/or enjoy a conversion status. The Program is targeting the following agribusinesses for this pilot project:

. MNK Ltd operates 4 hectares of thorn-less blackberry orchard in the village of Mukhiani, Tskaltubo municipality. Under the guidance of relevant certification agency, the company has been converting to organic farming since 2017. . SP Giorgi Kokozashvili operates 1.2 hectares of modern apple orchard and has been assisted by the Biological Association Visiting organic producers in Shida Kartli region Elkana in maintaining organic farming since 2016. . Agricultural Cooperative Agrostore started organic farming on 3 hectares of raspberry orchard in municipality, in 2019. . SP Elizabed Khmiadashvili grows different varieties of lettuce on a 1-hectare plantation in and has been converting to organic farming since 2018. . SP Aleksandre Vashakidze operates 3 hectares of blackberry orchard (in conversion to organic farming since 2017), 7 hectares of raspberry orchard and a 1-hectare blackberry orchard (both in conversion since 2019). All three orchards are located in the village of , municipality. . Shavra Ltd operates 1.2 hectares of plum orchard in the village of Agara, Kareli municipality, and has been applying organic farming practices since 2013. Activity 3.3: Selected Value-Chain Assistance Program To determine specific TA activities, the USAID Agriculture Program will study the needs of the grantee and non-grantee enterprises. The latter will have an opportunity to apply for a cost-shared non-grantee TA and the Program will determine one-on-one firm level TA on a case-by-case basis. In addition, to further contribute to the competitiveness of the selected VCs, the Program plans to undertake broader VC activities aimed at addressing the ongoing challenges identified in the “Sector Selection and VC Analysis” report.

Cost-Share Based TA Program for Non-Grantee Agribusinesses: In February 2019, the USAID Agriculture Program launched a cost-share based TA program for non-grantee agribusinesses engaged in the horticultural VCs focused on the following technical areas:

. International food safety and quality standards including biological and other social responsibility standards; . Modern agricultural technologies;

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. Organizational capacity building; . Business management; . Supply chain management and logistics; . Marketing and sales; . Branding; . Access to finance; . Export promotion; . Local market linkages. As of June 30, 2019, the Program has approved 14 applicants. The majority of the applicants requested TA in the area of food safety certification.

Berry Value-Chain Assistance Program

Facilitating Improved Access to New Varieties and Inputs: With the USAID Agriculture Program’s assistance, the beneficiaries of ARDA – Cooperative Agrostore, SP Mate Khurtsidze, SP Irakli Peikrishvili and SP Giorgi Gujabidze imported virus-free blackberry and protected raspberry seedlings from Serbia. As a result, 53,300 seedlings have been planted in three regions of Georgia, covering a total of 8 hectares. Total investment makes up 118,738 USD and is comprised of a 70/30 contribution by the private sector and ARDA. These beneficiaries plan to create around 80 field jobs to properly perform seasonal work under the Program’s technical guidance.

Introducing Improved Production Technologies: On June 18, 2019, in cooperation with Lurji Veli Ltd, the USAID Agriculture Program organized a field day and invited 30 berry growers, wholesalers and state extension specialists from , Imereti and Kakheti regions. The goal was to demonstrate best practices in berry harvesting while applying the digital traceability system, and observe pre-cooling operations. The latter is the first stage of postharvest handling and is necessary for removing the field heat from freshly harvested fruits, vegetables and berries. Visiting Lurji Veli Ltd.’s orchard

Lurji Veli Ltd is one of the first Georgian companies that introduced pre-cooling system and the majority of the invited berry growers observed pre-cooling operations for the first time. The company is a member of the partnership of four blueberry growers that jointly operate 20 hectares of orchard. This season, Lurji Veli Ltd and other member of the partnership jointly employ 12 full-time staff members and up to 200 berry pickers and expect to harvest 70 tons of blueberries. Part of the harvested blueberries has already been exported to Italy and Russia.

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Modern Practices in Postharvest Handling – Pre-Cooling System: In cooperation with its sub-contractor – WFLO, the USAID Agriculture Program developed a technical guide on pre-cooling system. This guide was actively requested by many growers, as pre-cooling system enables them to extend the shelf-life of different types of fruits, berries and vegetables. In addition, it is relatively new in Georgia and is being utilized by very few agribusinesses. The technical guide will help the growers select proper pre-cooling method for their products. The guide was translated into Georgian and disseminated among interested agribusinesses.

