ILO Road to Jobs Project

Transcription

1 ILO Road to Jobs Project Report on Participatory Appraisal for Competitive Advantage (PACA) Assessment in Balkh Province of Afghanistan Road to Jobs Project of the International Labour Organization Afghanistan, August 2015

2 Table of Contents Table of contents... II List of figures and tables... IV Abbreviations... V Executive summary... VI 1. Introduction background and objectives Main features and economy of the Balkh province The PACA exercise Training of PACA facilitators Process adapted in implementing the PACA exercise How well did the process go? Lessons learnt and areas to be improved Main sectors with promising potential to capitalize Cotton Sector Opportunities in cotton sector Proposed interventions/proposals Dairy sector Opportunities in dairy sector Proposed interventions/proposals Wheat sector Opportunities in wheat sector Proposed interventions/ proposals Poultry sector II P a g e

3 3.3.1 Opportunities in poultry sector Proposed interventions/proposals How the target groups of the Road to Jobs Project could benefit by these sectors Conclusion and next steps References Annexes III P a g e

4 List of Figures and Tables Figure 1: The administrative map of Balkh province... 2 Figure 2: The sequence of activities in PACA exercise... 4 Table 1: Strengths and weakness in cotton sector of Balkh province... 8 Table 2: A summary of proposed interventions in cotton sector Table 3: Strengths and weakness in dairy sector of Balkh province Table 4: A summary of proposed interventions in dairy sector Table 5: Strengths and weakness in wheat sector of Balkh province Table 6: A summary of proposed interventions in wheat sector... Error! Bookmark not defined. Table 7: Strengths and weakness in poultry sector of Balkh province Table 8: A summary of proposed interventions in poultry sector IV P a g e

5 Abbreviations ACCI AISA ANSA BCCI BLDU CARD-F DAIL ILO IPWM MSEs NGOs NHLP NMD PACA SMEs UHT UN UNOPS Afghanistan Chamber of Commerce and Industries Afghanistan Investment Support Agency Afghanistan National Standard Agency Balkh Chamber of Commerce and Industries Balkh Livestock and Dairy Union Comprehensive Agriculture and Rural Development Facility Directorate of Agriculture, Irrigation and Livestock International Labour Organization Integrated Pest and Weed Management Micro and Small Enterprises Non Governmental Organizations National Horticulture and Livestock Development Program New Market Development project Participatory Appraisal of Competitive Advantage Small and Medium Enterprises Ultra High Temperature United Nations United Nations Office for Project Services V P a g e

6 Executive summary This is the report of a participatory appraisal for competitive advantage (PACA) assessment in the rural districts of the Balkh Province. It was carried out by the Road to Jobs project of the International Labour Organization (ILO) in Afghanistan, funded by the Swedish International Development Agency (Sida). The project is aimed at increasing more and better jobs in Balkh and Samangan provinces which contribute to improved livelihoods and poverty reduction. The main objectives of the PACA assessment was to initiate a participatory dialogue process with the stakeholders, identify the most promising economic sectors for the rural districts of the Balkh Province and develop joint interventions together with the ownership of the stakeholders to address constraints in selected sectors and capitalize market opportunities to create more and better jobs and income. The PACA assessment was conducted during the end April to mid July, Forty four interviews and ten mini-workshops were conducted with farmers, input suppliers, collectors, processors, traders & exporters, supporting institutions, regulatory authorities and other actors in the Balkh Province in order to gather information and to assess local economic sub sectors. The cotton, dairy, wheat and poultry sectors were identified as the main sectors with promising potentials. It was found that more migrant labourers are also engaged in these sectors. The findings reveal that the demand is high in the market for the products of selected sectors showing a better potential for growth and expansion: e.g: cotton, dairy, poultry etc. The access to quality inputs (eg: improved seeds, agrochemicals, medicines/vaccines) is limited for farmers in some identified sectors: e.g: cotton, wheat, dairy. It is further revealed that the quality of farmer products in some identified sectors such as raw cotton fiber/lint, local wheat needs improvement Furthermore, the access to inputs for packaging is limited and the users are highly depended on imported packaging materials in some selected sectors such as dairy sector. In addition, dissemination of accurate information, transfer of good practices and technology are taking place at a slow rate in all selected sectors. It further denotes the lapses of policies available to monitor and control imports (input supply and products) in selected sectors.. The assessment came up with quite a few proposed interventions for the main sectors to address key constraints and capitalize market opportunities. The proposed interventions are a combination of short-term (quick-wins), medium-term and long-term interventions which were endorsed by the stakeholders at the validation workshop. The proposed interventions are directly related to the upgrading the productivity at the farming level, adding values at the processing level and regulating the monitoring of the process in the above sectors. The proposed interventions address, migrant labour, jobs creation and enhances decent work and economic empowerment aspects. Almost all the proposed interventions need strong commitments and support from the stakeholders for implementation. The project has to take a leading role of facilitation to follow up the implementation. VI P a g e

