CCP: ME 04/5

Table of Contents

I. OVERVIEW

II. STATUS AND PROGRESS REPORT

A. PROJECTS UNDER IMPLEMENTATION

The West African Livestock Marketing Project
Meat Commodity Diversification and Upgrading of Meat Processing Technologies in Asia-Pacific
Enhancing Beef Productivity, Quality, Safety and Trade in Central America

B. New Projects reviewed

III. CONCLUSIONS

Appendix I. Summary of Meat and Dairy projects financed by the Common Fund for Commodities and reviewed by the IGG Secretariat

Appendix II: Project Profile Submitted by the Sudan Ministry of Animal Resource and Fisheries

I. OVERVIEW

1. This document reports progress made in the formulation and implementation of projects sponsored by the Intergovernmental Group on Meat and Dairy Products. These projects are for funding consideration by the Common Fund for Commodities (CFC). The Intergovernmental Group on Meat and Dairy Products is designated by the CFC as the International Commodity Body (ICB) and has the authority to conceptualise, formulate and submit commodity project proposals to the CFC for funding consideration.

2. CFC projects adhere to the criteria laid out in the Development Strategy for Meat as submitted to the 15^th Session of the IGG (see document xxxxx) and are reviewed in the context of the challenges facing the meat industry. These include, in particular, reducing obstacles to domestic and international trade in livestock and meat; obtaining more value from slaughter stocks; and reducing livestock industry meat production costs. The CFC specifies that projects should focus on commodity development measures that improve structural conditions in markets and enhance the long-term competitiveness and prospects of particular commodities, in particular on:

• applied research & development, transfer of technology;
• productivity and quality improvement;
• marketing (new uses of a product; improved distribution and transport; measures aimed at strengthening competitive position of a commodity);
• production diversification (vertical, horizontal, geographical);
• promoting efficient use of resources (sustainable management of resources; optimum use of by-products and waste; use of renewable resources);
• environmentally sustainable commodity development.

3. This document provides project updates and describes progress made since the 19^th Session of the IGG. Relevant updated progress reports will be made available to delegates for review during the meeting. In addition the Secretariat, with the assistance of the Project Executing Agencies (PEA) responsible for these projects, has designed posters of the individual projects to display at the meeting.

4. The Secretariat has continued to coordinate project supervisory activities on behalf of the Group. Other activities of the Secretariat, since the last Session, include the review of four project profiles, one of which is attached for the Group’s consideration. Table 1 in the Appendix includes an overview of on-going and reviewed CFC projects.

5. Since late 2002, the West African Livestock Marketing Project has been extended twice with its completion date now scheduled for September 2004. Two previously approved projects: 1) Meat Commodity Diversification and Upgrading of Meat Processing Technologies in Asia Pacific; and 2) Enhancing Beef Productivity, Quality, Safety and Trade in Central America; have been implemented and activities are on-going.

6. The Group is reminded that the mandate of the Group now covers dairy products as well. In this regard, the Secretariat requests guidance from the Group as to whether regarding the development of strategies for dairy products.

II. STATUS AND PROGRESS REPORT

A. PROJECTS UNDER IMPLEMENTATION

The West African Livestock Marketing Project

7. This project, with a budget of US$1.51 million, was approved in 1998 and initiated in January 1999. Project activities focused on two components. The first was the development and strengthening of West African border markets (in Burkina Faso and Mali), which are conduits for transborder trade in livestock, and the construction of rest points on livestock paths in the six participating countries (including Niger, Cote d’Ivoire, Ghana and Nigeria). These components of the project were implemented by the Comité Permanent Inter États de Lutte Contre la Secheresse dans le Sahel (CILSS) as the PEA of the project, while the second component, the determination of appropriate economic incentives and policy framework to improve livestock marketing and intra-regional trade, was coordinated by the International Livestock Research Institute (ILRI).

8. At the request of the Supervisory Body (SB) and the PEA, the project was extended by the CFC in early January 2004 for an additional eight months. This was due to difficulties related to completing some of the livestock infrastructure activities as well as complications in scheduling two policy workshops: one to be attended by technical/livestock marketing experts and the other by regional policy makers.