Delivering Individual Consultancies to the Program’s Grant Recipients: In the reporting period, the USAID Agriculture Program delivered technical advice and guidance to 9 grant recipients in different areas (see Table 1). Technical guide

Table 1. Grant recipients that received consultancy

No. Name Region Crop Consultancy in 1 MNK Ltd Imereti Blackberry Drip irrigation and fertigation Greenhouse strawberry production 2 SP Berdia Silagadze Imereti Strawberry and sun protection net installation Agricultural Cooperative 3 Imereti Strawberry New strawberry varieties Shamatia Strawberry and New strawberry and raspberry 4 SP Aleksandre Sologhashvili Kakheti raspberry varieties 5 Kartuli Nergebi Ltd Kakheti Blueberry New blueberry varieties for nursery 6. Lurji Veli Ltd Guria Blueberry Selection of pre-cooler Blackberry and 7 Riverson Agro Ltd Kakheti Pest management and fertigation raspberry Raspberry and 9 SP Mindia Kavtaradze Imereti Integrated pest management blackberry

Facilitating Access to Markets: To facilitate market linkages across the berry VC members, the USAID Agriculture Program organized site visits to 27 blueberry, strawberry and raspberry growers from , Tskaltubo, Ozurgeti, Kvereli, , , and municipalities and invited foreign buyers and local wholesalers. As a result, in the reporting period, 50 tons of blueberries were exporterd to Russia and 74 tons of blueberries, stawberries and raspeberries were purchased for the local market and were Blueberry packed for export sold at Agrohub and Carrefour.

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Improving Knowledge of Berry Growing Practices and Postharvest Handling Technologies: In April 2019, with the support of the USAID Agriculture Program, the members of the Berry Growers’ Association, and Berry Producers’ Association participated in the “Soft-Stone Fruits International Value Chain Forum” held in Ukraine. The event was organized by the Berry Association of Ukraine and offered the opportunity to learn about berry growing practices and postharvest handling technologies, including pre-cooling and cold storage systems.

The attendees of the forum included the representatives of Soft-Stone Fruits International Value Chain Agricultural Cooperative Spartaki and Agricultural Forum in Ukraine Cooperative Chiri. These cooperatives are the grant recipients of the USAID Agriculture Program that plan to introduce modern postharvest handling practices. Thus, they used this opportunity to study relevant equipment available in Ukraine. In addition, Agricultural Cooperative Spartaki established relations with Ukrainian nurseries and is considering to import “Brusniava” raspberry seedlings.

Stone Fruits Value-Chain Assistance Program

Developing Postharvest and Processing Infrastructure and Capacity: The USAID Agriculture Program is developing the list of producers/processors involved in stone fruit processing. So far, the Program has gathered information about 17 enterprises that operate in 7 regions of Georgia. Once the list is finalized, the USAID Agriculture Program will work closely with the identified enterprises to obtain more information about their needs and design necessary interventions.

Improving Postharvest Handling and Infrastructure: The USAID Agricultural Program’s Supply Chain Manager and Stone and Pome Fruit Value Chain Specialist conducted field visits to 19 cold storage facilities based in Shida Kartli Region. Among these cold storage facilities only one company – Glenberry LLC – has modern equipment and its own facility. As for the remaining entities, the majority require investment in pre-cooling equipment. It is notable that 50% of the visited cold storages do not have modern equipment that would sustain the quality of products throughout the storage time. To assist cold storage facilities in improving their businesses, the Georgian Cold Storage and Logistics Association planned a meeting next quarter in order to share practical knowledge on relevant wide-ranging issues for all cold store operators.

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Culinary Herbs Value-Chain Assistance Program

Strengthening linkages among VC Participants: The USAID Agriculture Program arranged two roundtable discussions with the herbs and perishable vegetables VC stakeholders, including producers, collectors, traders, input suppliers, public extension agents and subject-specific experts from agricultural universities. The discussions aimed to highlight problems existing in the sector, gather stakeholder insights and identify areas for the Program’s focused interventions. The first meeting was held in and was facilitated by the Association of Herbs Producers, which unifies 28 members operating in Imereti region. Another meeting Roundtable discussion with herbs and perishable vegetable VC stakeholders was conducted in and engaged VC participants that operate in eastern regions of Georgia and have a significant potential to contribute to the growth of herbs and vegetables VCs. A total of 43 individuals attended the meeting, discussed challenges and proposed problem resolution mechanisms. This will help the USAID Agriculture Program to design more focused and result-oriented VC assistance activities.