7 1. Introduction background and objectives The Road to Jobs project of the International Labour Organization (ILO) in Afghanistan has been working in the Balkh and Samangan provinces of the northern region. It is funded by the Swedish International Development Agency (Sida). The Road to Jobs project intends to bring economic benefits to the rural communities of Balkh and Samangan provinces which are better connected by rural roads built by UNOPS with the financial support of the Sida. The overall objective of Roads to Jobs Project is to create more and better jobs in Balkh and Samangan provinces which contribute to improved livelihoods and poverty reduction. The project is aimed to improve collaboration and co-ordination between local stakeholders in rural districts and its urban centres for local economic development, improve the position of poor and disadvantaged groups within selected agricultural and urban sectors and improving financial management of poor and disadvantaged groups in Balkh and Samangan provinces. Hence the Road to Jobs project follows the market system approach to address critical underlying constraints inhibiting growth for better employment outcomes. It will contribute to bolstering private sector confidence and creating jobs, one of the seven reform agendas of the Government announced at the London Conference in December 2014, by promoting private sector-led job creation, along with several relevant national program priorities. Road to Jobs project supports the rural households through three components, namely a) developing the promising agricultural value chains for exports and import substitution so that the farmers will also develop with the value chains; b) enhancing opportunities for migrant workers in urban centres; and c) financial education for rural households and migrant labourers. A new local economic development process of the project is planned to generate a market-driven, private sector-led growth with job creation for the rural communities. The project has planned to carry out several overlapping assessments during its inception phase to identify the underlying constraints inhibiting pro-poor sector growth. Thus, as one of the assessments, Participatory Appraisal of Competitive Advantage (PACA) exercise was carried out to identify the most promising economic sectors in the rural districts of the Balkh Province. The objectives of the PACA assessment are as follows: a) Initiate the participatory dialogue process along with a stakeholder consultation b) Identify the most promising economic sectors in the rural districts of the Balkh Province c) Develop joint interventions together with the stakeholders and motivate them to take ownerships for initiatives/implementation 1.1 Main features and the economy of the Balkh Province The Balkh Province of the northern region is the fourth most populated province in Afghanistan. It is divided into 14 administrative districts (woleswalis) and total geographical area of the province covers 16,840 square kilometers as per Central Statistic Department of Balkh. The temperature of the province reaches to 43 C in summer while in winter its temperature stands at - 2 C( Background profile of Balkh, 2014). However, during the rest of the year, the average temperature remains at 24.8 C. The province 1 P a g e

8 experiences rainy weather during the spring season. Figure 1 below illustrates the administrative map of the Balkh Province.. Uzbekistan Tajikistan Jawzjan Province Kunduz Province Sar-e- Pol Province Samangan Province 2 P a g e Figure 1: The administrative map of the Balkh Province The total population of the province ( ) was estimated at 1, 298,300 and estimated composition based on gender is 634,200 female and male as per the Central Statistic Organizaion of Afghanistan in The province is ethnically heterogeneous, with Tajiks making up the largest group, followed by Pashtuns, Uzbeks, Hazaras, Turkmen and Arabs. The population has relatively better access to schools when compared with the other provinces. The overall literacy rate of the province is 44 percent while the national literacy rate is 28 percent (Paul at el, 2013). In the Balkh Province, 66 percent of the population is living in villages while the remaining 34 percent is in urban cities/towns (as per Central Statistic Department of the Balkh Province) such as Mazar - e Sharif, Balkh, Dehdadi, and Hairatan. The supply of electricity comes from Turkmenistan or Uzbekistan to the Balkh Province. The main cities and towns of Mazar, Dehdadi, Hairatan, Balkh and Khulm have a direct electricity supply from the main grid. However, there is a limited supply of electricity to rural villages and it covers only less than 10 percent of the villages in the Balkh Province (Paul at el, 2013). The City of Mazar e- Sharif is the northern regional commercial hub with an estimated population of 357,000. It is the fourth largest city in Afghanistan. Mazar City is more advanced than the other provincial centres in the northern region with one public and several private universities, technical training centres and a civilian airport (Paul at el, 2013). In addition, it has a trend of expansion and development in the areas of fuel industry, trade in general, transport and construction despite the uncertainty of the business climate. It also plays a positive role as a distribution point in the northern region for imports and exports. It is important to note that Mazar City plays a vital role in processing regional agricultural production and as a market-hub for local agricultural production. Few agro-processing industries (e.g. dairy processing, wheat flour mills,

