annex 1 european commission-fao programme in...

GCP/GEO/011/EC - FAO support to Georgian agricultural sector under ENPARD III

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ANNEX 1 European Commission-FAO Programme in Georgia

Project Title: FAO support to Georgian agricultural sector under ENPARD III

Project symbol: GCP/GEO/011/EC

Recipient Country: Georgia

Government(s)/other counterpart(s):

Ministry of Agriculture

Expected EOD (Starting Date): 1 January 2018

Expected NTE (End Date): 30 November 2022

Contribution to FAO’s Strategic Framework:

Strategic Objective/Organizational Outcome: Strategic Objective: 2 - Increase and improve provision of goods and services from agriculture, forestry and fisheries in a sustainable manner

Organizational Outcome: 201 - Producers and natural resource managers adopt practices that increase and improve agricultural sector production in a sustainable manner.

Organisational Output: 20101 - Innovative practices for sustainable agricultural production (including traditional practices that improve sustainability such as those listed as Globally Important Agricultural Heritage Systems) are identified, assessed and disseminated and their adoption by stakeholders is facilitated. f25 percent

Strategic Objective: 3 - Reduce rural poverty

Organizational Outcome: 301 - The rural poor have enhanced and equitable access to productive resources, services, organizations and markets and can manage their resources more sustainably.

Organisational Output: 30103 - Support to improve access of poor rural producers and households to appropriate technologies and knowledge, inputs and markets. 15 percent

Organisational Output: 30104 - Support to innovations in rural services provision and infrastructure development accessible to the rural poor. 15 percent

Strategic Objective: 4 - Enable more inclusive and efficient agricultural and food systems

Organizational Outcome: 402 - Agribusinesses and agri-food chains that are more inclusive and efficient are developed and implemented by the public and private sectors.


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Organisational Output: 40201 - Public sector institutions are supported to formulate and implement policies and strategies and to provide public goods that enhance inclusiveness and efficiency in agri-food chains. 10 percent

Organisational Output: 40203 - Value chain actors are provided with technical and managerial support to promote inclusive, efficient and sustainable agri-food chains. 20 percent

Organizational Outcome: 403 - Policies, financial instruments and investment that improve the inclusiveness and efficiency of agri-food systems are developed and implemented by the public and private sectors.

Organisational Output: 40301 - Public and private sector institutions are supported to design and implement financial instruments and services that improve access to capital for efficient and inclusive agri-food systems. 15 percent

Country Outcome(s): Strategic Direction 3.2: Institutional Development

Strategic Direction 3.4 - Regional and sectorial development – value-chain development.

Strategic Direction 3.7 - Climate Change, Environment and Biodiversity.

Country Programming Framework(s) Output(s):

Priority Area 1: institutional development; Priority Area 2: regional and sectoral development – value-chain

development; Priority Area 4: climate change, environment and biodiversity.

Regional Initiatives: i) empowering smallholders and family farming; and ii) agri-food trade and regional integration.

Environmental and Social Risk Classification

low risk moderate risk X high risk

Gender Marker1 G0 G1 G2a x G2b

Funded by: European Union and FAO

Total Budget: USD 14.692.4002

1 See Guidance Note on ¨Gender Mainstreaming in project identification and formulation¨ 2 Maximum contribution from the European Union will be the equivalent in USD of 12.000.000 EUR. FAO will contribute 500.000 USD


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Table of Contents EXECUTIVE SUMMARY ...................................................................................................................................... 8

SECTION 1 RELEVANCE .................................................................................................................................... 12

1 GENERAL CONTEXT ................................................................................................................................. 12

1.1 Country features related to the assistance...................................................................................... 12

1.2 Sectoral Context ............................................................................................................................. 14

1.2.1 Sectorial Policies ...................................................................................................................... 19

1.2.2 The European Union’s Rural Development approach ................................................................ 27

1.2.3 The ENPARD Programme for Georgia ....................................................................................... 29

2 RATIONALE ............................................................................................................................................. 32

2.1 Project Justification ........................................................................................................................ 32

2.2 Alignment and Strategic Fit ............................................................................................................ 36

2.3 FAO’s Comparative Advantage ....................................................................................................... 39

2.4 Stakeholder Consultation and Engagement .................................................................................... 42

2.5 Previous work and lessons learned ................................................................................................. 45

3 EXPECTED RESULTS................................................................................................................................. 49

3.1 Impact ........................................................................................................................................... 49

3.2 Outcomes ...................................................................................................................................... 49

3.3 Outputs and activities .................................................................................................................... 49

SECTION 2 – FEASIBILITY ................................................................................................................................. 69

4 RISK MANAGEMENT ............................................................................................................................... 69

4.1 Risk Management Strategy and Risk Mitigation .............................................................................. 70

4.2 Significant risks facing the project................................................................................................... 70

4.3 Environmental and social risks ........................................................................................................ 72

5 IMPLEMENTATION AND MANAGEMENT ARRANGEMENTS ...................................................................... 80

5.1 Institutional Framework and Coordination ..................................................................................... 80

5.2 Strategy/Methodology ................................................................................................................... 80

5.3 Inception Phase and phased approach for Outcome 1 .................................................................... 82

5.4 Government Inputs ........................................................................................................................ 83

5.5 Technical Support and FAO contribution......................................................................................... 84

5.6 Resource Partner Inputs ................................................................................................................. 85

5.7 Management and Operational Support Arrangements .................................................................... 89

6 MONITORING, PERFORMANCE ASSESSMENT AND REPORTING ............................................................... 91

6.1 Scope and Purpose ......................................................................................................................... 91

6.2 Monitoring .................................................................................................................................... 91

6.3 Reporting ....................................................................................................................................... 92

7. PROVISION FOR EVALUATION ................................................................................................................. 93

SECTION 3 - SUSTAINABILITY OF RESULTS ........................................................................................................ 95


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8. ENVIRONMENTAL SUSTAINABILITY ......................................................................................................... 95

9. GENDER EQUALITY ................................................................................................................................. 96

ANNEX 1: LOGICAL FRAMEWORK MATRIX ....................................................................................................... 99

ANNEX 2: WORK PLAN .................................................................................................................................... 99

ANNEX 3: BUDGET .......................................................................................................................................... 99

ANNEX 4: TERMS OF REFERENCE OF MAIN HHRR POSITIONS IN THE PROJECT ............................................... 100

ANNEX 5: SIMPLIFIED COST OPTIONS APPLIED BY FAO: STAFF COSTS AND OFFICE COSTS UNDER PAGODA .... 117

ANNEX 6: Communication and Visibility Plan ......................................................... Error! Bookmark not defined.


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LIST OF ACRONYMS AA Association Agreement ACDA Agriculture Cooperative Development Agency ADA Austrian Development Agency APMA Agriculture Project Management Agency ARC Application Review Committee ASF African Swine Fever BDD Basic Directions and Definitions CEDAW Committee on the Elimination of Discrimination against Women CIB Comprehensive Institutional Building CIS Commonwealth of Independent States CPF FAO Country Framework Programming CSA Climate-Smart Agriculture CSO Civil Society Organization DCFTA Deep and Comprehensive Free Trade Area DRR Disaster Risk Reduction EFF Extended Fund Facility EIPS European Innovation Partnerships ENP European Neighbourhood Policy ENPARD European Neighbourhood Programme for Agriculture and Rural

Development ESA FAO Agricultural and Economic Development Analysis Division EUD European Union Delegation in Georgia FAFA Financial and Administrative Framework Agreement FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investment FTA Free Trade Agreement GAPs Good Agricultural Practices GDP Gross Domestic Product GeoStat National Statistics Office of Georgia GHG Greenhouse Gas GIS Geographic Information System GSP General System of Preferences GOE General Operating Expenses GRAST Gender and Rural Advisory Service Assessment Tool HRBA Human Rights Based Approach ICC Information and Consultation Centre ICTs Information and Communication Technologies IDP Internally Displaced Person IFAD International Fund for Agricultural Development IMF International Monetary Fund IPARD Instrument for Pre-Accession Assistance for Rural Development IPM Integrated Pest Management ISTA International Seed Testing Association

http://www.fao.org/es/esa

https://en.wikipedia.org/wiki/International_Fund_for_Agricultural_Development


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IT Information Technology LAG Local Action Group LEADER Liaison Entre Actions de Développement de l'Economie Rurale (a

European Union rural development approach) LTO Lead Technical Officer M&E Monitoring and Evaluation MIS Market Information System MES Ministry of Education and Science MENRP Ministry of Environment and Natural Resources Protection MoA Ministry of Agriculture MoF Ministry of Finance MRDI Ministry of Regional Development and Infrastructure NFA National Food Agency NGO Non-Governmental Organization NPP National Project Personnel NTE Not To Exceed Date OED FAO Office of Evaluation OVI Objectively Verifiable Indicator PIU Project Implementation Unit PPP Purchasing Power Parity PRDP Pilot Regional Development Programmes PSA Personal Service Agreement PSC Project Steering Committee PTF Project Task Force RD Rural Development RDSG Rural Development Strategy of Georgia REU FAO Regional Office for Central Asia and Europe RIC Regional Information Centre ROM Result Oriented Monitoring SADG Strategy for Agriculture Development for Georgia SAPARD Special Accession Programme for Agriculture and Rural Development SDC Swiss Development Cooperation SDGs Sustainable Development Goals SFVC Sustainable Food Value Chain SMEs Small and Medium Entreprises SPS Sanitary and Phytosanitary measures SRDG Strategy for Rural Development of Georgia SSF Single Support Framework for the European Union’s Support to

Georgia TCPF Technical Cooperation Programme Facility ToRs Terms of Reference TSS Technical Support Services UN United Nations UN-SWAP system-wide Action Plan for Implementation of the United Nations

CEB Policy on Gender Equality and the Empowerment of Women

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0ahUKEwjCz72vnpTYAhWL7xQKHaNBArMQFgg5MAI&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FSpecial_Accession_Programme_for_Agriculture_and_Rural_Development&usg=AOvVaw1mZEh3LrfXmj0-gPQq37Th


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UNDP United Nations Development Programme UNPSD United Nations Partnership for Sustainable Development USAID United States Development Aid Programme USD United States Dollar USDA United States Department of Agriculture


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EXECUTIVE SUMMARY

Georgia’s agricultural sector remains critical for the overall food supply, for the Georgian economy and for the social and cultural fabric of the country. According to preliminary information from GEOSTAT, the national statistical agency, in 2016 agricultural production accounted for 9.3 percent of the Gross Domestic Product (GDP). Out of it, animal and plant production contributes 56 percent and 38 percent respectively. More than 40 percent of the economically active population and more than 90 percent of economically active rural residents find employment in agriculture; however, only less than 1 percent of economically active population is formally employed in this sector.

These facts clearly indicate that despite the overall economic progress of recent years and promising processes unfolding in agriculture, much remains to be done to ensure the successful modernization of the rural economy and inclusive growth. The small-scale and fragmented nature of agricultural production, the chronic lack of technology and expertise, the poor state of rural infrastructure and the difficulties in accessing the finances needed to upgrade productive capacities necessitate further comprehensive reforms in the Georgian agriculture.

Key items of the Ministry of Agriculture’s (MoA’s) policy reform agenda such as measures to improve the competitiveness of rural entrepreneurs, implementation of programmes supporting value-chain development and infrastructure, extension services, promotion of Georgian produce in the domestic and foreign markets, etc. require efficient policy planning and execution, which will require continuous improvement of the MoA’s institutional capacity as well as improved inter-ministerial coordination.

This will require further strengthening of the organizational structure and human resources of the Ministry, its agencies and the decentralized Regional Information Centres (RICs) and Information and Consultation Service Centres (ICCs) to upgrade their capacity and improve performance. A list of specific training courses, workshops and “on-the-job” support has been identified by the Food and Agriculture Organization of the United Nations (FAO) during FAO´s previous support programme to the MoA for this purpose.

To empower women and men farmers with proper support measures that will allow them to have better access to good agricultural practices, modern knowledge and technologies throughout their agricultural activities -- from production to commercialisation -- the MoA must improve its capacities to efficiently implement the Strategy for Agriculture Development (SADG) 2015-2020 and its associated action plan. The MoA’s newly approved extension strategy will serve as a basis for more efforts to improve in a sustainable way the capacities of farmers to meet market demand and to be better linked to other value chain stakeholders. This is thanks to the advice provided by government officials (ICCs and IRCs) and the practical implementation of field demonstration plots whereby farmers and other value chain stakeholders can assess first-hand the improvements that good agricultural practices may bring to their production and economic activities.

The Project aims at supporting the above-mentioned processes by strengthening the MoA’s capacity for effective policy-making and effective implementation of the SADG and of the Rural Development Strategy of Georgia (RDSG) 2017-2020 and improving the provision of extension services to small farmers. It also provides support to investments in agriculture to


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be made by individual farmers, cooperatives, SMEs, rural entrepreneurs or municipalities in order to increase the competitiveness of the agriculture activities at municipal level. It is expected that the Project’s activities will positively impact food production in Georgia and the parameters of rural poverty.

The Project is funded under the third phase of the European Neighbourhood Programme for Agriculture and Rural Development (ENPARD III) and builds on results delivered by FAO through the first projects that were implemented under ENPARD I and ENPARD II. The first two FAO projects provided technical assistance to the MoA and general capacity development to the Ministry’s staff, and provided support for the implementation of specific components of the SADG such as the development of agricultural cooperation, extension services, the improvement of statistical and analytical capacities, as well as value-chain development and climate smart agriculture.

The key achievements of the preceding projects included the following: i) the provision of technical support for the development of key policy documents such as the Agricultural Cooperatives Development Strategy, the National Strategy for Agriculture Extension, the Rural Development Strategy, as well as the SADG itself; ii) the technical support to amend or update legislation (such as the amendments to the law of cooperatives and the approval of the seed law); iii) the support to develop management tools within the MoA such as the Market Information System (MIS), the monitoring and evaluation system, the data warehouse, the extension packages, the scheme for seed certification, the action plan for farm registry or the creation of several working groups within the MoA (e.g. for extension, food security, rural development, value-chain analysis); and iv) the concrete training activities to increase the capacities of the MoA’s staff, including the related agencies and decentralized offices, training courses in English language, rural development, value-chain, data analysis and statistics, Geographic Information System (GIS), Microsoft Access, etc. These projects have also sponsored several study tours and the participation of MOA officials in international conference in areas such as statistics, rural policy-making, economic analysis and trade. In addition, these previous projects have contributed significantly to the creation of a two-tier donor coordination council under the MoA and the subsequent activation of relevant working groups. The Project also provides support to the MoA for their fulfilment of budget support conditions under ENPARD I and II (ongoing).

Based on the support provided to the MoA under ENPARD I and II, FAO has developed a very clear understanding of the areas which require further support under ENPARD III, specifically the technical assistance component. The role of FAO in supporting the coordination of the different ENPARD Stakeholders through the quarterly organisation of the ENPARD Stakeholder Committee meetings has also provided a good basis for understanding the ongoing work implemented by the different NGOs in the establishment of Local Action Groups following the LEADER methodology. In the process of preparation of this project document, there were joint UNDP-FAO missions to the eight municipalities. These missions gathered first-hand information of the local needs introduced the activities foreseen in this project at municipal level for the delivery of grants to private or municipal investment projects to increase the competitiveness of the agriculture sector.

In this sense, this project is also complementary to the activities that UNDP will develop in municipalities of Georgia focusing on economic diversification and environmental aspects.


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Both FAO and UNDP actions will seek complementarity not only with the work being implemented by the NGO LEADER partners but also between FAO and UNDP projects.

Finally, this project fully coordinates and complements the field activities of the MoA at the municipal level through state budget support, mainly disbursed through MoA dependent agencies such as APMA or ACDA. Given the fact that the MoA is responsible for coordination in the implementation of the Strategy for Rural Development of Georgia (SRDG) approved in December 2016, the MoA will also have an important role in ensuring that the UNDP and FAO projects, together and separately, are in line with the vision of the MoA and the implementation of the SADG and the RDSG.

The current project has two main outcomes:

Outcome 1: The Ministry of Agriculture and other relevant institutions have improved

capacity, management practices and technical knowledge to enhance sustainable policies

that foster and support the development of value chains and the sustainable

competitiveness of agriculture3.

Outcome 2: Farmers, cooperatives and other rural SMAEs entrepreneurs, workers and rural

households are included on equitable terms in sustainable food value chains through

improved access to finance, inputs and services, leading to increased competitiveness of the

agriculture sector

The main project partners are on one side the MoA, including its field agents (such as RICs and ICCs), the policy implementing arms, such as APMA and ACDA; and on the other side the LEADER Local Action Groups created in eight municipalities in Georgia with the support of the ENPARD Programme. The ultimate beneficiaries are farmers, farmers’ associations, cooperatives, rural enterprises and entrepreneurs, rural families and stakeholders such as Non-Governmental Organizations (NGOs). Focus will be given to capacity development within government extension and advisory agents that support the development of agriculture and rural communities to enable sustainability and to maximize impact.

The duration of the Project is 59 months (January 2018 – November 2022). It mainly comprises technical assistance to the MoA and its agencies provided by national and international FAO consultants and technical officers, implementation of extension strategy piloting activities comprising various types of demonstration, information dissemination, engagement and other training activities for farmers. It also includes the provision of individual grants to small farmers, rural entrepreneurs, cooperatives and SMEs for investments to improve their overall competitiveness.

Throughout the project’s implementation -- in full compliance with FAO corporate policy on gender equality, environmental and social management guidelines and FAO Regional Office for Europe and Central Asia (REU) strategy on gender equality -- the approach will be to

3 Competitiveness in terms of the this proposal refers to levels of agricultural production, productivity and commercialization of agricultural producers.


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ensure that both women and men can participate and benefit on equal terms. The Project will also ensure the inclusiveness of vulnerable groups4, avoiding any kind of discrimination.

4 Vulnerable groups in Georgia include ethnic minorities (mainly Armenians, Azerians and other minority ethnic

communities), Internally Displaced Peoples (IDPs) as well as other socially disadvanted groups such as disabled

people.


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SECTION 1 RELEVANCE

1 GENERAL CONTEXT

1.1 Country features related to the assistance

Georgia is an upper-middle-income country with a population of about 3.7 million (sex ratio of 91 men per each 100 women) and an average nominal GDP per capita of USD 3 908 as of 2016 (the estimate by International Monetary Fund).

Georgia made a peaceful transition of power following the 2012 and 2013 parliamentary and presidential elections, consolidating after the parliamentary elections in 2016 its commitment to stability and democracy. Corruption and ease of doing business indices continue to be favourable. An Association Agreement (AA) and a Deep and Comprehensive Free Trade Area (DCFTA) agreement were signed with the European Union in June 2014 and came fully into force in 2016. Trade with the Russian Federation opened in 2013 and has since grown significantly. Georgia is striving to become a go-to trade and logistical hub. Although the country has done well on the World Bank´s doing business index, there are shortcomings that the Government is committed to address.

In line with the European Union–Georgia AA that came into force in July 2016, the Government plans to harness the gains of deeper integration by promoting the allocation of capital and labour to more productive sectors, supporting firms to comply with the harmonization of the legal and regulatory frameworks, upgrading state institutions to facilitate international trade, reducing technical barriers to trade, protecting intellectual property rights, and developing the country’s human capital.

Georgia received a ranking of 16 among 190 economies in the “Doing Business 2017 - Equal Opportunity for All” report released in October 2016. According to this publication, Georgia is also among the top 10 global improvers for implementing reforms to their business regulations. Over the course of 2016, Georgia implemented five reforms in the following areas: producing electricity, registering property, protecting minority investors, trading across borders, and reducing tax evasion. With positive reforms implemented in the five topic areas measured by the Doing Business report, Georgia continues to be among the top reformers, accelerating inclusive and sustainable economic growth and fostering resilience to global shocks.

Although there are no legislative norms and provisions preventing women to engage in entrepreneurship or profitable employment, the de facto situation points to significantly lower numbers of women in business and other opportunities with high economic potential. Women are less likely to be landowners or lead farms, and there is a tendency for them to concentrate in poorly paid or non-paid jobs and be at higher risks of poverty. Despite this, women in Georgia have high education and economic activity rates. Gender stereotypes, especially in rural communities, assigning women these roles of being solely responsible for household chores and care work are deeply entrenched, contributing to structural barriers that prevent women’s full economic empowerment.

Since 2014, Georgia has been facing large and persistent external economic crises. Lower oil and commodity prices have reduced growth in the region and with it the demand for


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Georgia’s exports. The strength of the Unites States Dollar and the depreciation in partner countries' currencies has put pressure on Georgia’s currency. Exports and remittances declined in the first half of 2016 amid a weak external environment marked by low commodity prices. In contrast, the construction and other non-tradable sectors grew by 26 percent, pushing the GDP growth rate for the first half of 2016 to 2.9 percent.

The unemployment rate declined marginally from 12.4 percent in 2014 to 12 percent in 2015, with jobs slightly shifting toward services and away from agriculture. With economic growth below potential and low inflation, the National Bank of Georgia reduced its policy rate to 6.5 percent in September 2016. Prudent supervision reinforces the stability of the banking sector, with non-performing loans amounting to 2.3 percent of all loans in July 2016.

The decline in exports and remittances, coupled with the slow adjustment of imports, widened the current account deficit from 12 percent of GDP in 2015 to 13 percent in the first quarter of 2016. Foreign Direct Investment (FDI) has financed nearly 85 percent of this year’s current account deficit, while reserve assets have covered the rest. External debt declined from 107 percent of GDP in 2015 to 100 percent in the first quarter of 2016 after USD 675 million in intercompany loans were written off. To support growth, the Government boosted both capital and current spending, thereby widening the fiscal deficit to 2.5 percent of GDP.

There has been significant progress in poverty reduction and shared prosperity in recent years. The poverty rate, estimated using the USD 2.5/day Purchasing Power Parity (PPP) poverty line, fell from 46.7 percent in 2010 to 31.2 percent in 2015. During 2013–2014, poverty reduction was largely driven by a combination of strong growth in the construction and non-tradable sectors, contrasting with 2010–2013 when income growth among the poor was mostly driven by increased social transfers. Despite significant gains in agricultural incomes, poverty remains higher in rural areas. According to GeoStat, the share of rural population below 60 percent of the median consumption was 25.3 percent, whereas in urban areas 14.7 percent. The figures for below 40 percent of the median consumption stand at 9.6 percent and 4.5 percent, respectively.

There is still a strong consensus in Georgia among all stakeholders that agriculture is a considerable investment opportunity and is essential for the development of the country as a whole and particularly for poverty reduction, employment, sustainable growth and food security.


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1.2 Sectoral Context

The agriculture sector remains an important contributor to GDP and foreign exchange earnings. Agriculture has a great potential for poverty alleviation, as it is the main activity for a high share of Georgian population, hence the Government’s interest in transforming subsistence production patterns into vibrant market-oriented farming.

Agriculture production is concentrated among small-scale farming households. According to the results of 2014 Agricultural Census, 571 900 family holdings farm about 86.5 percent of total agriculture. The majority of holdings have small plots. About 77 percent of family holdings have, at most, one-hectare area of land, and the average plot size per family holding is 1.2 hectares.

State allotment to the agriculture sector has increased substantially during the recent years. Ministry of Agriculture´s ongoing main activities include animal and plant health protection, research, international promotion of Georgian products, support to the development of business oriented farmer groups, rehabilitation of irrigation and drainage systems, and improvement in the availability and accessibility to financial resources and production inputs (planting stock, seeds, fertilizers, and chemicals, etc.). State funding of agriculture sector and the share in total budget allocations from 2010 to 2016 have increased by 48 percent and 41 percent, respectively (Figure 1).

The agriculture contribution to the GDP has been variable and characterized with a trivial rise of 0.7 percent during 2010-2015 (Figure 2).

Approximately 26 percent of the agricultural land is arable, while 65 percent is permanent grassland that is utilized exclusively by cattle and small ruminants. Georgian pastures can roughly be subdivided into summer, winter and permanent village pastures. Part of village

Figure 1. Factual and planned (for 2016) budgetary allotments to the Ministry of Agriculture

Figure 2. Agriculture Share in GDP

Source: Ministry of Finance, Ministry of Agriculture Annual Report 2015.

Source: GeoStat, estimates 2016.

7.8%

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pastures are privately owned, while state-owned pastures are managed either by the state or locally by regional or communal administrative bodies. The responsibilities related to the usage and management of pastures are assigned to the Ministry of Economy, with some aspects of transhumance being in the mandate of the MoA. The Ministry of Economy pasture registry primarily contains cadastral information on private pastures. There is only limited information on state owned land.

The national cadastre system is maintained by the National Agency of Public Registry, which is a separate legal entity under the Ministry of Justice. The cadastre system is still evolving and not yet fully established. Accordingly, the ownership and boundaries of land plots, village pastures, mountain pastures, easements, windbreaks, canals, traditional livestock routes and corridors of cattle drives are frequently unclear. Due to a deficient of ownership documents, challenges are expected to increase as the number of registered plots increases. Sex-disaggregated data on land ownership are still incomplete.

During 2010-2016, total agriculture output showed an increase. The growth has been most pronounced in agriculture services, followed by plant and livestock production. Growth rate estimates of plant production, livestock production and agriculture services have been 13 percent, 8 percent, and 23 percent, accordingly in nominal terms (Figure 3).

Figure 3. Agriculture output Figure 4. FDI in Agriculture

Source: GeoStat, estimates 2016. Source: GeoStat, estimates 2016

FDI in agriculture surged during the last three consecutive years, and the growth rate during 2010-2015 period was approximating 11 percent; also, agriculture share in total FDI has risen, but to a lesser extent, totalling 0.9 percent (Figure 4).

The size of the rural population as of January 2016, totalled 1 592 million persons, or 42.8 percent of the total population. Despite steady trend towards alleviation of poverty, its absolute indicators remain higher in rural areas as compared to cities. In 2016, the share of people below the level of absolute poverty is 25.5 percent as compared to 16.9 percent in urban areas. The share of population below 60 percent of median income in rural areas is 26.5 percent and that of below 40 percent is 9.6 percent. The figures for the urban areas are 14.5 percent and 4.4 percent, respectively5. These figures demonstrate the need for more

5 GEOSTAT.

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efforts towards strengthening of rural infrastructure and supporting the creation of off-farm formal job places. In depth analysis of the GEOSTAT household survey results indicates that there is a tendency of gradual decline of extent and depth of rural poverty key to which is the increase of share of monetary income in total income of households.

Despite the progress made during the last three years, this sector still faces serious problems and challenges. Local production is characterized with lack of scale, consistency and quality. This is due to the land fragmentation, smallholder farmer's limited access to knowledge, education, support resources, modern technology, appropriate agricultural inputs, formal finance, insurance, etc. The above reduces the ability of local products to compete with imports successfully.

Crop Production

Changes in production level were brought by changes in planted area and yield levels. According to GEOSTAT, during 2010-2016 the production of cereals, melons, fodder crops, fruits, grapes and citrus increased while that of potatoes, vegetables, and tea declined (Table 1).

Table1. Annual and perennial crop production, ‘000 tons

Crop 2010 2011 2012 2013 2014 2015 2016

Annual crops

Grains 214.8 397.4 370.0 483.3 434.5 420.1 424

Beans 5.8 8.9 9.6 10.5 7.6 5.5 5.8

Potato 228.8 273.9 252.0 296.6 216.2 184.6 249

Melons 40.9 42.8 36.7 66.4 85.9 72.6 72.8

Vegetables 175.7 185.8 198.5 204.8 153.6 152.3 141.7

Fodder crop

37.1 66.6 36.9 41.1 41.5 61.2 55.1

Perennial crops

Fruits 124.1 187.3 157.9 217.6 210 144.3 186.4

Grapes 120.7 159.6 144.0 222.8 172.6 214.5 159.2

Citrus crops

52.1 54.9 77.0 110.4 69.8 77.6 66.5

Tea 3.5 2.9 2.6 3.3 1.8 2.1 3.0

The yield levels for the majority of crops fluctuate and demonstrate little, if any, improvement over time. This might be linked to the low quality of production inputs such as seeds, as well as lack of availability of technologies that would gradually lead to higher productivity.

Livestock population

During 2010-2015, growth was observed in all types of livestock population. The most significant rise was noticed in the swine population, followed by sheep, poultry, beehives, and dairy cattle in a descending order (Table 2). Consequently, the total meat output has increased, mostly driven by growth in pork and poultry meats.


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Table 2. Livestock population, ‘000 heads6 2010 2011 2012 2013 2014 2015

Cattle 1 049 1 088 1 129 1 230 1 278 1 326 Dairy cattle and buffalo

562 588 602 641 665 650

Swine 110 105 204 191 205 198 Sheep and goat 654 630 743 857 920 891 Poultry 6 522 6 360 6 159 6 761 7 273 8 806 Beehives 312 328 348 399 403 422 Source: GeoStat, 2016 The main reason for this increase in swine population is the recovery of the sector after the outbreak of African Swine Fever (ASF) that decimated the population of Georgian swine in 2007. This recovery remains fragile as the swine population is still very unstable due to sporadic outbreak of infections in various regions of the country.

International Trade

Georgia’s main trade partners in agriculture and food have included the Republic of Turkey, and member countries of the Commonwealth of Independent States (CIS) and the European Union. Georgia has a DCFTA with the European Union, Free Trade Agreement (FTAs) with CIS members and the Republic of Turkey, and General System of Preferences (GSP) trade regime with the United States of America, Canada, Japan, the Swiss Confederation, and the Kingdom of Norway.

Georgia has been a net importer of agriculture and food products. The total trade turnover fell in 2015 due to political and economic developments in main trade partner countries. In recent years, the growth rate of exports has been higher than that of imports.

Recently, fifteen agriculture and food products account for about 78 percent of total agriculture exports, with live animals, hazelnuts, wine and mineral water making up 50 percent of these exports. The most significant growth rates during the last five years were observed in the export of live cattle, fish meal, hazelnuts, mineral waters, and wine (Source: International Trade Centre, estimates 2016).

