Edward Seidler, Senior Officer, Marketing, AGSF

CEI Working Group on Agriculture, Rome, 22 May 2006

FAO’s Activities in Agricultural Marketing, Management and Finance

Central and Eastern Europe

Key issues for rural areas across CEE

• Lack of economic opportunity, low incomes and high levels of unemployment;

• Limited qualification levels of human capital and poorly developed management and commercial skills;

• Inadequate rural infrastructure;

• Lack of access to suitable rural finance and credit facilities for small to medium-sized enterprises (SMEs);

• Inadequate support for business in the form of information and mutual organization.

Challenges in Central and Eastern Europe

•Need to overcome difficulties in accessing markets due to lack of information and knowledge of market requirements, small volume and variable produce quality;

•The need to respond to international, national and industry food quality standards, vertical coordination and retail chain concentration by greater integration in the food supply chain;

•The need to become more competitive and efficient suppliers to combat imports and allow exports.

Trends

• Increasing diversification of farming activities into new products;

• Incomes from farming activities dependent on improving production, management and marketing skills and increasing intensification and scale of production;

• Increasing realisation that small producers benefit by grouping together for production support, input procurement and marketing.

Farm commercialisation and rural enterprise development

Pillars for FCRED

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Issues and constraints to FCRED

• Lack of strategic planning to address sector modernisation, consolidation and intensification in a sustainable way;

• Lack of market information, market analysis and appraisal, inadequate market research and promotion;

• Low level of credibility in contracts with producers and processors;

• Individuals and organizations have no experience of community activities;

• Need for a legal framework for farmers’ organizations and improved legislation on cooperatives;

Issues and constraints to FCRED

• Low competency of advisory services for rural business development;

• Limited availability of finance to underpin farm modernization and production intensification;

• Weak infrastructure for marketing and distribution- roads, markets and transport services;

Farm Business Management

• Stakeholder Workshops:i) Farm Commercialization and Income

Diversification on the Road to EU Accession Participants from Albania, Bulgaria, Croatia, Czech

Republic, Hungary, Romania, Slovakia and Slovenia

Key constraints identified: o lack of working capital and investment funds,o lack of appropriate managerial expertise and know-

how,o unstable market environmento poor and ineffective legislation (competition, contracts,

property rights and poor governance) ando inadequate economic infrastructure (roads, railways

and water supply).

Farm Business Management

• Trends and Issues in Commercial Farming, Agribusiness and Rural Enterprise Development - Experiences from Selected Central and Eastern European Countries , 2005

participants from Armenia, Hungary, Macedonia, Moldova, Serbia and Montenegro and Ukraine

Discussed: The declining role of Agriculture Restructuring of former state and cooperative

farms EU and CEE experience in vertical integration and

agri-food chain concentration and growing importance of scale economies

Field Projects

• Bulgaria- TCP Project “Capacity Building for Sustainable Delivery of Agribusiness Advice to Market-oriented Farmers:

• Provided training in: (i) farm business management and marketing (ii) farm management and marketing data

analysis, (iii) agribusiness management, (iv) group presentation and communication skills, (v) farm record keeping

FAO- CEI/EBRD Project (GCP/RER/014)

• CEI Wholesale Markets Foundation:• Project started in October 2001 to support the

functioning and activities of the CEIWMF• Membership comprises markets in Albania

(2),Croatia (3), Hungary, Romania and Poland;• Meetings have discussed:

Operation of Logistics PlatformsRegulatory Frameworks affecting MarketsDiversification of Market activitiesProduce Quality Enhancement and Export regulationsRole of markets in supporting producer groupsWholesale Market operations under EU Accession

FAO Projects (Marketing)

Albania: GCP/ALB/005- Agriculture Production Support(Integrated approach to food chain development): Supports development in: milk and dairy, fruits and

vegetables, wine and grape brandy and olive oil sectors:Provided support in:• Agronomy- new varieties, chemicals, protected

cultivation• Input supplies- planting materials, chemicals, farm

equipment• Group formation and development- management, rules,

finances, marketing arrangements• Processing improvement- milk and cheese, olive oil, wine• Business and Marketing plan preparation

OLIVE AND OIL CHAINOLIVE AND OIL CHAIN

• Most notable achievements include:• Two farmers’ association were formalized with 136 members,

owning 11,800 trees);• Various training and extension provided;• IPM campaign organized/conducted;• Olive pruning and sanitation conducted;• Infrastructure and technological renovation completed;• Improved quality of oil (bottled and labelled

FAO Projects ( Marketing)

• The Macedonia project GCP/MCD/001 (NOR):• linked farmers with processors and fresh buyers and

provided market and buyer requirements to farmers; • agreed quantities, deliveries; quality standards and

production levels between farmers and buyers;• provided farmers with the latest farming technology

and fertilizers and agro-chemicals on credit and arranged credit repayment through buyers;

• provided training, extension advice, agro chemical advice and pest control advice to farmers;

• advised farmers on EUROPGEP standards and compliance.

Rural Finance Study

• Undertaken in Romania and Bulgaria on behalf of EBRD:

• rapid appraisal and analysis of the supply of and demand for bank lending to small and medium sized enterprises (SME) in rural areas – for EBRD’s and the EU SME Finance Facility for small and medium-sized enterprises in EU Accession Countries.

• This facility aims at providing, through partner banks and leasing companies, finance to farms and other rural enterprises.

Thank you for your attention