Enhancing Knowledge of Cultivation Practices: To access low-cost TA, the USAID Agriculture program partnered with the USAID Farmer to Farmer (F2F) project and invited their consultant to deliver trainings in herbs and vegetable production to 36 smallholders and medium- size farmers. Training sessions were organized in Kutaisi and Tbilisi and incorporated theoretical and practical aspects of modern production practices. The Program selected these locations in order to cover those regions that have significant experience and potential in production of herbs and vegetables. Herbs and Vegetable Production Training, Kutaisi As part of this activity, the F2F consultant conducted 3 Office field visits in Vani and Tskaltubo municipalities to deliver tailored consultancy to the farmers. The areas of consultancy included: (1) sweet pepper production technologies in an open field, (2) herbs and vegetable production technologies in an open field and (3) greenhouse tomato production technologies.

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Table Grapes Value-Chain Assistance Program

Improved Access to New Varieties and Inputs: In the reporting period, the USAID Agriculture Program completed development of a database of table grape growers in Georgia, including the most wide-spread varieties, existing nurseries, and import and export data. In accordance with data provided by National Statistics Office of Georgia and the Information-Consultation Center (ICC) of MEPA, 128 hectares of vineyards in Georgia produce 1,600 tons annually, with an average of 13 tons per hectare. 70% of the most wide-spread table grape varieties are Tita Kartuli and Aladasturi. In Georgia, there are 2 non-licensed table grape nurseries operating Telavi and the village of Mukhani, that grow around 60 table grape varieties, including new varieties.

The USAID Agriculture Program scheduled roundtable meetings with table Visit to a Vineyard in grape growers in Kakheti early next quarter to identify existing gaps and Gurjaani design short and mid-term interventions.

Mandarin Value-Chain Assistance Program

Cooperation with the Ministry of Agriculture of Autonomous Republic (AR): The USAID Agriculture Program held working meetings with the public entity partners in Adjara to discuss the cooperation in strengthening mandarin VC. These meetings elicited a number of challenges, including the lack of nurseries and quality inputs for primary production, as well as the problems related to postharvest handling and storage infrastructure. Development of modern nurseries and large-scale consolidation centers represents one of the areas for the Program’s potential intervention and will be duly reflected in the TOC to be signed between the parties (see Activity 4.3: Donor and Host-Country Coordination).

Engaging VC Actors: In cooperation with ICCs based in Adjara and Guria regions, the USAID Agriculture Program organized meetings with key participants of mandarin VC, including producers, collectors/consolidators, processors and traders. Meetings aimed to gather information about their current activities, opportunities for engagement, and TA needs. As a result of these meetings, and in coordination with the regional Grants Activity Manager, the Program prepared a preliminary list of mandarin producers and processors that are ready to strengthen commercial linkages among the VC actors, as well as increase the efficiency of their production through modern technologies and improved marketing.

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Cross-Cutting Activities for Selected Value-Chains

Improving Access to Agricultural Inputs: The USAID Agriculture Program contracted Union Agroservice to organize the first enhanced meeting of input suppliers. The participants included the representatives of multinational input suppliers, local market players and new entrants, all of whom stating problems and opportunities existing in the sector. During the discussion, the attendees emphasized on the quality of inputs and appropriate certifications, need for improved extension services, lack of information and knowledge among smallholders, lack of organic fertilizers and plant protection products, and other Meeting with input suppliers issues.

The representatives of the FSC network and nursery operators proposed possible solutions to the existing challenges and suggested the ways in which the USAID Agriculture Program can contribute to the process. The Program will collaborate with Union Agroservice and relevant stakeholders to ensure that a coherent approach is taken to help the farmers access increasingly improved inputs and services. This, in turn, will increase the productivity of the agriculture sector of Georgia.

