Action for Sustainable Agro-Industry in Lebanon
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FINAL REPORT Expanding Economic Opportunities II (EEO II) Action for Sustainable Agro Industry in Lebanon (ASAIL) project Agreement No. 268-A-00-06-00303-00 Submitted 31 May 2008 to: Mandy Parham-Seotsanyana, Agreement Officer, USAID/ Egypt [email protected] Ghassan Jamous, Cognizant Technical Officer, USAID/Lebanon [email protected] by: 50 F Street Northwest, Suite 1050 Washington D.C., USA 20001 TABLE OF CONTENTS EXECUTIVE SUMMARY................................................................................................4 PROJECT SUMMARY.....................................................................................................8 SMALL RUMINANT DAIRY ..........................................................................................9 NICHE LEBANESE PRODUCTS..................................................................................13 PILOT PLANTS...............................................................................................................16 BUSINESS DEVELOPMENT SERVICES....................................................................19 MARKETING ..................................................................................................................20 ACCESS TO FINANCE ..................................................................................................23 STAFF DEVELOPMENT ...............................................................................................24 ACDI/VOCA VOLUNTEERS & CONSULTANTS......................................................24 MANAGEMENT..............................................................................................................25 ANNEXES ........................................................................................................................28 Annex 1: List of ASAIL Beneficiary SR Dairy SMEs and Cooperatives Annex 2: List of ASAIL Beneficiary NLP SMEs and Cooperatives Annex 3: Promotional Materials Developed for SMEs and Cooperatives Annex 4: Illustrative List of Services Performed at Pilot Plant Zahle Annex 5: Results From Business Development Services Provided by ASAIL Annex 6: Websites Developed for SMEs & Cooperatives Annex 7: Newspaper Coverage Annex 8: Loans Disbursed to ASAIL Beneficiaires through Byblos Bank Annex 9: Success Stories 2 List of Acronyms ASAIL Action for Sustainable Agro-Industry in Lebanon AREC Agricultural Research and Educational Center AUB American University of Beirut BDS Business Development Services CCIA Chambers of Commerce, Industry, and Agriculture COP Chief of Party CHF Community Habitat Finance DCOP Deputy Chief of Party GMP Good Management Practices FAO Food and Agriculture Organization FOD Field Operations Director GDP Gross Domestic Product HORECA Annual Hospitality and Food Event organized in Lebanon HACCP Hazard Analysis and Critical Control Point ISO International Standard Operations IFC International Finance Corporation IRI Industrial Research Institute LARI Lebanese Agricultural Research Institute LL Lebanese Pounds (1 US$ = 1,530) M & E Monitoring & Evaluation MOA Ministry of Agriculture NLP Niche Lebanese Products SME Small and Medium Enterprises PPM Pilot Plant Manager SR Small Ruminants TOT Training of Trainers USAID United States Agency for International Development 3 EXECUTIVE SUMMARY The Action for Sustainable Agro-Industry in Lebanon (ASAIL) program expanded economic opportunities for SMEs, cooperatives and producers along the small ruminant dairy and niche Lebanese products value chains. Implemented from November 20, 2005 to February 28, 2008 by ACDI/VOCA, in coordination with local sub grantee Vitech Consulting s.a.l., this 28.5 month, $6.9 million project was funded by the United States Agency for International Development (USAID). ASAIL provided extensive technical assistance, marketing, business development and access to finance facilitation. In-spite of many challenges during the course of the project, including political instability, war, civil strife, and major socio-economic changes in the industry and agricultural sector at large, ASAIL was committed to progress and worked closely with enterprising producers, processors, and other stakeholders to create a positive impact in the lives of the beneficiaries and in the sectors. In all, ASAIL provided technical assistance, training and market linkages for 82 processors (32 dairy and 50 NLP) resulting in direct sales of more than $270,000 in Lebanese local markets, and more than $2.2 million in exports to Europe, the Middle East, and Africa. Three pilot product development plants were established, with a focus on honey/distillates (Tripoli), baked goods/sweets (Saida) and fruit and vegetable products (Zahle). The plants