Report No. Xxxxxx Date: xxxx The International Fund for Agricultural Development SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT Final Project Design Report Main Report and Working Papers Near East and North Africa Division Programme Management Department THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT FINAL PROJECT DESIGN REPORT MAIN REPORT Table of Contents Page Currency equivalents iii Weights and measures iii Abbreviations and Acronyms iii Map 1: Map of the Project Area v Map 2: IFAD Ongoing Projects vi INTRODUCTION 1 I. II. III. IV. V. STRATEGIC CONTEXT AND RATIONALE FOR IFAD INVOLVEMENT, COMMITMENT AND PARTNERSHIP (KSF 1) 2 A. Rural Development Context B. Policy, governance, institutional, political and economic issues C. IFAD Country Programme 2 4 7 POVERTY, SOCIAL CAPITAL AND TARGETING (KSF 2) 11 A. Rural poverty, information and analysis B. Target Group C. Targeting Strategy, Gender Mainstreaming and Community Development D. Geographic Coverage of the Project 11 14 PROJECT DESCRIPTION (KSF 3) 19 A. Knowledge base: lessons from previous/ongoing projects B. Opportunities for Rural Development and Poverty Reduction C. Project Goal and Objectives D. Alignment with Country Rural Development Policies and IFAD Strategies E. Project Components 19 21 22 23 24 IMPLEMENTATION AND INSTITUTIONAL ARRANGEMENTS (KSF 4) 41 A. Institutional Development and Outcomes B. Implementation Arrangements and Responsibilities by Components Subcomponent C. Collaborative Framework 41 42 44 PROJECT BENEFITS, COSTS AND FINANCING 46 A. Summary benefit analysis B. Summary cost table C. Project Financing: IFAD, Cofinancers, Government and Beneficiaries D. Disbursement, Procurement and Accounts E. Economic and Financial Analysis 46 48 48 48 50 i 16 19 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT Page VI. VII. PROJECT RISKS AND SUSTAINABILITY (KSF 5) 51 A. Risk Analysis B. Exit strategy and post-project sustainability C. Environmental Classification 51 52 52 INNOVATIVE FEATURES, LEARNING, KNOWLEDGE MANAGEMENT AND SCALING UP (KSF 6) 53 A. Innovative Features B. Project Knowledge Products and Learning Processes C. Regional knowledge networking D. ILDP Scaling Up Approach 53 54 54 54 TEXT TABLES Table 1: Potential project beneficiary households 47 Table 2: Project Cost Summary 48 Table 3: Project Financing by Components 48 Table 4: Disbursement by Semester (USD’000) 49 ANNEXES ANNEX 1 - CONTENTS OF THE PROJECT LIFE KEY FILE 57 ANNEX 2 - UPDATED RESULTS-BASED LOGFRAME 59 ANNEX 3 - PROJECT COST SUMMARY TABLES 63 ANNEX 4 - PROJECT ORGANIZATIONAL CHART 71 ANNEX 5 - KEY FILES 73 ANNEX 6 – ENVIRONMENTAL SCREENING AND SCOPING NOTE 83 WORKING PAPERS Working Paper 1: Poverty profile and the target group Working Paper 2: Gender issues, targeting strategy and mechanisms Working Paper 3: Animal production and rangeland development Working Paper 4: Agriculture Extension (In Arabic) Working Paper 5: Livestock value chains − marketing and processing Working Paper 6: Rural microfinance Working Paper 7: Institutions and implementation arrangements Working Paper 8: Project costs and financing Working Paper 9: Project financial and economic analysis BACKGROUND TECHNICAL DOCUMENTS (Available on request from NEN) Guidelines for Community Development ii THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT Currency equivalents Currency unit US$ 1.00 SYP 1.00 = = = Syrian Pound (SYP) SYP 45.50 US$ 0.022 Weights and measures 1 1 1 1 1 1 1 1 1 kilogram (kg) 000 kg pound (lb) kilometre (km) metre (m) square metre (m2) acre (ac) hectare (ha) dunum (du) = = = = = = = = = 2.204 pounds 1 metric tonne (mt) 450 grams (gr) 0.62 miles 1.09 yards 10.76 square foots 0.405 hectares (ha) 2.47 acres 0.1 hectare Fiscal Year 1st January – 31st December Abbreviations and Acronyms ACB ACSAD AEU AES ASF ASZ AWP/B BRDP CMADP COSOP DAE DAH DAP DDM DRW DVD ESU ETT EU FYP GFU GCSAR ICARDA ILDP ILRI IRDP JHADP LPIC M&E Agricultural Cooperative Bank Arab Center for the Studies of Arid Zones and Dry Lands agricultural extension unit agriculture extension support Agriculture Support Fund agricultural settlement zone annual workplan and budget Badia Rangelands Development Project Coastal/Midland Agricultural Development Project country strategic opportunities paper (or programme) Directorate of Agriculture Extension Directorate of Animal Health Directorate of Animal Production Directorate of Drought Management Directorate of Rural Women Directorate of Veterinary Drugs extension support unit extension task team European Union Five-year Plan General Farmers’ Union General Commission for Scientific Agricultural Research International Center for Agricultural Research in the Dry Areas Integrated Livestock Development Project International Livestock Research Institute Idleb Rural Development Project Jebel Al-Hoss Agricultural Development Project Livestock and Pasture Improvement Cooperative monitoring and evaluation iii THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT MAAR ME MET MFI MI MLA MTR NEAP NERRDP NPED NPSC PMU RIMS RMC RMU RPD RPCC RPM SBM SME SPC SRADP UNDP WANA Ministry of Agriculture and Agrarian Reform Ministry of Environment Ministry of Economy and Trade microfinance institution Ministry of Industry Ministry of Local Administration mid-term review National Environmental Action Plan North-eastern Region Rural Development Project National Project Executive Director National Project Steering Committee project management unit results and impact management system range management committee range management unit Regional Project Directorate Regional Project Coordination Committee Regional Project Manager small business and micro-enterprise small and medium-sized enterprise State Planning Commission Southern Region Agricultural Development Project United Nations Development Programme West Asia and North Africa iv Map 1: Map of the Project Area THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT v THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT Map 2: IFAD Ongoing Projects vi THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT FINAL PROJECT DESIGN REPORT MAIN REPORT INTRODUCTION 1. In December 2009, the Government of Syria (hereafter ‘the Government’-GOS), through the Ministry of Agriculture and Agrarian Reform (MAAR) and the State Planning Commission (SPC), requested IFAD to finance a nationwide integrated livestock development project. The primary objectives of the project would be to help reduce poverty and empower poor rural households (the livelihoods of which depend on livestock activities in low-potential areas) through enhancing livestock productivity, integrating livestock into rain-fed farming systems and developing small businesses and microenterprises (SBMs) along the value chain of livestock produce. The Integrated Livestock Development Project (ILDP) is included in the IFAD country strategic opportunities programme (COSOP) for 2010-2015, approved by IFAD in December 2009 and endorsed by the Government. 2. The final ILDP design mission1 visited Syria from 23 May to 10 June 2010, following internal reviews by IFAD and by the Government of the Draft Design Report. The mission’s work was guided by the findings of earlier design missions (December 2009 and February 2010), the Government response to the Draft Report, IFAD’s internal review of the same and the need to confirm findings of earlier design stages. 3. Mission fieldwork and stakeholders’ involvement in project design. In Syria, the mission met with his Excellency Dr Adel Safar, Minister of Agriculture and Agrarian Reform (MAAR), and greatly benefited from his directions and insights, Dr. Reema Kaderi, Deputy Head of the State Planning Commission (SPC), Dr. Nabi Rasheed Mohammad, Deputy Minister (MAAR), Eng. M. Hassan Katana, Director of Statistics and Planning (MAAR), key officials of the Ministry, and Directors of completed and ongoing IFAD’s supported projects. The mission’s discussion with the main national stakeholders has greatly contributed to its work and assisted its members in adjusting and finalizing project design. It has also confirmed findings of earlier design work, which was based on the full involvement of the stakeholders in project design, and helped focus the mission work on aspects needing further analysis and redesign. 4. The mission also visited the French Agency for Development (AFD), the Italian Cooperation, UN agencies involved in rural development, the Syrian Arab Organization for Standards and Metrology (SASMO) and other stakeholders. The mission undertook field visits to small and medium operators in the milk processing value chain in rural areas and to some community based organizations to verify some findings of the earlier design work and complete data collection and analysis. In meetings with key project stakeholders and in its field work, the mission investigated the issues raised by GOS and IFAD, and means to address them. The results of these discussion and mission analysis are built-in the features of the final project design, described in this Report. 1 Mona Bishay (Mission Leader), Taoufik Jaballah (Financial Analyst), Abdalla Rahman (Organization & Management Specialist), Tahar Telahique (Rangelands Development Specialist), Mohamed Wardeh (Livestock Production Specialist), Nabil Mahaini (Extension/Communication Specialist and IFAD field representative) and Vineet Raswant (IFAD Senior Technical Adviser, Marketing and Institutions). Mohamed Bousselham (IFAD Loan Officer) joined the mission part of the time. Abdelhamid Abdouli (IFAD Country Programme Manager for Syria) accompanied the mission, participated in its field work as rural finance specialist and finalized the Micro finance working paper. 1 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 5. The mission findings were discussed and validated on 5 June 2010 during a wrapup meeting at MAAR, chaired by the Deputy Minister, with representatives of all the MAAR central directorates and of ACSAD and ICARDA. The mission’s findings were all endorsed by GOS. I. STRATEGIC CONTEXT AND RATIONALE FOR IFAD INVOLVEMENT, COMMITMENT AND PARTNERSHIP (KSF 1) A. Rural Development Context 6. General background. The Syrian Arab Republic covers a total land area of 185,000 km², of which about 6 million ha are cultivated. The country is bordered by Turkey in the north, Iraq in the east and south-east, Jordan in the south, Palestine in the south-west, and Lebanon and the Mediterranean in the west. Administratively, the country is divided into 14 governorates or provinces, 60 districts and 192 subdistricts. The smallest administrative unit is the village. The climate is Mediterranean with a continental influence: cool wet winters and hot dry summers, with a relatively short spring and autumn. 7. Geographically and agro ecologically, Syria is divided into five Agricultural Settlements Zones (ASZs), which are based on a number of variables of which the amount and reliability of annual precipitation and altitude are the most critical factors. The high-potential areas (ASZs I and II) that receive 350 mm or more of rainfall annually are concentrated in the western parts of the country and account for about 27 per cent of the total area. The moderate to low-potential areas (ASZs III and IV) that receive progressively less rainfall (350-200 mm per annum) are mainly located in the central and eastern part of the country and account for 18 per cent of the total. ASZ V, which receives less than 200 mm of rainfall per annum, is unsuitable for cultivation. It forms part of the Badia rangelands where sheep and camels are raised, and accounts for 55 per cent of all land in Syria. 8. According to the World Bank (2008 Key Development Data and Statistics), the population of Syria grew from 14 million in 1994 to about 21.2 million in 2008. The annual population growth rate is high, and stood at 2.5 per cent in 2008. About 55% of the population is urban, with considerable rural-urban migration. However, given the population increases, total numbers in rural areas are still rising. 9. Economic growth. During the period 1990-2008, despite the trend of decreasing oil production and increased frequency of drought that affected agriculture, the Syrian economy made a sustained growth averaging 5.1 per cent. This was the result of: (i) structural reforms that included the simplification of investment procedures, modernization of accounting standards and a streamlining of the tax system; and (ii) modernization of fiscal and monetary policies that reduced the role of the public sector and promoted privatization, trade liberalization, deregulation of the banking system and unification of the exchange rate. GNI per capita increased from USD 1,170 to USD 2,090 between 2000 and 2008. The impact of the global financial crisis on Syria has been relatively limited, having been transmitted through links with Europe and other countries in the region, notably the Gulf States, and contributed to a 1 per cent reduction in growth in 2009, a drop of about 4 per cent in exports of goods and services, and increased unemployment. 10. The Syrian Arab Republic’s medium-term economic outlook is expected to improve with the gradual global and regional recovery, and lead to further progress in terms of domestic economic reforms. A gradual increase in exports, remittances and foreign direct investment is also expected; agricultural output is likely to continue to recover from the severe drought of the past two years; non-oil growth is projected at about 5 per cent in 2010. Inflation declined to 2.5 per cent for 2009 (IMF data). 11. Unemployment and inequality. Syria’s economic growth has not been pro-poor and the incidence of inequality has become even more marked. The strong population 2 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT growth and influx of refugees in recent years has led to a steady rise in unemployment (11.7 per cent in 2005 and an expected 20 per cent by 2010), especially among young people. The labour market is unable to absorb the 380,000 new job-seekers each year. Some of the unemployed in rural areas are being absorbed in the informal dairy processing activities. As public enterprises provide employment to only 7 per cent of the country’s labour force, the burden of job creation falls on the private sector in agriculture, construction, manufacturing and services. 12. Social progress. There have been considerable improvements in the economic and social status of Syria’s population. Provision of health services and education has continued to improve. As of 2007, life expectancy had increased to 71 years, infant mortality per 1,000 live births had decreased to 34, and malnutrition among children under 5 years of age had decreased to 9 per cent. The performance of basic social services is satisfactory, with 89 per cent of the population having access to improved water sources and 92 per cent to better sanitation facilities. However, despite consistent improvements in social development, Syria still ranks 107th out of 182 countries included in the UNDP Human Development Index for 2009. 13. Rural poverty is widespread and is of major concern to the Government. According to the UNDP Household Income Expenditure Survey for 2005 and IFAD’s Rural Poverty Assessment and Mapping, around 14 per cent of the population (or close to 2 million people) are poor, based on the ‘lower’ poverty line (expenditure for essential requirements) and 32 per cent (or close to 7 million people) are poor based on the ‘higher’ poverty line (expenditure for reasonable requirements). Some 10.4 per cent of the population live on less than USD 2.0 a day. The incidence of poverty is higher in the rural areas, where it is concentrated in specific ‘pockets’, than in towns and cities (62 per cent and 38 per cent, respectively) but with considerable differences in geographic terms. Accounting for 45% of the population, the north-eastern governorates (Hassakeh, Deir Ezzor, Raqqa, Idleb, and Aleppo) have the greatest incidence, depth and severity of poverty (58.1 per cent, both rural and urban). There are huge interprovinces, and even inter-district, differences in poverty. A number of factors suggest that the poverty situation has worsened in recent years and that many of those who formerly lived just above the poverty line have probably now joined the ranks of the poor. 14. Gender gaps still persist. Despite considerable progress in terms of equal opportunities for men and women (see WP 2), significant gender gaps still prevail. Women still have difficulty in participating in economic activities or in accessing education and health services and their active involvement in politics is very limited. Female adult literacy (percentage of ages 15 and above) is low (74 per cent) compared with men (88 per cent). Women do not easily obtain access to land titles and are therefore unable to take advantage of a range of services linked to land ownership, such as credit. Despite women’s very considerable involvement in agriculture and in livestock husbandry, their role remains largely defined as ‘family labour’ and thus they do not adequately benefit either from extension or from most other support services. 15. The agriculture sector. Agriculture is vital for the Syrian economy. It supports the livelihoods of 50 per cent of the population, employs one fourth of the labour force, contributes 24 per cent of GDP (compared to 28 per cent for industry and 48 per cent for services), and 10 per cent of exports (2008). The 1994 agricultural census states that the main occupation of 410,000 landholders (i.e. 71 per cent of all landholders) is farming. Some 40,000 livestock owners and herders are landless. Limited private-sector manufacturing and service-sector growth has led to greater dependence on agriculture. In the 10 years up to 2004, the real value added component of the agricultural sector rose by 1.9 per cent each year and employment in agriculture grew by 2.3 per cent. Agricultural production is inevitably vulnerable to climate change, with recurrent droughts that cause large fluctuations in agricultural GDP and growth. The obstacles to rapid agricultural sector growth include unfavorable climatic conditions; scarce water; limited cultivable land; deteriorating soil fertility; small, scattered and fragmented 3 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT landholdings; limited access to formal credit, which impedes productive asset creation and development of SBMs; and limited application of modern agricultural technologies, coupled with weak farm support services. 16. The livestock sector plays a significant role in the Syrian economy. Livestock accounts for 35 per cent of the value of agricultural production and about one third of agricultural exports. Most livestock husbandry is carried out on smallholdings and is the activity most preferred by small-scale producers, landless farmers and rural women. The livestock sector is less subject to fluctuations (except during severe drought) than agricultural, absorbs about 20 per cent of unemployment in rural areas (mostly young men and women) and generates substantial foreign exchange earnings. Sheep are the most important animal species in the country. They are the largest in number (19.2 million in 2008) followed by cattle (1.1 million). The predominant breed of sheep is the local Awassi, for which there is a high and increasing demand in the Gulf States. Awassi meat constitutes the bulk of livestock exports. 17. The traditional transhumant and main system for sheep herding has weakened by severe droughts in 1998-1999 and 2007-2009 and deterioration of the rangelands. There are presently wide gaps in livestock feed balances, caused by the recurrent droughts, and this has negatively affected the livelihoods of small scale herders and livestock producers. The potential of the subsector is constrained by several factors including: low productivity; limited genetic improvement; shortage of feed and unbalanced rations, low feed conversion rates; lack of systems for animal performance control and quality control of milk products, weak livestock support services and scarcity of well-trained animal husbandry specialists. B. Policy, governance, institutional, political and economic issues Policies and strategies 18. The Government’s poverty reduction strategy. In its efforts to reduce poverty and protect vulnerable segments of society, the Government has adopted the multipronged ‘Vision 2025’ together with a poverty reduction strategy that is well articulated in the 10th Five-Year Plan (FYP) for 2006-2010. The main strategic objectives of the 10th FYP are to: (a) raise the educational level of poor households and combat illiteracy; (b) improve social services in the poorest areas; (c) develop social safety nets; (d) formulate financial policies that target the poor and improve income distribution; (e) ensure access of the poor to financial resources by developing the concept of microfinance, consolidating and scaling up the promising sanduq model of communitybased rural microfinance institutions (MFIs); and (f) empower local and civil communities to play a greater role in the development process. The quantitative targets of Vision 2025 are to: eradicate illiteracy; halve poverty by 2015; and, by 2025, achieve an economic growth of 7 per cent associated with yearly population increases of less than 2.16 per cent. 19. The poverty reduction strategy places particular emphasis on creating employment opportunities for the poor and unemployed young people. It aims to: (a) encourage private enterprises and innovations; (b) reduce the Government’s responsibility for creating jobs; (c) promote the development and competitiveness of SBMs; (d) develop training, capacity-building and rehabilitation facilities; and (e) create technological and business ‘incubators’ at the village level. In this context, a long list of projects has been selected for financing under the 10th FYP with priority given to participatory povertyreduction projects that benefit large numbers of poor people and disadvantaged groups. Furthermore, to ensure that targets are met, a comprehensive national system for monitoring poverty is to be established at the SPC, with the participation of representatives of the private sector and civil society. 20. Policy reform for a market-based economy. The 10th FYP departs from its predecessors in as much as it aims to mark the transition to a ‘social market economy’. The economic policy will be fully based on the market mechanisms of supply and 4 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT demand to achieve a more efficient distribution of resources. Promoting the role of the private sector as an engine of economic growth is a key priority of the 10th FYP. The Government will no longer control investment and market activities, but will work towards creating an enabling environment for investment and competitiveness. The Government acknowledges that this new policy can only be implemented if partnerships are forged among government, the private sector and civil society. Local authorities will participate in the formulation and implementation of local and national development plans and mobilize civil society and the private sector. The private sector is expected to increase its production and investments. 21. Agriculture development strategy. The Government’s present strategy for the development of agriculture, reflected in the 10th FYP, stresses the following essential themes: (a) optimal and sustainable use of natural resources to serve the objectives of socio-economic development and to ensure food security; (b) creation of jobs for the rural population through vertical expansion of production, dependence on labourintensive crops and promotion of national and foreign investment in agriculture and agro-industries; (c) industrialization and marketing of agricultural products aimed at increasing value added; (d) development of traditional agricultural industries, and promotion of income-generating activities to create job opportunities for the rural population; (e) modernizing agricultural production by developing scientific agricultural research and providing training and extension; and (f) helping the agriculture sector to face global economic challenges and trade liberalization. 22. Agriculture policy. Until recently, the Government pursued a self-sufficiency policy through the production, planning, pricing and marketing control of seven crops – barley, chick pea, cotton, lentil, sugar beet, tobacco and wheat – termed ‘strategic crops’. At the present time, only wheat, cotton and sugar beet remain within the centralized planning system. Accounting for 4 per cent of GDP, the government system of agriculture subsidies is costly and does not target the poorest. Given that 28 per cent of farmers operate 75 per cent of the irrigated land, most subsidized commodity production is in the hands of better-off farmers. In addition, the Government recently launched reforms that included a series of actions to mitigate the impact of drought and higher diesel prices on the agriculture sector. These measures included reduced taxes for farmers in the regions affected by drought, loan rescheduling, writing-off of penalties on arrears, and increasing the purchase prices of key crops. GOS established the ASF in 2008 with a view to replacing many input subsidies by cash transfers to farmers. 23. National environment strategy. The Syrian Arab Republic’s National Environmental Action Plan (NEAP) for 2003-2015 conforms to the objectives of, and principal requirements for, sustainable development. NEAP’s strategic objective is to incorporate environmental aspects in policies, plans and programmes; protect natural resources, biodiversity, cultural heritage and public health; and promote the use of clean and renewable sources of energy. The plan emphasizes the importance of efficient use of water and land resources, of combating desertification, and of improving the quality of air and management of solid waste and biodiversity. 24. Governance and major institutions involved in livestock development. Much of the agricultural and rural development in Syria is governed by public institutions. Notable exceptions are the livestock subsectors and fruit and vegetables, including the olive industry, which are almost totally in the hands of private sector. MAAR and the General Farmers’ Union (GFU) are the main institutions responsible for implementing agriculture and rural development programmes and, with the SPC, for policy formulation. Other institutions, particularly the Agricultural Cooperative Bank (ACB) and marketing organizations, play a crucial role in contributing to the good performance of the agricultural sector. SPC requires that all government agricultural activities be planned each year and coordinated with a view to maximizing productivity and production. 25. Ministry of Agriculture and Agrarian Reform. MAAR is responsible for all development activities related to agriculture, livestock, forestry and fisheries. It operates through a number of directorates at the central and provincial levels. The central 5 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT directorates are concerned mainly with national-level policy development and with drafting legislation, and provide some technical support and backstopping to governorate and field-level staff. The Directorate of Animal Production (DAP) is in charge of elaborating and implementing livestock development programmes, including artificial insemination, fodder resources development, and the establishment of rules and norms for livestock activities. The Directorate of Animal Health (DAH) is responsible for drawing up and delivering animal health programmes, producing vaccines and monitoring animal disease outbreaks. The Directorate of Veterinary Drugs (DVD) is entrusted with managing the supply of drugs and vaccines, including their quality control, for analysing drug residues in livestock produce, and for the licensing of drug producers. 26. The Directorate of Agricultural Extension (DAE) is in charge of technology transfers to farmers and livestock producers; field-level extension is carried out through agricultural extension units (AEU). The General Commission for scientific Agriculture Research (GCSAR), through DAP, is responsible for national-level research on livestock with emphasis on the genetic improvement of local breeds. The Directorate of Agricultural Marketing (DAM) is responsible for developing and providing market and price information on agricultural inputs and outputs, including for Awassi sheep exports to the Gulf countries. The Directorate of Rural Women (DRW) is responsible for drawing up and implementing activities addressed to women across all agriculture and livestock development projects. The Directorate of Drought Monitoring (DDM) is responsible for managing the early-warning system for drought, including the evaluation of damages and the setting of eligibility parameters for assistance. 27. Other institutions under the auspices of MAAR, and which play a role in the livestock sector, are: the ASF, in charge of coordinating and channelling agriculture subsidies for animal feed, drugs and vaccines and for artificial insemination; the General Establishment for Fodder, in charge of distributing locally-produced feed, fodder and byproducts, and of maintaining strategic reserves of animal feed; and the GFU, actively involved in overseeing farmers and livestock producers’ associations and in policy formulation and implementation. 28. Syrian Arab Organization for Standards and Metrology (SASMO). It is part of the Ministry of Industry and is responsible for determining the minimum specifications that various industrial and food products (human and animal food) must meet if they are to be traded in Syria, and for certifying, based on laboratory analysis, that products meet Syrian/international standards. It also provides Syrian exporters, upon request, with information on the standards requirements of other countries, and organizes training on quality standards using its lab technicians but using requesting firms’ own laboratories. SASMO recognizes the importance of educating consumers on the issue of product quality and safety and welcomes cooperation with ILDP. It is willing to enter into an MOU arrangement with ILDP to deliver any training, capacity building or technical assistance on standards for meat and milk products that ILDP may require. It provides its services for a pre-determined fee. 29. Ministry of Environment (ME). This ministry is responsible for the environment and natural resource management. ME has regulatory, coordination and research mandates and is responsible for such activities as: (a) identification of environmental problems; (b) elaboration of environmental policies and preparation of national strategies, action plans and programmes; (c) enhancing public awareness on the importance of environmental concerns and conservation; (d) research and scientific studies to mitigate adverse impacts; (e) drafting laws, regulations and procedures for environmental protection and development, within the framework of the general government policies; and (f) monitoring the activities of private and public establishments to verify their conformity with environmental standards and specifications. 30. The Agricultural Cooperative Bank is fully owned by the Government and is the main source of institutional credit for farmers and livestock producers. ACB is one of the cornerstones of the Government’s comprehensive assistance package to farmers. It 6 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT provides deposit and bank transfer facilities to the general public, grants loans for purposes closely related to agricultural production, extends in-kind loans for fertilizer and farm machinery, and makes payments to farmers on behalf of state-owned enterprises dealing with strategic crops such as cotton and wheat. However, ACB is beset by problems that prevent it from truly reaching out to the rural population in such a way as to have a truly effective impact on the lives of the poor. These problems include: the lack of adequate autonomy, an inverted interest structure (i.e. interest rates on savings deposits tend to exceed lending rates), which undermines both deposit-taking and lending; and lack of a diversified portfolio or competitive and attractive loan products for various market segments. 31. The Arab Centre for Studies of Arid Zones and Dry Lands (ACSAD). Established in 1971 within the framework of the specialized organizations of the League of Arab States, ACSAD has supported improvement of livestock production in the Syrian Arab Republic through: (a) surveys of animal resources and evaluation of feeding options; (b) genetic improvement of Awassi sheep and distribution of improved rams to private herders; (c) genetic improvement and distribution of Damascus goats; (d) studies on range nutrition, diet selection and supplementary feeding; and (e) training. 32. The International Center for Agricultural Research in the Dry Areas (ICARDA). Headquartered near Aleppo, ICARDA has supported livestock production and rangeland management in Syria through: (a) a project on ley-farming systems; (b) research on forage production; (c) studies on rangeland rehabilitation and management; (d) studies on the feeding values and use of crop residues; (e) research on dairy processing; and (f) training of Syrian scientists and technicians. C. IFAD Country Programme Ongoing and relevant IFAD-financed projects and grants 33. Idleb Rural Development Project (IRDP). This IFAD-AFESD project seeks to improve the food security and income levels of farmers and rural women through an innovative, bottom-up participatory community development process aimed at expanding the area of arable land, improving access to water and introducing more efficient farming and water management practices. The project is being implemented in 140 villages, each with 200-9,000 inhabitants, and benefits a total population of 380 000 persons. The project started up in November 2003 with a completion date of 31 December 2012. 34. At the time of the mid-tem review (MTR) conducted in July 2009, implementation progress was found to be satisfactory. Quantitative targets were being met as follows: community action plans had been prepared for 127 villages (91 per cent of target); 16,000 rural households (36 per cent of target) had benefited from project activities; and 11 water harvesting structures had been rehabilitated. De-rocking and land development led to an increase in arable land of 7,133 ha (35 per cent of target) for olive and fruit tree plantations and field crops. Improved sheep and goat breeds had been distributed on credit to beneficiaries in 18 villages, where community-based MFIs (sanduqs) had been established with 40 per cent women shareholders. The lessons learned from this project have been incorporated into the design of ILDP (see section 3.A). 35. Badia Rangelands Development Project (BRDP). This project is being implemented in eight provinces covering 3.0 million ha, or 29 per cent of the total Badia area (ASZ 5). The aim is to enhance the livelihoods and food security of transhumant, small ruminant herders through the adoption of a replicable participatory approach for sustainable natural resources conservation and management. The direct project beneficiaries total approximately 16,800 small ruminant producers, whose main source of income is animal production, organized into livestock and pasture improvement cooperatives (LPICs). The project started up in early 1999, with a completion date of 31 December 2010. Implementation progress is deemed satisfactory. 7 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 36. The project is structured around five components: (a) rangeland development through rehabilitation of natural vegetative cover and introduction of community-based pasture management schemes; (b) livestock development through improved breeds, herd management and animal health; (c) rural infrastructure, including water supplies and rural access roads; (d) community development, including interventions specifically designed to improve the educational levels (literacy) and socio-economic status of women; and (e) project management. 37. As of December 2009, rangeland rehabilitation covered about 1,255,000 ha, or 108 per cent of appraisal targets, including land resting, re-seeding and fodder shrubs plantation. By PY5 (full development), the productivity increases in fodder unit per ha as a result of land resting were fourfold, twelvefold for re-seeding and fifteenfold for fodder shrub plantation. The number of LPICs reached 140, organized into 173 Range Management Committees (RMCs). An Awassi sheep network (ASN) had been established, with all 74 members active in genetic improvement, and more than 2,000 improved rams were distributed to ASN members and other herders. Synchronization technology was successfully introduced for reproduction. Over 4.4 million animals were vaccinated and treated for disease. The implementation of the community development component is also on target with over 200 training sessions conducted in various fields and income-generating activities: literacy, animal health, sewing, knitting, family health, midwifery, food processing, handicrafts and wool shearing. Construction targets for rural roads and livestock water points targets were fully met. Lessons learned from the project have been incorporated into the design of ILDP (see section III A and E). 38. North-eastern Region Rural Development Project (NERRD). This project covers the three economically-depressed governorates of Deir Ezzor, Hassakeh and Raqqa. The project was designed to improve the socio-economic well-being of poor rural households through: (a) empowerment of rural community organizations; (b) improved water-use efficiency; (c) giving farmers access to effective advisory services; and (d) development of SBMs aimed at creating employment and ensuring access to markets. Improved water management through the empowerment of water users’ associations (WUAs) and investment in water-saving irrigation technologies will greatly reduce the pressure on water sources and prevent them being over-exploited or becoming saline. About 140,000 people are expected to benefit directly from project interventions and another 160,000 indirectly. Project implementation started in March 2008. 