A.1_AMA_SOO_revised.pdf

Attachment A.1

STATEMENT OF OBJECTIVES (SOO)

STATEMENT OF OBJECTIVES FOR AGRICULTURE MARKET ACTIVITY

C.1 SCOPE

The goal of the “Agriculture Market Activity” (AMA) is to increase trade and exports of Bosnia and

Herzegovina (BiH) food products with the aim of increasing economic growth and advancing BiH’s accession into the European Union (EU). The “Agriculture Market Activity” will be a five-year activity, jointly funded by United States Agency for International Development (USAID) and the Embassy of

Sweden/Sida in BiH.

The purpose of the activity is to 1) create agricultural and agri-business economic opportunities by assisting agricultural producer organizations (POs) in adopting European Union (EU) and international agricultural and food standards and new production techniques, producing new high-value products, and expanding domestic and international market access of producers, and 2) assist BiH government and public agencies to implement regulations related to food and agricultural products that meet EU and international requirements.

C.2 DEVELOPMENT HYPOTHESIS

The development hypothesis of this Activity is that if public institutions and the private sector effectively implement EU and international regulations related to food and agriculture production, processing and trade, then sales and exports of agricultural and food products will increase. This will create economic opportunities, especially in rural and peri-urban areas, and contribute to BiH’s economic growth and progress on EU Stabilization and Association Agreement (SAA) requirements.

In addressing the development question of whether the AMA activity has a focus on economic growth or has an explicit pro-poor approach, the answer is that the AMA activity focuses on economic growth metrics as opposed to poverty reduction metrics. Current development research stresses that inclusive economic growth is the force that has reduced extreme poverty sustainably and at scale. Without a growing, equitable economy which provides economic opportunity, incomes will not increase sufficiently to lift and keep individuals, families, and communities out of poverty. Specifically, promoting inclusive, country-led agriculture sector growth is among the most effective poverty-reducing tactics as fostering a secure and robust agricultural market ensures basic consumption needs, drives employment growth, builds and protects assets, and leads to healthier and more productive citizens

Producer Organization - The definition of “Producer organization” (PO) is considered from both a legal stance and a functional one. Specially, “Producer organizations” (POs) can be legally incorporated as (agricultural) associations, cooperatives, or for profit enterprise and can fulfill a range of functions within the agricultural value chain to include but not limited to: input supply, production, market integrator, storage, processing, marketing, branding, transport, export, technology transfer or any service provision needs or value-added activities. PO is defined as any non-profit or for-profit entity that a group of agricultural producers control to serve their interests as agricultural producers, as well as any such organization that may not be controlled by, but broadly serves the interest of agricultural producers. The definition of the PO provided in the SOO is unique to the AMA SOO, Again, to avoid any confusion, please note that an individual, privately owned agribusiness firm can be considered to be a “producer organization”. Also, please note whether a producer organization is registered as non-proft or for profit does not immediately (dis)qualify it as a commercially-oriented producer organizations, rather it is the type orientation

(commercial or not) of its production or processing operation.

2 Reference sources: USAID Vision for Ending Extreme Poverty, Linkages and Principles Background Paper, January 2015

(draft document); World Bank 2008 World Development Report, Agriculture for Development; World Bank, Agriculture and

Poverty Reduction, Policy Note.

In line with the focus on economic growth, the beneficiaries of AMA assistance will be commercially-oriented agriculture and food producer organizations. AMA will focus on the commercially-oriented POs and the agriculture and food value chain (as opposed to small-holder farmers), as there will be a spillover effect on small-holder farmers and rural households affected by poverty. This was shown in earlier

United States Government (USG) and Swedish assistance programs in agriculture, especially with value-added processing in which commercially oriented producers (in many cases small and medium enterprises

–SMEs), as they grew, were expanding their value and supply chain to connect with smaller farmers to ensure they had the inputs they needed for their products. In this assistance model, the greater economic and social returns are achieved by focusing on economic growth metrics rather than focusing solely on pro-poor approaches.

Moreover, AMA will increase economic opportunities and diversity in rural areas, and therefore it will also impact poverty levels in rural areas by having mid-level firms engage small holder farmers for inputs. Through strengthening commercially sustainable agriculture production and processing and developing market chains, AMA will increase economic development and opportunities in rural areas, thereby assisting the poorer segments of the population. Expanding commercial agriculture and improving the economic viability of agricultural holdings will create both on and off-farm employment and encourage investment in supportive infrastructure and services in rural areas, areas affected by poverty.

C.3 OVERARCHING GOAL, PURPOSE, OBJECTIVES, AND RELEVANCE

The goal of the “Agriculture Market Activity” (Activity) is to increase trade and exports of Bosnia and

Herzegovina (BiH) food products with the aim of increasing economic growth and advancing BiH’s accession into the European Union (EU).

