Linking  member organisations to domestic and international markets The goal of the project is to contribute to the reduction of rural poverty in Armenia through strengthened capacity of FAA member small farmers and their farmer organizations to engage in the market and other institutions having impact on rural development. The proposed activities through this project mainly focus on exploring linking FAA member FOs to markets through a variety of instruments.  The activities and the support to FAA member FOs in Armenia, will be to strengthen their access to markets, empower their members and build networks 
This project is complementary to project 5625 "Enhancing the Policy and Business Development Capacity of the FAA and its Member FOs", the Agriterra/Agricord funded part.

2013-2014
Focus these years will be on special services in order to investigate the financial management situation of FAA-ULE. This is based on a financial health check conducted in September 2012 which showed serious flaws in the financial management system. No project support is envisaged until the investigation is over and the results show that the financial management of FAA-ULE is OK.

2012
This new program proposed to IFAD will build upon the previous experience and complement other programs supporting the FAA in Armenia, in particular the “Enhancing the Policy and Business Development Capacity of the FAA and its Member FOs” proposed for funding by Agriterra.



Rational of the grant

This grant proposal falls under the third output of the IFAD grant policy: Capacity of partner institutions strengthened to deliver a range of services in support of poor rural people. 

The program responds to several specific recommendations of the 2010 Farmers’ Forum. 

In Armenia under component 3 of the program “Strengthening capacities of Farmers’ Organisations in relation with IFAD country programmes”, the proposed grant project will be exploring linking FAA member FOs to markets through a variety of instruments. IFAD’s strategy and investment projects in Armenia focus on boosting agricultural productivity and developing rural market economy. Smallholder’s farmers in Armenia have been facing a number of constraints that limit their capacity to access markets, increase their production and income and pull themselves out of poverty. They generally face problems linked to low productivity, lack of access to modern technology and finance, poor marketing skills and limited access to domestic and international markets.

In an environment where most of the agricultural output comes from small farms, the survival and prosperity of Armenian farmers depends on the realization of economies of scale in products collection and distribution and input acquisition to overcome a weak bargaining power in the market. In this context, The FAA can play an important role in realizing economies of scale, linking smallholder farmers to markets, accelerating adoption of technologies and inputs and articulating the voices of smallholder producers in policy-making and implementation processes from national to global levels. After the disintegration of the Former Soviet Union and the collapse of state collectives and cooperative marketing institutions, farmers have been expanding their activities and collaborating in producers associations (PAs), cooperatives and FOs. However, organizations of producers in Armenia still remain weak for a variety of reasons including limited management capacity, dependence on donor funds, generalized mistrust of collective action and provision of services to their members that are not consistent with the operation of a market-oriented economy and the increased role of private sector institutions. 

More specifically, in the Republic of Armenia the state of agriculture production is characterized by lack of agricultural equipment, lack of high quality agricultural inputs, rural credit in favorable terms, available technical assistance in different areas from farm management to modern agri-technological practices, and lack of market access opportunities for agricultural produce. However, the potential for agriculture to create economic, income and employment opportunities is greater than that of other sectors of the economy. In particular, according to the European Union’s pre-accession assistance, smallholder farmers would need to improve farming and processing technologies and align themselves to national and international accredited standards for operations, outputs produced and marketed and viability of facilities required. Especially in food production they would need to comply with European Union’s standards and therefore with the adoption of EurepGAP , HACCP, GlobalGap and ISO standards in order to be able to compete on markets and get better prices. 

IFAD and AgriCord share the conviction that only by working together smallholder farmers can break their isolation, enter additional markets and participate in the benefit of rural economic growth. Farmers' own organisations in Armenia, like the FAA can provide farm and business services, institutional access, confidence and voice to their members, but for this they need support to strengthen their capacities. The program purposely intends to build stronger FOs together with farmers in the rural areas of Armenia and contribute to alleviate rural poverty. The member of AgriCord ( Agriterra ) already works with the FAA in Armenia with a focus on market access. 


In all its components this grant program will generate synergies between IFAD country programmes and AgriCord’s large “Farmers Fighting Poverty” programme. The FAA that will be involved in this program belong to regional or global networks that have already a strong partnership with IFAD as participants in the Farmers’ Forum and with AgriCord as member of the IFAP Development Cooperation Committee.


Target Group

The main target group of the program comprises members farmers of the FAA and family farmers, men and women, directly or indirectly affiliated to FAA ULE that make specific efforts to include smallholders in a pro-poor development process in Armenia. 
 
On national level the FAA member FOs will be focused through AgriCord’s “Farmers Fighting Poverty” program, as a major but often neglected stakeholder in development processes. The FAA can service and advocate on behalf of their members and become significant sparring partners for the RA Government and IFAD country programs. 

