(TCP PROJECT EXAMPLE)

I. PROJECT SUMMARY

(Brief description of the project expectations and outcomes.)

II. BACKGROUND AND JUSTIFICATION

The agricultural sector is of major importance to the economy of Country XXX, both in terms of foreign exchange generation and its contribution to employment. Over the past few years, this sector contributed approximately 30 percent of GDP, compared with 11 percent for mining and quarrying, the second most important productive sector, and over 50 percent of the country's export earnings. In addition, more than 70 percent of the country's labour force is employed in agriculture and related activities. The economic liberalization policies implemented from the late 1980s gave impetus to agricultural activities resulting in significant increases in output and productivity. This sector has exhibited a pattern of sustained growth from 199- to 199-.

Traditionally, agricultural production has been dominated by the two main crops, sugar and rice, with other agriculture (non-traditional crops and livestock) being of secondary importance. Together, these two products contributed over 50 percent of export earnings. However, over the years, both sugar and rice have benefited from preferential trading arrangements in the export market and the uncertainty surrounding the future of these arrangements makes it imperative that XXX simultaneously improves the marketing of traditional exports, and increases the marketability of non-traditional crops and livestock.

In an effort to realize the objective of increasing the marketability of non-traditional exports the Ministry of Agriculture (MOA) was restructured in 19--, as part of the Government's National Development Strategy, to increase the income and foreign exchange generating capacity of the non-traditional agricultural sub-sector. MOA identified the dairy sector as one of its key potential areas and immediately set up a small but dedicated National Dairy Development Programme (NDDP) in 19--.

The livestock sub-sector's contribution to total agricultural output is relatively small, varying between ss percent to zz percent during the period 19- to 19--, however, the sub-sector is extremely important as a source of animal protein to the population and income to rural farmers. Within the sub-sector, cattle production is an area of particular significance.

Changes in the global market scenario that threaten many of the areas of traditional agriculture have caused increasing attention to be given to the development of this industry in XXX. Improvements in the dairy sector are priorities of the MOA and are regarded as having potential to significantly improve food security, generate income for the small and part-time farmers and also contribute to the reduction of rural poverty.

It has been estimated that the national requirement for fluid milk is about 54 million litres. Domestic production accounts for about 50 percent of this requirement, with the deficit being made up by the importation of milk powder and UHT, evaporated and condensed milks. This additional burden on an already unfavourable external trade balance, and the slide of the currency serve to exacerbate the current crisis. Further, those most vulnerable to the negative effects of increasing the cost of milk and milk products are the low-income groups, pregnant and nursing women, and children under five years. Dietary deficiency has always been a major contributory factor to the increase in malnutrition among the latter.

Milk production in the coastal regions of XXX accounts for approximately xx percent of the national production. Production in Region ggg accounts for about xx percent of national production. This region presently has the largest concentration of cattle in XXX, (approximately ...,000 heads) and is an area with great potential for the expansion of the cattle industry. It was in consideration of this potential that LDC (Livestock Development Company) established two collecting centres in the yyy and nnn areas in the late 1980s. Large quantities of milk were collected daily from these collecting centres by LDC's refrigerated tankers and taken to the capital for processing. However, this collection system deteriorated, and resulted in the complete cessation of operations towards the end of 19--. Several factors contributed to the closure of the collection centre. These included improper management practices, unreliability of electric supply, the increasing use of large quantities of cheaply imported 'food aid' milk powder, unattractive farm gate prices for milk and an increase in the cost of milk collection.

Over the years, private milk collectors have attempted to fill the void created by the closure of LDC’s collection centres. In the peak season, milk collectors can collect about 4,000 litters of milk daily. The extent of their operation is however limited by the lack of refrigeration facilities, and poor milk collection and distribution systems. These are the major impediments to the development of the industry.

Most of the milk collected is sold in the zzz area to private processors, retailers and consumers. The milk collected by the middlemen represents less than 10 percent of the daily milk production potential of Region DD. The lack of refrigeration/cooling facilities and appropriate transportation prevent milk from areas along the creeks from being collected. Farmers in these areas, aware of the marketing constraints, may milk only part of their herd once daily. Farmers are fully prepared to adopt improved technology that will result in increased production levels, once there is a visible and accessible market for their produce. Improvement of milk marketing opportunities constitutes the single most important stimulant of the development of the milk sub sector.

This project seeks to address the issue of marketing by improving milk collection using the Lactoperoxidase system (LP-s) of milk preservation and through introducing innovative processing technologies for farmers in the zzz area. MOA and NDDP are currently lacking in the technical knowledge and capacity to catalyze improvements in this area and have therefore requested FAO Technical assistance. The Government feels that if FAO can provide limited inputs and technical assistance that this will significantly contribute to the breakthrough of the current stagnation in the dairy sector and lead to real and sustainable development of small-scale dairy processing in XXX.

