Agribusiness Development Activity
CNFA implemented the four-year, $20 million Agribusiness Development Activity (ADA), funded under the Millennium Challenge Georgia Fund (MCG) as part of the Compact between the Georgian government and the Millennium Challenge Corporation (MCC). ADA catalyzed local matching investments from Georgian partner enterprises and farmers. Through matching grants, farmers accessed innovative agricultural production technology, inputs, quality control practices and output marketing. In addition, the project facilitated new, stronger market linkages and provided farmers with reliable sources of inputs and methods to market their higher-value products.
The prime assistance tool of ADA was the use of matching grants, awarded on a competitive basis, to Georgian agribusinesses and farmers. More than $16.25 million of the total project funding was set aside for grant awards. CNFA targeted use of matching grants to strengthen commercial linkages between agricultural service providers, producers, processors, wholesalers/distributors and markets, to support the sustainable, long-term growth and generate new jobs. Through long and short term activities our team provided targeted technical assistance and facilitated extensive workforce development. By utilizing ICT and community outreach, we both recruited private enterprises for the grants program and improved access to market information and agricultural best practices. Overall outcomes and effects of ADA included mitigating investment risk for MSMEs and farmers, mobilization of capital, introduction of new technology and assisting small-scale entrepreneurs and rural farmers in achieving commercial-scale viability.
Over the life of the program, which included nine separate application rounds, CNFA received and processed over 1,400 applications. This high demand resulted in the expansion of the program by MCG from $15.1 million to $20 million, including an increase in the grant fund from $11 million to $16.25 million as well as a six-month program extension. A total of 283 individual grants were awarded to support improvements in primary production, develop a commercial farm service and supply infrastructure and expand cash markets for farmer output through value adding enterprises. The $16.25 million in grant funds invested in these businesses leveraged more than $22 million in matching investment from grantees, making for a strong injection of capital to the sector.
- Enterprise Initiative: ADA awarded resources to groups of farmers and enterprises motivated to apply innovative business solutions and technology to significantly boost household incomes and net revenues; applications submitted included a sound business plan oriented to domestic market demand;
- Value Chain Initiative: Value chain improvements were accomplished through the delivery of technical assistance (long-term and short-term consultants/volunteers), formal and informal training, and access to grants and other capital mobilization proposed by bidders responding to ADA’s request;
- Rural Outreach Initiative: ADA launched a mass media campaign to empower Georgians to make better choices about their business environment and families through access to information.
The two primary components of ADA, the Enterprise Initiative and the Value Chain Initiative, involved a matching grants scheme for producers and micro, small and medium enterprises. With these initiatives, small-scale farmers were able to buy seed, fertilizers, and operational supplies from local enterprises that were funded by both private sector entities and ADA granting. Moreover, the development of new Farm Service Centers (FSC) under ADA provided the opportunity for farmers to receive agricultural training and consultation services to ensure the most efficient and effective usage of these newly available inputs. The grant matching system has also allowed far greater growth and expansion opportunities than would be possible if the grants were not matched. The program was thus able to fund a greater number of projects, and benefit far larger numbers of people for the same amount of funding.
The Enterprise Initiative used matching grants ranging from $5,000 to $50,000, with match requirements varying from 0.5:1 to 1:1. The grants focused on three broad categories-primary producers, Farm Service Centers (FSCs), and value-adders. Through the use of local entities, and provision of support services, including technical trainings and consultations, these enterprise grants helped increase efficiency, competition, and quality of agricultural outputs as well as provided increased numbers of opportunities for women-owned enterprises.
The Value Chain Initiative built strategic commercial linkages between producers, processors and markets in promising Georgian agricultural sectors, including dairy, meat and poultry products, fruits, citrus, and nuts, vegetables, and potatoes. Matching grants in this initiative range from $50,001 to $125,000, and used a 1:1 matching requirement. They linked producers to private sector cash markets, and provide processors and other value-adders with a reliable supply of quality raw material. These projects have increased the number of rural households participating in a formal value chain and have also created revenues for SMEs that develop forward linkages with markets and backward linkages to farmers. ADA supported intermediary enterprises directly linking farmers to markets and targeted large agribusinesses and key value chain drivers (seed production enterprises, meat processors, etc.). This initiative also increased opportunities for women and women-owned production facilities to access markets to sell their products.
The third component of ADA was the Market Information System (MIS) project, which supported Georgian farmers and agribusinesses with critical information resources, such as up-to-date market and price data, contact information for potential buyers, market quality requirements and standards, and best practice information learned through project implementation. In coordination with the USAID-funded AgVantage project, ADA developed a website and designed a newspaper-type journal, Agro Market, distributed in 9 regions of Georgia.
- 2,613 New jobs created;
- $6,618,160 million worth of new cash markets created for 1,918 farmers;
- $7,769,015 million in gross sales by value adding enterprises;
- $11,220,468 million In Farm Service Center sales to more than 100,000 clients;
- 283 Grants disbursed, worth $16.25 million, leveraging more than $22 million in private sector matching investment.