The main 15 imported products represented about 47 percent of total agriculture imports, with wheat and flowers totalling 14 percent of them. The most notable growth was observed in imports of swine cuts and feed additives.

Rural/Agricultural Complex

Georgia is in a privileged position regarding agriculture due to the diversity of climates that allow for a very wide number of crops, the availability of water, the fertility of soils and the low incidence of severe natural disasters in agriculture. Few countries in the world allow for cultivation of both temperate and subtropical crops.

6 Unit describing poultry population is million wings


18

However, the potential for improvement of Georgian agriculture is mainly constrained by very low yields of most of the agricultural crops, which reflect that the sector has not yet attracted enough investments to modernize its production, although there is a potential for substantial improvement of productivity and output.

Lack of scale might be one of the main constraint that prevents rapid development of agriculture, although yield comparison among the farms by size are not officially available to draw definitive conclusions. It seems that the problem of low productivity is characteristic to farms of all sizes. In general it should be stated that agriculture has only recently attracted the attention of the Government, which has commenced comprehensive reforms and facilitation of investments, the benefits of which are still to come.

Another reason agriculture is still largely based on subsistence farming is the chronic lack of investment in the sector. In this regard, a major opportunity lies in the exploitation of Georgia’s strategic location between Asia and Europe and its access to the European Union and other markets that have a high demand for diversified and high-quality food products. Agriculture is also a window of opportunity for advancing rural women’s economic empowerment7.

In many parts of the country, the rural population suffer from lack of agricultural land and/or access to capital and finance as well as low incomes, poor infrastructure and other factors that influence rural poverty. This has led to migration to the cities and depopulation of rural regions. Rural abandonment also affects the ability of households to engage in the production of labour-intensive cash crops.

Some parts of the country are adversely affected by climate change with advancing desertification and an increased dependency on irrigation. Some areas face landscape disadvantages (height, slope, proximity to borders and national parks, tourism based development), while others struggle with rooted monoculture patterns of low value crops.

Despite a significant potential in agriculture, food insecurity is still a significant issue in Georgia. Many Georgians must spend a significant part of their small income for food. Many also suffer from low dietary diversity. This more severely affects women and female-headed households, who tend to be poorer. Female-headed households are usually single-parent households with fewer active adults that can contribute economically8. Women, who earn on average 63 cents per each euro earned by a man, have fewer economic opportunities in rural areas of Georgia, including lower access to technology, extension services, land, mobility, knowledge, credit, entrepreneurship and decision-making. Given that women play a key role in agriculture, especially in family farming, this sector has a huge potential for the advancement of rural women’s economic empowerment.

7 This is given the existing involvement and interest raised by rural women in this sector (FAO Country Gender Assessment of Georgia, 2013). 8 National Statistics Office of Georgia (GeoStat), 2015, Women and Men in Georgia: http://www.GeoStat.ge/cms/site_images/_files/english/health/Women%20and%20Men_2015.pdf

http://www.geostat.ge/cms/site_images/_files/english/health/Women%20and%20Men_2015.pdf


19

1.2.1. Sectorial Policies

The MoA envisions progress in the sector based on principles of sustainable economic development through the facilitation of private sector initiatives and the establishment of a competitive agribusiness sector. Business-oriented agriculture, knowledge transfer, advanced technologies, quality improvement, fostering cooperation with the European Union, import substitution and effective use of foreign aid represent, among others, the key components of the approach taken by the MoA to develop agriculture in Georgia.

Expected results include the transition from subsistence to more commercially based agriculture, an attractive environment for agribusinesses and an enhanced competitiveness of agricultural products in international markets.

The updated SADG 2015-20209 approved in February 2015 as well as the Action Plan that develops this Strategy are the main drivers for the sector. The main directions of the SADG are the following:

Enhanced competitiveness of rural entrepreneurs;

Institutional development;

Soil amelioration and fertility;

Regional and sectorial development and value-chain development;

Ensuring food security;

Food safety, veterinary and plant protection;

Climate change, environment and biodiversity.

Special attention shall be paid to economic development activities for regions and municipalities. Interventions include: i) institutional improvements within the MoA and its agencies; ii) the development and implementation of flexible legislative initiatives in the process of carrying out the strategy; iii) support for the delivery of effective extension services through RICs and ICCs; iv) building women and men farmers’ capacity to meet the requirements of market demands; iv) integrated development of sustainable rural-agricultural cooperatives; v) the rehabilitation of agricultural infrastructure; vi) improving sex-disaggregated statistics vii) creating effective marketing information systems; viii) and conducting analysis and monitoring improvements in food security.

The SADG also aims to support the creation and development of sustainable and profitable agricultural cooperatives. It also aims to advance the empowerment of rural women and vulnerable groups by achieving the active engagement of women and youth in cooperatives and entrepreneurship. Finally, the strategy also envisions improving food safety and continuing the process of approximation with internationally recognized standards and norms and improvement of the quality of manufactured products.

The implementation of the SADG at farm level is comprised of services provided to small farmers, mainly in extension and advice provided through the extensionists located in the ICCs and RICs, but also linked to support to primary producers and Food Business Operators (FBOs) to achieve quality standards such as HACCP or ISO certification. The other main area

9 http://Ministry of Agriculture .gov.ge/En/Strategy

http://moa.gov.ge/En/Strategy


20

of support is through infrastructure improvement and investment opportunities for farmers linked to state support programmes implemented by agencies that depend on the MoA. These include the Amelioration Agency for irrigation and drainage works, the APMA for investment support to individuals, SMEs or the private sector to implement investments in areas related to agriculture, as well as ACDA support provided to the cooperatives.

The second important policy document guiding the work of the MoA is the RDSG, which was approved in December 2016. It covers three main priority areas:

Priority Area 1: economy and competitiveness;

Priority Area 2: social conditions and living standards;

Priority Area 3: environmental protection and the sustainable management of natural resources.

Most of the activities under direct responsibility of the MoA fall under the Priority Area 1, and more in detail in the Objective 1: economic recovery of farming, restructuring and modernization through the diversification and development of effective supply chains and in the following activities:

1.1.1 Facilitation of the opening of new enterprises and/or the expansion of the existing ones in agriculture sector through the preferential agro-credit programme.

1.1.2 Reduction of risks and improving the competitiveness of the agro-production by providing agro-insurance.

1.1.3 Facilitation of creation of new intensive/semi-intensive fruit gardens and high-quality nursery gardens within the frames of the State Programme Plant the Future.

1.1.4 Facilitation of the Georgian tea production within the State Programme Georgian Tea Plantation Rehabilitation.

1.1.5 Facilitation of agro-processing and storage enterprises creation.

1.1.6 Modernization/improvement of amelioration systems in rural areas in order to increase fertility.

1.1.7 Facilitation of the export of Georgian agro-products through promotion.

1.1.8 Facilitation of establishment of co-operatives and supporting of existing agro cooperatives to promote entrepreneurship in the rural areas.

Several of the activities listed above relate to state support programmes implemented by ACDA or APMA, showing the interconnectivity of the RDSG and the SADG.

The MoA is leading the coordination with other relevant ministries with responsibility in the implementation of the RDSG to develop a multiannual Rural Development Action Plan to accompany the Strategy for the period 2018-2020. The other ministries active in the development of the RDSG have been the Ministry of Regional Development and Infrastructure (MRDI), the Ministry of Finance (MoF), Ministry of Education and Science (MES) and the Ministry of Environment and Natural Resources Protection (MENRP). State Support and Agricultural/Rural Investments Since the declaration of agriculture as a key policy priority in late 2012, the Government of Georgia has been providing state support for the agricultural sector on a scale


21

unprecedented since the country’s independence. The increased volume of allocations and broadening of scope of the MoA operations necessitated creation of specialized agencies such as Agricultural Projects Management Agency (APMA) and the Agriculture Cooperative Development Agency (ACDA). The government sponsored support programmes, including financial instruments, infrastructure and institutional reforms, such as taxation modalities to promote certain priorities for the state action.

State agricultural support is mainly formatted as agricultural investment support through different variations of cost-shared modalities first introduced by the FAO/European Union IDP Livelihoods Support programme based on the European Union Pre-accession Rural Development principles for candidate and pre-candidate countries (IPARD and SAPARD). The programme spanned over seven years (2010-2017) and provided direct investment support to over 4 000 IDP households.

Afterwards, the State has further complemented the support to agriculture with various State subsidized financial instruments located within the MoA agencies (APMA and ACDA) such as support for ensuring financial security, access of subsidized credits, agricultural insurance, vouchers for agricultural inputs or services, and co-financing of targeted investments in infrastructures or equipment at farm level.

The purpose of these support programmes has been to minimize the main identified development constraints of the targeted population: lack of access to credit, lack of securities for access to credit, lack of start-up capital, etc. These factors have also limited the results and hindered the implementation of the state supported cost-shared investment approaches.

The FAO’s “Assessment of rural agricultural investment capacities and corresponding extension needs” -- developed in July 2017 with individual interviews in the eight LEADER municipalities targeted so far by the ENPARD Programme (Kazbegi, Lagodekhi, Dedopliskharo, Tetriskaro, Borjomi, Khulo, Keda and Alkhalkalaki) -- indicates that only half of the rural households have access to formal finance, limiting the overall investment capacity. At the same time, half of the households have debts. Larger and active farmers tend to invest in their development, demonstrating a direct link between the size of agricultural production and willingness and ability to invest in agricultural development as a professional activity.

Half of the population are aware about the availability of state investment support programmes, but a clear majority are aware only about a fraction of the available support programmes. In parallel, only a quarter of the households know where more information on agricultural investment support can be obtained.

Only 7 percent of the rural households have invested through state investment support programmes, with significant variations amongst the different municipalities, showing an unequal access to information and awareness about state investment support programmes at municipal level. This lack of information, as well as lack of funds, are the main reasons for potentially limiting investments in the agricultural sector. A lack of interest in investments in agriculture has been identified as a bottleneck, a symptom of the subsistence farming system prevalent in many areas of Georgia. However, almost half of the rural households are


22

prepared to invest in their agricultural development with ¨appropriate¨ incentives10. Of course, the level of support requested varies and may not be in line with the requirements for the use of state funds.

Another interesting finding is that the majority of those willing to invest recognizes the need for technical assistance aimed at development of their capacities. This is a good indication of the understanding of the farmers that they need to enhance their capacities to be able to successfully put in place enhanced technical proposals and business plans based on investments in infrastructures or equipment to increase their competitiveness.

FAO’s review of the delivery of the state support programmes managed by ACDA and APMA indicates that the current situation in the Georgian agricultural sector and the complex interdependencies -- paired with limited focus of the existing support programmes on long-term strategic outcomes and partial agricultural and rural development approaches -- have resulted in limited coverage and delivery of the support available.

As a result, the increased support provided to the sector by the government arguably has not yet delivered full results. However, some of the positive development trends noted in the crops and livestock sector can be linked to increased government support to through the targeted support programmes. Therefore, the limited coverage may be linked to the fact that these support programmes are at their early stages (most of them where initiated between 2012 and 2016) and there is need to persevere in investment support incentives to be able to finetune the process and reach the expected objectives.

Extension provision As already mentioned, the productivity of most crops in Georgia is very low and there are several factors limiting it, including farmers’ access to agricultural inputs, capital and markets and improved knowledge and access to information.

Access to information and technical advice is therefore one of the bottlenecks that influence the low performance of Georgian farmers, especially for women farmers. Farmers can use different means to get information, and the use of new communication channels, such as the Internet, has exposed many farmers to general information about agriculture, complementing other more traditional channels as radio, television or direct discussion amongst farmers or with the input suppliers.

10 FAO implemented agriculture investment support programmes with incentives which fostered development on several levels, targeted at different results. Beside the standard investment for improvement of agricultural production with a flat rate of 50 percent cost shared investments, the Project developed incentives for: 1) self-employment and employment of others in agriculture, which featured higher maximums for cost shared investments as well as technical assistance for development of the proposed ideas; 2) local companies in fostering employment of IDPs and their integration in the communities; 3) higher contributions for modernization and procurement of new mechanization compared to standard contributions for used equipment and 4) increased and varying investment ratios for the disadvantaged populations based on their level of vulnerability. The increased and adjusted incentives resulted in elevated interest of the beneficiaries and surpassing of the targets of the Project.


23

There is also a variety of actors that provide advice, from input suppliers, to donor-funded projects to private and public stakeholders. There is not a single model in terms of extension, and the European countries are using different models that integrate the private extensionists with the public extension services. This is also the case of Georgia where there is a need for better coordination and standardisation of the advice provided by different actors with the leading role of the public extension services from the MoA.

The extension system of the MoA is relatively recent, as it was created only in 2013. It currently consists of 54 municipalities plus an Agroservice centre operating in Ajara11. Management of the 54 municipal Information and Consulting Centres (ICCs) in the rest of the country is undertaken from nine Regional Information Centres (RICs) based in key municipalities of each region. There is an uneven level of capacity and training amongst the ICCs, with some very competent and motivated staff in some cases as well as more passive and less trained individuals in some others. Although in general the extensionists have the basic means to do their tasks (office space, internet, computer, vehicles, fuel, etc.) there is room to improve the way the extensionists provide advice to farmers.

In general, the ICCs are not proactive enough to reach farmers, leading to a reactive advice instead of a proactive role in training and organising farmers; ICCs mainly work with farmers visiting their offices. Therefore, women, those poorer, and those with less mobility are less likely to benefit from their services. To increase their outreach, ICCs would need to increase resources to allow for demonstration plots and on-farm trials, increasing outreach, coupled with more vibrant awareness campaigns to disseminate information, and better collaborate with the private sector and other partners also involved in extension.

Also, extensionists in the ICCs only devote only around half of their time to provide advice to farmers, as they are also formally responsible for a wide range of duties on behalf of the MoA. As a result, the ICCs play a smaller role in extension compared to their mandate, and this is practically compensated with private sector actors, such as input suppliers or private extensionists. The state extension system faces challenges with finding cost-effective advice delivery systems and building a consistent professional pool of extensionists

The extension service reform as proposed by the draft National Strategy for Agricultural Extension in Georgia elaborated with FAO´s support, requires a comprehensive reorganization of the service starting from the central apparatus of the MoA. First, the functional areas for management and economics, statistics, crops, livestock, media, and trainings should be merged at the central level, staffed by dedicated individuals and run by a competent manager.

The first and second phases of the reform would allow for piloting and roll-over of activities in the selected municipalities, after which the reformed service should cover the entire country. More importantly, the reform demands a cardinal change of approach towards extension from the current reactive -- relying on instructions from the centre -- to a proactive, outgoing and client-needs oriented service.

11 The Ajara model stipulates the existence of a unified extension service, Agroservice, that was created with the support of the ENPARD Programme. The Ajara model covers five municipalities of the Autonomous Republic.


24

Extension service employees should embrace the techniques for combining intensive work with a few beneficiaries with activities covering large number of clients through the mass-media. The terms of references should also change accordingly, become more specific and to the point, especially in relation to segregation of tasks between extension and support activities, allowing for a more motivating environment for extension officers. The culminating point of the extension system reform should be the formation of an independent structure within the MoA system.

Although other partners -- such as private extension or input suppliers -- should be taken into account as important stakeholders delivering extension, the MoA should play a central role in areas such as the definition of an extension strategy, the standardisation of tools and extension materials, the priorities for the sector, the training and evaluation of advisors, the coherence in the extension messages and information delivered country-wide through national media and internet, or to the monitoring and evaluation of the uptake and impact of advice12. The MoA should concentrate on maximizing its natural advantage over the private sector, which is an unbiased and impartial attitude towards the needs of the farmers, embodied in the fact that state employed extensionists are not driven by the goal to maximize the sales of production inputs and services and thus maximize profits.

FAO’s “Assessment of rural agricultural investment capacities and corresponding extension needs” collected the opinions of the farmers in the eight LEADER municipalities. It estimated that only one quarter of the farmer households have benefited from extension advice of any kind, but with severe variations on municipal level (probably linked to the unequal capacity of the ICCs, as well as the also uneven coverage of input suppliers within the country). Extension support most often was provided by the ICCs and has been evenly distributed to the most prominent agricultural subsectors and regional preferences. Donor projects have covered a substantial gap through reaching some 30 percent of overall advice provided.

Lack of information on the available extension support remains the reason not receiving assistance while the quality of service provided has resulted overall in moderate satisfaction from the extension recipients, indicating both the potential and the need for development of the capacities of the ICCs.

12 A detailed analysis of the background situation is presented in the FAO paper “Developing the agricultural extension system in Georgia: Issues and recommendations” of July 2014.

19.6%

10.0%

4.0%

1.1% 1.3% 2.0% 2.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

% of HH receiving extension support per source

Agriculture extension service

Donor/Projects

Other farmers

University professors or researchers

Input suppliers

Municipality


25

Extension has proved to be a significant facilitator of agricultural investments. Households willing to invest in agricultural development have benefited twice more from agricultural extension compared to those that are not willing to invest. This also shows that the initiative to receive extension advice often comes from the farmers themselves.

The MoA is working to improve the extension system in Georgia. For this purpose, a draft extension strategy has been produces with the support of the FAO ENPARD Technical Assistance projects. It is in the last stage for approval. The overall goal of this Extension Strategy is to build the existing 54 ICCs and RICs into a coherent, results-oriented national extension service that meets the real needs of farmers and is oriented towards their intensive engagement in extension policies implementation process.

Initially this will be achieved through reorganisation of resources within the Ministry of Agriculture to provide national, regional and municipal layers of extension. In 2019-2020 the extension service should be structured as an independent organisation reporting to the Ministry of Agriculture but focused solely on extension. It should be adequately funded for that purpose.

The strategy goal will be achieved through seven specific objectives:

Institutional development

o Objective 1. Establish core unit and regional pilots to develop effective extension approaches for selected sectors, starting in the first half of 2018.

o Objective 2. Expand core unit and replicate regional pilots to achieve full national coverage for a wider group of topics by the end of 2019.

o Objective 3. Establish National Extension Service as a separate organisation during 2019-2020.

Advice delivery

o Objective 4. Develop and implement proactive extension packages based on careful analysis of the messages and information that farmers need to implement change and become more efficient and profitable.

o Objective 5. Establish mass dissemination mechanisms to deliver these messages to tens, and eventually hundreds, of thousands of farmers.

Supporting actions

o Objective 6. Establish monitoring and feedback systems to ensure that extension messages are reaching farmers, are understood and accepted by them, and are put into practice and yield results.

o Objective 7. Upgrade staff skills through a long-term comprehensive programme of action-oriented training, covering general extension skills, specific extension packages and use of the monitoring and feedback systems.


26

Progress on the implementation of the Strategy for Agricultural Development of Georgia and its Action Plan (Report of the review mission for the 1st tranche of the Budget Support under ENPARD II)

The Strategy for Agricultural Development in Georgia (SADG) 2015-2020 was approved by the Government in February 2015. SADG aims to “to create an environment that will increase competitiveness in the agro-food sector, promote the stable growth of high-quality agricultural production, ensure food safety and security and eliminate rural poverty through the sustainable development of agriculture and rural areas". Annual reports of the MoA provide detail of progress in implementing SADG, and the Action Plan that develops the SADG has been updated several times since the approval of the SADG.

The value of agriculture and agribusiness output grew by 2.3 percent in 2016, the result of a 7.9 percent increase in primary production but a 2.3 percent fall in processing. The share of agriculture in the real GDP in 2016 was the 15.8 percent, composed of primary production around 9.3 percent, and processing around 6.6 percent, similar figures than in 2015. Value added in agriculture is widely spread with different micro-ecological and climatic zones offering opportunities for a range of produce. Eastern Georgia and Western Georgia each account for about 50 percent of agricultural value added.

The trade deficit in agricultural food products fell by 25 percent in 2016, following significant growth in the value of exports of agricultural products and a small decrease in the value of food product imports. Exports of agricultural products, which accounted for about 33 percent of total exports, grew by 13.1 percent. Almost a third of these exports were to the European Union, about twice the level in 2012.

Budgetary funding for MoA increased in 2016 to GEL 321.4 mn from GEL 292 mn in 2015. Of this, modernization of the irrigation system amounted to GEL 63.0 mn, concessional agriculture loans GEL 41.0 mn, spring cultivation facilitation works for small landholders GEL 48.0 mn, loans for agriculture machinery and coverage of leasing liabilities GEL 23.0 mn, and development of horticulture and wine-making GEL 32.9 mn.

To improve the legislative base for agriculture development and management and to meet obligations for approximation agreed with European Union in the context of the Deep and Comprehensive Free Trade Area Agreement (DCFTA), the MoA has continued its programme of legislative reform. In 2016 it drafted a series of legislative and regulatory acts. These included draft amendments to the Food/Feed Safety, Veterinary and Plant Protection Code, to the Tax Code and to 59 regulatory acts.

The Government commitment and ability to implement the strategy was backed by the allocation of sufficient funds. Besides various public statements by Government ministers and officials on the importance of agriculture to the country's economic and social development, Government in the Basic Directions and Definitions (BDD) document for 2017-2020, adopted by Parliament in December 2016 with the FY2017 Budget Law, reiterated its commitment to agriculture, and with it to the SADG, stating that 'the Government will continue active an agricultural policy, aiming at improvement of competitiveness based on the principles of sustainable development as well as at a stable increase of production of high quality products, ensuring food security, food safety and rural development'.


27

The 2017-2020 BDD lists seven programmes under MoA: 1. Agriculture Development Programme; 2. Food Safety, Plant Protection and Epizootic Trustworthiness; 3. Development of Viticulture and Wine-Making; 4. Implementation of Scientific Research Studies in Agriculture; 5. Common Agro Project; 6. Supporting Measures of Agro-Industrial Cooperatives; and 7. Modernization of Irrigation Systems and Facilitated Development of Agriculture Sector. For 2017 about 38 percent of funds in 2017 are allocated to the 'Common Agro Project', 29 percent for irrigation and drainage system rehabilitation, and 16 percent for viticulture and wine-making. Food Safety accounts for 10 percent of the funds.

The Strategy was revised and extended in 2015, at which time it was refocussed towards the key issues for agriculture sector development. Agriculture represents a key feature for national sustainable development both as a key driver of the economy and as the source of livelihood for a major section of the population. On the one hand, the rural areas remain a major underused resource, offering the potential for competitive development promoting growth in exports and a reduced dependency on imports, thereby offsetting the economy's and state budget's vulnerability to external prices, exchange rates, and regional demand, considered as continuing major problems for the Georgian economy (as reflected in the April 2017 agreement with the IMF for a new three-year Extended Fund Facility (EFF)).

On the other hand, the rural sector remains the repository of much of Georgia's poverty (approximately 25 percent of the rural population is below the poverty line) and agriculture, directly or indirectly, the main source of livelihood for the almost half of the population that live in rural areas. Although there have been significant developments in recent years, the need for Government to act as an engine of change remains. This is reflected in the SADG (and also in both the Single Support Framework (SSF) 2014-2017 and the European Union-Georgia Association Agreement (AA)).

1.2.2 The European Union’s Rural Development approach

The European Union’s rural development policy helps rural areas to meet the wide range of economic, environmental and social challenges. Frequently called "the second pillar” of the Common Agricultural Policy, it complements the "first pillar" of direct payments to farmers.

The European Union's rural development policy is worth €100 billion for the period 2014-2020. The rural development programmes are based on needs and addressing at least four of the following common Euroeapn Union priorities:

fostering knowledge transfer and innovation in agriculture, forestry and rural areas

enhancing the viability and competitiveness of all types of agriculture, and promoting innovative farm technologies and sustainable forest management

promoting food chain organisation, animal welfare and risk management in agriculture

restoring, preserving and enhancing ecosystems related to agriculture and forestry

promoting resource efficiency and supporting the shift toward a low-carbon and climate-resilient economy in the agriculture, food and forestry sectors

promoting social inclusion, poverty reduction and economic development in rural areas

Rural development priorities are broken down into "focus areas", e.g. the priority on resource efficiency includes focus areas "reducing greenhouse gas and ammonia emissions


28

from agriculture" and "fostering carbon conservation and sequestration in agriculture and forestry". All Rural Development programmes first set targets against the selected focus areas and then decide on measures to be used to achieve these targets. At least 30 percent of the funding must be dedicated to environment and climate change and at least five percent to LEADER approaches.

The implementation and impact of the rural development policy is monitored and evaluated in detail.

With the Rural Development component of the Instrument for Pre-accession Assistance (IPA), the European Union aims to support candidate countries:

to provide assistance for the implementation of the acquis concerning the Common Agricultural Policy;

to contribute to the sustainable adaptation of the agricultural sector and rural areas.

These objectives are to be met by implementation of nine measures under three priority axes:

Axis 1 - Improving Market Efficiency and Implementing Community Standards consists of the following measures:

Investments in agricultural holdings to restructure and upgrade to the European Union standards;

Investments in processing and marketing of agriculture and fishery products to restructure and upgrade to the European Union standards;

Supporting the setting up of producer groups.

Axis 2 - Preparatory actions for implementation of the agri-environmental measures and Leader include:

Preparation for implementation of actions relating to environment and the countryside

Preparation and implementation of local rural development strategies

Axis 3 - Development of the Rural Economy measures are:

Improvement and development of rural infrastructure;

Development and diversification of rural economic activities;

Training;

Technical assistance.

An overview of links between the project’s activities to the European Union’s Rural Development approach (Axis and relevant measures) integrated in the Project design is reflected in the following table:

European Union Rural Development axis and corresponding measures

Project components Link with Rural Development Strategy of Georgia 2017-2020

Axi

s 1

-

Imp

rovi

ng

Mar

ket

Effi

cie

ncy

an

d

Imp

lem

enti

ng

Co

mm

un

ity

Stan

dar

ds

Investments in agricultural holdings to restructure and upgrade to the European Union standards

2.1 Individual investment support grants provided to farmers and their organizations

Priority Area 1: Economy and Competitiveness Objective 1: Economic recovery, restructuring and modernization through diversification /

https://ec.europa.eu/agriculture/evaluation/rural-development-reports_en


29

Investments in processing and marketing of agriculture and fishery products to restructure and upgrade to the European Union standards

2.1 Household level, Farmer Organization level (postharvest and on farm processing)

development of effective supply chains. Objective 2: Diversification of the rural economy through strengthening agricultural-related value chain.

Axi

s 3

- D

eve

lop

men

t

of

the

Ru

ral E

con

om

y Improvement and development of rural infrastructure

2.2 Investment support to agricultural infrastructure

Capacity Development of local stakeholders (Training and TA)

2.3

Capacity development on local level (extension services, applicants) Capacity development of MOA/APMA and CSOs

Axi

s 2

- P

rep

arat

ory

imp

lem

enta

tio

n o

f ag

ri-e

nvi

ron

men

tal

mea

sure

s an

d L

ead

er Preparation for

implementation of actions relating to environment and the countryside

Mainstreaming Sustainable Agriculture and Climate Smart Agriculture into local policies and practices and capacity development of national, regional and local stakeholders

Priority Area 3: Environmental Protection and Sustainable Management of Natural Resources Objective 1: Water, forest and other resources. Objective 3: Climate Change

1.2.3 The ENPARD Programme for Georgia

The European Union assistance under the ENPARD for Georgia is a vehicle to help accelerate the restructuring of the agricultural sector and the rural economy of this country.

The first phase of ENPARD started in 2011 with financial support amounting to EUR 52 million. The programme was aimed at supporting the implementation of the SADG, increasing the competitiveness of the agricultural sector, increasing food production and reducing rural poverty in Georgia. It focused on five priorities, namely:

supporting and strengthening cooperation amongst farmers through the creation of business-oriented cooperatives;

improving access for farmers to knowledge and information through an improved extension system and the creation of RICs and ICCs at the district level;

improving the efficiency of key institutions involved in agriculture (through support for the Georgian Ministry of Agriculture, the Agriculture Cooperative Development Agency (ACDA), the Ministry of Agriculture of Adjara, agriculture-related education and research institutions and GeoStat;

developing a “geographical indications system”;

implementing three Liaison Entre Actions de Développement de l'Economie Rurale (LEADER) Pilot Rural Development projects which served as the basis for future Rural Development (RD).

The role of FAO under the first phase of ENPARD was to provide technical assistance to the MoA, capacity development of the staff of the MoA, as well as to support the development of specific components of the SADG such as the development of cooperatives, the


30

improvement of extension services, the improvement of statistics relevant to the agricultural sector and the development of efficient value-chains.

The key achievements of this first project included: i) the development of key policy documents such as the Agricultural Cooperatives Development Strategy, the draft of the National Strategy for Agricultural Extension, the rural Development Strategy, as well as the SADG itself; ii) amended or updated legislation (such as the amendments to the law of cooperatives or the writing of the seed law); iii) new management tools within the MoA, such as the MIS, the monitoring and evaluation system, the data warehouse, the extension packages, the scheme for seed certification, the action plan for farm registry or the creation of several working groups within the MoA (for Extension, Food Security, Rural Development, value-chain analysis); and iv) increased capacities of the staff of the MoA, including the related agencies and decentralized offices; in English language, food security, rural development, post-harvest losses, contract farming, value-chain, data analysis and statistics, Geographic Information Systems (GIS), Microsoft Access, etc. and coaching of the ACDA staff and policy unit staff within the MoA.

The Project also sponsored several study tours and participation of officials of the MoA in international conference in areas such as statistics, rural policy-making, economic analysis, and trade. The Project contributed significantly to the creation of two-tier donor coordination council under the MoA and the subsequent activation of the relevant working groups. The Project also provided support to the Ministry of Agriculture for their fulfilment of budget support conditions under ENPARD I, contributing to the 100 percent fulfilment of these conditions and the disbursement of the full budget support allocations foreseen in the ENPARD I agreement.

There is a consensus amongst the staff of the MoA, the donor community and the stakeholders involved in agriculture that significant improvements have been made in the last years in the capacities of the MoA. A part of this can be credited to the work done by the ENPARD Programme in which FAO has been an important player in providing technical assistance to the staff of the MoA.