9 raisin and tomato paste processing, mills for edible oil, jam and cordial processing, etc) are also located in Mazar. A large number of migrant workers from rural districts work on many of these industries for daily wage basis in Mazar City. The majority of the population in the Balkh Province is working in agricultural sector for their livelihoods. According to the Central Statistic Department of the Balkh Province, it was estimated that the Balkh Province owns 180,000 acres of irrigating land and 350,000 acres of rain-fed land.. However, many agricultural lands remain uncultivated due to lack of water. The agricultural economy of the Balkh Province is mainly based on wheat, fruits and nuts (e.g. almond, pistachio, apple, apricot, walnut etc.) commercial vegetables (e.g. tomato, onion etc.) cotton and livestock (e.g. dairy and poultry etc). It was also historically a major producer of cotton in Afghanistan. The other agricultural products of the Balkh Province include grape, barley, rice, sesame, flax, melons and small volume of high value niche crops such as saffron, liquorices, and hing (Background Profile of Balkh, 2014). The roads within the Balkh Province have been upgraded specially in rural agriculture areas over the last several years. The use of Zaranj for transportation has also increased widely which reduces the cost of transporting agricultural production/goods over short distances in rural districts. This has encouraged bringing more agriculture productions to local markets. Nevertheless, the lack of effective institutional infrastructure for inspection, certification and limited industrial facilities for cleaning, sorting, drying and storage have constrained production incentives and adding values in agro-processing of the province. 3 P a g e

10 2. The PACA exercise Participatory Appraisal for Local Competitive Advantages (PACA) is a methodology to assess local economic sectors and find interventions to address underlying causes. Also PACA is a highly adaptable and flexible methodology that can be deployed usefully for various types of local economic development initiatives. The PACA exercise consists of several key steps that need to be carried out in the field through PACA facilitators. Hence PACA exercise conducted in the Balkh Province had two components which included training of PACA facilitators and implementing the PACA exercise in the rural districts of the Balkh Province of Northern Afghanistan. It was carried out from 20 th of April 2015 to 10 th of July 2015 and compiled the outcomes of the PACA exercise into this report. 2.1 Training of PACA facilitators The training of PACA facilitators to carry-out the PACA exercise in Balkh and Samangan provinces was organized by the Road to Jobs project of ILO. The Identification of suitable candidates for the basic PACA training was done through a close consultation and association with the key stakeholders. Fifteen nominees (ten from Balkh province and five from Samangan) were identified for the training who represented government private and non-governmental organizations in Balkh and Samangan provinces. The training workshop was held in the City of Mazar e Sharif from 26 th of April to 29 th of April It covered the full content of basic PACA training and methodology. The figure 2 below shows the steps of PACA exercise which were discussed in details during the training workshop. The active participation in the group works provided ample opportunity for trainee facilitators to clarify their issues and to discuss further with PACA practitioners/ trainers. Fifteen PACA facilitators were trained at the end of the training workshop. The details of trained PACA facilitators are in Annex 1. Figure 2: The sequence of activities in the PACA exercise 2.2 Process adapted in implementing the PACA exercise All the key steps of the PACA exercise were carried out to implement this PACA exercise without deviating from the stranded PACA procedure. A PACA team was formed for each province. Each PACA team consisted of 7 PACA facilitators and 4 local collaborators. The PACA teams carried a leading role in the field coordination. The PACA tools were adapted according to the local situation and based on the responses of the stakeholders. The hypothesis workshop was performed as an internal activity of the PACA 4 P a g e

11 team to derive hypothesis. The start-up workshop was conducted with the key stakeholders as an orientation of PACA exercise while collecting limited information available on the local economic sub sectors. The Interview guidelines and mini-workshop format were adapted as data collecting instruments in the triangulation process. The PACA facilitators were mobilized to conduct workshops and interviews under the close supervision of two international PACA practitioners. Forty four interviews and ten miniworkshops were conducted with farmers, input suppliers, collectors, processors, traders & exporters, supporting institutions, regulatory authorities and other actors in the Balkh Province in order to gather information pertaining to local economic sub sectors (a summary denoting the types of actors /stakeholders who attended the start-up workshop, interviews and mini workshops from identified main sectors is in Annex 2). The results workshop was performed along with PACA team and a panel of international experts for the PACA analysis. 2.3 How well did the process go? There was a good connection between all the steps of PACA exercise and the events. The outcomes of the hypothesis workshop and start-up workshops were used to organize interviews and mini-workshops in the field. The main sub-sectors identified at the hypothesis workshop and the start-up workshop were almost the same except for few new sub sectors. The outcome of min-workshops and interviews were useful for the PACA analysis to diagnose the current situation of the sub sectors and find out the proposals at the result workshop. Female participation was at a very weak level in the PACA exercise. Poor and extremely poor groups were involved with interviews and mini-workshops process. MSEs and SMEs, exporters, business associations and supporting institutions had also actively contributed to the interviews. The overall participation and contribution of the local stakeholders were at a satisfactory level for start-up workshop, interviews and mini workshops. 2.4 Lessons learnt and Areas to be improved It was a challenge to cover a larger geographical area through this PACA exercise with security restrictions and limitation of movements to rural districts. Hence it took a longer period to carry out field interviews and mini-workshops in the Balkh Province. The team realized the need of keeping a flexible time period to carry out field-interviews and mini-workshops under this kind of a situation. The field activities of the PACA exercise could not be implemented as planned due to security restrictions and limitation of movements to rural districts. This cause changes to the initial work plan at several times and a contingency plan was made to implement the PACA exercise. Therefore it is advisable to have an advanced work plan along with a contingency plan (Plan A and B) at the planning stage to make efficient implementations of activities of this nature. The PACA facilitators were not in a position to carry out a PACA exercise independently and required further improvements in their capacities. It was compulsory for them to further improve their overall competencies and knowledge on local economic development. 5 P a g e

