RFI-114-23-00001 USAID Georgia Agricultural Trade Program.pdf

29, Georgian-American Friendship Avenue Tbilisi 0131, Georgia Tel: (995 32) 254 4000 Fax: (995 32) 254 4145 georgia.usaid.gov

SUBJECT: Request for Information: USAID/Georgia Agricultural Trade Program

ISSUANCE DATE: November 15, 2022

CLOSING DATE: December 6, 2022

CLOSING TIME: 10 a.m. Tbilisi Time

DOCUMENT NUMBER: RFI-114-23-00001 – USAID Georgia Agricultural Trade Program

TO: General Public

The United States Agency for International Development (USAID) is seeking comments and responses from interested parties to questions regarding a potential new activity as described in the following pages. The purpose of this Request for Information (RFI) is to conduct market research, determine the interest of capable organizations to provide USAID/Georgia with technical and advisory services, and request comments and recommendations from stakeholders to identify ways we can work together to improve the capacity of Georgian agricultural enterprises to access export markets, while reducing their environmental footprint.

This is an RFI, not a Solicitation or Request for Proposals. It is not a commitment by the US Government to issue any solicitation or ultimately award a contract on the basis of this RFI nor does it commit the Government to pay for any costs incurred in the preparation or submission of any comments.

Any funding proposals submitted in response to this request will not be considered. Responses to this notice must be received no later than the due date and time stated above in this notice. All materials submitted will become the property of the US Agency for International Development (USAID) and will not be returned.

USAID reserves the right to use information provided by respondents for USAID’s own purposes. While it is not the intention to make public any response to this RFI, proprietary and sensitive information should not be sent.

Further note that responding to this RFI will not give any advantage to any organization in any subsequent procurement.

Sincerely, //s//

Samuel Kraegel

Contracting Officer, USAID/Caucasus

Response Considerations

All responses to this notice must be in English and should include the following:

1. Cover page not to exceed one (1) page including:

a. Organization name and address;

b. Point of contact name, telephone number and e-mail address;

c. Organization Business type and status – US-based, International, Local (Georgian); For-Profit/Not-For-

Profit; Small, Medium, Large; etc.

2. Responses to Questions/other comments and suggestions (no page limit)

a. Organizations are invited to respond to any/all questions listed in “Attachment 2 - Questions” and provide any other comments or suggestions they may have pertaining to the information included in this notice.

Additional Notes/ Instructions

Responses to this RFI may be provided in Word or PDF format via email to: RCOcaucasus@usaid.gov no later than December 6, 2022, 10 AM Tbilisi Time.

mailto:RCOcaucasus@usaid.gov

Attachment 1 - Description and Problem Statement

Description

The purpose of this Request for Information (RFI) is to (a) provide a basic overview of the problem statement the USAID Agricultural Trade Program seeks to address, (b) determine the interest of capable organizations to provide USAID/Georgia with technical and advisory services, and (c) request comments and recommendations from stakeholders to identify ways we can work together to improve the capacity of Georgian agricultural enterprises to access export markets, while reducing their environmental footprint. The Agricultural Trade Program will support USAID/Georgia’s strategy to increase the competitiveness of Georgia’s key economic sectors through improved access to diverse, high-value markets.

Preliminary Problem Statement

Agriculture, particularly export oriented crops, remains an important contributor to Georgia’s GDP. The sector also provides an important safety net for the over 40 percent of Georgia’s population that live in rural areas, while commercial farming remains underdeveloped. Despite Georgia’s fertile soil and favorable climatic conditions, modern, high-value agriculture has yet to reach its full potential to contribute to Georgia’s post-independence economic growth.

Like other post-Soviet countries, Georgia maintains close trade ties to Russia. Agricultural commodities account for three out of the four biggest exports to Russia. Over 70% of Georgia’s fresh produce and 60% of wine are exported to Russia, making the agricultural sector highly vulnerable to Russian malign influence. Conversely, Georgia remains heavily reliant on imports from Russia and neighboring countries. In 2021, over 52% of all imports came from just three countries: Russia, Ukraine, and Turkey. Given this dependence, Georgia’s agricultural sector was previously a frequent target of politically motivated embargoes by Russia.

This history of economic dependence and retaliation has made export diversification a high priority for the Georgian government. The country has made some progress, with great emphasis placed on finding new markets for wine and other fresh products. Nevertheless, agricultural markets have yet to develop broad resilience to shocks in trade with Russia. Coupled with lingering effects from the COVID-19 pandemic, Russia’s invasion of Ukraine and the influx of migrants to Georgia have increased inflationary pressures on the economy, which are highly visible in increased food costs.

While Georgia’s desire to seek greater integration with the West, along with a basic realization that it is not wise to over rely on one or two particular markets, has led to increased diversification of import and export markets over the past 10 years, it will not be enough to insulate the country from broader economic pressures resulting from Russia’s war in Ukraine. Agricultural markets will be particularly vulnerable, given their outsized reliance on Russia.

In addition to the significant geopolitical challenges, Georgia’s export-oriented agricultural sector must also adapt to increased market demand for environmentally friendly production and processing, and the need to plan for increased climatic variability. The effects of the already ongoing change and increased intensity of climate events has already resulted in significant loss of life and livelihood, and the creation of internally-displaced eco-migrants.

