Livestock value chain analysis and project development

1 How to doLivestock value chain analysisand project developmentSustainable inclusion of smallholders in agricultural value chainsHow ToDo Notesare prepared by the IFADP olicy and Technical Advisory Divisionandprovide practical suggestions and guidelines for country programme managers, project designteams and implementing partners to help them design and implement programmes present technical and practical aspects of specific approaches, methodologies, modelsand project components that have been tested and can be recommended for implementationand scaling up. The notes include best practices and case studies that can be used as modelsin their particular thematic To Do Notesprovide tools for project design based on best practices collected at thefield guide teams on how to implement specific recommendations of IFAD soperational policies, standard project requirements and financing To Do Notesare living documents and will be updated periodically based on newexperiences and feedback.

2 If you have any comments or suggestions, please contact RotaLead Technical Specialist, LivestockPolicy and TechnicalAdvisory DivisionE-mail: acknowledgethe substantivetechnicalsupport andcontributions receivedfromPhilipp Baumgartner,Don Greenbergand Monica Romano. The technical guidance ofMarcoCamagniand Mylene Kherallahis also also go tothepeer reviewers:Michael Hamp,EdHeinemann,Norman Messer,Henning PedersenandClaus providededitorial,presentationand overall coordination supportthroughoutthe publication MangiaficoKnowledge Management and Grants OfficerPolicy and Technical Advisory 2016 Cover photo.

3 IFAD/Susan BeccioKenya-Smallholder Dairy Commercialization ProgrammeiContentsList of step-by-step approach to value chain analysis and project of the value chain chain project project design and quality and further of acronymsAIartificial inseminationCOSOP country strategic opportunities programmeEUEuropean UnionFFSfarmer field schoolIPinnovation platformLITS Livestock identification and traceability systemLPGlivestock producer groupsMFImicrofinance institutionPPPP public-private-producer partnershipR&Dresearch and developmentVCvalue chainHow to dolivestock value chain analysis and project development1 IntroductionMost newly designed projects at IFADare value chain (VC) projects, or at least use a VC approach toachieve core objectives.

4 Projects in the Livestock sector are no contributes to the livelihoods and food security of about 1 billion people around the world,particularly the rural poor in developing countries. Livestock accounts for more than 30 per cent of theagricultural GDP of developing countries andfor between2andmore than 33 per cent of household , beef production and marketing support 70 millionpeople in West Africa; dairy supports 124 million people inSouth Asia and 24 million in East Africa; and small ruminantproductionsupports81 million people in West Africa and28million in Southern , especially for edible Livestock products, hasincreased as a result ofgrowth in domestic consumption andexportsand is predicted to more than double in 20 years.

5 Theemergence of the modern retail sector has led to higherstandards for meat and dairy products in increasingly largeparts of the the right approach, supplying this growing demand can be a pathway out of poverty, especially forsmall-scale Livestock keepers at the upper and middle levels of the pyramid,2provided that they areorganized and have access to the necessary inputs, services and finance. Livestock keepers at the bottomof the pyramid, and even landless people, can also participate in Livestock VCs as service providers, feedsuppliers or thriving Livestock VC supports other agricultural VCs, as it pulls demand from the small-scale cropproducers who grow fodder crops or supply crop residues to Livestock is a value chain ?

6 A VC is the pathway of processes that aproduct follows as it moves from theprimary producer to the final consumer. In principle at least,valueis added at each stage of the chain ,hence the term value chain . value addition is determined by the market and is not necessarily increasedby processing or physical transformation. For example, a VC for fresh, open-range, organic beef with littlephysical transformation can generate greater value for the farmer (and other VC actors) than a VC forhighly processedbeef are meso-level structures in that they fall between the macro-level of the economy and the micro-level of individual Livestock producers.

7 VCs can be defined quite narrowly, such as the VC for 1-litre tubs ofyogurt inthe Republic ofMoldova ,or very broadly, such as the beef Livestock VCinBotswana . Livestock VCs can be short and quite simple, such as the VCfollowed bya bucket of milk from a farmer scowthat issold tothe farmer sneighbour,or they can be quite long and complex, such as the VC from asmall-scaleAngora goat keeper in Lesotho to a mohair sweater sold in Europe. Figure 1mapsa VC formohair , M., D. Grace, J. Njuki, N. Johnson, D. Enahoro, ,and roles of Livestock in developing , 7(s1):3-18;StaalS.

8 , J. Poole, I. Baltenweck, J. Mwacharo, A. Notenbaert, T. Randolph, W. Thorpe, J. Nzuma, and M. strategicinvestment inlivestock development as a vehicle for rural & Melinda Gates Foundation (BMGF)andInternational Livestock Research Institute(ILRI)Knowledge GenerationProject. Nairobi, Kenya: International Livestock Research Institute (ILRI).2 This typology is adapted fromVorleyB., , and the Balance: Policies to shape agricultural investments and markets infavour of small-scale , United Kingdom: Oxfam this HowTo Do NoteThis Livestock value chain note is part ofthe Commodity value chain Toolkit.

9 Thenotefocuses on Livestock -specific issuesand examples. For more generalguidance on the design andimplementation of value chaindevelopment projects please refer to:Camagni and Kherallah, 2014 to dolivestock value chain analysis and project development2 Source: IFAD(2014)Figure1: Mohair sweater value chainA VC map is a simplified representation of a complex anddynamic reality. The inputs and services that gointo each stepof the VC, and the enabling environment that affects the VC,cannoteasily be shown onaVC map but are vitally important. Keyinputsandservicesinclude feed, veterinary drugs and services,extension advice, market information and in anenabling environmentinclude: theinstitutional, policy, legal and business environment access to grazing land, licensingrestrictions on para-veterinarians, etc.

10 Cultural, social, religious and gender-basedsystems and practices control of cash from animalproducts, etc. rural infrastructure delineated stock routes, watering holes, slivestock VC projects are designed to be inclusiveandpro-poor. That is, theyseek toupgrade andimprove the efficiency of VCs primarily to benefitIFAD starget groups small-scalelivestock keepers andthe rural projects,thesetarget groups become more dynamic actors in theVC and benefit from: higher incomelevels more stable income streamsthroughout the year greater resilience to shocks induced by weather, diseaseormarket position of small-scalelivestock keepers can be improved throughvariousupgrading strategies.