39. Technical assistance grants (TAGs). The Syrian Arab Republic has benefited from several regional grants financed by IFAD, the most relevant of which are as follows: (a) Sustainable livelihoods development of agropastoral communities in the low-rainfall areas of West Asia and North Africa (WANA) (Maghreq-Maghreb III) - TAG 698. IFAD has provided support to ICARDA to undertake applied research on the sustainable livelihoods of agropastoral communities in low-potential areas of six WANA countries, including Syria. Research themes included: institutionalization of the community approach; options for communal management of rangeland resources; risk management and drought-mitigation crop diversification; income generation; and gender mainstreaming. Among the research studies conducted in the Syrian Badia, activities relating to participatory animal health monitoring and management, and the role of women in small ruminant production are particularly relevant to ILDP. The study on small ruminant health demonstrated that parasitic pathology infections are endemic and can be treated with appropriate veterinary medicines. The study on the role of women in the small ruminant chain demonstrated that dairy processing contributes significantly to gender empowerment. The introduction of better dairy processing practices through training in hygiene, packaging, securing refrigeration and access to microcredit will contribute to reducing existing gender gaps. 8 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT (b) Enhancing the livelihoods of poor livestock-keepers through increased use of fodder - TAG 853. IFAD has provided assistance to the International Livestock Research Institute (ILRI) to conduct research on strengthening the capacity of poor livestock keepers through the selection and adoption of fodder options and access to market opportunities – in partnership with ICARDA, the International Centre for Tropical Agriculture, and National Agriculture Research Systems (NARS) in six countries across Asia, Africa and the WANA region, including Syria. Using participatory approaches and considering a range of fodder options on pilot learning sites, the research topics included mechanisms for scaling up innovative fodder technologies; and options for effective delivery systems, including innovative communication strategies and on-farm interventions to improve fodder supply. The outputs achieved in Syria, which are relevant to ILDP, include: methods for assessing a year-round feed inventory; database on inter-annual variations in prices of main feed resources; development of cereal-legume systems to address the early-Spring feed gap; and technologies for quality fodder seed production. The fodder technologies tested by farmers showed potential for increasing quality feed supplies for smallholder lamb fattening and dairying. (c) Saving freshwater resources with salt-tolerant forage production systems in marginal areas of the WANA region - an opportunity to raise the incomes of the rural poor – TAG 699-ICBA. IFAD has provided assistance to the International Centre for Bio-saline Agriculture (ICBA) to conduct research, in partnership with NARS in eight countries across the WANA region, including Syria, on improving the livelihoods and productivity of poor farmers who have access only to marginal water resources (particularly saline). The outputs achieved and that are relevant to ILDP include the screening and evaluation of several forage species to identify genotypes with better salt-stress tolerance and productivity under marginal conditions. Nurseries of potentially highly-productive genotypes of the screened species were supplied to Syria for evaluation and selection by farmers. Seed production and plant propagation of annual and perennial salt-tolerant forages, constituting an integrated forage package that can secure forage resources year-round, were developed and provided to Syria for multiplication and distribution to farmers. IFAD strategy and focus 40. The COSOP of 2009 outlines IFAD’s development assistance strategy in Syria for the period 2010-2015, with the aim of supporting government efforts to improve the social and economic well-being of poor rural households. The clear comparative advantage for IFAD lies in its ability to work at the grass-roots community level and in its interventions aimed at combating poverty in marginal areas. The priority would be to build up inclusive, sustainable institutional systems for natural resources management, creation of employment and income generation. Activities would be based on the development of irrigated and rainfed agriculture, improved management of natural resources, enhanced agricultural research and extension, and promotion of SBMs and microfinance, backed up by pro-poor investments, policies, relevant innovations and learning initiatives, and guided by several strategic objectives. 41. Sustainable management of land and water resources. Access to land by all farmers is not a major issue in Syria; the challenge has to do with land fragmentation and deteriorating land quality. The aim is to restore the productive agricultural base and boost agricultural productivity. This would make it possible for poor households both to produce more of their own food and to have a surplus for sale to improve their incomes. Without neglecting rainfed agriculture, emphasis would be placed on modernizing irrigated agriculture (advanced on-farm irrigation technologies) with a concomitant reduction in the share of land irrigated by non-renewable underground water resources; 9 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT switching to high-value crops; improving natural resources management (soil, water and rangelands); and adopting a production approach whereby livestock if fully integrated into the farming system. 42. Sustainable rural financial services and pro-poor rural SBMs. Presidential Decree no. 15 of 2007 laid the ground for creating an enabling legal and regulatory framework for establishing MFIs to provide lending and savings services to the unbanked IFAD target group in Syria. IFAD intends to focus on promoting rural finance products that support the poorest and most vulnerable rural groups. 43. The sanduq village-based MFI model would be scaled up and strengthened through access to re-financing and technical support in order to diversify the product mix and improve financial management in accordance with international best practices. SBMs would be supported with the aim of establishing efficient value chains for commodities and services to strengthen market links between small farmers and livestock producers, collectors, processors, traders and consumers, and ensure regularity of market access. In partnership with other donors, IFAD would engage in policy dialogue with the Government with a view to formulating a national microfinance strategy that could lead to the adoption of a more comprehensive microfinance law to consolidate the aforementioned Presidential Decree. 44. Empowering rural communities. Partnerships with rural poor grass-roots institutions and civil society organizations would be reinforced, using community-driven development approaches in such a way that poor rural people can become major players in their own development. The process would be geared to supporting and actively involving the poor in local community initiatives for productive activities driven and managed by common interest groups. These would include farmer cooperatives, herder associations, WUAs, and on- and off-farm marketing associations. IFAD-supported interventions would seek ways of effectively linking community institutions to local government structures so as to ensure harmony in investment decisions and sustainability of the assets created. Priority action areas include: (a) capacity-building of communities to plan, operate and maintain community-based social and economic investments; (b) promoting the creation of producer groups and associations of common economic interest to allow producers to exploit economies of scale and value additions in production and marketing, and enhance their bargaining power in marketing; and (c) encouraging the representation of, and decision making by, women in community structures and producer groups. 45. Gender mainstreaming. Given the structural causes of gender gaps in Syria, gender mainstreaming would principally aim at improving and diversifying women’s skills development and employment, and increasing their participation in local institutions and grass-roots organizations. A multi-pronged approach would be adopted through (a) expanding women’s participation in the mainstream economy; (b) increasing the outreach of productive and social services to women; (c) ensuring women’s participation in local institutions; and (d) enabling local institutions to close the gender gap in accessing productive and financial services. 46. Climate change. The COSOP was prepared in harmony with the need for a thorough review and alignment of agricultural policies with climate changes in Syria. According to ‘Vulnerability Assessment and Adaptation of Climate Sector in Syria’, a subreport of Syria's Initial National Communication, potential climate changes in the eastern Mediterranean over the next 50 years are as follows: (a) temperatures will increase by 2 degrees Celsius in the north-western and south-eastern regions of Syria, while the rest of the country will see increases of at least 1 degree Celsius; (b) rainfall will increase throughout the region during Summer and Autumn; and (c) sea levels will rise by 70 cm by 2100. 47. The same report concludes that there will be an increase of 9 per cent in water requirements for wheat, which, if not met, will lead to a 10 per cent reduction in yields. For cotton, water needs will increase by 8 per cent, which, if not met, will result in a 10 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 5 per cent reduction in yields. For olive trees, water requirements will increase by around 10 per cent, which, if not met, could mean a 5 per cent reduction in yields. Adaptation measures are needed, including the use of heat- and drought-tolerant cultivars; better cropping practices; water-use saving, efficient water management practices and better irrigation technology; use of supplementary irrigation; and application of conservation farming to increase the effectiveness of rainfall. These measures are fully observed in the ongoing IFAD supported projects and would be in the proposed ILDP. II. POVERTY, SOCIAL CAPITAL AND TARGETING (KSF 2) A. Rural poverty, information and analysis 48. Poverty profile. With 32 per cent of its population unable to satisfy basic requirements and the majority of the poor (62 per cent) living in rural areas, the Government accords priority importance to reducing rural poverty. Rural poverty is more prevalent among: (a) smallholders and tenant farmers unable to earn a minimum living from farming and obliged to supplement their incomes through wages, livestock and offfarm economic activities; (b) small herder households owning up to 100 sheep and/or goats as their main source of income. These households are also obliged to supplement their income by casual labour; (c) landless people relying, for the bulk of their income, on small herds of animals, agricultural work as tenants or sharecroppers, and selling their labour both within Syria and in neighbouring countries; (d) unemployed youth, without any income or possibility of work either locally or abroad; and (e) rural women, particularly woman-headed households. 49. Of the rural poor, 23% are self-employed in on- and off-farm activities; 36 per cent are wage workers; 26 per cent are unpaid workers (family labour); and 15 per cent are unemployed. In one way or another, most of the rural population is involved in agriculture and livestock production. Non-agriculture rural employment is still limited. Most of the poor are dependent on more than one source of income for their survival. The fact that wages supply 47 per cent of all income is a clear indication of the importance of wage labour for the survival of poor households. This is also a reflection reflecting the fact that for the vast majority of land and livestock holdings are too small and/or with low productivity thus have to be complemented by wages to enable their households to survive. Limited access to land and pasture, water, services and markets reduces the ability of individuals and households to earn a reasonable living from farming and livestock herding. 50. Rural households and food insecurity. Some 62 per cent of the rural poor are food-insecure or vulnerable to it. Food-insecure rural households tend to have less land and own fewer head of livestock, they find it difficult to produce all the food they need and are constrained by income poverty from satisfying their food needs on the market. 51. Youth unemployment. This is a major issue in Syria and one important manifestation of poverty. More than 25 per cent of young people under 25 years of age are unemployed and the majority of them have been seeking work for more than a year and/or migrate to urban areas in search for employment. During the design ’s fieldwork many of the people met were younger men and women who had no source of income and participate in livestock herding to keep busy, but consider this as merely ‘filling time’ while seeking ‘real’ employment. The numbers of persons leaving education and joining the ranks of those in search of work are close to 400,000 annually, ensuring that the problem remains significant unless a very large number of jobs are created each year. 52. Gender Dimension of Poverty. Rural women and woman-headed households play a major role in rural economic life2, yet they are particularly disadvantaged. Farming is becoming increasingly feminized as men increasingly take up non-agricultural employment in urban areas or abroad. Women are the mainstay of smallholder 2 Gender issues are discussed in detail in Working Paper 2. 11 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT agriculture. They do most of the crop cultivation work, tend to the livestock and perform tasks as casual agricultural workers. But they have few opportunities to improve their living standards as they have limited access to assets and land. Illiteracy is more prevalent among rural women than men and rates of primary school enrolment are lower for women. Despite women’s close involvement in agriculture, their work is largely defined as ‘family’ and casual labour, and they are not considered for extension and other supporting services. 53. Gender distribution of responsibilities with respect to livestock husbandry is almost uniform, with no significant variation according to location or type of animal held. Men are responsible for herding the animals and taking them to watering points when these are distant from the home, as well as marketing of the animals and their products. Women are responsible for milking all animals, for processing milk at the household level into ghee, yogurt and cheese. In addition to processing the milk, women often also sell it locally either within the village or beyond in local towns, and even in the larger cities. Their control over the income is limited. Women are in charge of the animal’s pens and of cleaning the animals when this is done in the home compound. 54. Livestock are generally owned by the ‘household’ therefore the men have primary access to credit and other facilities provided by the Government. It is only in the case of widowhood or other circumstances which make women official ‘household heads’ that they can access state support directly. This is clearly a situation in which, giving women greater access to financial and other services, would contribute to their empowerment. 55. Livestock based livelihoods and poverty. The main livestock production systems are the small scale sheep herders [transhumant, semi-nomadic and settled]; small scale mixed farms with a few sheep; large scale sheep herders holding over 250 animals; small mixed farms with a few cattle; larger scale cattle farmers; and small numbers of full time buffalo and camel holders. Small scale sheep herding is the production system practiced by the vast majority of the population dependent on livestock. Sheep are the main ruminants kept, particularly in the Badia area, but also in the marginal 4th settlement zone. Elsewhere significant numbers of landless people and others with very small holdings depend considerably on their small herds of sheep. 56. Small scale sheep herding is the source of livelihood for about 200,000 households. Whether settled, semi-nomadic or nomadic they are among the poorest people in Syria: they have inadequate access to social services, there are no alternative sources of income in the rangelands, and marketing mechanisms for their milk and milk products are largely out of their control (para 63). They are visibly poor. Smallholders with few cattle, while still poor, are in a relatively better position even if landless. As they live in areas of higher population density and they are settled they have better access to other sources of income, better access to markets for their milk produce and better access to education, health and other social services 57. Trends in small livestock holdings. Available data indicate a steep drop in the size of livestock holdings for small scale sheep herders, particularly in the Badia and marginal areas of the 4th and 3rd settlement zones over the last few years. This resulted in a substantial loss of assets and incomes for smallholders dependent on 50 animals or less. If such losses continue the semi-nomadic livestock management systems might disappear as holders give up their herds, move to other occupations, and their range management skills would be lost forever. This trend can be explained by: (a) recurrent droughts and consequent deterioration of natural pasture which increases the need for purchased supplementary fodder; (b) the high cost of purchased fodder on which most livestock have depended in recent years; (c) low price of animals, which means that more have to be sold to obtain the same income to meet increased feed costs; and (d) limited means to increase animal productivity with the current limited availability and quality of livestock production services. 58. There seems to be little doubt that the living and working conditions of small sheep holders are worsening and have reached crisis. If not urgently addressed this situation 12 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT can reach a stage beyond which recovery of the stocks and skills may no longer be possible. So far, herders participating in the IFAD supported Badia project have demonstrably suffered less than others. 59. Causes of rural poverty. A number of factors suggest that the poverty situation has worsened in recent years and that many of those formerly living just above the poverty line have probably now joined the ranks of the poor. Factors that have affected livestock smallholders more acutely than others, as well as others whose livelihoods depend on rainfall in any form, include: (a) Deteriorating climatic and productive conditions for pasture and basic food production in the country owing to global warming and drought, particularly because the drought has persisted for almost 10 uninterrupted years throughout most of the country. (b) The sudden and very sharp increases in the cost of basic foods that occurred in 2007 and 2008 worldwide. Thanks to government policy, Syria is still selfsufficient in wheat despite increased population, but it imports other cereals, mainly those used for animal feed. Increased costs of produce and transport for imports do affect the Syrian population, albeit to a lesser degree than in countries with greater dependency on imports. (c) The increase in the cost of fodder and the trend for decreased size of holdings and income for the small herders (para 57). (d) Worsening water situation. The quality of water in the major rivers is deteriorating owing to pollution from chemicals and effluents, and the quantity, particularly in some of the smaller rivers, has been drastically reduced because of upstream pumping for agriculture. The shared Euphrates and Tigris River waters are also subject to allocation and sharing disputes between the three states that use them. (e) Great pressure on resources resulting from the massive influx of Iraqi refugees, which by 2008, were estimated at over 1.7 million. (f) In 2009, the Government increased diesel prices from SYP 9 to SYP 21 per litre. This had an immediate and direct impact on livestock holders, particularly the poorest, as it led to increased transport prices. It also led to higher water prices for all those dependent on pumped water from wells, mostly in the remote areas of the Badia where the poorest populations live. 60. Coping strategies of the poor. The rural poor in Syria have a number of strategies to cope with their difficulties. Having arisen primarily as a result of a combination of increased population and smaller landholdings, these strategies are mostly focused outside the cultivation of own land. It is important to note that many of the strategies are used by both men and women. The first strategy, used mainly in the areas of cultivation, including irrigated field crop and fruit tree areas, is the acquisition of livestock, both small and large ruminants. Both produce regular income from milk and milk products as well as larger lump-sum payments when animals are sold. This strategy requires initial capital to purchase animals and is therefore not accessible to the poorest without direct assistance, including access to microfinance. The second and most frequent strategy used by men and women livestock holders, land holders and the landless throughout the country, is casual labour in agriculture. This has two main forms: the first is harvesting work, mostly of cotton and some fruits, and is clearly seasonal and involves mostly women. The other involves work in the southern part of the country, mostly in ‘tunnel’ vegetable production where, again, women are the main participants. 61. The third strategy is mainly followed by men, although some women are involved. This concerns international short-term seasonal migration to neighbouring countries, mainly Lebanon and Jordan. In those countries, they are mainly involved in agricultural work, although some also work in unskilled or semi-skilled activities in construction 13 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT (men) and in household work [women]. The fourth strategy is when men go to work in Gulf Cooperation Council countries on a more long-term basis, usually staying away for most of the year or longer and returning for short periods. There they are involved in unskilled work, mostly in construction. Although the returns there are higher, it is more difficult to obtain visas and to find jobs. Therefore, this strategy is less easy to implement. 62. In the long term, most rural people believe that education will help the younger generations to rise out of poverty, although large numbers of youth with secondary school and higher qualifications are already unable to obtain employment. This does not prevent people from aspiring to more education for children and, indeed, such investments should produce returns in the medium to long term. B. Target Group 63. Typologies of poor households. The following are basic typologies of poor households in rural Syria. Women are part of all these household types and are should be targeted throughout, not just where they are explicitly mentioned. (a) Poor small sheep herders live mainly in the Badia and the marginal ASZs III and IV, but are found everywhere. They are semi-nomadic, settling in their home areas in winter, whether in tents in the Badia or in houses elsewhere. Housing is, mostly built of mud bricks in ASZs III and IV and cement blocks in other areas. Their source of income was previously their livestock but this has now been overtaken by casual labour by younger men (often abroad) and by most family members during the harvesting season. They live in small extended households. Men are involved in casual labour and the herding of animals. Women work in animal herding, milk processing and occasional harvesting of cash crops. The average household consists of about eight people. They have about 40 sheep and three goats; most of them had more animals in the past. They own their tent or house and have a few basic assets but no means of transport, which is a major constraint for transporting humans, animals and water. In particular, they have limited access to secondary school education for their children or to health services. (b) Small, semi-nomadic sheep herders living on the borderline of poverty. The characteristics of this group are similar to those of poor seminomads but with a few more animals – up to 60 sheep and five goats. Their income from casual labour is higher as they may have young men working in the Gulf countries, Lebanon or Jordan. Having had more animals in the past, they own an old, small truck with or without a water tanker, which they use for collecting water. They also earn an income from transporting water or other goods for local households. They have the same limited access to higher-level education or to medical services as the former group. Their household size is similar to that of the poor sheep herders. (c) Small, semi-nomadic sheep herders living just above the poverty line. These people are based in an area with some access to cultivation, thus having some fodder or better pastures. They have more than 100 animals as well as a regular income from a family member employed in the civil or military services or labouring on a more permanent basis locally or abroad. They own a truck in better condition and have either the means to transport a few animals or a water tanker. Their access to education and medical facilities is similar to the other groups, although they might be able to afford to send their children to boarding schools for secondary education. Like the poorer households, their livelihoods are extremely insecure and they are vulnerable to climatic risks or household problems such as unexpected necessary expenditures or inability of a worker to earn an income. 14 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT (d) Poor landless households with one or two cattle. This group is completely dependent on income from their one or two cows, for which they have to buy fodder or have access to pasture provided by neighbours or other farmers. Such households are likely to be composed of elderly people or headed by women and to consist of only three or four members, although perhaps one of them is able to work. They are highly vulnerable to any crisis leading to loss of income from their animals and clearly constitute a priority target group together with the poor sheep herders. They are unable to supplement their income through casual labour, for health, age, etc. (e) Poor small farmers with up to five cattle. These people live mostly in nuclear families although three generations may be living together, at least on a part-time basis. They have less than 1 ha of cultivated land producing limited field crops and, if irrigated, less than 0.5 ha. If they are in a fruittree growing area, they will own less than 200 trees. Their main sources of income are crop/tree production, cash income from labour in harvesting (for the women) or other casual work for men, or from their few cows, the main advantages of which are that they provide them with: (a) milk and milk products for the household; (b) regular, small amounts of money that can be used to cover daily expenditures; and (c) in case of urgent need for large amounts of cash, can be sold. Their access to education and health services is better than that of the more nomadic groups living in the Badia. They are vulnerable to climate-related events, particularly drought or floods, and their ability to maintain their standard of living is marginal. (f) Small-scale milk collectors and milk-processing family enterprises. These are poor, small entrepreneurs operating with their families in marginal enterprises that need to be technically upgraded to ensure more hygienic and better-quality produce, thus reducing health risks and improving profitability both for themselves and for the producers. 64. The poor’s perception of change. Livestock holders were asked about their perception of changes over the last decade or two. While cattle holders living in ASZ II generally considered that their living conditions had improved, their situation is very different from that of sheep holders. Cattle holders generally live in areas where there is easy access to both education and medical facilities and where communications and markets are easily accessible. 65. Sheep holders in the Badia almost universally considered that their living conditions had deteriorated over the last decade. Although their access to social services has improved, mainly insofar as women and children are less mobile and have settled in some larger settlements where schools and medical facilities are available, many still consider themselves as deprived compared with other population groups. Means of communication have also clearly improved with the wide distribution of mobile telephones and the asphalting of roads, even in remote locations; however, worsening income has meant that households are dependent on very old vehicles or public transportation for themselves and their livestock and, most urgently, for domestic water supplies and drinking water for the livestock. In addition, their access to Gulf countries for work is perceived as being far more restricted than in the past, and this affects the cash income necessary for renewing capital goods. However, the main reasons given by sheep herders for their deteriorating living conditions were a combination of increased prices for fodder, reduced availability of pasture and the ban on barley cultivation in the Badia, coupled with insufficient access to funds and alternative sources of income. 66. The target group. The total number of holders of small ruminants is estimated at 190,000 (2010), of which the vast majority (76 per cent) are smallholders with less than 100 animals. For the overwhelming majority of these persons, livestock herding is the occupation that defines their social status in society even though in many cases they are nowadays more financially dependent on casual labour (in the country and outside) for 15 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT income. An estimated 80 per cent of these households are semi-nomadic and live in the Badia. Others are landless people who live in the less arid settlement zones but are also primarily livestock herders. In addition large numbers of small landholders have a few sheep and goats, which constitute as much as 10 per cent of their household income. All these people can be considered poor and part of the potential target group for the project; therefore, the potential target group of primarily sheep holders is about 145,000 households. As most livestock-related activities are carried out by women, they would be given priority for most training and extension activities. 67. With respect to cattle holders, most cattle are kept either by farmers having up to ten cows and very little land or by small landholders with one or two cows. There are also about 5 per cent of small cattle holders who may be considered very poor, having no other income than that provided by their one or two cows. With the exception of the few very large cattle farms, and of large landholders who also own significant cattle farms, cattle keepers can be considered part of the project’s target group. The potential cattleowning target group can thus be estimated at 160,000 households. Here again, the focus of many activities would be on women as they are responsible for most of the husbandry and milk processing work. Owners of up to 25 buffalo in the Al Ghab area, Hassakeh Governorate and elsewhere could also significantly improve their living conditions by increasing income from their animals, as could the few camel holders. The potential number here is about 1,000 households. 68. As a general rule, the potential project target group should include all small holders of livestock provided they are not very large landholders or owners of other significant assets. The potential eligible target group in accordance with IFAD’s criteria for a longterm rural poverty reduction and livestock development programme, of which ILDP would be a first tranche, is thus estimated at 306,000 household producers to cover the following seven categories: (a) transhumant households across governorates in ASZ V (Badia); (b) semi-sedentary households in ASZ IV that primarily depend on livestock and hold less than 50 head of sheep per nuclear family; (c) landless livestock holders in ASZs III and IV with less than 50 sheep or four cattle; (d) small landowners with less than 1 ha of marginal or saline irrigated land, or 3 ha of rainfed land in ASZs III and IV with less than five cattle or 20 sheep/goats; (e) poor women whose nuclear household is lacking in assets despite being part of an extended household that may not belong to the target group; (f) small-scale milk collectors and processors; and (g) unemployed poor young men and women interested in establishing livestock-based microenterprises. Woman-headed households in the first four categories would receive priority support. 69. Including the small milk collectors and processors, the cumulative eligible target group based on IFAD’s criteria for a long-term rural poverty reduction and livestock development programme is thus estimated at 311,000 households, roughly distributed as follows: 145,000 small sheep holders, 160,000 small cattle holders, 1,000 buffalo herders and 5,000 milk collectors and processors. As mentioned earlier, in all these categories (except, possibly, milk collectors), women would be the main beneficiaries of project investments and activities because of their close involvement in livestock-related activities. While including the entire potential target group for some interventions, the ILDP project, which is proposed as a first tranche of a long-term livestock development programme, would focus directly on 25 per cent of the potential target group, or 77,750 households, through creation of sustainable income-generating assets. These households would be selected from a total of 1,260 settled villages and seasonal herder settlements in the Badia, or 20 per cent of all villages in Syria. C. Targeting Strategy, Gender Mainstreaming and Community Development 70. Targeting strategy. The project includes a number of components that would, directly or indirectly, benefit all livestock holders (genetic improvement, animal health and veterinary drugs), the benefits of which would reach both the target group and others. The distribution of improved rams and artificial insemination services would be first provided to the target group of poor people owning less than 50 head of sheep and 16 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT no other assets, particularly poor women with small herds. Extension and communication efforts would be also focused on the target group and, in particular, involve a significant increase in female extension staff in order to reach women directly. All testing and piloting of new activities, such as quality improvement of crop residues, promotion of forage production, etc., would be implemented with target group members. 71. A major targeting effort will be made in the extension component (WP 1, 2 and 4). Given the primary role of women in animal production and processing activities, extension services would target these women producers through the following measures: (a) Extension programmes on hygiene, nutrition, improved dairy processing, literacy and human health extension programmes will be implemented on as wide a scale as possible and addressed exclusively to women; (b) A major effort would be undertaken to attract additional female animal health and husbandry extension staff to be deployed with the aim of reaching a 50/50 gender balance in the extension units where the project is operating. This would bring about a major change towards improving the gender balance in the extension service and reaching women effectively; (c) All animal production extension specialists should be trained ( giving additional training to women as necessary) to ensure that their technical capacity is up to the highest standards and to effectively address women needs; (d) The elaboration of extension materials would give adequate consideration to women’s concerns in their animal husbandry and milk processing activities. Detailed study of the activities, needs and constraints of women in their work should be the first step in elaborating new extension materials; (e) Specific attention should be given to the needs of women staff in providing transport and other equipment; and (f) Extension programmes aimed at the utilization of crop and food processing residues, promotion of forage crops and improved herd management would be focused on the target group. This would entail that pilot testing of equipment is done primarily with small holders (particularly women)using their animals, , and that training and feed packages are all primarily designed for and provided to priority target group members. 72. Regarding project rangeland activities, the target group will be the main and prime beneficiary of all activities within this component. In addition it has been the policy of the BRDP and will be that of ILDP to give priority to women for most of the labouring jobs in planting of shrubs, which is a major contribution to household income and a form of empowerment to women. The distribution of Awassi rams, under this component would be specifically targeted at the poorest with the smallest numbers of sheep and at women managing and controlling small herds. 73. Enterprise development activities would be aimed at the target group, who would have priority of access to credit, technical training and support. The project would assess demand for credit on a yearly basis and ensure that priority support is given to target group members, and to the smaller over the larger enterprises. With respect to support to milk collection systems, priority would be given to those serving the largest number of target group members, thus enabling them to improve their milk marketing. 74. Access to microfinance would be based on the sanduq model as implemented in the JHADP and IRDP. A sanduq MFI would be made available to specific communities, selected in accordance with criteria relating to poverty, interest and potential ability to properly manage their sanduq. Such sanduqs would be also established in the Badia zone, within the framework of the LPICs, based on the same selection criteria, and include the highest possible percentage of poorest members (i.e. those holding less than 50 sheep). In the other ASZs, poor villages would be selected in accordance with the 17 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT same criteria relating to interest, poverty and ability to manage the sanduq. The baseline study to be conducted by the project in Year 1 would provide information on poor villages that would then be selected based on the willingness of at least 50 men and 50 women villagers to participate. 