Digital Agriculture Opportunities: Earlier in the Second Quarter, the USAID Agriculture Program, MEPA and international experts discussed piloting a digital crop management system. The Ministry’s leadership expressed their interest in launching this system. In fact, wide-spread utilization of modern technologies and promotion of innovative thinking among the farmers is of one the priorities of MEPA. With this in mind, the Program invited an international expert to provide technical expertise and consultancy, and assess the potential for developing digital crop management system in Georgia, including assessment of risks, Presentation on Digital Agriculture Opportunities identification of most appropriate technologies (for example sensors, communication networks/platforms, etc.) and development of a concept for implementing the system on a pilot base. There is a particular interest in the potential of digital agriculture to bring about lower insurance costs to participating farmers.

As part of his visit, the consultant met Union Agroservice and interested sector associations and medium and large-scale farmers to discuss the advantages of a digital system. Meetings were also organized in Shida Kartli region with the companies/farmers that installed sensors and gained certain experience in this direction. The consultant will develop a report that will reflect his vision and findings, as well as specific recommendations for piloting the system in Georgia.

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Addressing the Government’s Regulation on Mandatory Certification of Nurseries: As a response to the Government’s new regulation regarding the mandatory certification of nurseries, the USAID Agricultural Program hosted SEEDEV’s consultant to conduct a baseline study and evaluate current activities regarding the certification. Under this activity, the representatives of the Program met with the Scientific Research Center of Agriculture (SCRA), National Food Agency’s (NFA) Phytosanitary Department and nurseries participating in the “Plant the Future Program”. SEEDEV’s consultant shared with SCRA and NFA the experience of the EU countries in introducing mandatory certification procedures. A month later, the consultant conducted a follow-up visit to provide recommendations that can be easily adopted by SRCA, as the latter will become the certifying body from the Government.

Strengthening/Building Capacity of Sector Associations: The USAID Agriculture Program continued meeting with sectoral and cross-cutting business associations to discuss the possibility for their involvement in the Program’s activities at the VC level. The discussions were actively attended by Georgian Association of Herbs Producers, Georgian Association of Citrus Producers, Union Agroservice and Export Development Association. During the meetings, the Program also shared with the associations the recommendations developed in the scope of the institutional capacity assessment (see Activity 2.4: Capacity Building Grants to Associations).

Supporting Certification Procedures based on Immediate Beneficiary Request: GlobalGAP Since GlobalGAP is one of the most demanded standards for the primary producers, the USAID Agriculture Program launched a 50/50 matching assistance to ARDA-supported beneficiaries that operate modern berry orchards with high quality varieties. These include: . Drill Master Ltd – a primary producer of blueberries based in village Jikhashkari, Zugdidi municipality that operates 8 hectares of orchard. . SP Davit Robanishvili – a primary producer of blackberries based in village Patara Garejvari, Gori municipality that operates 6 hectares of orchard. The Program will sign an agreement with this enterprise early next quarter. These berry growers are anticipated to receive GlobalGAP certification in the season of 2020. GRASP The USAID Agriculture Program assisted its grant recipient Lurji Veli Ltd in obtaining GRASP certification that enables producers to establish a good social management system on the farm by addressing the aspects of workers’ health, safety and welfare. The Program supported development of previously unavailable GRASP National Interpretation Guidelines for Georgia that is a mandatory pre-condition for this certification. Now Georgian agribusinesses can easily apply for GRASP certification since the Guidelines have been submitted to GlobalGAP Secretariat. ISO 22 000 The USAID Agriculture Program initiated ISO 22 000 cost-shared consultancy projects for the following agribusinesses that operate in the target VCs:

. Farconi Ltd applied for the Program’s technical assistance to receive a consultancy in food safety and obtain ISO 22000:2018 certification for packaged spices and medicinal herbs. . Fruit Paper Company Ltd – a Kareli-based producer of jams, purees and rolls of different fruits.

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The company applied for the Program’s technical assistance to obtain ISO 22 000 certification that will enable the applicant to improve food safety management systems and expand domestic and export sales. . Euro Farm Ltd applied for the USAID Agriculture Program’s technical assistance to receive consultancy in food safety and obtain ISO 22000:2018 certification for its warehouse and storage facility located in Orkhevi Settlement of Tbilisi. GAP analysis The USAID Agriculture Program conducted GAP analysis of the following agribusinesses to identify necessary infrastructure improvements, determine associated costs, and their readiness to engage in cost-shared certification consultancies:

. Ekzofruit Ltd – a microenterprise that is based in Ozurgeti municipality and is e’ngaged in dried mandarin production. . Mtsvane Zumba Ltd – a company that is based in municipality and is engaged in the production of essential oils for the food industry.

