Turkmen producers, wholesalers, and distributors have long been frustrated by a lack of export options. Value chain and logistical challenges, lack of hard currency, inadequate understanding of Western import standards, and isolationist policies have all hindered the ability of these entrepreneurs to fully realize their export goals. Stymied by these challenges, Turkmen entrepreneurs were largely dependent limited on Kazakhstan and Russia as horticulture trading partners– traditional destinations with lax entry requirements – until now. The Innovation Facility, run by USAID/Central Asia’s Competitiveness, Trade, and Jobs activity, is supporting diversification of Turkmen exports and export partners by minimizing the risk to Turkmen entrepreneurs as they experiment westward. 

Quality Products - If You Can Find Them

Turkmen melons have long had the reputation of being both delicious and difficult to procure: in Soviet times, the melons were used as currency. There are approximately 400 varieties of melons cultivated in Turkmenistan, where the climate and soil are famously well-adapted to this purpose. Local contacts still tell stories of relatives who would board the train to Moscow in the Soviet era with no financial resources, but with the family farm’s stock of melons. After disembarking in Moscow, the Turkmen travelers would announce an offer to barter melons for transport via taxi to their destination – with no trouble finding interested parties as demand for the melons far outstripped supply.

Today, that tradition continues in modern form: during the melon-harvest months of June to December, Turkmen melons are regularly available as a duty-free purchase at Ashgabat International Airport. Unadorned, unpackaged, and unceremoniously available in a large crate designated for this purpose, 15-pound melons are carried off by passengers clutching them to their chests and cradling them in flight – a ritual reminiscent of Soviet times.

Although demand exists for Turkmen melons, the methods for efficiently and profitably transporting and marketing the melons in destinations outside of Russia and Central Asia remained out of reach for Turkmen farmers – until now. 

An Innovative Idea Blossoms

The original inspiration to ship melons to Austria originated at the Turkmen-Austrian Business Forum in December 2017. The forum, which was held in Ashgabat, brought together representatives of the Austrian government and 24 companies specializing in trade, health, agriculture, transport and logistics, energy, engineering, construction, tourism and other fields with GoTM representatives, including from the Chamber of Commerce and Industry and the Union of Industrialists and Entrepreneurs, and private sector actors. The following year, in September 2018, Austrian-Turkmen business forum was held in Vienna where Turkmen delegation travelled on a chartered plane with the samples of melons brought by Ter Önüm in an effort to build a brand awareness. 

Representatives of the Turkmen company Ter Önüm, a company specializing in wholesale produce import and export, attended the forums and there cultivated the idea of acting as a distributor for Turkmen melons in Austria. For assistance with this ambitious endeavor, Ter Önüm applied to USAID’s Innovation Facility. 

The Innovation Facility is a component of the USAID Competitiveness, Trade, and Jobs activity in Central Asia and co-finances inventive proposals from entrepreneurs to encourage creative business solutions, while reducing risks to local businesses. The Innovation Facility also co-financed the first private food safety lab in Turkmenistan with the Union of Industrialists and Entrepreneurs. GoTM representatives have commented on numerous occasions to USAID that they strongly support the Innovation Fund and the entrepreneurial, self-reliance-focused business model it promotes. 

Bet the Farm: The Pilot Shipment Makes its Way to Austria

In September 2019, USAID partnered with Ter Önüm to send the first trial shipment of 19 tons of fresh melons overland in refrigerated trucks. Ter Önüm worked with melon farmers in Dashoguz to source the melons, then sorted, packaged, and loaded them on trucks for transport. Packaging materials for melons have been purchased from neighboring Uzbekistan by Ter Önüm. Ter Önüm also negotiated the deal with the wholesaler in Austria: Turope Consulting (“Turope” being a portmanteau of TURkmenistan and EuROPE), an Austrian company which focuses on building business links between Turkmenistan and Austria. USAID’s Innovation Facility provided the funding for the transportation costs of the melons to Europe, thereby minimizing the risk to both the Turkmen and Austrian companies for this pilot.

The trial delivery, which took nine days from Dashoguz to Vienna, tested the new route, verified product sustainability during transport, confirmed compliance with EU perishable good requirements, and ascertained the interest of Austrian buyers of the melons.

The trial shipment was an immediate success and two further shipments followed in October 4 and 9 of 2019. Although the trial shipment was a test of the logistics, it was also an opportunity for Ter Önüm to test the market.  A local contact at Ter Önüm commented that the trial shipment allowed the company to test if the melons would meet “the EU’s rigid entry requirements and, more importantly, to learn consumers’ preferences.” The contact wondered if Turkmen melons were “too sweet” for a European palate, but his worries were allayed by the quick sale of the melons in Vienna.

Following the success of this year’s export of melons, Ter Önüm plans to “expand into other EU countries, in addition to Austria, next year.” The contact noted that export of Turkmen produce to the EU represents an important opportunity for the business to “earn hard currency,” which is in short supply in Turkmenistan.

Fetching a premium price of 7.9 euro each, the Turkmen melons represent an attractive investment opportunity with plenty of profit to go around for both Turkmen and European entrepreneurs. This pilot phase allowed the two companies to mitigate their risk while verifying the viability of the value chain and, as suggested by the representative from Turope, verifying the sustainability of the premium pricing model.  

Although USAID subsidized the first three shipments as described above, moving forward, the two companies will fully take over logistics and funding for the shipments – a model for how, with only minimal investment, self-reliance is achievable in this sector. After the success of these first three pilot shipments, in late November of 2019, Ter Onum took its own initiative and setup another shipment of Turkmen melons, this time by air cargo, and proudly delivered five tons of fresh melons to Dubai, U.A.E.

USAID stands ready to support these entrepreneurs as continue to set their sights on more innovative and diverse trading partners, in Europe and beyond.