The purpose of the Activity is to 1) create agricultural and agri-business economic opportunities by assisting agricultural producer organizations (POs) in adopting European Union (EU) and international agricultural and food standards and new production techniques, producing new high-value products, and expanding domestic and international market access of producers, and 2) assist BiH government and public agencies to implement regulations related to food and agricultural products that meet EU and international requirements.

USAID/BiH and Sida agreed that to realize this purpose, the Activity will have the following two objectives and cross-cutting priorities and resources:

Objective One: Strengthened agricultural producer organizations (POs) that have adopted EU and international food standards, production techniques, produce new high value products and have expanded markets.

Objective Two: Strengthened public sector that fully implements regulations, norms, practices, and rules in the areas of food, veterinary and plant health and safety, accreditation, standardization, and quality certification related to food and agricultural products and meets EU and international best practice requirements.

a) Relevance to host country priorities

On April 21, 2015, the European Council adopted a decision on the concluding of the Stabilization and

Association Agreement (SAA) with BiH. It is expected that the SAA will enter into force on 1 June

2015. The Stabilization and Association Agreement constitutes the framework of relations between the

European Union and BiH. The SAA establishes gradually a free trade area between the EU and the country. It also identifies common political and economic objectives and encourages regional co-operation. In the context of accession to the European Union, the SAA serves as the basis for implementation of the accession process.

The SAA Economic criteria for integration within the EU require the existence of a functioning market economy and the capacity to cope with market pressures and competitive forces within the EU. In addition, successful integration of BiH to the EU requires meeting EU Standards which affect industry, SMEs, agriculture, free movement of goods and capital, and energy. The 2014 EU Country Progress

Report issued in October 2014, concluded that there is a generally low degree of competitiveness in BiH.

Extensive reform efforts need to be pursued to enable BiH to cope over the long-term with the competitive pressures and market forces within the EU.

The progress on economic criteria needs to be seen in the context of the increased role of economic governance in the EU enlargement process, as explicitly stated by the European Commission General

Affairs Council. The economic structural reforms are at the center of the Compact for Growth (C4G) initiative launched by the EU in May 2014, which identified key economic policy issues. The proposed agenda is concentrated on six sets of measures: 1. Taxes on jobs 2. Barriers to jobs 3. Business climate 4.

Enterprise 5. Corruption 6. Social protection. This Activity is complementary to the C4G agenda, specifically in measures 3 and 4. C4G is focusing on reforms related to general business climate, while this Activity will complement these efforts through assistance to selected public sector actors to address specific constraints that hinder agricultural trade and growth (constraints relevant to production, exports, market development, EU standards, etc.).

By increasing the economic activity of the agribusiness sector in BiH, this Activity will help BiH develop capacity at a local level to cope with market pressures and competitive forces within the EU. Assistance will focus on increasing the capacity of all local actors (associations, enterprises, cooperatives, policy makers and regulatory bodies) for meeting EU accession requirements related to agriculture and a functioning market economy.

b) Overview of US Government and Swedish assistance in agriculture and agribusiness

Over the past twelve years, USAID and Sida have been supporting agriculture and agribusiness sectors through a range of activities, two most sizeable ones: Linking Agricultural Markets to Producers (LAMP) project and FARMA, detailed below.

From 2003-2008, USAID/BiH provided assistance to the agricultural and food sector through its Linking

Agricultural Markets and Producers (LAMP), a $25 million activity aimed at improving the competitiveness of BiH’s agricultural sector. LAMP targeted the following sub-sectors: fruit and vegetables, dairy, and medicinal and aromatic plants (MAP). The LAMP Final Report can be found in

Section C.9. From 2009-20015, USAID/BiH and Sida provided assistance to the agricultural and food

3 Note that LAMP Final Report has been produced by the LAMP implementing partner and all results, attributions, including lessons learned, best practices and views are those of the implementing partner and not of USAID. The LAMP project has not been independently evaluated by USAID.

sector through Fostering Agricultural Markets Activity (FARMA), a $22 million project aimed at improving the competitiveness of BiH’s agricultural sector. FARMA targeted the following sub-sectors:

fruit and vegetables, dairy, and medicinal and aromatic plants (MAP). The FARMA Annual Reports produced by the FARMA implementer provide information on FARMA activities and are accessible at the following link:

https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&get fields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-

8&emdstyle=true&image.x=9&image.y=5 .

