Promoting farmers’ access to markets
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Promoting farmers’ access to markets in transitional economies. Central Eastern Europe and the Newly Independent States. IFAD operates in 8 CEN Countries. Albania Armenia Azerbaijan Bosnia and Herzegovina Georgia Macedonia Moldova Romania.

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Promoting farmers’ access to markets

in transitional economies

Central Eastern Europe and the Newly Independent States


Ifad operates in 8 cen countries
IFAD operates in 8 CEN Countries

  • Albania

  • Armenia

  • Azerbaijan

  • Bosnia and Herzegovina

  • Georgia

  • Macedonia

  • Moldova

  • Romania


Common features related to agricultural markets
Common Features Related to Agricultural Markets

  • Countries are all former centrally-planned economies.

  • Transition process, including market development, is still on-going.

  • All have open trade regimes.

  • 6 are WTO members and 2 are applying for membership (Azerbaijan and Bosnia and Herzegovina).

  • All share an increasing interest in fostering market development & engaging in international trade.


Common challenges in accessing international markets
Common Challenges in Accessing International Markets

  • Poor and uneven quality standards.

  • Poor knowledge and targeting of consumer demand/tastes.

  • Difficulty in meeting OECD countries’ sanitary and phyto-sanitary rules and other non-tariff-barriers to trade.

  • Poor development of international marketing channels.

  • Political and security issues.


Common challenges in local market development

1

Common Challenges in Local Market Development

  • Poor infrastructure and high transport costs.

  • Old and inefficient processing units.

  • Lack of market information.

  • Vertical linkages poorly developed.


2

Common Challenges in Local Market Development

  • Difficulties in accessing financial services.

  • Institutional problems:

    • Under-developed property markets

    • Contracts are not well enforced

    • Lack of official grades & standards

    • Poor regulatory framework


1

Market Access Challenges Faced by Small Farmers

  • Poor access to inputs and extension services to increase productivity.

  • Poor management know-how in new market environment.


2

Market Access Challenges Faced by Small Farmers

  • Difficulties in organizing small producers in order to have more bargaining power and reduce transaction costs.

  • Old and degraded production & market infrastructure (e.g: irrigation, processing units, storage, rural roads).


What is IFAD doing?

  • Creating vertical market linkages in Albania, Bosnia and Herzegovina, and Macedonia via investment projects

    • Organizing producers into associations

    • Supporting contract farming

    • Assisting traders/processors


What is IFAD doing?

  • Fostering delivery of rural financial services to smallholders, farmers and rural businesspeople, and assisting in the creation of new financial institutions focused on agricultural credit in several countries.

    • ACBA in Armenia

    • MAFF in Albania

    • ACDF in Macedonia

    • Credit Unions in Georgia and Moldova


What is IFAD doing?

  • Mobilizing supplementary funds in support of marketing initiatives

    • Facility for Farmers’ Access to Markets in the Balkans – supported by the Italian Govt

    • Swedish Bilateral Assistance to ACDF in Macedonia

    • DFID Assistance to Albania’s MAFF and MADP


What is IFAD doing?

  • Funding a study to analyze the comparative advantage and marketing of agricultural products in the CEN region.


Thematic Study on Comparative Advantage and Agricultural Marketing in CEN

  • PHASE I – Comparative Advantage Analysis

  • Focus on underlying costs and profitability.

  • Identify most profitable investments.

  • PHASE II – Market Chain Analysis

  • Market Chain Analysis of 1-2 Commodity Groups per Country (Albania, Georgia, and Moldova).

  • Opportunities for strategic intervention.


Results from Phase 1 Marketing in CEN

  • Smallholder farmers are often lower cost and more profitable than large-scale producers.

    • Contradicts the popular notion that land reform was inefficient.

    • Supposedly “more advanced” systems not necessarily the best choice.

  • Perennial crops are more profitable than annual crops (e.g. fruit trees).


Results from Phase 1 Marketing in CEN

  • Vegetables are also profitable (but could be more difficult to market).

  • Switch from low value annual crops is essential for poverty reduction.

  • Livestock is an important sector (especially in mountain areas).


Key Discussion Questions Marketing in CEN

  • Given the profitability and the potential role of smallholder agriculture in reducing poverty, how can we support it?

    • How do we support the shift from low to higher value production?

  • What type of institutional reforms are needed (grades and standards, quality control, contract law and regulations, public versus private responsibilities)?

  • What should be the focus of future IFAD investment projects?


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