The second phase of the programme (ENPARD II) started its implementation in 2016 with financial support amounting to 50 million EUR. ENPARD II helps to consolidate and build on the achievements of ENPARD I and continues to support enhanced competitiveness and sustainability of the agriculture system in Georgia. This second phase of the programme integrates support to agriculture, food safety, sanitary and phytosanitary measures and rural development.

The expected outcome will be the improvement of employment and living conditions in poor rural areas of Georgia with subsequent impacts on poverty alleviation and growth. Specific measures will build resilience and improve food security and nutrition through the diversification of rural activities and income sources, particularly for women and girls and the most vulnerable groups including conflict-affected people and ethnic minorities.

The programme will contribute to biodiversity and climate change objectives through measures promoting biodiversity conservation and climate change mitigation and adaptation practices in rural areas.


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The general objective of ENPARD II is to assist the Government of Georgia in alleviating poverty, promoting sustainable and inclusive growth, and consolidating and improving democratic and economic governance.

The specific objective of ENPARD II is to promote agriculture and rural development policies and reforms and to improve the delivery of related services to help address basic needs of the rural population in Georgia.

The expected results of ENPARD II are as follows:

Result 1: enhanced competitiveness and sustainability of the agriculture sector;

Result 2: improved Sanitary and Phytosanitary (SPS) measures, food safety and food quality standards and procedures for inspection and control;

Result 3: improved employment and living conditions in the rural areas through the diversification of the rural economy.

Under ENPARD II, FAO continues the work that was started under the first phase related to capacity development of officials of the MoA. The aim is further improving its management capacities as well as providing technical assistance to develop some of the areas of work that are been considered as priorities in the SADG and RDSG by the European Union and the MoA. The main areas of work which will receive technical support from FAO will be extension, agricultural statistics, value-chain development and climate-smart agriculture (CSA).

Although there was great improvement in some of these areas during the first phase of ENPARD, there are still work to be done to improve the quality of some of the services provided by the MoA to farmers. These improvements lie in the terms of extension (the approval of the extension strategy, as well as the improved advice to farmers through extension programmes in the field, improved coordination between public extension services and private input suppliers), strengthening of analytical and statistical functions, collection of information, and efforts in value-chain development (mainly linked to a better understanding of the value-chains and identification of bottlenecks and needs of improved knowledge). Regarding CSA, this is an important area of work in the second phase of ENPARD.

The third phase of the programme (ENPARD III) will begin implementation in 2018. The European Union’s financial support will amount to EUR 77.5 million. The purpose of ENPARD III is to promote inclusive and sustainable growth and development, creating employment and livelihoods for the poor and excluded. Special measures will help build the resilience of vulnerable people in remote regions and to promote the economic and social empowerment of rural women.

ENPARD III will contribute to the implementation of the European Union-Georgia AA for improved competitiveness of agriculture under the DCFTA, the support of agriculture and rural development, the harmonization of environmental legislation and the improved management of natural resources.


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The overall objective of ENPARD III is to assist the Government of Georgia in eradicating poverty, promoting sustainable and inclusive growth, and consolidating and improving democratic and economic governance.

The specific objective is to promote inclusive and sustainable growth and development, creating employment and livelihoods for the poor and socially excluded.

The expected results of ENPARD III are as follows:

improved rural economic diversification, employment and services;

enhanced competitiveness of agriculture;

improved environment, sustainable management of natural resources and climate action.

Under this project proposal, which falls under ENPARD III, FAO will continue its support in technical assistance to further develop the capacities of the MoA (Outcome 1). FAO will also support the provision of improved agricultural services to increase the competitiveness and sustainability of the agricultural sector.

2 RATIONALE

2.1 Project Justification

Addressing the acute needs of small farming communities in Georgia requires targeted government attention, as stagnation of agricultural production and productivity is degrading the quality of the lives of rural population and sustainability continues to deteriorate. To empower agricultural producers and rural stakeholders and to build genuine investment development partnership with the farmers based on their actual needs, the Government should adopt a more comprehensive approach in providing agricultural support that fosters sustainable economic development and meets the needs of the targeted farmer population, both women and men.

Probably the largest problem of rural areas today is depopulation. This is closely linked to the lack of economic opportunities and leads to the migration of cities of the young population13. GeoStat demographic data indicates that on average the rural regions in Georgia have lost a quarter of their population since 2011. It has become critical for the Georgian Government to offer opportunities for a young generation of farmers to be able to remain in rural areas. For this it is fundamental to provide them with more opportunities in terms of education through extension, as well as in terms of affordable access to finance in order to embark in solid investments in agriculture infrastructure or equipment to become pillars of a more competitive commercial agricultural sector.

With this proposal, FAO aims to continue the support to the development of policy tools which enable the MoA to reach out to the sector’s stakeholders and to improve the services and investment incentives to the farmer population of the targeted areas and their communities, ensuring sustainable agricultural development and improvement in

13 Rural areas in the Ajara AR are showing only slight change in population which is proportional to the overall low unemployment rates in the region.


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agricultural output and rural incomes through enhanced competitiveness. The two outcomes of the Project are:

Outcome 1: The MoA and other relevant institutions have improved capacity, management

practices and technical knowledge to sustainably enhance policies, which foster and support

the development of value chains and the sustainable competitiveness of agriculture14.

Outcome 2: Farmers, cooperatives and other rural SMAEs entrepreneurs, workers and rural

households are included on equitable terms in sustainable food value chains through

improved access to finance, inputs and services, leading to increased competitiveness of the

agriculture sector.

The Project builds on the previous technical assistance provided by FAO to the MoA under the ENPARD phases I and II (ongoing) on technical assistance support to the MoA. It is considered as a key requirement to support the MoA in improving its work and implementing reforms proposed in the ENPARD programme to better serve the needs of the Georgian farmers and other stakeholders.

The first outcome of this Project on technical assistance will be a continuation of the projects already being implemented by FAO in support to the MoA staff, as well as to complement the conditions of budget support detailed in the different phases of ENPARD. The objective is to develop effective technical assistance programmes and expose the officers of the MoA and decision-makers as much as possible to new management practices and tools and technical knowledge; using the European model as an inspiration, drawing on knowledge and experience gained in agricultural, rural development and natural resource management in the European context.

Outcome 1 will focus on delivering increased capacity development of the MoA staff in particular areas that are relevant to improve the performance of the MoA together with the support to design and implement the correct policies and tools to develop the policy of the MoA as stated in the main two strategies: the SADG and the RDSG. Parallel to this, FAO will provide technical support in concrete areas of work of the SADG.

This outcome will serve as a continuation of the ongoing FAO project under ENPARD II (GCP/GEO/010/EC), that will end in March 2019. In the first half of 2019, the EUD, the MoA and FAO will finalise in detail the concrete areas of work requested to implement the SADG 2015-2020 and the RDSG 2017-2020, also in view of any possible strategic changes for the updated strategies after 2020.

FAO will continue supporting the implementation of SADG with a gradual deepening of capacity building focus in relation to the rural development strategy and effective blending of the two strategies. FAO will also support the MoA in defining strategies that will continue the work of the SADG and RDSG after 2020, with a possible focus on blending them into one single Strategy for Agriculture and Rural Development for Georgia.

14 Competitiveness in terms of the this proposal refers to levels of agricultural production, productivity and commercialization of agricultural producers.


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FAO support will be more emphasized in the areas of statistics, data and information gathering, flow, and analysis as well as strengthening of linkages between the MoA and other line ministries in pursuing the fulfilment of goals related to rural development and Climate Smart agriculture. One of the key areas of FAO activities will be trainings both for policy makers, as well for those implementing policies in the field and creation of study and information materials for a wide range of beneficiaries and stakeholders. FAO will also provide support to specific institutional reform and policies at advancement of competitiveness of selected value chains.

The second outcome of this project aims at improving the services and investment opportunities for farmers to contribute to the improved competitiveness of the sector. Indeed, two of the main challenges that the agriculture sector in Georgia faces are the lack of skills of the farmers and the difficulties that farmers have accessing finance support. With this project, FAO will contribute to facilitate investments in the agriculture sector by individual farmers, cooperatives, SMEs or other private sector actors, as well as.

The Outputs 2.1. and 2.2. envisage the provision of individual matching grants to individual farmers, cooperatives, rural entrepreneurs, SMEs or municipalities, to allow for investments in infrastructure or equipment and to create new business opportunities in the primary agriculture and food processing. These matching grants will follow a process of application similar to the methodologies already implemented in pre-accession countries (IPARD and SAPARD) to increase the competitiveness of agriculture, and the geographical scope is initially focused on the eight municipalities in Georgia where the LEADER pilot projects have started (Kazbegi, Lagodekhi, Dedopliskharo, Tetriskaro, Borjomi, Khulo, Keda and Alkhalkalaki) but will also be extended to other areas if the investments proposed are related to the selected value chains. This will be the case for adjacent municipalities in primary production, as well as other investments at a broader national level for investments linked to processing, storage, marketing or branding within the same value chain. In all cases, these investments that spill over the initial set of eight municipalities will need the case by case analysis and endorsement to be made by the ARD.

There will be two exceptions to this geographical coverage, one reserved for investments to be made by cooperatives, that will be considered eligible at national level within the pre-selected value chains, and the second exception will be linked to exceptional awards of investments at a country wide level and without working on a concrete value chain, as soon as they are considered by the ARC as projects ¨of high interest¨ as per the following criteria:

1. Innovative project that may be replicated in the future by GoG funds using the state support funds.

2. Projects with high impact in job creation and social sustainability in areas or sectors with high unemployment rate.

3. Projects with significant value added within the value chain.

4.- Projects that adhere to internationally recognized good environmental practices.


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Output National Adjacent Municipalities

Municipal (LEADER)

Outputs 1.1 – MoA capacity building

Except Adjara15

Outputs 1.2 – Promotion of specific SADG measures

Except Adjara

Outputs 2.1 – Individual Investments through matching grants

Cooperatives, Investments within the pre-selected value chains except for primary production; Exceptional awards (*)

All investments in the pre-selected value chains including primary production (*)

Farmers, SMEs, entrepreneurs

Outputs 2.2 – Municipal investments

Local Authorities, Farmers, SMEs

Outputs 2.3 - Extension National wide

(*) These investments will require the detailed revision of the ARC case by case prior to its approval.

These individual or municipal investments need to be seen in a broader picture of implementation of a full programme of Rural Development following the European Union model and composed of a component competitiveness of agriculture, a component of environment, a component of diversification of rural economy, and a component of LEADER projects.

FAO will coordinate the activities contemplated in these outputs that solely fall under the component to increase the competitiveness in agriculture, with the ongoing work being implemented by the ENPARD NGOs that work in these municipalities in this component, but also on the other ones. In this sense, FAO will try as much as possible to work together with the Local Action Groups that have been created in the frame of these projects. Also, UNDP will develop a twin project focused on the components of diversification of rural economy and environment. This FAO project will also coordinate with them, joining forces to develop a territorial approach for rural development.

The Project will offer support measures for integrated approach to agricultural development, in line with the goals of the state and municipal strategic policy documents16 and will aim to feed the policy dialogue with results and experiences, allowing for the new generation of strategies and programmes for agriculture and rural development to be developed.

Under the Output 2.3., FAO will aim at supporting the implementation of the extension strategy, that has just been finalised, and that sets the basis for a more performant extension service in the future. The Project aims at development the capacities of all the 15 UNDP will cover the technical assistance support to the Ministry of Agriculture of Adjara under its ENPARD III Programme. UNDP and FAO will coordinate actions in order to make sure that the TA support provided to both national MoA and MoA in Adjara are coherent and do not lead to contradictory policy making. FAO will support UNDP on its support to the MoA of Adjara as required. 16 Local Rural Development Strategies developed by the LAGs of the targeted municipalities.


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public extension services in Georgia, including the ICCs, RICs and the Agroservice in Adjara. As a complement to this general support in the implementation of the extension Strategy, the Project will also implement more targeted and intensive support in 3-5 ICCs. This will complement the theoretical support they have been providing in general so far with concrete hands-on demonstration plots where some of the key advice provided by extensionists are implemented, allowing for the farmers to compare with traditional techniques. These demonstration plots will be focused on the main crops in the selected ICCs and will also incorporate key aspects of Climate Smart Agriculture such as water and soil management.

Through this project, FAO will also continue to facilitate policy dialogue between the European Union Delegation and the MoA and to provide to both with expert technical assessments and relevant information and support to accompany the fulfilment their budget support conditions. FAO will also assist the MoA in the reporting the process linked to the budget support compliance reports and will provide the European Union Delegation with its own independent assessment of progress achieved in the agricultural sector and more specifically in the implementation of the SADG on a yearly basis.

Finally, FAO will also continue to provide support to the ENPARD Steering Committees and Stakeholder Committees; including drafting of agendas, proposal of themes for the steering committees, sending invitations to relevant stakeholders in a timely manner, moderating stakeholder discussions, circulating minutes, consolidating comments, and supporting the Ministry of Agriculture in fulfilling the action points agreed in these meetings.

2.2 Alignment and Strategic Fit

Alignment with Government Policies

This initiative is fully compliant with the strategy plans of the Government of Georgia in general and the Ministry of Agriculture. It can also be seen as an engagement of the MoA to fully support efforts in this direction and to ensure ownership and sustainability of the action.

The Project is specifically designed to support the implementation of the SADG 2015-2020, and more specifically, with:

Strategic Direction 3.2: Institutional Development and Measure 3.2.2 - Supporting an efficient market information collection, processing and dissemination among the different stakeholders actively engaged in the agricultural sector and Measure 3.2.4 - Strengthening coordination between the Ministry of Agriculture, donor community and other stakeholders.

Strategic Direction 3.4: Regional and sectorial development – value-chain development and the Measures: 3.4.1 - Defining and supporting rural development and investment strategies for each region; 3.4.2. - Development, implementation and monitoring of sectorial agricultural programmes; 3.4.7 - Strengthening post-harvest services, facilities, and operations (handling, storage, grading/sizing, packing, processing, marketing); 3.4.8 - Improved access to input supply services; and 3.4.9 - Improved access to agricultural machinery.


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Strategic Direction 3.7: Climate change, environment and biodiversity, and measure; 3.7.3 - Promoting CSA practice.

The Project will also support the implementation of the RDSG 2017-2020, and its action plan and more specifically the actions related to:

Priority Area 1: Economy and Competitiveness; Objective 1: Economic recovery of farming, restructuring and modernization through the diversification and development of effective supply chains; and more concretely in the following eight priorities:

1.1.1 facilitation of the opening of new enterprises and/or expansion of the existing ones in agriculture sector through the preferential agro-credit programme;

1.1.3 facilitation of creation of new intensive/semi-intensive fruit gardens and high-quality nursery gardens within the frames of State Programme Plant the Future;

1.1.5 facilitation of agro-processing and storage enterprises creation;

1.1.8 facilitation of establishment of cooperatives and supporting of existing agro-cooperatives to promote entrepreneurship in the rural areas.

In the same priority area, some activities also fall under Objective 2: Diversification of the Rural Economy through strengthening the agricultural-related value-chain and promoting various sustainable non-agricultural activities.

Alignment with the ENPARD Objectives

The ENPARD programme is in line with the 2015 review of the European Neighbourhood Policy (ENP), and is coherent with the European Union’s agriculture and rural development sector policy, which is one of the three pillars under the Single Support Framework for the European Union’s support to Georgia (SSF 2014-2017).

This action is fully compliant with the ENPARD objectives as technical assistance support to the MoA is embedded as one of the pillars of the support of the European Union under ENPARD. More concretely, some of the priorities of this action were included as priorities under ENPARD I, namely:

supporting strengthened cooperation amongst farmers through the creation of business-oriented cooperatives;

improving access for farmers to knowledge and information through an improved extension system and the creation of RICs and ICCs at district level;

improving the efficiency of key institutions involved in agriculture;

developing the geographical indications system;

Under ENPARD II, the activities of this action fall under the expected Result 1: Enhanced competitiveness and sustainability of the agriculture sector.

Alignment with the Sustainable Development Goals (SDGs) and the United Nations Partnership for Sustainable Development (UNPSD) for Georgia

This project will contribute towards Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture; and more specifically to the fulfilment of:

Goal 2.3: by 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and


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fishers, including thorough secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment.

Goal 2.a: increase investment, enhance international cooperation, in rural infrastructure, agricultural research and extension services, technology development and plant and livestock gene banks to enhance agricultural productive capacity in developing countries, particularly least developed countries.

This project proposal is aligned with the priorities of the UNPSD for Georgia 2016-2020, which summarizes the Government of Georgia and the United Nations (UN) partnership for the priority policy and programme areas for a five-year period. This project contributes to:

Focus Area/Outcome 5: Human Security and Community Resilience towards the fulfilment of Outcome 8: by 2020 communities enjoy greater resilience through enhanced institutional and legislative systems for environment protection, sustainable management of natural resources and disaster risk reduction;

Focus Area/Outcome 2: Jobs, Livelihood and Social Protection, and Outcome 3: by 2020 poor and excluded population groups have better employment and livelihood opportunities as a result of inclusive and sustainable growth and development policies.

Alignment of this proposal with FAO corporate strategy at global and national levels

This initiative falls under FAO Strategic Objectives 2, 3 and 4.

Strategic Objective 2: Increase and improve provision of goods and services from agriculture, forestry and fisheries in a sustainable manner

Organizational Outcome 201: Producers and natural resource managers adopt practices that increase and improve agricultural sector production in a sustainable manner.

Organisational Output 20101: Innovative practices for sustainable agricultural production (including traditional practices that improve sustainability, such as those listed as Globally Important Agricultural Heritage Systems) are identified, assessed and disseminated and their adoption by stakeholders is facilitated. 25 percent.

Strategic Objective 3: Reduce rural poverty

Organizational Outcome 301: The rural poor have enhanced and equitable access to productive resources, services, organizations and markets, and can manage their resources more sustainably.

Organisational Output 30103: Support to improve access of poor rural producers and households to appropriate technologies and knowledge, inputs and markets. 15 percent

Organisational Output 30104: Support to innovations in rural services provision and infrastructure development accessible to the rural poor. Fifteen percent

Strategic Objective 4: Enable more inclusive and efficient agricultural and food systems


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Organizational Outcome 402: Agribusinesses and agri-food chains that are more inclusive and efficient are developed and implemented by the public and private sectors.

Organisational Output 40201: Public sector institutions are supported to formulate and implement policies and strategies, and to provide public goods that enhance inclusiveness and efficiency in agri-food chains. 10 percent

Organisational Output 40203: Value chain actors are provided with technical and managerial support to promote inclusive, efficient and sustainable agri-food chains. 20 percent

Organizational Outcome 403: Policies, financial instruments and investment that improve the inclusiveness and efficiency of agri-food systems are developed and implemented by the public and private sectors.

Organisational Output 40301: Public and private sector institutions are supported to design and implement financial instruments and services that improve access to capital for efficient and inclusive agri-food systems. 15 percent

In addition, this project will contribute towards the work done under the Regional Priority for Europe and Central Asia “Policies for smallholder farming” as well as the FAO Regional Initiatives: (i) empowering smallholders and family farming; and (ii) improving agro-food trade and market integration.

Regarding the FAO Country Framework Programming (CPF) for Georgia for the period 2016-2020, which highlights the working priorities for FAO in Georgia, this project is included in:

Priority Area 1 - Institutional Development: under this priority, FAO will provide technical advice to MoA on how to introduce quality policy and align its measures with international and European Union standards.

Priority Area 2 - Regional and Sectoral development – Value-Chain Development: under this priority FAO aims at increasing the competitiveness and productivity of agricultural producers (both men and women) in rural areas through improved production, harvest and post-harvest practices, market linkages, addressing farm structures characterized by excessive land fragmentation and logistics supported by improved extension services.

Priority Area 4 - Climate Change, Environment and Biodiversity: under this priority area FAO will promote CSA (with consideration of needed Disaster Risk Reduction (DRR) measures) and environmentally friendly agriculture practices to support sustainable management of natural resources and biodiversity.

2.3 FAO’s Comparative Advantage

FAO has a number of specific comparative advantages for implementing this action and these are well recognized by the European Union, specifically:

It is a specialized agency of the UN and as such, an honest broker and the leading agency in supporting agriculture and rural development policies;

FAO as a specialized agency of the United Nations and as the leading agency in supporting agriculture and rural development has developed expertise to support --


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particularly rural residents -- in agriculture and rural development and to support their income generation efforts. Furthermore, FAO has the possibility to link the local development initiative to national policies by fostering policy dialogue as well as by providing a platform for such a dialogue among stakeholders.

FAO has corporate developed a methodology on Sustainable Food Value Chains (SFVC), a market-oriented and systems-based approach for measuring, analysing and improving the performance of food value chains (FVCs) in ways that help ensure their economic, social and environmental sustainability.

Under ENPARD, FAO has successfully implemented two projects of technical assistance to the Ministry of Agriculture GCP/GEO/001/EC and GCP/GEO/010/EC (ongoing) funded by the European Union, as well as the also ongoing project on the same topic GCP/GEO/004/AUT financed by the Austrian Development Agency (ADA);

FAO has expertise in supporting the review and analysis of the agricultural and rural development sectors worldwide, including countries in the Caucasus;

FAO has been working in the region for more than twenty years and has been implementing projects in a wide range of agricultural, forestry and fisheries areas (food safety and consumer protection, animal production and health, plant protection, agriculture research, information and knowledge and fisheries among others);

As FAO covers various fields, its contribution to the countries links well with some of the agriculturally-oriented projects and programmes the European Union is implementing, such as, the sector budget support, the Pilot Regional Development Programmes (PRDP) and the Comprehensive Institutional Building (CIB) programmes;

FAO has supported the drafting of the Extension Strategy, and has contributed to keep extension high in the agenda of both the MoA and the EUD; it is therefore the good partner to initiate the implementation of such strategy;

FAO is well experienced in implementation of economic empowerment programmes for vulnerable rural population in Georgia; and the European Union and FAO cooperated on rural investment incentives for Internal Displaced People (IDPs) in several projects that supported agricultural development, self-employment and employment support to rural populations. To date, under this IDP FAO programme, the investment support incentives (cost-share of 50-65 percent of the procured assets) provided assets to more then 4 000 households. The incentives provided constituted less than 30 percent of the overall investment as the Project did not cover turnover, maintenance and labor costs. The Project outcome included measurable improvement of livelihoods, food security and incomes, as well as through mobilization of agricultural investments of over EUR 15 million from the target population.

FAO has adequate decentralized capabilities at country level to develop and implement a project of this kind with overall technical support from technical divisions at FAO headquarters and FAO REU and operational support in particular operations;

Successful collaboration with other UN system organizations as a full member of UN Country Team at country level and close collaboration with other organizations, including embassies, and main donors in the country (European Union, ADA, Swiss Development Cooperation [SDC], United States Department of Agriculture (USDA)/United States Development Aid Programme (USAID), World Bank, etc.);


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FAO has a neutral partner position with a consolidated reputation for both Government, and national and local stakeholders in the region;

In addition, FAO can offer multidisciplinary perspectives due to its extensive expertise in various technical areas available both at headquarters and in decentralized offices.

FAO has already implemented successfully the first project of technical assistance for the MoA under the ENPARD I, and important progress has been made under this first project. It is also implementing the continuation of this Technical Assistance project now. Also, significant lessons learned have been identified.

Based on the aforementioned experience, as well as on other FAO projects implemented in Georgia within the scope of technical assistance and direct support to farmers, FAO has gained a very good understanding of the capacities of the MoA and the related agencies in the areas that need most capacity development as well as the complexities of application processes for grant selection and disbursement.

Focused on FAO´s support to ENPARD, some of the main achievements of FAO´s work have been the development of policy and strategic documents, the implementation of working tools and the improvement of the individual capacities of the staff of the MOA, as well as the coordination amongst the different ENPARD stakeholders.


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2.4 Stakeholder Consultation and Engagement

Consultation with the MoA The definition and preparation of this action comes because of intense and daily discussions with the officials of the MoA and related agencies at different levels that have taken place during the implementation of the ENPARD I and II (ongoing) technical assistance projects implemented by FAO, as well as the twin projects financed by ADA but also part of ENPARD I.

Also during period, FAO has developed a good understanding of the priorities of the high-level officers of the MoA based on the reporting requirements at highest levels towards the Government of Georgia. This has been a good complement to the needs identified in the lower grades of officers.

In parallel, FAO has also done internal research on the capacities that FAO has in terms of technical support to the country office both in REU and in the headquarters in Rome. The FAO team has made a considerable effort to deploy technical capacities in those areas in which FAO has a comparative advantage, drawing on similar experiences of technical support worldwide. Officers of the MoA have been exposed to experiences, methodologies and tools that have been developed corporately by FAO or other partners, to identify those of potential use in the Georgian context.

This project proposes general areas of work under the Outcome 1, but the concrete activities falling under the technical assistance will need to be reassessed in the first half of 2019 since this Outcome will only start as a continuation of the ongoing Technical Assistance project (GCP/GEO/010/EC) under ENPARD II. This takes into consideration also the fact that the SADG and the RDSG will both end in 2020. Therefore 2019 will be a good time to start evaluating the impact and adjusting the agriculture policy for the next years.

Consultation with UNDP Although UNDP will not be part of the implementation of this project, there will be a twin project under ENPARD III implemented by UNDP to promote environment and economic diversification in rural areas, two of the main pillars that, together with competitiveness of the agriculture sector, conform the main areas of work under a Rural Development Programme, following the European Union model.

UNDP and FAO are working hand in hand to develop two proposals that will be complementary and will also take advantage of the work being implemented by ENPARD partners under ENPARD I and II, promoting the LEADER approach in eight municipalities in Georgia.

Consultation with the ENPARD Municipalities, Local Action Groups and ENPARD partners

It has been FAO’s practice to engage and involve local authorities in the implementation of investment support projects both as beneficiaries for municipality level investments as well as partners in the application management and investment monitoring processes of the supported individual applicants (physical and legal entities).

The contractual arrangements with local authorities ensure the ability to invest in public agricultural services, as well as build ownership of the responsibilities and involvement in case of disputes.


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The proposed project aims to support the MoA and its decentralised offices and agencies as well as the local authorities such as municipal administrations/governor offices of the targeted municipalities with technical assistance. It will provide investment incentives to farmers, SMEs, cooperatives, farmer organizations and the targeted communities to foster the active roles of different levels of governance and to allow regional and municipality authorities to join and contribute to the development of agricultural and the rural sector.

To this end, FAO visited all the targeted municipalities during the inception programming phase of the Project to assess the identify the areas for further assistance and involvement in the frame of upcoming ENPARD III. This exchange of information and coordination ensured consideration of already operating programs, donor/municipalities assistance, levels of awareness and use of already existing state agricultural investment and rural development programmes, with the aim of creation of value added and synergies with locally present partners.

During June-July 2017, FAO and UNDP attended stakeholder meetings in the targeted municipalities, that included local stakeholders, LAG members and implementation partners CARE (Lagodekhi), RDFG (Kvemo Kartli), Mercy Corps (Borjomi), PiN (Stepantsminda); GIPA (Akhalkalaki), Caritas ( Khulo), CENN (Qeda) and Heks-Eper (Dedoplistskharo)

In parallel FAO completed the specialized assessment in the targeted municipalities entitled “Assessment of rural agricultural investment capacities and corresponding extension needs” ensuring the possibility to maintain an informed dialogue with the stakeholders and to cross reference the main results captured during the assessment.

FAO’s research highlights the areas and subsectors of the agro and food complex of most interest in addition to the investment capacities of the target population. Dialogue with the local stakeholders further confirmed several constraints affecting the development of the agricultural and rural sector which are in cases unique for some municipalities and in some cases shared by all.

These constraints include: insufficient skills/technology for modernization of agricultural production, limited diversification of rural/agricultural economy, land fragmentation, lack of entrepreneurial skills, limited access to finance, limited awareness and use of state programs.

The review of data available on APMA state support for agricultural development on regional and municipal level further illustrates the average underuse of funds in the targeted municipalities and regions and overall limited delivery of the available development funding17. This is further illustrating the need for improvement of both the capacities of the targeted population in facilitating access to funds, as well as sensitization and adjustment of the state support programmes.

17 The FAO assessment “Assessment of rural agricultural investment capacities and corresponding extension

needs” indicated that half of the rural households are “aware” of the availability of state investment support

programmes. However, only a quarter has more information or knows where information on agricultural

investments can be obtained. As result, less then 7 percent of the rural households have invested in their

activities through investment support programmes.

http://www.seslisozluk.net/en/what-is-the-meaning-of-sensitization/


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Agricultural statistical profiles of the targeted municipalities are provided in the table below. The provided data illustrates the diversity of the targeted municipalities both in terms of population, as well as in terms of agricultural resources, providing insight into the complexity that needs to be addressed through the Project on national, regional and municipal level.

Region Population ‘000

# villages Rural residents

Rural HH

HH with perennial crops

HH with annual crops

Agri land total (ha)

Adjara AR 339.0 31 376 34 733 15 064

Keda, 17.0 64 15 250 4 485 2 223 3 660 1 659

Khulo, 23.7 78 22 320 6 565 368 5 001 1 346

Kakheti 317.5 44 414 82 581 1 66 216

Dedoplistskaro 21.0 15 15 281 5 660 1 688 7 177 33 571

Lagodekhi 41.7 67 35 760 13 244 4 848 12 406 19 137

Mtskheta-Mtianeti

93.8 13 492 13 492 13 492

Kazbegi 3.8 45 2 469 1 029 13 1 283 101

Samtskhe-Javakheti

160.6 4 869 33 412 29 313

Akhalqalaqi 45.2 64 36 775 12 258 81 9 223 13 764

Borjomi 25.1 39 10 052 3 351 152 4 424 1 341

Kvemo Kartli 427.4 9 680 64 052 52 183

Tetri Tskaro 20.8 90 16 593 4 609 824 6 513 4 516

Total 198.3 462.0 154 500 51 201 10 197 49 687 75 435

Fluid opinions on the roles of the LAGs and the municipalities are evident and ownership of the LEADER approach at times appears limited; however, an agreement that LAGs and municipalities should work together is prevailing. Close cooperation and synergetic actions towards common goals as seen as methods for ultimately improving the sustainability of the LEADER approach.