The FARMA project has been independently evaluated by USAID and Sida, the three evaluation reports can be downloaded at the following links https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&get fields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-

8&emdstyle=true&image.x=9&image.y=5 (USAID evaluation report, 2015) http://www.sida.se/contentassets/96758da2a2bb4b4fac6527834395b2ad/7d38a090-d561-46b0-9372-

8f4c0116fe8a.pdf (Sida evaluation report, 2015)

The progress that has been accomplished to date in these three sub-sectors (dairy, fruits and vegetables and Medicinal and Aromatic Plants (MAP) and honey) and the USG and Swedish investments made in these sub-sectors, as well as the remaining challenges identified for assisted sub-sectors should inform the

Offeror’s technical approach, specifically its selection of assisted subsectors. In addition, in preparing their technical proposals, Offerors are strongly encouraged to examine all relevant agriculture and agribusiness sub-sectors in BiH (not only those assisted by USAID and Sida in the past) and their potential for rapid, sustainable and broad-based growth and to absorb assistance.

c) Relevance to Sweden Development strategy

The 2014 – 2020 Results Strategy for Sweden’s Reform Cooperation with Eastern Europe, the Western

Balkans and Turkey compliments the strategic objectives of USAID/BiH. Cooperation with the Western

Balkans (Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia) totals approximately SEK 3.6 billion, of which Sida manages SEK 3.5 billion. The expected results of the

Swedish Strategy for the Western Balkans in the field of “Market Development” are as follows:

Enhanced economic integration with the EU and development of market economy;

Enhanced capacity among institutions to continue economic integration with the EU; and

Competitive small and medium-sized enterprises make up a greater share of the economy.

Activities and expected results of this Activity fall under the “Market development” pillar of the Swedish

Strategy and focus on both the private and public sectors.

d) Relevance to USAID/BiH Country Development Cooperation Strategy

USAID/BiH is operating under an approved Country Development Cooperation Strategy (CDCS) for

2012-2016 period. USAID/BiH’s strategic goal is that BiH is a more stable country closer to Euro-

Atlantic integration. Reaching this goal requires functional state-level institutions, inclusion of minorities in the political process, compliance with the European Convention on Human Rights, GDP growth, increased economic competitiveness, and a clear strategy for EU accession.

4 Note that FARMA Annual Reports have been produced by the FARMA implementing partner and all results, attributions, including lessons learned, best practices and views are those of the implementing partner and not of USAID.

https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&getfields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-8&emdstyle=true&image.x=9&image.y=5 https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&getfields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-8&emdstyle=true&image.x=9&image.y=5 https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&getfields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-8&emdstyle=true&image.x=9&image.y=5 https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&getfields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-8&emdstyle=true&image.x=9&image.y=5 https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&getfields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-8&emdstyle=true&image.x=9&image.y=5 https://decsearch.usaid.gov/search?q=FARMA+Bosnia&client=dec_pdfs&proxystylesheet=dec_pdfs&getfields=*&filter=0&site=default_collection&output=xml_no_dtd&proxyreload=1&ulang=en&ie=UTF-8&emdstyle=true&image.x=9&image.y=5 http://www.sida.se/contentassets/96758da2a2bb4b4fac6527834395b2ad/7d38a090-d561-46b0-9372-8f4c0116fe8a.pdf http://www.sida.se/contentassets/96758da2a2bb4b4fac6527834395b2ad/7d38a090-d561-46b0-9372-8f4c0116fe8a.pdf

USAID/BiH’s CDCS has two development objectives (DO) to achieve the overarching goal. The democracy and governance DO focuses on functional and accountable institutions and actors that meet citizens’ needs; the economic growth DO focuses on a market-oriented economy. The approaches to both

DOs reinforce each other and support the achievement of USAID/BiH’s overarching goal.

The Activity will contribute to the development of “a competitive, market-oriented economy providing better economic opportunities for all its citizens” (DO) and to:

IR 2.1: Improved capacity of the private sector to compete in market economy; and

IR 2.2: Improved economic aspects of governance relevant to business activity.

The causal relationship of the DO, the four IRs, and the linkages between IRs are described in the Result

Framework of the CDCS attached to Section J.

This Activity is part of the USAID Project for IR 2.1, titled “Improved capacity of private sector to compete in a market economy”. Project 2.1 logical framework attached to Section J.

The development hypothesis of Project 2.1 assumes that the stronger private sector export performance and increased FDI inflows and domestic direct investments supported by targeted technological innovation that increases resource efficiency will restore and accelerate economic growth in BiH while strengthening integrative ties with the EU.

Project 2.1 purpose is to improve the capacity of the private sector to compete in market economy. The project, as a set of activities, is targeting specific market failures that inhibit performance of private enterprises’ success. This includes addressing specific regulatory and institutional barriers critical for private enterprises, but also strengthening government/public and private organizations that support competitiveness of private enterprises. All activities are carried out through close local partnerships.

The ultimate results will be a more competitive private sector able to withstand competitive pressures and market forces within the EU (Copenhagen criteria) underpinned by sustained and expanded employment opportunities. AMA will primarily contribute to Project sub-purpose 2.1.1. (Integrative Growth-

Increased market access of assisted enterprises).

