EU Assistance for Agriculture and Rural Development in Ukraine - Sector-Wide Approach Presentation

1. Delegation of the European Commission to Ukraine On-going and planned EU assistance related to agriculture and rural development in Ukraine(presentation of Sector-Wide Approach for Agriculture, Food Safety and Rural Development) Berlin, 4-5 May 2006 Natalya Korchakova Project manager, agriculture & rural development

2. On-going EU-funded agricultural projects in Ukraine AP 2001“Support toSMEsin the Rural Sector” (December 2003- August 2006). The project objective is to build up an effective cooperative system for rural SMEs based on existing credit unions and to develop tools and instruments, necessary for the establishment of cooperative banking. AP 2002“Improvement of Logistics Services and Marketing Channels for SMEs in Agriculture”(March 2005-December 2006). The project objective is to promote the rationalisation of marketing channels in particular for small farms. AP 2003 project “Improvement of Risk Management Capacity of Farmers and SMEs in Agriculture” (May 2005-May 2007).The project objective is to improve insurance services provided to farmers and SMEs and to enable private Ukrainian agricultural enterprises to minimize their risks and improve financial sustainability.

3. Recent EU projects in agriculture IBPP project“Reform on Agricultural Management” (completed in August 2004) IBPP project“Co-operation of Public Bodies with Civil Organizations in the Process of Agrarian Policy Formulation” (completed in December, 2005) AP 2001 project“Establishment of an Agricultural Standards Certification and Control Mechanism in Line with WTO-SPS Requirements” (October 2003-December 2005). Bistro project 2003 “Combating Counterfeit Plant Protection Products” (January 2005- January 2006). Bistro 2003 project“Development of Organic Farming in Ukraine” (May 2005- May 2006).

4. Planned EU project – Sector Wide Approach in food safety, market infrastructure and rural development Apx. budget - 9mln, duration - 3 years. Three main components: food safety, market infrastructure, rural development. Overall Objective The overall objective of the project is to implement Ukraine’s commitments under WTO and ENP framework. Specific Objective The specific objective of the programme is to develop a common framework approach and understanding of the priorities and issues in agriculture, food sector and rural areas

5. EU- Ukraine Policy Framework for application of SWAP in agriculture • National Indicative Programme: Section 1.1 Legal and administrative reform; Section 2“Support to the private sector and assistance for economic development”,Section 3 “Support to the development of social assistance policy and services targeting vulnerable groups” • European Neighbourhood Policy Action Plan Section 2.2. Economic and social reform and development; Section 2.3 Trade, market and regulatory reform. • Partnership Cooperation Agreement Article 60 agriculture and the agro-industrial sector, 63 environment, 70 regional development

6. Operational framework The Agriculture–SWAP is one of the components with value up to 9 mln of “Support to ENP Action Plan Implementation Programme ” (27 mln EUR) within a draft of the National Action Programme 2006 (100 mln). “Support to ENP Action Plan Implementation” Programme also covers the following components: • Preparation for ex-ante decentralised management of EC External assistance; • Competition Policy; • Twinning Operations.

7. SWAP is government–led approach Preparatory activities: Agreement with Ministry of Agricultural Policy (September, 2005) Agreement with vice-prime minister on agriculture (December, 2005) Agreement with stakeholders groups (line ministries, NGOs, researchers, private sector) (December, 2005).

8. Donor Cooperation in Ukraine(relevant to SWAP in agriculture) Increased donor coordination: • World Bank – market infrastructure and food safety; • CIDA- rural development; Under discussion: • German technical assistance- policy advice project; • FAO – policy advice project; • SIDA • IFC

9. What has been done? • Initiation of the discussion of a new sector-wide approach in agriculture (September, 2005); • Launching of the three-month preparatory project “Agriculture Sector Assessment in a View of Preparation of an EU-funded Agriculture Sector Programme in Ukraine” (October, 2005-December, 2005). The main project outcomes: • sector wide approach introduced to the government and main stakeholders; • the discussion paper drafted, widely discussed and revised into position paper; • SWAP project fiche drafted; • SWAP project fiche is integrated into “Support to ENP Action Plan Implementation” project within the National Action Programme 2006”(February, 2006) • “Support to ENP Action Plan Implementation” project is approved for funding by the Tacis Committee (March, 2006)

10. What will be done? • Launching of a new framework contract (150 000 EUR) to organise brainstorming sessions on the content of each component of the future SWAP-project: market infrastructure, food safety, rural development (May, 2006); • Re-confirm agreement about SWAP with new government of Ukraine and other stakeholders (May-June, 2006); • Finalise project fiche, (May-June, 2006); • Set modalities/conditionalities in coordination with other donors (June 2006); • Proceed with drafting of the terms of reference (July, 2006). • Project tendered ( 2007) and carried out (2007-2011)

11. Key message The successful application of sector-wide approach in agriculture depends on several key factors, amongst which, close donor cooperation and synergy. The Delegation invites other donors to find its niche in sector-wide approach project and join this initiative.