Further, in XXX, tuberculosis a zoonotic disease that is transmissible from animal to man is present in the cattle herds, but the exact levels are unknown. The consumption of raw milk, which is a common practice in XXX, is one means of transmission of this disease. The process of pasteurization destroys the tuberculosis organism and reduces or eliminates this possibility of transmission.

Milk being collected and sold gives higher returns to collectors, which should be passed on to the farmers. A pilot pasteurization and processing plant owned and run by a farmers group will provide substantial increased returns to dairy farmers and thus boost rural food security, generate additional income and increase milk production and consumption of safe quality milk.

III. OBJECTIVES OF THE ASSISTANCE

The overall objective of the project is to facilitate market access for dairy products thereby stimulating farmers' productivity and creating the opportunity for improving the income and standard of living of small-scale farmers.

The immediate objectives are:

1. To develop an efficient milk collection and storage system and establish a processing facility that is controlled and owned by the XXX Cattle Farmer Association. The system proposed is an innovative low cost process recently developed in Country TTT for groups of small farmers. This will be the first time it will be demonstrated outside the VVV continent.
2. To provide education/training to members of the XXX Cattle Farmers Association to enable them to manage/organize the collection, processing and marketing of their milk.
3. To use the pilot plant as a model for farmers' associations from other districts (intra-region) and other regions. Demonstration and training will be organized in collaboration with the National Dairy Development Programme.
4. To develop a business plan for the commercial operation of the milk processing plant.

IV. PROJECT OUTPUTS (RESULTS)

1. Collection/cooling centres established and operational in the zzz area.
2. A suitable and sustainable mini milk-processing unit established in the zzz area.
3. The XXX Cattle Farmers' Association established and empowered to organize/manage the collection, processing and marketing of their milk.
4. Business plan of the model pasteurization plant developed, to be used for the transfer of the experience to other locations and Associations.
5. Workshop for presentation of pilot dairy processing enterprise experiences in order to draw up an action plan, including budgetary requirements, to replicate the milk collection-processing-marketing system to other areas of XXX.

V. WORK PLAN

The 20 months project period has been divided into three phases, namely:

Phase 1 Diagnosis and Preparation (months 1 and 2)

Concurrent visits of the FAO-AGAP Dairy Officer for two weeks and the Consultant in Dairy Technology and Plant Management for one month: to review the situation and assess the detailed requirements for establishing the low cost pilot milk pasteurization enterprise; to set up the project task force; and to prepare a detailed project work plan; organize the project awareness/inception workshop; recruit the National Consultant.

Phase 2: Implementation (months 3 to 18) (See table below for details)

ACTIVITY SCHEDULE

Phase 3: Replication of the Model (months 19 and 20) (See table below for details)

NDDP National Dairy Development Programme

FAO Food and Agriculture Organization

MMCFA XXX Cattle Farmers' Association

GOX Government of .XXX.

VI. CAPACITY BUILDING

Key elements in the project include the organization of farmers into a cohesive group, provision of on-farm advisory services, processing and milk marketing operations leading to the commercial operation of a sustainable pilot dairy processing plant. Significant capacity building is therefore predominant throughout the project. At farm level training in improved hygienic milk production, preservation and transportation will be provided through training of trainers. Full training and advice will be provided from senior level in the Ministry and NDDP through to the MMCFA on the successful set up and commercial management of a low cost pasteurizing and packaging plant. The project will result in a core cadre of highly trained staff at all levels who can be used as resource persons by the MOA to implement the Dairy Development Strategy for smallholders, which is to be one of the key outputs of the final workshop.

VII. INPUTS TO BE PROVIDED BY FAO

Personnel

• One TCDC Consultant in Dairy Technology and Plant Management - 2 months in 2 missions (TOR in Annex 1I1)
• One TCDC Consultant in Dairy Engineering - 1 person, 15 days in 1 visit to install and commission the in-pouch milk pasteurization system. (TOR in Annex 2).
• One National Consultant Dairy Advisory Services and Training - 6 months in three missions each of 2 months (TOR in annex 3)

Supervisory Technical Services

Technical Backstopping by officers from AGAP - 3 visits for a total of 7 weeks30 days (TOR in Annex 4III2).

Official Travel

Budgetary provision is made for in-country travel of project personnel.

General Operating Expenses

General operating expenses will be up to US$10,210

Materials and Supplies

Materials and supplies for training up to US$10,000

Equipment

Equipment for a small-scale processing unit, up to US$65,000 (see Annex 5IV2 for details).

Direct Operating Cost

Direct expenses at FAO headquarters connected with the implementation of the project, up to US$20,000.