Export Facilitation in the Target VCs: The USAID Agriculture Program cooperates with Enterprise Georgia of MoESD (see Activity 4.3: Donor and Host- Country Coordination) to facilitate the participation of Georgian agribusinesses in international trade shows and exhibitions. This is one of the most effective ways of penetrating new export markets. Following high- level meetings between the Georgian and South Korean Governments, aimed at strengthening economic cooperation between two countries, Enterprise Georgia decided to facilitate the participation of Georgian agribusinesses in “Import “Import Goods Fair” in Seoul, South Korea Goods Fair” (IGF), since it was the best option for exploring business opportunities in South Korean market. The fair took place in Seoul on June 27-29, 2019.

IGF is held annually since 2003 and it is the only import-centered exhibition in South Korea. The fair is organized by Korea Importers Association and sponsored by the Ministry of Trade, Industry and Energy, Korea Trade Investment Promotion Agency, Korea International Trade Association and Foreign Embassies in Korea. The following sectors were presented at the exhibition: food and beverages, household items, apparel and leather goods. Georgia participated in this exhibition for the first time. MoESD’s Enterprise Georgia supported participation of 12 companies from food and beverage and apparel and leather goods sectors. Within this initiative, Enterprise Georgia funded the costs associated with renting of the exhibition space and constructing the exhibition stand, while the USAID Agriculture Program co-funded the space rent and stand construction for 5 agribusinesses, as well as marketing materials and associated costs. These agribusinesses include: Caucasus Organic Fruits Ltd (dried fruits), GeoPriprava Ltd (spices), Waime Spices Ltd (spices), Herbia Ltd (vegetable sauces), Geofresh Ltd (blueberry, asparagus, dried fruits). All of them operate in the Program’s target VCs. Enterprise Georgia was delighted to receive positive feedback about Georgia’s stand that was arranged in cooperation with the USAID Agriculture Program. In addition,

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as a follow up to the trade fair, South Korean authorities started discussing the possibility of signing a Free Trade Agreement with Georgia.

Supporting VC Beneficiaries in Strengthening Branding Identity: The USAID Agriculture Program assisted a local wholesaler – SP Gocha Nozadze in developing branding identity. The enterprise launched operations in 2018 and started to actively cooperate with local producers. SP Gocha Nozadze regularly purchases berries and fruits from the farmers based in Kakheti, Guria, Shida Kartli, , and Imereti regions. With this cost-share based assistance, the Program aims to increase the visibility of the enterprise, as branding and packaging is becoming increasingly important for the consumers. As a result, SP Gocha Nozadze Kenkrovana’s products in Agrohub now supplies large supermarkets, such as Agrohub and Carrefour with newly branded berries and fruits.

Developing Video Guides for Stone and Pome Fruits Producers: In the Second Quarter, within the framework of the selected VC assistance program, the USAID Agricultural Program invited SEEDEV’s consultant to conduct theoretical and practical training for stone and pome fruit producers. As a follow up to this activity, the Program created video guides on apple2, pear3, sweet cherry4 and plum5 tree pruning and formation. These were translated into Georgian and uploaded on the program’s Facebook page. The Program sent the online resources to MEPA’s ICCs and Farm Service Centers (FSCs) that are based in those regions which produce stone and pome fruits. These guides will also be shared on MEPA’s online library. Cross-Cutting Activity 4.1: Gender and Youth Integration In close cooperation with the USAID Agriculture Program’s Gender Specialist, an international STTA in Inclusive Economic Growth carried out a Rapid Assessment of Youth Inclusion in Agriculture Value-Chain Development Programming. The assessment includes the methodology, an overview of the global best practices and lessons learned in the area of youth economic empowerment and recommendations. The recommendations, along with USAID’s Policy on Youth in Development (2012) and previous experience of engaging young agricultural entrepreneurs and professionals in agribusiness development, will guide the Program in designing its approach to youth-inclusive agricultural value-chain development programming.