12 It was leant that the direct application of PACA standard tools and techniques was not effective with most of the stakeholders and target groups (eg: card facilitation technique cannot be used for mini-workshops since illiteracy of rural communities is very high). Therefore PACA tools were adapted according to the local situation and the responses received from the stakeholders. Interview guidelines, start-up workshop and mini-workshop formats were also adapted accordingly in order to use them in an effective manner. Therefore, adaptation of tools and methods according to the context by experts is very important to carry out the PACA exercise. Searching for secondary data and statistics pertaining to the local economic sub sectors was a real challenge during the PACA exercise. The availability of secondary information and data was limited and gathering them within a limited period of time was difficult. Secondary information that was available was also based on estimated data and was inconsistent. Thus, an additional effort and time were taken to find them than as planned. Collecting accurate primary data through mini-workshop and interviews was also a concern due to contradictory responses. Probing techniques of triangulation with many clarifications were used to collect reliable primary data in many cases. Some of the tasks of PACA exercises were planned during the holy Ramadan period. It was observed that it is generally difficult to organize, coordinate, and participate in activities during this period. Also, the PACA team had to face difficulties in observing and performing religious obligations while participating in the PACA activities. The dedication and firm commitment is fundamental to complete the PACA exercise successfully. Hence it is better to plan future PACA exercises or any other similar exercises by avoiding the holy Ramadan period. The PACA teams were highly encouraged by support of stakeholders and their positive responses to carry out the PACA exercise. An initial step of networking of stakeholders with Road to Jobs project was done through the PACA exercise. It is compulsory to further strengthen the stakeholders network through implementation of PACA proposals and joint actions together with these stakeholders. 6 P a g e

13 7 P a g e 3. Main sectors with promising potential to capitalize This chapter discusses the findings of PACA exercise in the Balkh Province with special emphasis on decent work and migrant labor aspects. The following sectors were covered to collect data and information during the field work of PACA exercise: wheat, cotton, grape, dairy, commercial vegetables, carpet, poultry, melon and water melon, medicinal herbs and saffron and pistachio. These sectors were further assessed and prioritized during the PACA analysis to identify the main sectors with promising potential. Identification of main sectors: Pro-poor potential ( a larger number of target beneficiaries is represented in the sector), growth potential and intervention potential to stimulate systemic change were used as criteria to assess sectors and prioritize to identify main sectors. Thus cotton, dairy, wheat and poultry sectors were identified as the main sectors with promising potentials by the analysis. In addition, it was found that more migrant workers are already engaged in above identified sectors and further possibility to enhance more migrant work opportunities through intervention to create more jobs and income. Why did the other sectors not selected: Almost all pistachio plantations (forest) belong to the government and no ownerships for target communities. The government allows them to harvest only for a short period of time. It was found that a long period is necessary for interventions to make a systemic change in this sector. Grape and almond sectors require a long time period for interventions and there is less possibility to find quick wins as well. The number of target beneficiaries in the grape sector is also comparatively less in the Balkh Province. Melon and water melon are short term crops and take only two or three months for cultivation. Also this sector has a very short period for harvesting. The commercial vegetable sector (e.g. tomato) in the Balkh Province too has a limited growth potential. Thus both melon and water melon and commercial vegetable sectors have less potential for short term interventions where a systemic change could be made. Medicinal herbs and saffron sector has a less potential for intervention for quick wins. Saffron is very new to target beneficiaries and initial investment for cultivation is also very high. The number of target beneficiaries in this sector is less. It takes a long time period for expansion and to make a systemic change. Carpet sector of the Balkh Province is less competitive in the international market. Labour exploitation is also high due to less competiveness of this sector. Growth potential is also limited. Thus the carpet sector has a less intervention potential to makes a systemic change. 3.1 Cotton sector Cotton is one of the main crops in the Balkh Province. It was the third largest sector in the province as per output value in And Cotton farming is a main source of livelihood for many poor farmers. It was estimated that nearly 20,000 farmers have been engaged in cotton farming in the Balkh Province. Cotton is more prominent in the Balkh district and approximately 10,000 farmers are engaged in cotton farming. This