75. The process of sanduq establishment would include the following: (a) creating a sanduq in the village; (b) purchasing at least one share per member at SYP 1,000; (c) electing a chairperson, treasurer and secretary; (d) undergoing a one year probation period; and (e) operating within the project framework of by-laws and regulations. The sanduqs would not be stand-alone activities. The villages/groups selected for the sanduqs would also benefit from the concentrated activities of other project components and thus benefit from the full package of project activities – becoming, by the end of the project period, models for community-level livestock development. 76. Implementation of the project’s targeting strategy would be based on mechanisms to ensure that, wherever possible, target group members are given priority for all activities. This would be ensured by appointing a senior staff (Gender and Targeting Officer) at central and provincial levels with direct, responsibility for this aspect (WP 7) and by providing all project-related staff with training in targeting. 77. Gender mainstreaming strategy. The important role that women play in livestock production and processing will be addressed by a dual strategy involving the mainstreaming of gender in project activities coupled with empowering mechanisms and systematic efforts to improve women’s participation both as beneficiaries and implementers. These will include: (a) a separate budget for support to women producers and processors of livestock products; (b) appointment of a senior gender officer in each of the project’s national and provincial project directorates to directly oversee and coordinate the implementation of the project gender mainstreaming and targeting strategy; (c) improving the gender balance in the institutions directly delivering services to livestock holders (veterinarians, assistant veterinarians, extension staff); (d) providing specific gender sensitization training to all staff and at all levels to ensure that they address gender issues; (e) specific gender training to male extension staff and other staff assigned to the project; (f) where feasible ensuring that quotas are set for women beneficiaries of all project activities and for project supported community based organizations (at least 30% women memberships); and (g) gender disaggregated costing and budgeting of project interventions to ensure that benefits are appropriately distributed (see for more details WP2 and project logframe). 78. Community development. IFAD’s COSOP for Syria states that the Community based development approach is a major thrust of IFAD’s country programme. The essence of community development, as embodied in the COSOP, is improving community technical and managerial capacity to organize and manage its own development, and adopt a participatory approach to planning and implementation of project activities. This approach has been applied in most of IFAD closed and all its ongoing projects in Syria. The IRDP has promoted the establishment of VDCs for organizing community participation in planning, design and implementation of community-based activities. The NERRDP is developing this approach further by, supporting communities in the formation of interest groups, bringing them and the existing users groups into the VDCs, and training all groups and committees in technical and community management skills. The BRDP has pioneered such approach through the promotion of ILPCs and RMCs. In all these projects capacity building of the poor and their organizations is a major cross cutting axis to empower grass roots organizations to achieve the agreed upon goals.. 79. The ILDP would build on these experiences and extend them at the national level to all provinces. It would empower the poor in local communities to work together to identify their needs, objectives and priorities, while integrating existing organizations and building new ones within the project framework. The project would promote ILPCs, RMCs, micro finance sanduqs, farmers’ schools, milk collecting groups, etc. using these principles. The main elements of the ILDP approach are (a) building trust of the community in community organisations (e.g. RMCs and sanduqs) through community 18 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT sensitisation; the formation of Local Development Committees and common Interest Groups (e.g. range management group or a sanduq group) to identify common objectives, priority needs and possible solutions. This raises their trust, confidence and willingness to achieve the objectives; (b) selection of management boards in a democratic and cohesive manner including individuals with recognised community leadership qualities; (c) capacity building of management boards and groups by coaching and training to strengthen leadership capacities and enterprise skills; (d) building accountability and transparency through clear rules and procedures for management practices, decision making, finance and internal discipline. ILDP would promote Group maturity and sustainability and would monitor the process through well defined institutional, financial and technical indicators (WP 7, Appendix 2, Attachment 13). The NERRDP has produced comprehensive Guidelines for Community Development based on its experience and these would be used and adapted as needed by ILDP. D. Geographic Coverage of the Project 80. The project would be national in scope and will cover all provinces in Syria: Deir Ezzor, Hassakeh, Raqqa, Aleppo, Idleb, Homs, Hama, Tartous, Lattakia, Dara’a, Sweida, Quneitra, Rif Damascus as well as the region of El Ghab. Within provinces, project activities would be targeted to priority areas where the overall rural poverty rate is high and livestock is a major source of livelihood, with focus on about 1,260 villages as indicated in para. 69 (details in WP 1). 81. Interventions relating to support services, such as research and extension, training, marketing and quality control of produce and inputs, microfinance and enterprise development, would benefit all provinces. The type of intervention to support the livestock production systems in the priority areas would be dictated by the potential of natural resources for livestock development. Specifically, the transhumant sheep production system is confined to ASZ V (Badia); the semi-sedentary small ruminant production system is predominant in ASZ IV; the settled livestock rainfed integrated farming system is in ASZs I, II and III and their remote mountainous areas where goat production system is predominant. On- and off-farm dairy cow production systems predominate in ASZs I, II and III. III. PROJECT DESCRIPTION (KSF 3) A. Knowledge base: lessons from previous/ongoing projects 82. A number of lessons and conclusions may be drawn from some seven IFAD-supported projects in Syria (4 completed and 3 ongoing) that have been or are being completed, and from several IFAD-financed technical assistance grants for agricultural research and capacity-building. In addition, a number of development projects funded by other donors under implementation throughout the country also provide useful insights and ideas for future operations. Key lessons learned from these experiences, which are of relevance to the proposed ILDP, are presented in the following paragraphs. 83. Participatory approach. Although the beneficiaries have been keen to participate in project-supported activities as individuals, this type of involvement is not sufficient to create a structured platform from which the rural poor can direct their own development. Much still needs to be done in terms of mobilizing the beneficiaries, particularly with respect to the development and empowerment of grass-roots organizations. As part of the IFAD agenda for policy dialogue with the Government, the IFAD-supported BRDP, IRDP and, more recently, the North-eastern Region Rural Development Project (NERRDP) have been used as entry points to promote the adoption, for the first time in Syria, of a large-scale participatory approach by MAAR. 19 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 84. Community-based organizations. Related to the above, water user’s organizations, herders associations, farmers associations could play a major role in project implementation. They do however need capacity building at the levels of their management committees and members. 85. Gender issues. While the targeting of women in IFAD-supported projects in Syria has been generally successful, it has not always included the poorest women. The approach has been successful in terms of extension and training, but less so in ensuring access to credit. Therefore, activities aimed at women should be more poverty-sensitive and take account of the constraints they face. In addition, two important lessons have been learned from gender-oriented research conducted by ICARDA’s MachreqMagrheb III Programme in Syria (see para. 39): (a) in the low-potential rainfed areas (ASZs III and IV) and in poor mountain villages in the better-off ASZs I and II, local dairy cows and small ruminants could be promoted as a means for women to obtain income from an activity that is integrated within the overall family productive operation and compatible with women’s acquired skills. Women's ownership of a few head of sheep or a dairy cow would enable them to dispose of separate assets that may in turn break their dependency on other family members even for petty cash; and (b) in the Badia rangelands, one of the consequences of trends and changes in livestock management because of frequent droughts, has been an increase in women’s involvement in the livestock sector. 86. When livestock productivity is viewed in the light of herd size and the status of labour supply, it becomes clear that women play an important role in the development and consolidation of new practices. In the past, small ruminants were constantly moved to available water and grazing areas. Today, growing numbers of herders are developing small fattening and dairy sheep activities with family female labour. 87. Rural finance. Until six years ago, ACB was the main provider of rural finance in IFAD interventions. Many disadvantaged rural women and other poor people still have little or no access to credit owing to their inability to provide guarantees acceptable to ACB. IFAD would continue to explore ways of ensuring that such services reach the poorest. This should include promoting sustainable financial institutions managed and owned by the local population, e.g. sanduqs. Thanks to policy dialogue with the Government and using the JHADP and IRDP interventions as entry points, microfinance systems are increasingly recognized by decision-makers as being both appropriate to and most likely to have a significant impact on the rural poor. 88. Marketing support. Constraints on market access, such as weak infrastructure, lack of rural trade networks and absence of market information, result in low prices, consumption-oriented production and poor household incomes. IFAD-supported interventions should proactively address these constraints and strengthen links between producers and collectors/processors/traders to ensure regularity of market access, value addition and optimum prices. More emphasis should be placed on reducing post-harvest losses and on the need to promote contract farming as a way of enhancing small farmers’ access to the value chain. 89. Pro-poor demand-driven research and extension. Research and extension services have been traditionally programmed from Damascus following a research-driven, topdown approach with little interaction with farmers or service providers at the governorate level. It is clear that, when generating and/or disseminating agricultural technologies to farmers, the agricultural research and extension services should be more responsive to the needs of small-scale producers and rural women, and place more emphasis on agricultural productivity, marketing of high-value crops, crop-livestock integration and better water management. 90. Rangelands development in the Badia. The first lesson learned from BRDP is that, despite the advanced state of degradation, much of the perennial native species with high forage value still have significant regeneration potential. The second lesson is that the success of any large-scale rehabilitation effort hinges on resolving key socio- 20 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT economic constraints through organizing rangeland users (Bedouins) into socially cohesive traditional groupings to ensure the equitable and sustainable management of the rehabilitated resource. The third lesson is that the most pertinent technological and institutional options to ensure rapid healing of the ecosystems and simultaneously provide a substantial increase in forage output are relatively simple. They combine range resting based on Hima’ indigenous practice, direct re-seeding of range including native shrubs and self-regenerating herbaceous species, high-density fodder shrub plantation in selected favourable sites, selected livestock water points favouring low-cost structures for water harvesting in strategic locations, all combined with the establishment of participatory RMCs for sustainable grazing practices. Through the above institutional and technological packages, the BRDP brought about significant cumulative productivity gains to the Badia rangelands. 91. Sustainability. Following the closure of completed IFAD projects, their implementation has continued with government funding, thereby reflecting a strong sense of ownership. However, the monitoring and evaluation (M&E) systems of these projects are still weak and need to be strengthened. B. Opportunities for Rural Development and Poverty Reduction 92. Livestock activities are a major source of livelihoods and employment generation in Syria, and are practised in all the regions of the country because of their links to the agricultural sector as a whole. In all, livestock accounts for 35 per cent of the value of agricultural production and for 15 per cent of agricultural exports. In addition, the Syrian agro-food industry, of which dairy and meat represent an important share, has evolved in recent years to become the sector with the highest value added margin, i.e. over 33 per cent of the industrial manufacturing value. On average, small ruminants (sheep and goats) provide 35 per cent of total milk production and 65 per cent of all red meat production per annum. Livestock production generates more than 30 per cent of the annual family cash income in most rural areas of Syria. 93. Unlike for other agricultural commodities such as cereal grains, the dairy and meat subsectors are minimally controlled by the Government and are considered to be among the mostly liberalized sectors of the economy. However, they are still considered as emerging sectors, and consequently they are highly affected by external factors such as international market fluctuation and trends, local supply and demand, seasonal and climatic conditions, animal productivity, cost of feed, cost of fuel, and the development of value added products. In particular, the processing of milk products is of primary importance because milk is a highly perishable commodity; therefore its processing does not merely increase its commercial shelf life, but it generates value addition of as much as 150 per cent for some items. 94. Far from being fully mobilized, the potential for Syrian livestock offers concrete opportunities for rural development and poverty reduction. Important productivity gains could be easily achieved along the main segments of the value chain, namely, production, collection, marketing and processing, provided the respective technical, policy and institutional constraints now being facing are addressed and available technologies and practices for productivity enhancement and value addition are adopted by producers, traders and processors. The ILDP has been designed as a response to these opportunities. 95. Recent studies on the comparative advantage of industrial sectors in Syria show that dairy is one of the most promising particularly in view of recent policy and institutional changes and the development of the relation between Syria and its main trading partners. With the gradual shift to an open market economy regionally and internationally, the coming into force of the EU-Syrian Association Agreement, in addition to the already active Arab market agreement, Syrian products will have the opportunity to penetrate new and rich markets. The same factors create new challenges for the sector and its products as Syrian markets will be opened to foreign products, and consequently Syrian products will be exposed to international competition and have to be 21 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT competitive in price as much as in quality to survive. The efficiency of the sector and its major players, along the dairy value chain becomes a crucial factor in addressing those challenges and capturing these opportunities. ILDP would be addressing such issues. 96. The on-site collection and processing of fresh milk, and the off-site marketing and processing of dairy products, both important links in the dairy value chain, are constrained by: (a) the diversity and number of small farms, their remoteness from points of consumption or sale, road conditions and sensitivity of milk to heat and ambient temperature; and (b) the absence of refrigeration facilities at the farm level and lack of a sanitation/hygiene culture among milk producers and collectors/processors (jabban/hallabs/warshe) involved in the handling, storage, transportation and processing of milk. These conditions do not guarantee the availability of good-quality milk and its products either to consumers or to processing units. These constraints could be addressed through public- and private-sector interventions. 97. At the public-sector level, the following interventions are needed: (a) development and application of standards related to dairy products and sanitary criteria in order to reduce unfair competition and adjust the price positioning of products based on quality and price; (b) encouraging the establishment of adequate collection centres with refrigeration facilities, inspection laboratories, transportation means and qualified personnel; (c) application of strict regulations on quality, hygiene and labelling rules so as to put pressure on informal markets to follow market regulations. 98. At the private-sector level, the dairy processors need to: (a) work with milk suppliers on improving both the productivity of livestock and milk transportation conditions; (b) invest more time and money in developing new products adapted to local and regional markets; and (c) establish milk collection centres near milk production areas in order to reduce transportation costs and avoid milk deterioration. C. Project Goal and Objectives 99. The livestock sector plays a significant role in the Syrian economy. It accounts for 35 per cent of the value of agricultural production, and one third of agricultural exports. Most livestock husbandry is carried out on smallholdings and the sector is the mainstay of the IFAD target group (small-scale rural producers, landless farmers and rural women). Because of modest past development efforts, the sector is currently facing a number of constraints including low productivity; limited genetic improvement; shortage of feed; lack of animal performance control systems; poor quality control of milk products; inadequate marketing and processing capacities; and weak livestock support services. These and the recurrent draughts have weakened the sector and are seriously threatening the living conditions of small rural producers, processors and employment seeking youth. Previous IFAD-supported projects were local area specific (five out of eight projects largely focused on land reclamation) and have included support to livestock at a very limited scale and in relation to production only. None of the previous IFAD-supported projects included a comprehensive value-chain approach to the development of the sector. In order for the livestock sector in Syria to realise its high potential and to meet the challenges of providing adequate income to small producers, collectors and processors, and safe, low price, nutritious and adequate products to consumers, both internally and for export, it needs to modernise. Far from being fully mobilized, the potential for Syrian livestock offers concrete opportunities for rural development and poverty reduction. Important productivity gains could be easily achieved along the four main segments of the value chain, namely, production, collection, processing and marketing, provided the respective technical, policy and institutional constraints now being faced are addressed and available technologies and practices for productivity enhancement and value addition are adopted by producers, collectors and processors. The ILDP has been designed to address the sector’s constraints and to respond to the existing opportunities. 100. The project is designed as a precursor to a major long-term programme for livestock development in Syria. In line of the overall goal of IFAD’s support to the GOS 22 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT rural poverty reduction efforts , the objective of the proposed ILDP would be to increase the incomes of poor rural people (nomads, small livestock holders, small farmers, rural women and unemployed youth) whose livelihoods are dependent on livestock activities in low-potential areas, in a sustainable manner. This would be achieved through targeted interventions aimed at (a) supporting livestock production services; (b) improving rangeland productivity and development of feed resources; and (c) supporting the development of enterprises along the value chain of livestock produce, with focus on marketing, processing and micro finance. 101. The project’s approach would include the following main thrusts: D. (a) An integrated livestock sector approach to assessing constraints and opportunities along the entire value chains of major animal products, and at institutional and policy level; (b) Productivity improvement per animal unit associated with a series of interventions to enhance the quality of animal products along the value chain and thereby ensure the highest returns to the target group: small livestock producers, milk collectors and processors; (c) Capacity-building of the institutions involved, and access by the rural poor to productivity-enhancing livestock production technologies through extension and training; (d) Effective participation by the target group in rangeland development, to ensure the sustainability of commonly improved and managed pasture; (e) Integration of livestock into rainfed crop production systems to increase forage production and feed supply; (f) Access of the rural poor to microfinance would be promoted through village based and community-driven initiatives; (g) For rural microenterprise development, criteria for participation would give priority to the poorest and landless on a systematic basis, ensuring that conditions are favourable to unemployed poor young men and women. Facilitating access to these services would also be possible through training and empowerment measures; (h) Gender mainstreaming, women and youth empowerment, including access to microfinance, would be incorporated as an integral part of project activities coupled with measures to ensure equal opportunities and empowerment for women; and (i) Given the national coverage of the project, M&E mechanisms would be established at the national and provincial levels to ensure accountability and generate adequate feedback to allow for knowledge sharing, cross fertilization and rational adjustments to implementation plans. Alignment with Country Rural Development Policies and IFAD Strategies 102. The main thrust of the COSOP approved by the Executive Board in December 2009 has been discussed in paras. 40-47. The goals and objectives of ILDP are fully aligned with the strategic emphasis of the COSOP with regard to sustainable land management, particularly user-driven range improvement in Badia and livestock integration in the rainfed farming systems in low-potential areas (ASZs III and IV). The project is also fully aligned with the “Strategic Objective two” of the COSOP in terms of providing sustainable rural financial services to poor rural households, support to rural microenterprises, and market links along the value chain for employment creation and empowerment of local communities. The project takes full account of the premises of IFAD’s Rural Finance Policy, Small-scale Enterprise Policy, Targeting Policy and Gender Mainstreaming Guidelines. 23 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 103. The project is fully consistent with the Government of Syria’s strategies for poverty reduction (see paras.18-19) and agriculture development and policy (see paras. 20-23). Furthermore, its Vision 2025 accords priority to improving social services and economic opportunities in the poorest areas in order to create employment opportunities. The strategy for agricultural development calls for increasing the efficiency of agriculture, particularly the livestock sector, through improving productivity by animal unit, capacitybuilding for the poor, particularly women, participatory governance, and support for local-level organizations to directly manage resources and increase their market power. These thrusts are fully reflected in ILDP design. 104. Like all IFAD supported projects in Syria ILDP’s proposed activities are in line with GOS strategies and policies regarding the efficient utilization of water resources (see WP 3 Appendix 5). The project activities are not expected to affect the demand for water for livestock purposes and in line with GOS policies introduce water harvesting technologies when needed to reduce current and future dependence on groundwater, and facilitate utilisation of indigenous methods of water supply (e.g. hafirs). 105. The proposed ILDP has been designed to build on and complement ongoing government/donor technical assistance programmes in agricultural and livestock development, the most relevant of which are the three recent study programmes funded by EU in support of Syria’s gradual shift to an open market economy in the context of the EU-Syrian Association Agreement now coming into force. The first such study is in support of the SBM programme in Syria aimed at defining a development strategy for three priority sectors, namely; textiles, agrofood, and fresh fruits and vegetables to foster growth and increase their competitiveness on international markets. The second study, also in support of the SBM programme in Syria, aims at reviewing and conducting a value chain analysis of the dairy sector, and providing recommendations for its development and competitiveness as the country moves toward an open market economy. The third, on strengthening food quality management in Syria, is aimed at developing relevant food legislation, standards and quality control laboratories required to ensure that food products conform to international practices on product safety. The findings of these studies are reflected in the design of ILDP. 106. In addition to the above-mentioned EU initiatives, the design of ILDP has benefited from: (a) ongoing UNDP-funded work on preparation of a microfinance strategy for Syria; (b) previous work by the Consultative Group to Assist the Poorest (CGAP) on rural finance; and (c) relevant technologies generated by partners such as international and regional research centres, particularly ICARDA and ACSAD, on fodder crop improvement, crop/livestock integration, improved nutritional value of crop residues as animal feed, natural resources management and value addition to milk processing; and by ICBA on the safe use of marginal water in fodder production. Partnerships are being pursued with the French Development Agency (Agence francaise de dévelopment (AFD)) in order for ILDP to be able to access its SBM credit line and with Italian Cooperation in Syria with regard to formalizing the legal framework for micro finance sanduqs. In addition, cofinancing from OPEC Fund for International Development (OFID) and the Islamic Development Bank (IsDB) would be explored. E. Project Components 107. The project would finance a series of interventions structured around four main components: (a) Livestock development; (b) Rangeland improvement and development of feed resources; (c) SBM development in the livestock value chain and rural microfinance; and (d) Project coordination and management. Component 1: Livestock development 108. The overall objective here would be to increase the incomes of small livestock holders by improving their productivity per animal unit. This would be achieved through a series of productivity-enhancing interventions in the areas of control of animal performance; quality control of dairy products; genetic improvement; herd 24 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT management; integration of livestock into rain-fed farming systems; effective extension and training, use of crop and food residues; animal health; and quality vaccines and veterinary drugs. The component would include support to: (a) pilot system for animal registration and performance control; (b) support to livestock genetic improvement and production of improved breeds; (c) support to animal health and veterinary services; and (d) support to agriculture and livestock extension and training services. (a) Pilot system for animal registration and performance control 109. Establishment of an animal performance control system. Advancement of the livestock sector in Syria is seriously constrained by: (a) the lack of reliable databases on animal statistics to serve as a basis for efficient animal health control and vaccination programmes, proper traceability in case of outbreaks of trans-boundary diseases, and a well-targeted feed support policy during drought years; and (b) the absence of reliable and recorded data on animal performance as a basis for genetic improvement, selection and distribution of performing breeders. To address constraints related to the absence of performance control, the project would strengthen the capacity of the DAP to design a national identification/registration system (herd book and flock book) in accordance with international norms. This would be followed by the implementation of an animal performance control pilot programme with focus on a representative sample of dairy cattle and small ruminants (Awassi sheep) by major category of breed. 110. The activities would include provision of technical assistance training and support for: (a) a baseline survey on cattle and small ruminants to determine the current status of productivity in milk and meat, fertility, genetic traits, health and nutrition; (b) tagging and registration of animals and development of computerized databases to record and monitor animal performance indicators. Animal identification tools have evolved from tattooing to electronic devices, and could be alpha-numeric, numerical or based on electronic codification. Recording animals allows herders to recognize their animals’ performance with a minimum of error; (c) issuing herd registration cards for livestock producers; and (d) establishing collaborative arrangements with international entities specialized in herd registration, performance control and genetic improvement. 111. Quality control of milk and dairy products. The current lack of quality control of raw milk and dairy products is a major impediment to growth of Syria’s dairy sector. There is a need to promote and regulate a marketing and pricing system for quality milk based on fat content, physical, bacteriological and residue analyses. The consumption of raw milk and by-products exceeds 80% of current demand in Syria and is considered to be a health hazard. From producers to end-consumers, raw milk is handled in unhealthy conditions and is exposed to dirt and germs, resulting in harmful quality alterations. 112. To address this gap, ILDP would provide support for the establishment and implementation of a quality control system for milk and dairy products (see also component 3). This would include assistance to (a) assess the current Syrian food laws against international major food legislations and benchmarks; (b) formulate and adopt new food standards aimed at improving consumer products, in term of quality and safety, suitable even for export; (c) build up the capacity of existing institutions, including accredited laboratories involved in quality control; and (d) train livestock producers, particularly women household members in charge of milking animals and milk processing at home, milk collectors (hallabs) and mobile cheese makers (jabbans). (b) Livestock Genetic improvement and production of improved breeds 113. Genetic improvement and selection in Syria relies on high genetic-value bulls and rams, imported semen (mainly for cattle) and control of performance through herd-book databases. Ongoing activities for the selection of rams and ewes, high-quality heifers and bulls, are inefficient and need improvement. Imports of superior genetic-quality pure-bred dairy heifers would be the fastest way of improving the dairy sector and for reaching immediate self-sufficiency in milk. 25 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 114. To address the above constraints, the project would provide capacity-building and quality training to staff of GCSAR to conduct focused research on genetic improvement with a view to increasing productivity per animal unit. Such training would include support to post-graduate candidates to undertake applied practical research on genetic improvement in collaboration with ICARDA, ACSAD, advanced research institutions and universities as part of PhD thesis fulfilment. Provision would be made for three candidates, one each for local breeds of cattle, Awassi sheep and goats. In an effort to conserve the genetically-eroded local breeds resistant to prevailing diseases and adapted to local harsh conditions, the physical description and DNA characterization of these local breeds would be among the priority research proposals for one of the PhD candidates. 115. Support to, and the involvement of, existing Awassi sheep herders’ networks would be essential for speeding up sheep genetic improvement and multiplication of superior animals at the herder level and their sale to animal producers. The approach would be to promote the establishment of a participatory livestock breeding scheme involving a large base of qualified private herders, members of a livestock herders’ and animal breeding network. The scheme would be supported by a dedicated software management system, good tagging and registering. The system would be extended to mountain goats, camels and buffalo on a pilot basis. For buffalo, the breeding programme would benefit from the successful experience of the IFAD-financed West Noubaria Project in Egypt to introduce exotic species tolerant to dry conditions. 116. For small ruminants, existing GCSAR field stations would be supported to enhance research focusing on the improvement of Awassi sheep, Shami and mountain goats as well as other local breeds of cattle and buffalo. Artificial insemination techniques would be applied to Awassi sheep and goats to accelerate the transfer of the genetic potential imbedded in the improved rams produced by research stations and the sheep herders’ network. Studies on the performance of cross-bred cattle and assessment of the impact of improved Awassi rams and Shami goats at the beneficiary level would be undertaken. Studies would also be conducted on the impact of herd management and of use of technical packages, outsourced to regional and international organizations. 117. Syria’s existing genetic resources for dairy cattle production need to be urgently upgraded. Given that existing herds have been genetically closed since the 1980s and their productivity is relatively low compared with neighbouring countries, the introduction of new genetic resources through artificial insemination is a strategic priority for rapid development of the dairy sector. The project would strengthen current artificial insemination capacity through access to high-quality semen from abroad for dairy cattle improvement. In the long run, herder associations would be established for the improvement, production and dissemination of animals. The project would support the importation of semen from international top-quality bulls to mitigate the risk of consanguinity problems. Local cross-bred cattle (Damascene, Golani and Akchi) would also need to be improved under a special scheme to prevent them becoming extinct while preserving the unique genetic characteristics of local breed. This applies particularly to Shami goats and other endogenous cattle breeds. Given the global relevance of these genetic resources, research work supported under the project would be undertaken in partnership with regional and international research centres, including ACSAD, ICARDA, the International Livestock Research Institute (ILRI) and universities. (c) Support to animal health services and veterinary drugs 118. Animal health services. To ensure and maintain an effective system of animal health delivery, the existing capacity of veterinary services (including vaccinations) will need to be modernized and strengthened. Under the proposed ILDP, new veterinary centres would be established and existing centres rehabilitated when necessary. Centres would be equipped with mobile veterinary units and field vehicles when needed. In establishing new veterinary centres and mobile veterinary units, project support would include assistance to private veterinarians willing to set up their own animal health delivery enterprises in the project area with financing from available credit lines for SBMs. 26 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT The veterinary centres would carry out all annual vaccinations against major diseases and treat internal/external parasites. 119. Surveillance and epidemiology studies. The surveillance and epidemiology studies available in Syria are outdated and no longer reliable for determining the economic impact of several prevailing animal health diseases and or/animal health issues that might be induced by climate change. To address this gap, the project would provide support to the DAH to undertake a comprehensive surveillance and epidemiology study programme, to include: (a) a rapid survey to determine the present health status of cattle, sheep and goats. The survey would help establish the priority problems and diseases most in need of detailed epidemiologic studies. For example, mastitis is a serious problem, especially among dairy cows (according to an old study, 70 per cent of all cases of mastitis are caused by a pathogenic factor) and demonstrations would need to be conducted on pilot farms both to study the problem and demonstrate the importance of hygiene and prevention; (b) training of veterinarians on systems and methodologies for conducting epidemiologic surveys and use of GIS technologies for sampling, data processing, assessment and analysis of results; (c) data collection on livestock and its entry into the GIS; and (d) technical assistance in the areas of epidemiology, GIS technologies and laboratory characterization. 