The proposed project will aim to address any potential overlap with the APMA programmes, as well as to address the limited involvement of the MoA, which in turn limits the contribution of the LAGs to national policy making.

The need to develop an effective stakeholder engagement and consultation strategy is clearly identified, and FAO is recognized by all stakeholders as instrumental in facilitating closer involvement of the MoA in the LEADER approach, further driving better alignment of the state support for rural development.

The Project will explore synergies with other ENPARD III components targeting the most vulnerable and disadvantaged groups in rural areas, and where shortfall in coverage is identified adequate provisions for addressing their status constraints will be made. With this aim FAO stands ready to aid the LEADER partners for the review and development of the agricultural sections of the LAG/municipal development strategies and action plans.

Where appropriate FAO on basis of the determined needs will explore possibilities for wider development through spill over effects to neighbouring municipalities, in particular in areas where community production and supply lines and joint production resources (arable land and infrastructure) is divided by only administrative lines, aiming to best serve value chains,


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commodity clusters, cooperatives and agricultural infrastructure initiatives, based on needs and interests of their stakeholders which function on basis of commodity and geographical units.

2.5 Previous work and lessons learned

In capacity development of the MoA

The main lesson learned regarding capacity development of the MoA, as stated in the ENPARD III document, is that “to speed up the necessary changes within the Ministry and make those changes more profound, sustained support is required to improve the working culture.”

The lessons generated at the initial stages of ENPARD programme implementation are to be viewed within the context of sudden and abrupt positive change in attitude towards agriculture from government of Georgia. This created an excellent possibility to create new policies in multiple directions and support institutional reforms through joint initiatives, but lack of time and scale of tasks required much sharper focus on fewer, carefully prioritized policy goals.

In general, FAO’s previous projects were very good in ¨moving things forward” in the MoA agenda. This dynamism was occasionally too fast to the MoA -- which had never been exposed to such a scale of activities -- and put pressure on MoA in terms of advanced management skills, smooth policy execution processes, existence of institutional memory and other factors, which were understandably not fully developed at the initial stage of the implementation of the ENPARD Programme in 2013.

There are two consequences arising from the fact that an important part of the MoA´s actions are very recent. On one side, the staff of the MoA have been often newly recruited to implement some of these tasks and they may not have enough experience in some technical aspects. This is also linked to the significant increase in human resources by the MoA and its agencies in the recent years.

On the other hand, the promotion of agriculture in Georgia has been accompanied by an accelerated process of modernization of the work of the MoA in comparison with the tools and techniques that were used previously. This has been greatly impacted by the process of approximation to the European Union in general, and by the ENPARD and the CIB Programmes, as well as by the action of other donors. The process of approximation to the European Union’s acquis communautaire is a very challenging process for any country, but in the case of small countries it entails a tremendous challenge for the government institutions and officials.

One of the lessons learned during the first phase of the ENPARD project technical assistance implemented by FAO is how to address this reality. This had direct implications in the way the different technical trainings are conceived and implemented. Indeed, some of the changes that are being promoted through FAO interventions relate to changes in the management practices within the MoA. For example, the creation of management or information tools that need to be filled in a systematic and consistent manner to report progress in the implementation of the SADG require not only capacity development and


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tools such as software solutions but also political support from the management of the MoA on the way staff is managed and its performance evaluated.

Another important point is that policy work takes a significant amount of time to deliver concrete results. If the process of policy making needs to be participative for the final products to be fully owned by the MoA, this means that the process of finalization of policy documents often take longer than expected. At the same time, changes in the senior management of the MoA may also lead to changes in priorities and therefore adjustments in the policy documents, although in general there has been continuity in the main priorities of the MoA in the recent years.

Another important lesson learned from the previous work done by FAO is the need to be consistent in the support provided to the MoA and to have clear long-term strategic directions and priorities. While ENPARD documents set a good basis as a general framework, there is also a need to define more in detail some of the policy options to make sure that any recommendations will be consistent with main concepts, such as the need for the policy to include the interest of small farmers, women, or minorities. This will help to modulate the messages that FAO and the European Union Delegation see as priorities in the discussions with the MoA.

Bringing new initiatives to logical end in time was complicated by lack of ownership in specific instances, such as technical capacity building exercise to the newly established Agriculture Cooperative Development Agency (ACDA). ENPARD has contributed to significantly promote the concept of cooperatives, leading to over 1 400 cooperatives being created by middle of 2017. There has also been significant policy changes with the structure of ACDA, an improved legal and organisational framework, sustained capacity building in several areas of work and the training and coaching of the ACDA officers. It remains pending, however, to achieve a full ownership by the MoA in the promotion of cooperatives through public funds to move from a ¨donor funded¨ intervention, towards integrating cooperative promotion in the core policy making of the MoA.

In addition to still prevalent institutional weakness of agriculture policy making in Georgia discussed in the beginning of this chapter, the Project should be more demanding in requesting adherence to jointly elaborated plans and measures, which were often subject to political changes during the first phase of the ENPARD Programme implementation.

Important lesson to be considered in the future is lack of culture of low and medium-level collaboration between the governmental entities which are jointly responsible for thematic activities. This pertains to support to agricultural and rural statistics generation and dissemination, which required effective collaboration between MoA and GEOSTAT but could not always be maintained at the necessary level. A partial remedy to this problem would be the strengthening of institutional platforms in each of these two entities, as well as development of specific tools of information gathering and analysis at the MoA, as well as introduction and institutionalization of new products at GEOSTAT.

An additional lesson learned is how to better integrate the ENPARD work in general and the policy work supported by FAO in particular in the full picture of the work being developed or promoted by other donors not only in the agriculture sector, but also by other ministries in areas where several ministries participate. These include Rural Development or Value-Chain


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Development. In this sense, it is important to improve communication and information sharing and to develop tools and mechanisms (donor coordination, interministerial working groups, etc.) to gradually move to a process of ownership by the Government of Georgia of the different actions developed in a sector. This will also facilitate a process of homogenization of practices and standards for particular working areas.

In supporting investments through matching grants

FAO previous experience in the programme of matching grants for IDPs show that when provided with enabling environment and appropriate incentives even the most passive and vulnerable rural population in Georgia is encouraged to invest in their agricultural development. Approaches that are flexible enough to mobilize various segments of farmers and which give a broad development framework, provided that they consider the specific needs of individuals and their locations, have yielded the most sustainable results as they enable rural entrepreneurship and innovation. The participatory approach during the design and programming of application cycles and activities, coupling it with the progress achieved, has been a major contributor to the overall success of the support programmes.

Through its IDP Livelihoods support programme the FAO has provided equitable development opportunities for different types of applicants as well as for various vulnerabilities of the target population, tailored on basis of the specific natural constraints of each area.

FAO has been implementing European Union funded IDP programmes since 2009 evolving the approaches and the type of assistance provided to the beneficiaries, allowing them to address their food insecurity and gradually develop their agricultural production into value adding activities as well as in self-employment and employment. The activities of the Project have often been linked to the host communities and local value-chain stakeholders considering the needs of the local agricultural subsectors and value-chains.

FAO implemented investment support programmes amounting to over USD 6 000 000 (EUR 4 960 060). The programme spanned over seven years and provided direct investment support to over 5 000 IDP households, which in turn and in addition to FAO invested over EUR 15 000 000 in their agricultural production.

Regular internal and external monitoring has confirmed the viability of the results achieved, indicating that the Project supported the needs of the producers with significant quantity of outputs in the investment support components. The utilization of different types of investment support allowed involvement of a wide range of households both in terms of scope of investments and status of households (vulnerability). The value of the outputs produced is high and made real contributions to improving the of the livelihoods of beneficiaries, both in terms of improvement of agriculture production and productivity and to a significant extent to their self-employment and income generation activities.

The increase in income generation of the targeted population in instances reached and even surpassed the host population. The economic viability of the Project results/outcomes and the financial sustainability of the Project were assessed as high.

Beyond the measurable indicators, it is noteworthy that the Project managed to instil substantial ownership, motivation and vigour in the target population in relation to


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agricultural production and investments, which as relevant output as the financial benefits, as it will continue to provide sustainability of the project’s interventions in the years to come.

The importance of enabling and empowering the rural IDP population to take charge of their development has been the main lesson learned. Assistance should be provided only on demand and equitable selection criteria should be established to foster equitable development.

Beneficiaries perform best when they decide on joint or individual investments, on the timing (season), value and the type of investment. The importance of enabling access to an investment programme and awarding all who meet the criteria is one of the main lessons learned in accordance to “do no harm” principle, as it encourages farmers to freely plan their activities.

Another lesson learned has been the importance to ensure that technical and financial review and evaluation of the investment is conducted by the Project, rather as part of the application submitted by the beneficiaries. Often business plans developed by applicants have been found to have unrealistic expectations, as well as different risks which are not always captured by the financial documentation (business plans). As such, the beneficiaries remain exposed to financial risks and limited sustainability, often further aggravated by debt incurred by the applicants to provide their co-investment share.

At the same time the technical solutions proposed by the applicants have not always been optimal for the proposed investments, resulting in higher investment costs as well as higher operating costs. As such, it is up to the Project and its arrangements for technical review to consider and alternatively propose more adequate technical solutions to the beneficiaries.

The involvement of the local authorities in the application review and the legal responsibilities arising from the support has also proved to be an excellent mechanism for both quality control and sustainability, as municipalities possess both the leverage and in-depth knowledge of the area and the potential applicants.

Previous experience of other ENPARD partners in similar projects

The Project will also build up on the experiences of the other implementing partners of the ENPARD programme in Georgia. There has been a lot of work done during ENPARD I and ENPARD II in several fields such as cooperatives or rural development that have had also used mechanisms to disburse grants to farmers under different co-sharing schemes regarding the contribution from the final beneficiaries, from cash contributions, in-kind contributions, as well as revolving funds. The work been implemented by the consortia led by CARE, People in Need and Mercy Corps in support to cooperatives, as well as the work under the Rural Development portfolio for ENPARD with the creation of eight Local Action Groups (LAGs), will be also analysed to bring to this project all the best practices identified through these projects.

A lot of work has also been done under ENPARD in the field of extension and advice to farmers directly in the field through the ENPARD stakeholders, and the Project will also integrate the lessons learned and modalities of collaboration between the private sector


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(input suppliers) and the state extension services (ICCs and RICs) with the facilitation of the ENPARD stakeholders.

3 EXPECTED RESULTS

3.1 Impact

The Project will contribute to the reduction of rural poverty of the targeted rural population because of improved and development oriented policies, as well as improved agricultural services and investments accessible for farmers, allowing for increased competitiveness and employment creation within the agriculture sector.

3.2 Outcomes

The Project has two main outcomes:

Outcome 1: The MoA and other relevant institutions have improved capacity,

management practices and technical knowledge to sustainably enhance policies,

which foster and support the development of value chains and the sustainable

competitiveness of agriculture18.

Outcome 2: Farmers, cooperatives and other rural SMAEs entrepreneurs, workers

and rural households are included on equitable terms in sustainable food value

chains through improved access to finance, inputs and services, leading to increased

competitiveness of the agriculture sector

3.3 Outputs and activities

Outputs and activities under Outcome 1:

Output 1.1. Increased efficiency of the operations of the MoA and more effective

implementation of the MoA's key policies as a result of institutional development

The Project will ensure continuity of the ongoing technical assistance support from FAO to the MoA under ENPARD II (GCP/GEO/010/EC) as of 2020, when this ENPARD II project will end. FAO´s work will complement the efforts of the MoA to fulfil the conditions of budget support under ENPARD II and III, and will support the MoA decision-makers to develop their capacities and introduce new management practices and tools; drawing on knowledge and experience of the European model in agricultural, rural development and natural resource management. A detailed work plan and activities will be developed based on the needs assessment that will be conducted with the MoA in the first months of 2019, and will be submitted to the Project Steering Committee and EUD for validation.

The institutional capacity building support by the Project will be focused on intensive use of the monitoring and evaluation system to assess the performance of the MoA in the last

18 Competitivness in terms of the this proposal refers to levels of agricultural production, productivity and commercialization of agricultural producers.


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years of implementation of the ongoing SADG, as well as in the planning of the continuation of the SADG, which should be more oriented towards the facilitation of agricultural development and strengthening of role of non-state actors, as well as in blending the agriculture and rural development strategies, possibly into a single Agriculture and Rural Development Strategy for Georgia starting in 2021.

The above development necessitates support to strengthening of more advanced information collection, analysis, and dissemination systems for policy-making at the MoA as well as increased role of information in planning of joint activities between the MoA and other line ministries and agencies. Emphasis should be given to enhancement of the role of the MoA as generator of registries that are subsequently used for regular surveys and other policy planning instruments. In this light, the Project will continue support to collaboration between the MoA and GEOSTAT in terms of support to elaboration of new statistical products, exchange of information and databases, etc.

FAO will continue capacity building assistance in the areas of policy formulation and planning with more focus of bringing the experience of so-called new European countries to Georgia.

FAO will continue supporting capacity building of the extension service both at the central apparatus and field level. In this regard, the assistance will again be moving towards facilitation of multi-actor approach and increase of synergies between the state extension, private sector and CSOs. This also includes creation and propagation of training materials related to production, storage, marketing, and other aspects of agriculture production.

The Project will retain its role as facilitator of multi-party dialogue between the donors operating in the field and the MoA.

Output 1.2. Technical support has allowed the MOA to implement the specific components

of the SADG and the SRDG targeted by the ENPARD Georgia Programme

The Project will provide inclusive technical assistance to the MoA and other relevant institutions, responsive to the development of the agriculture sector, to develop some of the key directions of the ongoing SADG and RDSG or any strategy that will follow them.

The Project will support the MoA in the maintenance of the Monitoring and Evaluation System of the MoA, and will also provide support to UNDP and other ministries to expand this M&E Result Oriented Monitoring (ROM) System to allow for the monitoring of the RDSG within other ministries. The Project will also support MoA and GEOSTAT in the process of collection of information, analysis and exchange, especially in terms of indicators that would allow to measure the pace of implementation of the SADG, the RDSG and the ENPARD programme.

A particular emphasis will be given to strengthening of structured information flow both within the MoA system, as well as between the MoA and other governmental entities with a stake in the implementation of SADG and SRDG. This also applies for the development and support of monitoring and evaluation systems and procedures.

Another field of concentration of the Project will be support to implementation of policies towards strengthening of value chain linkages. As it can be drawn from lessons learned,


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deeper focus should be paid to prioritized value chains and specific measures suggested to the MoA about concrete bottlenecks to generation of value added across the value chain.

FAO will continue working in Climate Smart Agriculture and the promotion of extension, and will incorporate other concrete technical areas depending on the needs assessment that will be made together with the MoA in the first months of 2019. Also, FAO will continue providing support to both MoA and the EUD in technical support as well as facilitating the policy dialogue between them and with other partners. FAO will continue supporting ENPARD through the organisation and secretariat of the ENPARD Steering and Stakeholders Committee meetings that meet quarterly.

As already mentioned in Output 1.1, the Project will analyse together with the MoA any changes in the policy priorities, that may affect the work under this Output, and based on this, will propose to the Project Steering Committee for approval any further technical support under any technical priority not previously defined.

Outputs under Outcome 2:

Output 2.1. Documented economic improvement of the target population (individual

farmers, cooperatives, SMEs) as a result of equitable agricultural investment support

Individual grants in support of cost-shared investments provided to economic actors farmers, cooperatives, rural entrepreneurs, agribusinesses, SMEs) within selected subsectors and along value chains will aim at improving productivity, supporting the development of sectorial cooperative services, and increasing the quality and marketability of agricultural products through standard certification by relevant bodies.

The support measures will be developed through a clear and open processes of outreach, assessment19, information dissemination, consultation with and participation of regional, municipal and village level through both formal and informal networks, making specific provisions to reach women and disadvantaged groups and include their voices throughout the process.

The main driving policy framework will be the Rural Development Strategy of Georgia 2017-2020 as well as the Strategy for Agriculture Development for Georgia 2015-2020, but the Project will also build upon the existing regional and local agricultural/economic development and in particular the strategies created under ENPARD II under the European Union supported LEADER projects.

The Project will develop specific tools to support the development of agricultural cooperatives, building on the lessons learned and the foundation created during the first phase of the ENPARD Programme. In this regard, FAO will rely on earlier recommendations developed for the MoA and ACDA stipulating the creation of support schemes for cooperatives by size that will include technical assistance and/or investment schemes for capital expenditures. The Project will explore the need to reserve a percentage of the funds

19 e.g. based on community development plans and further development of appropriate action documents for the agricultural sector and specific sub-sectors/value chains, further addressing the needs identified into municipal, regional strategies and policies and the new Agriculture and Rural Development Strategy


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for individual investments for cooperatives, or to reduce the requirements for matching grants.

Other type of assistance to cooperatives might include business plan development services for a few large, established cooperatives who can demonstrate best practice, including co-op governance, quality assurance, market focus and effective supply chain involvement. The feasibility study assessing the viability of the Project would be required in order to develop a project that would be the subject of financing by means of concessional credit by APMA.

Activities:

Activity 2.1.1. Collect background information and prepare baseline assessment on

investment needs

During the inception phase, FAO will conduct a municipal/regional assessment covering the target municipalities and regions based on the FAO’s all-inclusive participatory appraisal techniques. As a result, the Project will produce municipal profiles, which will support the idenfication of the most relevant sub-sectors/value chains (which will be detailed in Activity 2.1.4) as well as the development needs and opportunities in the targeted rural communities. In addition, the evidence and reports concerning implementation of sectorial support measures by the GoG and development organizations will be carefully analysed.

Although having a particular focus in the agriculture and food processing sectors, the assessment will also aim at the identification of the capacities of the rural population that will yield appropriate recommendations for future interventions. Assessing aspects such as education, skills and labor needs (quantity, intensity, annual distribution) and labor availability will be vital to identify opportunities, mitigate constraints, improve linkages and build capacity.

The results from the municipal profiles will form the basis for the development of the schemes of matching grants, tailored to the identified situation in each of the target municipalities.

The results from the municipal/regional assessments will be disseminated to all partners in order to maximize benefits. Th Project will present the results so that key stakeholders will be informed of the findings, make sure that the proposed activities will augment and leverage any other on-going activities and will develop strong horizontal and vertical coordination mechanisms.

The Project will rely on the information and recommendations from the evaluation of the ENPARD I in development of the exact type, scope and coverage of activities targeting farmer cooperatives.

Activity 2.1.2 Development of baseline for the ENPARD III programme

Considering the level of interlinkage between the Project indicators and the overall ENPARD

III programme indicators, ensuring the availability of appropriate shared baselines for the

Project and the programme is a crucial step for appropriate monitoring of the project

development and results.


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The Project will undertake activities for establishment of baselines for all Impacts, Outcomes

and Outputs of the ENPARD III programmes during its inception phase. The baseline will be

developed on basis of already available information, statistics and report, as well as on the

basis of specific assessments and studies for indicators which require quantification and

qualification by specific research.

This activity will be done in coordination with UNDP in order to achieve a common baseline

that could be used for both projects that will implement the ENPARD III programme.

Activity 2.1.3. Creation of a project structure for management and approval of applications

and management of documentation

The Project will have three working levels to ensure transparency of the process and an

objective management of applications:

An FAO Project Implementation Unit (PIU) that will be in charge of the overall

management, evaluation and monitoring of the grant component. It will provide

general support, training and quality assurance to the application process.

One or more implementing partners that will be contracted by FAO to implement

some activities of the application process (awareness raising, outreach, support in

the preparation of application documentation, technical proposals and business

plans, screening and review of applications, and submission of recommended

investments for final screening by the ARC of the Project).

An Application Review Committee (ARC) that will be in charge of the final screening

of applications and final award. The ARC will be composed of the MoA, the EUD, FAO

and other relevant partners as observers or advisors invited on case-by-case basis.

To ensure the smooth operation of this grant component, there is a need to clearly define

responsibilities, and develop Standard Operating Procedures (SOPs), such as workflows,

investment support manuals, application administration protocols and application review

procedures.

Just as important, the appropriate handling and storage of information will be crucial to allow for a transparent process with records being kept to back any decision taken during the process that could be referred to in case of disputes or complaints raised by any of the actors.

The design of the application management structure, including contracting arrangements with implementing partners (calls for proposals), will be completed during the inception phase of the Project and pending on the results of the assessment and the actual scope and needs for implementation of the intervention. In order to increase the sustainability of the Project, the participation as implementers of state agencies, such as APMA or ACDA, will be taken into account in order to look for complementarity of the ongoing support programmes within the MoA, allowing for blending of funds to provide more sustainable investment options for individuals, cooperatives or SMEs.


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In this sense, the Project will start the implementation phase with the scope of using national or international NGOs as implementing partners. One of the tasks of the implementing partners will be to support the capacity building of APMA, that after three years of project will take over the main implementing functions until the end of the Project. The proposal of the exit strategy of the NGOs implementing the Project in the first phase will be taken into account in their competitive selection.

The shaping of the project management structure will ensure that the consultative process at local level and among the programme stakeholders will be incorporate the qualitative and quantitative presence of women, youth and minorities, in order to support for a stronger farmer/rural advocacy. Also, the Project will to the maximum extent possible use the already established networks and will further invest in strengthened networking at all levels, as crucial means of empowering rural stakeholders and in particularly women to provide feedback for shaping of the support policies.

Activity 2.1.4. Identification of priority subsectors/value chains and development of value

chain development vision and strategy aiming at benefitting the targeted population.

Using the FAO SFVC Value Chain selection tool, the Project will identify and prioritize the relevant sub-sectors/value chains to develop in the target communities. The appraisals/analyses of the selected sub-sectors/value chains will then be conducted, applying the Sustainable Food Value Chain approach in order to identify the root causes of value-chain underperformance (in terms of economic, social and environmental sustainability), binding constraints, leverage points along the value chains as well as the environment within which thse value chains operate. The ultimate goal of this appraisal is to identify, together with all value chain stakeholders, the vision and strategy to sustainably develop the value chains/sub-sectors for the benefit of the targeted population. The identified vision and strategy for the sustainable development of selected value chains/sub-sectors will inform the design of the support programs to be implemented in this project. In other words, other activitities in the Project will be designed and implemented based on the findings of the value chain appraisals conducted under this activity 2.1.4.

The pre-selected value chains will cover the main agricultural crops in the eight pre-selected municipalities, including annual crops, perennial crops and livestock, making an emphasis in the high value crops such as the ones produced in the horticulture sub-sector (orchards and vegetables).

Activity 2.1.5. Development of support programs which match the need of the targeted population

The Project aims to capitalize on the capacities of the targeted population by supporting them in coming forward with and acting on their initiatives. This support will focus on the provision of grants as well as other support necessary for the effective utilisation of grants such as capacity building, business development, and enhancing linkages between stakeholders, and so on, which are in part described under Activity 2.1.8 and Output 2.3.

FAO will develop the documentation needed for the application process, including the regulations for co-financing shares to be awarded and the maximum and minimum amounts of support for each category of beneficiary, the calls for interest to be disseminated publicly,


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the instructions for the applications, the templates for the applications and contracts, the eligibility and ranking criteria, documentative requirements from applicants, etc.

A detailed description of the application, review, inspection, award and prioritization criteria and control processes envisaged as well as responsibilities for their implementation will be elaborated during the Project’s inception. The preparation of these criteria and documentation will be done in a participatory basis, trying as much as possible to take into account the views and opinions of the MoA, the LAGs, the implementing partners, as well as the ENPARD Partners (NGOs that support the ongoing RD projects in the eight municipalities) and UNDP in order to coordinate as much as possible with the ongoing efforts.

The process of application and the eligibility, prioritization and award criteria, will be unique for all the individual investments in all the municipalities, with unified percentages for cost-sharing depending on local conditions and vulnerability for all the municipalities. Regarding the composition of the grant component in the different sub-sectors (livestock, farming) and value chain (cereals, cattle, grape, orchards, horticulture, etc.) and also within the value chains (primary production, storage, processing, branding), the thresholds for contribution to individual initiatives in each sub-sector, value chain and level of the value chain, will be aligned to the prioritization criteria for investments in accordance to the results from the Baseline Assessment and the FAO research on the targeted areas.

The ranking criteria for the proposed investments as well as the incentives offered will be in line with the priorities of the SFVC framework and will aim to support and facilitate value added beyond that obtained from the direct investment supported.

At the inception of the Project, FAO will provide training and guidance to selected implementing partners delivering the appropriate documentation (application forms, instructions, agreement templates and monitoring report templates, as well as individual contracts), which will be developed and presented to the beneficiaries. Trainings will also be extended to LAGs and ENPARD implementing partners in order to ensure coherence and transparency on the process of application as well to provide appropriate information to the potential beneficiaries and prevent competition amongst the different available support programmes (the ones of the ENPARD partners and also the ones of the Government support through APMA and ACDA).

Targeted population’s initiatives will be supported with predetermined contributions, depending on the type of proposed activity (subsector, value chain, level of the value chain) location, sustainability and the benefits generated for the Project’s beneficiaries in particular and the municipality in general.

Following the EU Rural Development Programme, and more concretely the RD programmes in EU accession countries, like SAPARD and IPARD, the co-funding amount to be provided by the beneficiaries will take into consideration the situation of special vulnerable groups, such as minorities, people with disabilities, etc. This target group of people with specific needs and constraints will have access to more favourable investment scheme, leading to a reduced cash contribution. The approval of these investment proposals will follow the same process of technical evaluation. The concrete thresholds of co-funding, as well as the definition of vulnerable groups that would receive this more favourable investment


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opportunities, will be defined in detail during the shaping of the support programmes during the inception phase.

Activity 2.1.6. Awareness raising and outreach to the targeted population on the

availability of the investment support programme

A Communication and Visibility Plan will be developed by FAO in cooperation with the implementing partners, the EUD and the MOA during the inception period. The Communication and Visibility Plan with include components for continuous dissemination of information and awareness among the potential project beneficiaries and other relevant partners/investors from the private sector as well as for collection of relevant feedback for adaptation and improvement of the investment support programme.

All the activities will remain under the technical guidance and supervision of FAO, in coordination with the Department of Public Relations of the MOA and the ENPARD communication unit.

The Communication and Visibility Plan will include an inception Outreach Campaign aiming to disseminate information to the potential target population about the Project, the scope, activities and the application criteria and mechanisms. The Outreach Campaign will sensitize potential target population on economic empowerment through the extension and investment opportunities.

Sectorial information activities will focus in concrete sub-sectors or potential beneficiaries to adjust any imbalance in the reception of applications in the different calls for applications. The objective of the Communication and Visibility Plan will be to ensure a full awareness of the investment opportunities at all levels of the community and all the segments of the population with a particular emphasis on women, youth and vulnerable groups in order to allow that the applications received will reflect to the extent possible the diversity of the communities in terms of gender, age, ethnicity and economic level of the potential beneficiaries.

The information activities will count on existing networks and stakeholders such as local authorities, the ICCs, community leaders, civil society organizations, ENPARD partners and especially Local Action Groups.

The Project’s beneficiaries (physical and legal entities) -- both women and men -- will be encouraged to propose investments they consider would improve their agricultural output and incomes within a comprehensive investment frame.

The Outreach Campaign will include information dissemination to the potential targeted beneficiaries through:

SMS and phone calls to registered potential beneficiaries;

meetings with the Local Action Groups;

visits to the communities and information dissemination meetings;

development and dissemination of information materials;

dissemination of information through various media outlets.

Extended outreach to the beneficiaries as needed will be ensured through:


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using the existing information and support points in municipalities, linked to the ICCs,

the LEADER partners and/or the LAGs;

regular field visits by the ENPARD Projects and Partners;

establishment of a specialised phone line and;

website.

Depending on the level of responsiveness and the participation of the various stakeholders, the Project may include extra activities or reinforce the existing ones in order to strengthen the information and outreach.

The Project also foresees joint field missions composed of the MoA, EUD and FAO officers in order to assess the performance of the Project, show evidence of the success stories and provide the base to integrate some of the components developed through the Project into the general policies of the MoA and other actors of the Government of Georgia.

Activity 2.1.7. Coordination mechanisms with other stakeholders and investment support

providers in order to prevent overlaps and duplications

One of the key points for the successful implementation of the Project is to coordinate the grant support to individual farmers, cooperatives or SMEs, with the ongoing support programmes in agriculture implemented by the MoA agencies (ACDA, APMA), as well as with the grant component of the ongoing LEADER Rural Development projects being implemented in the eight municipalities and, finally, with the UNDP individual investments in the complementary areas of environment and economic diversification for rural areas.

In the preparation for this Project, FAO has already finalised an assessment to understand better the level of awareness of farmers of the ongoing support programmes developed by the MoA. The results demonstrate that programmes are poorly known in the municipalities, which results in low number of projects being implemented in targeted municipalities.

The Project will also explore the possibilities of blending different funding sources, such as the preferential agro-credit programme of APMA, with the grant component of this FAO project, to allow for an increased interest of individual farmers. The objective is on one side to ensure that the grant component of the Project will be as accessible as possible for different levels of income, while ensuring the technical quality and sustainability of the proposals. Also to ensure the sustainability of the action, the Project will engage in capacity development of APMA to allow for a gradual process of increased presence and ownership of APMA during the Project’s duration, that will end up with APMA being fully able to have developed its capacities after the first three years of the Project, when APMA is expected to be able to take over the main implementing activities and integrate this support programme for farmers into its portfolio.

