ITC and Sweden partner with Ukraine to boost trade in fruit and vegetables

(Kherson, Ukraine) – Representatives from Ukraine’s Kherson, Mykolaiv and Odessa regions, the Ministry of Economic Development and Trade, the Government of Sweden and the International Trade Centre (ITC) today kicked off the implementation phase of ‘Linking Ukrainian SMEs in the Fruits and Vegetables Sector to Global and Domestic Markets and Value Chains’, a four-year project that aims to increase the competitiveness of agricultural produce.

Agricultural products currently account for 31.5% of Ukraine’s exports and 17% of GDP. In 2014 the Kherson, Mykolaiv, and Odessa regions contributed 25% to the total production of vegetables and cucurbitaceous crops such as squash, pumpkin, zucchini and watermelon. With its seaports and fertile agricultural land, the three regions have the potential to export high-quality agricultural products to demanding global markets, including the European Union.

However, agri-businesses, particularly small and medium-sized enterprises (SMEs), struggle to keep up with new and more demanding market requirements, especially those of the EU. SMEs lack knowledge of modern management skills and business practices, and the country’s trade and business support organizations (BSOs) have a limited capacity to offer business services needed by SMEs.

The need to meet such requirements has increased with the entry into force on 1 January 2016 of the Deep and Comprehensive Free Trade Agreement (DCFTA). Part of the Association Agreement between the EU and Ukraine, the DCFTA has opened up a raft of challenges and opportunities for Ukrainian SMEs.

The Swedish-funded ITC project is designed to help SMEs seize these new opportunities, enabling them to produce goods according to market demands. It will also strengthen the capacity of BSOs, allowing them to provide better services to their SME clients.

Andreas von Beckerath, Ambassador of Sweden to Ukraine, said that his country was looking forward to the implementation of the project. ‘I am very happy to see the Swedish embassy entering into this project with the support of ITC. We firmly believe that strengthening the capacities of Ukrainian agriculture SMEs and BSOs is a key component in the ongoing reforms, especially to unlock the full potential that the DCFTA offers. The choice to focus on the three southern regions of Odessa, Kherson and Mykolaiv further strengthens the Swedish effort to promote inclusive economic growth across Ukraine,’ he said.

Ashish Shah, ITC’s Director for Country Programmes, said: ‘The project will work with Ukrainian BSOs and strategic partners to increase the international competitiveness of SMEs in the fruits and vegetables sector, including value addition and help them to diversify markets, particularly to the EU.’

Nataliya Mykolska, Ukraine’s Deputy Minister of Economic Development and Trade, said: 'Export promotion is one of the major priorities of the Government for 2016. Thus, we appreciate all support related to promoting Ukrainian exports. This project is targeted at the regional level, reaching SMEs in the southern region. We believe that to boost Ukrainian exports, we need to work in the field and this project will help us to do so. Ukraine should be known not only as the breadbasket of Europe, but as the country growing the best vegetables and fruits'

As part of the project inception phase, ITC has in recent months held in-depth consultations with sector stakeholders to identify challenges and develop solutions. A series of roundtables organized in each region highlighted the opportunities in the international and domestic markets and the main challenges faced by fruit and vegetable producers and processors. This has led to the development of a roadmap, which will guide the project until 2019.

Andriy Hordeyev, Governor of the Kherson region, said: ‘The project has been initiated at the very right moment when our private sector faces challenges and needs guidance, so that companies can benefit the most from the opportunities that the DCFTA with the EU offers.’

Note for the Editor

About ITC - ITC is the joint agency of the World Trade Organization and the United Nations. ITC assists small and medium-sized enterprises in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade agenda and the United Nations’ Global Goals for Sustainable Development. For more information, visit www.intracen.org. Follow ITC on Twitter: @ITCnews