The Activity addresses primarily the economic growth DO, but the achievement of the Activity goal and purpose will depend on and reinforce the democracy/governance objective (particularly sub-intermediate result (IR)1.1.1: Government processes improved and capabilities of actors strengthened). Economic growth is highly dependent on the existence of effective institutions. Increased transparency in government institutions and reduced corruption will promote private sector investment and growth.

C.4 COOPERATION WITH SWEDEN AND INSTITUTIONAL OWNERSHIP

The Agreement between USAID and Sweden sets the parameters for financial and technical coordination and management of the activity. This Agreement sets out the Activity as one contract with USAID, with

Swedish and USAID funds pooled together. As part of this Agreement, two different bodies will provide guidance to the Activity: the Joint Management Committee (JMC) and the Advisory Board. The JMC will comprise an equal number of representatives from Sida and USAID. USAID will conduct day-to-day contract administration and direct the Contractor on behalf of the JMC and in accordance with the

JMC guidance.

The Contractor must establish a Coordination and Advisory Board (Board), comprised of a select number of participants with relevant experience and insight into agricultural trade and production, value-chain development, EU alignment and policies, and other relevant areas. The composition of the Coordination and Advisory Board is subject to USAID approval, in consultation with the JMC. The Board will meet on a regular basis and provide comments and advice to the donors and the Contractor with the overall goal of improving the activity’s effectiveness. These meetings, in addition to providing guidance to the

Contractor will be used to inform relevant public sector organizations and institutions on planned future activities, discuss effects of past activities and coordinate initiatives within the policy and regulatory area.

The two donors (USAID and the Embassy of Sweden) do not have a particular position related to the

AMA “Coordination and Advisory Board” and specifically as to whether the system adopted for

“Coordination and Advisory Board” under FARMA should be replicated, as well as whether the continuity of Board representation is preferable, or new representatives on the Coordination and Advisory

Board are preferable, or a combination thereof.

The Contractor should examine what systems already exist to facilitate donor coordination within BiH, what are the relevant regional best practices and to examine what type of role, if any, AMA should play with respect to overall donor coordination. The Contractor need to consider and propose best approaches tailored to the BiH to ensure effectiveness of the Coordination Body and Advisory Council where the overall goal of the Board(s) is to improve the AMA activity’s effectiveness. The Board will inform relevant public sector organizations and institutions on planned future AMA activities, discuss effects of past activities and coordinate initiatives within the policy and regulatory area.

The JMC and Board do not have the authority to supersede the CO and/or COR roles as outlined in the

Section G provisions entitled “Contracting Officer’s Authority” and “Technical Direction.”

C.5 CONTRACT OBJECTIVES AND EXPECTED RESULTS

The following sections describe the objectives and the results that the Contractor must accomplish under the contract. The following sections also provide a brief development context for each of the two objectives. The Contractor must demonstrate a clear understanding of the development context in BiH and carry out a set of prioritized activities and critical tasks that must be tailored to the development context in BiH. The Contractor’s activities must address the cross cutting issues detailed below.

Objective 1: Strengthened agricultural producer organizations (POs) that have adopted EU and international food standards, production techniques, and produce new high value products and have expanded markets.

a) Development context

BiH’s location in the Western Balkans offers outstanding prospects to expand trade substantially with its neighbors in Southeastern Europe and the EU market. As neighboring countries join the EU, BiH’s traditional regional export markets are disappearing, because of its slow progress in complying with EU trade requirements. Moreover, trade liberalization in BiH has created a competitive environment in the local markets. BiH is part of a number of bilateral and regional trade agreements, exposing its local food markets to imports from the EU and other countries in the region, thus increasing the pressure on local farmers and processors to become more competitive in the local market. Local producers find it difficult to match the prices and quality of imported agricultural products. Unless agriculture producers become more competitive, local producers will lose market share both domestically and abroad.

There are several challenges that BiH producers confront when looking to sell to foreign and domestic markets. The first constraint is compliance with the EU and international quality standards. The second is the design and quality of the products (the value added of the product). BiH producers need to meet both mandatory and voluntary product quality standards to be able to export to the EU market. In addition to mandatory standards, there are voluntary, market-driven standards, which improve access to distribution channels in the EU and regional markets. Large supermarket chains and retailers often require producers to adhere to voluntary production and labeling standards, regardless of whether they operate in the EU or not. To implement quality management systems required by the trade certification process, producers need to obtain the “know how” and to invest resources to make these changes.

Selling products to EU countries and other new markets requires specific market knowledge and a wide range of networks of contacts. For most BiH companies, especially small agriculture producers, it is too costly to acquire this knowledge on their own. Given their small size, BiH producers need to collaborate to access foreign markets through joint strategies and by complementing each other’s product range.

