Technical Assistance Grant (TAG) - Grant Design Document

Technical Assistance Grant (TAG) - Grant Design Document

Summary Sheet

Grant Title / Enhancing dairy-based livelihoods in India and Tanzania through feed innovation and value chain development approaches
Recipient / ILRI in partnership with CIAT
IFAD Originator/Sponsor / Antonio Rota
Grant Objectives and links to the Strategic Objectives/SF and Grant policy / To contribute to improved dairy-supported livelihoods in India and Tanzania via intensification of smallholder production focusing on feed enhancement using innovation and value chain approaches. Links to grant policy: innovative technologies and approaches, capacity strengthening, knowledge sharing.
Beneficiary Countries / India and Tanzania
Proposed IFAD Grant Amount
Co-financing
Total Programme Cost / 1.00 million USD
0.266 million USD
(note: additional co-financing is likely through CRP3.7)
1.266 million USD
Projected Executive Board Date / April 2011
Programme Duration / 3 years
Target Group and Benefits / Smallholder dairy farmers in India and Tanzania will benefit from enhanced feed options for dairy cows leading to greater income opportunities
IFAD Projects Likely To Benefit / In Tanzania
Agricultural Services Support Programme (2007-2014)
Rural Micro, Small and Medium Enterprise Support Programme (2007 – 2014)
In India
Integrated Livelihoods Support Project, Uttarakhand(starting imminently)
Mitigating Poverty in Western Rajasthan Project (2008 – 2014)
Supervision Arrangements / ILRI will be the implementing institution, and will work in partnership with CIAT, and a range of national development, research and private sector partners in India and Tanzania.

ACRONYMS AND ABBREVIATIONS

APAndhra Pradesh

ASARECAAssociation for Strengthening Agricultural Research in Eastern and Central Africa

BMGF BMGF Bill and Melinda Gates Foundation

CBOCommunity Based Organisation

CGIAR Consultative Group on International Agricultural Research

CIATInternationalCenter for Tropical Agriculture, Colombia

CoECentres of Excellence of EAAPP

COP-PPLDCommunity of Practice for Pro-poor Livestock Development

CRPCGIAR Research Program

DALDODistrict Agriculture and Livestock Officer, Tanzania

DFIDDepartment for International Development, UK

DRETDirectorate of Research, Extension and Training of MLD, Tanzania

DRTDepartment of Research and Training of MAFC, Tanzania

EAAPPEast Africa Agricultural Productivity Project funded by World Bank

EADDEast African Dairy Development project

FAPFodder Adoption Project, conducted by ILRI and partners in Ethiopia

FBOFaith-based Organsations (e.g., Roman Catholic and LutheranChurches)

FIPFodder Innovation Project, conducted by ILRI and partners in India and Nigeria

GDPGross domestic product

GoIGovernment of India

HPIHeifer International

ICRISATInternational Crops Research Institute for the Semi-Arid Tropics, India

ILRIInternational Livestock Research Institute, Kenya

LITILivestock Training Institutes, Tanzania

MAFCMinistry of Agriculture, Food and Cooperatives, Tanzania

MLDMinistry of Livestock Development, Tanzania

NARESNational Agricultural Research and Extension System

NCAPNational Centre for Agricultural Economics and Policy Research, India

NDDBNational Dairy Development Board, India

NDRINational Dairy Research Institute, India

NGONon-governmental Organisation

PADEPParticipatory Agriculture Development Programme, Tanzania

SARISelian Agricultural Research Institute, Arusha, Tanzania

SUASokoineUniversity of Agriculture, Morogoro, Tanzania

TAMPATanzania Milk Processors Association

TAMPRODATanzania Milk Producers Association

TDBTanzania Dairy Board

TFA Tanganyika Farmers Association

ULSPUIntegrated Livelihoods Support Project, Uttarakhand

USAID United States Agency for International Development

VCValue chain

I.BACKGROUND

Feed is a key issue but enhancing feed availability requires a broad approach

Small-scale dairy production is an almost universal component of the farming enterprise among smallholders farming in mixed crop-livestock systems in Sub-Saharan African and South Asia. The availability of sufficient high quality feed is a key constraint to improving milk yields and hence dairy income for smallholders through intensification of smallholder dairy systems.

One response to this situation has been the attempt to introduce or promote improved feed technologies at farm level but this has rarely had the intended benefits and new approaches are required. This proposal therefore places feed in a broader context and acknowledges that enhancing feed supply has both technical and institutional dimensions. It also builds on previous work led by ILRI, including the IFAD-funded Fodder Adoption Project (TAG853; the DFID-funded Fodder Innovation Project ( the OFID-funded project on dairy intensification and milk marketing and the BMGF-funded East Africa Dairy Development Project ( The proposed project will tackle feed scarcity from a value chain perspective and employ innovation system principles.The emphasis on value chain and innovation approaches will necessarily involve consideration of issues beyond feed including enhancing breed quality and health status of dairy cows: these elements will be addressed through the embedding of the proposed project within the larger context of the CGIAR Research Programme 3.7 (More milk, meat and fish, for and by the poor). For details of objectives and activities refer to Annex I.