120. Quality control of locally-produced veterinary drugs. Syria is almost selfsufficient in the production of veterinary drugs through 47 private entities. The current capacity of the MAAR to ensure independent quality control of drugs in line with international standards is lagging, however. The project would strengthen the capacity of the Directorates of Veterinary Drugs and Animal Health to enhance their role in quality control. This would include: (a) upgrading the quality control laboratory for better analysis of drugs through procurement of advanced equipment and tools, provision of local and international expertise, and training; and (b) upgrading the impact assessment unit for residues in livestock products resulting from the use of hormones and drugs, through technical assistance and external partnerships to operate the existing laboratory for residue control. 121. Quality enhancement of locally-produced vaccines. Production of preventive vaccines for cattle and small ruminants covers 70 per cent of total needs from publicsector facilities. Many of the vaccines produced locally tend to fall below quality benchmarks. To address this gap, the project would strengthen the capacity of the Directorates of Animal Health and Veterinary Drugs to ensure that locally-produced vaccines are based on high-quality norms and effective impact. This would include the provision of local and international technical assistance for (a) upgrading the live vaccine assessment unit by providing for international expertise and study tours abroad; (b) assessment of locally-produced vaccines, both in the laboratory and in the field; (c) training in advanced vaccine production technologies and quality assessment of products; and (iv) protection of vaccines against viral and bacterial diseases. 122. Quality control of red meat in slaughterhouses. All slaughterhouses are government property operated by the municipalities under the overall responsibility of the Ministry of Local Administration (MLA). The quality control of meat is done by private veterinarians, who are hired by the municipalities on short-term contracts. MAAR technical clearance is required before MLA can license a slaughterhouse. However, MAAR is not empowered to supervise compliance with quality control regulations and norms. Meat quality control in the slaughterhouses is below standard owing to lack of staff, insufficient expertise and strict municipality rules that exclude veterinarians from their regular civil servant staff. In addition, it seems that over 40 per cent of animals are slaughtered illegally outside the slaughterhouses, and without any quality control. 123. To address this problem, the project would: (a) provide training on up-to-date practices and benchmarks to meet quality control standards; (b) assist in the deployment of sufficient veterinarians to the slaughterhouses, to be mobilized under the responsibility of MAAR, through out-sourcing arrangements on a full cost-recovery basis from the slaughterhouses; and (c) introduce provisions that would allow MAAR to 27 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT withdraw slaughterhouse licences in the event conditions for ensuring meat safety were not met. 124. The problem of food hygiene in the meat value chain, from slaughterhouse to final consumer needs to be urgently addresses by GOS. The proposed ILDP would finance the preparation of a master plan for the modernization of slaughterhouses, to include the elaboration and adoption of meat quality standards aimed at improving consumer products and ensuring safe meat products. (d) Support to livestock extension and training 125. In terms of transferring improved animal production technologies to livestock producers, the present extension capacity is weak, particularly at the field level. Constraints include: shortage of qualified extension staff, limited adoption of demanddriven research and extension system, limited transportation facilities, reduced operating budgets, limited extension material in terms of published information on research results, insufficient training of extension agents, absence of incentives and weak coordination among the collaborating MAAR directorates (DAE, DAP, DRW and DAH) at the level of the extension support units (ESUs), subdistrict-level extension units and village-level AEUs. On the other hand, the ESUs and AEUs assigned to previous and ongoing IFAD-financed projects in Syria performed better when supported with appropriate logistics, training, a unified coordinating function and incentives. 126. The ILDP would build on the above-mentioned extension arrangements in IFADsupported projects and adapt them to livestock development, with focus on the transfer of improved technologies for animal nutrition, herd management, diversified feed sources, preventive and curative animal health interventions and gender mainstreaming. To that end, the project would support selected ESUs and organize them into multidisciplinary extension task teams (ETTs) reflecting the above technologies to be promoted. Members of the ETTs would be selected from the relevant MAAR directorates. Each ESU and AEU would work under the technical and organizational leadership of a single coordinator and provide similar types of support as under the ongoing IFADfinanced projects in Syria. The composition of ETTs for ASZs I, II, III and IV would include: an animal production engineer, a crop-livestock farming system engineer, a veterinarian and a woman gender mainstreaming and targeting officer. For the Badia (ASZ V), the crop-livestock farming system specialist would be replaced by a range management engineer. Some of the ESUs would also include qualified subject matter specialists in animal nutrition, dairy processing and communication. 127. DAP, DAE, DRW and particularly DAH would need to deploy incremental extension and service delivery staff in the field with priority to women candidates where available. All ETTs would benefit from group training in team building and expertise upgrading in their respective disciplines. Demonstration material, such as feed chopping/mixing machines, very small-scale dairy processing units and related inputs, etc., would be mobilized by the project. Training for veterinarians would cover the following areas: elaboration of demand-driven veterinary extension programmes (problem identification and solution), extension approaches and communication tools, and practical technical skills enhancement in related livestock extension themes and gender issues. 128. Areas of technology transfer. Among the key areas for technology transfer, the following would have a special focus: (a) enhancement of the use of crop and food processing residues; (b) integration of livestock into the rain fed farming systems; (c) herd management; (d) promotion of backyard rural poultry and rabbit production as income-generating activities for women; and (e) quality milk and dairy products. 129. Enhancing the use of crop and food processing residues. Crop and food processing residues contribute significantly to filling feed balance gaps caused by overgrazing of Badia rangelands and limited fodder crops in the rain fed farming systems in ASZs II, III and IV. In these zones, the project would introduce the use of available low-cost quality-enhancing technologies to upgrade the nutritive value of crop residues from cereals (straw, etc.), vegetable, fruit and olive tree production and agro-industry 28 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT residues from olive oil, cotton seed, sugar beet, and fruit and vegetable processing. The feed block technology, developed by ACSAD and ICARDA with IFAD grant financing and adopted in some countries of the Near East and North Africa (NENA) region, would be transferred to farmers and private service providers. This would include support to unemployed young people interested in working as service providers and in establishing rural microenterprises for the production and marketing of feed blocks using mobile equipment available in the market. 130. Integration of livestock into rainfed farming systems. Traditional barley production is an integral element of the cropping system in ASZ IV, where average annual rainfall rarely exceeds 250 mm. In good years, barley grains are harvested and used mainly for the supplementary feeding of sheep. Crop residues are grazed by the herds within a migratory-feeding cycle; stunted crops during drought years are grazed through the same migratory cycle. To further enhance feed availability in ASZ IV, the project would promote the cultivation of legume forage crops and introduction of strip plantation of high-yielding and nutritious fodder browsing shrubs to complement barley. In ASZ III, where the farming system is cereals-based, pulses and forage crop cultivation would be promoted to replace fallow cultivation. The project would scale up field-validated technological packages developed by international research centres operating in Syria, particularly ICARDA, ACSAD and ICBA in partnership with GCSAR, through grant support by IFAD. 131. Herd management. Technical packages to be transferred to livestock producers would include improved livestock feeding using micronutrients, animal housing, synchronization/flushing, use of artificial insemination and pedigrees, veterinary care, early weaning, fattening and conditioning. Packages of supplementary feeding during critical periods under rangeland or sedentary animal production systems would increase productivity, release pressure on rangelands, reduce production costs and increase the net returns by animal unit. A small herder with about 50 sheep or goats or five dairy cows would benefit from a cumulative 10-15 per cent yield increase from such herd management technologies. For the intensive and semi-intensive production systems, use of low-cost feed mixes would be promoted to increase productivity. Packages are well developed for feeding different animal species to perform different physiological functions. This could result in yearly savings of about 20 per cent in feed in addition to a productivity increase of more than 20 per cent. For cattle, good management practices in feeding, nutrition and reproduction, e.g. heat detection and prevention of mastitis, would be introduced by the project. Component 2: Rangeland improvement and development of feed resources 132. The overall objective of the component would be to (a) restore the productivity of additional Badia rangelands; and (b) increase feed resource availability outside the Badia by scaling up/adapting technologies and practices successfully applied by BRDP. The component will also aim at enhancing the existing best practices base through introduction of new technologies generated by IFAD-funded grants for agricultural research in the NENA region. This will include the introduction of halophytes species developed by ICBA and drought-tolerant legumes developed by ICARDA. The component would be implemented by the existing project management structures of the BRDP. (a) Rangeland Improvement in the Badia 133. In the past, the Badia (settlement zone 5) provided a large proportion of the feed requirements of its livestock and made a major contribution to Bedouins' livelihoods. Increasing degradation of the Badia, itself the result of a combination of excessive utilization by grazing animals, shrub gathering for fuel and crop cultivation, often supported by inappropriate policies, has drastically diminished the forage contribution of the Badia. Without correcting this very advanced degradation, even banning of cropping in the Badia (imposed since 1995) would not be sufficient for rangelands selfrehabilitation. IFAD supported BRDP has been designed with the main aim to establish processes that would rapidly relieve the difficult situation created by the shortage of feed 29 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT and ensure sustainability of rangeland resources through appropriate rangeland management approaches. The BRDP has a 10 years experience in the Badia and is now in its final stage. A number of useful lessons have been learnt from the Badia implementation (para 92). 134. The implementation of the BRDP has led to significant results in terms of rehabilitation of rangelands, productivity gains and herder’s livelihoods (para 35-37). BRDP approaches leading to these results (technical and socio-economic) have been assessed and fully recorded (para 92 and WP 3). The BRDP proven technical package is simple, cheap and produces rapid results in terms of forage output as well as healing the Badia ecological deterioration. Building on this experience, the ILDP would scale up the successful approaches related to rangelands rehabilitation, development and management in areas in the Badia presenting urgent need for re-introduction of extinct native forage species, and those with evident indicators of rapid response to resting. The package can also be adapted to the development of forage resources in zones 3 and 4. 135. The pertinent technologies to be scaled up by ILDP to ensure rapid healing of ecosystems and a substantial increase in forage are: (a) re-seeding of native species (shrubs and herbaceous species); (b) fodder planting of native and well acclimated shrubs; (c) resting of promising rangeland sites; (d) ensuring balanced availability of water for the existing herd; and (e) application of appropriate grazing practices. 136. Reseeding of rangelands and fodder shrubs planting. This is a cost effective technique which can rapidly and substantially enhance the productivity and initiate the needed dynamics towards the establishment of high forage value rangelands. Reseeded plants are self–regenerating, native, and well adapted species. All used seeds are locally produced in seed production units established by the BRDP within the Badia land. Reseeding would be complemented by the use of fodder shrub plantation in the most favourable sites. This would result in rapid and substantial productivity increases to relief the pressure on rangelands and speed healing the ecosystem. Fodder shrub planting has the advantage of accelerating the natural regeneration of native pastoral species and preserving the biodiversity of existing living fauna and flora species. 137. Resting of rangelands. Short term resting of selected rangelands sites is based on the well established, low cost, collectively shared and traditionally practiced system known as ‘Hima’. This practice consists of prohibiting grazing on part of the rangelands during two successive growing seasons, with the objective of restoring plant vigour and rebuilding seed stocks in the soil, and to trigger positive rehabilitation trend on a sustainable basis. This would result in a substantial recovery of plants and increased forage biomass, and will boost local fauna rehabilitation. 138. Balanced availability of water. To ensure appropriate availability of water with well balanced densities and geographic distribution, ILDP would rehabilitate and construct livestock water points when needed. As per IBRD experience the project will use endogenous environmentally safe water harvesting measures to minimize livestock production costs and to discourage high concentrations of animals as a mitigation measure to the overgrazing risk. 139. Appropriate grazing practices. This will be ensured through the establishment of and support to participatory RMCs to agree on and apply sustainable grazing rotation practices on rangelands that have been rehabilitated with the participation of users. Prior to the grazing of any developed site, the project or the contracted implementing institution, would undertake the necessary assessment of the forage output of the sites and establish the grazing parameters including at least the carrying capacity rate, and the stoking rate guidance correlated with the duration of grazing periods. Detailed sitespecific plans would reflect beneficiary requirements, as expressed in participatory meetings and formalized with the RMCs in their Rangeland Management Plans. Monitoring and evaluation of the grazing impacts would be the responsibility of the implementation team in charge of grazing modules elaboration together with the RMCs. 30 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT (b) Development of feed resources outside the Badia 140. There is a high potential and a strong need for forage resources development outside the Badia. Severe successive droughts induced a shift in the farming systems in zones 3 and 4 away from livestock participation in farmers’ incomes and consequently increased poverty in these areas. Sustainability of livestock in these zones is threaten by the lack of perennials participation in the forage which confines feed availability only to the growing season, and causes chronic feed shortage. ILDP would intervene in settlement zones 3 and 4, to establish a model for development of feed resources for scaling up at later stages. However, the model developed by BRDP in the Badia needs to be adapted to the conditions of these zones (where grazing lands consist of fallows, stubbles or severely degraded land unfit for cropping, but will respond to appropriate development and management). 141. Technical packages. To expand and adapt the BRDP technical package to settlement zones 3 and 4 ILDP would: (a) test the module under different environmental conditions; (b) enrich the techniques through adding more diversified forage resources; and (c) rehabilitate and improve the integration of livestock within the cropping-based production systems, especially in settlement zone 4 where livestock was dramatically reduced by recurrent droughts. Due to the land tenure regime in these settlement zones, the fragmentation of properties, and the time that might be needed for the adoption of the concept by farmers, the introduction of forage production will be undertaken first at pilot level. If results are encouraging, the component would be reviewed and scaled up during mid-term review. 142. Because natural forage resources are provided by annuals in settlement zones 3 and 4 and the size of grazing land is limited, resting would not be applied. Fodder shrubs would be established on rows alternating with cropping strips (barley or others practiced by farmers). Reseeding would be practiced on a portion of the farm land, with more diversified species fitting the specific cropping patterns. ILDP would undertake, at pilot level, the planting of shrubs on 1,500 ha and the reseeding of 10,000 ha. 143. Link to IFAD support to Regional agricultural research. Benefiting from IFAD grants, ICBA and ICARD have been developing salt-tolerant forage species and legumes which can be integrated in farming systems with salt water and salt affected soils. The specific technical cropping packages have been tested and ready for use. ILDP would promote the inclusion of these packages in zones 3 and 4 in close collaboration with the Syrian NARS. To ensure adequate supply of the native species seeds to be used for reseeding as well as the required seedlings, the project would benefit from the infrastructure and facilities established in the Badia including the established seed units which produce seeds suitable for Badia and settlement zones 3 and 4 conditions. 144. Besides the maintenance and the management of the 1.3 million ha of rangelands developed by BRDP, the component activities would include: (a) Reseeding 173,000 ha; planting 63,000 ha with fodder shrubs; land resting of 300,000 ha of rangelands combined with water-harvesting techniques such as a half-moon shaped structure; construction of 10 heifers in remote areas for livestock watering; and adoption of controlled pasture management; (b) provision of eight mobile veterinary units; (c) distribution of 1,500 improved Awassi rams in the Badia and settlement zones 3 and 4 to be purchased by herdsmen and Awassi Sheep Network members through credit; (d) construction of four veterinary centres; upgrading of 12 vet labs; provision of three water tanks and eight mobile vet units; (e) pilot processing of crop residues into feed blocks, introducing salt-tolerant forage crops and legumes in high productive pastures; (f) mobilizing willing herders into socially cohesive LPICs and establishing related RMCs; and (g) training project staff in rangeland development and of women and young people in livestock-based income-generating activities. 145. The beneficiaries of this component would consist of: (a) group of herders such as existing livestock cooperatives, which may need to be strengthened adapted using the BRDP approach; (b) eventual new groupings which would be established on social or 31 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT professional basis; (c) individual herders (large rangeland owners or those enjoying confirmed right of use) willing to adopt the project’s approach; and (d) small farmers in zones 3 and 4. For the Badia rangelands, once the willing beneficiaries have been identified and their grazing lands accurately delineated and properly rehabilitated, it would be necessary to guarantee their commitment to directly assume responsibility to undertake their developed rangelands protection and management. Component 3: SBMs development in the livestock value chain and rural microfinance 146. Markets of dairy products. Syrians are dairy consumers “par excellence”. Almost every household (3.5 million in total) consumes milk, yoghurt and cheese on a daily basis. The average consumption of fresh milk is about 120 litres per capita which is more than double the corresponding average in other developing countries. The products are sold via two main channels: an informal channel and a formal channel. While this is not uncommon in other countries in the region; the size of the informal market in Syria is quite significant and in some items, such as fresh milk and its products, it dominates. The reasons for the dominant role of the informal sector are linked to the purchasing behaviour of consumers and market characteristics including: low prices of final products in the informal sector due to low quality and poor presentation; low purchasing power of consumers; absence of quality control; prevailing consumer behaviours in the milk market (e.g. boiling milk before its use); limited knowledge on the importance of nutritious and hygienic characteristics of food; current tradition of distribution channels, and preference to specific traditional characteristics of end products. 147. Value Chains. Within the livestock sector there are two major value chains. The first revolves around sheep and goats and includes milk, processed dairy products, meat, hides, wool and miscellaneous by-products. The second covers cattle with a similar differentiation pattern, excluding wool. There are smaller value chains associated with goats and buffalos. The poultry value chain was not examined by the design team. The two major value chains of sheep and cattle have their focus in and around the two major urban centres of Damascus and Aleppo. Aleppo is the main market for sheep products and Damascus the main market for cattle. Milk production has been increasing steadily over the past decade. Most of the production consists of cow’s milk, which accounts on average for two thirds of total milk production. Sheep milk, produced mostly in the Badia accounts for slightly less than one third of the total and the quantity supplied is more vulnerable to draught than cow’s milk (see value chain mapping, WP5). There is also a growing export market for Syrian dairy products, which have been registering growth of 50 per cent per annum. Cattle Value Chain 148. Cow milk production is largely undertaken by smallholders farmers and many small cattle farms (the project target groups), who maintain their herds in micro to small units (2 to 40 cows). Most have low productivity but they account for the bulk of production. There are about 15 state farms and few privately owned larger farms accounting for only a fraction of total milk production. Milk collection is a costly and cumbersome issue as the majority of producers are small family farms (daily production could be as small as 50 litres a day) and the accessibility of some rural roads is difficult. Some 99 per cent of the small farms do not have refrigerated storage thus surplus milk has either to be processed on-farm and sold locally, or collected twice a day, adding to the cost of collection. Most are characterized by lack of hygiene and sanitation. Furthermore, the high temperature in summer increases the deterioration rate of milk and collection becomes more risky without refrigerated trucks. 149. The milk collectors (hallabs) dominate the milk supply in Syria and are indispensable for the small and micro producers. Most collect and sell milk in raw form either directly to consumers or to small and medium processing units called warshe. Many add value to themselves by producing some traditional dairy products (yogurt, labne, butter, butter milk, cheese and ghee). The milk is usually transported unchilled, 32 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT and the losses that might occur, are usually covered through the addition of chemicals. Because the number of producers and hallabs is large and the losses are low due to adulteration, the price of milk is low to the point that it is practically impossible for the formal sector (registered, modern processing dairies) to compete with the hallabs using good standard and quality practices. 150. The hallabs have strong leverage on the milk producers. They perform two very important functions: timely collection before the milk gets spoiled and provision of loans/advances to small producers for feed supply and other farm requirements. They also negotiate the prices with farmers who are totally dependent on hallab for selling their milk and are usually bound by pre determined commitments. Each hallab has traditionally a number of farmers or clients from whom he collects milk and some small to medium processing units (warshe) to whom he sells it. Some refrigerated and well inspected milk collection centres have emerged recently in areas of concentration of milk supply and exigent clientele but their numbers are still few. 151. Cow milk processing is undertaken at farm level for household consumption, or for sale locally, and by hallabs and warshe to produce a spectrum of Syrian white cheese specialities. There are no official figures on the number of warshe, but they are many (thousands) as the cost of entry is low. These micro and small milk processing units in the informal market produce 85-90 per cent of all processed milk in Syria; either selling directly to consumers or to small scale retailers/groceries. However they lack good milk production and processing practices and the standards of sanitation and hygiene are low. 152. The other actors in processing are the registered milk dairies, both public and private, which have invested heavily in plant and equipment and adhere to certain quality standards. Because of low quality of the milk and lack of reliable supply of quality milk many are operating below capacity. They barely cover 10 to 15 per cent of the market. The main reason is their inability to compete with the low cost structure of the warshe. In response they have opted to produce items that warshe cannot produce (e.g. yellow cheese, processed cheese, UHT drinking milk, bottled milk etc.), are targeting export markets and are increasingly using imported powdered milk. 153. Overall, the cow dairy market in Syria is highly complex and unstructured as a result of the presence of the powerful informal market. There are no reliable estimates, but probably over 50 per cent of the milk and milk products produced and sold are substandard and are beyond any significant control other than the trust bond that exists between the producer and his hallab, and the consumer and his grocery. Sheep and Goat value chain 154. Sheep milk production. Sheep milk products are well appreciated in Syria. It is estimated that per capita sheep cheese consumption is about 20 kilos per year, but the cost of the cheese has risen faster than wages, so consumers are stocking less (cheese in brine) and considering cheaper alternatives made from cows’ milk. The main Sheep milk production area is in the Badia, with the greatest concentration of grazing animals. The milk from these animals flow towards the Aleppo market. Many herders process their milk themselves to gain more time in selling their products. 155. Sheep milk collection. Sheep is mostly raised in small and medium herds moving from area to area looking for grazing land. This situation makes fresh milk collection a difficult task. Nevertheless milk collectors/processors known in the Badia as Jabban follow the herds and travel to remote areas to collect the milk from herders. The herders milk their animals, once or twice a day. They have no cooling equipment and they rely on the timely appearance of the Jabban who either operates independently or is financed by a cheese wholesaler/trader in Aleppo, to collect milk from regular suppliers. The herder is usually paid monthly for the milk. The wholesalers/traders in town may offer the farmer an advance of up to 25 percent of the value of the milk prior to the start of the season, which allows the herders to buy fodder. 33 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 156. Processing of sheep milk. Processing follows a seasonal pattern. In the high season, this milk is processed by the Jabban on site, in make-shift field kitchens, adjacent to the herders. The milk is transformed into yoghurt and cheese and then shipped to the wholesalers. In the low season, the milk travels directly to Aleppo, where it is transformed. It is reported that there are a few powerful wholesalers that control the price of cheese. These prices are fixed every two weeks and, based on these prices, the jabbans establish the price that will be paid to the producers. 157. The sheep dairy value chain is well adapted to the seasonality and constraints of supply and demand and operates on the basis of traditional long established trust between the actors. The weakness in the system is the poor current standards of hygiene, lack of appropriate equipment and a cold chain, the adulteration of milk especially when the producers are given an advance, and the power exercised by the traders. These factors result in the jabban operating with low margins and the producers receiving low prices. Design calculations indicate that the jabban in the Badia, dependent on the wholesaler for financing, fares relatively badly compared to his counterpart processor in the city with independent access to capital. They also confirm the relative financial strength of traders vis-à-vis the jabban. Given the low margins, it is not surprising that there is wide perception that the producers are receiving lower prices than officially stated, in some cases as little as 60 per cent of the price. 158. The meat value chains are well organized around wholesale markets. In the case of sheep, there is an intricate value chain that sees the animals raised and partially fattened in one area before being moved to another. There is no value added that ILDP could bring to this value chain or to the by-product value chains. The wool market is one fifth the value it was at the beginning of the decade and does not appear to be picking up; there is no real local tradition of value addition to raw wool. (a) Support to SBMs for dairy marketing and processing 159. Livestock product marketing and processing face the following challenges: (a) high seasonality in the provision of raw material, use of chemical additive and limited supplies of quality milk for the formal processors; (b) small and micro milk producers lack the means and technical knowledge to process their surplus milk hygienically on farm and enhance their income through value addition; (c) although milk collectors Hallab/Jabbans play a key role , their activities are not regulated by a code of practice and they lack access to equipment/ facilities to ensure milk quality; (d) micro and small scale milk producers loose opportunities due to inadequate milk collection infrastructure; (e) informal small processing units (warshe) lack adequate technologies and equipment, and fail to maintain acceptable hygiene and safety standards; (f) the present food laws do not match current norms; and (g) large dairy processing companies are unable to obtain sufficient volumes of raw milk, hence use imported milk powder. The project could make a significant impact on the livelihoods of the target group within the dairy value chains by addressing some of these constraints and supporting their modernization. 160. Modernization of the dairy sector in Syria could be accelerated by gradually encouraging the development of the modern formal sector, but by no means at the expense of the current traditional system. The existing system based on Hallab/Jabban and warshe works well for the local market and generates employment for a large number of poor people hence the solution should not be in suppressing the role of traditional actors and stressing their livelihoods. While this role cannot be replaced in the medium term, there is large room for improvements in terms of efficiency and quality. ILDP’s SBMs initiative would seek to address the constraints encountered by the project’s target group in the dairy chain while at the same time engaging them with their service providers: the milk collectors and large processors. Improvements along the chosen value chains need to occur in the formal and informal sector. 161. ILDP would select simultaneous entry points along the dairy value chains in such a way as to upgrade the business of small actors, allow fair commercial practices on the local market and provide safe finished products to the consumer. The entry points would 34 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT be to: (a) support small livestock farmers in upgrading their practices for the production and marketing of quality milk; (b) support small scale processors and collectors in upgrading their technology and business for quality products and services; and (c) encourage the establishment of chilled milk collection centres supported by willing large milk processors based on quality milk pricing. There is also an urgent need for building up awareness among actors along the value chain that quality can and must be improved. Such Strategy would be based on two types of interventions: vertical, common to all links of the dairy chains; and horizontal, involving each link separately. 162. Vertical interventions in the dairy sector. These include: (a) support to updating the present Food Production Law with reference to the findings of the EU’s comparison of Syrian food laws against major food legislation for quality and food safety standards; (b) measures to support effective compliance with food laws and commercial, quality and safety standards to protect consumers’ health and improve commercial practices. This would include building up the capacity of existing entities and accredited laboratories involved in quality controls (e.g. SASMO); and (c) support to education and communication campaigns for consumers with regard to food quality and safety. 163. Horizontal interventions in the dairy sector. The horizontal interventions would include support to safer milking practices, better collection systems, either mobile or settled including chilled Milk Collection Centres (MCCs), and micro or small-scale processing units. This would be achieved through access to incentive-based credit schemes and micro finance, provision of equipment, training, and technical assistance. The latter would encompass business plan development and the purchase equipment to support existing and new dairy SBMs. Most of the interventions would be piloted with government funding during the first two years of ILDP implementation. After the first interim review of the project (see para 211), these interventions would be scaled up by private operators on a credit basis through access to the nationwide SBM credit line financed by the French Agency for Development (AFD). 164. Within the bilateral assistance programme provided by France to Syria, the AFD has agreed with the Syrian State Planning commission and the Ministry of Agriculture to finance this requirement for an estimated amount of USD 5.0 million. The AFD-supported programme for SBMs aims at increasing finance for small and medium-sized enterprises and helping banks and financial institutions – including microfinance institutions – modernize their management and adapt to international standards (compliance with prudential rules, social and environmental protection). 165. SBMs financing mechanism. AFD financing would be provided by the project through an intermediary bank/s to be selected using the following weighted criteria: (a) the bank must have a good track record and willingness to establish a loan portfolio category for SBM clients; (b) it should have a large well staffed network of branches throughout the target area; (c) bank management and staff should be capable of working with the SBM sector and willing to develop a marketing strategy to expand its outreach; and (d) bank should be in good standing with the Central Bank of Syria’s (CBS) indicators regarding: profitability, liquidity, capital adequacy, leverage, and loan recovery rates. The selected bank(s) would be that with the highest final score. 166. ILDP would establish a long term contract (MOU) with the selected Bank(s) with an 8 years maturity. This would specify, inter alia, (a) funding to be availed from the project; (b) bank’s fees for administering the loan; (c) type of activities eligible for financing; and (d) lending terms. Client SBMs would approach the project about the viability of proposals, the project would evaluate the idea , help with the preparation of a business plan, assess applicant potential ability to repay and if acceptable, clients are passed on to the bank, which would undertake its own assessment. Upon bank’s approval of the loan application, the project is notified, necessary loan documentation completed and the loan is disbursed to the client. The project would track the loan amount to the bank and the client, undertake a regular review of the credit profile of the bank and reserve the right to review the financial performance of the client. 