Weak horizontal and vertical organization of the private sector strongly hinders creation of stable and efficient value chains, which is one of the most important preconditions for competitiveness in the international markets.

Moreover, lack of access to finance (including insurance) that is tailored to specific needs of agricultural and agri-businesses producers that will stimulate investments into quality and quantity improvements, modernization of technologies, equipment and processes as well as funding of research activities and investments into irrigation and similar systems is a constraint for agricultural and agribusiness value chains.

The Contractor must prioritize and carry out a set of interventions which will address constraints in the entire market chain that are determined to be priorities by private sector. The contractor must build capacity of market chain participants to address these specific constraints (examples include meeting product quality requirements, improved marketing or enhancing processing capacity). The activities must be based on expected benefits as measured by increased sales, employment, exports, and new investments. All assistance to individual agriculture POs must be strategic and address sector-wide issues. The Contractor must take into account other donor (European Commission (EC), Deutsche

Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), World Bank (WB), and other) programs and initiatives in this area and ensure that maximum synergies between other donors interventions and this Activity exist.

The contractor must provide justification for selection of specific sub-sectors based on the above criteria. Final USAID and Sida approval of the Contractor’s recommendations will be provided in approval to the work plan.

The Contractor must build on achievements and lessons learned from the previous USAID and Sida agricultural activities, as documented in the USAID and Sida evaluations.

b) Illustrative activities (These activities are illustrative. Offerors will be expected to describe their activities in their proposed Statement of Work (SOW). See Section L):

In partnership with local Business Development Service (BDS) providers and relevant public sector organizations, assist agricultural POs to improve product quality to meet EU standards and international product certification standards;

In partnership with local BDS providers and relevant public sector organizations, assist agricultural POs to apply modern production techniques and develop higher value-added products, including improving productivity and manufacturing processes;

In partnership with local BDS providers and relevant public sector organizations, assist agricultural POs to expand their market access and build sustainable market linkages;

In partnership with local organizations, facilitate product aggregation to include preparation, packaging, cold storage or freezing, and export logistics;

Support expansion of current agricultural POs, through utilization of new technologies and innovations, including Joint Ventures between foreign and local producers;

Facilitate access to capital for agriculture PO’s investments in new production technologies, including facilitating foreign and domestic direct investment and introduction of different modalities for financing for farmers and cooperatives;

Facilitate development of market-based insurance schemes for agricultural POs; and

Assist public and private sector to provide education, workforce development and advisory services in line with best practices and market needs.

c) Expected results:

Increased jobs of assisted-POs in selected agricultural subsectors;

Increased exports of assisted-POs in selected agricultural subsectors

Increased sales of assisted-POs in selected agricultural subsectors

Assistance provided to POs based on the principles of focus, selectivity and scale.

Objective 2: Strengthened BiH public sector that fully implements regulations, norms, practices, and rules in the areas of food, veterinary and plant health and safety, accreditation, standardization, and quality certification related to food and agricultural products and meets EU and international best practice requirements.

a) Development context

The European Commission 2014 Progress Report stresses that considerable work remains in the areas of agriculture and rural Development, food safety, veterinary and phyto-sanitary policy, and fisheries. The fact that there is still not full compliance in the food safety, veterinary, and plant health protection (PHP) and phyto-sanitary areas with EU requirements continues to adversely affect BiH’s trade in agricultural products and EU alignment. Moreover, BiH still lacks laboratory capacity to cover the type and scope of analysis in line with EU standards. In addition, existing public advisory system(s) and private Business

Development Service (BDS) providers in BiH are still not providing a full range and quality of services

5 As was shown in the FARMA mid-term evaluation, it is a reality that in developing economies employment in agriculture will ultimately fall as mechanization and productivity improvements are achieved. As agriculture becomes more efficient, adopts state-of-the-art technologies, and as farms become larger, employment in agriculture will decline. Therefore, the “increased jobs” expected result must be understood in this context, specifically this result must capture the increased economic opportunities in this Activity and employment and/or income effects resulting from this, while at the same time being able to accommodate for negative employment as a result of increased productivity.

needed to help producers increase competitiveness and productivity, or to respond to new circumstances such as changing market requirements, or food safety.

The Contractor’s interventions must strengthen the public sector institutions and improve regulations to align these with the EU and international best practices. The Contractor must develop a set of activities that will address weaknesses of local BDS providers and relevant public and private organizations that support agricultural competitiveness. The Contractor must prioritize and implement activities which will result in an enabling environment, to include both polices and services that support knowledge transfers, technological upgrading, market information and market access for BiH farmers. The Contractor’s criteria for prioritization of assistance to organizations and policy and legislative interventions must be based on their relevance to host country priorities and commitments. The Contractor must take into account other donor programs and initiatives (EC, WB and other) and ensure that maximum synergies between these different activities and the Activity exist.