The main emphasis will be in avoiding competition amongst different investing opportunities, preventing overlaps and duplications, and promoting sustainability. FAO, together with UNDP, has already had a round of discussions with the LEADER implementing partners, and there is a consensus that the needs in the municipalities regarding agriculture investments by far exceed the funding available in these eight projects. Although the absorption capacity seems to be appropriate, this should be reassessed within the selected


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Sub-Sectors/Value Chains and considering capacities of individual farmers, cooperatives or SMEs to access to the requested co-financing at the proposed standard rate of 50 percent.

The Project will also try to harmonize its support in the different municipalities, moving from the different cost-sharing investing requirements provided by the different LEADER partners, to an unified scale that would as much as possible be in line with the state support.

Activity 2.1.8. Support for the development and review of proposals and applications

The FAO implementing partners at a first stage and APMA during the second part of the Project will support individual potential beneficiaries in the preparation for the technical proposals and business plans for the preselected sub-sectors and value chains, as well as in the process of collection of the relevant documentation to be revised in the eligibility and technical evaluations of the proposals.

This process will be as inclusive as possible, ensuring that there is transparency and non-discrimination as a result of any lower level of applications linked to lack of capacities by the beneficiaries. While the review process will be to ensure that the applications meet the eligibility criteria, there should be also a component of support to potential beneficiaries in the preparation of sound proposals. This relates to the technical component of the proposals, as well as support to avoid any possible language barriers of some ethnic minorities, specific support to promote the participation of women, also taking into account any other limitations or barriers (illiteracy, mobility limitations, etc.). The best investment ideas and opportunities should prevail if they reach a required level of technical development.

The implementing partners and FAO will also implement verification and superintendence

mechanisms for the preparation of the technical proposals or business plans and

applications.

The objective of the review process will be on one side to ensure the eligibility of the proposal and fulfilment of the criteria for awards, as well as the technical evaluation of the proposal, confirming that the technical proposals or business plan prepared by the beneficiaries has correctly planned for annual incomes, prioritized investments in accordance to the cropping calendar, taken advantage of business opportunities to expand the already established production and diversify income-generating activities.

The process of pre-approval of individual applications would consist of:

1. The confirmation of eligibility by the implementing partners:

This process would be a formal revision of the documentation submitted to ensure that the applicants and the proposals conform with the eligibility criteria set forward in the call for applications. Other than the review of the eligibility of the applicant (status as individual investor or cooperative, or the commitment to co-fund the investment), the eligibility criteria will also integrate two main components: geographical coverage and value chain approach.

The main focus will be investments on pre-selected value chains in the eight LEADER municipalities, although within these pre-selected value chains individual investments in the


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adjacent municipalities or in an extended geographical coverage can be authorised by the ARC. The extension of primary production investments will only be eligible in the adjacent municipalities to the eight LEADER municipalities while other investments in processing, storage, marketing and branding could be authorised by the ARC elsewhere.

There would be two exceptions to this, linked to the investments of cooperatives in the pre-selected value chains, that could be done national wide, as well as investments of exceptional award that could be authorised by the ARC for investments considered as ¨of high interest¨

Indeed, the Project contemplates that a part of the funds will be reserved for the exceptional award of individual investments ¨of high interest¨. Prior to the final ensorsement of the ARC, these investments will follow the same technical evaluation of the proposals, but the eligibility criteria will not consider the geographical scope or the value chain approach, but the following criteria:

Innovative project that may be replicated in the future by GoG funds using the state support funds.

Projects with high impact in job creation and social sustainability in areas or sectors with high unemployment rate.

Projects with significant value added within the value chain.

Projects that adhere to internationally recognized good environmental practices.

The proposals submitted by the Local Action Groups of the 8 municipaliites mentioned, will be automatically accepted to the process of screening against the criteria of eligibility (status, co-funding capacity) and to the technical evaluation of the proposed investments.

2. The technical evaluation of the proposals:

The implementing partners, with the support from FAO, MoA decentralised branches (ICCs and/or NFA regional offices, as required) and other partners, will review the applications based on the administrative, commercial and technical soundness of the proposals. Amongst others, some of the criteria that will be assessed will be that the investment proposals:

have the highest potential to provide a sustainable economic income for farmers based on the local cropping conditions;

consider risks typical for the targeted sub-sectors/value chains and incorporate

information and activities on how the risks will be mitigated;

address natural constraints preventing for higher production costs and lower

productivity;

support the diversification and substitution of rooted monoculture production

patterns where various constraints inhibit the development of the current

production;

add value to commodities from primary agricultural production;

are inclusive of the needs of vulnerable groups;

provide options to diversify agricultural incomes.


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The application and review process will be organized in cycles, depending on the different calls for applications, and following on the numbers of proposals that will be considered as ¨eligible¨. The Project will build on the experience by the LEADER Rural Development partners in the eight municipalities to develop mechanisms to support the increased quality of the proposals submitted.

In the evaluation of proposals, the Project will take into consideration, amongst others:

The prioritization of applications with multiplier effects, such as the number of additional households beneficiating from the activity, the size, type and sustainability of returns from the proposed investments and its future development potential for income and employment generation.

All investments proposed will be required to demonstrate the traceable benefits to the targeted direct and indirect beneficiaries.

Capacity for upkeep and use of the proposed investments by the Project-targeted persons.

Capacity to directly contribute their prescribed share of the investment.

As required, the commercial and technical evaluation of the investment initiatives will be confirmed by field visits to the proposed investment sites to confirm the accuracy of the information provided as well as to meet in situ the applicants and possible input suppliers. These field cross check missions will be implemented by i). the implementing partner and relevant competent institutions in the Project’s target areas (NFA regional offices, ICCs etc.) or ii). superintendence service providers contracted by FAO in the case of spot checks for evaluations or for concrete of very technical nature.

FAO will ensure provision of field support such as advice, monitoring and verification throughout the application processing and the timeframe stipulated in the agreement with the grantee in order to ensure compliance of the processes with the UN/FAO and European Union norms for transparency and accountability. As required, the proposed investments will be subject of specialized FAO assessment in terms of technical feasibility, value for money and cost benefit of the action.

Business Plans

Investment initiatives above EUR 5 000 will have to be supported with development of simplified Business Plans, in order to ensure their viability, appropriate cost-benefit analysis and sustainability. The developed Business Plans will further aim to improve the understanding of the business environment and facilitate realistic expectations by the beneficiaries.

In order to ensure that the business plans are not biased, they will be developed by hired implementing partners selected by the Project on competitive basis. The Business Plans will be based on information provided by the applicants, however will integrate independent research and market assessments of the main economic parameters (prices, incomes and costs etc.), in order to confirm the viability and sustainability of the proposal.

The Business Plans will also serve as capacity development tool as they will provide more


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insight in the total annual investment needs, market conditions, realistic returns, constraints and infrastructural and planning needs. The experience gained from the Business Plan exercise will improve the knowledge, approach and decision-making capacity of the beneficiaries, thus further enabling them to apply for commercial credits and loans. Such experience will be needed for further development of their economic activities beyond the Project’s timeframe.

The Project will aim to create sustainable linkages between applicants and service providers for development of Business Plans, and depending on the value, scope and return potential of the proposed investment, the Business Plan will be provided as a free service or cost shared input into the overall investment.

The pre-selection process will finalise with a recommendation been made by the implementing partner to the Application Review Committee (ARC) for the final review. The ARC will provide a recommendation to approve or reject the application; in case of approval of the final selection, linked to the signature of a contract between the individual beneficiary and FAO, as well as the approval of a financial contribution for the investment to start. The ARC will also have the opportunity to resend it to the previous step of pre-selection for clarification of any unclear aspect of the proposal.

The Application Review Committee (ARC) will consist of FAO, MOA, European Union and implementing partners or stakeholders invited as observers or advisors as required.

The Project will remain committed to the goal of economic development and will support only initiatives with clear social and economic benefits, sustainability and prolonged development opportunities and it will contribute to the improvement of the household incomes and poverty alleviation of the targeted population.

Activity 2.1.9. Monitoring and Evaluation of the implementation of individual investments

FAO will ensure the appropriate execution of the individual investments as per the approved

technical proposals and business plans, and to ensure the respect of the individual contract

signed between the beneficiary and FAO.

At the same time, the Project will provide any extra technical assistance needed for ensuring the successful execution of the planned individual investments, as well as the sustainability of the intervention.

The PIU will count with several FAO monitoring and evaluation officers that will be

responsible to implement field missions to ensure the correct implementation of the

financed investments. MoA officers and LAG representatives will also be invited to these

field missions, as required, to come to a common understanding of the pace of the

implementation, as well as to gather any information that would require of any corrective

action.


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Output 2.2. The targeted population benefits from the improved provision of agricultural services as a result of increased municipal-level investments of public interest

In addition to the individual investments aimed at farmers, cooperatives and SMEs already developed under Output 2.1., the Project will also take into account the needs of investments in small/medium infrastructure or equipment at the level of municipalities, in order to improve the service rendered by municipal authorities, as well as other public institutions or eventually private sector, to the farming sector in each one of the LEADER municipalities.

These investments for public interest will further enable provision of services for the selected sub-sectors, improving their effectiveness in line with the municipal strategic documents, and act as a leverage to impulse some sub-sectors and value chains that often require infrastructures or equipment for collective use (e.g. agricultural infrastructure of public (municipal) or private management such as slaughterhouses, small irrigation, storage facilities for consolidation of produce, infrastructure for collective management of livestock, etc.).

These investments will also blend with state funds in a common goal to finance investments at municipal level that may have been underfunded so far, although they have been identified as priorities by the municipalities.

The Project will assess the investment priorities made by the municipalities in the sector of agriculture and food processing to the state budget and that not have been sufficiently funded and will seek reconfirmation of the priorities of the municipalities with the involvement of the LAGs.

Based on this initial assessment, and also coupled with the municipal profiles already mentioned under Output 2.1. (Activity 2.1.2.), FAO will identify individual investments to be funded under the Project and explore the options for blending public funds together with the portion invested by the Project.

Activities:

Activity 2.2.1. Assessment of municipal investment needs at municipal level

The Project will identify priority investments in each municipality using as a basis the requests for investments made regularly by the municipalities to the Georgian government as well as the municipal profiles already developed by the Project (under Activity 2.1.1), and the Rural Development local strategies and other municipal strategic documents that set up priority sub sectors, relevant communal infrastructure and priority needs

The Project will promote increased and equitable support to naturally constrained areas and disadvantaged farming populations and critical investments for the development of strategic subsectors/value chains, seeking to level out the field for investments through well equitable development incentives.

A full list of constraints affecting the municipalities and a set of criteria for their determination will be considered and developed during the inception phase as part of the development of the comprehensive municipal profiles, which for the most relevant sub-sectors/value chains will aim to look also into the synergies, needs and opportunities in the


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neighbouring municipalities, with the possibility of spill over neighbour municipalities if justified.

An indicative list of indicators to be used is provided in the table below.

Indicator Constraint

Mountain

Areas

Sea level ≥ 1200m Short growing period

Slope ≥ 20%

Combination ≥800m+≥15%

Expensive special machinery needed

Other areas

with specific

constraints

Extremely hilly landscape, marshland,

flood plains, extreme remoteness

Higher production costs and reduced yields or

quality of produce, isolation

< 70% of average national yield due to

various reasons (soil types, risks, etc.)

Reduced competitiveness and incomes

Climate (extreme weather), aridity and

desertification

Higher production costs and reduced yields

and incomes

Proximity to State Borders, proximity or

location within national parks (< 15 km)

Limited movement, access to goods /services,

infrastructure and agricultural activities

Rural depopulation/ abandonment

(annual population decline < -0.5%)

Reduced labour availability and increased

costs, land abandonment

Sub sector/

value-chain

relevance

Investment identified as crucial for

development in in the

National/Municipal development

strategies and action plans

Remoteness and logistical issues (access,

utilities, services, human resources) affect the

attractiveness and development costs for the

site or the investment

The approach used by the Project is aligned with the design of the European Union Pre-

accession rural development assistance, aiming to increase awareness and increase capacity

of stakeholders for management of such approaches. The Project will also build upon the

existing regional and local agricultural/economic development strategies and in particular

the strategies created under ENPARD under the European Union supported LEADER projects.

Where required it will provide technical assistance to the targeted municipalities for

development, revision and update of agriculture development strategic and policy

documents.

Activity 2.2.2. Develop mechanisms for preparation and technical review of applications, and verification and superintendence of investments for public interest

Based on the findings of the value chain apprasals/analyses conducted under Activity 2.1.4, the Project will identify the development needs on community level and the feasible investments that could address those needs after a dialogue with the local LAGs and municipal and regional authorities. Whenever an investment support is considered, the support should first and foremost aim at facilitating and incentivizing private-sector actors (including farmers, cooperatives, rural entrepreneurs, agribusinesses, SMEs) to actively take on their market roles, and only when private-sector solutions cannot be found should public-sector solutions be considered.

Along with municipality mandated and supported investments, the Project will also explore the possibilities for public-private partnerships in line with the relevant national, regional


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and local regulations, or investments of public use that will provide a service for the full municipality (i.e. slaughterhouses).

The Project will provide opportunity for public entities as well as local authorities (municipalities) to apply for support for small scale investments such as agricultural infrastructure, required for delivery of services to farmers in support to the agricultural activities of the targeted population.

The possible investments in infrastructure will be focused in the pre-selected sub-sectors and value chains that are considered as priorities for the municipalities. The list of possible investments to co-finance would include infrastructure related to movement of livestock (water troughs, resting stations, treatment facilities), cultivation (water filing stations, production waste depos), irrigation and access to land and infrastructure, and value-adding activities along agricultural value chains (e.g. storage facilities, (primary) processing facilities).

These investments will also need a co-funding mechanism by state, municipal or private funds, leading to a blending solution for the individual investments.

Output 2.3. The target population has increased knowledge and capacities as a result of improved service delivery by extension services

Based on the findings of the value chain appraisals/analyses conducted under Activity 2.1.4, the Project will provide capacity development support on various levels, focusing on the public extension system (ICCs and RICs) and business development services as accelerators of the economic development. The objective is to increase the capacity of farmers, leading to improved agricultural production, enhanced use of good agriculture practices and increased competitiveness of the agriculture sector.

Striving towards improved competitiveness and sector growth demands new attitudes, skills and experiences for all stakeholders, (public officials at central /municipal level, Information and Consultation Centres (ICCS), farmer organizations and farmers).

The Project will use as basis for development of the extension activities the Draft Strategy on Extension, expected to be adopted in 2017, which outlines the main strategic directions and priority actions.

The support to the gender-sensitive agricultural extension services will aim at helping women and men farmers increase production output in a sustainable manner, considering both the needs at national level and the constraints in the selected target areas.

The Project will focus in the delivery of agriculture related services to the agricultural/rural population, with its outputs and activities being designed in line with the following European Union Rural development priorities20: Knowledge transfer, Value Chains, Competitiveness,

20 2014-2020 rural development priorities: 1) Fostering knowledge transfer in agriculture, forestry and rural areas, 2) Enhancing the competitiveness of all types of agriculture and enhancing farm viability, 3) Promoting food chain organisation and risk management in agriculture, 4) Restoring, preserving and enhancing ecosystems dependent on agriculture and forestry, 5) Promoting resource efficiency and supporting the shift toward a low-carbon and climate-resilient economy in agriculture, food and forestry sectors, 6) Promoting

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/knowledge-transfer_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/knowledge-transfer_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/competitivness_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/food-chain_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/food-chain_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/ecosystems_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/ecosystems_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/resource-efficiency_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/resource-efficiency_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/social-inclusion_en


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Resource-Efficiency/Low Carbon, Climate Resiliency, Social Inclusion, Poverty Reduction and in line with the Georgia’s national priorities and international commitments (SDGs) and with FAO’s Environmental and Social Safeguards.

Extension services, beneficiary producers and other value chain actors, concerned value chains and commodity clusters will receive capacity development on agricultural production, value-adding activities and business skills. Where applicable, FAO will also provide technical assistance for improving and implementing local development policies, strategies and approaches (LAGs, Regional and Municipal authorities and Commodity clusters), in addressing needs for upgrading to European Union standards (community planning, environmental and climate-smart agricultural practices, food safety and quality, farmer cooperation, value chain development).

FAO will also support the MoA in the process of institutional building of the extension service as a separate entity or agency dependant on the MoA as foreseen in the extension strategy.

Activities:

Activity 2.3.1. Prepare training need assessments at national and local level, identifying the capacities of the national extension providers as well as the needs of the targeted populations, the priorities and opportunities for capacity development, technical levels and preferred approaches and methods

To achieve optimum production in agricultural activities, smallholder farmers should benefit from tailored training. Farmers are often unfamiliar with modern agricultural practices or new technologies, the use of which can lead to significant productivity gains compared to existing local methods. Appropriate training programmes play a critical role in bridging this gap, providing farmers with the new skills and technical knowledge necessary to implement improved methods and to make informed decisions about the best options to suit their needs. Effective training of any kind requires comprehensive knowledge of the training needs of the target group. A training needs assessment will identify the "gap" between current performance and the performance required, and will explore the causes and reasons for the gap and methods for closing or eliminating it.

The Project will assess the training needs of the target population with specific effort to reach women engaged in agricultural production and will review the members’ preferred training methods and timings. The training need assessment will be based on the findings of the value chain apprasals/analyses conducted under Activity 2.1.4 and will aim at assessing the performance gap of value chain actors. To understand the training needs, the assessment will use internationally recognised qualitative and quantitative research methods to capture their current knowledge and the importance placed on different agricultural practices and to understand what are the best and most efficient tools for transmitting agricultural knowledge. The study will involve semi structured interviews and focus group discussions.

social inclusion, poverty reduction and economic development in rural areas. https://enrd.ec.europa.eu/node/1587/policy-overview-2014-2020/rural-development-priorities_en

https://enrd.ec.europa.eu/policy-in-action/cap-towards-2020/rdp-programming-2014-2020/rural-development-priorities/social-inclusion_en


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Along with training need assessment of the targeted population, the Project will also assess the training needs of national extention providers and workers in order to identify priorities and opportunities for capacity development.

Activity 2.3.2. Develop training programmes for the extension service providers and the target beneficiaries, in line with the MOA strategic documents and using as much as possible existing training tools (curricula, training materials, training tools etc.);

Farmer training is education that usually takes place outside formal learning institutions and is geared towards adult learning and changing behaviours. It therefore requires an approach that takes the route of ‘situations’, rather than ‘subjects’.

The curriculum in adult education is built around the needs and interests, ensuring that both the subject matter and approach are suitable and relevant to farmers. In most cases, the training of farmers forms part of agricultural extension, which can be defined as provision of need and demand-based agricultural knowledge and skills to rural men and women in a non-formal and participatory manner.

Training programmes and curricula will be developed in consultation with FAO relevant Technical Divisions, choice of which will depend on the content of selected applications, drawing on relevant experience from Georgia, the region and the other parts of the world. FAO will incorporate innovative and relevant training, knowledge and technology transfer into the Project, including new concepts such as the use of ICTs (Information and Communication Technologies).

The training programmes will also include study tours of extensionists to different regions in Georgia or to neighbour or other foreing countries, in order to expose extension officers to other extension models and techniques in approaching individual farmers.

The Project team will put maximum effort into ensuring provision of relevant capacity development for local and national stakeholders, making use, as appropriate, of FAO developed methodological tools and instruments such as GRAST (Gender and Rural Advisory Service Assessment Tool); a Training-of-Trainers Manual to develop capacities in gender-sensitive rural advisory services (FAO REU, 2016); or the Guidelines for Gender mainstreaming and Human-rights based approach developed and others which will be provided by the REU Gender Team.

Activity 2.3.3. Capacity development at National level (for extension agents) on agricultural production and value-adding activities and business skills

Nationally, the Project will aim to support agricultural innovation capacity development at institutional levels, strengthening the system of monitoring and evaluation towards result-oriented, needs-based and inclusive extension provision.

There have been several assessments on the capacities of the ICCs and RICs that set a good base to identify the training gaps and the needs for further development of the capacities of the extension system in Georgia.

Other than the technical trainings in concrete value chains, techniques or technologies, there is a need of more focused trainings in how to provide advise to final beneficiaries and


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how to promote a vibrant collaboration and confidence with individual farmers that will turn the extensionists into a support for the farmer´s activities.

Activity 2.3.4. Coordination mechanisms with other stakeholders and extension support providers in order to prevent overlaps and duplications of efforts and exploring of synergies

The Project will strengthen the public and private agricultural extension services (ICCs and RICs, input suppliers), simultaneously linking them by building synergies and avoiding duplication with other extension programmes offered by the MoA (ACDA, APMA, ICCs), the private sector (input suppliers), other donor funded projects (IFAD ZRDA) and those deployed by other ministries or agencies.

Where appropriate, synergies will be explored with other stakeholders and state institutions involved in livelihood support and agricultural extension provision. The leadership and facilitation capacities at the MoA policy department and public extension service management will be enhanced through programmes and promotion of annual extension service providers.

Activity 2.3.5. Develop and implement identified demonstration plots, showcasing improved practices, technologies and approaches for improvement of the priority agricultural subsectors

Farmers have limited capacity to learn on the basis of generic trainings. As a result many initiatives without proper concrete application in the field, beside the excellent possibilities they offer, often end with the poor results. Based on experience the Project, and in order to enable learning through doing, will develop concrete demonstration plots in the field which provide visual return for the trainees as well as to demonstrate the most efficient technologies for improvement of the production in the targeted sub-sectors.

The demonstration plots will be aligned with locally grown crops and animal breeds and based on the sub-sectors and value chains identified based on the local conditions. Innovative farmers lead farmers) will be identified to host the demonstration plots.

The selection of the locations for the demonstration plots will be on competitive basis, ensuring that maximum multiplication effect (access to the locations, ability to showcase the technologies and approaches) and the contribution from the lead farmers to provide access and guidance to other farmers and ICCs or RICs that will use their farms for demonstration purposes.

The finished demonstration plots will be used for peer-to-peer farmer meetings to learn from the success of and apply on practice innovations such as new technologies and practices, including farm management, organisational and market innovations at farm level.

The Project will consider the use of other participatory extension approaches for farmers, such as training of local leaders and trainers (e.g. lead farmers); Farmer Field and Farmer Business Schools, Training of trainers and European Innovation Partnerships (EIPs), like solution oriented teams. Gender-sensitive methods for women and youth participation will largely be applied in training needs identification and training delivery.


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Farmers will receive training both in terms of agricultural production techniques as well as business skills and value-adding activities on basis of established needs of the targeted subsectors and demand from the Project’s potential targeted persons. The Project will aim to use approaches with two-way flow of information tailored to local conditions, crops and breeds and ensuring equal and sustainable access to agricultural advice and a variety of agricultural technology related information to facilitate the adoption of good practices for producers, including those who may not so actively seek such advice.

Specifically, the Project will take advantage of the FAO VERCON concept on development of a research and extension network to connect, learn and engage in collaboration all innovation actors in Georgia- farmers, processors, research and academia, policy makers, input suppliers, producer organisations and relevant agricultural NGOs, on concrete topics of local importance and national significance.

Activity 2.3.6. Awareness raising and improving (mainstreaming) local development policies towards upgrading agricultural practices to European Union standards, with a focus on environment, food safety and quality

The quality of products produced by small farmers is often seen as poor, further limiting their transition from a subsistence and semi subsistence status to commercial production.

There is a need to enhance the environment, quality and safety standards for small farmers to cover this gap, standards that will become more constringent in the future as a result of the DCFTA and AA and the approximation of European Union legislation to the Acquis communautaire.

While the improvement of the food safety quality “infrastructure” and environment related interventions is beyond the scope of this proposal, there are concrete steps that can be taken to improve product standards in the targeted sub-sectors.

Guided by the market-driven approach for each subsector the gaps on environment, food safety and quality standards, consulting, testing and certification services will be assessed including:

awareness on the requirements of the pertinent standards and the certification process to access new markets and meet buyers’ demands in terms of HACCP (traceability, IPM), in particular for crops destined for processing; and primary production quality assurance standards (GAP, organic etc.) for crops sold and consumed as fresh.

awareness on Climate Smart Agriculture concepts21 in order to sustainably increase productivity, enhance resilience to climatic stresses, and reduce greenhouse gas emissions.

On the basis of the assessment results, the Project will engage in awareness raising targeting various stakeholders, depending on the issue addressed.

21 minimum tillage, different methods of crop establishment, nutrient and irrigation management and residue incorporation, rainwater harvesting, use of improved seeds, ICT based agro-advisories and crop/livestock insurances can improve crop yields, water and nutrient use efficiency and reduce Greenhouse Gas emissions from agricultural activities


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Awareness raising activities on food safety requirements will be communicated to various operators identified as part of the municipality and sub sector profiling, including but not limited to food production and processing establishments and food outlets.

Activities related to Good Agricultural Practices and Climate smart agriculture will target the general farming population, as well as relevant stakeholders such as input suppliers, service providers, extensionists etc. The Awareness Campaign will include information dissemination through:

• targeted SMS disbursements; • Visits to the communities and information dissemination meetings; • Development and dissemination of information materials; • Dissemination of information through various public and social media outlets.

The Baseline Assessment Report and the Municipal/Subsector profiles will include recommendations for appropriate information dissemination activities tailored to the identified situation in each of the targeted areas.

Climate-Smart Agriculture: A specific country vision for Georgia agricultural production sector Climate-smart agriculture (CSA), as defined and presented by FAO (Conference on Agriculture, Food Security and Climate Change, The Hague, NL, 2010) integrates the three dimensions of sustainable development - economic, social and environmental - by jointly addressing food security and climate challenges. It is composed of three main pillars:

Sustainably increasing agricultural productivity and incomes; Adapting and building resilience to climate change; Reducing and/or removing greenhouse gases emissions.

In more specific terms, the CSA approach is designed to identify and operationalize sustainable agricultural development within the explicit parameters of climate change.

In the particular case of Georgia, FAO has identified several priorities for Climate Smart Agriculture practices to be mainstreamed through the policy and to be disseminated through extension support and awareness raising for farmers and rural population, such as:

Land use and planning;

Good Agricultural Practices (GAPs), including soil, water and crop management practices;

Reduction of agricultural greenhouse gas (GHG) emissions;

Agrometeorological applications and services: establishment of an efficient Early Warning System on Pest & Diseases.

SECTION 2 – FEASIBILITY

4 RISK MANAGEMENT


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4.1 Risk Management Strategy and Risk Mitigation

A risk log (Annex IV) has been established during the formulation of the project document and has been reviewed during the internal FAO project appraisal and approval process. Major risks, including those where effective mitigation is out of the project’s control, have been identified and responsibilities for mitigating actions have been assigned. Furthermore, internal Environmental and Social risk appraisal process have been completed. The Project was rated as low risk.

The Project incorporates regular monitoring and evaluation activities during which the main indicators will be recorded and analysed and any developments corresponding to the identified risks will be identified in a timely manner. If any of these risks materialize during the implementation period, the respective action of concern will be duly revised in accordance to the Risk Management and Mitigation measures outlined in the Risk Log. The European Union Delegation will be informed in a timely manner and duly involved in case of this occurrence.

The Project monitoring, evaluation and reprogramming cycle phases as provided in the section on project implementation add a second layer of risk protection, as the regular meetings of the Project Steering Committee will timely record developments. The committee has the flexibility to appropriately amend the approaches used, addressing all arising issues and risks that might affect the Project’s results.

4.2 Significant risks facing the project

There are some risks associated with the implementation of this project, namely:

Outcome 1 (Technical Assistance to the MoA) related risks:

Lack of commitment from the MoA to approve and develop some of the policy recommendations developed with the project team;

Lack of absorption capacity at the level of the MoA in order to develop and implement new policies;

Geopolitical tensions in the Caucasus or economic crisis could divert the Government's focus and resources away from agriculture;

Fragile national economic situation could divert the Government's focus and donor and public funding away from support of Agriculture and Rural Development, which in turn might slow implementation of vital reforms and strategic goals under the SADG, thus undermining the objectives to be achieved through the capacity development activities;

High turnover of the staff of the MoA and associated loss of institutional memory could jeopardize the implementation of the SAGD, the RDSG or the Strategy for Extension and associated measures;

Difficulties in the inter-ministerial coordination in areas related to Rural Development and extension delivery;

Due to change of priorities, the Strategy on Extension and associated documents may

not be further developed by the Government, resulting in limited sustainability of

some of the action’s components;


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Uneven capacities in the different ministries involved in Rural Development to produce information or inputs in a consolidated and comparable level;

Lack of interest for mainstreaming natural constraints, gender and vulnerabilities in

the agriculture-related policies could result in stagnating Rural development.

In general, the main risk related to a Technical Assistance Component is the lack of commitment of the MoA to approve and develop some of the proposed areas of work that will lead to policy recommendations.

While this risk exists, there are some aspects that need to be taken into account in order to understand this risk and the probability that this will lead to a major obstacle for the success of this project. As already mentioned, the strong political support to the process of approximation of Georgia to the European Union is a main driver for the policy making of the MoA The AA, as well as the DCFTA, set concrete milestones that reflect the commitments from both parties.

It is important to stress the fact that this is the continuation of the previous work done by FAO under ENPARD I and II (ongoing), and the MoA has already made considerable efforts to implement reforms with the assessment and support from FAO. There is a strong collaboration and trust between the officers of the MoA and the FAO team, and this will facilitate the policy dialogue to ensure that the MoA keeps giving the importance to implement structural changes.

Outcome 2 (Support of investments and extension) related risks:

Difficulties in targeting the most relevant segments of the agricultural sector for

facilitating investments due to limited incentives for support, unbalanced inclusion and

exclusion criteria, preferences for targeting not matching the needs of the population,

resulting in limited responsiveness of the target population;

Limited capacity of the individual farmers, cooperatives or SMEs, as well as

municipalities, to cost-share the proposed investments at the required percentage;

Limited interest from farmers to be involved in the Project or limited and

uncoordinated outreach and limited understanding of the Project’s objectives by the

target population or project partners;

Limited capacities of the implementing partner/s to manage the investment support

component;

Limited capacities of state agencies, donor projects and civil society organizations to

coordinate with the Project and find synergies for implementation of the investment

support and extension sub-component, resulting in overlaps and competition between

the available support programmes.

