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1 ACTION FICHE FOR CAMBODIA 1. IDENTIFICATION Title/Number Improve the food security of farming families affected by the volatile food prices. Total cost Total Cost: 11,200,000 Aid method / Method of implementation EC Contribution: 11,200,000 Joint co-financing with FAO. Project approach joint management DAC-code Sector Food Security 2. RATIONALE 2.1. Sector context After 20 years of conflict and civil war, Cambodia is now in a process of democratic reconstruction. Economical progress is significant but poverty and food security are still prevalent in the country. 36% of the 13.4 million population live with less than 1 dollar a day and the income distribution is still highly uneven (Gini Index of 0.42). Cambodia has high levels of malnutrition and micronutrient deficiencies with over 20 percent of the Cambodian population considered as food-deprived with access to less than the minimum dietary energy requirement of 1,715 kcal/person/day. The rice production at national level is sufficient, but the paddy being sold or exported immediately after harvest is usually used to repay debts. The poor households do not have always sufficient means to store rice or purchase re-imported milled rice. Moreover, recurrent natural disasters, such as floods, droughts and pest and disease outbreaks, for instance, directly affect agricultural production resulting in food shortages. Furthermore, parts of the country are difficultly reachable due to infrastructure deficit and stay constantly in a food insecurity situation. World food and fuel volatile prices are worsening the situation as transport prices and imported milled rice prices are going up. In Cambodia, rice prices doubled between 2007 and As a result, the already poor and food-insecure households are expected to become even more exposed to shocks and stresses, leading to depletion of their productive assets and increased indebtedness. To reduce the effects of high rice prices and its impact on Food Security, the Government of Cambodia has introduced various policies such as banned export of paddy to shore up domestic supply, reduction of import duties, increase of national rice stock. Nonetheless, there has been a dramatic escalation of domestic prices since January 2008 with amongst other rice price increase of 50 percent, pork price increase of 58 percent and fish price increase of 32 percent. Given that on average 71 percent of Cambodian household expenditure is spent on food, these increases put significant pressure on the poorest and most vulnerable farmers when for example they need to purchase agricultural inputs for the new crop season

2 At medium term, the Government of Cambodia is implementing and considering a number of measures to ensure sound macro-economic management. Those measures focus mainly on agriculture and rural economy as they are considered as key drivers for poverty reduction. The Governement plan is to increase the agricultural production, to develop the value added in rice production chain and to improve nutrition by crop diversification. This is done through the Food Security Support Programme which is coordinated by the Governement of Cambodia and the different development partners. This programme has two components, one focusing on community self reliance for food security and the other on enhancement of institutional and policy environment. The present proposal constitutes an important component of the National Food Security Support Programme and will help the government to raise the agricultural productivity through input distribution and technical support Lessons learnt In line with the Paris Declaration, the European Union pledged to provide more assistance through multi-donor arrangements and to avoid to setup new project implementation units. For this reason, the European Commission decided to channel this assistance through the FAO which is already involved in an on-going similar project and was highly involved in the discussion concerning the national Food Security Support Programme (FSSP). The presented proposal is issued from the FSSP and is part of the document. Lessons learnt from previous projects include the importance of decentralisation to improve the financial situation of the poor's in Cambodia. Moreover, the local communities should be involved in the project implementation. The proposed project will be realised at the district level and beneficiaries will be indentified in collaboration with district authorities and NGOs present in the field Complementary actions European Union Cooperation aims to reduce Poverty of Cambodian population by supporting the National Strategic Development Plan. This is done mainly trough a budget support in the context of the multi-donor Poverty Reduction and Growth Operation (EC contribution of 23.1 million). In addition, 5 on-going food security projects, one launched call for proposals and another pipeline call for proposals are implemented or will be implemented through NGOs for a total of 8 million. The European Community Humanitarian Office (ECHO) is also present to strengthen disaster resilience of local communities with its DIPECHO programme. Over 1.6 million are channelled through NGOs for country based projects and over 1.4 million are channelled through UN agencies and IFRC for projects with a regional reach.. A number of food security activities are being implemented with the support of other development partners. Those include (1) the IFAD projects on poverty alleviation and rural development (3 projects for a total of 27 million for 7 years); (2) the Asian Development Bank Emergency Food Project ( 29.2 on 3 years); (3) the FAO emergency project of input distribution ( ) and (3) the continuous WFP support for food assistance to the poorest part of the population. All those projects are in line with the Food Security Support Programme and are thus complementing each other