The USAID Agriculture Program’s Gender Specialist developed a roadmap to ensure the effectiveness of inclusive agriculture VC development. According to this roadmap, the Program will establish a system that will cover:

. Gender Transformative Agricultural Value Chain Development.

2 https://www.facebook.com/apgeorgia.org/videos/1645790348900189/ 3 https://www.facebook.com/apgeorgia.org/videos/288170045435880/ 4 https://www.facebook.com/apgeorgia.org/videos/2332350947090701/ 5 https://www.facebook.com/apgeorgia.org/videos/421896538356360/

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. Youth-Inclusive Agricultural Value Chain Development. Activity 4.2: Public Information and Outreach Following the announcement of the second RFA, the USAID Agriculture Program conducted a total of 13 outreach meetings in different regions of Georgia. Under this solicitation, the Program is supporting the development of postharvest handling, packing, and cold storage infrastructure within the selected VCs.

Through these meetings, the Program reached 396 potential applicants (see Table 2), who asked highly technical questions, including the requirements and restrictions related to the equipment and machinery, matching contribution, and potential sources for co- Outreach Meeting in Kutaisi funding. The audience mainly included people who are dealing with perishable products, such as berries, greens, persimmons and grapes and are thus interested in introducing pre-cooling, cold storage and packaging equipment.

Table 2. The Number of attendees of outreach meetings

Location Participants Date Venue , -Mtianeti Region 48 April 19, 2019 Dusheti Municipality Gori, Shida Kartli Region 27 April 22, 2019 Centers for Civic Engagement , Samtskhe-Javakheti Region 25 April 23, 2019 Centers for Civic Engagement Imereti Region Chamber of Commerce Kutaisi, Imereti Region 44 April 24, 2019 and Industry , Racha-Lechkhumi and Kvemo 35 April 25, 2019 Mayor’s Office Svaneti Marneuli, Kvemo Kartli Region 15 April 30, 2019 Center for Civic Engagement Civic Integration Foundation’s Center of , Kvemo Kartli Region 6 April 30, 2019 Youth Gurjaani, Kakheti Region 24 May 1, 2019 Gile Ltd Administration of Lagodekhi Protected Lagodekhi, Kakheti Region 45 May 2, 2019 Areas Zugdidi, Samegrelo-Zemo Svaneti Region 70 May 6, 2019 Samegrelo Regional Municipality Ozurgeti, Guria Region 20 May 7, 2019 Center for Civic Engagement Regional Chamber of Commerce and , Adjara Region 20 May 8, 2019 Industry Tbilisi 17 May 10, 2019 Hotel Costé Total number of attendees 396

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Activity 4.3: Donor and Host-Country Coordination On April 4, 2019 the USAID Agriculture Program signed a TOC with Enterprise Georgia. Under the cooperation, the parties aim to strengthen the technical capacity of Georgian food processors, engage in export promotion and introduce international food safety standards, and modern production technologies.

Early in July 2019, the USAID Agriculture Program will sign a TOC with the Ministry of Agriculture of Adjara AR. In April, the Program met with the Ministry to discuss the challenges existing in the region and agreed that the TOC signed with Enterprise Georgia Program can potentially support the development of nurseries and consolidation centers.

Throughout the quarter, the USAID Agriculture Program actively met with McDonald’s Georgia to discuss the challenges related to the supply of local products and identify opportunities for cooperation, including selection of local suppliers of tomatoes, cucumbers, onions, carrots and lettuces that meet McDonald’s requirements. This was immediately followed by facilitation of a meeting between McDonald’s and potential lettuce suppliers. In the next quarter, the Program plans to organize a field visit for the management of McDonald’s Georgia to Herbia Ltd in Tskaltubo municipality. Project Management Activity 5.1-5.2: Operations, Facilities, and Equipment and Staffing In the Second Quarter, the USAID Agriculture Program opened a competitive call on www.jobs.ge to recruit a Value Chain Specialist for the last vacant position. 15 individuals applied for the position. Following the interviews with the shortlisted applicants, the selection committee identified the most suitable candidate who was mobilized by the Program in April 2019. With this last person coming onboard, the Program is fully staffed and operates by 29 staff members including the expatriate COP.