The budget support provided by ENPARD is linked to the fulfilment of a certain number of concrete reforms, and there are annual revisions to assess the fulfilment of these conditions. While this project will not duplicate or take over the work to be done by the GoG to ensure that conditions will be fulfilled, it will complement the efforts of the MoA and other


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ministries, and will also contribute to an effective policy dialogue between the GoG and the EUD.

4.3 Environmental and social risks

There are some environmental risks associated with the incorrect definition of implementation of agricultural policies, such as fertilizers or pesticides procured under a state sponsored support programme. Also, the promotion of a sub-sector in a particular locality without a proper planning may also lead to environmental problems such as overgrazing when the livestock is sharply increased, or the intensified use of chemicals that may follow the adoption of intensive farming techniques.

Although the risks that may be directly attributed to the implementation of this project can be considered as low, FAO also takes into account, following the FAO Guidelines on Environment and Social Management22, the possible secondary environmental and social impact of this project. In this regard, this Project has been corporately categorized as a Moderate Risk project.

Environmental and social risks have been taken into account in the formulation of this Project, and these aspects will be taken fully into consideration throughout the its implementation in all the components. The risks identified and the mitigation actions proposed and technically cleared by the FAO department in charge of environmental and social evaluation, are included in the Risk Management Plan below:

Risk identified Risk Classification

Risk Description in the project

Mitigation Action (s)

Indicators Progress on mitigation action

1.1 - Could this project result in the degradation (biological or physical) of soils?

Moderate

The Project will promote sustainable agricultural practices through the climate smart agriculture approach. This may result in increased activity in agriculture, with impacts in the quality of soils.

Mainstreaming of sustainable CSA agricultural practices in the national policy

Report with the recommendations on CSA to MoA

To be completed during progress report

Training to the MoA officials in decentralised offices (ICCs) on Climate Smart Agriculture and Sustainable Agriculture, including sustainable management of water and soil, good agricultural practices, etc.

Capacity Building report (s), including list of participants and contents of the sessions.


1.5 - Would Moderate The Project may Technical Technical clearance To be

22 http://www.fao.org/3/a-i4413e.pdf

http://www.fao.org/3/a-i4413e.pdf


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this project aim at improving an irrigation scheme (without expansion)?

require support to improve existing irrigation schemes with small works. (to be confirmed).

clearance of the technical specifications, infrastructure, business plans and ICID checklist

by headquarters technical officer.

completed during progress report

5.1 - Would this project procure, supply and/or result in the use of pesticides on crops, livestock, aquaculture or forestry?

Moderate

Overall, the Project promotes Integrated Pest Management (IPM) through pilots to reduce the use of pesticides. Procurement of pesticides may be required for demonstration purposes. (to be confirmed)

Quantity procured under this project will be minimized and meet basic needs.

Purchase order indicating the amount of pesticide procured.


Technical Clearance by AGPM

Technical clearance by AGPM.


Pesticides to be used exclusively for the training of extension services and stored in the extension offices. All manipulation pesticides to be done in the trainings to extension services and under the supervision of FAO staff with the appropriate technical clearance Training on improvement of sprayer application and demonstration of new application equipment does not involve actual pesticides.

Guidance note on the use of pesticides under this project, specifying where pesticides are stored and who can handle them.


The Project may procure small equipment for use of chemicals (sprayers). (to be confirmed)

Technical clearance of technical specifications. Any demonstration of spraying techniques is

Purchase Order/ Technical clearance by headquarters technical Officer in AGP



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accompanied by trainings on IPM to spray only when necessary (with support of the early warning systems)

5.2 - Would this project provide seeds or other materials treated with pesticides (in the field and/or in storage)?

Moderate

The Project may procure treated seed (cereal and potato seed foreseen) for demonstration purposes (to be confirmed)

Obtain clearance from LTO or headquarters Technical Officer for technical specifications of seed to be purchased

Technical specifications form cleared by LTO or headquarters unit The Project will strictly adhere to the process of technical clearance from FAO pesticides group in headquarters in case there would be any procurement of treated seeds, that, as mentioned, would solely be used for demonstration purposes linked to demonstration plots for extension capacity building of farmers.


Purchase order issued with technical specifications attached

Purchase order awarded to a bidder that has declared that will fulfil the technical requirements


Seed purchased sampled by an agreed independent service provider according to sampling methodology described in the guidelines of the International Seed Testing Association (ISTA) and sent to an internationally accredited laboratory for

Result from ISTA accredited laboratory shows compliance with quality required in the technical specifications



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quality control

5.4 - Could this project lead to increased use of pesticides through intensification or expansion of production?

Moderate

The Project intends to improve the primary production in the areas that will be affected by the Project. FAO is making sustained efforts in the last years and under the ENPARD programme to promote sustainable agriculture and reduce use of pesticides. The Project promotes a more rational use of pesticides. Outputs 1.2. and 2.2. do not allow for the procurement of pesticides.

Technical specifications form for procurement of pesticides will cleared by AGP

Technical clearance by AGP


The programme will integrate a gender perspective into all stages of its implementation, including, amongst other actions: i) specific activities within associated grant components to promote equality of opportunity and outcomes between women and men; ii) pro-active actions to ensure the full and equal participation of men and women and vulnerable groups, with a focus in access to trainings, capacity development or access to investments and; iii) ensuring that all statistics systems supported by the programme reflect the realities of the of women and men engaged in agriculture.

Human rights and vulnerable groups will also be considered as crosscutting issues in the programme. Promotion of good governance is a core element of the budget of the European Union’s support approach as well as of the ENPARD approach and therefore will be fully embodied in the programme, including through the involvement of the sector's stakeholders and civil society organizations.

Special attention will be provided to promote the inclusion of Internal Dispaced People (IDPs) in the activities related to extension and training, as well as in the individual


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investments. This would build up in the lessons learned from the extensive experience of FAO in support programmes to IDPs in Georgia.


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Annex IV : Risk Log

Risk Impact Probability

Overall ranking

Mitigating action Action owner

Target date

Lack of commitment from the Ministry of Agriculture to approve and develop some of the policy recommendations developed with the Project team

Limited results in policy development and corresponding limited development of the agricultural sector

Low Red

Establish strong and close cooperation with the MoA, ensuring access to relevant decision makers, providing an opportunity for the Project to have a continuous constructive dialogue and to ensure MoA’s ownership and to subscribe to the Project’s results

FAOGE MoA

Inception Midterm

Geopolitical tensions in the Caucasus or economic crisis divert government focus and resources allocated to agriculture

Such a situation would affect the extent of implementation of the Strategy for Agriculture and the Strategy for Extension but not really the technical support required for improved policy-making

Medium

Amber

Revisions would be made in agreement with the European Union and the Ministry of Agriculture with greater focus given to improved policy-making and support to implementation of European Union-ENPARD and other donor programmes

FAOGE MoA

Inception Midterm

Absorption capacity at the level of the officers of the MoA to fully use the policy development support provided by FAO

The recipients of the support are the officers of the MoA. If they don’t want, or cannot, fully engage with the Project, this could put at risk part of the expected results

Medium Green There is a need to have a good work plan to couple the agendas of the officers of the MoA and FAO activities with adequate time to ensure their participation

FAOGE MoA

Inception Midterm

The fragile national economic situation could divert the Government's focus and donor and public funding away from support of agriculture and Rural Development, which in turn might slow implementation of vital reforms and strategic goals under the SADG, thus undermining the objectives to be achieved through the capacity development activities.

The pace of reforms targeted at improving the competitiveness of the Georgian agriculture, enhancement of food safety and security, rural development, institutional capacity development of the MoA, as well implementation of specific long-term programmes is significantly decelerated

Low Amber

The Project team would have to focus on policy areas and aspects of rural development and extension which provide maximum value for money and a Strategy and a set of measures acceptable to the MoA and the European Union. The European Union budgetary support is dependent on approval and implementation of the strategy for agriculture. The Project will amend its support for agricultural investments in the target municipalities to compensate for any reduction in the state funding of rural development

FAOGE MoA

Inception Midterm


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A high turnover of the MoA’s staff and associated loss of “institutional memory” jeopardize the implementation of the Project

Significant in terms of time and capacity development as well as the understanding and commitment to implementing the SADG and RDSG

Medium

Green

The Project team will work with whoever is nominated within the MoA and will brief them on project objectives and progress to date and fully engage them in implementing future activities

FAOGE MoA

Inception Midterm

Due to change of priorities, the Strategy on Extension and associated documents may not be further developed by the Government, resulting in limited sustainability of some of the action’s components

Limited guidance and support from the MoA provided on the development of extension in the country, reducing the overall development possibilities for the agricultural sector

Medium Green

The Project team will develop the extension sub-component of the project on basis of the best examples that match the Georgian agricultural sector and in line with FAO’s extension development practices and policies, ensuring efficient and relevant support provided to the target beneficiaries

FAOGE MoA

Inception Midterm

Lack of interest for mainstreaming natural constraints and vulnerabilities in the agriculture-related policies could result in stagnating Rural development.

Such occurrence will reduce the scope of the assistance with potentially limiting the benefits of significant sections of the population and resulting in unbalanced development

Medium Green

The Project will on basis of established needs further support the introduction of appropriate incentives for the segments of the target population facing such constraints through establishing synergies with various support providers, or appropriate mainstreaming in the Project support measures

FAOGE MoA

Inception

Lack of coordination or integration of the actions of ministries, mainly in Rural Development, but also in value-chain development and CSA

Delays in the implementation, uneven quality of the inputs received from the different ministries, contradictions in the actions of different ministries, overlapping, duplications, etc.

Medium Green

To foster coordination, including coordination with UNDP´s ENPARD technical assistance for rural development, and to develop effective working contacts and methodologies with the Ministry of Environment and Natural Resources Protection and the Ministry of Economy for the other aspects

FAOGE

Inception Midterm

Difficulties in targeting the most relevant segments of the agricultural sector for facilitating investments, due to limited incentives for support, equitable inclusion and exclusion criteria, preferences for targeting not matching the needs of the population

Such occurrence could result in limited responsiveness of the target population and limit the number of applications from project beneficiaries, resulting in prolongation of activities and reduced delivery as well as revision of the target group

Medium Green

Actions will be revised and the Project will revise the selection of implementing partners and distribution of activities among implementing partners, mobilization methodology, participation criteria and support conditions, Improved targeting of the beneficiaries

FAOGE IPs OPs

Inception Application cycle


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Limited interest from farmers to be involved in the Project or limited and uncoordinated outreach and limited understanding of the Project objectives by the target population or project partners.

Such occurrence could limit the number of applications from project beneficiaries, resulting in additional outreach costs and in prolongations

Low Green

FAOGE IPs OPs


Limited capacities of the implementing partner/s to manage the investment support and extension sub-components;

Such occurrence could limit the number of applications from project beneficiaries

Medium Green

The Project will revise the selection of implementing partners and distribution of activities among. Identify other potential implementing partners from the pool of potential candidates in the country

FAOGE IPs OPs


Limited capacities of state agencies, donor projects and civil society organizations to coordinate with the Project and find synergies for implementation of the investment support and extension sub-component, resulting in overlaps and competition of the available support programmes;

Such occurrence could result in competing interventions as well as overlapping support, further creating confusion among the Project beneficiaries and reducing the overall delivery of results

Low Green

The Project team will ensure regular coordination with all stakeholders ensuring that any such developments are addressed as needed. If any such assurances persist and the Project is unable to resolve the activities and their scopes will have modified to avoid duplication of the assistance provided.

FAOGE IPs OPs


Both genders and all social and minority groups are not effectively engaged

Significant in terms of Project impact, justification and project credibility

Low

Green The Project team will have a priority focus in fully engaging both genders and all social and minority groups in activities

FAOGE IPs OPs



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5 IMPLEMENTATION AND MANAGEMENT ARRANGEMENTS

5.1. Institutional Framework and Coordination The MoA is responsible for providing an enabling environment for the implementation of this project including support facilities and dedicated staff which are required to maximize the benefits from the services provided under this project. The Ministry will be responsible for facilitating the day-to-day implementation of the Outcome 1 and will be the primary recipients of all project inputs and outputs.

The European Union, the MoA and FAO will establish a Project Steering Committee (PSC) in order to supervise the Project, and will be composed of:

the management of the Ministry (Chair);

representatives of the European Union (staff of the European Union Delegation);

the Assistant FAO Representative in Georgia;

the Technical Advisor (FAO);

the ENPARD Coordinator (FAO);

the International Programme Officer (FAO).

The main functions of the PSC are:

to assess the Project progress and guide it strategically;

to jointly discuss any critical issues or bottlenecks for further project implementation;

to propose and discuss remedial actions to be taken in order to address problems;

to issue recommendations affecting timing, or project contents;

to endorse the various reports (six-month reports, final report).

to take any final recommendations on disputes that may arise as a result of the selection of applications.

The PSC meetings should convene at half-year intervals and/or upon the request of one of its members. The Committee may invite other organizations/people to attend meetings if they expect valuable discussion, direction and outcomes for the Project.

The PSC will also coordinate with the UNDP Project under ENPARD III on Rural Development, as this UNDP project will also have a Project Steering Committee. Because of the complentarity of both projects under ENPARD III, as well as the similar geographical scope and support to the municipalities where ENPARD LEADER projects are active, during the inception phase it will be considered whether both Project Steering Committees (from FAO and UNDP projects under ENPARD III).

5.2. Strategy/Methodology Throughout implementation of this project, the approach that will be adopted will be one of participation, engagement and ownership. The ultimate beneficiaries are farmers and rural


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communities living on low incomes. The empowerment of rural communities in decision making, and ultimately policy-making and legislation, in areas affecting their own lives is fundamental. As far as practically possible, both genders and all ethnic and social groups will be equally engaged in the Project’s activities. Development of local capacity will be encouraged as a key element of the action, adding to the sustainability of project outcomes after the completion of the Project.

Particular focus will be given to capacity development within the MoA to improve overall policy and decision-making. This will be delivered through direct technical assistance on a day-to-day basis -- as well as designed for particular issues -- through individual mentoring and group training/development programmes. The building of local advisory and support capacity will be especially encouraged to enable sustainability of support after completion of the programme. The collaboration with agencies and entities that depend on the MoA, such as APMA, ACDA, NFA or the extension system (ICCs and RICs) will also be a key aspect to ensure the compatibility of the Project within the broader state action in the sector of Agriculture and Rural Development.

The strategy of implementation will be focused on the selection through call for interest and call for proposals for implementing partners (most possibly national or international NGOs) that will be responsible for the implementation of the main tasks during the first three years of the Project. It will also integrate on their proposals and workplans the capacity building of APMA in order for APMA to be able to take the leading role in the implementation of the Project after three years as an effort to ensure the exit strategy of the contracted NGOs and ensure the ownership of the MoA of the investment component.

Beside the direct involvement of implementing partners, the Project will establish a close cooperation with partner organizations already supporting Rural Development and the LAGs in the targeted municipalities as well as with the local authorities. In particular, the Project will pay due attention to ensure complementarities, to strengthen the sustainability and to avoid duplication of efforts with other on-going interventions, with a very particular focus on the UNDP twin project under ENPARD III that will concentrate on environment and economic diversification.

To ensure the most appropriate and targeted assistance is delivered in accordance with the specific needs of the targeted population and organizations, regular assessments will be carried and a possible revision of the Project will be undertaken if/as needed with due and timely notification of the European Union Delegation in Georgia.

The Project is based on cooperation between FAO and selected implementing partners and active participation of the MoA and other relevant governmental Institutions and/or I/NGOs in the following activities:

• outreach activities for timely information of the Project’s potential targeted persons at

the inception phase and throughout the duration of the Project. These activities will be

accompanied with relevant capacity development interventions for the implementing

partners;

• development of technical proposals or business plans for selected investments of

project beneficiaries by service providers;


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• processing of investment related applications inclusive of signing of support

agreements and disbursement of payment to the suppliers of equipment in support of

selected applications;

• training and extension support for improvement of agricultural/rural income

generating activities. In particular, the Project will aim to establish cooperation with

state extension services. Alternatively, the Project will aim towards service provision

through partners;

• data collection services for the purposes of the baseline assessment and final project

evaluation;

• review (quality and feasibility) of the investments/inputs proposed by the Project

beneficiaries. The Project will aim to cooperate with the Regional offices of the MOA,

when feasible.

FAO will be responsible for overseeing the implementation of the Project in close coordination with other stakeholders (LAGs, MoA, municipal authorities) and will entrust selected implementing partners a share of the activities and respective budgets. The processing of investment applications will be managed through one or several contracts with one or more Implementing partners. Potential partners include specialized service providers and suppliers and CSOs already active in the field of agriculture and rural development.

The Implementing Partners will be mandated with variety of tasks related to administration and management of investment applications, following previously defined methodologies, workflows and templates, and receiving appropriate training to effectively implement their tasks.

All partners will be required to adhere to a set of reporting obligations including: submission of accurate and timely narrative reports on activities carried out under their contracts and certified financial statements for expenses incurred.

FAO will cooperate with selected implementing partners and the government (including decentralised services), local authorities, civil society and various commercial service providers. A close and timely communication and information sharing with all partners and stakeholders will be maintained.

Within FAO the Project will be overseen, guided and supported by the FAO Project Task Force (PTF). PTF is a management and consultative body consisting of designated FAO staff possessing the appropriate authority and skill mix to ensure effective technical, operational and administrative project management throughout the Project’s implementation.

A Funding Liaison Officer in Donor Relations and Resource Mobilization Team in FAO headquarters will ensure compliance with the European Union Rules and Regulations and maintaining corporate relations with the resource partner throughout the Project’s implementation.

5.3. Inception Phase and phased approach for Outcome 1 The Project will have an inception phase during the first six months of implementation to allow for the necessary assessments and surveys to be done in order to define the baselines


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and targets for the indicators. Some of the activities have already been detailed in the Output 2.1. The main objective of the inception phase is to have a detailed and updated set of documents -- including the baseline for ENPARD III -- and the field assessments that will serve as the basis for the implementation of the project.

Regarding the Outputs 2.1. and 2.2. that are specifically linked to individual and municipal investments, the inception phase will serve for finetuning and finalising the proposed activities and workplans within these two outputs, including the identification of sub-sectors and value chains, and the programming of the different cycles of applications throughout the project implementation period. The inception phase will also allow for a better understanding of the absorption capacities at the different levels (LEADER municipalities, cooperatives, value chain investments, etc.).

Regarding the Output 2.3., during the inception phase, the project will develop the assessment on training needs of extension services, that will allow to more detailed information to develop the activities under this Output.

The inception phase will allow to finalise in detailed Logical Framework of the Project, as well as the Workplan, and to allow for any recommendations to be made to the Project Steering Committee in case any changes in the implementation of the Project are needed.

The inception phase will also allow for the call for interests and call for proposals on the different proposed contracts to identify suitable implementing partners for the main outputs.

As already mentioned throughout the document, the Outcome 1 on technical assistance to support the MoA, will be phased and will only start after the finalisation of the ongoint technical assistance project under ENPARD II by FAO (GCP/GEO/010/EC) in order to avoid duplications or overlaps of the activities of both projects.

5.4. Government Inputs Through the MoA, the Government of Georgia will:


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guarantee full timely and effective support throughout the implementation of the various project phases;

contribute to the analysis of available related national data and material with its own professional field/capacity;

provide all necessary national and/or regional government authorizations to carry out field activities, taking into consideration that the absence of these authorizations could prevent or delay field project activities;

make available office space for the Project’s staff and provide meeting rooms for official meetings and workshops;

cover the travel costs and daily allowances of Ministry’s staff and national institutions participating on workshops;

make available sufficient and appropriate staff for all the training purposes;

facilitate contacts and smooth cooperation with the municipalities at local level as well as with entities and agencies that depend on the MoA, such as APMA, ACDA or the ICCs, entities with whom FAO intends to build solid cooperation under this project.

5.5. Technical Support and FAO contribution The Project will count on technical support from different disciplines of the FAO technical officers in the FAO REU and in FAO headquarters. This project will use FAO technical support on different technical aspects, such as extension, plant and pest management, statistics, value-chain and CSA, as relevant in Outcome 1. For Outcome 2, FAO will count on headquarters and REU officers that are experts on value chain, territorial planning and rural development.

Gender expertise will be engaged throughout the whole project for effective gender mainstreaming to ensure that both women and men benefit from the Project and that no one is left behind. The FAO Policy on Gender Equality and the FAO Environmental and Social Management Guidelines will frame this support.

The quality of technical support is fundamental in the success of the Project, and FAO will deploy technical officers who have been implementing similar policy work and direct investments to farmers and municipalities in other countries with similar starting positions to Georgia and who possess wide experience in projects of this complexity.

FAO will contribute to the Project by using its own funding for a total amount of USD 500 000 that will be used through funds made available for the Project through three different Technical Cooperation Programme Facility funds (TCPFs) to be disbursed on 2018 (USD 200 000), 2020 (USD 200 000) and 2022 (USD 100 000). These funds will be used as integral part of the budget of this action and will not be earmarked, but will come to support to the already defined Outputs. FAO funds will mainly be used for technical assistance in terms of Consultants, Travel costs and Technical Support Services (TSS) budget lines.

The FAO contribution is not concretely defined with the concrete amounts to be dedicated to each budget line, as this will depend on the emerging needs throughout the Project implementation. This will allow flexibility for FAO to match its contribution in areas where


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unexpected shortcomings may arise. During the inception phase, the Project will develop in detail the first contribution for an amount of USD 200 000 to be added to the Project.

5.6. Resource Partner Inputs The maximum budget allocated for this Project is EUR 12 000 000. The total budget for the activity will include all the related activities of the FAO team and experts and will be distributed in the following way.

Professional Staff The project staff allocated to the Project will be the following:

ENPARD Coordinator (At P4 level): The Project will contribute 100 percent of his/her salary, for a duration of three years. His task will be to coordinate the implementation of this project.

Technical Advisor (At P4 level): The Project will contribute 100 percent of his/her salary, for a duration of three years. His task will be to provide technical support to the Project’s activities.

Programme Officer (At P3 level): The Project will contribute 100 percent of his/her salary, for the full duration of the project. His task will be to provide operational support to the Project, and ensure the FAO corporate procedures are fully respected throughout the life of the Project.

General Staff General Staff will provide project administration services, including finance, HHRR, Travel, procurement, accounting and other support staff necessary for project implementation:

Administrative Staff for Finance (At G6 level): The Project will contribute 100 percent of his/her salary, for a duration of two years. His task will be to ensure the financial support to the Project, as well as the financial closure of the Project.

Administrative Staff for Travel, HHRR and procurement (At G5 level): The Project will contribute 100 percent of the salaries of two positions, for the full duration of the project. Their tasks will be to ensure the smooth administrative support in terms of travel, HHRR and procurement.

Consultants

Various expertise will be recruited to support the successful implementation of the Project activities, comprising of:

For Outcome 1: This Outcome is a continuation of the ongoing Technical Assistance project under ENPARD II (GDCP/GEO/010/EC), and it will only start in 2020, to ensure the continuation

National Long term Consultants (Main positions for the Project’s implementation in support to the FAO international professional staff as mentioned above). The national project team will be hired on a National Project Personnel (NPP) contracts. The main positions will be the following:


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National Technical Advisor for Outcome 1: The Project will contribute 100 percent of his/her salary, for a duration of 3 years. His/her task will be to ensure the management of the technical assistance component of the Project under Outome 1.

National Communications Consultant: The Project will contribute 100 precent of his/her salary, for a duration of 3 years. His/her task will be to ensure the visibility of the Project.

Project Assistant: The Project will contribute 100 percent of his/her salary, for a duration of 3 years. His/her task will be to ensure the visibility of the Project.

National Policy Advisor – Data Management and Statistics: The Project will contribute 100 precent of his/her salary, for a duration of 3 years. His/her task will be to provide policy advice to the MoA Data Management and Statistics.

National Policy Advisor in Value Chain Analysis: The Project will contribute 100 percent of his/her salary, for a duration of 3 years. His/her task will be to provide policy advice to the MoA in Value Chain Analysis.

Since the priorities of the MoA may change as a result of the changes in the SADG in 2020, it may be possible that other long term positions in the Project will be necessary during the Projec’st life. The Project will address with any long term positions to request the agreement of the donor prior to any hiring action.

National and International short consultants: The Project will also hire national and international consultants with short consultances in order to provide technical inputs to the Outcome 1 in non full time basis. The Project will develop ToRs for these consultancies to provide support in the implementation of the Project and following the workplan. Consultancies will be hired under national or international Personal Service Agreement (PSA) contracts, or under COF.REG contracts, local or international.

For Outcome 2: The Outcome 2 of the Project will start since the beginning of the implementation period, and the team will also be comprise of:

National Long term Consultants (under NPP contract) and Personal Service Agreement (PSA):

Grant Coordinators: The Project will hire two Grant Coordinators and will contribute 100 percent of their salaries, for the full duration of the project. Their task will be to ensure the implementation of the Outcome 2.1.

Municipal Investment Coordinator The Project will contribute to a 100 percent of his/her salary, for the full duration of the project. His/her task will be to ensure the implementation of the Outcome 2.2.

National Consultants on Extension: The Project will hire two National Consultants on Extention and will contribute 100 percent of their salaries, for the full duration of the project . Their task will be to ensure the implementation of the Outcome 2.3.

Drivers: The Project will hire two drivers and will contribute 100 precent of their salaries, for a duration of 5 years. Their task will be to ensure the transportation of the Project team to the field throughout the Project implementation period.

National and International short consultants: The Project will also hire national and international consultants with short consultances in order to provide technical inputs to the Outcome 2 in non full time basis. The Project will develop ToRs for these consultancies to


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provide support in the implementation of the Project and following the workplan. Consultancies will be hired under national or international Personal Service Agreement (PSA) contracts, or under COF.REG contracts, local or international.

Contracts

This budget line covers the costs of commercial Service Contracts and Letters of Agreement. These contracts or LoAs to be signed will outline the description of the activities to be undertaken and results to be achieved by the implementing partners and service providers, the envisaged schedules and timetables of the activities to be completed, the budgetary allocations and their schedules, narrative and financial reporting requirements and overall responsibilities of involved parties.

The main project activities for support to the targeted population/applicants (Outputs 2.1 and 2.2.) will be executed through one or several implementing partners who will sign an LoA or a contract with FAO for the process of management of the applications and pre-selection of investments to be funded.

The selection of these implementing partners will be done following a call for proposals to be issued publicly where all national and international NGOs with presence in Georgia will be able to present their application.

Parallel to this, FAO will engage through a contract with a financing institution that will be in charge of the processing of the final payments to each beneficiary of the selected applications, probably by making bank transfers to the suppliers previously identified by the applicants once the beneficiaries have made their cash contribution to the matching investment. With support and oversight from FAO, this approach allows timely and transparent securing of goods in accordance to the cropping calendar and in quantities demanded by the applicants/beneficiaries. The Project will carry out superintendence control of the items procured and investments supported.

Travel

This budget line covers the costs for all travel activities of both national and international project staff as well as travel costs for technical backstopping of officers involved in project implementation. It includes airfares and per diems for staff as well as other local travel costs. It also includes travel costs of non FAO staff that need to participate in trainings in country or study tours outside of Georgia.

Training

This budget line covers all the costs related to the organization of local workshops with stakeholders, as well as training sessions with the beneficiaries of the Project, such as individual farmers, cooperatives and SMEs, but also municipal authorities, extension services and, under the Outcome 1, the MoA staff at centralised and decentralised offices. This includes the translation of documents, consultant interpreters, venues, travel of trainers and of participants in the training, as well as other costs related to training, such as the payment of training fees in the case of study tours by third parties/institutions.

In the case of training events or other events that require overnight stays for participants; venues, catering and other logistical arrangements for activities will be sourced with


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constant attention to prudence and exemplarity in the use of funds, as well as to the carbon print. Public venues will be prioritised over private ones, distance from the usual work places of respective audience will be minimal, and use of five star hotel or resorts will be avoided except in exceptional circumstances duly authorised by the European Union Delegation with 3 weeks of prior notice.

Non-Expendable Equipment

This budget lines covers the expenditure for office equipment (desks, chairs, etc.) and office Information Technology (IT) equipment needed to run the Project implementation unit such as laptop computers (including the relevant software) printers, scanners and photocopiers, projectors, digital cameras, accessories and similar items.

This budget line also includes the procurement of items of non-expendable nature (tractors, sprayers, cultivators, drip irrigation, anti-hail nets, etc.) to be used in field demonstration activities on extension, or any other activities of capacity development at local level.

This budget line also covers the procurement of two 4x4 vehicles to be used by the Project activities during the implementation period.

Expendable Equipment

This budget line covers the expenditure for minor procurement actions of low value needed for the day-to-day implementation of the Project, including equipment of less than 1,500 USD, as well as printing and publications. This budget line also covers the procurement of items of expendable nature (seeds, fertiliser, chemicals, protection equipment) that will be used during the implementation of field demonstration activities on extension, or any other activities of capacity development at local level.

Technical Support Service and Report and Evaluation Costs

This budget line covers the costs of the involvement of the FAO technical staff inputs to the Project, both from the Regional Office and from FAO headquarters for backstopping, technical guidance, quality control, and any ad hoc technical inputs that may be required to ensure the corporate FAO guidance to the international consultants. This budget line will also cover the technical support provided by FAO staff in cross-cutting issues such as gender and environmental support to the Project’s activities.

This budget line also covers costs for the preparation and processing of the final technical report, as well as for the mid term and final evaluation of the Project to be done by an external contractor.

Communication and Visibility

This budget will cover all costs (contracts, salaries, travel and other costs under expendable, non expendable or GOE) for activities centered in Communication and Visibility purposes as defined in the separate Annex on the Communication and Visibility Plan, including both the activities linked to provide visibility to the donor and the Project, as well as the activities linked to the awareness campaign and outreach of the grant component amongst the possible applicants.