Training

The total cost for training is up to US$37,000 for:

Study Tour: one week practical course for 2 dairy plant staff members at a small-scale dairy abroad (BBB or CCC as the technology has not yet been introduced to other development regions) (US$15,000).

In-Country Training (US$22,000):

• Project awareness/inception workshop (US$3,500).
• Two one-week courses for approximately 15 participants who are involved in milk production in the zone in dairy husbandry and handling of milk (US$7,000).
• One week in-country course for two dairy staff members (US$3,000).
• Three months in-service work training for two staff members at the dairy plant (US$5,000).
• The final workshop (one day) shall be held in the last month of the project and organized by NDDP. The objective of the workshop will be to finalize a Detailed Plan of Action to be forwarded to the Ministry for the dissemination of this approach for sustainable small-scale dairy development in 19--. Detailed technical documents prepared under the project shall be presented. NDDP shall chair the workshop to which MMCFA representatives, the concerned FAO Representative and FAO HQ technical officer, industry stakeholders, representatives of MOA, other interested farmers groups and farmers shall be invited. MOA in collaboration with NDDP shall then take over the drive for rural dairy development in XXX using project experiences and successes as a solid based for sustainable development of a dynamic and vibrant smallholder sector. (Estimated cost US$3,500).

VIII. REPORTING

The consultants will prepare reports at the end of each mission giving their findings, conclusions and recommendations, as well as contributing to the final technical report which will represent a detailed manual for the installation and operation of a similar small milk processing units in the country.

The National Coordinator will submit quarterly progress reports and will contribute to the final project report.

The Technical Backstopping Officer from FAO Headquarters will have the prime responsibility for the finalizing the technical report and drafting the Terminal Report.

IX. GOVERNMENT COUNTERPART CONTRIBUTION AND SUPPORTING ARRANGEMENTS

The Government of XXX/NDDP will provide the following for the implementation of the project:

• Full time National Coordinator of the project provided by the Ministry of Agriculture.

• Set up the project task force representing all project stakeholders to guide project implementation.

• Fully functional office accommodation, administrative and secretarial support, and transport for project consultants.
• Site and facilities (existing building preferred), road access including supply of power and water connectors for the dairy plant.
• Premises and facilities, including transport and accommodation, for the training of farmers and staff of the dairy plant.

• Arrange transportation and make funds available for customs clearance of imported equipment and supplies and also arrange tax free local purchase of project equipment and supplies.

PROJECT BUDGET COVERING FAO INPUTS

(in U.S. Dollars)

ANNEX 1

TERMS OF REFERENCE

TCDC Consultant in Dairy Technology and Plant Management

Duration: two months in 2 visits of 1 month each

Duty Station: ...............

Qualifications: A graduate in dairy technology with a minimum of ten years experience in integrated dairy development projects covering the financial, economic and technical aspects.

Under the technical supervision of the AGAP Dairy Officer and the operational supervision of the Regional FAO Office concerned, the consultant will work closely with the National Coordinator, the TCDC consultants and the MOA/NDDP counterparts in performing the following duties:

First mission (1 month)

1. Assess conditions for dairying in the country and familiarize him/herself with the training needs and background of the participants.
2. Develop the training programme for staff of the dairy plant.
3. Prepare teaching material for courses and in-service training.
4. Assess the suitability of the proposed sites/premises for the dairy plant.
5. Make a financial and economic analysis of plant.
6. Specify and order dairy/laboratory equipment and supplies and milk packaging materials.
7. Prepare and submit a brief report of activities, findings and recommendations to the AGAP Dairy Officer (hard copy with diskette)

Second mission (1 month)

In-service training of dairy personnel in the operation and maintenance of the equipment.

1. Support the installation of the dairy equipment.
2. Prepare the first draft of the technical guidelines/report, which will represent a detailed plan for the installation and operation of the similar small milk processing units in the country.
3. Assist milk producers in organizing themselves for milk delivery to the plant and in clean milk production.
4. Prepare and submit for AGAP technical clearance a report of activities (a hard copy with diskette) with findings and recommendations for follow up activities training addresses to NDDP and MOA.

Annex 2

TERMS OF REFERENCE

TCDC Consultant in Dairy Engineering

Duration: 0.5 months in 1 visit

Duty Station: .............

Qualifications: The consultant shall have substantial experience in the installation and commission of the low cost in-pouch milk pasteurization system.

Under the technical supervision of the AGAP Dairy Officer and the operational supervision of the Regional FAO Office concerned, the consultant will work closely with the National Coordinator, the TCDC consultants and the MOAL/NDDP counterparts in performing the following duties:

1. Install the in-pouch milk pasteurizing system, fillers and coolers
2. Commission the equipment on water and on milk
3. Prepare a detailed maintenance manual
4. Prepare a list of running spare parts
5. In service training of maintenance staff
6. Prepare and submit for AGAP technical clearance a report of activities (hard copy with diskette) with findings and recommendations for follow up activities training addresses to NDDP and MOA.

