Agricultural Employment Support through Enhanced Market Linkages - Phase II Project

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The proposal builds on the Formal Employment Support in Agriculture Sector (FESAS) project, funded by the EU Facility for Refugees in Turkiye, and implemented by the Agricultural Credit Cooperatives (ACC) under World Bank’s supervision. This project combines innovative and complementary interventions. The first component of the Project aims to encourage the formal hiring of agricultural labor. To this end, the project expands the ACC’s contract farming agreements to allow farmers to move into higher-value crops, improve market access and thereby increase demand for skilled labor. To support this process, eligible farmers are provided with temporary wage subsidies to reduce the costs of formally hiring workers. The project also assesses farmer needs for workers and provides them with technical assistance including training on worker management.The current proposal builds on the experience of FESAS, by expanding the geographical scope and products covered under existing interventions. Proposed activities include:Activity 1: Wage subsidies and farmer support for formalization of jobs. This activity would include provision of wage subsidies and technical assistance to farmers, with the aim of incentivizing them to hire workers formally and equipping them with the information on the processes related to formalization. To promote the creation of jobs that can be resilient to climate shocks, this component will also include technical assistance to farmers on climate-smart agriculture processes and technologies. Activity 1.1: Knowledge strengthening on formal and sustainable jobs. The project would provide trainings and a package of information on benefits for farmers to enroll in the SSI, advice on managing workers, and the legal requirements for employing workers. TA to farmers will also be provided on topics related to climate-smart agriculture (CSA), to protect farmers from climate shocks and boost resilience. Additionally, awareness raising activities for workers will also be carried out as part of this sub-component. These activity will aim raise awareness among potential workers of the benefits of formalization.Activity 1.2: Wages Subsidies. Temporary wage subsidies would be provided to incentivize farmers to formally employ vulnerable groups. These jobs would pay at least the minimum wage and would require registering workers with the Social Security Institution (SSI). Wage subsidies would fund a portion of the wages of newly formal employees, as well as their registration costs including SSI contributions, income tax, and stamp tax, for the duration of the employment. Activity 2: Enhancing ACC’s aggregation capacity. This activity would finance small grants to local ACCs to stimulate demand for agricultural products in the project areas. Capacity constraints in local ACC facilities limit the expansion of contract farming schemes. While both farmers and buyers have high demand for contract farming, the small-scale farm structure makes linking these parties and maintaining crop quality challenging. To address this, micro and small grants would be provided to local ACCs to enhance their physical and technical capacity in secondary production activities such as drying, storing, grading, sorting, and packaging produce. This would improve aggregation capacity and maintain crop quality throughout the marketing value chain. This activity aims to enhance the demand for and utilization capacity of contract farming by primary ACCs, resulting in a greater number and/or volume of contracts signed with farmers under Activity 1.Activity 3: Implementation support and institutional capacity building. This activity would maintain and further strengthen the capacity of the local, regional and central ACCs to effectively implement the proposed project. It would therefore continue to finance the activities of the Project Implementation Unit (PIU) established for project management, relevant capacity building activities for local, regional and central ACCs, management of the Grievance and Redress Mechanism, as well as monitoring and evaluation (M&E) and communication activities. This activity would also support studies, technical assistance and training activities for ACC focusing on capacity building in business areas such agricultural marketing, exports, fair trade, agricultural start-ups; including but not limited to the areas identified through the international study tours conducted under the first project.