35 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 167. Currently annual lending rates of Public Banks range between 7 per cent for shortterm loans to 9 per cent for mid to long term loans. Private Banks charge up to two percentage points more on average. Candidate banks for SBM financing are: Commercial Bank of Syria; Industrial Bank; Savings Bank; Banque Bemo Saudi Fransi; Bank of Syria & Oversees; International Bank for Trade & Finance, Syria Gulf Bank, and Audi Bank. In addition, First Micro Finance Institution Syria (FMFI-S) has shown a strong interest in financing SBMs within its microfinance portfolio. Following the adoption of Micro Finance Decree no. 15 of 2007, the CBS licensed FMFI-S to be the first deposit-taking microfinance institution serving small and medium enterprises (WP 6). 168. To enhance the Banks’ credit capacities to service SBMs, the Loan Guarantee Institution of Syria (LGIS), established in January 2010, finances on a joint risk basis the credit guarantees required by the banks. For viable Syrian businesses that cannot provide the level of collateral required, the LGIS can help by guaranteeing a limited percentage of the requested loan. The overall objective is to create a better business environment through better business opportunities and contribute to the stability of the Syrian financial system. The first such agreement has been already signed between LGIS and Syria Gulf Bank (SGB). 169. The types of SBMs support and related project beneficiaries are: (a) Support to small scale milk producers Cow, sheep and buffalo livestock producers will have the opportunity to purchase small-scale dairy processing equipment to transform their raw material into value added products such as yoghurt, cheese and ghee. (b) Support to small scale milk collectors Individuals and common interest groups will have the opportunity to establish a refrigerated storage depot to be used by livestock producers to maintain the quality of their cow milk prior to collection and transportation to processors in insulated trucks. Improvement of existing mobile cow and sheep milk collection system through opportunity to purchase equipment such as scales, quality testing tools and aluminium milk cans to improve quality and ensure transparency and fairness to both producers and collectors. (c) Support to micro and small scale dairy processors Jabbans mobile sheep-cheese processors will have the opportunity to purchase improved equipment to transform collected sheep’s milk on-site in the Badia into value added products such as cheese and ghee. Micro-scale cow, buffalo and sheep milk dairy processors will have the opportunity either individually or as groups, to establish improved (or to refurbish) milk processing facilities. Such units would be suitable to process cow, buffalo or sheep milk and produce a wide range of traditional products such as yoghurt, cheese and ghee. The capacity would be 200 kg/day of milk. The unit could be hosted in a 50 m2 room. The packaging of the final product would be by hand and the packaging material would include the traditional 1-kg plastic pot for yoghurt and ghee. The unit would receive the raw milk from nearby farmers or middlemen. Small-scale cow, buffalo and sheep milk dairy processors will have the opportunity, either individually or as groups, to establish improved (or to refurbish) milk processing facilities for the manufacture of yoghurt, cheese, butter and ghee. The unit would be able to process buffalo, sheep and cow milk. Most of equipment and utilities would be designed for production or assemblage in Syria. The proposed model would process up to 2 tons of milk/day, received from nearby farmers or middlemen. The end-products 36 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT would be sold either to wholesalers or to final consumers inside the factory milk shop. (d) Construction and equipment of milk collection centres (MCCs) The project would provide opportunity for forging public-/private-sector partnerships to establish MCCs. The focus would be on helping improve the milk collection system for the formal market. The project would provide joint finance with large modern processors to build and equip a number of MCCs, each with a capacity of 5 tons/day, to be operated by private entrepreneurs on a leasing basis (large processors or their representatives). The project would assist in establishing cooling centres and related investments in mobile collection systems, where necessary, to transport the milk under refrigerated, safe and hygienic conditions. All milk would be tested before purchase for quality and the centres would be equipped with the necessary testing equipment for this purpose. A differential pricing system would be introduced for quality milk in agreement with producers. The MCCs would provide technical advice to the farmers to improve quality and information on animal nutrition. A model Milk Collecting Centre (MCC) has been developed by the design team with the aim of evaluating its sustainability (WP 5, Annex 1). Most of equipment and utilities are designed, produced or assembled in Syria. Centres could be financed on a cost (and profit) sharing basis between the producers and processors with the project (GOS) contributing in the first instance the share of the producers as an incentive. This model or the one that the producers prefer will be supported by the project. It is estimated that four MCCs will be established by the project and that the private sector would replicate an additional ten. 170. Training in the dairy value chain. ILDP would provide practical training for project beneficiaries and value-chain stakeholders (a, b, c, and d above) in milk handling techniques, in preparation for improved added value dairy products. The training programme would seek to leverage the knowledge and experience of institutions such as ICARDA. Specifically, the training would benefit livestock producers at the village and community levels, Jabbans, milk collectors and micro and small-scale milk processors. Training topics would include: milk handling and processing techniques, including hygiene, care of milk and its conservation before processing, preparation of improved added-value dairy products, different milk pasteurization technologies, analysis techniques for the payment of milk based on quality, and bookkeeping. Two workshops would be conducted at project start-up, one in Damascus on the dairy cow value chain; the other in Aleppo on the sheep’s milk value chain. 171. Pilot initiative on quality-based milk prices. In collaboration with private operators, the ILDP would demonstrate quality-based milk payments as a pilot activity in each of the fourteen ILDP provincial directorates, which implies that ILDP would finance the incremental costs of setting up such demonstrations. The objective would be to assess the performance and possible improvement of existing mechanisms in the value chain prior to replication on a larger scale. Jabbans could play a key role in this initiative by setting up a mode of payment for milk based on quality. This pilot activity would be coupled with extensive training, assisted by project staff for timely evaluation of results. The initiative would serve also as the basis for testing a public-private partnership arrangement in the dairy sector. 172. Sector wide and feasibility studies. The proposed ILDP would undertake the following technical and economic feasibility studies as a basis for promoting small and medium-sized enterprises (SMEs) within public/private partnership arrangements. The objective would be to link small livestock producers to markets: (a) A sector wide approach to enhance product quality in the dairy industry. Since it is not recommended to disturb the present informal system, the 37 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT study will define sectoral policies and measures to be enacted to ensure the production of quality milk and processed products through the traditional actors. This could be a mixture of an incentives system, certification, enforcement of laws, penalties, and consumers’ awareness that will lead to consumers demanding quality products. The study will provide a framework for a sector wide plan including needed policies, implementation approaches, and resources required. (b) (b) Value Chain in the Badia. At present there is little information on the informal markets in the Badias but it is generally understood that producers, especially those in remote areas, are getting a very low farm gate price. The study would clarify some of these issues and suggest measures (especially independent access to finance and/or joint marketing) to ensure that the interests of the producers are protected. (c) Introduction of new sheep’s milk collecting and transportation system. Some of the private milk processors are currently testing new milk supply systems based on direct milk collection from nomadic breeders; or improved collection through middlemen using modern equipment. In addition some innovative milk transportation systems are being developed by private operators. ILDP would finance an assessment of these new systems to determine their suitability for introduction, on a pilot basis, to existing milk processors or MCCs. (d) Buffalo value chain development. It is proposed to conduct a study on the feasibility of supporting improved buffalo production by small farmers. The study would also assess the sustainability of buffalo milk-collecting centres and of processing units both to increase the added-value of production and facilitate small farmers’ access to markets. (e) Shami goat-breeding value chain development. It is proposed to conduct a study to assess the feasibility of supporting improved Shami goat breeding by small farmers in well-adapted areas. The study would also evaluate the feasibility of establishing facilities for Shami goat milk and meat value addition. (f) Modern slaughterhouse and meat carcass marketing of quality Awassi sheep in Al-Hassakeh. It is proposed to conduct a study on the feasibility of establishing a medium-size pilot unit to slaughter sheep produced and fattened by small herders of Hassakeh Governorate. The unit would supply traders and butchers in Aleppo with quality labelled fresh meat in carcass form, using a refrigerated truck. (g) Study on quality-based milk pricing. The quality parameters would focus on physical, chemical and microbiological aspects and residues. In line with para. 170, a milk quality payment system developed through this study would help to eliminate any alteration and adulteration of milk and ensure safe dairy products. Support to rural microfinance 173. Demand for microfinance products and services are far from being satisfied in Syria. Conservative scenarios (CGAP 2008) indicate the existence of at least one million clients in waiting whereas the number of active clients is a meagre fraction. Several studies (CGAP, IFC, UNCDF and IFAD) have confirmed the high demand for microfinance by Syria’s rural poor. This is not being met by existing Banks because of the poor’s lack of sufficient collateral and the Banks inability to meet the high transaction costs involved As such informal money lenders are highly active offering credits at exorbitantly high interest rates (77 per cent annualized), and providing 73 per cent of the credit needs of the poor. 38 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 174. Past experience. Over the last ten years, the fabric of rural finance in Syria has been enriched by a number of innovative financing mechanisms. UNDP, IFAD, and the Italian Cooperation are among a host of donors which have provided various types of rural finance facilities aimed at assisting the rural population which are not adequately served by agriculture and other banks. Of these interventions, the “sanduq” rural micro finance promoted by the UNDP supported JHCDP, and the IFAD-supported IRDP and NERRDP is the most promising. In the meantime the legal, institutional and policy framework have been moving steadily in favour of rural micro finance. 175. Based on assessments conducted by the UNDP, UNCDF, CGAP, IFAD, the Italian Cooperation and the ILDP design team of the micro finance experience in Syria, it was concluded that the village solidarity-based Micro Finance sanduq model is a powerful instrument for poverty alleviation. The model is based on members’ contribution and ownership, targets rural poor households, and builds-in a gender-balanced perspective to establish demand based profitable income-generating activities. However, the sanduq is not yet recognized as a formal MFI under the 2007 Presidential Decree no 17 (para 175) because the minimum capital for an MFI under this law is USD 5.0 million, beyond the means of the sanduqs. The sanduq has a locally based governance structure and operates within a specific set of operating rules under the responsibility of the sponsoring projects and the GOS (MAAR). Despite such informal status, these sanduqs have been operating best practices in terms of interest rates (Morahaba Islamic mode, 12 per cent to 18 per cent per year) and high repayments (average 96 per cent). 176. Government commitment. The Government of Syria is strongly committed to promoting micro finance institutions (MFIs) as an instrument for poverty alleviation. This is particularly evident from Presidential Decree no. 15 of February 2007, which authorized the Central Bank of Syria to licence MFIs created with a minimum capital of USD 5.0 million. As a reflection of its strong conviction about the importance of sanduqs as a promising tool for microfinance promotion, the Ministry of Agriculture and Agrarian reform decided to scale up the initiative in the governorates of Aleppo, Hama and Homs, using government own resources. An initial amount of USD 3.5 million has been already approved by the State Planning Commission and the Ministry of Finance in 2009 to start implementation in these governorates. 177. Donors’ commitment. IFAD together with all the above mentioned donors, are actively engaged in policy dialogue with GOS and are providing assistance, for the purpose of formulating a national microfinance strategy (a draft in Arabic has been already prepared). This could lead to the adoption of a microfinance law in 2011 or early 2012. In particular the Italian Cooperation has a keen interest in leading this effort with IFAD through sponsoring an initiative aimed at pioneering a micro finance sector wide approach in Syria. The initiative would, under GOS leadership, promote a coordinated approach towards improvement, expansion and consolidation of community-based local institutions, such the Micro Finance Sanduqs. The Italian Cooperation is willing also to establish an interim refinancing facility aimed at testing banking linkages with the Micro Finance Sanduqs (para 183 and WP6). 178. Given all the above mentioned considerations, the ILDP design team considers that the minimum conditions required to establishing a national MFI based on the sanduq network in Syria could be put in place. The expansion of the sanduq model on a national basis by ILDP would contribute significantly to this process. 179. Component objectives. ILDP would build, consolidate and expand the financial basis of the sanduq mechanism, with the objective of its evolvement into a viable MFI with legal operating status, governed by prudential regulatory rules and capable of accessing the services of the formal banking system. ILDP would provide an opportunity for the sanduqs to respond to the increasing, but unmet, demand for loans in rural areas. This will be achieved by providing a package of rural finance and capacity building to establish a network of micro finance institutions that would ensure rural financial services to the target group to engage, primarily, in livestock-based income generating activities. 39 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 180. Component activities. The project would support the creation of 140 new villagelevel sanduqs on a demand-driven basis across all provinces (except those covered by the NERRDP) using a two stage implementation strategy (see WP6). Support would include: (a) start-up capital as seed money to match the sanduq’s own resources collected from members; (b) technical assistance; (c) building sanduq’s capacity through training; and (d) support to enacting the legal operating status for the sanduq. It is vital that, from the very outset, all Micro Finance Sanduqs are linked together through a formal network to benefit from other experience e.g. the utilization of institutional knowhow of previous sanduqs, bylaws, training programs, management experience, etc. 181. An important element of the component’s strategy is the creation of a Micro Finance Sanduq Markazi (Central Micro Finance Sanduq), that will have its own resources and will be able to take on project’s responsibilities once the project is completed, and whole sale lending funds to sanduqs. ILDP would provide seed money to the sanduqs. This is essential to: (a) create incentives for the target population to invest in sanduq and engage in an experiment which has no recent precedent; (b) increase outreach to ensure an accelerated process of lending and development which, in turn, will serve to encourage and facilitate the replication of this model; and (c) provide a source of financing for Central Sanduq as the extended seed money in village based sanduqs and its returns (from lending activities) would be eventually injected in the Sanduq Markazi as one source of its capitalisation (see WP6). The first tranche of seed money will be released after a one year probation period for each sanduq where activities would be based on own resources. 182. Staffing, technical Assistance and training. The project will provide specialized training in micro finance to staff at central and provincial level (except those covered by the NERRDP).Separate Micro Finance Units will be established in the Provincial Directorates to oversee the implementation of this component at local level (see component 4 below). Training would be provided for staff and leaders of sanduqs by national or regional service providers. International & National Expertise necessary to develop, monitor and evaluate the Micro Finance Sanduqs network will be provided. This will cover the areas of micro-finance development and accounting, local-institutions organization and community development. 183. Service providers for capacity building. The design team confirmed the availability of several institutions and NGOs within Syria and in the region to provide the necessary capacity building. The main active service providers are: the Consultative Group to Assist the Poor (CGAP); Sanabel - Microfinance Network of Arab Countries; the Microfinance Information Exchange, Inc. (MIX); Syria Trust for Development; Fouadi, the Foundation for Advancing Development Integration; and the Syrian Enterprise and Business Centre (SEBC). 184. The Italian Cooperation role. Italian intervention would enhance considerably the effectiveness of IFAD/GOS Microfinance investments. Italy is in principle considering a package of financial assistance to Syria in the range of about Euro 8.0 million for a period of 3 years, to finance (a) investment packages related to enhancement of the present sanduqs and their replication and scaling up; (b) testing other types of bankable community based MFIs; (c) creation of an Interim Refinancing Facility for sanduqs; and (d) provision of short-term technical assistance in strategic areas, including strengthening the capacity of State Planning Commission in policy development and monitoring of community based MFI; legalization of sanduqs, and assisting the CBS and MOF in the preparation of appropriate Prudential Framework for Micro Finance Sanduqs. 185. Monitoring Sanduqs. A set of best practices have been identified and would be followed during project implementation and beyond regarding implementation approaches and M&E. A number of state of the art performance indicators will be measured and followed up during project implementation encompassing project quality; financial sustainability and efficiency (see WP 6). Sanduqs will be audited annually. 40 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT Component 4: Project coordination and management 186. ILDP would ensure efficient coordination and management of project activities at the national and provincial levels. It would support the establishment and operation of a National Project Directorate (NPD) headed by a national Project Director (PD) and fourteen Provincial Project Directorates (PPDs), each headed by a Provincial Project Manager (PPM). The NPD and PPDs will be responsible for the coordination and management of project activities in accordance with approved annual work plans and budgets (AWP/Bs) at the national and provincial levels. A national project steering committee (PSC) will be responsible for policy decisions at the national level. In the provinces, like all agricultural activities, the project will be under the overall supervision of the Branch Agricultural Committee which is headed by the Provincial Governor. 187. Provision will be made for salaries and incentives for officers and staff, field allowances, vehicles and office equipment as well as for operating and maintenance costs. Provisions will be also made for national and international technical assistance and studies, as well as capacity building for project management and implementation staff. 188. Institutional Support and training. To ensure smooth coordination and management of project activities, provision will be made for: (a) project start-up (launch or sensitization) workshops one at the central and fourteen at the provincial levels ; (b) workshops to familiarize implementing staff and beneficiaries, at the provincial level, with project objectives, components, implementation strategy, and administrative and management procedures; and (c) annual review workshops to assess implementation progress as the basis for preparing the AWP/Bs. Provision will be made for specialized training, of project staff at the national, provincial and district levels. The subjects covered will be project cycle management (including participatory planning and M&E), implementation modalities, gender issues and financial management. In addition, training will be provided for field-level staff, AEUs and ESUs, in implementation approaches, gender issues and technology transfers. 189. Technical Assistance. Funds will be allocated for mobilizing the services of international consultants, for capacity-building and training in advanced technologies related to various aspects of the livestock value chains. Funds will also be allocated to review the M&E systems of ongoing IFAD-funded projects in Syria in order to develop a revised system on the basis of the Results and Impact Management Systems (RIMS), consistent with participatory roles, gender-disaggregated data collection, and environmental aspects of the project. The participatory M&E system will emphasize: (a) monitoring of the physical and financial progress and impact of project initiatives; (b) impact and sustainability of funded initiatives; and (c) efficient use of facilities. 190. Studies and Surveys. Baseline surveys will be funded and conducted in each province during the first year of project implementation. The objective will be to assess the physical and socio-economic status of villages and their inhabitants in order to define their ‘baseline’ status and select the poorest villages to be targeted by project activities. Follow-up household surveys will be carried out during project interim reviews (IRs) and at project completion. Provision will be made for a first IR during the second half of PY3 and a second one during the second half of PY5, and for a project completion report. The project will also finance a number of thematic and diagnostic studies that will help shed light and resolve specific aspects of project implementation, as needed. IV. IMPLEMENTATION AND INSTITUTIONAL ARRANGEMENTS (KSF 4) A. Institutional Development and Outcomes 191. Approach. The project will be implemented by government institutions with outsourcing to non-government entities, as needed, under the overall responsibility of MAAR as lead ministry. Being national in scope, effective coordination and management is crucial and will be driven by the following considerations: (a) the systematic use of existing institutions and capabilities whilst making necessary adjustments for building up 41 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT their capacity where needed (provincial agricultural directorates); (b the need for effective guidance and coordination at the central and provincial levels while observing GOS drive to decentralization of decision making at local level; and (c) the imperative of having effective project M&E systems at the national and provincial levels to provide the necessary information for decision making and to achieve project objectives. 192. Project Steering Committee (PSC). This is a high-level inter-ministerial Committee with authority in all matters of policy and coordination. It would consist of representatives of central MAAR directorates, of MET, MI, MLA and SPC, and be chaired by the Minister for MAAR or his representative. Specifically PSC will be responsible for (a) defining the general policy framework of project implementation; (b) provide conceptual, strategic and policy guidance for the design and implementation of project activities in conformity with GOS development strategies and policies; (c) approve AWPB and monitor project progress; (d) ensure effective cooperation between the project implementing partners; (e) ensure project interventions are coordinated with other projects and programs where appropriate; and (f) solving problems and potential conflicts of interest between participating departments. PSC will meet at least twice yearly and on an ad hoc basis as and when deemed necessary. The Project Director (PD) will serve as PSC secretary. 193. National Project Directorate (NDP). MAAR will create a new directorate within its structure to be called the National Project Directorate (NDP) to overseer project implementation. NPD will be headed by the national Project Director (PD) appointed by the Minister of MAAR. PD will be responsible to the Minister to whom he/she will report though the PSC. NDP will implement some project activities using its own staff and capabilities but will outsource the implementation of other project activities to principal implementing partners (PIPs). NPD will be responsible for overall project programming, financial management, contracting implementing partners, M&E, progress reporting and for regular liaison with the Government, IFAD and other cofinanciers. The NPD will be composed of seven operational divisions (see WP 7): administration and finance; M&E; livestock production; rangeland development; extension; gender and rural Women development; SBMs/rural microfinance. 194. Provincial Project Directorates (PPDs). Fourteen PPDs will be established, one in each of the 13 Syrian provinces other than Damascus, and one in Al Ghab special region to overseer project implementation in the provinces. The PPD will be headed by a provincial project manager (PPM) appointed by the Minister for MAAR. The PPM will be responsible to the PD for all project affairs in the province and reports to him. PPD will be responsible for direct implementation of the SBM/Microfinance component of the project and for following up on the implementation of other project activities in the province performed by other implementing partners. It will also be responsible for the selection of project beneficiaries, monitoring and supervising implementation and, managing project funds at the provincial level and M&E and reporting. 195. Principal Implementing Partners (PIPs). The NDP will outsource the implementation of some project activities to PIPs. PIPs will include (a) MAAR departments at the central level and their provincial representation within the provincial directorates of agriculture and agrarian reform (DAAR); (b) other Government entities and Ministries in accordance with their mandates, responsibilities and capabilities; (c) farmer organisations, NGOs, and private sector service providers, and other relevant institutions in accordance with their capabilities. Outsourcing will be through signed MOU or contracts/agreements between the NPD and the concerned PIP. Activities outsourced to PIPs will also appear in the project’s AWPBs. B. Implementation Arrangements and Responsibilities by Components Subcomponent Livestock Development Component 196. Pilot system for animal registration and performance control. The interventions under this subcomponent would be implemented by DAP and the Ministry 42 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT of Industry under the overall guidance, financial management and M&E of the NPD and PPDs. MAAR would provide the required incremental staff for DAP, while the NPD and PPDs would mobilize technical assistance, training, goods and services, and provide incentives for staff assigned on a full-time basis for implementation of activities under this subcomponent. In consultation with, and facilitation by, the NPD and PPDs, DAP would establish a task team for implementing the animal performance control system that includes the development and management of a national herd book for cattle and small ruminants. MI, in consultation with NDP would establish a task team for implementing the development of a dairy quality control system. 197. Support to livestock genetic improvement and production of improved breeds. The interventions under this subcomponent would be implemented by GCSAR, under the overall guidance, financial management and M&E of the NPD and PPDs. MAAR would provide the required incremental staff for GCSAR, while the NPD and PPDs would mobilize technical assistance, training, goods and services, and provide incentives for staff assigned on a full-time basis for implementation of activities under this subcomponent. GCSAR, in consultation with NDP would establish a task team for implementing the applied research programme on genetic improvement and production of improved breeds in collaboration with ACSAD and ICARDA in their respective areas. 198. Support to animal health delivery. The cluster of interventions under this subcomponent would be implemented by DAH and DVD at the central level and their provincial structures under the overall guidance, financial management and M&E of the NPD and PPDs. MAAR would provide the required incremental staff for DAH and DVD, while the NPD and PPDs would mobilize technical assistance, training, goods and services and provide salary incentives to staff assigned on a full-time basis for implementation of animal health and veterinary drugs activities. In consultation with, and facilitation by, the NPD and PPDs, DAH and DVD would establish the following implementation task teams: (a) a joint task team to be set up by DAH and DVD with facilitation by the NPD senior veterinary officer for implementing the intervention on animal health; (b) a joint task team for developing and implementing a programme on surveillance and epidemiology studies; (c) a joint task team for implementing the quality control of locally-produced veterinary drugs, and the quality enhancement of locally-produced vaccines; and (d) a joint task team for implementing the intervention on the quality control of red meat. 199. Support to livestock extension services and training. Activities under this component would have national coverage. Under the overall guidance, financial management and M&E of the NPD and PPDs, the lead coordinating institution for the implementation of this subcomponent would be DAE, in close collaboration with and with contributions from, DAP, DAH and DRW at the central level and their respective provincial structures. MAAR would provide the required incremental staff for these four directorates, while NPD would mobilize technical assistance, training, goods and services and provide salary incentives to staff assigned on a full-time basis for implementation of this subcomponent. In consultation with, and facilitation by, the NPD senior extension officer, DAE, DAH, DAP and DRW would establish joint multidisciplinary extension task teams at the ESU and AEU levels. To ensure efficient coordination and harmonization of extension approaches and delivery on the ground, the ETTs selected by ILDP and their originating ESUs and AEUs would be integrated into the management structures of the interventions of other IFAD supported projects with agreed upon finance by ILDP. Rangeland Improvement and Development of Feed Resources Component 200. Activities under this component would focus on the large ASZ 5 (Badia), with pilot interventions for development feed resources in ASZ 4 and 3. Interventions in the Badia rangelands under this component will cover eight of the project’s 13 provinces. Designed with the objective of scaling up the successful BRDP due to close in June 2011, this component would be implemented by the existing PMU of the BRDP, under the overall guidance, financial management and M&E of the NPD. As with all completed projects, the Government has agreed to maintain the PMU for that purpose. It is well staffed and sufficiently experienced to ensure adequate implementation, and is composed of a 43 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT central management unit located in Damascus and a network of eight provincial project directorates. Development of SBMs and Micro Finance Component 201. SBMs dairy marketing and processing. Given that the MAAR does not have a specific entity in charge of SBM development in agro-industry, the ILDP would create its own internal capacity to provide the core expertise necessary for implementation of this subcomponent. At NPD level, there would be an SBM development unit within the SBM/Microfinance Division staffed by a senior agro-industry specialist and a business development specialist. At the PPD level, there would be a processing specialist in each of the fourteen PPDs. In addition ILDP would provide adequate support in the form of training, equipment and technical backstopping by national technical assistance. 202. Rural microfinance development. Because MAAR does not have sufficient capacity to implement a nationwide rural finance development programme, ILDP would create such a capacity. At NPD level, there would be a Microfinance development unit within the SBM/Microfinance Division staffed by a senior rural finance specialist, sanduq organiser, accountant/auditor. At the PPD level, there would be a Sanduq sub-section in each of the nine PPDs where sanduqs are to be promoted by ILDP. Each sub-section would be staffed by a Sanduq organiser and accountant /auditor. This sub-section would receive technical backstopping and support from the relevant unit at NPD and with the help of training and technical assistance from other IFAD project with experience in this field. Sanduq establishment in the selected villages would be on the willingness of the constituency using mechanisms established under IRDP and JHADP. C. Collaborative Framework 203. Main Implementing Agencies and their roles. The four main agencies involved in ILDP implementation would be: MAAR, MLA, MET and MI. MLA is in charge of management and quality control of red meat in slaughterhouses; MI plays a major role in the agro-industry sector; and MET is involved in the development of SBMs. MAAR would be the lead agency in charge of implementing the project, for appointing members of the PSC. It would house the NPD at the central level and the PPDs in their respective provinces, and play a major role in project staffing, procurements of good and services according to IFAD guidelines, etc. Details descriptions of MAAR and other agencies roles and responsibilities are described in Working Paper 7. 204. Technical partners in implementation. Technical directorates of the project implementing partners, particularly of the MAAR, would play an important role in providing technical support for project implementation. These include: DAP for the livestock development programmes; DAH for the animal health programmes; DVD for drugs and vaccines; DAE for technology transfers to farmers and livestock producers; DAM for market and price information; DRW for women’s programmes; and GCSAR for livestock research, including genetic improvement (details in WP7). Private consulting engineering firms and contractors would be key players in feasibility studies and for the design of construction work funded under the project. Qualified consulting engineering and construction firms are widely available in the country. 205. Links with complementary projects. ILDP has been designed as a precursor to a major government programme for livestock development. It would consolidate and scale up the ongoing BRDP, including full beneficiary responsibility for the maintenance and management of commonly-created assets in improved rangelands. It would also complement and scale up the ongoing IRDP and complete JHADP, CMADP, SRADP interventions in establishing demand-driven rural MFIs, SBMs in the livestock value chain and for gender mainstreaming and strengthening of field-level AEUs. 206. Integration with the IFAD Country Programme. ILDP has been designed on the basis of a whole set of lessons learned from IFAD’s previous projects and grants and aims at scaling up successes particularly in the areas of micro finance and range development (see III A, D, E).The project is fully in line with the ongoing COSOP, 44 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT government policies and strategies as well as donors interventions in the agriculture and livestock sector (see III B,D,E) and would provide models for further scaling up replication and lessons for future IFAD country programme development in Syria. D. Results-Based M&E 207. ILDP would establish an M&E system at the national and provincial levels, designed to perform two key functions: progress monitoring and impact M&E. Both are part of a systematic, participatory learning process geared to ensuring that a project attains its planned objectives and impact (WP 7). Progress monitoring would be done at all levels by NPD, PPDs, and staff of implementing partners and by the beneficiaries themselves. It would measure the project’s physical and financial progress, including specific information on targeting, gender mainstreaming, outputs and outcomes by component following selected indicators (Logframe, Annex 2). The M&E would be based on performance indicators following the logframe. Indicators are SMART (specific, measurable, attributable, reliable and time bound), and fulfil RIMS requirements. Impact M&E involves regular reviews and assessments of performance, and changes occurring in the livelihoods of project beneficiaries to alert management to changes needed to ensure that the project achieves its objectives. It would be undertaken through: (a) discussion among different stakeholders including the target beneficiaries, through AWP/B exercises; (b) inclusive participatory consultations on specific issues; (c) participatory annual reviews of activities; and (d) a completion assessment as an input for the project completion report. IFAD’s independent Office of Evaluation (OE) may also undertake a formal evaluation of the project. 