This mission should be timed to coincide with the second visit of the TCDC Consultant/Dairy Technology and Plant Management.

Annex 3

TERMS OF REFERENCE

National Consultant Dairy Farmers' Organization and Training

Duration: Six months in three missions of two months each

Duty Station: .................

Qualifications: A graduate in animal science or dairy technology with at least 5 year's experience smallholder milk production and group formation.

Under the technical supervision of the AGAP Dairy Officer and the operational supervision of the Regional FAO Office concerned, the consultant will work closely with the National Coordinator, the TCDC consultants and the MOA/NDDP counterparts in performing the following duties:

First mission of two months

1. Review milk production in XXX with special reference to the major problems related to the dairy farmer community and the dairy farmers organizations, to farm productivity, to dairy support services, and to training delivery systems.
2. Assess the training needs of the milk producers, smallholder dairy groups and service providers.
3. Develop and document training programmes and course materials with special reference to group formation, clean milk production and milk collection.
4. Draft field guidelines for group formation, milk production and milk collection components of the dairy enterprise.
5. Assist the national project coordinator to conduct and evaluate the project awareness workshop.
6. Prepare and submit a brief report of activities, findings and recommendations to the AGAP Dairy Officer (hard copy with diskette)

Second mission of two months

1. Train trainers in-group formation, clean milk production and milk collection.
2. Conduct and evaluate the first two training sessions for milk producers.
3. Prepare a training report, including a training calendar for the remaining project period.
4. Prepare and submit a brief report of activities, findings and recommendations to the AGAP Dairy Officer (hard copy with diskette)

Third mission of two months

1. Finalize the field guidelines.
2. Assist the National Coordinator to run the project evaluation workshop.
3. Contribute the training, group organization, clean milk production and milk collection sections to the final technical report.
4. Prepare and submit for AGAP technical clearance a report of activities (hard copy with diskette) with findings and recommendations for follow up activities training addresses to NDDP and MOA.

Annex 4

TERMS OF REFERENCE

Technical Backstopping

Under the supervision of the Senior Dairy Officer, the Technical Backstopping Officer from FAO Headquarters will be responsible for the following activities:

1. In collaboration with the NDDP and MOA finalize a detailed work plan.
2. In collaboration with the NDDP and MOA set up the representative project task force and draft its TOR.
3. Identify a suitable location for the pilot low cost processing plant.
4. Participate in the assessment of the opportunities and constraints for milk marketing in XXX.
5. Coordinate the inputs from the international consultants.
6. Provide technical support for the implementation of the project.
7. Advise on the development of a marketing plan.
8. Supervise the project initiative for strengthening establishment of farmers' organizations.
9. Finalize the technical guidelines/report, which will represent a detailed plan for the installation and operation of the similar small milk processing units in the country.
10. Evaluate project achievements, including assisting with the organization of the terminal workshop to draw up an action plan for extending the milk collection-processing-marketing-system to other areas of XXX as part of the national dairy development strategy.
11. Prepare the draft terminal statement of the project according to TCP procedures in collaboration with the National Project Coordinator.
12. The above-mentioned tasks will be carried out in three missions with a total duration of six weeks. The activities to be undertaken during each mission are as follows:

First mission (3 weeks)

1. Organize a meeting with the small milk producers benefiting from the project during a joint visit to the project with the International Consultant on Dairy Technology and Plant Management. During this meeting the Technical Backstopping Officer will present the experiences from many other projects of milk producers organizations drawing attention to the constraints and advantages of this form of organization and will also prepare a paper with relevant recommendations.
2. Supervise the work plan prepared by the International Consultant.
3. Evaluate the dairy equipment to be purchased.
4. Contribute to the establishment of a pricing system for the payment to milk producers, as well as to drawing-up detailed costs and benefits for the dairy products produced by the Association in collaboration with the International Consultant.

Second-mission (two weeks)

1. Contribute to the establishment of a suitable methodology for the payments to the milk producers, in collaboration with the International Consultant, tailored to the needs of the Farmers' Association.
2. Provide general supervision to the activities of the project,
3. Contribute to the preparation of the technical guidelines/report.

Third mission (two weeks)

1. Assist with organizing the project evaluation/terminal workshop and the dairy development strategy.
2. Assist with preparing the action plan which can be used as a guideline for similar projects in XXX and the region.
3. Contribute to finalizing the technical guidelines/report.
4. Contribute to the preparation of the Terminal Statement of the project.

ANNEX 3

EQUIPMENT FOR THE SMALL-SCALE DAIRY PLANT

(This is a partial and provisional list and is subject to complete review by the TCDC consultant and AGAP backstopping officer in light of their findings during their first mission)