14 includes small-scale farmers (nearly 58%) as well as large-scale farmers (possess more than 1.6 Ha of land for cotton cultivation). It could be estimated that nearly 5000 people are indirectly engaged in the cotton sector through transporting, processing of cotton products and trading. Main products are cotton lint (fibre), edible cotton oil and cotton cake. There are at least 100 small-scale and 50 medium scale cotton-ginning mills (SMEs) in the Balkh district. These mills are engaged in cotton fiber extraction and seed separation. Farmers supply cotton to these mills at village level. Cotton lint caters for international market while cotton oil and cake caters for domestic markets in Balkh and other provinces. A very few large -scale companies is available in the Balkh Province for cotton processing and exports at present. Cotton lint is exported to Pakistan, Bangladesh, Chain, Belarus, Russia etc. A large volume of cotton lint from the Balkh Province mostly goes to Lahore (most of cotton textile factories are located in Lahore) in Pakistan due to good road access for transportation. Edible cotton oil production is getting popular mostly in the City of Mazar and in the Balkh district. It could be estimated that more than 100 small and medium scale cotton oil mills (SMEs) are located in the Balkh district. And there are several large cotton oil mills available in Mazar city. Also, cotton cake is a byproduct of oil extraction which is mainly used for animal feed. Thus it is interconnected with local animal feed industry. There is a high demand for cotton lint in the international market. However, current supply is insufficient as per a large scale processor/exporter in the Balkh district. It is observed that there is a tendency to increase the demand in local markets/domestic markets for edible cotton oil due to health benefits. The number of people engaged at various levels in cotton sector has been increased over the recent past. The extent of cotton cultivation has been expanded in the last few years although local price of cotton has been declined in the last three years. However, high cost of production and low yield /Ha is still a challenge for cotton farmers. The table 1 below summarizes the strengths and weakness in cotton sector of the Balkh Province. Table 1: Strengths and weakness in cotton sector of the Balkh Province Strengths Suitable land is available for cotton cultivation Favourable climate conditions for cotton farming Experienced farmers are available Cotton processing factories are available with a strong international buyers network 8 P a g e Weakness Limited availability of improved cotton seeds for farming Lack of knowledge of farmers on good cultivation practices Limited access of farmers to quality agrochemicals Lower price for cotton and rejection of

15 High demand for cotton lint in the international market shipments due to poor quality in some cases Good demand for cotton oil in local market Limited access to extension services of private and public sector due to lack of resources /budget to reach larger number of farmers in rural districts No affordable Micro Finance (MF) schemes are available for farmers, and limited availability of MF Banks in rural districts No any clear government policy for cotton sector and lapses in rules to regulate the functions of monitoring of quality of input supply, standards for cotton oil production and farmer activities Limited availability of improved seeds, lack of knowledge of farmers on good cultivation practices and limited access of farmers to quality agrochemicals are causes for the low yield in cotton farming. In addition, limited access to extension services of private and public sector due to lack of resources /budget to reach larger numbers of farmers in rural districts is also linked with lack of knowledge of farmers on good cultivation practices. Moreover, lapses of rules to regulate the functions of monitoring of quality of input supply have led to limited access of farmers to quality agrochemicals Opportunities in the cotton sector There is a potential to increase the cotton production through good agricultural (agronomic) practices (experts opinion reveals that cotton production could be doubled through good agricultural practices). Also it is possible to increase the cotton production by expanding the extent of cultivation. And there is a good potential to link farmers with private companies to introduce new knowledge to farmers and improve access to better seeds and quality agrochemicals to increase the production. There is a potential to add value by sorting and cleaning at the farm gate level and processing level (e.g. cotton lint) since cleaning is not taking place properly at present. In addition, farmers receive a low price for unclean cotton. Hence, adding value through sorting and cleaning at the farm gate level will improve the quality of cotton. As a result, farmers will receive a better price for their cotton lint. The demand for edible cotton oil in local markets seemed gradually increasing due to its health benefits. Thus, there is a good potential to expand and improve the quality of cotton oil (especially SMEs level) sent for local markets. Consumers preference is for refined cotton oil even though most of cotton oil available in 9 P a g e

16 local markets is unrefined. Cotton oil cake production will be a by-product and will generate additional income for producers. There is a potential to improve access to international markets for cotton lit of the Balkh Province due to better road conditions for transportation. Quite a few local cotton export companies are having a very strong global buyers network which is also a very positive sign in improving access to international market. It is important that the authorities take into account the negative implications of the imported cotton lint on local cotton production. Hence this could be regulated by imposing high taxes on imported cotton Proposed interventions/proposals 1. Cotton export companies inform and train farmers on quality requirements of cotton lint (fibres). This could include introduction of gunny sacks in transportation. There are nearly 20,000 cotton farmers who are involved in producing cotton for export companies in the Balkh Province. The current cotton supply of farmers contains certain impurities (nylon and other particles as well as high moisture content). As a result, farmers receive a low price for their cotton from the export companies. It was reported that rejection of export consignments has happened due to poor quality. If the cotton supply from farmers continued to be poor in quality, it will affect negatively on cotton exports which eventually leads to reduced purchasing of cotton from farmers. If export companies inform and train farmers on quality requirements of cotton lint, export companies will receive incentives by exporting high quality cotton while farmers receive incentives in terms of a better price for their cotton. Proposed partners: Farid Cotton Processing and Export Company in Balkh district Activities: I. Assess if quality is an issue for cotton processing and export companies II. If quality is an issue, try to work with smaller firms as well III. Identify and establish causes of low quality IV. Design intervention for implementation Expected outcome: Good quality cotton supply for export companies and better price for farmers 2. Inform oil processors on quality standards to improve the quality of cotton oil. A large amount of locally produced unrefined edible cotton oil products is available in local markets at present. However, consumers preference is for refined cotton oil products. A trend for the demand for edible cotton oil in local markets seemed gradually increasing due to its health benefits. If processors /millers improve the quality of cotton oil it will lead to increase the demand 10 P a g e

