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 In 2004 IFDC implemented its first Food
for Progress (FFP) program with funding from the United States
Department of Agriculture (USDA) in Albania. The USDA FFP program is
designed for countries that have made commitments to introduce or expand
free market elements in their agricultural economies. IFDC’s FFP in
Albania was designed to address the absence of a credit for agribusiness
development in Albania.
First, the project supported private
sector development of agribusiness enterprises engaged in feed milling
or meat, dairy, and egg production by providing technical assistance and
linkages to world market sources and by promoting market development
programs.
Second, the project established an
agribusiness credit guarantee by providing an escrow account at the
American Bank of Albania (ABA). This account is being used as a
guarantee for loans to the target sectors—feed milling and meat, dairy
and egg production enterprises—and to other selected agribusiness
activities, primarily for first-time loan applicants engaged in small-
and medium-size agribusiness activities.
IFDC generated funds to support these
objectives and the resulting activities by monetizing in Albania 16,000
tons of maize and soybean meal provided by the USDA grant. IFDC used a
transparent sealed bid process that attracted more than 100 participants
in each of three auctions and was successful in obtaining winning bids
reflective of international prices for the commodities.
Total funds generated through the
monetization activity amounted to $4.2 million. Of this amount, $1.2
million is being used for technical and market development assistance to
emerging livestock and feed milling enterprises. In 2004 activities
focused on experimental feeding trials for poultry, dairy cattle, and
swine and the dissemination of results showing production and economic
benefits derived from the use of improved feed formulations based on
quality maize and high protein (48%) soybean meal raw material provided
by USDA. Demand for these raw materials by the Albanian feed milling
industry and its farmer clients resulted in the additional purchase of
approximately 8,000 tons of maize and high protein soybean meal directly
from the international market by the Albanian private sector in the
latter half of 2004.
IFDC staff began
implementing the loan guarantee program by partnering with the ABA to
provide credit specifically for agribusiness ventures not currently
serviced by the banking sector. Beginning in July 2004 IFDC assisted 25
potential clients seeking loans guaranteed from the IFDC/Albania loan
guarantee fund (LGF) by performing an initial review of the financial
soundness of the business proposal. For those identified as feasible
candidates, IFDC provided additional assistance to develop a business
plan including a cash flow scenario and conducted a technical review of
the proposal. Candidates were then provided guidance through the loan
application process at ABA, where ABA assumed responsibility for final
loan approval. In 2004 loans totaling $526,000 (mobilizing approximately
20% of the LGF) were disbursed.
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