CURRENT PROJECTS
Southern Tajikistan Agriculture Supply Chain Development Project
Southern Ukraine Vegetable Supply Chain Development Project
Vinnytsya Dairy Supply Chain Development Project
Vinnytsya Fruit Supply Chain Development Project
COMPLETED PROJECTS
Agro-Industrial Finance Company
Dmitrov Potato and Dairy Production Project
Ukraine Agribusiness Development Project
Uzbekistan Dairy Sector Supply Chain Development Project
THE CHALLENGE
Although fresh markets and agro-processors are expanding in the CIS countries, they have difficulty obtaining high-quality raw material from local producers. Farms in the region often lag behind in technology and quality, and many lack the management skills necessary to join the agribusiness supply chain.
As a result, agricultural output in the region is often characterized by low productivity, poor access to markets, and inadequate farm management.
THE IFC APPROACH
The presence of large processors provide a “pull” factor for local businesses, giving farms the incentive to modernize and improve their operating processes for a specific market. IFC’s agribusiness projects center around these large investments, matching their requirements with local producers best able to meet those needs:
Building linkages: IFC works with processors to identify potential suppliers in the regions. We then provide in-depth assistance to those farms, to help them improve productivity, quality and increase their competitiveness in the market. Our projects have provided training and advise on farming practices and helped introduce hybrid seed usage for more resilient, better-quality produce. With an active outreach approach we showcase the best practices modeled in the selected pilot farms for the benefit of the whole sector.
Working with banks and credit suppliers: We help financial institutions to find alternative ways to assess creditworthiness for farms. Our projects develop training programs to educate credit and insurance agencies on agribusiness risk management and agri-insurance, and work with microfinance institutions to build agricultural loan portfolios.
Improving business and regulatory environment: By working with governments to improve land property rights and farm legislation, our projects help remove constraints for agricultural development and investment. Our projects have helped government agencies like the Ukrainian State Commission for Regulation of Financial Services Markets to improve the regulatory framework for agribusiness.
ACHIEVEMENTS TO DATE as of July 1, 2007
Better access to finance: Agribusiness projects have enabled more than $4.5 million in financing to Tajikistan and more than $71.4 million in Russia. Agricultural loans in Ukraine have increased by $68 million through work with local banks and financial institutions.
Increased competitiveness through supply chain linkages: IFC has matched a Dutch dairy processor to Russian producers and linked Ukraine’s largest juice manufacturer to promising local fruit and vegetable producers. New techniques and modern equipment allowed farms in Southern Ukraine to introduce new crop varieties and hybrids, increasing vegetable production by more than 50% while keeping cost under control. Tomato and carrot production in Mykolaiv region alone has increased 2.5 times to reach 51,000 tons and satisfy the growing demand for raw material for processing. As a result, farms that have worked with IFC are more competitive at the market.
Improved legislation: Our projects have helped draft land laws in Tajikistan and Ukraine, and helped pass Ukraine’s “On Rent of Land” and “On Registration of Creditor’s Titles to Movable Property Offered as Security” laws related to farm financing.
THE RURAL FINANCE CHALLENGE
One of the key challenges faced by farms is access to finance. Lending institutions have almost no experience in assessing agricultural risk, and often demand collaterals beyond the reach of most farms. As a result, agricultural producers are hampered with outdated machinery, without the resources to modernize and expand. IFC leverages its financial expertise to help financial institutions develop agricultural lending portfolios, and train farm managers on accessing bank credits.
Senior Operations Manager
Linkages
Ivan Ivanov
36/1, Bolshaya Molchanovka Str., 3rd Fl.
Moscow 121069, Russia
Tel: +7 (495) 411-7555
Fax: +7 (495) 411-7556
International Finance Corporation
Operations Officer
CAG TA Coordinator
Brad Roberts
2121 Pennsylvania Avenue, NW
Washington, DC 20433, USA
Tel: +1 (202) 458-4529
Fax: +1 (202) 974-4312