There are several additional EU accession priorities and agricultural policy reforms and assistance areas in addition to ones outlined previously. Specifically, regarding agriculture and rural development policy, BiH has yet to adopt a country-wide rural development strategy and coordination mechanism, including agriculture support measures. BiH has not reached an agreement on the institutional structure for utilization of the Instrument for Pre-Accession Assistance for Rural Development (IPARD). BiH has not adopted the agricultural information strategy or the Law on the Agricultural Census. The EC recommends that BiH’s agricultural statistics and the agricultural information system be improved and harmonized between the Entities. Land registration systems also need to be harmonized and land management requires strengthening. These reforms and assistance areas (such as IPARD structure, agricultural census, land registration and other) are expected to be addressed by host country partners with possible assistance from other donors. The Contractor must take into account host country initiatives and other donor programs (EC, WB and other) in these policy areas and must ensure that maximum synergies between host country, other donors’ interventions and this Activity exist.

The Contractor must strengthen state-level capacities to ensure that EU-compliant policies and regulations are implemented effectively at the state-level and that public agencies at other governance levels (entity, Brcko District, cantonal and municipal) effectively coordinate and cooperate with state-level agencies.

The Contractor’s activities must strengthen the public sector institutions at the state-level and improve state-level regulations to align these with the EU requirements and international best practices.

b) Illustrative activities (These activities are illustrative. Offerors will be expected to describe their activities in their proposed SOW). See Section L.:

Advance adoption and full implementation of EU food safety, veterinary, and plant health protection (PHP) and phyto-sanitary regulation at levels, and across public and private sector;

Assist in adopting international sector-related standards and quality control systems by ensuring that accredited laboratories can actually perform tasks for which they are accredited;

Assist technical control agencies involved in international trade to introduce risk-based control systems to achieve reduced inspection and sampling rates, and enable issuance of phyto-sanitary certificates and Sanitary and Phyto Sanitary (SPS) permits as they relate to subsectors;

Assist with aligning requirements and inspection check-lists for compliance with the EU hygiene requirements for selected value chains/subsectors;

Assist accreditation institutions to become internationally accredited, enable greater private sector participation;

Strengthen the capacity of the Administration of Plant Protection and Plant Health, Food

Safety Agency, State Veterinary Office and other public agencies at all levels responsible for

EU -compliant quality control systems;

Advance the process of adopting and implementing the EU Common Catalogue for

Agricultural Plant Species/National Variety List;

Advance and implement a system for domestic testing of plant species that can provide farmers with recommendations;

Subject to host country agreement, advance IPARD institutional and operational structure in

BiH aligned with EU requirement and assist private sector to take advantage of IPARD funding;

Advance training programs and adoption of alternative fertilizing and pest management methods and relevant EU environment directives in agriculture;

Strengthen agricultural research and education, advisory, extension and BDS services and make these more receptive to the demands of the private sector and responsive to EU requirements and aligned with regional best practices;

Assist in advancing agricultural research, innovation and technological upgrading to respond to market and private sector needs; and

Assist in improving vertical and horizontal coordination among different governance levels and public agents responsible for agriculture and agribusiness policy and trade and with appropriate EU and other political levers, if available, help address complex organizational structures in the agri-sector.

c) Expected results:

Increased private and public sector capacity for product certification and standardization in line with the EU acquis and market requirements.

Harmonized and implemented legislation related to agriculture and food to meet EU requirements (as measured by progress in the relevant sections of the EU Country Progress

Report and legislative and policy progress benchmarks);

C.6 GRANT FUND

The Contractor will administer a Grant Fund that must be US$3.5 million. The Grant Fund will be used for small grants under the contract in a targeted way in order to accomplish the purpose of the Activity.

These small grants may be awarded to support activities under any of the Activity components, provided that all specified eligibility criteria have been met. The Grant Fund under the contract is part of the overall budget of the award. The Contractor will be responsible for administering and overseeing the

Grant Fund in accordance with the USAID approved manual.

The Grant Fund must serve as a catalyst for private and public interventions that will substantially impact agriculture and food value-chains, clusters, standardization and other. As an illustration, small grants will be used to promote innovative ideas and new technologies, create new sustainable jobs, assist producers to meet international quality standards, promote collaboration on product marketing and promotion, conduct specific related research, workshops, trainings and public education and awareness initiatives.

All grants must contribute directly and substantially to increasing the competitiveness of the agro-food sector, or agro-food sub-sectors, agro-food enterprise clusters, or agro-food value-chains, as distinguished from generating financial benefits that accrue solely or primarily for a single grant recipient.

