Afghanistan: Enhanced Value Chains

Agriculture and Natural Resources / Agriculture, natural resources and rural development

Afghanistan is a poor rural country and according to the latest National Risk and Vulnerability Assessment (NRVA), rural households accounted for 80% of the total population and rural poverty accounted for 84% of the poverty nationwide (NRVA 2007/08). The national poverty rate is 36%; however there is significant regional variation with poverty levels exceeding 57% in some provinces. Agriculture is an important sector to Afghanistan as 36% of all households rely on farming with another 6% depending upon farm wages as their main source of income. Following decades of conflict and neglect many agricultural industries have low productivity and much of the market infrastructure and systems are in a serious state of disrepair. This is a major constraint to the successful implementation of initiatives to increase incomes in rural communities.

The Government recognizes that economic growth is key to reducing poverty and that agriculture is an important sector in this process. While the causes of poverty in Afghanistan have yet to be thoroughly studied, there is consensus that poverty is linked to low economic growth and inadequate income-generating opportunities, particularly in rural areas. The Ministry of Agriculture Irrigation and Livestock's (MAIL) Agriculture Sector Development Master Plan emphasizes that rising farm incomes drive the rural nonfarm sector and that efforts to stimulate its growth without increasing demand for agricultural products will not bring about the targeted results. MAIL prioritizes activities that rapidly stimulate employment and thus increase farm incomes and wage rates. The ministry supports the development of the private sector, a key pillar of the Afghanistan National Development Strategy (ANDS).

The premise behind this project is that incomes across the rural sector are improved when all elements of the value-added chain are addressed. Consequently, project interventions should not be confined to just on-farm technologies and capacity building, but should also consider reducing constraints elsewhere in the value chain such as post-harvest storage/handling, processing, and marketing. The project will focus on the entire chain rather than a component such as production, and thus will ensure that all the parts required to stimulate and sustain economic development are in place.

Physical activities of the project were successfully completed in June 2017 and financial closure of the grant is underway. The project account will be closed in November 2018.

The achievements under the project are listed below:

1) In total, 1,697 on farm potato storages and 75 community potato storages were constructed. The initial target for on-farm potato storages was 1,316. All the additional storages and activities were completed within the original scope and budget of the project. The assessments show that the potato (marketed) yield has significantly increased compared to the target of 20 tons per hectare.

2) Physical activities of the project were completed in June 2017.

In total, 957 on-farm onion storages and 81 community onion storages were constructed. The initial targets for on-farm onion storages and community storages were 818 and 80 respectively. All the additional storages were built within the original scope and fund of the project. The assessments show that the yield has significantly increased compared to the target of 20 tons per hectare.

3) Edible oil refinery buildings in Nangarhar and Balkh were completed in 2015 and have been turned over to farmer cooperatives. The facilities are currently operational and refined oil is produced to market. Initial assessments show that the farmers in Balkh province have cultivated more cotton compared to last years.

The factory in Mazar sells a liter of refined oil for 80 AFS and the factory in Jalalabad sells it for 87 AFS. Whereas, the prices of unrefined oil ranges between 57-66 AFS/Lit. The production capacity of edible oil facilities in Jalalabad and Mazar have considerably increased.

Production management capacity of participating communities is improved

On-farm storage losses of potatoes and onions are reduced

Two oil-processing facilities in Jalalabad and Mazar-e-Sharif produce high-quality edible oil for human consumption

Project is managed, monitored, and evaluated properly

1.All civil works, goods and consultants contracts are awarded.

Achieved. M&E plan established in Q2 2014

Ongoing. 15th Quarterly reports submitted on-time.

(i) The project has achieved more than its target and 12,258 farmers have been trained where 20% were female beneficiaries.

(ii) Consulting firm was recruited and guidelines developed with translation to local languages.

(iii) Workshops of Training to Trainers (TOT) and Training to Farmers (TOF) have been conducted.

1. The contracts for the supply of equipment and for civil works of the facilities were awarded in March and May 2014, respectively. The facility was completed in 2015 and handed over to cooperative.

2. The price has been increased from AF70/liter, while currently it is sold out at Afs 90.

3. Civil works and equipment installation are completed, an assessment of the price has been done.

3. Both companies were supported to participate in Agricultural Exhibition in Kabul in order to establish market linkages with edible oil traders at the country level.

1. With establishment of additional potato storages the farmer beneficiaries now have the opportunity to store their potato with reduced post harvest losses.

2. Baseline surveys completed and the feasibility study report shows that the losses in potato storage as of now reduced from 40% to 3%.

2. The assessments show that the loss in potato storage has been significantly decreased, below the initial target of 2%.

Baseline surveys completed Q1 2014, while reduction in loses of onion storage has been determined where the stored onions are produced to market, and current assessment shows that it is reduced to 2% loses.

Feasibility studies - $360,000 (ICS)

M&E specialist - $150,000 (ICS)

Implementing partner consulting firm - $1,096,000 (QCBS)

Financial systems specialist - $60,000 (ICS)

M&E specialist - $45,000 (ICS)

Audit - $40,000 (LCS)

Oil refining equipment - $1,400,000 (ICB)

Oil refining storage facilities - $600,000 (NCB)

Pilot on-farm storages - $320,000 (shopping)

Pilot community storages - $250,000 (shopping)

On-farm demonstration equipment - $360,000 (shopping)

Equity scheme (on-farm storages) - $10,475,000 (community participation)