9. The project achieved its objective of developing market infrastructure in the three border markets located in Burkina Faso and Mali. Supervision at the level of individual markets appeared to be supported by strong local participation and surveillance. Activities involved in mapping of livestock trekking routes (part of component 1) were complicated by political difficulties in Cote d’Ivoire, and thus were not completed. Delays in implementing these activities reflect the difficulties of managing a regional project, especially those related to lack of appropriate support action by public authorities in the individual participating countries.

10. Activities related to the policy component of the project were difficult to monitor over the course of the project; however, ILRI, despite losing the project economist prior to completion, is working towards completion of its project responsibilities. It released a draft document “Improvement of Livestock Marketing and Regional Trade in West Africa: the determination of appropriate economic incentives and policy framework to improve livestock and intra-regional trade”. This document is available to delegates upon request. The final joint CILSS/ILRI technical and policy workshops are expected to be held in May 2004.

Meat Commodity Diversification and Upgrading of Meat Processing Technologies in Asia-Pacific

11. This project, a US$ 2.2 million project endorsed by the Group at its 17th Session (1998), finally began implemention in October 2003, three years after CFC approval in September 2000. Delays in the implementation of the project were due to difficulties in finding a PEA that had the technical, organisational and financial capability to manage a regional project in Asia. The UN Office for Project Services (UNOPS) Malaysia was designated as the PEA, with technical support provided by FAO’s Division of Animal Production and Health (AGAP).

12. As presented to the Group at its 18^th Session, this 3-year project is a regional meat processing project for Asia and Pacific that focuses on improved utilisation and marketing of meat and processed meat products from various livestock species. The immediate objective of the project is to address regional issues in meat processing, including severe hygiene and technological problems, that lead to significant economic losses and food safety concerns.

13. The project is based in the Philippines (at the Animal Products Development Centre - APDC) with satellite centres in Bangladesh, Myanmar and Samoa. The regional nature of the project will strengthen the technological, sanitary, commercial and environmental conditions of meat sector development in the more advanced countries and will act as a catalyst to stimulate similar developments in those countries that are least developed.

14. A project inception meeting was held in Manila in September 2003, which was attended by representatives from CFC, FAO, APDC and UNOPS. The decision was made to initiate activities in the satellite centres six months after project inception to allow the APDC to concentrate on refurbishing and initiating activities at the regional training centre. This allowed them to effectively utilise FAO training funds which were set to expire at the end of 2003.

15. The project has started well and is staffed by a well-trained, enthusiastic staff at the APDC, supported by the Government of the Philippines which is committed to providing nearly US$900,000 of counterpart funding. The greatest difficulty of the project since implementation has been the inability of UNOPS to provide consistent project support in the form of full-time project staff to monitor project implementation. This is expected to be resolved in the near future as UNOPS finalises its current reorganisation activities.

Enhancing Beef Productivity, Quality, Safety and Trade in Central America

16. Endorsed in November 1998 by the Group, the project was finally approved by the CFC Consultative Committee (CC) in July 2001, endorsed by the CFC Board in October 2002, and implementation started in September 2003. This four-year project, budgeted for US$6.2 million and implemented by ILRI as the PEA, has a regional focus covering Costa Rica, Guatemala, Honduras and Nicaragua. It is a collaborative project involving regional institutions such as the Instituto Interamericano de Cooperación para la Agricultura (IICA), Centro Internacional de Agricultura Tropical (CIAT), Servicios Internacionales para el Desarrollo Empresarial (SIDE), and Secretaria de la Integración Economica de Centro Americo (SIECA). In addition, GTZ has provided the project with a technical expert.

17. The project objective is to improve incomes of poor smallholder cattle producers by: 1) raising cattle productivity of farm operations through activities related to improved feeding and health technologies at the farm level; and 2) enhanced performance of the beef industry with an emphasis on beef quality and safety standards and controls, through training in carcass classification systems. The first supervisory mission was conducted in November 2003 with participation by the CFC representative and a livestock specialist from the FAO regional office. Specific attention was focused on the need for more precise detail on planned activities and a refocusing of the project emphasis to include a clearer pro-poor focus. The project is off to a good start, managed by a competent team of experienced staff that is well connected to institutions in the region. Activities are on schedule.