The Contractor is required to ensure clear, transparent, and competitive procedures for grants funded from the Grant Fund with key considerations to include: expected results, market distortion, and cost share, with special consideration of female and youth economic empowerment. The principal criteria for grants approval will be the expected quantitative and qualitative benefits to the sector, sub-sector, or cluster, including reasonable estimates of increased sales, exports and employment generated in comparison with total cost and cost-share. In addition, one of the evaluation sub-criteria for small grants will also be the degree to which the grant recipient will have impact on women’s employment and economic empowerment.

The Contractor must ensure that small grants do not distort the market or favor one producer, business group or interest over another. In improving the competitiveness of a particular sector, sub-sector, or enterprise cluster, grants shall foster a level playing field for competing and complementary firms in the same value chain. All small grants, in particular those to for-profit firms, will include appropriate provisions to ensure that program income is used to advance Activity objectives.

The Contractor must ensure clear, simple and transparent procedures for the Grant Fund. The Contractor will be responsible for administering and overseeing the fund where prior approval of USAID, in consultation with Sida, will be required for all grants. All assistance to microenterprises under the

Activity must conform to the requirements in ADS 219, e.g., programs being open to women, annual reporting requirements, and commitments to attain financial sustainability, the contractor must adhere to these requirements.

C.7 CROSS-CUTTING PRINCIPLES

There are five key cross-cutting principles for this Activity, each of equal priority. The Contractor must implement all activities in compliance with these key principles.

a) Radical Transparency

Radical transparency is a key principle that must be encompassed in all AMA activities, actions and approaches and must be implemented in such a way to substantially increase the openness of US

Government and Swedish assistance processes and data. Furthermore, AMA technical approach must ensure that published data is used to make USG and Swedish assistance more effective and transformative.

In the Contractor’s technical approach, radical transparency, the idea of everyone knowing everything, must be leveraged to become a driver of increased performance of USG and Swedish development assistance. In promoting the principle of radical transparency, the Contractor must leverage Information and Communication (ICT) technology, but also develop solutions which could be performed by existing

BiH institutions and organizations.

The principles of radical transparency must improve AMA performance in terms of focus and engagement as well as transparent data collection and presentation.

An example of Donors’s commitment to radical transparency is the “Flood Map”

(www.tinyurl.com/usaidmap-en). The “Flood Map” is a user-friendly website which makes it easy for citizens in BiH-at the click of a button – to see where and how US Government flood recovery assistance is being spent, as well as what is being achieved. The “Flood Map” also includes information on grants to agricultural producers under the flood recovery grant fund of the FARMA contract. The “Flood Map” has been a key tool in improving the traceability and mapping of US Government flood recovery development assistance. The map is important fo accountability, but is also an important way for all our partners and recipients to see where and how we are delivering US Government flood recovery assistance.

http://www.tinyurl.com/usaidmap-en

Another example of transparent data collection and presentation can be seen at the web-site Open aid. Itis a web-based information service about Swedish aid built on open government data. On this site, you can follow when, to whom and for what purposes aid funds have been disbursed, and with what results

(www.openaid.se).

b) Ownership and Sustainability: All activities must be conducted in close cooperation and partnership with local counterparts to ensure their full ownership. The assistance must, whenever possible, be designed to favor long-term solutions which could be performed by existing BiH institutions and organizations.

To ensure that sustainability is achieved and host country partners and beneficiaries are empowered to take ownership of development processes, including financing, and maintaining the results and impacts beyond the life of the Activity, the Contractor must conduct a sustainability analysis and develop sustainability plan within the first quarter of operation to ensure that issues of sustainability is built in from the beginning of the Activity. This sustainability plan must include details on how sustainability can be achieved through the life of Activity and how the Activity will build in tools and capacity to ensure that local institutions and partners will have the ability to maintain results and processes after USAID and

Sida support has ended.

c) Gender equality and Female Economic Empowerment: To the extent relevant to the Activity, assistance under the Activity will promote and be in compliance with USAID’s Gender Equality and

Female Empowerment Policy and Sida’s relevant policies on gender. Specifically, in the award, USAID/BiH will hold the Contractor responsible to integrate gender into all relevant aspects of programming, develop indicators that will measure specific gender equality goals for the Activity, and report to USAID and Sida on results related to gender equality and female empowerment.

Consistent with the USAID ADS 205, the contractor must conduct a gender analysis at the early stage of the Activity implementation. This analysis will be submitted to USAID COR, USAID Gender Advisor and Sida. The contractor will be required to ensure that the AMA is reducing the gaps between males and females that were identified in the gender analysis that was carried out in the context of the AMA activity.