3 2.4. Donor coordination A 5 year Food Security Support Program (FSSP) has been developed based on an extensive consultative process between the governmental agencies and the external development partners. The present proposal will be part of this program and will scale up the ongoing FAO emergency seed and fertilizer distribution program to counter the volatile food prices. The Food Security Support Programme is the overall framework informing the project implementing strategy and activities. The Ministry of Agriculture, Forestry and Fisheries (MAFF) will ensure that continuous programmatic and operational linkages are established with the FSSP. 3. DESCRIPTION 3.1. Objectives The overall objective of the project is to improve the food security of rural population, in particular those affected by the volatile food prices. The specific objectives are (1) to increase food production and farm productivity; (2) to improve dietary diversity and (3) to support income generation Expected results and main activities The proposed project will achieve its objectives through an improved access to agricultural inputs and management practices, a promotion of vegetable and fish farming, the enhancement of irrigation infrastructures and other supports such as vocational trainings, promotion of agro-processing methods and technical support to the Food Security Support Program team. Targeting and beneficiary selection will be in line with criteria set by the Food Security Programme and ongoing/start-up initiatives of other donors. The target provinces and districts will be indentified by the Steering Committee and will include provinces and districts with highest poverty rates and most affected by different crises (volatile food price, low income, flood, drought ). More specifically criteria will include province with high rate of poverty as defined by the Ministry of planning. This will be mainly provinces in the upland areas, some provinces around the Tonly Sap Lake and some low land area. Selection of individual households and villages will be guided by the latest information available from official sources such as the data from the Identification of Poor Households Project. The village with high proportion of poor in their population (50% or more) will be selected. The project will give priority to smallholder rural producers with potentials for expanding rapidly their agricultural production (i.e. access to farm land of 0.3 ha or more with adequate labour). The project is divided in 5 components which are mentioned below including the related activities and results. Component 1: Distribution of rice seeds and fertilizers and transfer of technologies. Food production and farm productivity in 50,000 farming families is increased through the distribution of quality agricultural inputs and the introduction of low input environmentally friendly technologies

4 Each beneficiary will received a kit comprising 20 kg of rice seeds and 100 kg of fertilisers (DAP and Urea) to enable the cultivation of about 0.3 ha of land. A credit scheme will be implemented with the support of existing micro finance institutions or bank and 30 to 50% subsidized value of each package will be reimbursed by beneficiaries. On a participatory basis, agricultural project will be identified and implemented for community development. The project will distribute 1000 tonnes of seeds and 5000 tonnes of fertilisers to rural farming households. The beneficiaries will be trained in soil fertility management and conservation (compost making) and low input environmentally friendly technologies (Integrated Pest Management and Conservation Agriculture). Component 2: Development of post-harvest storage and processing techniques. The post-harvest losses will be reduced in at least 3,000 farming families or community groups through improved post-harvest practices and provision of equipments and storage facilities. The families will be assisted through the provision of metallic storage silos. Local tinsmiths will be trained on silos fabrication. A training programme will be developed covering postharvest handling, storage management, processing and marketing of grains, seeds and crops. Component 3: Support to vegetable growing techniques and small-scale fish farming. The nutrition intake of 4,000 community groups will be diversified through vegetable growing techniques, fish farming and training on improved feeding practices based on local foods. Small scale aquaculture including rice-fish culture and family fish ponds will be promoted and homestead food production and fruit tree planting for improved access to nutrition source will be assisted input packages will be distributed (2000 for vegetables and 2000 for fishing farming). Nutrition training targeting to the most vulnerable households and based on nutrition values on local food will be given. Component 4: Enhancement of small irrigation infrastructures. The cultivated areas and cropping intensity will be increased and crop damage will be minimized through the promotion of a proper irrigation community groups will be assisted through the provision of water pumps. This will allow cultivation during the short dry season and will help to start beforehand the cultivation during the wet season. It will allow as well the farmers to have water even during the small droughts that effect periodically Cambodia. The project is expected to provide cm water pumps and cm water pumps. Community based water resources management will be established and the associations will be assisted with the management of the water pump and will get technical advices on the irrigation technique. Component 5: Vocational training and other support to component 1,2,3 and