will continue beyond the project under the management of the Chambers of Commerce, Industry, and Agriculture for use by small and medium-sized agrofood businesses throughout Lebanon. Beneficiaries participated in 7 domestic and international trade shows and a variety of advertising tools (websites, brochures, logos, labels) were developed for 32 processors. Through a partnership with a large Lebansee bank, ASAIL facilitaetd access to $1.9 million in loans for producers and SMEs through a partnership with a large Lebanese bank. Vaccination campaigns to small ruminant producers benefited 7,590 family members spread out across more than 40 villages in 6 cazas owning over 312,000 small ruminant animals, and producers were trained in improved milking, breeding, and animal health practices. Over the course of ASAIL, Lebanon’s agroindustrial sector grew, especially in export markets - in the food and beverages sector, exports increased from $1,282 million in 2006 to $1,744 million in 2007. ASAIL worked with Lebanese SMEs and cooperatives to capitalize on this growth by facilitating export linkages, promoting quality control, improving forward and backward linkages within each subsector, and improving demand-driven product and packaging development. The following report highlights achievements over the entire length of the project, with emphasis on the short-term and long-term impact in small ruminant dairy and the NLP sector (fruit and vegetable, traditional sweets, distillates and essential oil). Accomplishments and achievements have been divided into six sections and can be summarized as follows using beneficiaries as a point of focus: I. Small Ruminants ♦ Producers: Over the last two years, ACDI/VOCA worked on facilitating technical assistance, training and services to small ruminant producers in northeast and southeast Beqaa. This was part of ASAIL’s strategy for targeting beneficiaries at the lower end of the value chain and moving progressively along the chain to include all stakeholders concerned. Specifically: 4 o ACDI/VOCA activities resulted in an increased income of more than $10.3 million dollars for producers as a result of lowered operational costs (feed and veterinary services), improved nutritional diet (culling), milk pricing through production differentiation, more efficient inter-sector and inter-regional linkages and cost-efficient practices on breeding, health and milk handling. o ACDI/VOCA activities maintained over 7,900 jobs belonging to more than 1,265 producer households. These households worked in small ruminants across more than 45 villages in North-East and South-West Beqaa. This estimate includes all jobs occupied by main producers and their family members, including brothers, sisters, mothers and others working to manage the family livestock. o ACDI/VOCA strengthened linkages between 15 producer cluster groups in Beqa’a and 32 dairy processing SMEs and cooperatives. ♦ Processors: ASAIL provided technical assistance, training and marketing services to dairy processors in Beqa’a. The following increase in the production levels of particular type of cheeses, improvement in the overall quality of cheese produced and additional investment in infrastructure development and expansion, all resulted in increased sales returns of particular type of cheeses. Specifically: o An increase in the production levels of milk by more than 30 tons for 32 SMEs from 2006 to 2007, resulting in an increase in income by $100,000. This is attributed to increased production levels of milk, from 90 tons to 120 tons per year, calculated using an average cost of 500 LL per kg. o The project maintained the jobs of 127 permanent employees working in 32 SMEs and cooperatives and over 380 other seasonal jobs. On average, each SME employs around 16 employees. Providing technical assistance and support to SMEs helped them find ways to expand their market, and consequently, their production levels, which impacted employment. II. Niche Lebanese Products ♦ Producers: ACDI/VOCA facilitated technical assistance, training and services to fruit and vegetable producers in Akkar, North Lebanon and Beqaa. Results included: o An increase in production capacity of producers by 25% to 50%, and a decrease in overhead costs by at least 35%. These changes in capacity and cost are a result of ASAIL training on cultural practices including irrigation, pesticide control, harvesting, etc. o The preservation of 3300 producers’ jobs, representing more than 500 producer households. o An increase in producers’ income by approximately 25%, from a baseline average of $6,000 per year to $7,500 per year, due to a decrease in production costs. ♦ Processors: ASAIL provided technical assistance, training and services to SMEs and cooperatives. This directly impacted production quantities and product