In late Third Quarter the USAID Agriculture Program announced a call for internship positions in 8 technical areas. 146 applicants submitted their resumes in response to this call and 14 were selected as a result of rigorous and competitive selection. Selected interns will start their assignments early in Fourth Quarter. Activity 5.3: International Subcontracting Sub-contracts with international partners, SEEDEV and WFLO, were executed in in the First Quarter and both organizations have launched their performance under the assigned Scopes of Work (SOW). Activity 5.4: Monitoring and Evaluation The USAID Agriculture Program conducted a Pre-Data Quality Assessment (DQA). Based on the review of selected projects, the Program identified the data collection procedures and documented the Monitoring, Evaluation and Learning (MEL) Plan. By doing so, the Program also assessed potential data quality issues that could arise from the planned protocols.

The USAID Agriculture Program held introductory meeting with the grantee and non-grantee enterprises to inform them about the importance of data collection and introduce corresponding forms. Following

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this meeting, the Program collected baseline data from 6 grantee and 12 non-grantee enterprises. The Program will analyze these data along with the information obtained from the rest of grantee and non- grantee beneficiaries and will present it in the Year One Annual Report.

The USAID Agriculture Program plans to cooperate with a local consultant to develop non-grantee data collection and impact attribution methodology. The consultant will begin the assignment in the Fourth Quarter. Once the methodology is developed, the Program will share it to USAID for review and comments.

By the end of the Third Quarter, USAID approved 11 In-Kind Grants. The remaining In-Kind and Capacity Building Grants are expected to be approved early in July 2019. The Program will collect the baseline data for all approved grant projects early in the Fourth Quarter. Activity 5.5: Environmental Compliance The USAID Agriculture Program’s Environmental Manager developed ERCs/EMMPs for 12 applicants that were shortlisted as a result of the Program’s first RFA (see Activity 2.2: In-kind Grants to MSMEs and Cooperatives). These have been submitted to USAID, along with investment proposals and negotiation memorandums.

The USAID Agriculture Program announced a call to contract a Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP) consultant and developed SOW that was agreed with USAID’s Bureau Environmental Officer (BEO). A total of 6 people responded to the announcement and the Program will select the most suitable candidate in the next reporting period.

Special Initiatives A recent hail storm in Gori and Kareli municipalities severely affected farmers in 29 villages by almost destroying their yield for 2019. These farmers mainly grow vegetables and operate apple and stone fruit orchards. USAID received a special request from MEPA to support the farmers that have been affected by the hail storm and the USAID Agriculture Program was advised to address the mentioned problem by coming up with relevant initiatives and long-term solutions.

The USAID Agriculture Program met with ARDA, Food and Agriculture Organization (FAO) and the USAID ZRDA Project to discuss agricultural insurance. The Program also met with MEPA to talk about the idea of producing anti-hail nets in Georgia. At present, the Program is working on a detailed proposal and is considering two areas for intervention: (1) agricultural insurance and (2) anti-hail systems. The Program is also working with private sector companies to identify the possibility of establishing a factory to produce anti-hail nets. Detailed information about the progress of these initiatives and possible interventions will be shared with USAID for review and approval.

The USAID Agriculture Program is considering to allocate small part of the grant funds to supporting innovation in agriculture. By doing so, the Program aims to contribute to solving the overarching challenges that affect the development of the agriculture sector in general. The Program’s staff members are refining the details of this special initiative that will be reflected in Year Two Work Plan for USAID’s review and comments.

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Financial and Expenditure Summary USAID Contract No.: 72011418C00001 Date of Issuance: 9/24/2018 Total Potential Amount: $ 18,224,697 Amount Obligated to date: $ 6,961,965 Total Project Funds Expended through: 06/30/2019 $ 1,750,492 Key Constraints In the reporting period, the USAID Agriculture Program faced a constraint regarding the mechanism for issuing Capacity Building Grants. This delayed the submission of the grant packages. The Program found that the mechanism suggested in the Grants Manual contradicts the requirements of the contract. The former suggested using a Fixed Award Amount (FAA) mechanism; however, when using this mechanism, the Program was unable to request grantee cost-share. On the other hand, according to the contract, it is mandatory for the Program to request a cost-share. As a result, in consultation with USAID, the Program decided to utilize the Simplified Grants Mechanism while awarding Capacity Building Grants.

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