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General Operating Expenses

This budget line relates to day to day office running costs, such as rental, electricity, internet, car fuel, supplies and insurances, petty cash for small procurement locally, etc.

For office rent: The estimation is based on simplified cost options (Please see Annex 5) i.e. the cost of office space is proportionate to the number of project staff using the office compared with the total number of staff using the office

For consumables - office supplies: The estimation is based on simplified cost options for the cost of supplies incurred by FAO i.e. the cost of consumables - office supplies is proportionate to the number of project staff using the consumables- office supplies compared with the total number of staff using the consumables- office supplies

For other services (tel/fax, electricity/heating, maintenance): The estimation is based on simplified cost options for the cost of supplies incurred by FAO i.e. the cost of other services is proportionate to the number of project staff using other services compared with the total number of staff using other services.

Project Servicing Costs (seven percent of total project size)

Project servicing costs cover FAO headquarters and REU costs relating to the administrative and financial management service for the Project.

5.7. Management and Operational Support Arrangements Overall responsibility for project implementation will be with FAO, namely its Representation in Georgia supported technically by the FAO Regional Office for Europe and Central Asia (REU) and FAO Technical Units in REU and FAO Headquarters.

FAO will be the only signatory of the funding agreement, taking full responsibility for the implementation of the Project in line with the provisions of the Special and General Conditions of Delegation Agreement. FAO will entrust to selected implementing partners with a share of the activities and respective budgets. FAO will bear overall responsibility for the budget of the action.

The Project will be implemented under the technical supervision of FAO’s Agricultural and Economic Development Analysis Division (ESA) in general, and the overall technical guidance by the FAO Lead Technical Officer (LTO) in particular, with support from various FAO Technical Officers for specific thematic areas.

The Project will be coordinated by a steering committee composed of representatives from the MoA, the European Union Delegation to Georgia and FAO. This steering committee will approve work plans and reports and undertake strategic programming decisions, and will meet every six months, although meeting can be called by any of the members at any time to discuss any particular issue of concern.

An Application Review Committee (ARC) consisting of MoA, FAO, and EUD, with the possible participation of other partners as observers or advisors, such as implementing partners or other stakeholders, will be tasked to review the proposed pre-selected investment




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applications, accept or reject them, or eventually request revision of applications. The ARC will ultimately make the decision on each award or rejection of the received investment proposals.

FAO will bear overall responsibility for the quality of the Project, including, but not limited to: mobilisation of potential beneficiaries, fiduciary risk assessment and selection of implementing partners, production of training syllabus and materials, quality of the administrative process applied in screening of the applications, overseeing investment support, provision of coaching, advice, support and analysis provided to the MoA, etc.

Day-to-day management of the Project in Georgia is carried out through the Project Implementation Unit (PIU). This will consist of a team of national and international experts under the overall guidance of the ENPARD Coordinator (P4 level, fully funded for this project for three years), the technical guidance of the Technical Advisor (P4 level for three years) and the operationsl support of the Operations Officer (P3 level, during the full duration of the Project). The PIU will count on a team of full time national experts in charge of each of the technical areas of work as well as with the punctual support of national and international consultants in support to specific technical areas.

Full-time administrative support (project administration and management, including finance, HHRR and travel) will be incorporated into project team, with the assistance of three staff national positions for administration (two full time G5 positions during the full duration of the Project, as well as a finance G6 position only for the two last years of the Project).

The implementation of the Project will be coordinated and regularly reviewed by the FAO technical backstopping team under the Project Task Force (PTF) -- which will be comprised of an LTO and other technical officers as and when required -- to ensure that the results of the assignments are in line with the Project document, logical framework and inception report and that the procedures and outputs of the Project are in line with the FAO corporate guidelines.


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6 MONITORING, PERFORMANCE ASSESSMENT AND REPORTING

6.1 Scope and Purpose

The Project will define milestones and Objectively Verifiable Indicators (OVIs). Attention should be paid to the simplicity, measurability, adequacy, relevance and timeliness of the OVIs included in the logical framework matrix. Where possible, the Project will collect primary information to set up a baseline that will identify targets for specific indicators. This will be finalized during the inception phase or during the first months of the Project, since some of these primary data will need to be drawn from specific assessments or studies.

The indicators will also be gender-sensitive as much as possible, and there will be an effort to get sex-disaggregated data from the different users or beneficiaries from this project. Gender expertise will be involved in the establishment of indicators, data collection and M&E.

The work plan will be the another important document for monitoring purposes as well as to assess performance from a project management point of view. The work plan will be finalized in detail during the inception phase, it will be adjusted and updated regularly and it will be shared for approval in the meetings of the PSC, which will take place at least twice a year.

Because of its importance in the process of shaping the work plan and the logical framework, the inception report will be a key milestone of the first part of the project and will serve to fine-tune some of the activities and expected results.

6.2 Monitoring

Regular monitoring of progress of project activities’ implementation will be ensured by all the Project staff in their specific roles.

There will be monitoring visits of each investment received and supported in cooperation with the implementing partner, local authorities and LAGs will aim to verify the correct application of established investment contribution agreements by the applicants, as well as to supervise that the investment was effectively implemented as explained in the application process.

More regular monitoring visits to the LAGs of the selected municipalities will aim to check the appropriateness of the activities of all implementing partners and involved organizations ensuring that the agreed services are provided both in terms of quality and quantity.

Additionally, the monitoring will aim to gather response from the Project beneficiaries both in terms of the quality of service from the implementing partners and involved organizations and feedback on possible improvements.

A comprehensive monitoring of at least 30 percent of the targeted beneficiaries will be undertaken, producing data for an assessment of results achieved at the targeted population level. Findings from the regular monitoring missions will be provided in the Project progress reports.


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The monitoring exercise will collect data on the impact of the supported investment on income generation of the households. In addition, it will gather data on the model of implementation used and on the best ways for its possible future improvement.

The proposed monitoring and evaluation framework aims to deliver clarity through the use of the elements of audit, monitoring, and evaluation as these are complementary albeit different exercises. The process will serve to feed the policy dialogue to be integral part of the TA component (Outcome 1) and to provide evidence for shaping of the future state agricultural support to the agricultural and rural sector.

The continuous monitoring will generate quantitative feedback on the implementation preventing deviations from the operational objectives making the spending accountable and enabling the evaluation.

The sequence for programming, monitoring and evolution to be used by the Project is provided in the table below:

Programming period 1 (2018-2019) Programming period 2 (2020-2022)

Programming Program Application Programming Program Application

SWOT+ Ex-ante evaluation

Midterm evaluation

Ex-post evaluation

SWOT+ Ex-ante evaluation

Midterm evaluation

Ex-post evaluation

Ongoing evaluation and monitoring

6.3 Reporting

The reports will provide a clear pictures of the situation of the project at the different stages of implementation, ensuring the appropriate tracking of progress in terms of outputs and results as set forward in the logical framework through the indicators, baselines and targets.

The ultimate reporting responsibility will lie with the FAO Representation in Georgia with close support from the FAO Regional Office for Europe and Central Asia (REU). Direct responsibility for preparing all reports lies with the Technical Advisor, with the support provided by the Programme Officer and REU LTO as well as technical officers as applicable.

All reports shall be written in English. If necessary, working documents and reports should be translated into Georgian. Formats for the Inception, Interim, Final and Mission reports shall follow FAO guidelines and their Table of Contents shall be agreed upon.

Reports will include:

Annual Progress Reports: The annual reports will give clear information on the status of the Project’s implementation and will be subject to approval and endorsement by the members of the PSC. The annual progress reports shall be prepared during the period of execution of the contract. These progress reports will be prepared as per FAO´s reporting procedures, sent to the donor and presented to the PSC by the technical advisor. After required adjustments, the reports will be endorsed by all parties.

Annual Certified Financial Reports: annual certified financial reports of a given year will be provided to donor as per the dispositions defined in the funding agreement. The certified financial reports will be produced following FAO internal regulations in the budget at parent level FAO Format, and will be produced in USD.


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Mission reports of the experts: experts will produce standalone reports in addition to their contributions to other documents to be elaborated under the Terms of Reference of their individual contracts. Reports of short-term experts will be delivered within 15 days of the end of each of their missions. Where experts subdivide their assignment in Georgia into several missions, each of the visits or each two-week mission period shall be concluded by a report outlining the activities performed and outputs produced. The reports shall contain an outlook on the subsequent mission and specify anticipated outputs, related activities and duration. When needed, because of the complexity of the task, a peer review will be organized by FAO to make sure that the technical content of important reports is evaluated with several specialists. In any case, all the reports of a technical nature produced by international consultants will follow a strict process of technical clearance by the FAO technical officers in the REU or in FAO headquarters in Rome.

Technical Reports: technical reports on specific sectors/issues will be produced by international consultants or by the Technical Advisor, and will follow the process of peer review (optional) and technical clearance (compulsory) as stated above.

Final Report: the final report to be delivered at the end of the Project is composed of a final narrative report and a final financial report.

The final narrative report summarizes the Project’s implementation history. The report contains an executive summary, a description of all documents prepared (reports, proceedings from conferences, the minutes of relevant meetings, findings from workshops), all previously approved reports, documents and other on electronic data medium, the results, the lessons and a judgement of the sustainability of the measures taken.

The certified final financial report will be submitted to the donors six months after the finalization of the Project to allow for the closure of pending accounting actions for a large and complex project as this one. The financial report will be produced following FAO internal financial regulations in the Budget at Parent Level FAO Format, and will be produced in USD.

Other reports and documentation: in addition to the above formal reports, the Project develop training documents, instruction manuals and software documentation as required. The software source code and user rights restricted to Georgia will be handed over to the beneficiary (the MoA).

Reporting will be carried out in compliance with the Special Conditions to the General Conditions, the Financial and Administrative Framework Agreement (FAFA) and the Joint Guidelines on reporting obligation under the FAFA. Provisions included in the relevant framework agreements signed with the European Union will apply.

7. PROVISION FOR EVALUATION

The Project Steering Committee (PSC) will meet every six months to review progress and advise on future implementation, and will involve the EUD and the MoA as well as FAO.

The Project will include ongoing monitoring and evaluation throughout its duration that will continuously look at results and impacts - by assessing effectiveness, efficiency, and


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relevance and will provide input into the formulation and re-orientation of policies for programing cycles.

All project data throughout monitoring and evaluation process will be collected, disaggregated by sex and location, and where possible, by age and other variables. The continuous evaluation will allow by annual reporting (midterm and ex post report for each programming cycle) and development of thematic studies examining in closer detail various aspects of the programme (measures, geographic zones, sub sectors).

On top of this, FAO will commission one external and independent mid-term evaluation to be undertaken when delivery reaches 50 percent of the total budget and/or at mid-point of scheduled project duration, whichever comes first. The mid-term review will assess delivery of results against the work plan, logical framework and indicated milestones, as well as analyse any deviations from the original plan and propose recommendations and amendments to overcome any bottlenecks or delays in implementation. The mid-term assessment will aim to contribute to improved implementation of the remaining project activities, through operational, administrative and strategic recommendations.

The report produced by this mid-term review will be analysed in the PSC, endorsed and the recommendations enforced. This mid-term review may lead to changes in any of the original management documents (logical framework, work plan, milestones) to adapt to the review.

Finally, FAO will commission an external independent Final Evaluation to be completed within six months prior to the actual completion date (NTE date) of the Project. It will aim at identifying project outcomes, their sustainability and actual or potential impacts. It will also have the purpose of indicating future actions needed to assure continuity of the process developed through the Project. FAO Office of Evaluation (OED), in consultation with project stakeholders, will be responsible for organizing and backstopping the Final Evaluation, including: finalizing the ToR, selecting and backstopping the team and quality assurance of the final report.

Representatives of the European Union Delegation in Georgia will be invited to participate in the assessments relating to the performance of the action. This is without prejudice to any evaluation mission that the European Union as a resource partner may decide to perform.


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SECTION 3 - SUSTAINABILITY OF RESULTS The main objectives of the Project are to provide capacity development to the MoA and other key institutions engaged in the sector and to improve the services or investment opportunities for farmers and municipalities. It will therefore be of outmost importance to ensure the institutional sustainability of the results achieved within the MoA action after the end of the Project.

Regarding Outcome 1, the officers of the MoA will need to be in a position to continue delivering the foreseen results when donor assistance ends. To ensure this, the Project is mainly focused on capacity development of the officers of the Ministry and all the activities are conceptualized in such a manner that FAO will provide the grounds for training and exposure to new methodologies so that the officers of the Ministry will be able, since the beginning, to use these tools and methodologies by themselves.

The improvement in policy-making capacities within the MoA is one of the main priorities of the senior officers of the Ministry, so there is a firm commitment to maintain and enhance the work that will be initiated by the Project in terms of policy support to some of the key areas of work of the SADG 2015-2020.

Regarding Outcome 2, the Project has been designed to ensure that targeted persons continue enjoying the outputs of the investments implemented through the Project. However, there is a greater dimension in the intent to support policies by the MoA and its agencies and units (APMA, ACDA, ICCs) to replicate the implementation modalities tested with this Project to improve the outreach of the MoA in the rural areas. The inclusion of some of the elements of this Project into the MoA policies for individual support to farmers would enable durable benefits after the action has been implemented and would allow for a better integration of territorial development in the agenda of the MoA.

The Project’s interventions will contribute to increased food security and income through sustainable quantitative and qualitative engagement in agricultural production and improvement of the agriculture/rural based livelihoods. The improved capacity of the extension system to deliver improved advice to farmers will ensure that the farmers are better trained and will also ensure the potential for further growth of the agricultural production and income generation.

It is expected that the Project’s activities will contribute to increase the competitiveness of the agriculture and food sectors and to the development of the rural areas in a broader sense.

Technical sustainability will be carefully considered during project implementation, especially in relation to the capacity development actions of the MOA and to the Project targeted persons and institutions.

8. ENVIRONMENTAL SUSTAINABILITY

The main objective of the Project is to support the MoA of Georgia to implement the SADG 2015-2020, both from a point of view of improved capacities of the MoA officials, as well as direct support provided for the improved services rendered to farmers (through extension or options for investments in agriculture). This is obviously linked to the desire of the


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Government of Georgia to improve the productive sector of agriculture, which has many positive economic and social implications.

A more effective agricultural sector will be the best means to reduce rural poverty in Georgia. If farmers are more competitive, they will be able to produce more and better will have a higher income that will allow for them to improve their lives.

However, this may also have environmental risks, as already mentioned, and environmental sustainability is one of the areas that need to be very carefully looked at when proposing development actions. While a particular action in agriculture may have a very positive impact to boost production, this may have long lasting repercussions in terms of water pollution, loss of soil coverage, soil erosion, desertification or loss of biodiversity.

Therefore, FAO will keep environmental sustainability at the core of the action implemented by the Project to ensure that any possible risks are properly taken into account. Environmental considerations will be integrated into all relevant project activities, policy papers proposed to the MoA for mainstreaming and in the review of all investment initiatives selected for co-financing.

The implementing partners, the MoA’s Information and Consultation Centres, Local Authorities, LAGs and project beneficiaries will be advised on environmentally sustainable agricultural production by the Project’s personnel. Equipment and investments supported by the Project will take into account internationally-recognized environmental standards.

It is envisioned that continuous supervision of project activities and their outputs, in relation to environmental and social impacts, will be conducted by the Project’s team.

Under the FAO projects implemented under the ENPARD programme, GCP/GEO/001/EC, GCP/GEO/010/EC (ongoing) and GCP/GEO/004/AUT, FAO has dedicated significant efforts to promote sustainable agricultural practices. Since 2013, FAO has supported the MoA to expand the agrometeorology system and link it with Integrated Pest Management (IPM) models as well as promoting GAPs.

9. GENDER EQUALITY

In Georgia, rural women have high education and economic activity rates, but their access to productive assets, modern technologies, information, markets and decision-making is limited compared to rural men. Even though agriculture is often the main economic activity for the whole family, 64 percent of rural households consider a man to be a “head” of the household, responsible for taking decisions and controlling the family budget23. The property is also more often registered in his name which affects women’s de facto enjoyment of ownership rights, as well as their economic status, prospective and opportunities. The women’s employment rate is 51 percent compared to 77 percent of men, and women tend to concentrate in informal employment or work as unpaid family workers.

Gender-based challenges are even greater for the disadvantaged groups, including the poorest groups, as well as youth, the elderly, Internally Displaced Persons (IDPs), ethnic

23 Shengelia, Nino and Kereselidze, Mziya. Gender statistics in agriculture and rural development. Presentation

at the FAO regional conference, Almaty, 22-23 June 2016.


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minorities, rural women with disabilities, and those living in remote areas who constitute the most socially and economically marginalized and excluded groups in the country.

The FAO programming and field interventions are framed by the Committee on the Elimination of All Forms of Discrimination against Women (CEDAW), General Recommendations on the rights of Rural Women24, the SDGs’ principle of “Leaving no one Behind’’, the FAO Policy on Gender Equality25, the FAO Regional Gender Equality Strategy for Europe and Central Asia26, the system-wide Action Plan for Implementation of the United Nations CEB Policy on Gender Equality and the Empowerment of Women (UN-SWAP)27 and the FAO Environmental and Social Management guidelines28. To address the issues related to unequal access to the productive resources, this Project will be specifically informed by the FAO Voluntary Guidelines on the Responsible Governance of Tenure29 (and its technical guidelines). Across its work, FAO ensures in all projects that no-harm is caused to women and to the disadvantaged groups and takes every opportunity and action to contribute to closing the gender gap.

To ensure sustainability of the Project’s results, a national gender expert will be engaged right from the start of the Project with the support from the FAO REU gender team and in close collaboration and consultation with FAO Georgia. Specifically, the national gender consultant, in coordination with the other project team members, will be responsible for the implementation of the following activities:

conducting a situational gender analysis to contribute to the Project’s gender-sensitive work plan. This will include collecting relevant data and formulating gender-sensitive indicators. Data disaggregated by sex, age and other social determinants, will be collected by desk review and field visits to identify the most vulnerable groups and propose measures to address their status in the process of the Project’s implementation. The burdens of women and of those most vulnerable to engage in the Project will be identified and a plan on gender mainstreaming and on Human Rights Based Approach (HRBA) will be designed;

contribute to the development of the Project’s gender-sensitive monitoring and evaluation plan, and participate in the monitoring and evaluation activities;

act as a resource throughout the Project’s implementation, engaging in training and awareness raising activities when necessary;

analyse the communication channels with women and men farmers and farmer associations and identify barriers that may limit women’s access to information and impede their participation in the Project’s activities;

24 Committee on the Elimination of Discrimination Against Women (March 2016), General Recommendation

No. 34 on the rights of rural women: http://tbinternet.ohchr.org/Treaties/CEDAW/Shared%20Documents/1_Global/INT_CEDAW_GEC_7933_E.pdf 25 http://www.fao.org/docrep/017/i3205e/i3205e.pdf 26 http://www.fao.org/3/a-i5501e.pdf 27 UN system-wide policy on gender equality and the empowerment of women:

http://www2.unwomen.org/~/media/headquarters/attachments/sections/how%20we%20work/unsystemcoordinati

on/un-swap-framework-dec-2012.pdf?v=1&d=20141013T121441 28 http://www.fao.org/3/a-i4413e.pdf

http://tbinternet.ohchr.org/Treaties/CEDAW/Shared%2520Documents/1_Global/INT_CEDAW_GEC_7933_E.pdf

http://www.fao.org/docrep/017/i3205e/i3205e.pdf


http://www2.unwomen.org/~/media/headquarters/attachments/sections/how%2520we%2520work/unsystemcoordination/un-swap-framework-dec-2012.pdf?v=1&d=20141013T121441

http://www2.unwomen.org/~/media/headquarters/attachments/sections/how%2520we%2520work/unsystemcoordination/un-swap-framework-dec-2012.pdf?v=1&d=20141013T121441



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ensure gender perspective in all project documentation, activities, outputs and outcomes and visibility materials, conducting gender analysis when required;

draw attention of the Project’S management to the most vulnerable and disadvantaged groups of women and men and advise on the measures to actively engage them in the Project so both women and men can, at the end, benefit from its results;

ensure that during the implementation of the training plan, as well as other activities, both women and men farmers are reached and mobilized;

ensure that national stakeholders with gender relevant experience and expertise are engaged and participate during the M&E of the project.

This Project will be fully committed to promote gender equality in agriculture and rural development and contributed to the improved livelihoods of rural women and their families. This cross-cutting issue will be targeted at all stages of the project’s implementation, with the objective of reducing the gap between rural women and men. The approach is based on the SADG and its action plan which reflect the principles of the National Gender Strategy and related action plan.

The main targets of the FAO support for gender equality coincide with the general principles specified in the ENPARD ‘Programme, namely:

ensuring women secure their rights over land, and that the criteria for granting farmer status during farm registration processes do not discriminate them;

ensuring that needs of minority women, IDPs and women in labour (especially those with children) in rural areas are properly assessed and appropriate support provided;

ensuring women and men have equal opportunities to access agricultural extension information and support;

promoting incentives and preferential access to women and vulnerable groups for the formation of cooperatives and other rural businesses;

enhancing access of women and vulnerable farmers to programmes offering rural machinery and equipment;

ensuring that rural development relevant data is disaggregated by sex and other criteria in the statistical system of GeoStat.


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ANNEX 1: LOGICAL FRAMEWORK MATRIX

ANNEX 2: WORK PLAN

ANNEX 3: BUDGET


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ANNEX 4: TERMS OF REFERENCE OF MAIN HHRR POSITIONS IN THE PROJECT

A.- Professional Positions: ENPARD Coordinator P4 level Technical AdvisorP4 level (Value Chain and Investments Expert) (Draft) Programme Officer P3 level (Project cycle and operations support)

(Draft) B.- General Staff Positions:

G6 Finance Associate G5 National Administrative Assistants (HHRR, Travel, Procurement,

Assets) (2 positions) (Draft)

C.- National Project Personnel (Under Consultants Budget Line)

National Technical Advisor Outcome 1 National Policy Advisor – Data Management and Statistics National Policy Advisor – Value Chain Development National Communications Consultant Regional Grant Coordinators (2) (Draft) Municipal Investment Coordinator (Draft) National Consultants on Extension (2) (Draft) Project Assistant

D.- Support Project Personnel (Under Consultants Budget Line with PSA contract)

Driver (2)


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Food and Agriculture organization of the United Nations

Terms of Reference Title: ENPARD Coordinator P4 level (three years) Reporting Lines: Under the overall supervision of the FAO Representative in Georgia (FEGEO), direct supervision of the Assistant FAO Representative in Georgia and close collaboration with the Technical Advisor of the FAO European Neighbourhood Program for Agriculture and Rural Development (ENPARD) and other project staff in Georgia, the FEGEO staff in charge of administration and finance as well as relevant local stakeholders, the incumbent will lead the management and coordination of the ENPARD Programme in Georgia. Technical Focus: The incumbent will lead the management and coordination of the European Union funded FAO programme under the ENPARD, including planning, formulation, monitoring and reporting of the programme Key Functions:

Develops, implements and evaluates assigned programmes/projects; monitors and analyses programme/project development and implementation; reviews relevant documents and reports; identifies problems and issues to be addressed and initiates corrective actions; liaises with relevant parties; ensures follow-up actions;

Performs consulting assignments, in collaboration with the stakeholder, by planning facilitating workshops, through other interactive sessions and assisting in developing the action plan the stakeholder will use to manage the change;

Researches, analyses and presents information gathered from diverse sources; • Coordinates policy development, including the review and analysis of issues and trends, preparation of impact evaluation equivalent studies, etc.;

Generates survey initiatives; reviews, analyses and interprets responses, identify problems/issues and prepare conclusions;

Organizes and prepares written outputs, e.g. draft background papers, analysis, sections of reports and studies, inputs to publications, etc.;

Provides substantive backstopping to consultative and other meetings, conferences, etc., to include proposing agenda topics, identifying participants, preparation of documents and presentations, etc.;

Initiates and coordinates outreach activities; conducts training workshops, seminars, etc.; makes presentations on assigned topics/activities;

Leads and/or participates in large, complex field missions, including provision of guidance to external consultants, government officials and other parties and drafting mission summaries, etc.;

Coordinates activities related to budget funding (programme/project preparation and submissions, progress reports, financial statements, etc.) and prepares related documents/reports (pledging, work programme, programme budget, etc.).

Specific Functions:

Leads the coordination of the implementation of the ENPARD Programme in Georgia, with direct supervision for the staff recruited for project operations

Coordinates the ENPARD programme and acts as Alternate Budget Holder for the Project’s operations and management in the areas of finance, administration, budget monitoring, reporting and human resources;

Oversees the budget management of the Project in support of the Budget Holder, including proposed budget revisions and financial reporting, as well as the update of the Project ‘s information.

Maintains a close liaison and communication with the European Union, Ministry of Agriculture (MoA) and FAO in relation to the programme implementation and development, and participates in coordination bodies.


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In coordination with the MoA and the European Union Delegation (EUD), facilitates the full organization of the ENPARD Steering and Stakeholder Committees.

In coordination with the teams of the respective projects of the ENPARD Programme, facilitates contacts with FAO technical units in both the Regional Office and headquarters as required for the implementation of the programme including the timely identification and deployment of expertise, and coordinates technical input of national and international consultants from different projects and finds synergies amongst the different projects under the FAO ENPARD Programme.

Ensures the strategic fit of the ENPARD programme in the corporate FAO country plans, including the Country programming Framework (CPF), FAO strategic Programme and Regional Initiatives, as well as supports resource mobilization, partnership and South South and triangular cooperation activities, as relevant for the scope of the ENPARD Programme.

Ensures communication of results and Programme visibility, as required.

Performs any other related duties


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Terms of Reference Title: Technical Advisor P4 level (three years) Reporting Lines: Under the overall supervision of the FAO Representative in Georgia (FEGEO), direct supervision of the ENPARD Coordinator and technical guidance of the Lead Technical Officer (LTO) and other FAO technical officers in headquarters and REU, and in close collaboration with the Programme Officer and other project staff in Georgia, the FEGEO staff in charge of administration and finance as well as relevant local stakeholders, the incumbent will provide technical support in the implementation of the Project. Technical Focus: The incumbent will lead the technical support for the implementation of the ENPARD Programme in Georgia, including the coordination with relevant technical officers of FAO in headquarters and REU offices, following the Sustainable Food Value Chain (SFVC) development approach developed by FAO. Key Results: Comprehensive technical and policy expertise to support the planning, development and implementation of the FAO ENPARD Programme in Georgia in accordance with FAO Strategic Objectives. Key Functions:

Provides technical leadership assistance on the development, the implementation and evaluation pf assigned programmes/projects; assists to the review of relevant documents and reports; identifies priorities, liaises with relevant parties; identifies follow-up actions;

Assists to the coordination of programmes and reviews the assessments of issues and trends for the implementation of programmes and projects and the preparation of impact evaluation or equivalent studies;

Assists/supervises preparation of various written outputs, e.g. background papers, analysis, substantial sections of reports and studies, inputs to publications;

Contributes to consultative and other meetings, conferences, to include proposing agenda topics, identifying participants, preparation of documents and presentations

Participate in activities; structures training workshops, seminars, makes presentations on assigned topics/activities;

Leads field missions, including provision of guidance to external consultants, government officials and other parties;

Provides advice to develop policies and strategies as well as national protocols and guide lines for projects with specific domains related to FAO's work

Specific Functions:

Plans, leads and coordinates the technical implementation of the ENPARD Programme. This includes: (i) provision of technical guidance over the development of project implementation plan/action plan, ensuring buy-in from all relevant stakeholders; (ii) provision of technical guidance and coordination of technical multi-disciplinary teams of national and international experts for the implementation of this plan; (iii) development and delivery of training materials and technical reports required for the implementation of the Programme; and (iv) provision of technical guidance over the monitoring and evaluation of the implementation of project activities (through quarterly project progress reports, mission report, financial reports and other documentation) and propose adjustments to project activities as necessary.

Liaise with the Lead Technical Officer (LTO) and other FAO technical officers in headquarters and REU to get technical input and technical clearances on technical reports and presentations.


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Support and build capacity for the rest of the ENPARD team to ensure timely technical support and capacity building provided to relevant stakeholders and project partners during the implementation of the Project’s workplan. This includes training, coaching and mentoring.

Facilitate linkages between the Programme’s beneficiaries with markets (output and input markets) and with potential sources of financial support, including grants and investment support to be provided over the course of the Programme as well as existing network of financial service providers, donors and (more) informal sources of finance.

Aligned with FAO’s monitoring and reporting standards, develop technical, statistical, analytical, monitoring and reporting frameworks, and related tools, methodologies, systems and databases etc. to support the planning, implementation/delivery and monitoring of the programmes of work, products, projects, and services.

Design, conduct and coordinate the conduct of research, data collection, validation, analysis and/or reporting activities to allow for the collection of data for progress indicators and the assessment of the implementation of the programme in technical aspects as defined in the logical frameworks.

Draft policy proposals as well as provide technical specialist and/or policy advice and expertise, in collaboration with and under the guidance of the LTO and other relevant FAO technical officers.

Respond to requests from the donor, the Ministry of Agriculture and FAO Country Office and provide technical advice and support.

Promote linkages and technical cooperation with all relevant stakeholders in Georgia, including Government institutions, donors, private-sector companies and civil society organizations, and participate in technical platforms and coordination fora, meetings and conferences.

Facilitate public-private dialogues and partnerships among all relevant stakeholders in Georgia. This will contribute to the enhancement of linkages and collaboration between the stakeholders for the benefit of the Programme’s targeted population

Collaborate with all relevant stakeholders in Georgia in capacity development activities involving knowledge sharing and capacity building, such as training workshops, seminars, and meetings as well as the development of related materials and presentations.