B. NEW PROJECTS REVIEWED

18. No new projects were submitted for the Group’s approval in the 19^th Session of the IGG (August 2002). However, since that time four separate projects have been submitted for the Secretariat’s review: 1) a series of 5 meat-related project proposals from the Congo, 2) a request for fast track funding ¹ for the organisation of a workshop focused on export enhancement of livestock trade from the Horn of Africa to the Middle East (submitted by the Red Sea Livestock Trade Commission); 3) the development and evaluation of improved and new foot-and-mouth disease (FMD) control technologies (submitted by ILRI); and, finally, 4) a regional project for Sudan and Ethiopia on meat hygiene and quality control. Most of the proposals were generated at one of the CFC’s recent two regional commodity round table meetings held since the last IGG. The Secretariat was represented at both of these round tables: in 2002 the Africa meeting was held in Burkina Faso and in 2003 Cuba hosted the meeting for Latin America and the Caribbean.

19. Status of project reviews:

1. Projects submitted by the Congo were reviewed by the Secretariat and internally by the CFC. The separate and diverse nature of the projects, which ranged from slaughterhouse development to disease control, to the dissemination of breeding technologies, prompted recommendations to the project organisers to develop a more regional focus and a more integrated nature of project activities. The CFC expressed interest in receiving a more focused, regional project proposal on supporting the production for short cycle animal species. These comments have been sent to project initiators.
2. Considerable interest was shown by the Secretariat and the CFC on the topic of export enhancement of livestock trade between the Horn of Africa and the Middle East. Suggestions provided to the Red Sea Livestock Trade Commission (RSLTC) included: 1) a request to narrow down the focus of the project proposal; 2) to better identify specific problems, constraints and potential prioritized areas for interventions; and 3) to provide more private sector involvement. These comments were sent to the RSLTC; however, to date no revised proposal has been submitted.
3. The ILRI proposal entitled “Predicting the performance and economic impact of new technologies in different settings” is part of a larger US$90 million strategic global research partnership initiative aimed at progressively controlling FMD. The activities for the fifth pillar of this project (proposed funding of US$8.3 million) involves evaluating: 1) how new technologies might influence policy and strategy options; 2) the role of epidemiological and economic modelling in predictive technology evaluation; and 3) the application of technologies and their impact on global/local meat markets. This project concept was reviewed by the CFC project officer and the Secretariat. It was decided that, while the research objective is critical to livestock markets and producer livelihood opportunities, the research focus and the magnitude of the budget request would likely preclude it from being funded by the CFC. However, within the global funding opportunities for the entire project, project organisers have been encouraged to identify specific development activities of a more focused nature that might be considered for endorsement at a later date by the IGG.
4. The project proposal submitted by the Sudan Ministry of Animal Resources and Fisheries on “Meat Hygiene and Quality Control” focused on standardising meat hygiene and quality control systems in the Sudan and Ethiopia. The activities in this US$5 million (18-month) proposal include: constructing a quality control and assurance centre within a Regional Meat Hygiene, Inspection and Grading Centre; providing slaughterhouse laboratory equipment for abattoirs; and conducting training for personnel. As currently conceived, the project would be unlikely to receive CFC funding given its heavy emphasis on construction and materials procurement. However, since this is a very important issue in the region, the project profile is included in the Appendix. Members are invited to discuss the relevance of the project concept and to provide suggestions for enhancing the proposal with a view to securing CFC financing.

III. CONCLUSIONS

20. In view of the above, and based on the information provided on individual projects, the Group is invited to make comments and/or recommendations on any issues raised therein. In particular, the Group may wish to:

1. Review and examine the achievements/progress of on-going projects;
2. Comment on the Secretariat’s approach to the project review process;
3. Discuss and formally endorse or reject the concept of the new project profile. Delegates may, in particular, express their views on the importance of the project and provide recommendations on possible activities, implementation mechanisms, the enhancement of regional linkages, and potential collaborative financing linkages. The Group is reminded that the Development Strategy for Meat (Document XXXX) which, elaborated in 1994 and approved by the IGG in 1996, provides the context for evaluating any project to be submitted to the CFC for funding consideration.
4. Identify new focus areas for future projects; and
5. Provide guidance to the Secretary as for the need to draft a Development Strategy for Dairy Products for consideration by the Group. If so, suggestions are solicited as to the focus of such a strategy.