5 Livelihood opportunities of beneficiaries will be expanded through vocational training and enhanced linkages with existing extension, market and credit services. The vocational training will be demand driven based amongst other on training needs assessment of key beneficiary groups. Existing training materials will be adjusted to the needs and translated. Piloting of improved agriculture practices and farmer to farmers learning approach (farmer field school) will be adopted to promote learning by doing. The trainings will cover subjects such as Good agricultural practices, water pump maintenance, nutrition or food processing techniques. Field training activities will be coordinated by project staff but delivered by experienced NGO and service providers. While organizing vocational trainings, adequate attention should be given towards nutrition consideration. In that, a close linkage between various home scale fruits and vegetable processing vis-à-vis their role on improving nutrition to the family will be highlighted. The project will as well promote the establishment of agro-processing enterprises as means for generating job opportunities in target areas. Access to affordable credit scheme will be assessed and access by most vulnerable groups to existing services will be supported. Technical support will be given to the National Food Security Support Programme and to the Ministry of agriculture. This will be done through bottom-up approach starting with documentation on field lessons which can inform higher level and the provision of senior level advisory services on key issues such as access to land, macro-economic policies, extension service development This project will be implemented through the FAO in partnership with the Ministry of Agriculture, Forestry and Fisheries. At project inception, a Project Steering Committee (PSC) will be established. It will be composed of representatives of the Ministry of Agriculture, FAO and EC. Other key government institutions may also become permanent members of the PSC or are invited at meeting when specific subsector issues need to be discussed. The PSC will meet on a biannual basis or more often if needed. Technical Working groups will ensure effective linkages and coordination with other government programs and will provide technical and strategic advices. The Project Management Unit will be based in FAO representation which will be responsible for implementation and coordination of activities agreed by the Steering Committee Risks and assumptions To be sustainable, the project should be owned by the government. To secure this, the project has been initially discussed with the government and is in line with the Government Strategy on Agriculture and Water (Sub-programme Food Security). To avoid the lack a potential lack of communication between the project and the already existing projects, FAO will have coordination meetings with the different stakeholders to ensure coordination and non overlap of the activities through Technical Working Group Agriculture and Water. For such a project, there is always a risk of procurement delays due to non availability of the inputs at supplier level. This risk is mitigated by the fact that the capacity in country for the agricultural inputs is quite good in terms of seeds. Fertilizers will almost certainly be procured from outside. Procurement service is already set up at field level and FAO Head Quarter procurement service is well aware of the local constraints

6 There is the risk related to the credit scheme sustainability. To mitigate this risk, existing microfinance service providers will be preferred. Alternatively, well-established NGOs with good credit could be selected. Natural disasters such as drought and floods can impact the programme. To mitigate this risk, the project will strengthen the capacities of local farmers and communities and will ensure that the coping mechanisms are in place to face the disasters. Coordination will be done as well with the UN disaster Management Team and the National Committee for Disaster Management at governmental level Crosscutting Issues In Cambodia, 65% of the farming population are women. They have the dual responsibility for farm and household management. Women are thus a key contributor to household food security and special emphasis will be put on the female-headed households during the beneficiaries' selection. The project promotes sustainable agriculture. The farmers will be trained on environmental friendly agricultural techniques and will received seeds adapted to local conditions to reduce pesticide use Good governance will be mainstreamed throughout all component of the project. Beneficiaries' selection and input distribution will be done in full transparency, based on objective and clearly established selection criteria Stakeholders The targeted direct beneficiaries are at least poor farming families having access to land and affected by the crisis. However, the final number will probably be much higher as at least 2500 Community groups of around 25 farmers will be involved in the project. Those community groups may include direct beneficiary farmers or non-direct beneficiary farmers. Special emphasis will be put on the female-headed households, child-headed households, disabled-headed households and disaster affected households. Other beneficiaries will be the local tinsmiths who will be trained for the fabrication of metallic silos in beneficiary districts. This project will be implemented in partnership with the Ministry of Agriculture, Forestry and Fisheries in collaboration with national and international non-governmental organisations and ongoing EC rural development projects. FAO will be implementing the project. Due to its history of activities in the country, FAO is considered as having the capacity to run the presented programme. It has the right experience and many activities were already done previously (Special Programme for Food Security, Integrated Irrigation Development Project, agricultural policy and programme support under the Initiative on Soaring Food Prices ). 4. IMPLEMENTATION ISSUES 4.1. Method of implementation The project will be joint-managed through the signature of a contribution agreement with the FAO

7 4.2. Procurement and grant award procedures. All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by FAO

8 4.3. Budget and calendar EC maximum contributions: 11,200,000. Budget Items (Preliminary Indicative Budget) Euros 1. Human Resources (salaries and per diem) 1,807, Travel (international and local) 123, Equipment and supplies (vehicles, furniture, seeds, fertilizers, post-harvest equipment, water pumps, implementing partners ) 7,843, Office costs 205, Services (evaluation, publications, visitbility ). 180, Technical support services and trainings 156, Subtotal Direct Cost 10,314, Contingency reserve (1.5% direct cost subtotal) 154, Total Direct Cost 10,468, Indirect Costs: administrative overheads (7%) 732,000 Total 11,200,000 The activities will start in 2009 and will last 30 months Performance monitoring The performance of the project will be closely monitored by FAO. The EC delegation in the country will also ensure adequate monitoring on the basis of key indicators established in the Logical Framework, progress reports and participation to relevant meetings/committees. External Results Oriented Monitoring missions by European Commission may be carried out Evaluation and audit The project will undergo a final evaluation, to be carried out by the European Commission. Audits will be carried out by FAO according to its Financial Regulations, Rules and Directives. In addition, expenditure verifications may be carried out by the European Commission Communication and visibility In accordance with the visibility provisions under the EC-UN Financial and Administrative Framework Agreement (FAFA) and with the EC-UN Joint Action Plan on Visibility signed in September 2006, the EC and the implementing organisations will work together to ensure - 8 -

9 appropriate visibility actions for the programme as a whole, as well as for specific interventions and activities under the programme. Standards regarding visibility will be derived from the "EU visibility guidelines for external actions"