17 for good quality cotton oil products in the market. Cotton oil processors/millers will receive a high demand, sale and income as an incentive for their refined cotton oil products. Proposed partners: Afghanistan National Standard Agency (ANSA), Afghanistan Investment Support Agency (AISA) and New Market Development project (NMD). Activities: I. Check what AISA and NMD are following to meet food safety and quality standards II. III. Design follow up interventions to enable processors to meet standards Next step includes follow up intervention for ISO standard Expected outcome: Increased demand for good quality cotton oil products in the market 3. Explore the effect of imports and lack of duties on cotton imports with Balkh Chamber of Commerce and Industries / Afghanistan Chamber of Commerce and Industries. It is better to explore the negative effect of cotton imports on local cotton industry in order to make remedies to protect the local cotton industry. It is also reported that lack of duties on cotton imports has affected negatively on the performance of the local cotton farmers. Therefore, it is imperative to understand this effect and lobby the authorities to regulate the process of cotton imports in favour of the better performance of local cotton industry. Proposed partners: Balkh Chamber of Commerce and Industries (BCCI) and Afghanistan Chamber of Commerce and Industries (ACCI) Activities: I. Discuss with BCCI/ACCI II. Design interventions which could include a study to demonstrate the effect of lack of duties Expected outcome: Cotton imports are controlled and regulated by the authorities 4. Improve access to inputs, knowledge and skills of cotton farmers 11 P a g e

18 There are nearly farmers who are involved in cotton farming. Current, the productivity of cotton farming is low ( low yield /ha ) due to lack of knowledge and skills of cotton farmers on new methods and good farming practices as well as due to limited access to good quality inputs. Therefore, improving access to inputs, knowledge and skills of cotton farmers is important to enhance the productivity of cotton farming through better quality inputs and good practices in cotton cultivation. Farmers will receive high yield /ha and better income as incentives of adapting good practices. Proposed implementer: Road to Jobs Project Activities: I. Analysis of input (seeds, fertilizer and agrochemicals ) market system for farming - cross sector analysis II. III. Coordinate with other projects Design interventions to address supply constraints and practices Expected outcome: Improved access of farmers to good quality inputs, knowledge and skills, leading to higher yields 5. Explore interest /incentives to add more value to cotton lint (Yarn) Currently value addition of cotton is limited to cotton lint and it is exported by cotton processing and export companies. However, there is a considerable possibility to explore adding more values to cotton lint locally. Adding value to cotton lint will result in additional income to local firms and create more jobs for people. Proposed implementer: Road to Jobs Project with interested companies Activities: I. Discuss with Farid Cotton Processing and Export Company and other potential companies II. III. Asses market for cotton yarn Proceed with feasibility study / business plan Expected outcome: More income from adding value to cotton lint and more jobs 12 P a g e

19 The proposed interventions to the cotton sector with required timeframe are summarized in the table 2 below. Table 2: A summary of proposed interventions to the cotton sector Proposed intervention/proposal 1 Cotton export companies inform and train farmers on quality requirements of cotton lint (fibers). This could include introducing gunny sacks for easy transportation 2 Inform oil processors on quality standards to improve the quality of cotton oil Timeframe Short term/ Medium term Medium term 3 Explore the impact of imported cotton on local cotton production and lack of duties on cotton imports.with Balkh Chamber of Commerce and Industries / Afghanistan Chamber of Commerce and Industries Medium term term/long 4 Improve access to inputs and knowledge and skills of cotton farmers Long term 5 Explore interest /incentives to add more value to cotton lint (Yarn) Long term 3.2 Dairy sector Dairy farming at a small-scale is prominent in Balkh, Dawlatabad and Kishindi districts of the Balkh Province. It was reported that there are nearly 2000 small dairy farming households in Balkh district. They have average milking cows. However, every household in rural district rears at least one dairy cow to fulfil their household milk requirement, and also it is a source of little income to poor households. Women are involved in dairy farming activities such as rearing, care giving, feeding, and milking at household level. In addition, they are engaged in primary level value addition: yoghurt and dried yoghurt production at household level (micro enterprises) to earn a living. It was estimated that small-scale dairy farming activities at household level has been increased by 30% over last three years since it is a good source of income for poor households. Nevertheless, small dairy farmers use traditional management practices which lead to low milk yield and low productivity. Thus, it is still a challenge for poor small farmers to get fresh milk from dairy cows during winter season by using traditional management practices. There are two milk processing factories ( Pakiza Diary (Pvt )Ltd. and Balkh Livestock Development Union farmer cooperative )in Mazar City. The production capacity of these two factories is limited. These factories produce pasteurized milk, yoghurt, cheese and cream for local market. Also there are few small scale ice cream factories in Mazar City. These factories collect fresh milk from small farmers. However, current collection system of fresh milk is weak in rural districts due to insufficient infrastructure facilities. Few milk collection centers have been established in Balkh district by donor funded projects. Rest of the districts in 13 P a g e

