AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL PERFORMANCE REPORT August 28, 2020 This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc. AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL PERFORMANCE REPORT Award No: AID-121-TO-16-00002 Cover photo: Workers harvest apples at Sady Donbasu, an ARDS champion firm, after the company relocated following military action in Eastern Ukraine. With ARDS support, the company reestablished itself as a leading apple producer and now helps other producers thrive with agricultural services. (Credit: Vladyslav Sodel) DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States government. CONTENTS Acronyms ................................................................................................................ ii ARDS by the Numbers .......................................................................................... 1 Executive Summary ............................................................................................... 2 About ARDS ........................................................................................................... 6 ARDS Activities and Legacy ................................................................................. 8 Land Market Reformed ........................................................................................................... 8 Institutional Capacity .............................................................................................................10 Capacity of Consolidated Communities ............................................................................12 State Agri-Food Controls .....................................................................................................14 Enhancing Value Chains and Supporting Functions ..............................................................16 Fruit and Vegetable Value Chains .......................................................................................16 Dairy Value Chain ...................................................................................................................23 Meat Value Chain ....................................................................................................................26 Supporting Functions .............................................................................................................30 Lessons Learned ................................................................................................... 37 Communication and Learning ....................................................................................................37 Communicating Behavior Change .......................................................................................37 Enhancing Communication Skills .........................................................................................38 CC Capacity Development ..................................................................................................38 Enhancing Value Chains and Supporting Functions .........................................................39 Annex A. Environmental Mitigation and Monitoring ....................................... 41 Annex B. Progress Against Targets ................................................................... 44 Annex C. Indicator Tables .................................................................................. 46 Annex D. Financial Information ......................................................................... 70 Attachment: ARDS Interactive Final Report AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL REPORT | i ACRONYMS AMP Association of Milk Producers ARDS Agriculture and Rural Development Support project AUPB Association of Ukrainian Pig Breeders CC Consolidated Community CE communal enterprise CLA collaborating, learning, and adapting CVS center for veterinary services DL draft law DSTU State Standard of Ukraine EU European Union FAO United Nations Food and Agriculture Organization FFU Future Farmers of Ukraine FWB Foundation of Women-Beekeepers FY fiscal year GDP gross domestic product GIS geographic information system GRASP GLOBALG.A.P. Risk Assessment on Social Practice HACCP Hazard Analysis and Critical Control Points IMF International Monetary Fund LSD local systems development M-Kit mastitis kit MAPF Ministry of Agrarian Policy and Food of Ukraine MEDTA Ministry of Economic Development, Trade, and Agriculture MEL monitoring, evaluation, and learning MP member of parliament MSME micro-, small-, and medium-sized enterprise NGCA non-government-controlled area NTWG National Technical Working Group PLT Prime Lab Technology AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL REPORT | ii RST Reform Support Team SGC StateGeoCadastre SME Small- and Medium-sized Enterprise SRO Self-Regulatory Organization USAID United States Agency for International Development USBA Ukrainian Stock Breeders Association VR Verkhovna Rada (Parliament of Ukraine) AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL REPORT | iii ARDS BY THE NUMBERS • 9,438 people engaged in ARDS activities • 17 associations and self-regulatory organizations strengthened capacities • 24-percent increase — 15 percent to 39 percent — in support for land reform • 72 legislative pieces revised and drafted • 13 laws adopted • 79 communities supported implementing land-management methodology • 24 infrastructure projects • 1 million indirect beneficiaries • $89 million incremental sales for small- and medium-sized enterprises • $22 million exported agricultural products • 520 farmers implemented new technologies • 50,000 farmers and private households engaged with ARDS • $13 million of new private sector investment in the agricultural sector • $16 million in loans for farmers AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL REPORT | 1 EXECUTIVE SUMMARY A remarkable Ukrainian chapter opened in 2013 to 2014 when a “Euromaidan” citizen uprising brought tens of thousands of citizens into the streets to protest the then- government’s rejection of an EU agreement in favor of developing closer ties with Russia. By March 2014, the pro-Russia regime was ousted and replaced by an EU-aligned government. Undeterred by Russia’s response — the illegal annexation of Crimea followed by military occupation of 7 percent of Ukrainian territory, where fighting continues to this day — Ukraine’s determination to open economic opportunities as a European country and attract more foreign and domestic investment only increased. The conflict, which severed ties to markets in Russia and non-government-controlled areas (NGCAs) and attacked Ukraine’s independence, reignited the country’s national pride and fueled action in the public and private sectors as Ukraine continued bold strides toward a more stable and financially sound future. In April 2014, decentralization reforms started to transfer political, administrative, and financial rules and responsibilities from the central government to the local level. Ongoing goals include forming effective local government to create and support a sustainable rural living environment by voluntarily merging local villages into Consolidated Communities (CCs), providing high quality and accessible public services, and reducing corruption in various economic sectors — especially its agricultural industries — in the country known as “the breadbasket of Europe.” In February 2015, the country enacted unprecedented and wide-ranging deregulatory changes aimed at strengthening the economy, adhering to EU democratic and trade principles, and protecting against further Russian encroachment. In September 2016, in the midst of Ukraine’s pivot toward the European Union and the opportunities of its open marketplace, USAID launched the Agricultural and Rural Development Support (ARDS) project, a $22 million, four-year initiative. Building on successes and lessons learned from previous agricultural projects and functioning on both national and local levels, with a special focus on rural development in southern and eastern Ukraine, ARDS embraced the U.S. Global Food Security Act of 2016’s1 commitment to the “productivity, incomes, and livelihoods of small-scale producers, particularly women, by working across agricultural value chains and expanding farmers’ access to local and international markets.” Closely linking its activities to Ukraine’s decentralization process, and working with a range of entities (government, the private sector, civil society, and donor partners), the project bolstered inclusive, competitive, and sustainable economic growth of Ukraine’s 1 https://www.usaid.gov/feed-the-future/vision/global-food-security- act#:~:text=The%20Global%20Food%20Security%20Act,in%20development%20and%20national%20securit y. AGRICULTURE AND RURAL DEVELOPMENT SUPPORT PROJECT FINAL REPORT | 2 agricultural sector and mainstreamed gender integration. ARDS achieved its results by focusing on two goals: 1. Improving rules and regulations governing land-market reform — Build institutional capacity to both design and implement reforms — Build the capacity of CCs to design and implement reforms on the local level — Reform and improve state agri-food controls 2. Enhancing agricultural value chains (meat, dairy, fruit, and vegetable value chains) and their supporting functions. ARDS based all activities