FAA will bring together, in different configurations, producers organisations that range from community groups over cooperatives and regional bodies to commercial farmers embedded in commodity chains. The program will support the linking-up of local and district-level farmers’ initiatives to the activities of the FAA.


Objectives 

Goal

The goal of the project is to contribute to the reduction of rural poverty in Armenia through strengthened capacity of FAA member small farmers and their farmer organizations to engage in the market and other institutions having impact on rural development. The proposed activities through this project mainly focus on exploring linking FAA member FOs to markets through a variety of instruments.  The activities and the support to FAA member FOs in Armenia, will be to strengthen their access to markets, empower their members and build network with AgriCord agri-agencies  

Specific objectives/outcomes 


Improved market linkages can result in better prices for primary products and higher incomes for FAA smallholder farmers. Interventions in this area will also help to strengthen supply chains, ensuring that FAA member farmers have better access to related services such as animal breeders, veterinary services and financial services.
        The FAA will be linking FOs to domestic and international markets, increasing member FOs’ capacity to articulate members’ needs and executing their role vis-à-vis public institutions. The FAA member FOs are interested in capacity building through training, technical assistance and networks development that could help them to access European markets. The support will  be provided in the following areas and not only: local market development to develop and strengthen linkages between farmers, suppliers, processors and marketing agents; cooperative input purchasing scheme; institutional building. These areas of intervention have found a broad concurrence from some of the agri-agencies and could be matched by agri-agencies’ expertise and skills developed in the context of the FFP programme. 

       Trainings and capacity building will build and strengthen the technical capacities of FAA member FOs in different areas according to FOs’ needs and agri-agencies’ availability. The areas are: processing (process and product quality, product differentiation and market penetration, linkages), adoption of international accredited standards, agricultural production and marketing, business plan, investment proposal, accounting. Training and capacity building will develop FAA smallholder farmers’ skills and tools to participate in agriculture markets.

     Technical assistance will increase knowledge level and professional qualification of FAA member FOs’ and improve delivery of qualitative services to farmers to all levels. The introduction of new technologies and provision of advisory services will improve FAA smallholders’ capabilities and market access. 

       Horizontal exchanges between AgriCord’s agri-agencies and the FAA would facilitate the access of farmers to international innovative knowledge. Sharing knowledge mechanism will be envisioned according to the experience developed by the agri-agencies in supporting FAA. 

The objectives specific to each component are the following:
Component 1
•	Establishing farmer friendly database and information system on selected crops/products;
Component 2
•	Enhancing skills, knowledge and competence of 23 FAA member farmer leaders;
Component 3
•	Developing market intermediation system for FAA member small holder farmers;
Component 4
•	Establishing healthy partnership among various market players towards improved marketing arrangement benefiting small holder farmers;
	
These results will generate increases in production collection, storage, marketing facilities that will translate into higher incomes for FAA member smallholders involved in this program.

Activities and Outputs


Component 1 Establishing farmer friendly database and information system on selected crops/products
•	Mapping of market intermediation initiatives
•	Selection of a focused commodity 
•	Assessment of marketing capacity of small farmers organization
•	Conduct inventory of productive capacity of small farmer organization involved in the production of the selected commodity


Component 2 Enhancing skills, knowledge and competence of 23 FAA member farmer leaders;
•	Organize 6 National Training Workshops and 3 Regional Training Workshops
•	Organize cross-community exchange and learning visit.


Component 3 Developing market intermediation system for FAA member small holder farmers;
•	Build or identify and strengthening of appropriate market intermediation mechanism(s)
•	Consolidation and strengthening of farmers group based on common commodity through regular forum, trainings, exchanges etc.
•	Setting-up appropriate organizational systems and policies (e.g. Governance structure etc.)
•	Installation of effective and efficient enterprise development system for commodity-based farmers group
•	Participation in trade fairs

Component 4 Establishing healthy partnership among various market players towards improved marketing arrangement benefiting small holder farmers;
•	Formation of National Project Advisory Group and Technical Working Group
•	Conduct regular meetings
•	Provide technical advice to farmer groups and organizations involved in the project.
•	Conduct of forum/consultations with key industry players
•	Mobilization of expertise and technical resources



More specifically the project aims to deliver the following outputs:

•	Installed farmer-friendly market data-base and information system focused on selected crops as tool for decision making and negotiation on market related engagements of the FAA member and non member FOs;
•	Enhanced knowledge and skills of 23 FAA member farmer leaders on engaging small farmers with the market and managing on-ground marketing projects;
•	Strengthened and established Market Intermediation Mechanisms with direct involvement of FAA member Farmers' Organizations;
•	Established healthy partnership among various market players towards improved marketing arrangement benefiting small farmers;

The goal of the project is to contribute to the reduction of rural poverty in Armenia through strengthened capacity of FAA member small farmers and their farmer organizations to engage in the market and other institutions having impact on rural development.