20 the province does not have any milk collection centers. Wastage of local fresh milk due to spoiling at rural village level is occurring at a considerable level. There is a high demand for Ultra high temperature (UHT ) tetra milk packs (high sophisticated demand) in local market since UHT milk packs can be stored at least for 06 months under rooml temperature and do not require cooling facilities for storage. There is no local UHT milk processing factory in northern region of Afghanistan. Imported UHT milk products from Iran (PAKG company) and Pakistan (Milk Pac and TRANG companies) have dominated the local markets. The demand for local pasteurized milk products is low at the local markets due to its short shelf life. Therefore, the demand for local fresh milk is also limited in the Balkh Province. The strengths and weakness of dairy sector is summarized in the table 3. Table 3: Strengths and weakness in the dairy sector of the Balkh province Strengths Weakness Suitable land is available for dairy farming Wheat straw and hay is available for fodder Good climate conditions for dairy farming Medium scale local dairy processing factories are available Good demand for dairy products in the market (high sophisticated demand for UHT tetra milk packs ) Experienced farmers/ farmer families are available No UHT dairy processing factory in the Mazar City and UHT milk is imported. Hence limited market (low market share) and lower price for local fresh milk. No proper system of transportation of milk from farmer to retailers/traders/collectors Lack of good hygienic practices and most of the farms are not managed properly Most of the inputs (feed and medicines ) are imported, low in quality and expensive Poor access to extension and veterinary services at rural district level. Lack of veterinary clinic and insufficient numbers of trained Para-vets at rural district level Weak packaging industry packaging is imported and heavily taxed. Therefore, expensive No control and monitoring mechanism for imported dairy products. Lower taxes on imported dairy products and malpractices at the borders. Lack of value added tax (VAT) 14 P a g e

21 rule on imports. No policy for milk price Limited access to extension and veterinary services and lack of veterinary clinics at rural district level are the reasons for poor dairy farm management by small farmers at village level. Improper farm management and lack of good hygienic practices have led to low milk yield of cows. Low quality inputs are also a reason for low milk yield and it is not affordable to farmers. No proper system of collection and transportation of local fresh milk from farmer to retailers/traders/collectors which resulted in spoiling and wasting of fresh milk (e.g. farmers throwaway fresh milk due to spoilage) at village level in rural districts Opportunities in the dairy sector Demand for UHT milk products is very high in the market. Hence there is a good opportunity to invest in local UHT dairy processing factories to cater for the demand. It is highly potential to link farmers with these local UHT dairy factories for fresh milk supply. There is a good potential to promote sub milk collection centers and village level transport system in rural districts to ensure better fresh milk supply to existing dairy processing factories (e.g. ice cream factories) since some of them still use powder milk for their production due to bad quality of local fresh milk (receiving spoiled fresh milk from farmers). It is highly possible to introduce good dairy farming practices and new breeds/cows to farmers to increase milk production and maintain a continuous fresh milk supply. Developing existing Para-vets for artificial insemination (AI) services is a possibility to improve the farmer access to AI services. It is also possible to develop village level experienced /lead farmers as Para-vets to improve the extension supports and minimum veterinary services at village level in rural districts. Awareness and promotion on local dairy products to the public/consumers is possible to increase the demand in the market for local fresh milk/milk products. Current market share of local milk products could be increased through awareness and promotion Proposed interventions/proposals 1. Best dairy farm competition to promote best practices among the small farmers 15 P a g e Weak dairy farm management at village level by small dairy farmers has led to poor hygienic practices and low milk yield. It is the reason for poor quality of fresh milk and high possibility of spoilage at the farm gate. Promoting best practices among small dairy farmers will improve hygienic conditions and dairy farm management at village level. This competition will motivate