208. M&E officers in the NPD and PPDs would collect and analyse data gathered by implementing partners at the provincial level on the basis of agreed reporting formats and timing. The M&E officer at the NPD would consolidate and further analyse the input from PPD M&E officers, provide them with back-up and technical support, coordinate implementation of the project’s management information system and ensure consistency, accuracy and timeliness of all reporting. M&E activities would be based on the IFAD Guidelines for Project M&E. Immediately after establishment of the NPD and PPDs, M&E experts would be deployed to assist in designing and establishing the M&E system, including a gender-disaggregated system of data collection and reporting. The system would be designed to capture the rate of implementation against planned targets and objectives, as set out in the project design document and reflected in the AWP/Bs. 209. Start-up. The project would conduct a series of workshops one at the central level and fourteen at the provincial level with the objective of sensitizing and building of a sense of ownership of the project’s objectives and scope among the NPD, PPDs, implementing partner staff and project beneficiary organizations. At these workshops, time would be allocated to an M&E session during which the project’s logframe would be reviewed and indicators modified, if needed. 210. The RIMS. The system would be fully incorporated into project M&E which would be designed to allow for RIMS first- and second-level indicators to be monitored on a constant basis so as to facilitate their computation and reporting at the end of the year. RIMS third-level indicators would require specific surveys at the start of the project, during the second IR in PY5 and at project completion. These indicators would be measured and analysed as part of the baseline surveys, the MTR and the PCR. 211. Reporting. The NPD would be responsible for establishing and operating the project reporting system. It would involve brief monthly progress reports by each PPD covering both its own work and that of implementing partners at the provincial level. These reports would be forwarded to the NPD in accordance with an agreed format, frequency and coverage (WP7). Project-wide quarterly progress reports would be issued by the NPD, for the information of the PSC and IFAD. An annual project progress report would be produced by NPD within two months of the end of each financial year. 212. Interim Reviews. Given the eight-year implementation period of the proposed project and its innovative and pilot initiative features, two IRs would be conducted in lieu 45 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT of one single review at mid-term. The first IR would be conducted towards the end of PY3 to assess the overall progress, achievements and constraints prior to scaling up, and recommend necessary adjustments. A second IR would be conducted towards the end of PY5 to update the first IR and further assess emerging impact and likely sustainability and recommend necessary adjustments for the remaining period. The IRs would be carried out jointly by the lead project implementation agency and IFAD, based on terms of reference prepared by the Government and approved by IFAD. 213. Supervision Arrangements. IFAD would directly supervise the project every six months, and focus on fiduciary and implementation support functions in collaboration with CPMT. The composition of supervision missions would be based on the supervision plan (overall and annual) to be discussed at start-up which would highlight the main thematic or performance areas in need of strengthening. One of the semi-annual supervision missions would be scheduled to coincide with an annual review workshop, to be scheduled by NPD close to the end of the financial year and to be attended by all stakeholders at both the national and provincial levels. The annual review workshop would provide an opportunity for the supervision mission members to work closely with all stakeholders to assess progress and constraints, and to facilitate review and approval. 214. Project CPMT. The Country Programme Management Team (CPMT) is a resource group of stakeholders in IFAD’s country programme who participate in the entire cycle from the COSOP through programme design, implementation and supervision. During implementation the CPMT is the anchor for all country level activities. Managed by the CPM it will support him and the project management team in ensuring orderly implementation and achievement of project objectives. The broad in country CPMT will include the CPM, the IFAD legal counsel, loan officer, portfolio management officer, senior representatives from MAAR as the main implementing agency, from other Ministries, SPC, and the main PIPs. It will also include the country presence officer; the project directors of all ongoing IFAD-supported projects; representatives from the participating Banks, private sectors involved (large dairy processors), civil society (NGOs, CBOs, sanduqs, RMCs etc.), and the cofinanciers with presence in the country. Not all CPMT members will be involved in every process. The CPM will arrange the CPMT and its members in various configurations tailored to suit the specific task at hand. While the core members may be actively involved in most CPMT activities, others will likely be involved in only few where their position and/or expertise is of particular relevance. As such, the terms of reference for the CPMT and its membership will be task-specific. V. PROJECT BENEFITS, COSTS AND FINANCING A. Summary benefit analysis 215. Project benefits. Project activities would benefit a large number of poor rural households: small sheep, cattle and buffalo holders; small milk producers, collectors and processors living in poverty-stricken seasonal settlements in the Badia and in settled villages across all provinces, as well as poor rural women and youth. Their income would be increased through project investments under the various components. Project investments in strengthening animal production support services would help reduce poverty and enhance livelihoods through improvements in milk and meat production, increasing farmers’ incomes, access to employment opportunities, and through quality nutrition and lower animal feed costs. 216. Efficiency in terms of productivity gains of small ruminant and cattle production systems would be achieved mainly as a result of increased feed availability, reduced feed costs, better animal nutrition and health, superior and higher-performing breeds and quality herd management. Efficiency in terms of contributions to value addition in the dairy chain would be achieved first from improved milk production, collection and pricing practices based on quality , and better standards of sanitation and hygiene; and, secondly, from better application of the rules and quality norms for processing milk into 46 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT safe dairy products, and their fair marketing. Micro finance and credit to SBAs would benefit the target groups through support to income generating activities. 217. The project is expected to have positive social and environmental impact: (a) improved rangelands in the Badia through land resting, re-seeding, and fodder shrub planting. This would increase dry matter per hectare from an average of 100 kg/ha to 1,000 kg/ha and reduce nomadic transhumance to shorter distances; (b) sustainable pasture management and biodiversity conservation of native fodder plants resilient to drought; and (c) biodiversity conservation of indigenous cattle and small ruminant breeds that are resistant both to disease and to the effects of climate change. 218. Project beneficiaries. The livestock development and rangeland development components would reach directly the targeted 67,500 livestock household producers, of which 52 per cent are in the Badia and the remainder in ASZs I, II, III and IV, covering all priority areas estimated at 1,260 villages. In addition, the rangelands improvement interventions in the Badia would generate greater seasonal and part-time employment for more than 24,000 men and women in activities related to seed collection, re-seeding, planting of fodder shrubs, construction of underground cisterns and hafirs for water harvesting, and maintenance of improved pastures. 219. Other project services such as extension and training, animal health and veterinary drugs, milk collection and quality control would have an indirect impact on livestock producers all over the country. The SBM development subcomponent would reach 2,250 rural SBMs as service providers in milk collection and processing through access to existing credit lines and the financial services of sanduqs. In addition, sanduq rural microfinance development will have a direct impact on 8,000 rural women as micro borrowers for establishment of income-generating activities. The number of potential direct beneficiaries by category of target group is shown in Table 1. 220. From an institutional perspective, the project would: (a) build up the capacity of the field-level support services of MAAR in animal production, animal health and veterinary drugs, extension and rural women’s development; (b) reorganize and consolidate the above-mentioned services, composed of 111 support extension units and 1,085 AEUs, into multidisciplinary extension task teams and train their staff of engineers (2,262 men and 1,627 women), 2,054 technicians, 620 veterinarians and 4,972 auxiliary veterinarians; (c) establish and train 130 new LPICs and their RMCs in the Badia; (d) enhance and train 140 new village-level sanduq MFIs; and (e) transform and train 2,250 small-scale private milk collectors and processors to ensure that they comply with food quality hygiene and safety standards. The impact of this institutional development is expected to yield significant gains in terms of empowerment of livestock producers and their local-level organizations and service providers. Table 1: Potential project beneficiary households Target beneficiaries Small and medium-sized sheep and goat producers Large sheep and goat producers Small cattle producers Buffalo producers Sub-total, livestock producers Small dairy collectors and processors Rural women (micro loans for IGAs*) Total Total 41 500 3 500 22 000 500 67 500 2 250 8 000 77 750 * Income-generating activities. 47 ASZ 5 (Badia) 31 500 (sheep only) 3 500 (sheep only) 35 000 1 500 1 000 37 500 ASZ 4,3.2.1 (outside Badia) 10 000 (sheep and goats) 22 000 500 32 500 750 7 000 40 500 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT B. Summary cost table 221. The total project costs including physical and price contingencies are estimated at USD 73.13 million (SYP 3,637 million) spread over an eight years implementation period. The foreign exchange component totalling USD 12.68 million (SYP 590 million) represents 18 per cent of the total base costs. Physical and price contingencies account for about 3 per cent of total project costs. The investment costs totalling USD 54.79 million (SYP 2.548 million) represent 78 per cent of the total base cost. The recurrent costs totalling USD 15.88 million (SYP 738 million) represent 22 per cent of the total base costs. Project costs by components are summarized in Table 2. A complete set of summary tables and detailed costs tables are attached in Annex 3. Table 2: Project Cost Summary (SYP Million) Local Foreign Total A. Livestock Development Pilot system for animal registration & performance control Support to livestock genetic improvement & production of improved breeds Support to animal health and veterinary services Support to livestock extension services and training Subtotal Livestock Development B. Rangelands Improvement and Development of Feed Resources C. Development of BM and Micro Finance Support to SBM for dairy marketing and processing Support to Rural Microfinance Subtotal Development of BM and Micro Finance D. Project Coordination and Management Total BASELINE COSTS Physical Contingencies Price Contingencies Total PROJECT COSTS C. (US$ '000) % % Total % % Total For Base For Base Exch Costs Local Foreign Total Exch Costs 75 155 41 230 500 998 113 86 21 81 301 51 188 240 62 311 801 1 050 60 36 34 26 38 5 6 7 2 9 24 32 1 605 3 324 883 4 940 10 752 21 469 2 439 1 842 450 1 750 6 480 1 105 4 043 5 166 1 333 6 690 17 232 22 574 60 36 34 26 38 5 6 7 2 9 24 32 318 261 579 619 2 697 58 251 3 006 65 3 68 169 590 9 32 631 383 264 647 788 3 286 67 284 3 637 17 1 10 21 18 13 11 17 12 8 20 24 100 2 9 111 6 832 5 621 12 453 13 317 57 991 1 248 896 60 135 1 406 54 1 460 3 635 12 680 193 121 12 994 8 238 5 675 13 913 16 952 70 671 1 441 1 017 73 129 17 12 1 8 10 20 21 24 18 100 13 2 12 1 18 103 Project Financing: IFAD, Cofinanciers, Government and Beneficiaries 222. The project would be financed by a loan from IFAD of USD 27.4 million, on intermediate terms, a regular grant of USD 0.59 million and USD 16.37 million from the Government. The beneficiary contribution for the sanduq establishment and SBMs is estimated at USD 1.76 million. The remaining USD 27.0 million is expected to be financed by the French Agency for Development. The proposed financing plan is summarized in Table 3 below. Table 3: Project Financing by Components IFAD Amount % A. Livestock Development Pilot system for animal registration & performance control Support to livestock genetic improvement & production of improved breeds Support to animal health and veterinary services Support to livestock extension services and training Subtotal Livestock Development B. Rangelands Improvement and Development of Feed Resources C. Development of SBM and Micro Finance Support to SBM for dairy marketing and processing Support to Rural Microfinance Subtotal Development of SBM and Micro Finance D. Project Coordination and Management Total PROJECT COSTS D. IFAD Grant Amount % French AD Amount % Beneficiaries The Government Total Amount % Amount % Amount % 5.7 7.2 1.9 9.6 24.4 31.9 Local Duties For. (Excl. & Exch. Taxes) Taxes 2 857 1 879 1 354 6 477 12 566 2 448 68.5 35.6 96.9 92.0 70.3 10.5 0 0 0 0 0 0 - 0 2 818 0 288 3 106 19 878 53.4 4.1 17.4 85.3 0 0 0 0 0 0 - 1 311 581 43 272 2 207 987 31.5 11.0 3.1 3.9 12.3 4.2 4 168 5 277 1 397 7 036 17 879 23 314 2 482 1 454 1 883 3 288 465 890 1 780 4 985 6 610 10 617 1 174 21 994 232 106 43 272 653 146 2 604 4 855 7 458 4 937 27 410 31.2 85.2 53.1 27.6 37.5 498 91 589 0 589 6.0 1.6 4.2 0.8 4 016 0 4 016 0 27 000 48.2 28.6 36.9 1 004 753 1 757 0 1 757 12.0 13.2 12.5 2.4 218 0 218 12 961 16 373 2.6 1.6 72.4 22.4 8 340 11.4 1 423 6 699 5 698 7.8 54 5 643 14 037 19.2 1 477 12 343 17 899 24.5 3 733 13 614 73 129 100.0 12 994 58 567 218 0 218 551 1 568 Disbursement, Procurement and Accounts 223. Annual Work Plan and Budget. The Annual Work Plan and Budget (AWPB) will be prepared by the Project Director, reviewed by the Project Steering Committee prior to submission to IFAD for non objection. The AWPB will show detailed activities, unit costs and monitoring indicators for results and impacts, as well as the modality of implementation. The AWPB will include a procurement plan for the eighteen (18) months to be submitted separately to IFAD for non objection. 48 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT 224. Disbursement. The IFAD financing (loan and grant) will be disbursed over a period of eight years. The estimated disbursement schedule for the IFAD financing is shown in Table 4 below. Annual requirements for IFAD financing from the loan range between USD 0.80 million to a maximum of USD 7.16 million. In order to facilitate timely payments and due to Government inability to pre-finance IFAD target group, payment will be made through direct payment to a Special account opened in a bank acceptable to IFAD. The initial deposit into the Project Special Account would be about USD 2.5 million equivalent in Euros in year 1 and increase to about USD 3.5 million equivalent in Euros by year 3, and reduced to about USD 0.6 million equivalent in Euros during the last 3 years. The replenishment of the Project Special Accounts will be made against Certified Statement of Expenditures (SOEs). 225. Disbursement from the Grant will be made through a Grant Account. In order to facilitate timely payments and due to Government inability to pre-finance IFAD eligible expenditures. Disbursement from IFAD Grant Account would be made on the basis of the approved Annual Work Plan and Budget (AWPB). The disbursement would be through three (3) instalments: (a) First instalment equivalent to 100 per cent of the first approved AWPB; (b) Second instalment: upon justification of at least 80 per cent of the first AWPB, IFAD would release the eventual balance of the first AWPB in addition to 90 per cent amount claimed under the second AWPB; (c) third instalment: The remainder balance of the grant amount will be disbursed upon receipt of the final report in a satisfactory form with the final SOE. 226. The disbursement accounts are similar to expenditure accounts. The financing rules adopted for the disbursement accounts are 100 per cent of cost excluding: (a) all recurrent costs of the Coordination and Management Component; and (b) taxes and duties. These would be Government’s contribution. The Government would finance around 15 per cent of total project costs. The project disbursement by semester is summarized in Table 4. Table 4: Disbursement by Semester (USD’000) IFAD Amount 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total 3 622.5 3 622.5 3 692.4 3 692.4 2 818.3 2 818.3 1 291.0 1 291.0 1 057.1 1 057.1 489.0 489.0 418.8 418.8 316.1 316.1 27 410.1 Financing Available IFAD Grant French AD Amount Amount 87.5 87.5 174.5 174.5 6.4 6.4 6.5 6.5 6.5 6.5 6.5 6.5 6.6 6.6 588.9 1 469.3 1 469.3 952.9 952.9 1 575.4 1 575.4 2 566.6 2 566.6 1 980.7 1 980.7 2 082.6 2 082.6 2 072.9 2 072.9 799.9 799.9 27 000.5 Beneficiaries Amount 43.0 43.0 161.3 161.3 182.0 182.0 111.5 111.5 111.5 111.5 134.5 134.5 134.5 134.5 1 756.7 Total 5 134.8 5 134.8 4 894.0 4 894.0 4 750.3 4 750.3 3 975.5 3 975.5 3 155.7 3 155.7 2 712.5 2 712.5 2 632.7 2 632.7 1 122.6 1 122.6 56 756.2 Costs to be Financed The Government Project Cumulative Costs Cash Flow Cash Flow 6 608.0 6 608.0 5 965.5 5 965.5 5 754.2 5 754.2 4 917.7 4 917.7 4 098.0 4 098.0 3 632.2 3 632.2 3 555.3 3 555.3 2 033.4 2 033.4 73 128.9 -6 608.0 -1 473.3 -830.7 -1 071.4 -860.2 -1 004.0 -167.4 -942.2 -122.5 -942.3 -476.5 -919.7 -842.8 -922.6 599.3 -910.9 1 122.6 -16 372.7 -6 608.0 -8 081.3 -8 912.0 -9 983.5 -10 843.6 -11 847.6 -12 015.1 -12 957.3 -13 079.8 -14 022.1 -14 498.6 -15 418.3 -16 261.0 -17 183.6 -16 584.4 -17 495.3 -16 372.7 -16 372.7 227. Procurement. The procurement of goods, works and services to be financed from the proceeds of IFAD’s financing would be in accordance with the Fund’s procurement guidelines, observing the following specific principles (see WP 8): (a) procurement would be carried out in accordance with the Financing Agreement and any duly agreed amendments thereto; (b) it would be conducted within the project implementation period, except as provided for under Article 4.10(a)(ii) of IFAD’s General Conditions or 49 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT where the loan agreement provides for retroactive financing and then within the limits therein specified; and (c) the cost of the procurement is not to exceed the availability of duly allocated funds as per loan agreement. 228. Procurement would be consistent with approved AWP/Bs, procurement plan for a period of at least 18 months (see WP 7). E. and include a Economic and Financial Analysis 229. Project investments would raise livestock productivity and incomes of the target group, while directly and indirectly providing quantifiable benefits to the Syrian economy. These benefits would be in the form of improved production and productivity by animal unit, increased productivity of rangelands and availability of feed resources, quality control of milk production and processing, improved marketing of livestock products, and increased access by the rural poor, particularly women and unemployed youth, to microfinance services. It would empower: (a) nomadic communities as a result of grassroots formation of socially cohesive LPICs that can take decisions to achieve sustainable management of improved rangelands; and (b) village communities to set up and manage microfinance sanduqs. Other direct project benefits resulting from activities such as capacity-building and training, and indirect benefits were not considered. 230. Financial and economic analyses were conducted to determine the viability of the project. Financial analysis was undertaken based on: (a) representative activity budgets and activity models for the various livestock systems, using the prevailing herd management and looking at incremental costs and benefits due to project interventions in genetic improvement, livestock health services, transfer of technologies in herd management, improved feeding mixes, enhanced integration of fodder crops in rainfed farming systems and improved pasture in the Badia rangelands; and (b) representative income generating enterprise models for milk collection, processing and marketing in the dairy value chain. Project’s economic analysis was conducted by aggregating from the activity budgets to the overall area that would benefit from the project activities (main assumptions and activity budgets and models are detailed in WP 9). 231. In order to determine the project’s potential impact on individual livestock producers, detailed financial analysis of livestock activities and flock budgets were carried out for the following typical models in the Badia rangelands (ASZ V) and rainfed areas (ASZs III and IV): (a) small-size sedentary flock (model 1); (b) medium-size semi-sedentary flock (model 2); (c) large-size extensive flock (model 3); and (d) smallsize improved cross-bred cattle (model 4). These models were developed and used to arrive at incremental incomes. The financial results indicate that the household benefits after financing would increase in model 1 by 106 per cent, in model 2 by 125 per cent, in model 3 by 260 per cent and in model 4 by 80 per cent. 232. For evaluating the financial viability of small and medium-sized enterprises (SMEs), two representative models in the dairy value chain were considered. The first was a milk collection centre with a capacity of 5 mt/day; the second was a dairy processing unit with a capacity of 2 mt/day. A cash-flow analysis was carried out for each MSE to arrive at expected annual costs and returns using market prices and prevailing terms and conditions of short- and medium-term loans from ACB. The financial results show attractive incremental returns in both cases. For the milk collection centre model, the generated annual incremental income would pay back the investment over a period of seven years. For the dairy processing model, the resulting incremental net annual income would be able to pay back the investment within one year. 233. Economic rate of return. The economic project costs have been derived from the financial cost of the incremental investment and recurrent costs by applying the appropriate conversion factors. Price escalation and taxes were excluded from the 50 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT economic analysis. The stream of net economic benefits has been determined for both the ‘without’ and the ’with’ project situations. These net benefits were derived by taking the difference between the ’with’ and the ’without’ project net value of crop production and deducting the inputted cost of farm labour (project phasing and the assumed adoption rates are given in WP9). The overall economic internal rate of return (EIRR) on project investments over 20 years is estimated at about 18 per cent. 234. Sensitivity analysis. This analysis assessed the effect of variations in benefits and costs, and for various lags in the realization of benefits. The criteria adopted were: a 10 and 20 per cent cost overrun, a 10 and 20 per cent decrease in benefits, and combinations of the two. Overall, the sensitivity analysis indicates that the project would be relatively robust and that it would remain economically viable under most foreseeable adverse conditions. The results of these analyses indicate that: (a) a 20 per cent increase in costs would decrease the EIRR to 17.2 per cent; and (b) a 10 per cent decrease in benefits would decrease the EIRR to 17.5%. The combined 20% increase in cost and 20 per cent decrease in benefits would still ensure an EIRR of 16.3 per cent. VI. PROJECT RISKS AND SUSTAINABILITY (KSF 5) A. Risk Analysis 235. The potential risks of the project and the mitigating measures envisioned are presented in the following box: Risks 1. Effective targeting The target group of landless, young people, and womanheaded households, particularly in remote areas, may prove to be difficult to reach. Their inability to access project interventions could be also a limiting factor. 2. High frequency of drought threats as a result of climate change The expected high frequency and intensity of drought may threaten the sustainability of rangelands and lead to pressure on water availability. 3. Provision of training and mobilization of technical assistance Previous projects in Syria have encountered difficulties in delivering quality training, including mobilizing high-calibre technical assistance owing to the Government’s inflexibility and unattractive remuneration for consultants. Risk Mitigation Factors Rating This risk would be mitigated through effective extension and widespread information campaigns at the national level and by establishment of village based sanduqs designed to provide outreach to rural microfinance services. Medium To help address this risk, ILDP would strengthen the existing network of human and livestock water points in the Badia rangelands through the construction of underground cisterns to increase the storage capacity of water harvested. The project would not compete on the current use of water availability. Land resting, re-seeding, fodder planting and rotational grazing would restore and maintain rangelands' resilience to climate change. This resilience would be enhanced by the introduction of ICBAreleased drought- and salt-tolerant fodder species. Medium Given the importance of training and the need for high-quality training and technical assistance for the project, in order to mitigate this risk it is suggested that unattractive government conditions for the recruitment of consultants for project implementation be waived. This would be reflected as a covenant in the financing agreement Low 51 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT B. Exit strategy and post-project sustainability 236. Sustainability and exit strategy. The Government has demonstrated its commitment to sustainable pro-poor agricultural and livestock development by adopting the multi-pronged Vision 2025, of which the cornerstone is efficient use of water and management of rangelands and natural resources for agricultural production in low-potential areas. With the support of donors, the Government is in the process of launching a major, long-term and nationwide investment programme for livestock value chain development – of which the proposed ILDP is a precursor. In addition, there is high level political commitment on the part of key ministries with a direct role in the livestock value chain to fully cooperate in facing the challenge of modernizing the chain and improving its performance by means of policy changes on food standards in order to ensure quality dairy and meat products. 237. There was evidence of such cooperation and political will during the ILDP design mission’s fieldwork. Another indication in this regard is the preparation of donorsupported assessments of major food commodity chains aimed at developing and supporting a project investment pipeline in the agriculture sector, particularly by the European Union and Italian and French Cooperation in the context of the EU-Syria Association Agreement. 238. Project design has been built on lessons learned from previous and ongoing IFAD-financed projects in Syria and on recent assessment studies of the agriculture sector by the aforementioned donors. As such, important design features have been incorporated into ILDP design to ensure appropriate exit strategies. These features are centred on the taking over of management responsibility by empowered local-level organizations and user groups, and on capacity-building, involvement of the private sector and strong institutional commitment. 239. Project support for upgrading the performance of existing private milk collection and processing systems, and the creation of new milk collection centres with private operators taking responsibility for operation and maintenance and for training and capacity-building for all actors in the livestock value chains, would play a crucial role in ensuring the systems’ sustainability. 240. Regarding rural microfinance, ILDP has been designed on the basis of strong political commitment for promotion of sustainable MFIs, as manifested by donor-supported work aimed at the finalization of a national microfinance strategy as the basis for adoption, in 2011/2012, of a microfinance law, legal operating status and regulatory prudential rules. The emphasis on capacity-building for the purpose of creation, upgrading and expansion of SBMs has the ultimate objective of ensuring their financial sustainability after project completion. 241. Finally, the Government’s current exit strategy for maintaining project implementation structures with national funding in order to consolidate and scale up the activities of IFAD-financed projects after completion (e.g. SRADP, JHADP and CMADP) would also apply to ILDP. C. Environmental Classification 242. Project interventions would have direct positive impact on the environment. However, they would be implemented in poor villages and communities, mainly in low-potential agriculture settlement zones where there is an evident risk of environmental degradation as manifested by overexploitation of natural resources, particularly overgrazing in the Badia rangelands and fragile mountainous areas. The potential positive impact of the project on the environment would come from (a) improved rangelands in the Badia through land resting, re-seeding and fodder shrub 52 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT plantation. This would increase the dry matter per hectare from an average of 100 kg/ha to 1,000 kg/ha and reduce nomadic transhumance to shorter distances; (b) sustainable pasture management and biodiversity conservation of native fodder plants resilient to drought; and (c) biodiversity conservation of indigenous cattle and small ruminant breeds resistant to disease and to the effects of climate change. 243. None of the project activities would be implemented in environmentally sensitive areas such as national parks, wildlife reserves and classified forests, or have an adverse impact on archaeological and/or historical sites. The project would not support activities that might generate significant irreversible or cumulative environmental impacts. It is therefore classified as “Category B” according to IFAD’s Administrative Procedures for Environmental Assessment. This classification is based on information gathered during field visits and on-site assessments in the country.3 VII. INNOVATIVE FEATURES, LEARNING, KNOWLEDGE MANAGEMENT AND SCALING UP (KSF 6) A. Innovative Features 244. In designing the ILDP, an important consideration of the Government and IFAD was the replication and scaling up, on over 3 million ha of land in the Badia, of proven new technical and institutional options for sustainable rangeland management and increased productivity by animal unit to alleviate poverty and achieve higher efficiency in the use of common natural resources. In its entirety, therefore, ILDP is a knowledge-creating project and a precursor to a much larger, long-term national programme for the transformation and modernization of the livestock production value chain. More specifically, the project embodies a number of innovative features within the context of IFAD operations in Syria, including: 3 (a) The establishment of a system of animal registration and performance control for dairy and meat production by category of breed and production system, and its piloting for small ruminants and cattle is a major innovative and timely undertaking in Syria. (b) The introduction of a quality control system for meat in slaughterhouses and of milk in all the segments of the dairy chain, as well as milk payments based on quality, through the adoption and strict application of international standard of sanitation and hygiene are both innovative and pressing needs for modernization of Syria’s livestock sector. (c) The recognition, rather than the suppression, of the role of the nationwide network of private mobile milk collectors and processors (Jabbans/hallabs) in the dairy chain and its integration and reorganization to allow fair commercial practices, is important innovative measures in support of ongoing policy reforms for a market-based economy in Syria. (d) The initiative to assess the opportunity for a public/private partnership to invest in milk collection centres and refrigeration facility for marketing, labelled fresh quality meat from Awassi sheep fattened in a major producing zone such as Hassakeh, is another innovation to modernize the sector. (e) The introduction of participatory livestock breeding schemes involving a large base of qualified private herders, members of herders’ networks to speed up the production of improved breeds in collaboration with GCSAR is an innovative option to complement the limited capacity of the public sector. (f) Introduction of a participatory extension approach, through the organization of multidisciplinary ETTs at ESU and AEU field level bringing together for the For details see Annex 4, Environmental Screening and Scoping Note (ESSN). 53 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT first time technical staff from the Directorates of Extension, Animal Production, Animal Health and Rural Women. In addition piloting a few ETTs with the involvement of private input dealers as specialized extension service providers is an innovative feature. B. Project Knowledge Products and Learning Processes 245. Knowledge management. Given the knowledge-creating purpose of the abovementioned innovative features of ILDP, it would be essential to compile and disseminate project information, experiences and results on an ongoing basis both within country and to IFAD headquarters. This would be facilitated by the participation of the CPMT in advising on and supporting ILDP implementation and by an IFAD presence in all livestock development, rural-finance and natural resources management policy and coordination forums in-country, through the IFAD proxy country presence officer in Damascus. The explicit assignment of knowledge management and communication responsibilities to the M&E officers in the project, and the allocation of funds for communication and dissemination purposes would add value to the knowledge and learning output. This would be achieved by preparing brochures on certain thematic experiences during project implementation and by establishing links with local farmer forums and community-based organizations in order to discuss and share experiences. C. Regional knowledge networking 246. The IFAD proxy country presence officer in Damascus, supported by the Country Programme Manager and the CPMT members, would organize yearly project portfolio implementation workshops to allow staff of ongoing projects and other implementing partners in Syria to communicate and share lessons learned across respective operations. The project would also make substantial use of the ongoing IFAD/IDRC "Knowledge Access in Rural Interconnected Areas (KARIANET)”, Phase II, to learn from and share experience with IFAD projects in the NENA region and the staff of both IFAD and its partners. It would also link up with ongoing IFAD grants to ICARDA and ICBA for applied research relevant to ILDP. The project would also link up with the IFAD grant for Capacity-building in Managing for Results and Impact (CaMaRI), for continuous support in M&E. D. ILDP Scaling Up Approach 247. Scaling up of IFAD achievements is inherently part of ILDP agenda. Two of the three project components namely: micro finance and rangelands improvement are direct scaling up of approaches adopted and tested in ongoing and completed IFAD supported projects in Syria. In addition the underlying approach of community development is a cross cutting theme that is being scaled up using lessons learnt from past country programme experience. Below the conceptual framework developed in IFAD’s ongoing work on scaling up has been used to illustrate that the essential ingredients of scaling up is embodied in the basic design characteristics of ILDP. 248. Scaling up idea and vision. In the case of microfinance the initial idea was that of UNDP followed by two IFAD-supported projects at a much large scale (see III-E). As a result of the success of the sanduq initiatives, MAAR decided to scale up the initiative three provinces, using government own resources with an initial amount of USD 3.5 million. ILDP, with other donors and GOS, would support the creation of 140 new village-level sanduqs on a demand-driven basis across all the provinces. The ultimate aim of these combined efforts is to reach a national scale and to cover the whole of rural areas in the country and expand the lending and deposit services to Syria’s “unbanked” population, men and women. 