How can a small farmer be convinced to deliver their harvest for processing today and receive payment several months later?

The answer from the Ternopil-based initiative “Shchedre Opillia” is absolute digital transparency. By implementing a “field-to-packaging” traceability system, the cluster not only automatically met strict HACCP requirements for EU exports but also introduced a unique “50/50” financial model. This is a story of how data replaces informal agreements, and small producers become export partners, earning from finished products rather than low-margin raw materials.

“When a farmer sees in the system how much output their batch yielded after freezing, trust stops being abstract,” — Taras Andriichuk, Coordinator

Practice Passport

Practice Title	Creation of a digital crop accounting system and transparent revenue-sharing model (“50/50”)
Cluster / Source Organization	“Shchedre Opillia” Cluster Initiative
Region	Ternopil region
Implementation Period	Pilot → scaling (since 2021)
Cluster Maturity Level	Cluster initiative (active growth stage)
Number of participants	Over 20 MSMEs (farms)
Thematic Areas	Twin transition (digitalization), value chain development, SME services
Target Audience	Agro-clusters aiming to move from a raw-material model to deep processing and joint exports, requiring tools for transparent profit distribution

Context and Problem Addressed by the Practice

The initial situation in the berry sector of Ternopil region was typical for many regions in Ukraine: hundreds of small farms produced high-quality raw materials but had no access to added value. Without their own freezing facilities, farmers were forced to sell harvests to intermediaries at minimal “field prices.”

What did not work before implementation?
Attempts to create cooperatives often failed due to lack of trust. Farmers feared that their high-quality berries would be mixed with lower-quality produce and that profits would be distributed unfairly. Additionally, the absence of documented traceability for each batch made it impossible to obtain international HACCP certification. Without a digital trace, products remained “grey,” and access to premium EU markets was closed.

Description of the Practice Mechanism (“What’s Under the Hood”)

The practice combines an IT solution with a unique financial cooperation model.

Digital traceability chain

The cluster implemented specialized software integrated with hardware tools (scanners, label printers, scales).

Process flow:

• Field registration: Each farmer has a digital profile. At harvest, each batch receives a unique QR code containing data on the producer, harvest time, and variety.
• Receiving hub: Upon arrival at the freezing facility, each crate is scanned. The system automatically records weight and quality parameters. During peak season, it processes data from up to 350 producers daily.
• Processing stage: Products undergo shock freezing. The system tracks output from each specific batch, allowing precise calculation of shrinkage or rejection rates per farmer.
• Storage and packaging: Frozen berries are labeled as cluster products, while the digital batch passport retains full origin history.

“50/50” financial model

This is a high-trust model enabled by digitalization:

• Farmers deliver products without immediate payment (effectively financing the cluster with raw materials)
• The cluster handles processing, storage, and export sales
• After selling the finished product at higher prices (frozen berries in the EU are significantly more valuable), revenue is shared between the farmer and the cluster
• Transparent system analytics eliminate manipulation in settlements

Roles:

• Cluster management: System operator, logistics provider, export broker, and freezing facility manager
• MSMEs (farmers): Raw material suppliers and “shareholders” in final profits
• IT provider: Developer of the customized solution adapted for field and warehouse conditions

Resources and Preconditions

The practice was implemented primarily using the cluster’s own resources and participant contributions, demonstrating high viability without reliance on donor funding.

Critical prerequisites:

• Physical infrastructure (owned or leased shock-freezing facility)
• Willingness of cluster leaders to train farmers in using scanners and digital interfaces
• High concentration of producers within a 50–70 km radius, enabling delivery within 3–4 hours after harvest

Results and Outcomes

The practice transformed fragmented farms into a high-tech export value chain.

Quantitative and economic indicators:

• 100% traceability: Every batch from over 20 MSMEs recorded, ensuring automatic HACCP compliance
• Time optimization: Product intake and accounting time reduced threefold compared to paper logs
• Margin growth: Participant incomes increased by 30–50% compared to selling to intermediaries

Structural changes:

• Internal capital market formation: The “50/50” model effectively replaced bank lending
• Legalization and standardization: Farmers improved quality and varietal purity, as the system clearly links input quality to final revenue
• Investment attractiveness: The cluster became a transparent partner for international buyers, offering full traceability of each pallet

Sustainability of the Practice

The practice demonstrates full sustainability as it is embedded in daily business operations. It is not a project but a new operating model.

The key factor is “economic irreversibility”: once farmers experience profits through the transparent “50/50” system, they do not return to opaque intermediary schemes. The system is self-financed through added value generated in the processing chain.

Limitations and Risks

• Digital literacy: Requires intensive training for staff and farmers; resistance to digital tools in rural areas remains a challenge
• Cash flow risk: Delayed payments may strain farmers’ liquidity, especially if EU sales are delayed
• IT dependency: System failures during peak season could disrupt operations

Lessons Learned and Recommendations for Clusters4Regions

This case clearly demonstrates how technology solves mental barriers (lack of trust).

Key lessons:

• Trust is built on data, not declarations: Digital systems are the only effective tool for resolving cooperation conflicts
• Cluster as a financial instrument: The “50/50” model shows that a mature cluster can act as an internal financial intermediary
• Focus on shared assets: Agro-clusters must have a common value-added asset (cold storage, packaging line, certification), while digital systems connect this asset with producers’ interests

The presentation of the case study is available via the link:

This practice has been included in the Ukraine Best Practice Guide, which we are developing as part of the Clusters4Regions project.

To be among the first to receive the full version of the Guide, please complete the short pre-registration form.

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Clusters4Regions is an initiative aimed at designing and implementing cluster programs in six regions of Ukraine (Vinnytsia, Volyn, Sumy, Odesa, Khmelnytskyi, and Ternopil regions). The initiative is implemented by the Ukrainian Cluster Alliance at the request of the Ministry of Economy, Environment and Agriculture of Ukraine, with the support of the Swiss-Ukrainian project “Ukraine`s Cohesion and Regional Development” UCORD, and is aligned with EU priorities, international donor frameworks, and Ukraine’s recovery agenda.