22 small dairy farmers to adapt best practices. Eventually farmers will be able to increase their milk yield with better quality at the farm gate through adapting best practices. Therefore, promoting best practices among small farmers is important to make better quality milk production and supply. Proposed partners: Directorate of Agriculture, Irrigation and Livestock (DAIL), Balkh Livestock and Dairy Union (BLDU), Pakisa Dairy Production Company, Veterinary Services, Comprehensive Agriculture and Rural Development Facility (CARD-F) and Input suppliers and others. Activities: I. Discuss with partners II. III. Develop a proposal for best dairy farm competition Pilot implementation Expected outcome: Improved hygienic conditions and dairy farm management by small scale dairy farmers 2. Feasibility study for Ultra High Temperature (UHT) milk production The demand for UHT milk products is very high in the market. There is no UHT dairy processing factory in the Balkh Province and imported UHT milk caters for the market demand. Hence the market is limited (low market share) and the price is low for local fresh milk production. Therefore, it is important to establish local processing factory/factories for UHT milk products. Eventually farmers will be able to link with local UHT dairy factory/factories for fresh milk supply and receive good incomes. Local UHT dairy factory/factories could also increase their market share of UHT products and receive more income. Proposed partners: Dairy processors and Road to Jobs project Activities: I. Check if there is any studies already available II. III. IV. Check what CARD-F and others are doing Check interest of the local firms Conduct a feasibility study and business plan Expected outcome: Increased market share of local milk products 16 P a g e

23 3. Get milk collection centers connected to the national power supply grid and installation of chilling equipment There is no chilling equipment and power supply available for recently established milk collection centers. Hence there are no facilities available to keep the collected milk a fresh and without being spoilt. This situation has led to spoilage of collected milk and wastage. Therefore, collection centers buy only a limited quantity of fresh milk from farmers that could be immediately transported to the processing factories. Thus, connecting collection centers to the national power supply and installing chilling equipment are important for the better fresh milk supply for factories from farmers. Potential partners: Balkh Livestock and Dairy Union (BLDU), Pakisa Dairy Production Company, and Comprehensive Agriculture and Rural Development Facility (CARD-F). Activities: I. Meet collectors, processors, CARD-F, to assess the problem II. Develop a strategy together to find a solution. Expected outcome: Better fresh milk supply for factories from farmers The table 4 below summarizes proposed interventions with required timeframe in the dairy sector. Table 4: A summary of proposed interventions in the dairy sector Proposed intervention/proposal 1 Dairy farm competition to promote best practices among the small farmers Timeframe Medium term 2 Feasibility study for Ultra Heat Treatment (UHT) milk production Medium term 3 Get milk collection centers connected to the national power supply grid and installation of chilling equipment Short term / Medium term 3.3 Wheat sector Wheat is the main staple food in Afghanistan. The Balkh Province is the second largest area of wheat cultivation in northern region (Paul at el, 2013). Wheat farming in the Balkh Province is conducted under 17 P a g e

24 irrigated and rain-fed conditions. It is common that almost all the farmers grow wheat and it was estimated that nearly farmers grow wheat in province. Irrigated land is more productive and rain fed land is relatively unproductive. It is observed that a greater part of local wheat production is used by farmers for self consumption. Subsistence farming at village level is very common in rural districts of the Balkh Province while semi-commercial and commercial wheat farming under irrigated condition is also seen at a limited extent. The majority of farmers use low quality seeds for their wheat cultivation. Usually farmers buy wheat seeds from other farmers or use their own seeds from the harvest of previous season. These seeds may be contaminated with impurities (weed seeds). In addition, farmers buy seeds from the market. Those seeds are not in good quality either and in many cases it has been consumable grains. Currently, the low yield is the biggest challenge for farmers. There are small scale local mills at village level in rural districts and poor farmers use these mills to process wheat for their own consumptions. There is an increasing demand for wheat flour in the market. As per wheat flour processing factories in Mazar, the domestic production of wheat has never been sufficient to meet this demand.. There are a number of wheat flour processing factories in Mazar. These factories source local wheat from either whole sellers or suppliers in Mazar for the production of flour (from June to October). However, this is not sufficient for their annual production. Thus, they depend on imported wheat from Kazakhstan, Uzbekistan and Pakistan. The price of local wheat (good quality) is higher than that of imported wheat in the market. In addition, there is an upward trend in the demand for Afghan wheat in the market. However, at present, the number of consumers is limited with the possibility to increase in future. The table 5 below summarizes strengths and weakness in the wheat sector of the Balkh Province. Table 5: Strengths and weakness in the wheat sector of the Balkh Province 18 P a g e Strengths Experienced and skilled farmers are available Good climate conditions for wheat cultivation Enough suitable land for wheat cultivation It can be cultivated under irrigated and rain fed conditions Availability of private transportation companies DAIL, NGOs and UN agencies provide Weakness Weeds, pests and diseases do intensive damage to wheat cultivation Lack of access to inputs (good quality fertilizer, pesticides, weedicides and improved seeds ) Wheat price is currently low in the market due to poor quality of local wheat Low outreach of extension services of private and public sector due to