249. For Rangeland Management it was the IFAD-supported BRDP which initiated the idea of community-based participatory rangeland management; and has at completion rehabilitated 1.3 million ha of rangelands to the benefit of 17,000 families organized in 140 herders associations. The project brought about significant cumulative gains to the 54 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT Badia rangeland. ILDP aims to scale up this success by with the overall vision to cover, in the medium term an additional 2 million ha. 250. Drivers for Scaling up. For rural microfinance, the lack of a rural credit delivery system and the huge unsatisfied demand of credit by the rural poor acted as an important driver, calling for rapid action to scale up sanduqs as the most promising solution. This scaling up is a reflection of championships, political and organizational leadership, and values at a high level in GOS (SPC, MAAR, CBS, and MOF). It was also driven by village communities whose enthusiasm for sanduq led to its success and local demand for expansion. External catalysts are represented by financial and other support received from IFAD, UNDP, Italian Cooperation, CGAP and others which are significant factors in driving the scaling up of this development intervention. To ensure continuous momentum, the ILDP will provide incentives at policy decision-makers and project staff level, local leaders and beneficiaries, and at institutional level in terms of start-up capital to the sanduq’s own resources; capacity building/training to staff and leaders of sanadiq and equal opportunities for women. These incentives would be associated with clear accountability to encourage actors to look at scaling up as a key criterion defining success. 251. In the case of rangeland management the main driving factor for the original IFAD intervention was the deterioration in the quality of the range due to overgrazing. This and the absence of a defined strategy regarding the role of local communities in the use of rangeland resulted in a strong drive for scaling up the IBRD experience which tackled successfully these constraints. The scaling up of the rangelands intervention is a reflection of a strong political and organizational leadership mainly MAAR and the project’s PSC. Drivers at local level are the provincial governments, the leaders and the members of herders associations, farmers associations, and the communities themselves. Funding received from IFAD and AFESD and the commitments of GOS have been decisive factors in driving the development interventions to scale. An important set of drivers pushing the scaling up process are the incentives that would be provided by the project at individual, community and institutional level including: significant increase in forage availability; construction and equipping of veterinary centres, mobile veterinary units; distribution of improved Awassi rams; training and technical assistance etc. 252. Scaling up spaces. The legal and policy space for microfinance are provided through law No. 15 in February 2007, which opened a new frontier in microfinance, the licensing of the First Micro Finance Institution in Syria (FMFI-S), and the ongoing formulation, with donors support, of a National Strategy for micro finance (WP 6). Cultural space is provided through acquiring acceptability among communities and the rural poor. Sanduqs operate in accordance with Islamic Shariah principles and the Morabaha Islamic financing mode. Learning space would be provided through creating a network of Sanadiq with IFAD’s supported ongoing projects, training and technical assistance, the project M&E system and its knowledge sharing practices (III E). The institutional/organizational space is provided by the project’s PSC, NPD and PPDs and the Micro Finance Units in the NPD and PPDs which will be responsible for implementing the component, as well the support of GOS. The financial space is secured by ILDP, IRDP and NERRDP support to microfinance sanduq, the MAAR and DRW’s own finance mentioned above and the financial contribution of the Italian Government to the scaling up of sanduq and to the formalization of its legal framework. IFAD, UNDP and Italian Cooperation, and also the KfW, EU, IFC, JICA, UNRWA and CGAP, support the drivers to scale up, by providing a strong partnership space through financial and technical support, and to keep momentum and focus of the scaling up process. 253. The legal space and policy space for rangelands development is provided by (a) the legal decision (No. 759/V) of February 1996, which mapped and recognised the territories of the cooperatives involved; and (b) legislation regulating dry farming in the Badia, Law no 40 in 1970, and its amendments in 1973 and 2006), whereby the cropping of barley was definitely banned. The implementation of the BRDP and the 55 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT design of the ILDP is a manifestation of the continuing policy intention of the GOS with respect to rangelands development. The financial space is guaranteed by the resources devoted to BRDP and ILDP by GOS and AFESD. The establishment of the Badia Authority and Directorate, the formation of herders associations with full involvement in implementation, and the PSC, NPD, PPDs provide the institutional space for scaling up the Badia rangelands intervention. Community based RMCs and herders associations provide local acceptability to the participatory approach and cultural space for scaling up. IFAD’s long standing relations with ICARDA, ACSAD and ICBA provides the partnership space. Regular monitoring and evaluation and feedback from communities and field-based staff will be important for learning and adjustments to take place. 254. Pathways to scaling up. For microfinance, the ILDP will adopt a participatory approach, whereby the local communities will be empowered to organize into interest groups (e.g. sanduqs) and build capacities to manage their own development. The expansion path is defined through the promotion to a national level of the successful sanduq model. The process will be continuously adjusted and improved in accordance with the needs and local conditions. To this effect the component will be implemented in two major stages; a “foundation-creation” stage and a “scaling up” stage. The former will last three years, and the latter will continue until the project’s completion. The nationwide effort would be a continuous process encompassing the combined time horizons of the IRDP (9 years to end-2010), the NERRDP (7 years to end-2014); and the ILDP (8 years). The sustainability path is assured through the combined efforts of IFAD, other donors and GOS to create the appropriate legal and regulatory space for the sanduqs. 255. For the rangelands the component is designed along the lines of BRDP and will be implemented by technical staff of that project, thus following the same institutional approach and organizational pathway, as well as, making use of devoted and capable managerial and institutional drivers. The precise assignment of functions to specific actors at different levels and clear guidance on what they should do, how to do it and what tools to use, are well documented based on BRDP experience, and will ensure success of the scaling up efforts. 56 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 1: CONTENTS OF THE PROJECT LIFE KEY FILE ANNEX 1 - CONTENTS OF THE PROJECT LIFE KEY FILE Country Programme Management Team 1. List of CPMT members (in-country and in-house) 2. List of persons met during the formulation design process, January /February 2010 Project-generated knowledge 3. ILDP Concept Note, 2009 4. Detailed rural poverty profile of the target group in proposed project area 5. Aide-mémoire prepared by the formulation mission, February 2010 Knowledge base 6. COSOP for Syria, IFAD 2009 7. MAAR/NAPC - Women’s Role in Agriculture and Gender-Related Issues in Syria, Working Paper No. 18, April 2006 8. MAAR/NAPC - Supply Chain Coordination and Policy Implications - The Case of Dairy and Red Meat Products in Syria, Working Paper No. 7 9. MAAR/NAPC - Guide to Commodity Chain Analysis Applied To Syrian Sheep Meat, Working Paper No. 22; June 2006 10. MAAR/NAPC - Comparative Advantage of Cow Milk in Syria, Working Paper No. 25, August 2006 11. MAAR/NAPC - Comparative Advantages of Syrian Barley, Working Paper No. 39, April 2008 12. FAO - The Livestock Sector and Policies in Syria -Summarized by J. Vercueil from a study by G. Cummins. 13. FAO - Marketing, Processing, and the Special Cases of Dairy Products and Horticulture-by Daniele Rama 14. ILRI/ICARDA - Enhancing Livelihoods of Poor Livestock Keepers through Increased Use of Fodder - IFAD/TAG 853, December 2008 15. IFAD - Syrian Arab Republic: Northern Eastern Regional Rural Development Project (NERRDP) – Appraisal Report; 2007 16. IBRD - Syrian Arab Republic at Glance 17. IFAD - Badia Rangelands Development Project (Badia) –Progress Report, 2009 Lessons learned from similar projects 18. See Section III. A of Main Report 57 ANNEX 2 - UPDATED RESULTS-BASED LOGFRAME Key Performance Indicators • Households with improvement in asset ownership index (RIMS 3); Reduction in the prevalence of malnutrition for children under five (RIMS 3). Goal Poverty reduction and improved incomes and livelihoods of small livestock producers, rural women and unemployed youth. • Number (and %) of livestock producers reporting 59 Purpose Sustainably improve the production and productivity of farmers/herders livestock and related SBMs in the milk and meat value chains. • • • • Outputs Livestock Development (SO 1)* • Increased quality production from a genetically upgraded, well managed and fed farmer/herder livestock; • Better agricultural services in adaptive research, extension and animal health delivered by agricultural service providers with improved capacity. • • • • production/yield increase (RIMS 2) (T 80%)**; Number of livestock producers reporting adoption of improved technologies (RIMS 2); Number of jobs generated by project supported small & medium enterprises (RIMS 2); Number of project supported enterprises operating after three years (RIMS 2) by gender (T 50%)**; Increase in marketed livestock products by target groups. Change in productivity per animal for sheep, cattle & goats by type of production system; People accessing facilitated advisory services (by gender) (RIMS 1); Households accessing facilitated animal health services (RIMS 1); and % households satisfied with service (extension & vet) provision. Monitoring Mechanisms and Information Sources • National Household Living Standard Surveys; • Baseline and socioeconomic surveys at startup; mid-term and project completion; and • Project monitoring and RIMS reports and PCR. • Project monitoring and RIMS reports; • Participatory monitoring by beneficiaries; and • Thematic market surveys on meat. As above, plus • RIMS annual reporting; • Annual Impact Assessment; • Annual progress and supervision reports; and • Thematic market surveys on meat, milk and dairy products. Assumptions • Continued Government • • • • commitment to pro-poor macroeconomic policies; Macroeconomic situation continues to improve; and Economic environment and climate remain conducive to market-based development. Continued government commitment to livestock development; and Effective cooperation between MAAR, MLA, MET and MI. As above, plus • MAAR continues to provide institutional support and capacity-building to livestock support services. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 2: UPDATED RESULT-BASED LOGFRAME Objective Hierarchy Objective Hierarchy Key Performance Indicators • % changes in range productivity from various range Activities Livestock development • Pilot system for animal registration and livestock data base established; • Production and distribution of improved breeds; • Quality control of milk, meat and dairy products instituted; • Upgrade the delivery of vet services; • Quality control and enhancement of locally produced vet drugs and vaccines; and • Upgrade the delivery of extension • Pilot system for animal registration established by treatments (re-seeding, fodder shrub plantations, land resting etc); • Number of groups (RMCs, LPICs) effectively operational/functional (RIMS 2); and • % Change of forages/area in semi intensive production zones. • Enterprises accessing facilitated non-financial services • • • • • • (T 50%)** (RIMS 1); Enterprises accessing facilitated financial services (T 50%)** (RIMS 1); Voluntary savers (T 30% women)*** (RIMS 1); Active borrowers (T 30% women)*** (RIMS 1); Value of voluntary savings (RIMS 1); Value of gross loan portfolio (US$) (RIMS 1); and Microfinance law adopted BY Mid-Term. • Good project performance in relation to appraisal and AWP/B targets; • M&E system operational by PY2; • Satisfactory disbursement of IFAD funds; and • Satisfactory disbursement of GOS funds. • • • • • • Mid-Term; Number of genetically improved animals produced and distributed (1,500 in Badia); Number of animals vaccinated and treated; Number of vet stations established (T 4 in Badia); Number of staff of service providers trained (extension & vet) (RIMS 1); Number of legislation on quality and safety standards of dairy & meat products adopted and operational (T2); Number of ESUs and AEUs reconfigured into multidisciplinary Extension Task Teams; As above, plus: • Business records of SBMs in milk collection and processing; and • Sanduqs reports. Assumptions As above, plus • Limited disputes on grazing rights among and within LPICs; and • Agriculture Support Fund allowed to finance LPICs drought mitigation plans. As above, plus • Availability and competence of cooperating SBMs; • Government support to microfinance continues; and • Willingness of banks to wholesale credit to sanduqs. As above, plus: • MAAR /IFAD Supervision, InterimReviews and Project Completion Reports. As above, plus: • Reports of collaborating project agencies: GCSAR, ICARDA, ACSAD and consultants; • Reports of collaborating project entities: DAH, DVD and consultants; and • Reports of collaborating project entities: DAE, DAH, DRW, DAP & consultants. As above, plus: • Continuous MAAR commitment to the project objectives; and • Strong oversight and supervision by GOS & IFAD. As for above ,plus: • Strong commitment of all implementing institutions. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 2: UPDATED RESULT-BASED LOGFRAME 60 Rangeland Improvement and Feed Resources Development (SO 1)*& (SO 3)* • Badia livestock producers accessing rangelands with increased productivity sustainably managed; and • Farmers in semi intensive systems increase production of feeds and forages. Development of SBM and Microfinance (SO 2)* & (SO 3)* • Financially viable SBM in various livestock value chains serving small producers accessing effective financial and nonfinancial support; • Increased access to sustainable microfinance through member owned and managed Sanduqs; and • Legal Framework for microfinance in place. Project coordination and management Effective project management and coordination. Monitoring Mechanisms and Information Sources As above, plus: • Records of the Awassi Sheep Network Associations; and • Records of RMCs. Objective Hierarchy services. Key Performance Indicators Monitoring Mechanisms and Information Sources Assumptions • Number of additional extension agents and veterinarians deployed; • Number of demonstrations conducted; and • Number of people trained in animal production practices and technologies (T 50%)** (RIMS 1). • Hectares of land improved through soil/water • • • • • • 61 • Development of SBM and Rural Finance • Provide training and capacity building to SBMs in livestock products value chain; and • Establish infrastructure and institutions for demand driven sanduqs. • • • • • • • • • • • • conservation methods (re-seeding (T 173,000 ha); fodder shrub plantations (T 63,000 ha); and land resting (T 300,000 ha)) (RIMS 2); Groups involved in NRM (RMCs/LPICs) formed/ strengthened (RIMS 1); % of NRM groups receiving training and support (T 50%)**; People in NRM groups (T 30% women)*** (RIMS 1); Groups (RMCs) with women in leadership positions (T 30%)***(RIMS 1); Land under improved management (RIMS 1); Number of groups (RMCs) operational/functional (RIMS 2); Number of groups (RMCs) collecting membership /grazing fees (T 75%)**; and Hectares of land reseeded and planted with shrubs. Number of mobile Jabbans trained; Number of SBMs investing in milk collection and processing equipment; Number of MCCs established; People trained in post production milk processing and marketing (T 30% women)*** (RIMS 1); People trained in business & entrepreneurship (T 30% women)*** (RIMS 1); Saving and credit groups (Sanduqs) formed/ strengthened (T 140) (RIMS 1); People in Savings & Credit groups (Sanduqs) formed/strengthened (T 30% women) ***(RIMS 1); Saving & Credit groups (Sanduqs) with women in leadership positions (T 30%)*** (RIMS 1); Staff of Sanduqs trained (RIMS 1); Sanduq performance ratios****; and Number (and %) of groups (sanduqs) operational/functional (T 80%)** (RIMS 2). • Reports of collaborating project entities: DAE, DAH, DRW, DAP & consultants. • Reports of collaborating project entities and consultants. As above, plus: • Reports of collaborating project entities and consultants. As above, plus: • MAAR strong commitment to rangeland development in the Badia continues. As above, plus: • Enabling policy framework for rural microfinance institutions maintained. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 2: UPDATED RESULT-BASED LOGFRAME Rangeland Improvement and Feed Resource Development • Improve Badia rangelands through low cost range productivity enhancing techniques; and • Pilot initiative for increased feed and fodder production in zones 3 and 4 through reseeding and forage shrub planting. Project coordination and management • Establish NPD and RPDs; • Conclude outsourcing arrangements with appropriate partners; and • Establish a result based M&E system. Key Performance Indicators • Ministerial decrees for establishment of PSR, NPD and PPDs issued by project effectiveness; • MOU and agreements/contracts with implementing partners signed; and • Result based M&E system operational by PY2. • • 62 • • Monitoring Mechanisms and Information Sources NPD and PPDs management meeting minutes and reports; NPSC and coordination meeting minutes and reports; NPD audit reports; and Participatory M&E reports. Assumptions • Gender factors included in staff and service provider contract conditions; and • Project funds allocation criterion approved and in use. *SO1, SO2 and SO3 refer to COSOP (2009) strategic objectives **Targets in yellow refer to COSOP (2009) Result Framework targets and milestones Targets in Bold alone are project targets *** Targets underlined are for women participation **** Sanduq performance ratios include: Breadth of outreach, Depth of outreach, % PAR (> 30 days), Return on Equity (ROE), Operating expense ratio (OER), Cost per client (or loan) THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 2: UPDATED RESULT-BASED LOGFRAME Objective Hierarchy ANNEX 3 - PROJECT COST SUMMARY TABLES (SYP Million) Local Foreign Total 63 A. Livestock Development Pilot system for animal registration & performance control Support to livestock genetic improvement & production of improved breeds Support to animal health and veterinary services Support to livestock extension services and training Subtotal Livestock Development B. Rangelands Improvement and Development of Feed Resources C. Development of BM and Micro Finance Support to SBM for dairy marketing and processing Support to Rural Microfinance Subtotal Development of BM and Micro Finance D. Project Coordination and Management Total BASELINE COSTS Physical Contingencies Price Contingencies Total PROJECT COSTS (US$ '000) % % Total % % Total For Base For Base Exch Costs Local Foreign Total Exch Costs 75 155 41 230 500 998 113 86 21 81 301 51 188 240 62 311 801 1 050 60 36 34 26 38 5 6 7 2 9 24 32 1 605 3 324 883 4 940 10 752 21 469 2 439 1 842 450 1 750 6 480 1 105 4 043 5 166 1 333 6 690 17 232 22 574 60 36 34 26 38 5 6 7 2 9 24 32 318 261 579 619 2 697 58 251 3 006 65 3 68 169 590 9 32 631 383 264 647 788 3 286 67 284 3 637 17 1 10 21 18 13 11 17 12 8 20 24 100 2 9 111 6 832 5 621 12 453 13 317 57 991 1 248 896 60 135 1 406 54 1 460 3 635 12 680 193 121 12 994 8 238 5 675 13 913 16 952 70 671 1 441 1 017 73 129 17 12 1 8 10 20 21 24 18 100 13 2 12 1 18 103 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY Table 1: Components Project Cost Summary Table 2: Expenditure Accounts Project Cost Summary (SYP Million) Local Total Local Foreign Total % % Total Foreign Base Exchange Costs 103 44 148 30 4 2 220 952 3 172 30 4 57 9 23 89 66 174 28 69 271 106 232 37 92 360 172 75 75 75 75 61 7 1 3 11 5 1 234 196 490 1 920 1 424 3 747 595 1 487 5 829 2 272 4 981 791 1 977 7 749 3 696 75 75 75 75 61 7 1 3 11 5 36 8 44 280 245 233 961 2 022 24 54 78 27 526 60 63 122 307 245 233 961 2 548 40 87 64 9 21 2 2 4 9 7 7 29 78 769 181 950 6 013 5 269 5 020 20 667 43 484 511 1 164 1 675 581 11 308 1 280 1 345 2 625 6 594 5 269 5 020 20 667 54 792 40 87 64 9 21 2 2 4 9 7 7 29 78 375 150 525 - 375 150 525 - 11 5 16 8 062 3 235 11 298 - 8 062 3 235 11 298 - 11 5 16 2 9 116 22 149 675 2 697 58 251 3 006 0 9 50 5 64 64 590 9 32 631 2 18 166 27 213 738 3 286 67 284 3 637 10 50 30 18 30 9 18 13 11 17 1 5 1 6 22 100 2 9 111 40 191 2 495 483 3 210 14 507 57 991 1 248 896 60 135 4 191 1 069 107 1 372 1 372 12 680 193 121 12 994 45 382 3 564 591 4 582 15 879 70 671 1 441 1 017 73 129 10 50 30 18 30 9 18 13 12 18 1 5 1 6 22 100 2 1 103 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY 64 I. Investment Costs A. Civil Works B. Equipment Equipment for livestock activities Communication equipment Office equipment & furniture Subtotal Equipment C. Vehicles D. Studies and technical assistance Studies Technical assistance Subtotal Studies and technical assistance E. Training F. Seed capital for Sanduqs G. Finance for SBM development H. Agricultural inputs Total Investment Costs II. Recurrent Costs A. Incremental salaries, allowances & incentives Salaries & Allowances Incentives Subtotal Incremental salaries, allowances & incentives B. Operation & maintenance and supplies Civil works O&M Other equipment O&M Vehicles O&M Annual Supplies Subtotal Operation & maintenance and supplies Total Recurrent Costs Total BASELINE COSTS Physical Contingencies Price Contingencies Total PROJECT COSTS Foreign (US$ '000) % % Total Foreign Base Exchange Costs Table 3: Expenditure Accounts by Components - Totals Including Contingencies (USD '000) 65 I. Investment Costs A. Civil Works B. Equipment Equipment for livestock activities Communication equipment Office equipment & furniture Subtotal Equipment C. Vehicles D. Studies and technical assistance Studies Technical assistance Subtotal Studies and technical assistance E. Training F. Seed capital for Sanduqs G. Finance for SBM development H. Agricultural inputs Total Investment Costs II. Recurrent Costs A. Incremental salaries, allowances & incentives Salaries & Allowances Incentives Subtotal Incremental salaries, allowances & incentives B. Operation & maintenance and supplies Civil works O&M Other equipment O&M Vehicles O&M Annual Supplies Subtotal Operation & maintenance and supplies Total Recurrent Costs Total PROJECT COSTS Taxes Foreign Exchange Support to livestock extension services and training Rangelands Improvement and Development of Feed Resources Development of SBM and Micro Finance Support to SBM for dairy marketing Support to and Rural processing Microfinance Project Coordination and Management Total - 652 474 288 2 116 - - - 3 530 1 388 48 1 436 369 926 926 - 375 375 - 331 798 918 2 048 200 114 114 737 1 892 1 892 - - 1 026 1 026 2 403 5 025 798 1 992 7 815 3 710 462 283 745 538 3 089 82 706 788 272 2 640 5 277 205 92 297 252 1 397 138 54 192 3 024 5 751 1 180 18 445 22 592 171 171 1 257 5 020 8 340 77 77 352 5 269 5 698 232 146 378 160 3 966 1 290 1 358 2 648 7 034 5 269 5 020 21 085 56 111 606 606 - - 1 285 1 285 663 663 - - 8 032 1 522 9 554 8 638 3 471 12 109 21 452 473 1 079 4 168 5 277 1 397 1 285 7 036 58 58 721 23 314 8 340 5 698 48 388 3 367 575 4 378 13 932 17 899 48 409 3 819 633 4 909 17 018 73 129 232 2 482 106 1 883 43 465 272 1 780 146 1 174 218 1 423 54 551 3 733 1 568 12 994 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY Pilot system for animal registration & performance control Livestock Development Support to livestock genetic improvement Support to & animal production health and of improved veterinary breeds services Table 4: Project Components by Year -- Base Costs (USD '000) 66 A. Livestock Development Pilot system for animal registration & performance control Support to livestock genetic improvement & production of improved breeds Support to animal health and veterinary services Support to livestock extension services and training Subtotal Livestock Development B. Rangelands Improvement and Development of Feed Resources C. Development of BM and Micro Finance Support to SBM for dairy marketing and processing Support to Rural Microfinance Subtotal Development of BM and Micro Finance D. Project Coordination and Management Total BASELINE COSTS Physical Contingencies Price Contingencies Inflation Local Foreign Subtotal Inflation Devaluation Subtotal Price Contingencies Total PROJECT COSTS Taxes Foreign Exchange 2011 2012 2013 Base Cost 2014 2015 2016 2017 Total 151 2 985 793 627 4 556 2 310 2 641 682 180 967 4 471 2 239 383 212 157 1 326 2 078 3 343 248 1 117 153 1 349 2 867 3 356 197 42 50 1 224 1 514 3 202 141 106 525 772 3 167 141 10 401 552 3 216 141 10 271 422 1 743 4 043 5 166 1 333 6 690 17 232 22 574 9 671 681 5 360 12 906 278 908 2 346 3 254 1 734 11 698 160 1 603 2 502 4 105 1 660 11 186 211 1 575 34 1 609 1 650 9 482 202 1 452 34 1 486 1 650 7 852 187 1 345 29 1 374 1 641 6 954 150 1 345 29 1 374 1 641 6 783 144 29 29 1 617 3 810 108 8 238 5 675 13 913 16 952 70 671 1 441 91 12 103 -71 31 13 216 224 29 253 -181 72 11 931 486 25 511 -399 112 11 508 787 16 804 -653 151 9 835 853 15 868 -710 157 8 196 935 8 943 -783 160 7 264 1 091 9 1 101 -917 184 7 111 902 7 910 -760 149 4 067 5 371 121 5 492 -4 475 1 017 73 129 874 4 778 362 3 829 197 1 985 70 949 57 667 3 293 3 294 2 199 1 568 12 994 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY 2010 Table 5: Project Components by Year -- Totals Including Contingencies (USD '000) 2010 2012 Totals Including Contingencies 2013 2014 2015 2016 2017 Total 157 3 054 838 635 4 684 2 391 2 680 688 183 998 4 549 2 272 404 220 163 1 384 2 171 3 427 260 1 142 161 1 423 2 985 3 451 209 43 52 1 302 1 607 3 310 152 109 566 827 3 291 153 11 434 598 3 357 153 11 295 459 1 815 4 168 5 277 1 397 7 036 17 879 23 314 10 674 684 5 457 13 216 927 2 350 3 277 1 833 11 931 1 640 2 507 4 146 1 764 11 508 1 601 36 1 637 1 762 9 835 1 472 36 1 508 1 772 8 196 1 345 32 1 377 1 770 7 264 1 345 32 1 377 1 779 7 111 32 32 1 762 4 067 8 340 5 698 14 037 17 899 73 129 67 Table 6: Disbursement Accounts by Financiers (USD '000) IFAD Amount Civil works Equipment for livestock activities Communication & office equipment Vehicles Studies Technical assistance Training Seed capital for Sanduqs Finance for SBM development Agricultural inputs Salaries Incentives Operation & maintenance Total PROJECT COSTS % 474.3 13.4 3 897.9 77.6 2 469.0 88.5 3 040.6 82.0 1 240.0 96.1 1 358.0 100.0 6 943.4 98.7 4 516.1 85.7 3 470.8 100.0 27 410.1 37.5 IFAD Grant Amount % 448.0 50.4 90.5 588.9 8.9 3.9 1.3 0.8 French AD Amount % 2 581.7 100.8 4 016.0 20 302.1 27 000.5 73.1 2.0 80.0 96.3 36.9 Beneficiaries Amount % 752.7 1 004.0 1 756.7 14.3 20.0 2.4 The Government Amount % 474.3 13.4 578.1 11.5 321.0 11.5 668.9 18.0 0.0 783.1 3.7 8 638.2 100.0 4 909.2 100.0 16 372.7 22.4 Total Amount % For. Exch. 3 530.3 4.8 1 059.1 5 024.7 6.9 3 779.6 2 790.0 3.8 2 098.7 3 709.5 5.1 2 280.4 1 290.4 1.8 514.8 1 358.0 1.9 1 174.5 7 033.9 9.6 616.5 5 268.8 7.2 5 020.0 6.9 21 085.1 28.8 8 638.2 11.8 3 470.8 4.7 4 909.2 6.7 1 470.2 73 128.9 100.0 12 993.8 Local Duties (Excl. Taxes) & Taxes 2 471.2 667.0 370.4 760.1 775.6 183.5 6 417.4 5 268.8 5 020.0 21 085.1 8 638.2 3 470.8 3 439.0 58 567.1 578.1 321.0 668.9 1 568.0 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY A. Livestock Development Pilot system for animal registration & performance control Support to livestock genetic improvement & production of improved breeds Support to animal health and veterinary services Support to livestock extension services and training Subtotal Livestock Development B. Rangelands Improvement and Development of Feed Resources C. Development of BM and Micro Finance Support to SBM for dairy marketing and processing Support to Rural Microfinance Subtotal Development of BM and Micro Finance D. Project Coordination and Management Total PROJECT COSTS 2011 Local IFAD Amount IFAD Grant % Amount % French AD Amount Beneficiaries The Government % Amount % Amount % Total Amount % Duties For. (Excl. & Exch. Taxes) Taxes A. Livestock Development 68 Pilot system for animal registration & performance control 2 857 68.5 0 - 0 - 0 - 1 311 31.5 4 168 5.7 2 482 1 454 232 Support to livestock genetic improvement & production of improved breeds 1 879 35.6 0 - 2 818 53.4 0 - 581 11.0 5 277 7.2 1 883 3 288 106 Support to animal health and veterinary services 1 354 96.9 0 - 0 - 0 - 43 3.1 1 397 1.9 465 890 43 Support to livestock extension services and training 6 477 92.0 0 - 288 4.1 0 - 272 3.9 7 036 9.6 1 780 4 985 272 12 566 70.3 0 - 3 106 17.4 0 - 2 207 12.3 17 879 24.4 6 610 10 617 653 2 448 10.5 0 - 19 878 85.3 0 - 987 4.2 23 314 31.9 1 174 21 994 146 218 Subtotal Livestock Development B. Rangelands Improvement and Development of Feed Resources C. Development of SBM and Micro Finance Support to SBM for dairy marketing and processing 2 604 31.2 498 6.0 4 016 48.2 1 004 12.0 218 2.6 8 340 11.4 1 423 6 699 Support to Rural Microfinance 4 855 85.2 91 1.6 0 - 753 13.2 0 - 5 698 7.8 54 5 643 0 7 458 53.1 589 4.2 4 016 28.6 1 757 12.5 218 1.6 14 037 19.2 1 477 12 343 218 Subtotal Development of SBM and Micro Finance D. Project Coordination and Management Total PROJECT COSTS 4 937 27.6 0 - 0 - 0 - 12 961 72.4 17 899 24.5 3 733 13 614 551 27 410 37.5 589 0.8 27 000 36.9 1 757 2.4 16 373 22.4 73 129 100.0 12 994 58 567 1 568 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY Table 7: Components by Financiers (USD '000) Table 8: Expenditure Accounts by Financiers (USD '000) 69 I. Investment Costs A. Civil Works B. Equipment Equipment for livestock activities Communication equipment Office equipment & furniture Subtotal Equipment C. Vehicles D. Studies and technical assistance Studies Technical assistance Subtotal Studies and technical assistance E. Training F. Seed capital for Sanduqs G. Finance for SBM development H. Agricultural inputs Total Investment Costs II. Recurrent Costs A. Incremental salaries, allowances & incentives Salaries & Allowances Incentives Subtotal Incremental salaries, allowances & incentives B. Operation & maintenance and supplies Civil works O&M Other equipment O&M Vehicles O&M Annual Supplies Subtotal Operation & maintenance and supplies Total Recurrent Costs Total PROJECT COSTS % IFAD Grant Amount % French AD Amount % Beneficiaries Amount % The Government Amount % Total Amount % For. Exch. Local (Excl. Taxes) Duties & Taxes 474.3 13.4 - - 2 581.7 73.1 - - 474.3 13.4 3 530.3 4.8 1 059.1 2 471.2 - 3 897.9 706.2 1 762.8 6 366.9 3 040.6 77.6 88.5 88.5 81.5 82.0 448.0 448.0 - 8.9 5.7 - 100.8 100.8 - 2.0 1.3 - - - 578.1 91.8 229.2 899.0 668.9 11.5 11.5 11.5 11.5 18.0 5 024.7 798.0 1 992.0 7 814.7 3 709.5 6.9 1.1 2.7 10.7 5.1 3 779.6 600.3 1 498.4 5 878.3 2 280.4 667.0 105.9 264.4 1 037.3 760.1 578.1 91.8 229.2 899.0 668.9 1 240.0 1 358.0 2 598.0 6 943.4 4 516.1 23 939.3 96.1 100.0 98.1 98.7 85.7 42.7 50.4 50.4 90.5 588.9 3.9 1.9 1.3 1.0 4 016.0 20 302.1 27 000.5 80.0 96.3 48.1 752.7 1 004.0 1 756.7 14.3 20.0 3.1 0.0 783.1 2 825.3 3.7 5.0 1 290.4 1 358.0 2 648.4 7 033.9 5 268.8 5 020.0 21 085.1 56 110.7 1.8 1.9 3.6 9.6 7.2 6.9 28.8 76.7 514.8 1 174.5 1 689.3 616.5 11 523.6 775.6 183.5 959.1 6 417.4 5 268.8 5 020.0 21 085.1 43 019.1 1 568.0 3 470.8 3 470.8 100.0 28.7 - - - - - - 8 638.2 8 638.2 100.0 71.3 8 638.2 3 470.8 12 108.9 11.8 4.7 16.6 - 8 638.2 3 470.8 12 108.9 - 3 470.8 27 410.1 20.4 37.5 588.9 0.8 27 000.5 36.9 1 756.7 2.4 47.7 409.3 3 819.1 633.0 4 909.2 13 547.3 16 372.7 100.0 100.0 100.0 100.0 100.0 79.6 22.4 47.7 409.3 3 819.1 633.0 4 909.2 17 018.1 73 128.9 0.1 0.6 5.2 0.9 6.7 23.3 100.0 4.8 204.7 1 145.7 115.0 1 470.2 1 470.2 12 993.8 42.9 204.7 2 673.4 518.0 3 439.0 15 547.9 58 567.1 1 568.0 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 3: PROJECT COST SUMMARY IFAD Amount THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 4: PROJECT ORGANIZATIONAL CHART ANNEX 4 - PROJECT ORGANIZATION CHART Ministry of Agriculture and Agrarian Reform (MAAR) N AT IONA L PS C DA P DAH Se rvi ce Pro vid ers NP D DVD Ad ministr ation & Finance M&E DA E DRW G CSAR Livestock Range lands Exten sion SBMs a nd Finan ci al S ervices G ender O THERS PPDs PROVIN CIA L DAARs Dai ry Pro ce ssing (SB Ms) and Sa nduq s M&E Technical follow-u p: Gend er, Extension , Livestock, V ete rinar y Dairy Pr ocessin g San duqs BE N EF IC IARI E S Leg end: M&E A SN NPD P PD P SC Monitorin g & E va luation Awasi Shee p Ne tworks National Pro ject Dire ctora te Pro vin cia l P roject Dir ector ate Pro ject Steer ing Committe e DAP DAH DVD DAE DRW DAA R G CS AR MOU/Contractual Relationsh ip Coo rdina tion Rela tio nship Dire ct Re lationship 71 Di recto rate of An imal Pro ductio n Di recto rate of An imal Health Di recto rate of Ve te rinar y Dr ug Di recto rate of Ag ricultural Extension Di recto rate of Rura l W omen Provincial Directora te of Agricul tur al and Agr arian Reform Gen eral Commission for Scientific A gricultural Resea rch ANNEX 5 - KEY FILES Table 1: Poverty and Rural Sector Issues Priority Areas All farmers, but especially smaller fragmented farms 73 Low productivity of the livestock All livestock producers and particularly small herders Major Issues • Poor irrigation practices and high rate of water losses; • Declining groundwater levels; • Insufficient data and lack of appropriate hydrogeological and groundwater information system; • Poor groundwater management; excessive and unsustainable overexploitation; • Limited farmer skills in modern irrigation techniques; • Poor maintenance of on-farm irrigation equipment; • Lack of specialized farmer groups in irrigation and water management. • Low productivity per animal unit; • Limited feed resources and poor animal nutrition; • Genetic erosion of local breeds and particularly cattle; • Inefficient herd management; • Outdated surveillance and epidemiology studies; • Weak quality control of locally produced veterinary drugs and Vaccines; • Outdated legislation on dairy products quality and safety standards; • Outdated and traditional and non hygienic milk collection and processing; • Lack of animal registration and performance control system; • Weak capacity in livestock extension and transfer of technologies to farmers and herders; • Limited private sector investment in livestock products and particularly in the dairy value chain. Actions Needed • Promotion of advanced on-farm irrigation systems and water conservation technologies; • Provision of TA and support to water users for design and installation of on-farm modern irrigation systems; • Encourage water users, under the tertiary canals/groundwater wells/springs, to establish WUAs; • Support for groundwater studies and hydro geological surveys; • Support for development of a water resources information system for water basins. • Support to livestock producers to exploit the genetic potential of local Awassi sheep, Shami goat and Damascene cattle; • Better integration of fodder crops in farming systems; • Improve the nutritional value of crop and food processing residues; • Enhance existing capacity in genetic improvement and production of reproducing animals; • Use artificial insemination and high quality semen in genetic improvement programmes; • Update existing surveillance and epidemiology studies; • Elaborate and adopt an advanced legislation on quality control of animal products; • Establish an animal registration and performance control system; • Upgrade the current capacity of quality control of locally produced vaccines and veterinary drugs; • Promote investment by private sector in modern milk collection and processing systems; • Reorganize, strengthen the capacity of livestock extension and retrain extension agents and veterinarians. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES Low productivity of irrigated agriculture Affected Group Table 1: Poverty and Rural Sector Issues (cont’d) Affected Group Smallholder farmers and livestock holders Employment opportunities All disadvantaged rural poor, particularly landless men, youth and women Agricultural research and extension service Smallholder farmers and livestock holders • Recurrent droughts and degradation of grazing resources for livestock; • Excessive use of Badia River and overgrazing of natural vegetation; • Soil erosion and declining soil fertility; • Drought and low soil fertility resulting in infrequent harvests on rainfed land; • Inappropriate land use and management of land and water resources. 74 Range management, soil and water conservation Major Issues • Holdings insufficient to sustain families; • Little off-farm employment opportunities in rural areas; • Workforce under-skilled, less educated, severely under employed and lower paid; • Low income keeps them in poverty. • Focus of research and extension not farmerled; • Lack of farmer confidence in the extension services because of its enforcement role with respect to fines and production planning; • Poor cropping techniques and limited use of improved technologies for cultivation of nonstrategic crops. Actions Needed • Investment in natural resource (soil, water and rangelands) development and management; • Enforcement of environmental impact assessments at the design stage, mid term and at completion of programmes and projects; • Adoption of land-use planning and participatory approach; • Environmental education for, and awareness-raising of, rural communities; • Supporting sustainable income generating activities to reduce resource over-exploitation; • Introduction of climate change-related adaptation measures. • Off-farm SME development/creation with resulting increase in jobs and family income; • Improve education and skills of under-skilled workforce; • Availability of capital for micro-and small enterprises; • Availability of non-financial business services. • Intensify demand-led research and extension effort; • Build extension capacities to promote communitydriven development, crop diversification, marketing and value addition; • Create job opportunities outside farm; • Encourage, foster and support farmer enterprise groups; • Separate the extension and enforcement roles of the Extension Service. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES Priority Areas Table 1: Poverty and Rural Sector Issues (cont’d) Priority Areas Affected Group Gender mainstreaming Poor rural women and men Access to rural microfinance Smallholder farmers and Bedouin herders, rural women, landless poor and unemployed youth • Limited skills among government and farmers to identify market opportunities; • Lack of clear signals for price, quality and quantity of rural produce; • Poorly developed supply-chain services and private markets; • Limited market infrastructure (collection, processing, cold storage, rural roads); • Limited crops diversification; • Lack of skills in post-harvest storage, valueadding and agro-processing activities; • Weak bargaining position and negotiating skills of farmers. • Higher illiteracy rates; • Large family size; • Lack of income-generating activities. • Rigid and inappropriate collateral requirements; • Reluctance of commercial banks to extend credit to small farmers; • Limited supply of microfinance. Actions Needed • Identify opportunities for expansion of markets, for local sale and for export; • Development of network of rural business service providers, capable of supplying range of services; • Help farmers to organize themselves into marketing groups, engage with supply-chain entities and improve bargaining position; • Diversification into higher-value crops, the market for which is not controlled by the monopolies; • Promote on- and off-farm SMEs and farmer skills, including post-harvest, value-adding and agroprocessing; • Generate and disseminate timely market information; • Develop market infrastructure. • Literacy and skills training; • Gender mainstreaming of project activities; • Greater access of rural women to financial services and provision of gender-friendly technologies; • Ensure women’s representation and participation in farmer-based organizations and cooperatives. • Improve the business and investment climate for onand off-farm SMEs; • Medium- and long-term on-lending funds to be made available for production and investment into small holders and SMEs; • Promote microfinance through involvement of financial intermediaries, such as MFIs, commercial banks and NGOs; • Promote more innovative financial products to be offered by banks to overcome collateral difficulties. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES Smallholder farmers, and livestock holders 75 Weak market linkages for nonstrategic crops and livestock production Major Issues Table 2: Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis Institution Strengths • National and large field presence; Ministry of Agriculture and Agrarian Reform • Good project implementation experience; • Good discipline for implementation of instructions; • Organized to address gender issues. • Highly qualified technical staff; Ministry of Irrigation • National and large field presence; 76 • High technical competence. State Planning Commission (Prime Minister’s Office) Ministry of Environment • Decision-makers ready and willing to speed up reforms and modernization • Top-down attitude of most staff; of public offices, and to adopt • Limited understanding of requirements of participatory approaches; market economy; • Decision to separate enforcement • Limited community development skills from extension has been made but and participatory processes; not yet implemented; • Overstaffing; • Extension service focused on enforcement • Difficulty in downsizing public offices of plans and penalization of farmers. and re-orienting extension services. • Limited resources and political will to control over-extraction of groundwater; • Limited skill for participatory irrigation management and formation of WUAs. • Increased ownership and dedication • to poverty alleviation; • • National policy decision and development planning mandate; • • Ensures liaison with donor community; • • Responsible for overall coordination of all external assistance. • Comprehensive mandate and legal base for environment and natural resources management. Opportunities/ Threats Limited presence in the field; Limited authority over line ministries, particularly at field level; Lack of operational capacity to ensure adequate M&E of agreed indicators; Slow capacity-building process to handle transition to market economy. • Poor technical competence; • Weak field presence; • Limited budget to respond to new legislative framework. • New water laws provide additional legal instruments to better control and manage water resources; • Political pressure at the local level and inability to execute stringent groundwater management measures. • Transformation from state-controlled central planning to market-oriented economy; • Strong commitment by the Prime Minister’s Office to manage external assistance and coordinate inflows of development assistance. • Mandate and priority for sustainable development; • Challenging state of the environment; • Membership of international conventions and donor support. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES • Strong ownership and dedication to agricultural development; Weaknesses Table 2: Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis (cont’d) Institution Weaknesses • Mandate to work with farmers and rural businesses; • Widest banking outlet in Syria. • Funding entirely dependent on Government; limited flexibility and sustainability of operations; • Lending based on government policies to increase production outputs and not on economic opportunities; • Stringent collateral requirements that render lending inaccessible to poor and rural women. • Strong control by Government; • Limited participatory approach; • Strong control by relatively large producers; • Limited representation of small producers and women in management; • Cannot mobilize members for professional/technical activities. • Not well entrenched in history of agriculture in Syria; • Perceived as sectarian; • Lack of experience. Agricultural Cooperative Bank • Large membership; • Ability to access services and inputs at subsidized rates. • Ability to mobilize members for Agricultural cooperatives services and subsidies 77 • • • • • Fairly large membership; Members real private farmers; Financial autonomy; Chamber of Agriculture Entrepreneurship mentality; Professional activities: insurance of animals. • Strong connection to Government for rights advocacy; General Union of Women • Large presence in the field. General Union of Farmers National NGOs • Legal base for establishment framed; • Strong government support for capacity-building. • High dependence on Government; • Limited participatory approaches. • Limited number of local NGOs; • Limited exposure and cooperation with international NGOs; • Lengthy procedures for establishment. • Actions/results so far weak; • Lengthy procedures for establishment. Opportunities/Threats • Government’s willingness to reform ACB; but process of reform, capacity-building, and reorientation of banking operations is low; • High demand for micro, small and medium size loans in rural areas. • Willingness to adoption of participatory approach and to participate in rural and community development activities; • Syndicate nature more than professional organization. • Willingness to participate in success of ILDP; • Capacity to mobilize farmers for technical; • Appropriation by big farmers only. • Willingness to adopt participatory approaches and participate in rural and community development activities; • Limited representation of small producers and women in community resources management. • Increased government recognition of NGOs role in community development; • Possibilities of building on localized NGO activities; • Loan funding to NGOs possible; • Associations recognized only for services offered and not for constituency ‘’gap-fillers’’. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES Strengths Table 3: Activities of Other Partners in Development – Ongoing and Planned Donor/Agency UNDP/GEF UNDP/JICA 78 FAO/Italian Cooperation Italian Cooperation Complementarities/ Synergy Potential • Eastern Region: development of regional plan and establishment of regional authority. • Ongoing • Highly complementary • Support for Business Innovation and Development Centre; capacitybuilding and TA for local entrepreneurs. • Deir Ezzor Governorate: marketing, feasibility studies; business development and technical needs. • Ongoing • Complementary • Sustainable land management. • Eastern Region: coordination and scaling up of land management activities in rangeland management and irrigation. • Proposed pipeline • Highly complementary • Rural community development and microfinance. • Jebel Al-Hoss: promotion and development of community-based microfinance. • Completed • Lessons learned • Water resources management; • Brada-Awaj and Coastal basins, including strengthening and building up capacity of WRIC; development of modernized water resources information systems in each region and at the national level. • Ongoing • High synergy – water resources information system can be adjusted, upgraded and used in Eastern Region. • Development of efficient irrigation techniques and extension. • Nationwide; water use efficiency; onfarm water management methods; capacity-building and training. • Ongoing • Highly complementary to on-farm irrigation promoted in Eastern Region. • Support to small farmers and herders on marginal and degraded land. • Ten governorates with focus on Badia and adjacent lands. • Ongoing • High synergy • TA and capacity-building • Formulation of the National Programme for Food Security. • Ongoing • High synergy • Agropolis: ALGHAB Programme Development • ALGHAB area. • Formulation • Lessons learned • Institutional development of organic agriculture. • Nationwide: TA and support for sustainable development of organic farming. • Ongoing • Complementary • Support to establishment of microfinance. • Nationwide. • Pipeline • synergy and complementarity JICA FAO Status • Regional development planning; institution-building. • Water supply and urban water distribution projects World Food Programme Project/Programme Coverage THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES UNDP Nature of Project/Programme Table 3: Activities of Other Partners in Development – Ongoing and Planned (cont’d) Donor/Agency GTZ Project/Project Coverage Status • TA for efficient use of water in irrigation and drinking water supply systems. • Nationwide for irrigation and cities of Aleppo and Damascus for drinking water supply. • Ongoing • Participatory range management • BRDP in nine governorates, cofinanced with IFAD. • Ongoing • Rural, agriculture and livestock development, community-based development, and microfinance; participatory land reclamation, soil conservation and water harvesting. • IRDP, cofinanced with IFAD • Ongoing • Institution-building EU 79 • Human resources development: modernization of vocational education and training. • National: upgrading the capacity of central government bodies to conduct policies in line with liberalization of economy; achieving efficient banking and monetary system, and market-oriented economy. • National; establishment of vocational education and training system; to be used in support of the private sector with SMEs and restructuring of the public enterprise sector. Complementarity/Synergy Potential • Synergy • High synergy, lessons learned are of value for expansion of activities in future. • High synergy; approaches to community development and soil and water conservation. Lessons learned are valuable to the Eastern Region Project. • Ongoing • Low to medium synergy • Ongoing • Medium synergy World Bank • Technical Assistance • Thematic analysis on reform of agriculture and irrigation sectors. • Ongoing • High synergy Spanish Agency for International Cooperation • Rural development • Raqqa Governorate, micro-credit and rural TA. • Potential • Medium to high synergy. OFID • Community empowerment; farm productivity raising; natural resources management and irrigation; SME development. • NERRDP (cofinanced with IFAD). Three governorates: Hassakeh, Deir Ezzor and Raqqa. • Ongoing • High synergy ICARDA • Research and TA • Agriculture, water management, livestock development, value chain and HMAPs • Ongoing • High synergy ACSAD • Research and TA • Agriculture, water management, livestock development. • Ongoing • High synergy ICBA • Research • Saline and marginal water. • Ongoing • High synergy THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES AFESD Nature Of Project/Project Table 4: Target Group Identification, Priority Issues and Potential Response Typology Poverty Levels And Causes • High dependence ratios with large Small farmers and Bedouin herders • • • • 80 • • Small livestock owners • Insufficient fodder production due to drought; • Risk of livestock losses from disease and drought; • Inappropriate research and extension systems; • Limited market access. Priority Needs COSOP Response • Men and women work as casual labourers locally; • Temporary labour migration to neighbouring countries; • Public works projects for cash, food or vouchers; • Sale of assets, including livestock; • Support from relatives; • Informal credit from friends and input suppliers. • Technical packages/training; • Improved access to land and other productive resources (especially water); • Better access to rural finance and markets; • Institutional support to users and/or producer associations; • Better access to off-farm income opportunities. • Promotion of demand-driven, pro-poor research and extension, with more emphasis on non-strategic crops and crop-livestock integration; • Promotion and support for improved on-farm, efficient water irrigation technologies; and promotion of water saving mechanisms and users’ associations; • Strengthening capabilities for improved groundwater management; • Promotion of microfinance through best practices and pilot initiatives; • SME development; • Environmental awareness training. • Work as casual labour locally; • Labour migration to neighbouring countries; • Sale of animals and other assets; • Loans from relatives and traders. • Drought-resistant fodder varieties for animal consumption; • Pro-poor research and extension and training; • Better access to rural finance and off-farm income-generating opportunities; • Better access to cultivable land and water. • Environmental awareness; • Introduction of droughtresistant seed varieties and species; • Better extension for crops and livestock; • Technical training for off-farm activities; • Promotion of micro finance; • Empowerment of communitybased associations. THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES • • • • families and many dependants; Poor nutritional status; Low adult literacy rates; High fertility rates; Limited productive and household assets; Limited holding size; Limited and untimely availability of irrigation water; Depletion of groundwater resources; Limited use of improved cropping practices; Limited access to markets; Limited opportunities to diversity livelihoods into non-farm activities. Coping Actions Table 5: Stakeholders Matrix/Project Actors and Roles Livestock Development 81 Range Management in Badia SME and Rural Finance Coordination and Management Intervention by sub/component • Animal performance control system • Quality control of dairy & meat products • Genetic improvement • Animal health delivery • Surveillance and epidemiology studies • Control of veterinary drugs • Quality enhancement of local vaccines • Agriculture and livestock extension Project Coverage Possible Contractors Other Partners • ICARDA, ACSAD, Herder’s Associations • Milk collectors and processors • Herders Networks • GCSAR,ACSAD • Nationwide • MAAR, DAP • Nationwide • MAAR, MLA, MI • GCSAR, private contractors • Private contractors • Nationwide • Nationwide • MAAR,GCSAR • MAAR, DAH, DVD • ICARDA, ACSAD • Private veterinarians • Nationwide • MAAR, DAH, DVD • Private veterinarians • Nationwide • MAAR, DVD, DAH • Private veterinarians • ACSAD, GCSAR, universities • Ministry of Health • Nationwide • MAAR, DAH, DVD • Private contractors • Universities • Nationwide • MAAR, DAE, DAP, DAH, DRW • MAAR, DAP, DAH, DVD, DRW. • MAAR, MET, MI • Private input dealers • ICARDA, ACSAD, FAO • Private contractors • ICARDA, FAO • Private contractors • Private milk collectors and processors ICARDA; • UNDP, Private Banks, Donors. • Range improvement • Badia ( ASZ 5) • SMEs in dairy value chain • Rural microfinance • Nationwide • Coordination and Management Key Institutions involved • Nationwide • Nationwide • MAAR, Central Bank, SPC. • MAAR, MET, MI, MLA, GCSAR. • Private contractors • GCSAR, ICARDA THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 5: KEY FILES Component THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 6: ENVIRONMENTAL SCREENING AND SCOPING NOTE ANNEX 6 – ENVIRONMENTAL SCREENING AND SCOPING NOTE A. Project Description 1. The goal of the Integrated Livestock Development Project is to raise the incomes of rural poor households (nomads, small farmers, rural women and unemployed youth), engaged in livestock production and to improve their livelihoods. The project seeks to improve livelihoods that depend on livestock production by increasing productivity per animal unit through: (a) improving rangeland productivity and livestock integration in rainfed farming systems; (b) strengthening livestock production services; and (c) supporting enterprise development along the value chain of livestock produce, with focus on marketing and processing. 2. As a general rule, the potential project’s target group includes all smallholders of livestock provided they are not very large landholders or owners of other significant assets. The potential eligible target group for a long term rural poverty reduction livestock development program, of which ILDP is a first phase, is thus estimated at 306 000 household producers, to cover the following six categories: (a) transhumant households across governorates in AZ5 (Badia); (b) semi-sedentary households in agriculture zone 4 who are primarily dependent on livestock and holding less than 50 head of sheep per nuclear family; (c) landless livestock holders in agriculture zones 3 and 4 who have less than 50 sheep or 4 cattle; (d) small landowners with less than 1 ha of marginal or saline irrigated land or 3 ha of rainfed land in settlement zones 3 and 4, who have less than 5 cattle or 20 sheep/goats; (e) poor women whose nuclear household is lacking assets although they are part of an extended household which may not be part of the target group; (f) small-scale milk collectors and processors, and (g) Unemployed poor young women and men who are interested in establishing livestock based micro-enterprises. Women headed households in the first four categories would be given priority for support. 3. ILDP would be implemented nationally over an 8-year period, from 2011 through 2019. The Project includes three primary components, and project management Social and environmental benefits are outlined in the design document as follows: 4. Component 1. Livestock Development. This component provides support to technical livestock services (such as data bases and quality control, research on genetic improvements, and provision of animal health services) that benefit all livestock holders. In terms of targeted activities benefiting individuals or households, the component includes training of livestock holders, with a focus on small producers, in quality control and improvement of the quality of milk products. In addition to training, poor rural men and women would benefit from the distribution of improved Awassi rams and from Artificial Insemination for cattle, which would be provided as a priority to poor people owning less than 50 sheep and with no other assets, and in particular to poor women owning small herds. A number of measures are proposed that would ensure effective outreach of extension activities to rural women. 5. Enhancement of utilization of crop and food processing residues, promotion of forage crops, and improved herd management are all techniques which would be focused on the 83 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 6: ENVIRONMENTAL SCREENING AND SCOPING NOTE target group, ensuring that the pilot testing of equipment is done primarily with small holders exclusively dependent on their few animals, particularly in the badia as well as with women throughout the country, and that training and feed packages are all primarily designed for and provided to priority target group members. 6. Component 2. Rangeland and livestock development in the badia. This component focuses on the badia rangelands (and on groups of transhumant and seminomadic sheep holders) and would operate using the same principles as the current project. The formation of groups is based on homogenous communities and would therefore include small, medium and larger herders. However, given that the vast majority of livestock herders are small, these herders would be the main and prime beneficiary of all activities within this component. In accordance with the policy of IFAD’s badia project, it would be the policy of ILDP to give priority to women for most of the labouring jobs in planting of bushes, which is a major contribution to household income and a form of empowerment to women. 7. The one activity that would be directed at individuals, namely the distribution of the improved Awassi rams, would be specifically targeted at the households with the smallest numbers of sheep, and at women managing and controlling small herds. 8. Component 3. Enterprise development and rural finance. Most of the activities under this sub-component concern the establishment, expansion or otherwise support to small and micro enterprises, and training to improve quality, as well as the provision of micro-credit. These would be aimed primarily at the target group who would have priority of access to funds and to technical training and support. 9. Existing medium-sized milk collectors and processors working with the poor would also be supported, given that they provide an important service to the poor and would thus be able to improve the living standards of the poor. With respect to financial support, the project shall assess demand and shall ensure that priority of allocations is given to target group members- with remaining amounts or support given to others on the basis of the size and scope of enterprises. With respect to milk collection systems, priority shall go to those enterprises that would serve the largest number of target group members thus enabling them to improve the marketing of their milk. 10. With respect to microfinance, the project shall expand community-based mechanisms based on the sanduq model, as implemented in the IFAD-funded Jabal-al-Hoss and Idleb programmes. The sanduqs would be established in communities selected on criteria of poverty, interest and potential ability to manage their sanduq well. These would be established in the 5th settlement zone in the framework of the livestock associations, again selecting those who are interested, able and include the highest percentage of poorest members [i.e. those holding less than 50 sheep]. In the other settlement zones, poor villages would be selected on the same basis of interest, poverty and ability to manage the sanduq. 11. Component 4. Implementation and Institutional Arrangements. Through this component the project would attempt to improve the gender balance among its staff as well as give opportunities to unemployed younger people, graduates and others, supplementing their existing qualifications with additional technical and other training. In addition, the project directorates at national and regional levels shall include a gender officer in each office on a full-time basis, and a targeting officer on a ‘half-time’ basis (i.e. one officer would cover two directorates). 84 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 6: ENVIRONMENTAL SCREENING AND SCOPING NOTE B. Major Site Characteristics 12. The project is national in coverage across all governorates of Syria, focusing its interventions on villages with highest overall rural poverty rates where livestock keeping is a major source of livelihood. Given their high level of involvement in livestock related activities, women would be the main beneficiaries from all project interventions aside from support to existing milk collection centres. The cumulative eligible target group under the Project is estimated at 311,000 households in the 1,260 poorest villages, roughly distributed as follows: 145,000 small sheep holder households, 160,000 small cattle holders, 1,000 buffalo herders and 5,000 milk collectors and processors. 13. The country’s livestock population has increased markedly in recent decades, notwithstanding a marked destocking (largely a result of climatic trends and of rising input and feed prices) over the past few years. Sheep numbers rose from 14 million in 1999 to 19 million in 2008; the first year of serious destocking, 2008 saw an official drop of 16 per cent from 2007 and up to 50 per cent according to informal estimations. Cattle numbers have increased steadily, from 984,000 animals in 1999 to 1.1 million in 2008; again the latter figure represents a drop in the last year of 5 per cent over 2007. This demonstrates the vulnerability of small livestock keepers to drought and other weather events that are exacerbated by climatic trends. 14. Geographically and agro-ecologically, Syria is divided into five Agricultural Settlements Zones (ASZs). These ASZs are based on a number of variables of which the amount and reliability of annual precipitation and altitude are the most critical factors. The high potential areas (ASZs I and II), receiving 350 mm or more rainfall annually, are concentrated in the western parts of the country and make up about 27 per cent of the total area. The modest and low potential areas (ASZs III and IV) receiving progressively less rainfall annually (350 to 200 mm) and are located mainly in the central and eastern part of the country, making up 18 per cent of the total area. ASZ V receiving less than 200 mm of rainfall is unsuitable for cultivation, and forms to the Badia rangelands where sheep and camels are raised and makes up to 55 per cent of all land in Syria. 15. Of the total 18.5 million ha of land in Syria between 8 and 10 million ha are considered to be pasture and steppe, and forms what is known as the 5th settlement zone as well as the more marginal areas of the 4th settlement zone. The large rangeland steppe area officially listed as the 5th settlement zone is the main location for winter residence and pasture for the sheep breeders of Syria. Since the early 1990s cultivation has been illegal in that zone (with the exception of the irrigated areas connected to the Euphrates and Tigris rivers, those irrigated by boreholes as well as some areas which have been ‘privatized’ through the cultivation process). C. Issues in Natural Resource Management 16. Project activities need to be designed while taking this into consideration methods to increase pasture and improve living conditions through rainwater retention systems and considering the most sustainable use of water. Climate change, lessons learned with respect to sustainable use and effective management of range resources, and use of water for small and medium enterprises are some of the main issues that needed to be addressed by the ILDP. Climate change 17. Climate variability has been pronounced in Syria. The last ten years have been years of drought with two exceptions. News about Syria in the last 3 years has focused on the issue of drought and the worsening conditions for farmers and livestock keepers. Climatic trends are already strongly worsening the situation in rural areas with respect to availability of water for agriculture (both rainfed and irrigated), amount of pasture available for livestock and worsening desertification. As a result, the rangeland’s capacity to sustain livestock units has dropped. 85 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 6: ENVIRONMENTAL SCREENING AND SCOPING NOTE Range Degradation and Tenure Systems in the Steppe 18. One of the primary issues of concern in the management of range resources is the risk of their overgrazing or overuse, degrading soils and vegetation and jeopardizing the sustainability of the entire eco-system, or increasing competition with wildlife for forage and water, thereby resulting in wildlife reduction. The Syrian rangeland has been overgrazed in the past three decades as a result of various factors, including the increase in animal numbers and changes in management systems applied the area. Once the State asserted its ownership over uncultivated lands throughout the country, earlier ‘tribal’ range management mechanisms became difficult to enforce, and there was effectively a ‘free for all’ situation where anyone from anywhere could come and graze their animals wherever and whenever they liked. Former ‘resting’ periods were ignored and the pasture soon became exhausted, in some areas almost beyond recovery. 19. The rejuvenation of environmentally sound approaches to managing the range in harmony with traditional management practices is critical, considering (a) the importance of nomadic and semi-nomadic use of the rangeland pastures in such delicate environment; (b) the fact that it is the only viable mechanisms to ensure long term sustainable use of the steppe rangelands; and (c) the increasing demand for food from the growing population. 20. Towards this end, ILDP interventions involve controlling the number of animals in the long run, managing the rangeland through planting fodder species and enforcing rest periods, improving animal health and productivity of the limited resources, and providing additional support to ensure that transhumant and semi-nomadic lifestyles continue to be viable. Drawing on the BRDP experience, technical assistance would be expanded in seeds production, resting, reseeding, planting and watering; and sustainable management approaches would be put in place in close collaboration of the range users. 21. This steppe rangeland, which covers between 8 and 10 million ha of the 18.5 million ha agricultural land in Syria, is currently almost exclusively state land. There “have been many attempts to extend the cultivated areas and to acquire private rights to formerly communal land. The expansion of the land frontier has been particularly noticeable in the sixties. The putting under cultivation of marginal land, mainly for barley, continued being the way for acquiring private rights up until the early nineties when legislation was enacted for the protection of rangelands (‘Decision’ no 17 of 1992 and ‘decision’ number 27 of 1995). This legislation banned cultivation under both irrigated and non irrigated conditions in the steppe, but still recognized private ownership of the areas then cultivated. This means that at present there are portions of the badia which are under private possession even if not open to cultivation but only to grazing. (In theory planting of shrubs and reseeding for grazing purposes is allowed but does not seem to be much practised)” (Forni pages 11-12). 22. The above description does not address the issue of traditional rights and range management systems prevailing prior to state ownership or the ways these have been affected and transformed by the change in ownership and authority. The nomadic and seminomadic groups who had rights and had organised management mechanisms suitable for a sustainable use of the land have lost these, and as a result the pastoral potential of the area has been undermined by the ‘free for all’ approach which has been brought about by the state’s assertion of its rights. Today, use of the range land is largely unmanaged, with free access for anyone- resulting in overgrazing and the exhaustion of the resource. The areas covered by the Badia Rangeland Development Project are a notable exception: grazing has been rationalised through participatory rangelands management (see paragraph 20 below). 23. Among the main problems this has caused is the almost complete ban on crop cultivation, which is reducing the ability of sheep holders to produce some of their own fodder, thus, leaving them almost completely dependent on purchased fodder in years of low rainfall or drought, which are increasingly frequent. The exceptions to this ban are small areas whose status as private property has been recognised as a result of different processes taking place in recent decades and where irrigated cultivation is permitted. Most of these areas have been transformed from common ownership areas to private property 86 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 6: ENVIRONMENTAL SCREENING AND SCOPING NOTE through the cultivation process prior to the ban on cultivation and this is one of the reasons why the State is so reluctant to allow any cultivation in the area regardless of conditions. 24. There is a high level of frustration about the current authorised use of the steppe. The majority of livestock holders met complained bitterly about the fact that cultivation is forbidden and that this reduced their ability to keep animals and resulted in their de-stocking and impoverishment. Although permitted by the state, it appears that there has been very little ‘re-seeding’ of grasses and other fodder species or planting of bushes and shrubs, all of which could have contributed to increasing grazing potential and reducing the level of crisis. Water use in small and medium enterprises 25. Support to small and medium enterprises is not expected to substantially increase demand for water since ILDP would work with already existing/functional dairy or slaughterhouses. Supported enterprises may involve micro-level processing that would draw on livestock by-products supported by other components, or involve local, incomegenerating opportunities in the Badia. Consequently, neither significant use of chemicals nor potential of pollution/over-use of natural resources is foreseen under the Project. D. Potential Environmental Impacts/Concerns 26. Under ILDP, support services interventions (including research and extension, training, marketing and quality control of produce and inputs, micro finance and enterprise development) would benefit all governorates. The type of intervention to support livestock production systems in the selected priority areas would be determined based on the potential of natural resources for livestock development. There are no major environmental impacts expected from these activities aside from increasing productivity of the systems on which they depend or improving the margin of return of livestock keepers benefiting from such activities. 27. Support to the transhumant sheep production system is confined to ASZ 5 (badia), the semi sedentary small ruminant production system is predominant in ASZ 4, the settled livestock rainfed integrated farming system in ASZs 3, 2 and 1 and in remote mountainous areas where goat production systems prevail. The on- and off-farm dairy cow production system is predominant in ASZs 3, 2 and 1. 28. The ILDP project would build on the experience of the Badia Rangeland Development Project, which developed and implemented effective and community-based range management systems, including resting zones and widespread planting of bushes and pasture plants. The BRDP was implemented in about 30% of the total badia area, leaving many areas still uncovered that would be addressed by ILDP. The risk of continued rainfall variability requires adaptive planning, including continuous monitoring of livestock productivity and range condition and productivity. A healthy range eco-system would be developed in part through controlled grazing, which allows for more even distribution of dung and urine that can enhance soil organic matter and nutrients for plant productivity, thus regenerating the natural resource base and improving livestock production simultaneously. Improved range management can also reduce methane by increasing animal productivity and reduces the proportion of energy lost as CH4. Methane emissions are also countered by carbon sequestration under improved rangelands. 29. From a socio-economic point of view, clearer access rights based on traditional, community-based range management approaches ensure long-term conservation instead of short-term exploitation under unclear user rights. Overall, community-managed grazing plans are expected to improve soil cover, increase water infiltration/retention, improve plant diversity and biomass, control the time the plant is exposed to grazing, increase animal density and trampling, distribute dung and urine, and improve livestock quality and productivity while maintaining rangelands with livestock. The risks of rangeland degradation associated with high rainfall variability would also require adaptive planning, including continuous monitoring of livestock productivity and range condition and productivity. 87 THE SYRIAN ARAB REPUBLIC INTEGRATED LIVESTOCK DEVELOPMENT PROJECT: FINAL PROJECT DESIGN REPORT MAIN REPORT ANNEX 6: ENVIRONMENTAL SCREENING AND SCOPING NOTE 30. There are a number of potential positive environmental impacts envisaged under the programme, including improvement of ecosystem health and, consequently, biodiversity, and improving carbon storage as a result of carbon inputs from plant roots- which benefit soil aeration, erosion control, enhanced nutrient cycling, soil building, and increased waterholding capacity. E. Classification 31. Whilst the project interventions would have direct positive impact on the environment, they would be implemented in poor villages and communities mainly in low potential agriculture settlement zones where there is an evident risk of environmental degradation manifested by overexploitation of natural resources, particularly overgrazing in the Badia rangelands and fragile mountainous areas. The project potential positive impact on the environment would come from (a) improved rangelands in the Badia through land resting, reseeding, and fodder shrub plantation. This would increase the dry mater matter per ha from an average of 100 kg per hectare to an average of 1000 kg per hectare and reduce nomadic transhumance to shorter distances; (b) sustainable pasture management and biodiversity conservation of native fodder plants resilient to drought; and (c) biodiversity conservation of indigenous cattle and small ruminant breeds resistant to diseases and resilient to climate change conditions. 32. None of the project activities would be implemented in environmentally sensitive areas, such as national parks, wildlife reserves, classified forests, or have adverse impacts on archaeological and/or historical sites. The project would not support activities that might generate significant irreversible or cumulative environmental impacts and is therefore classified as “Category B” according to IFAD’s Administrative Procedures for Environmental Assessment. The classification is based on the available information gathered during the field visits and on-site assessment in the country. F. Further Information Required 33. No further information is required to complete the screening and scoping exercise on the project. However it is recommended to develop a GEF proposal under the GEF-5 biodiversity or climate change mitigation windows (with focus on carbon sequestration). 88
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