Appendix I.
Summary of Meat and Dairy projects financed by the Common Fund for Commodities and reviewed by the IGG Secretariat

Appendix II:
Project Profile Submitted by the Sudan Ministry of Animal Resource and Fisheries

Project Profile
Strengthening of Meat Hygiene and Quality Control
Measures in Sudan and Ethiopia

1. Background and Justification

Pastoral livestock production is a major economic activity in East Africa including Sudan and Ethiopia. Both countries have huge export potential which is far from being exploited. There are a number of causes that constrain livestock marketing, including endemic livestock diseases, lack of appropriate livestock information on production centres and marketing outlets, poor handling and lack of standards. Food quality, safety, and their regulation are the theme of this project. The first two issues, i.e. control of endemic diseases and improvement of livestock marketing infrastructure, are dealt with in other Regional projects, e.g. Pan African control of Epizootics (PACE), which aims to control major livestock diseases.

Food quality and safety are of concern to every individual. The responsibility for ensuring that rests with governments, industry, and the consumers themselves. The responsibility of governments is to ensure that food quality and safety requirements are appropriate, adequately supported within the frame of national food quality and safety legislation and regulations, and clearly communicated to industry and consumers. The food industry must ensure the quality and safety of their products through the implementation of quality assurance programmes, including food safety programmes based on the hazard analysis and critical control point (HACCP) system, designed to ensure competence with all relevant regulations. Consumers must employ correct food handling practices in order to avoid food quality and safety problems at home level.

Food quality and safety arc now of even greater concern to the livestock export industry. Sudan and Ethiopia being major producers of livestock have to strengthen their competitiveness in order to exploit their livestock potential as regional meat and meat product exporters.

They have to strengthen their capability for inspection, monitoring, standardization and certification and this standard should be internationality promoted. Strengthening competitiveness through quality livestock products can be achieved by:

• Strengthening veterinary services to maintain and enforce high veterinary sanitary measures for export of livestock and livestock products.
• Establishing livestock product standards.
• Promoting quality assurance programmes (QAP).
• Promoting good manufacturing practice (GMP) and hazard analysis critical control point (HACCP) in all abattoirs and processing plants.

In the 1980s, FAO, supported by the Government of the Netherlands, established in Kadaro (Sudan) a regional training centre for meat inspection, hygiene and grading. The centre is responsible for training main players involved in meat hygiene and processing. It is anticipated that the same activity would continue but with high technical support.

The new QCA (Quality Control Assurance) will add to the ordinary conventional work of the centre. Participants from Sudan, Ethiopia, and other countries of the region could receive specialized training in different models of QCA like ISO 9000 and HACCP on ways and means of their application.

The project, however, originates from the Sudan. The theme of the project is to establish an efficient meat hygiene and quality control system capable of meeting the standards required by Saudi and the Gulf markets, in the first place, and other potential markets in the region (Egypt, Jordan, Yemen, Libya etc) as well.

Meat hygiene and quality control in the Sudan is vested in the General Directorate of Quarantine and Meat Hygiene of the Ministry of Animal Resources and Fisheries. The Directorate is running its responsibility through a network of:

• Inspection centres in production areas.
• Internal quarantines halfway to export points.
• Terminal quarantines at export points.
• Six export standard abattoirs.
• Meat Inspection, Hygiene, and Grading Centre.

The system though backed by vast experience acquired by long practice of the profession, it is crippled by shortage of up-to-date laboratory and quality control equipment, training, and capacity building facilities.

2. Commodity Strategy:

The promotion of meat export ranks high in the development agenda of both Sudan and Ethiopia governments. Not only is the commodity produced by two of the least developed countries in the world, but it also has a great export development potential and moreover is produced by traditional herders who make up the most alienated stratum of the populations in the two countries.

3. Project Objectives and Rationale:

Establishment and Standardization of quality control and meat hygiene centres in each of the two countries.

• Safeguard and improvement of the market competitiveness of Sudanese and Ethiopian live animals and meat exports.
• Capacity-building by utilizing the existing human resources and infrastructure to build a quality control and assurance (QCA) system.
• Expansion of meat and live animal exports to other potential regional markets - especially Egypt - as step to market diversification and COMESA Block integration.

The rationale of the project lies on the fact that the more competitive the Sudanese and Ethiopian meat and live animals in the export market become, the more chances are made available to traditional herders to market their stocks and improve their standard of living and the more hard currency will be generated for the two countries to achieve balance of payments.

4. Tentative Costs and Financing

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¹ A fast track facility was established by the CFC in 1997 for financing small projects such as studies, very small projects and workshops. Whereas regular projects need the approval of the CFC Executive Board, Fast Track projects can be approved by the Managing Director.