In the agriculture sector, anticipated changes range from movement and disappearance of agri-climatic zones, reductions in crop productivity due to both to extreme weather events and rising nighttime temperatures, land fertility reduction, and reduced availability of and increased competition for agricultural water resources.

As a result, the Georgian agriculture sector is dependent on a few markets, with limited assortment of new market-oriented products, limited capacity of exporters to connect high-value markets, underdeveloped market systems and infrastructure, and significant environmental footprint, all of which interfere with the agriculture sector’s ability to grow economically, provide high value employment, and meet international commitments for climate change. It is these intertwined challenges that the potential USAID/Georgia Agricultural Trade Program seeks to address.

Guiding Principles

The project will build upon the previous U.S. Government, Government of Georgia (GoG), and other donor-supported achievements in agricultural development and economic growth in Georgia. USAID/Georgia works closely with the Ministry of Environmental Protection and Agriculture, the Ministry of Economy and Sustainable

Development, and other GoG agencies with a mandate to contribute to development of the new export markets for fresh and processed food products from Georgia (including wine). Activities and interventions within the scope of the Agricultural Trade Program should be aligned with the Agriculture Development Strategy 2021- 2027. Agriculture export market development is supported by other donors; the Agricultural Trade Program should leverage and complement other donor investments in the sector, including building upon USAID/Georgia’s extensive investments and lessons learned in agriculture. Current USAID/Georgia programming has demonstrated that opportunities are ripe for sustained private sector engagement in agriculture.

Co-creating solutions with private sector partners are critical to unlock private resources and help businesses diversify export markets. Cost-shared grants are an effective mechanism to help the private sector improve infrastructure and access modern technology needed to reach export markets.

To adequately respond to Georgia’s interwoven geopolitical and climate threats, economic development planning must align with climate resilient sector strategies, including Georgia’s 2030 Climate Change Strategy and the Agriculture Sector National Adaptation Plan for Climate Change (AgriNAP). Significant co-investments to reduce the environmental footprint of agriculture and agribusiness in partnership with the Georgian government, private sector, and other partners is necessary to future-proof Georgia’s agriculture sector against the changing climate

The intended project will support activities nationwide in Georgia and the budget is anticipated to be up to $30 million over five years. The anticipated program will support USAID/Georgia’s Strategic Development Objective 3- Inclusive High Value Employment Opportunities Provided Through Expanded Access to Diverse, High-Value Markets (found at https://www.usaid.gov/georgia/cdcs).

Objectives

The USAID Agricultural Trade Program aims to strengthen Georgia’s capacity to sustainability export to high-value markets. The Program will support export diversification, strengthen local agricultural market systems in

Georgia, and attract new private investment into the sector. The overarching objectives of the Program are as follows:

● Increased market linkages with non-malign markets, with a specific focus on reducing dependence on the

Russian market;

● Improved capacity of agricultural enterprises to access export markets, including compliance with international standards and improving or establishing export-oriented infrastructure for agricultural goods; and,

● Strengthened climate-responsive food and agricultural systems.

Theory of Change: IF we increase market linkages with high-value, diverse, non-malign markets, IF we build market systems, creating sufficient modern, sustainable agricultural infrastructure and support services, IF we build the capacity of firms to comply with internationally-recognized standards, and IF we strengthen climate-responsive and resilient food and agricultural systems, THEN Georgia’s capacity to sustainably export to strategic markets will be enhanced.

Illustrative Indicators

● Value of targeted agricultural exports going to identified strategic markets

● Percentage increase of targeted agricultural exports going to strategic markets

● Number and value of facilitated trade deals closed within strategic markets/countries

● Export percentage share from USAID beneficiaries (value and volume)

● Value and volume of Georgian goods that meet international market standards

● Value of new domestic and foreign investment mobilized in agriculture as a result of USG assistance

(debt/equity, public/private)

● Value of export and domestic sales of USG-assisted agribusinesses

● Number of high value jobs (off farm) created with USG assistance

● Reduced GHG emissions from agricultural enterprises and through support for systemic change as a result of USG assistance

Attachment 2 - Questions

USAID seeks input, comments, and recommendations on any or all of the following questions below. This is not a formal question period; therefore, USAID will not be providing responses. The USAID design team will review all comments and questions and use them to inform the further design and development of the activity.

● USAID is considering using the Statement of Objectives (SOO) model for this procurement to encourage innovation and creative approaches to achieving the stated objectives. However, USAID is willing to reconsider its approach based on the feedback received through this RFI. Would you recommend the use of a SOO or Statement of Work (SOW) and why?

● Do you have any recommendations for improving the high level objectives? Given the problem statement, what types of interventions would you propose to achieve the stated objectives?

● What type of production-level support is needed to help Georgian agribusinesses reach export markets?

● Logistical constraints and poor infrastructure impede the ability of Georgian producers to efficiently get perishable goods to export markets. Where do you see the biggest gaps in Georgia’s existing logistics infrastructure for agricultural goods? What is needed to help address these gaps?

● How can long-term private sector partnerships be built into activities developed by the program? What is the level of interest from the Georgian private sector in playing a central role in Program activities?

● What are potential approaches to strengthening climate-responsive and resilient food and agricultural systems in Georgia? Are there successful examples adopted in development contexts similar to Georgia?

Explain why they worked and would work here.

● Are there illustrative indicators listed above that you would drop, change, or add? What indicators would you recommend for tracking the high-level results, outcomes, and impact?

Any other suggestions you may wish to offer that will improve program design and implementation are welcome.