RCI Tirana Workshop September 25, 2008

1. AgBiz Update and Opportunities for Regional Cooperation in Export Development RCI Tirana Workshop September 25, 2008

2. AgBiz Export-focused Projects • Signed Nine Grants for Business Expansion Projects • $3.2 mil. in total investment stimulated • $28.3 mil. in additional exports over three years • $16.6 mil. in additional purchases from producers • 1,351 households receiving additional income • >10% AgBiz share of total investment • 11 More Project Grants to be Signed in the Next Few Weeks • $50 million projected increase in exports from the 20 projects • Total AgBiz Direct Investment - $500,000

3. Export-focused Value Chain Competitiveness Enhancement Activities • Capacity Enhancement • IPARD Preparation Training • HACCP Training (2) for Winery & Fresh Products Mgrs. • Fair Wild Workshop • Linkages Enhancement • Producers with Processors/Packers Linkages Workshops • Enhanced Access to Agribusiness Finance • Trade Fairs • Interfest Wine Festival – Novi Sad • Prowein Trade Show – Berlin • Fancy Foods Trade Show – Chicago • Private Label Trade Fair – Amsterdam • International Agricultural Fair – Novi Sad • Anuga – Cologne

4. Export-focused Value Chain Competitiveness Enhancement – Activities (cont.) • Study Tours/B2B Meetings • Turkey for Processed Vegetables • Fruitlogistica (Germany) for Fresh Vegetables • South Africa for Table Grapes • Novi Sad Agricultural Fair for Producers • Moscow for Fresh Vegetables • Kosovo for All Value Chains • Poland for Table Grapes (October) • Sweden for Processed Vegetables (November) • Assessments • Impact of Regional Trade Agreements on Agribusiness • Developing Trade Associations and Producer Organizations • Value Chain Profiles – Table Grapes, Fresh Vegetables and Processed Vegetables

5. Export Enhancement Needs and Opportunities • Improved Cooling & Packaging of Fresh Produce • Value-adding to Wild Mushrooms & Berries • Shift from Bulk (85%) to Bottled Wine • Increased Processing Capacity & Market Penetration of Processed Vegetables • Substantially Improved Linkages between • Producers & Processors/Marketers • Processors/Marketers & Developed EU Markets • Adoption of International Standards • GlobalGap, HACCP, ISOs • Producer & Trade Association Development? • Add Fresh Fruits to Table Grapes Value Chain?

6. Market Considerations • +/- 75% of Current Exports are to Serbia & Croatia • Need to protect those through product & presentation upgrading • Major Target Markets • Poland • Germany • Russia • Belorussia • Sweden • UK • Regional Commonality of Agricultural Raw Materials • Macedonia’s Possible Advantages • Somewhat earlier season • Lower labor costs • Traditional Yugoslav supplier of agricultural products

7. Regional Strategies • Value Chain Profile Exchange • Processed Vegetables, Table Grapes & Fresh Vegetables • Assessments Exchange • Producer Organization Development, Trade Association Development, Impact on Agribusinesses of Regional Trade Agreements (e.g., CEFTA) • Marketing Specialists Exchange • Identification of Cross-selling Opportunities • Mac Fresh Vegs & Table Grapes for Serbian Meat & Dairy Product • Investors from Croatia or Serbia in Macedonian Bulk Wineries • Sourcing Macedonian Agr Inputs for Albanian Processors • IPA FP 7 Cooperation • Enhanced Post Harvest Handling of Fresh Produce • Alternatives to Barrel Aging of Wine • Market Demand & Agronomic Forecasting of Grape Varieties

8. IPA Funds of Interest to AgBiz Customers • Instrument for Pre-accession for Rural Development. (IPARD) • European Commission's Sixth Framework Program (FP6) • European Commission’s Seventh Framework Program (FP7)

9. IPARD Measure 1.1 Investments in agricultural holdings to restructure & to upgrade to Community standards Measure 1.2 Investments in processing & marketing of agricultural & fishery products to restructure those activities & to upgrade them to Community standards - EU19 million available Measure 3.1: Diversification & development of rural diversification activities Public sector support for private sector projects of 50% of which: - 75% is EU contribution and - 25% is from the national budget

10. Framework Program 7 • Objective: Gain European leadership in key areas through co-operation of industry and research institutions. Support to research activities carried out in trans-national cooperation, from collaborative projects and networks to the coordination of national research programs. • The Cooperation program is organized into sub-programs which will be operationally autonomous and at the same time demonstrate coherence and consistency, and allow for joint, cross-thematic approaches to research subjects of common interest. • Nine themes identified: • Health • Food, agriculture and biotechnology • Information and communication technologies • Nanosciences and nanotechnologies, materials and new production technologies • Energy • Environment (including climate change) • Transport (including aeronautics) • Socio-economic sciences and the humanities • Security and Space

11. Estimated Timing of EU Funds for Macedonia • FP6 and FP7 funds are available now, however these may be in the form of Tempus Funds from the old system • IPARD funds are estimated to be available from mid 2009. • IPARD project should be prepared and finalized by 2009 Spring as projects might be accepted before funds become available on a first come first served basis.

12. Possible AgBiz Actions and Opportunities for Collaboration • Develop a close relationship with MAFWE and Payment Agency (IPARD) • Macedonian Consultancy Company Capacity Enhancement • Direct TA support to projects partially funded by various IPA instruments • Regional research institution partnerships with private sector