The project will work on dairy value chains in India and Tanzania; in both countries milk already is an important commodity while projected supply-demand gaps for milk and milk products indicate a need for intensification. The project will form part of a larger body of work on dairy value chains in India and Tanzania encompassed in CGIAR Research Programme 3.7 (More milk, meat and fish, for and by the poor). Present diversity in institutional settings will allow lessons to be learned which can be applied in a range of contexts beyond this project.

Why India and Tanzania?

We have selected India and Tanzania as our study countries, as they provide interesting and in some aspects contrasting situations, presenting opportunities for comparisons and learning. Dairy value chains in these countries are also a priority focus of the new CGIAR Research Programme on livestock and fish ( meaning there are considerable opportunities for synergies. In both countries many poor livestock keepers are engaged in dairy production and a variety of dairy production systems exist. Furthermore, the extent of dairy development varies considerably between countries. India has a long history of dairy development, most notably through the co-operative movement. In Tanzania the development of milk market chains that extend beyond the very local is relatively nascent but the large and vibrant milk sector in neighbouring Kenya, which shares similar agro-ecologies, suggests that there is potential for similar development in Tanzania, given rising dairy demand. Institutionally there are also interesting comparisons to be made. In India the government has been active for many years in the establishment of dairy cooperatives through the National Dairy Development Board (NDDB), civil society is strong and rural development NGOs are a feature of the development environment. The private sector is also emerging as an important dairy player: recent examples of increased vertical integration in dairy production can be found in Andhra Pradesh, Rajasthan, Maharashtra and Bihar, amongst others. In Tanzania, the presence of numerous small-scale milk collectors and processors indicate an emerging market for milk processing. Njombe and Masanga (2009[1]) suggest that 14% of all processed milk is currently processed by these 'micro-dairies’. Women are strongly involved in this emerging market. In both India and Tanzania average milk yields are far below their potential (see Annex III).

In both countries, dairy development has considerable potential to contribute towards reducing poverty: smallholder dairy production can successfully compete with larger scale operations where the household labour it uses has low opportunity costs, thus representing a promising option especially for poor households.

More detail on the dairy context in India and Tanzania including some suggestions for researchable issues are presented in Annex III. Examples of potential research sites are given in Annex IV.

II. RATIONALE, RELEVANCE AND LINKAGES

Project rationale: Current thinking on how to address feed enhancement in smallholder systems

Given the lack of progress in enhancing feed supply for smallholders using technology-led approaches, new approaches which place feed enhancement in a broader context are needed. Two key concepts help us to do this. The first relates to the need to consider the broader value chain issues when dealing with feed constraints. The second places emphasis on the need to enhance ‘innovation capacity’ in the local stakeholder network.

Value chain thinking and innovation approaches

There is an increasing recognition that the level of agricultural production intensity and the efficiency of resource use are not just determined by what goes on at farm level but by transactions among different actors along the value chain. Thus, availability of and access to inputs, services, information and output markets, the relationships to trading partners, the perception of risk and trust, and finally the entrepreneurial environment all contribute to decisions on how much to invest in improved feeding strategies for dairy production and how this ultimately impacts on livelihoods. While the direct linkages for the producers are the starting point of most investigations and interventions, the overall impact of higher-level actors involved in dairy value chains often have profound impacts felt indirectly by a large number of producers. For instance, feeding of compounded feeds to dairy cows in India is much less common than one might expect – this may relate the need for economies of scale in production of compounded feeds meaning that production is restricted to formal institutions such as dairy cooperatives and feed companies. Similarly in Tanzania, feeding of dairy cows depends to a large extent on crop residues fed whole. There could be scope for enhancing feed supply through processing of such crop residues through mechanical chopping to increase daily intakes and hence milk yield. Such technologies could be made available to farmers through focus on Business Development Services (BDS) by providing opportunities for small-scale entrepreneurs to set up feed processing micro-businesses. Enhancing feed supply in these situations thus requires attention not just at farm level but at points further along the value chain. Looking beyond farm-level technologies to technical and institutional issues along the value chain is especially important in regard to dairy production because of the nature of the product and the production characteristics. Milk is highly perishable and is supplied daily. Therefore product marketing requires reliable institutions with a high level of technical and marketing expertise. In addition, these institutions have to be trusted by the producers to honour their commitments, even in times of high production. Ensuring reliable procurement and marketing services for milk is likely to encourage on-farm feed investment

Consideration of the whole value chain tends to broaden intervention strategies beyond an otherwise narrow focus on a particular issue. For example as feed constraints are dealt with, other bottlenecks such as breed quality and health status will come to the fore. The value chain approach thus encourages upgrading of whole systems through parallel emphasis on a range of issues.