Consistent with USAID’s Policy, output and outcome indicators on gender equality, female empowerment Contractor must develop and use in the award Monitoring and Evaluation (M&E) Plan for tracking progress toward implementation results and measuring gender impact across the award. Per

Policy, possible indicator to be considered for inclusion in the award M&E are (final M&E will be developed as part of work-plan and M&E submission and approved by USAID and Sida):

■ Proportion of female participants in USG-assisted programs designed to increase access to productive economic resources (assets, credit, income, or employment).

Specifically, the Contractor must take into account the role of women and facilitate where possible their involvement and professional development. The Contractor must also consider how the different roles and status of women and men will affect the work, and how the anticipated results will affect women and men differently. The Activity’s capacity building, private sector value-chain support development programs will take into account possible gender imbalance and will provide equal opportunities for women to participate in all activities and to benefit from USAID and Sida-funded assistance.

In recognition of a possible imbalance in opportunity accessibility, the Contractor shall make special efforts to ensure that woman farmers, trainees, and women-owned SMEs are beneficiaries of USG-funded assistance. These efforts will include, but not be limited to targeted outreach and project opportunity publicity. Full details of efforts to be undertaken shall be elaborated on in the contractor’s work plans. All contractor-submitted quarterly reports shall describe all actions taken to ensure the participation of women, including required data with gender breakdowns of participants and beneficiaries.

d) Environmental Best Practices and Climate Change: In order to identify any potential negative impacts and ensure compliance with USAID and USG environmental procedures, the Contractor will be required to develop procedures to assess the environmental impact of proposed assistance and develop mechanisms to address the relevant assessment requirements. The environmental compliance of the award will be guided by the approved Initial Environmental Examination (IEE). The IEE is attached to the RFP and Oferrors need to incorporate IEE requirements in their proposals.

Moreover, BiH is vulnerable to climate change as a result of a legacy of weak environmental management. This increases the threat to the agriculture sector from climate risks. The Contractor must integrate environmental sustainability and climate change adaptation into its activities.

In mid to late May 2014, Bosnia and Herzegovina (BiH) experienced severe floods, caused by the heaviest rainfall in 120 years of recorded weather measurements in BiH. Thousands of people were forced to flee from their homes. These devastating floods have severely affected agricultural producers, particularly in the northeastern, eastern, central, and northern parts of BiH. About 70,000 hectares of land were flooded, causing significant damage to agricultural crops – particularly cereals and vegetables.

Through FARMA activity, USAID and Sida provided US$ 2.2 million in direct support to farmers who have been affected by floods to help restore the sector’s productivity, income and employment of the affected population. FARMA has been using small grants dedicated especially to flood recovery (this is in addition to the regular FARMA Grant Development Fund) to help recover agricultural production in 23 municipalities. FARMA focused on municipalities that have experienced the most significant damage to the agricultural sector. To date, FARMA has disbursed 69 grants, with additional 6 grants in process of disbursement, valued at over KM 3.6 million, to producer organizations to benefit over 3,000 farms.

Assistance was also provided to agricultural and veterinary service providers in affected areas, which provide services to flood-affected producers.

The grant fund in AMA activity will not be expected to continue direct support for flood-affected producers. However, the Contractor is expected to integrate climate change adaptation and mitigation activities in their technical approach and especially focus on coordinating, levering and strengthening host country and other donor efforts in this area.

C.8 MONITORING AND EVALUATION

USAID and Sweden encourage approaches amenable to a rigorous experimental or quasi-experimental impact evaluation. If such an approach is proposed, the Contractor will be required to work with

USAID/BiH M&E contractor on developing the impact evaluation design. Offerors, however, should consider including an initial impact evaluation design as part of their proposals. In that case, the

Contractor will work with the M&E contractor on the final impact evaluation design as part of the M&E plan. USAID and Sweden anticipate that a strong design should include, but not limited to, the following:

a logic model or theory of change for the evaluated interventions, evaluation research questions to be addressed, strategies for gathering baseline and follow-up data, availability and utility of relevant administrative data, sample size/power consideration and minimum detectable impacts (MDI), analysis plan, and design limitations and practical considerations.

The Contractor must submit a Monitoring and Evaluation Plan (M&E) that allows for measuring implementation progress against performance indicators and related targets and benchmarks. The required M&E Plan template is attached to Section J. The M&E Plan must be submitted within 90 days of the award and approved by USAID in consultation with Sida. The Contractor must develop performance indicators, collect necessary baseline and annual follow-up data and numerical targets to measure the results for each Activity component and to assess the impact of proposed interventions. The

Contractor must produce a Performance Indicator Sheet for each indicator, which will identify the data sources and collection methods. The M&E must be updated and submitted annually, unless specified otherwise by USAID.

Under USAID/BiH M&E contractor guidance, the Contractor will develop a comprehensive, on-line…