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international development aid

IMPLEMENTED PROJECTS > Support to Fruit and Vegetables Marketing Structures

  • Country – Bulgaria
  • Donor – GTZ
  • Duration – 22 months
  • Status – completed

ABG was contracted by GTZ to implement a technical assistance project to assist the development of fruit and vegetable markets in Bulgaria. The project had a duration of 2 years and was located in Haskovo, Sliven, Pazardjiik, Plovdiv and Sofia.

The TA project implemented by ABG is part of a combined financial and technical assistance project involving bi-lateral (GTZ) and multi-national donors (EBRD). The whole project concept was based on a master plan elaborated in 1992. This master plan stressed the need for designing and building of several green site wholesale markets for fruits and vegetables all over Bulgaria. The main assumption was that the construction of green site wholesale markets would significantly improve the marketing and indirectly the production conditions for fruit and vegetables. With this concept Bulgaria should turn out to regain its important position as exporter for fruit and vegetables.

Financed with EBRD funds a green site wholesale market has been constructed in Sliven and in 2000 financed with KfW funds a green site wholesale market has been constructed in Haskovo. Since the middle of the nineties of last century it became more and more obvious that the concept of green site markets with large investment volumes turned out to be not economically sustainable and more or less useless for local producers. The only promising investment option was a wholesale market situated close to big urban centres (e.g. Sofia), that means close to big consumer markets, and not overloaded with too big investments.

The failure of green site markets based on oversized investments and far away from big consumer markets was proven again in Haskovo and Sliven. When ABG was contracted the two wholesale markets were rather empty and still stakeholders were promoting the idea to build with an investment of rather 5,0 Mio. Euro an additional green site market in Burgas or Plovdiv or Pleven.

ABG has achieved the following practical results:

  • savings of 0,35 Mio. Euro gained on the initiative of ABG by stopping additional investments have been transferred with the assistance and approval of KfW to rebuild and enlarge existing marketing structures in Pazardjik, this investment turned out to be very successful, the turnover on this market is 100 times higher than the turnover on the markets in Haskovo and Sliven together (investment of approx. 10 Mio. Euro);
  • the Ministry of Agriculture has been informed about the high risks in ongoing promotion of green site wholesale markets; the Ministry has been made aware about the huge financial burden accumulated resulting from the mistaken investments in Haskovo and Sliven;
  • a new strategy how market structures should be developed has been elaborated and presented;
  • a detailed concept how the remaining KfW credit funds (round 5,0 Mio.) could be used and disbursed ensuring the proper repayment has been elaborated and discussed;
  • a system of agricultural advisory centres in five Bulgarian production areas has been established and is working addressing the needs of the rural entrepreneurs and producers;
  • a market information bulletin and a monthly farmers information bulletin has been published monthly and distributed in at least more than 2000 copies;
  • training for more than 3000 farmers on marketing and production issues has been undertaken;
  • three producer groups have been founded and supported in a bottom-up approach;
  • a credit programme has been elaborated and working capital credits for farmers have been disbursed and repayment was 99 %;
  • strategies to restructure the markets of Haskovo and Sliven and to minimise losses have been developed and presented;
  • during the life time of the TA Project contracted to ABG, we could block new investments in inefficient green site markets.

The context of this project was rather difficult. In spite of the economic rationale some stakeholders are still promoting the establishment of oversized green site markets based on very high investments. In this difficult framework ABG has thoroughly identified the technical and financial weak points of the current strategy, presented an alternative strategy and was able to show in different examples the success of the proposed alternative strategy.