As well as the social, economic and biophysical characteristics of the dairy household, it is increasingly being recognized that actors and influences beyond the household play an important if not over-riding part in shaping smallholder livestock feeding strategies. This has been conceptualized in the innovation systems framework, which recognizes that change in rural settings requires a well-connected innovation ‘architecture’ and a diverse set of actors, including from government, NGO, research, private and civil society sectors, to connect and collaborate to bring about change. While this is intuitively attractive, finding mechanisms for enhancing innovation capacity has proved challenging. Innovation platforms, which provide a forum for exchange of information and development of joint action[2], appear promising although developing and sustaining such mechanisms is not trivial. A further challenge relates to how success is measured when considering long-term changes in social processes rather than simple short-term changes to farming practice.

There is increasing convergence in value chain and innovation approaches. Value chain development has connotations of more focus on business aspects of enhancing flow of products from source to consumer. Innovation system principles place greater emphasis on building connections between actors including supporting actors and enhancing capacity of local stakeholder clusters to innovate and change. The rationale for the current project is to bring together various strands of work from recently completed and ongoing projects in a coherent and focused effort to experiment with approaches to feed development based on value chain and innovation approaches. Previous efforts have been piecemeal. For example, in the Fodder Adoption Project work in Vietnam was strong on value chain approaches to livestock development: as the work progressed use of value chain analyses to support development of linkages between smallholders and distant urban markets led to widespread change in feeding practices and types of cattle being kept with accompanying benefits for producers. Such change was arrived at over several years and it is possible that more rapid innovation would have occurred through a more systematic approach to bringing stakeholders together in innovation platforms. In Ethiopia the emphasis was more on the use of stakeholder platforms to enhance innovation capacity. These platforms led local stakeholders to think beyond feed technology development to other elements of the value chain including market development and breed enhancement. However, the project could have done more to build capacity to conduct value chain analysis at the outset and this would very likely have led to greater impact. In the project proposed here, we will combine the stronger elements of different components of the IFAD-funded Fodder Adoption Project and other recently completed projects for a more concerted approach across different countries to allow more powerful lessons to be distilled. Bringing together value chain development and innovation approaches the current project will aim to contribute to improved dairy-derived livelihoods in India and Tanzania via intensification of smallholder production focusing on enhancement of feeds and feeding using both innovation and value chain approaches.

The objectives of the project will be three-fold:

Institutional strengthening: To strengthen use of value chain and innovation approaches among dairy stakeholders to improve feeding strategies for dairy cows.

Productivity enhancement: To develop options for improved feeding strategies leading to yield enhancement with potential income benefits.

Knowledge sharing: To strengthen knowledge sharing mechanisms on feed development strategies at local, regional and international levels

The details of how these objectives will be met are elaborated in Section C: Strategy, Approach/Methodology.

The selection of one value chain (dairy) in two contrasting countries (India and Tanzania) provides a strong research design. Many of the issues associated with dairy production are common to the two countries but both the biophysical environment and the institutional set-up vary considerably providing opportunities to learn what works well where and apply such learning more widely.

relevance to IFAD programmes and priorities

The proposed project is framed around a number of key concepts, all of which appear central to IFAD’s global strategy: innovation approaches, value chain analysis, capacity and institution building, and knowledge sharing. The revised IFAD Grants Policy (December 2009) defines the four outputs which should be sought from grants:

1. Innovative activities and innovative technologies and approaches in support of IFAD’s target group;
2. Awareness, advocacy and policy dialogue on issues of importance to poor rural people;
3. Capacity of partner institutions strengthened to deliver a range of services in support of poor rural people; and
4. Lesson learning, knowledge management and dissemination of information on issues related to rural poverty reduction.

The proposed project contributes especially to outputs 1, 3 and 4. Through the activities of local innovation platforms we expect a number of innovative technologies and organizational innovations associated with enhanced feeding to emerge, be evaluated and tested through action research for the benefit of smallholder dairy cow keepers and other dairy value chain actors. Furthermore by working with local actors through innovation platforms we will strengthen capacity of partner institutions to analyse value chains, identify bottlenecks and implement solutions aimed at enhancing support delivery related to improved feed quality and availability for poor rural dairy farmers. Finally, and again through local innovation platforms, the project will catalyse identification of knowledge gaps by local partners and will set in place a knowledge management and dissemination strategy that builds on existing knowledge pathways. The generic lessons derived from the proposed research will be important not just in the selected study countries but will have wide applicability to IFAD’s loan projects including livestock globally. Distillation of key lessons and wide communication of such lessons will be achieved through a range of communication mechanisms as outlined in Annex V.

Looking more specifically at current IFAD loan projects in India and Tanzania that this grant would support, a number of synergies are apparent. For example, in Tanzania the Agricultural Services Support Programme (2007-2014) targets a broad section of the country’s farming population, with a particular focus on the poorest households, including landless labourers, women, households headed by women and orphans, and HIV/AIDS-affected smallholders. These poor farmers are held back by lack of access to technology, financing, markets and natural resources. The programme works to improve agricultural productivity by:

1. promoting farmer’s organizations to prioritize and manage development needs
2. strengthening linkages between farmers and local and central government as well as the private sector
3. improving access to relevant agricultural knowledge and technologies
   promoting policy changes in favour of poor farmers

These areas, especially 2 and 3, are a strong focus of the proposed grant and many of the approaches developed through the project could be usefully scaled up through the loan programme.