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Terms of Reference Title: Programme Officer P3 level (for the full duration of the project) Reporting Lines: Under the overall supervision of the FAO Representative, in Georgia (FEGEO), direct supervision of the ENPARD Coordinator and close collaboration with the Technical Advisor of the FAO ENPARD project and other project staff in Georgia, the FEGEO staff in charge of administration and finance as well as relevant local stakeholders, the incumbent will liaise with relevant technical and programme staff at FAO Regional Office and headquarters Technical Focus: The incumbent will support the operations, management, technical support and coordination of the ENPARD project Key Results : In close collaboration with the ENPARD Coordinator and the Technical Advisor, ensures the correct implementation of the FAO ENPARD project in Georgia, including planning, formulation, monitoring and reporting. Key Functions:

Participates in the development, implementation and evaluation of assigned programmes/projects, etc.; monitors and analyses programme/project development and implementation;

Reviews relevant documents and reports; identifies problems and issues to be addressed and proposes corrective actions; liaises with relevant parties; identifies and tracks follow-up actions;

Assists in policy development, including the review and analysis of issues and trends, preparation of impact evaluation or equivalent studies, etc.;

Prepares various written outputs, e.g. drafts background papers, analysis, sections of reports and studies, inputs to publications, etc.;

Undertakes outreach activities; conducts training workshops, seminars, etc.; makes presentations on assigned topics/activities;

Coordinates activities related to budget and funding (programme/project preparation and submissions, progress reports, financial statements, etc.) and prepares related documents/reports (pledging, work programme, programme budget, etc.).

Specific Functions:

Prepares project task force meetings and ensure the secretariat of such meetings;

Ensures the timely provision of project inputs (personnel, technical support services, sub-contracts, training, equipment and supplies) directly by the Organization or, when appropriate, through contractors, and by liaising with other' support units;

Participates in the preparation of project work plans, monitor progress and, where necessary, identify corrective measures to overcome operational constraints;

Reviews and monitors project budget and prepare requests and revisions as required; maintains and alerts about budget expenditures and resources; reviews project' transaction listings with a view to identifying errors in accounting against budget lines;

Prepares and submits the Project Implementation Reports and any other reports required by the Organization;

Ensures the complete and quality of data and documentation in the FAO corporate systems for all assigned operational field projects/activities;

Contributes to the formulation of project proposals according to FAO's procedures and prepare project documents for technical clearance and final approval under different' funding arrangements.

Performs other duties as required


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Terms of Reference Title: G-6 Finance Associate (To be paid fully by the Project for a period of two years) Job Role, Duties and Responsibilities: The Finance Associate (G-5) provides administrative, financial and budgetary support to the activities of the Project. He / she works under the overall guidance of the FAO Representative and the direct supervision of the Assistant FAO Representative in Georgia. He / she works with wide latitude for independent action and gives guidance to clerical and junior administrative staff. The incumbent performs the following duties:

Support the management and administration of financial records and monitoring systems for the Project; monitor project and programme accounts; maintain imprest accounts; reconcile expenditures, balances, payments, statements and other data for day-to-day transactions and reports; manage the Project’s petty cash.

Provide and coordinate the retrieval, entry, selection and analysis of data from a wide variety of sources, including FAO’s corporate systems and data bases (e.g., GRMS, the Country Office Information System (COIN), Datawarehouse, et al.); verify accuracy of data and documents; make necessary calculations.

Verify availability of funds under the Project; ensure that operational expenditures are in accordance with approved budget and that all committing documents are complete and consistent.

Independently compose and finalize correspondence of administrative nature; initiate and draft correspondence to verify data, answer queries, and obtain additional information on transactions and financial matters, as required.

Maintain detailed records of budget estimates, obligations and available balances; participate in the consolidation of budget proposals; prepare financial data for budget estimates and financial planning.

Prepare recurring reports on programme, project and office accounts, report variations from budgets; prepare special reports on budgetary performance.

Monitor the receipt of Government contributions and the transfer of ownership of the Organization’s equipment.

Maintain liaison with local banks and financial institutions.

Advise other staff in the area of office / administrative management; actively support the streamlining of procedures and practices and the introduction of new information technologies.

Advise international staff on administrative and financial matters.

Make administrative arrangements for the Project and perform administrative duties to ensure security and office maintenance.

Perform other related duties as required.


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Terms of Reference Title: G-5 National Administration Assistants (two positions to be paid fully by the Project during the full period of implementation of the Project, for the full duration of the project ) Job Role, Duties and Responsibilities: The National Administrative Assistants will operate under the overall the overall guidance of the FAO Representative and the direct supervision of the Finance Associate and in close collaboration with the Programme Officer of the Project and the rest of the Project staff and other FEGEO staff. Duties and Responsibilities:

Provide administrative and logistical support to ensure smooth implementation of the Project.

Ensure maintenance/keep-up of documentation and records of all actions of the Project.

Assist in procurement, HHRR and travel

Assist in preparing the financial transactions

Create/enter purchase orders and invoices in GRMS and assist in sorting the petty cash receipts

Monitor fuel usage for FAO vehicles and maintain the vehicle log books

Monitor the MOSS compliance of FAO offices and vehicles

Provide logistical support to missions of international/national consultants and experts

Assist in interpretation and translation (Georgian - English),

Assist in organizing workshops and seminars;

Perform other related functions as required.


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Terms of Reference

Title: National Technical Advisor for Outcome 1 (Technical Assistance to the MoA) (to be fully funded by the Project during 3 years) General Description of task(s) and objectives to be achieved The National Technical Advisor shall operate under the overall guidance and responsibility of the FAO Representative in Georgia; direct supervision of the ENPARD Coordinator, and in close collaboration with the Technical Advisor and other international and national consultants, FAO Representation Office and Ministry of Agriculture (MoA) officers in Georgia. Duties and responsibilities

Overall day to day technical advise of the capacity building/support program to the Ministry of Agriculture of Georgia;

Maintaining close liaison and communication with the MoA in relation to the program implementation and development;

Support to the MoA in relation to implementation of project activities and actions related to the Strategy of Agricultural Development of Georgia; namely statistics, extension, value chain development and climate smart agriculture.

Support to the MoA to run the policy group and monitoring and evaluation system for actions related to the Strategy for Agricultural Development;

Support to the MoA in assessing training needs and designing a staff training and human resources development programme;

Preparation terms of references for short and medium term consultants;

Management and coordination of local team members, international and national consultants;

Inputs into overall coordination of the ENPARD programme;

Support the MoA in further strengthening an effective donor coordination mechanism;

General promotion and representation of the Project, objectives, outputs and results throughout Georgia and at regional and international forums;

Responsibility for overall preparation, quality and timeliness of inception, progress and final reports;

Presentations to any Project steering group established to oversee project progress;

Facilitate that the Project objectives and outputs are satisfactorily achieved;

Other duties as required.


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Terms of Reference Title: National Policy Advisor – Data Management and Statistics (to be fully funded by the Project during 3 years) General Description of task(s) and objectives to be achieved The National Policy Advisor shall operate under the overall guidance and responsibility of the FAO Representative in Georgia; direct supervision of the National Technical Advisor for Outcome 1, and in close collaboration with the ENPARD Coordinator, the Technical Advisor for the Project as well as other international and national consultants, FAO Representation Office and Ministry of Agriculture (MoA) officers in Georgia

Duties and responsibilities

Participate in functioning of a policy analysis/advisory mechanism relying on the relevant departmental resources of the Ministry;

Participate in identification of the priority areas for policy intervention by setting up the relevant information gathering/analysis/presentation mechanism based on the criteria of relevance, reasonability, efficiency, and short and long term policy implications;

Participate in preparation of position papers on selected subjects at the request of the Minister, as well as in relation to the strategic directions outlined by the Strategy and Action Plan;

Participate in determination of content, periodicity, and users of agricultural outlooks to be produced by the Ministry of Agriculture of Georgia;

Identify the existing data sources within the MoA systems and relevant providers of agricultural development related information outside the MoA (statistical, administrative, monitoring, own sources, and etc) and match these with the MoA needs for the purpose of elimination of overlapping and duplications, identification of data gaps and design the plans for action thereof;

In consultation with the data providers within the MoA system and outside if (notably, GEOSTAT) develop the structure and methodology for data warehouse comprising the historical and forecast information necessary for improved agricultural policy making and related to resources, production, trade, technologies, and etc;

Contribute to developing of an action plan for operationalization and running of the data warehouse, as it relates, inter alia, to creation of data extraction, analysis, and dissemination mechanisms and calendar;

Participate in development of mechanisms for improvement of data collection and analysis systems in the MoA and in liaising with the representatives of the MoA departments, and in determining the capacity building needs and drafting the relevant technical support measures by the Project;

Assist the MoA in planning and execution of the human resources skills and capacities upgrade and training programs by means establishing the concept for sustainability of training programs, their content, regularity, and budget;

Assist the MoA and the its agencies in the process of policy institutional policy formulation, implementation and performance monitoring in relation to specific value chain activities;



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Terms of Reference Title: National Policy Advisor – Value Chain Development (to be fully funded by the Project during 3 years) General Description of task(s) and objectives to be achieved The National Policy Advisor shall operate under the overall guidance and responsibility of the FAO Representative in Georgia; direct supervision of the National Technical Advisor for Outcome 1, and in close collaboration with the ENPARD Coordinator, the Technical Advisor for the Project as well as other international and national consultants, FAO Representation Office and Ministry of Agriculture (MoA) officers in Georgia

Duties and responsibilities

Participate in functioning of a policy analysis/advisory mechanism relying on the relevant departmental resources of the Ministry;

Participate in identification of the priority areas for policy intervention by setting up the relevant information gathering/analysis/presentation mechanism based on the criteria of relevance, reasonability, efficiency, and short and long term policy implications;

Work with the MoA and its agencies, governmental entities, donor organizations, representatives of the private sector, farming organizations, local and international investors for the purpose of elaboration of schemes for encouraging innovative economic growth among the small farmers and small scale agribusiness entrepreneurs, as well as studying the competitiveness of the selected Georgian agricultural value chains, including high value adding agriculture, for the purpose of development of specific policy recommendations for actionable reforms for the MoA;

Assist MoA and the its agencies in the process of policy institutional policy formulation, implementation and performance monitoring in relation to specific value chain activities;

Participate in preparation of position papers on selected subjects at the request of the Minister, as well as in relation to the strategic directions outlined by the Strategy and Action Plan;

Assist the MoA in planning and execution of the human resources skills and capacities upgrade and training programs, including participation of other relevant stakeholders;

Help and guide the Project team in terms of development of methodological framework for the Value chain studies including information and data sources, timing, logistics, budget, human resources requirements and the output of specific value chain studies;

Help and guide the team in terms of reaching the relevant key international sources of qualitative and quantitative information necessary for drawing conclusions as to the global and specific competitiveness trends and patterns relevant to value chains identified;

Participate in development of identified value chains focused on competitiveness and actionable changes that can be implemented by the private sector with the support of the government for strengthening their competitive position;

Serve as a key peer reviewer to the drafts developed by the team and recommend the external peer review when and if required;

Participate in functioning of a policy analysis/advisory mechanism relying on the relevant departmental resources of the MoA;

Participate in identification of policy areas related to value chains development with a potential of quick gains by means of innovative and pragmatic policy interventions;

Support the Ministry and project in implementation of the policy recommendation regarding value chain development



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Terms of Reference Title: National Communications Consultant (to be fully funded by the Project during 3 years) General Description of task(s) and objectives to be achieved: Under the overall and direct supervision of Assistant FAO Representative in Georgia, under the technical guidance of the Communications Officer (REU) and in close collaboration with the ENPARD Coordinator for FAO ENPARD Projects in Georgia, the rest of the Project team and other staff of FAO Representation, the National Communications Consultant will: Duties and responsibilities

Undertake all information and communication work related to the technical assistance of ENPARD projects and the related work of the FAO Country Office in Georgia;

Further develop overall communication and visibility action plans for all activities based on consultations with relevant staff at the country as well as regional level;

Ensure appropriate visibility of FAO and its resource partners in line with relevant visibility requirements and guidelines;

Create regular news outlets (press releases, news stories, newsletters) of various formats (electronic, printed, web) and disseminate to stakeholders (FAO globally, donors, government, media, partners) through appropriate channels (TV, radio, social networks, web-pages, etc.);

Distribute various articles, news releases, reports, multimedia materials from regional office as well as FAO headquarters to local stakeholders;

Assist in development of video as well as photo materials covering FAO activities in Georgia and maintaining relevant video and photo library;

Serve as a focal point for local and international media, facilitate field visits of media to FAO projects;

Create various information packages for media and arrange opportunities for educating them on the issues of agriculture;

Participate in planning and organizing of public events (conferences, presentations, trainings, visits of officials, field visits, etc.) to ensure consistency of messages, quality of events, and visibility;

Work closely with FAO staff to draw ideas on new communication-related activities and initiatives;

Provide guidelines to local staff on how to deal with media and ensure consistency of messages, provide advice in case of various media-related cases;

Ensure regular media monitoring and report on impact of FAO media outreach in Georgia



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Terms of Reference Title: Regional Grant Coordinators (two positions) (to be fully funded by the Project during the Project implementation period) General Description of task(s) and objectives to be achieved The Regional Grant Coordinators shall operate under the overall guidance and responsibility of the FAO Representative in Georgia; direct supervision of the ENPARD Coordinator, and in close collaboration with the Technical Advisor for the Project as well as other international and national consultants, FAO Representation Office and Ministry of Agriculture (MoA) officers in Georgia Duties and responsibilities

Oversee and coordinate the implementation of the various activities on the grant component under Outputs 2.1. and 2.2.; with a focus on individual investments under Output 2.1.

Participate in data collection and analysis for the baseline assessment, as well as monitoring of indicators during the Project’s formulation

Support the training and capacity development activities for the implementing partners in charge of grant applications;

Liaise with implementing partners on behalf of the Project, and monitor and evaluate the performance of implementing partners;

Support the implementing partners in the launch of applications (Including the awareness campaign), as well as in the reception, screening and evaluation of the received proposals for investments;

Participate in project baseline and impact assessment surveys and evaluation;

Participate in inspections and evaluations of investments been co-funded by the Project;

Support mechanism and provide guidance and capacity development for the implementing partners;

Ensure effective liaison with local and national authorities, key partners, and stakeholders on a regular basis;

Support the preparation of project reports and briefs and review;

Prepare, monitor and revise work plans, guidelines and budgets;

Prepare Monthly Activity Report of activities and outputs.



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Terms of Reference Title: Municipal Investment Coordinator (to be fully funded by the Project during the Project implementation period) General Description of task(s) and objectives to be achieved The Municipal Investment Coordinator shall operate under the overall guidance and responsibility of the FAO Representative in Georgia; direct supervision of the ENPARD Coordinator, and in close collaboration with the Technical Advisor for the Project as well as other international and national consultants, FAO Representation Office and Ministry of Agriculture (MoA) officers in Georgia Duties and responsibilities

Oversee and coordinate the implementation of the various activities on the grant component under Outputs 2.1. and 2.2, with a focus on municipal investments under Output 2.2.

Participate in data collection and analysis for the baseline assessment and municipal profiles, as well as monitoring of indicators during the Project’s formulation

Support the Project’s implementers in the selection of municipal priorities for investments in agriculture related sectors of municipal/collective interest

Liaise with implementing partners on behalf of the Project, and monitor and evaluate the performance of the work done by the implementing partners;

Participate in project baseline and impact assessment surveys and evaluation;

Liaise with other FAO project team members and technical officers in order to provide technical assessment of the proposed municipal investments,

Participate in inspections and evaluations of municipal investments been co-funded by the Project;

Support mechanisms to coordinate and provide guidance and capacity development for the implementing partners;

Ensure effective liaison with local and national authorities, key partners, and stakeholders on a regular basis;

Support the preparation of project reports and briefs and review;

Prepare, monitor and revise work plans, guidelines and budgets;

Prepare Monthly Activity Report of activities and outputs.



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Terms of Reference Title: National Consultants on Extension (two positions) (to be fully funded by the Project during the Project implementation period) General Description of task(s) and objectives to be achieved The National Consultants on Extension shall operate under the overall guidance and responsibility of the FAO Representative in Georgia; direct supervision of the ENPARD Coordinator, and in close collaboration with the Technical Advisor for the Project as well as other international and national consultants, FAO Representation Office and Ministry of Agriculture (MoA) officers in Georgia Duties and responsibilities

Participate in identification and selection of 3-4 municipalities for implementation of pilot activities of the Draft National Strategy for Agricultural Extension 2017-2019;

Define the package of activities per municipality and workplan to allow for the implementation of the pilots, including availability of necessary human resources and infrastructure in the area of concern, logistics, and other supportive factors;

Take part in planning and implantation in field activities related to dissemination of information to farmers and using resources for interacting with them through group work, mass campaigns, individual activities, and etc. when required;

Take part in planning and implementation of demonstration activities as decided by project team for each municipality concerned relying on the resources available locally and in cooperation with the ICC-s, donor and farmer organization, as well as private sector for the purpose of ensuring the maximum possible coverage of farmers and uptake of products channelled to them through the piloting activities;

Work on a regular basis with the selected MoA ICC personnel for the purpose of ensuring their maximum participation in planning and implementation of the pilot activities;

Ensure maximum synergy of operations with team members working in related functional areas such as climate smart agriculture, media extension, value chain analysis;

Define means of dissemination of the relevant information taking into consideration various media means such as TV, Radio, local and nationwide newspapers, printed material, video material dissemination facilities, internet media and mobile phone connection;

Take part in and subsequently monitor the group advice activities including the methodology for groups selection and effective and efficient means of transferring the extension information and maximization of spillover effects of the group activities;

Take active part in designing and application of special forms aimed at assessing performance of the extension information dissemination activities for the purpose of generating feedback and improving the means of dissemination;

Work on comparative analytical assessment of results of extension information dissemination activities across the municipalities and areas of application for the purpose of improvement of subsequent operations and generation of recommendations for rolling over of the piloting results;

Take part in identifying the key training needs of the ICC and other related personnel for the purpose of feeding into the tailor made training plans for improvement of qualification of the personnel;

Participation in designing of promotional activities and events targeted at identification of successful farmers;



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Terms of Reference Title: Project Assistant (to be fully funded by the Project during 3 years) General Description of task(s) and objectives to be achieved The Project Assistant will operate under the overall and direct supervision of the Assistant FAO Representative for Georgia, under daily supervision and responsibility of the Programme Manager, and in close collaboration with project and administrative staff of the FAO Representation in Georgia. Duties and Responsibilities

Maintain a filing system of relevant administrative and financial documents.

Prepare routine correspondence; draft communications, invitations, letters, etc.

Participate in the task force meetings and support in reporting and preparation of minutes.

Provide logistical support to missions of international/national consultants and experts.

Initiate all travel actions; provide logistical support in finding flights and accommodations.

Regularly monitor submission of travel expenses claims; assist in collecting proof documents from travellers and verifying their quality; systematically monitor status of mission files (including payments and recoveries) and apply relevant follow-up action if required.

Initiate all recruitment actions (recruitment, extensions, funding changes, etc.) and ensure accurate and timely submission of documents for finalization of contracts for national and international human resources.

Perform other related functions as required.


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Terms of Reference Title: Drivers (two full time positions paid during the full duration of the Project – for the full duration of the project ) General Description of task(s) and objectives to be achieved Under the overall responsibility and supervision of the Assistant FAO Representative in Georgia and the direct supervision of the ENPARD Coordinator, the Driver provides reliable and safe driving services ensuring high accuracy of work. The Driver demonstrates a client-oriented approach, high sense of responsibility, courtesy, tact and the ability to work with people of different national and cultural backgrounds. The Driver provides driving services to the FAO national staff and FAO international staff on mission. Duties and responsibilities

Ensures provision of reliable and secure driving services by a) driving office vehicles for the transport of authorized personnel and delivery and collection of mail, documents, procurement items, etc and b) meeting official personnel and visitors at the airport, visa and customs formalities arrangement when required.

Ensures cost-savings through proper use of vehicle through accurate maintenance of daily vehicle logs, provision of inputs to preparation of the vehicle maintenance plans and reports.

Ensures proper day-to-day maintenance of the assigned vehicle through timely minor repairs, arrangements for major repairs, timely changes of oil, check of tires, brakes, car washing, etc.

Ensures availability of all the required documents/supplies including vehicle insurance, vehicle logs, office directory, map of the city/country, first aid kit, necessary spare parts.

Ensures that all immediate actions required by rules and regulations are taken in case of involvement in accidents.

Any other duties as required by Supervisor.


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ANNEX 5: SIMPLIFIED COST OPTIONS APPLIED BY FAO: STAFF COSTS AND OFFICE COSTS UNDER PAGODA

1. Description of staff cost accounting at FAO, prepared in accordance with EC

guidance on simplified cost options for such expenditure under Pillar Assessed

Grant/ Delegation Agreements (PAGoDA)

Background

FAO applies the UN Common System of entitlements i.e. salaries, allowance and benefits, for

all staff, irrespective of funding source. It should be noted that the effect of this is that, since

rates of pay and of allowance and benefits are set centrally for the entire UN, they are not

under the control of the Organization. It should also be noted that their accountable cost in

USD is also largely outside the Organization’s control e.g. the US Dollar cost of project staff

salaries will vary in in some degree, often in large degree, with the movement of the

exchange rate of country of the duty station against the US Dollar. Unit staff costs charged

are thus likely to change, sometimes very considerably, over the course of a project.

Staff costs – recurrent and non-recurrent elements

Staff costs may broadly be classified as arising in one of two ways:

From so-called ‘recurrent’ pay elements, processed through the monthly payroll:

salary, mobility and hardship allowance, rental subsidy etc., as detailed on the

monthly pay status and payable to the staff member; and medical insurance and

pension fund contributions made by FAO

From ‘non-recurrent’ pay elements, processed either as other staff entitlements are

paid, usually outside the monthly payroll, or as such entitlements are earned through

qualifying service. Installation allowance on re-location and education grant

payments for eligible children are examples of the former; charges to fund the

eventual payment of repatriation grants to separating staff on their return to their

home country or to fund FAO’s obligation to contribute to the eventual after-service

medical costs of qualifying retired staff, are examples of the latter.

Note: a ‘non-recurrent’ pay element might in fact be paid through the monthly payroll,

e.g. children allowances, but this does not change the accounting treatment described

above.

FAO accounts for staff costs chargeable to projects in two ways, both to be considered

simplified cost options under PAGoDA, as follows.

As standard unit staff costs, applicable for staff employed under its core budget or

Regular Programme (RP), funded from assessed contributions of its members;

As modified standard unit staff costs, applicable for staff on projects funded by

voluntary funds from donors - so-called Extra-Budgetary Funds (EB), comprising

Trust Funds and UNDP funds.


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Regular Programme (RP) – Standard Cost Accounting

Staff employed under the Regular Programme (RP) may also do work for European Union (or

other EB) projects, whether through a period of assignment or for provision of technical

support service (TSS - chargeable at daily rates) based on the RP standard staff costs.

Accordingly, this method of staff cost accounting is also being presented for EC certification

– see note on this below. These standard staff costs are derived as follows.

The budget for Regular Programme staff costs and related charges are based on average

total staff costs by grade and major location for the biennium concerned. Accordingly, all

costs and charges arising for RP staff, whether from the monthly payroll recurrent pay

elements or non-recurrent pay elements, are charged to the designated ‘Staff Cost Variance

(SCV) Account’ for the grade and location. With each month’s payroll, the standard unit staff

costs (as set during budget preparation for the biennium in course) are charged to the

budgets of RP units and credited to the appropriate SCV account. Differences on SCV

accounts at period end between total costs and credits, are distributed in proportion to total

payroll charges made throughout the period.

Extra-Budgetary Funds (EB) – Modified Standard Cost Accounting

Staff cost budgets and related charges for projects funded from extra-budgetary (also called

donor funds or voluntary contributions), are based on:

Actual recurrent’ payroll costs, as reflected in monthly salary payments and FAO

monthly contributions towards social security schemes viz. Pension Fund and medical

insurance scheme

A percentage ‘uplift’ calculated on the basis of the amount needed to cover the

balance of costs outstanding on the Cost Collection/ Staff Cost Variance (SCV)

Account, to which the cost of all ‘non-recurrent’ staff entitlements is charged. The

percentage so calculated is applied each month to each ‘recurrent’ element of

monthly payroll processing. (As mentioned above, some ‘non-recurrent’ pay

elements e.g. child allowances, are paid through the monthly payroll but their cost is

included in the ‘uplift’ calculation).

Just as for the RP, differences at year-end between total costs so charged and

recoveries from the standard unit staff costs charged through the monthly payroll

and credited to the SCV, are distributed in proportion to total charges made

throughout the year.

Preparation of staff costs estimates for inclusion in project budget

Amounts budgeted for project staff inevitably reflect experience of average staff costs:

details of prospective actual costs could be known only after staff recruitment or

assignment, not at the time of project and budget formulation. Estimating and charging staff

costs on the simplified bases used by FAO provide greater certainty and lead to lower levels

of budget variance than would the charging of all costs at actual.


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Certification of FAO’s simplified staff cost accounting methods

Comprehensive documentation of FAO’s methods of simplified staff cost accounting is under

preparation, for purposes of review and certification under the provisions of PAGoDA and

Commission Decision C (2016) 3631 dated 16.6.2016. In this regard it should be noted that

DEVCO have signaled acceptance of FAO’s use of simplified staff costing practices under pre-

PAGoDA agreements, subject to their consistent and equitable application (Note from Mr.

Sarazin, R.3 dated 21/11/2016). It is accordingly to be expected that certification of the same

methods, to be applied for projects under PAGoDA agreements, will be duly forthcoming

later this year.

It should be noted that if there were eventually to be modifications to FAO’s simplified staff

cost accounting in connection with the certification process, these would be duly considered

for projects affected. In this regard, FAO recognizes that reimbursement of such costs (as

distinct from their pre-financing), would be based on simplified staff cost accounting as

eventually certified.

2. Simplified cost options for FAO office costs: description prepared in accordance with

EC guidance for use in preparing estimates and charging such costs under PAGoDA

Agreements

Accounting for FAO office costs, usually applicable to projects in the field, will typically

reflect a mix of actual charges for costs wholly incurred for the Project concerned and

charges on account of shared office costs. Under the provisions of PAGoDA and related

guidance, in particular Commission Decision C (2016) 3634 dated 16.6.2016, allocations of

shared or common office costs is acceptable under stated conditions, essentially designed to

ensure that such allocations are equitable and applied in a consistent manner.

The degree in which office costs may be directly or wholly incurred for a project or subject to

allocation, will vary largely according to local arrangements, though there are certain

standard elements. One such is the so-called Improved Cost Recovery Uplift (ICRU),

applicable to projects since 2014.

Under ICRU, percentage rates are applied to the cost of project staff and consultants, to

cover the cost of Information Technology Services provided and of the cost of Headquarters-

administered Security Services applicable to field offices. These percentage charges are

calculated to recover all the related costs actually incurred to provide the services in

question, with Regional variation in the case of Security Service costs. The costs incurred and

credits arising from the percentage charges made each month are recorded in separate

accounts. Those accounts are subject to periodic review and re-assessment of the level of

the percentage charges needed to cover the underlying costs incurred.

It should be noted that, while ICRU costs are calculated on the basis of the related staff and

consultant costs, they are in nature general operating expenses (GOE) and should be

budgeted accordingly.


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In the present case, the estimated cost of office consumables has been based on the

proportion of office staff months estimated to be attributable to the Project. Changes in

attributable staff numbers during the life of the Project, might alter the actual costs

allocated, though that would depend on actual unit consumption of the consumables

concerned. In this regard it is to be borne in mind that the purpose of simplified cost options

is to reduce transaction costs. For expenditure of relatively modest amount allocated on a

basis that is considered reasonable, it would be counter-productive to seek a high level of

precision.


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ANNEX 6: Communication and Visibility Plan

Communication and visibility will be organized by FAO in coordination with the European Union Delegation (and the ENPARD Communication Unit) and with the Ministry of Agriculture and other institutions involved in the implementation of the Project, in accordance with the orientation of the “Communication and Visibility Manual for European Union External Actions" (http://ec.europa.eu/europeaid/ work/visibility/index_en.htm.), as well as the recently developed communication guidelines for European Union projects in Georgia.

Within 30 days from the start of the Project, FAO will submit a Communication and Visibility Plan, which will comprise two separate parts:

A. Communication to raise public awareness and ensure full visibility of the EU’s leading role in promoting rural development in Georgia, and communicating successful cooperation between the European Union and FAO in working together towards enhancing rural development policies and achieving results within the project.

B. Communication to raise awareness of the Project’s rationale, objectives and activities to facilitate its implementation. Since the collaboration of farmers will be fundamental for acceptance of the Project results, this component of the communication plan will be aimed at raising awareness amongst farmers on certain issues, such as Climate-Smart Agriculture, in close coordination with the work being done through extension services. Most of the activities of information and outreach have been already explained under the Activity 2.1.6.

The Communication and Visibility plan will raise awareness on EU’s leading role in promoting rural development in Georgia, and communicating successful cooperation between the EU and FAO in working together towards enhancing rural development policies and achieving results within the project.

Part of the plan will involve a visibility strategy to ensure that the results achieved by the Project receive the widest possible dissemination. This will include communication actions within the country (TV, radio, internet, printed press, etc.) as well as internationally through media outreach, social media, UN Georgia website, ENPARD (www.enpard.ge) and FAO´s own websites (www.fao.org/Europe, www.fao.org/georgia). FAO will issue monthly newsletters with articles about the Project´s activities. Media outreach will be coordinated with key moments such as inception of the Project, meetings, training sessions, workshops, delivery of media worthy support to end beneficiaries, as well as human interest stories and success stories.

In all phases of project implementation, communication and visibility will be in compliance with European Union Delegation visibility guidelines. European Union visibility will be ensured for all activities supported with the project funds and any written output will give priority focus on the European Union support to the initiative. The visual identity of the project will be based on the branding standards agreed in advance with the EU Delegation in Georgia.

http://ec.europa.eu/europeaid/%20work/visibility/index_en.htm

http://www.fao.org/georgia