FAO CONTRIBUTION TO AGRICULTURE OF MONGOLIA

“INNOVATIVE AGRICULTURE FINANCE OPPORTUNITIES”

CONFERENCE

FAO Representation in Mongolia

Food and Agriculture Organization of the United Nations

OUTLINEFAO’s Vision & Goals What FAO does globallyWhat FAO has been doing in Mongolia

– Achievements – Way forward: Country Programming Framework

What can be done to ensure sustainability

Food and Agriculture Organization of the United Nations

• Achieving food security for all is at the heart of FAO's efforts – to make sure people have regular access to enough high-quality food to lead active, healthy lives.

The three main goals:

Food and Agriculture Organization of the United Nations

1 • the eradication of hunger, food insecurity and malnutrition;

2• the elimination of poverty and the driving

forward of economic and social progress for all;

3• the sustainable management and utilization

of natural resources, including land, water, air, climate and genetic resources for the benefit of present and future generations.

Food and Agriculture Organization of the United Nations

Ensures the participation of smallholders, women,  indigenous peoples and marginalized groups in each of these sectors.

Ensures the increased

productivity does not only

benefit the few

Applies innovative approaches to increase productivity, conserve natural resources, and use inputs sustainably and efficiently

Humanitarian aid

Agricultural land and

water resources

Fisheries Forestry

Agriculture

Food security

FAO IN MONGOLIA

1973-2008 2009-2014

13,443,467 US$

• Mongolia became a member of FAO in 1973, and was accredited through the FAOR office in China.

• The FAO office in Mongolia opened on 1 July 2009; facilitates projects implementation according to FAO rules and regulations.

• Up to date: 113 projects with the total value 38,694,394 $

66 47

25,250,918 US$

Number of projects

Food and Agriculture Organization of the United Nations

ACHIEVEMENTS …

• GCSP/MON/001/JPN “Increasing the supply of dairy products in Mongolia by reducing post-harvest losses and re-stocking” 2004-2007 (1.92 million USD)

• Six commercial dairy models covering each link in the cow-to-consumer dairy food chain were demonstrated with private and public sector partners.

Food and Agriculture Organization of the United Nations

16 model units demonstrating all aspects of this vertically-integrated industry – from dairy cow breeding to dairy sales centers

5 dairies in the capital

Collect milk from 1500 rural and nomadic families, then safely transport and sell it in cities.

“One-Stop Dairy Sales Centre”

In Ulaanbaatar

School nutrition programme

In 2006 in UB 110 000 children across the country and 2007 reaching 1 870 000 students in all.

National Dairy Vocational Training Centre

53 training activities for over 1 000 dairy operators. About 65% of the participants were women. Over 7 500 persons visited exhibitions and field days jointly sponsored by the project to promote dairy development activities in Mongolia.

GCSP/MON/001/JPN – II Phase 2008-2009– Government KR-2 fund, MoFA 2,12 billion MNT

• During the project lifetime, a new National Dairy Programme was approved by the government (2006).

• The three main project intervention areas of:– (i) milk production enhancement, – (ii) milk marketing enhancement and – (iii) dairy training/capacity building were

mainstreamed into the new National Dairy

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ACHIEVEMENTS …

Lessons learnt related to the public & private sector

Public

Governments need to be cautious about interventions in the sector, especially pricing policies and dairy cow loan

schemes Government investment in large state-run processing does not work

and it is recognized that smallholder dairy development

needs to be target based on selected criteria

Graduation: from subsistence to commercial smallholder and/or

larger-scale milk production level occurs when the right policies and

strategies are adopted

Private

The private sector was not engaged soon enough: creative and carefully

thought out linkages by smallholders/smallholder groups with the private sector (including technical

assistance, financial support) can enable smallholders to move up the

marketing chainMilk quality and attractive product branding/presentation: are pre-

requisites for persuading modern urban consumers to switch from imports to milk produced by local

smallholdersValue addition: to enhance returns to dairying, selected smallholders close

both formal and informal markets should go into high value added ready-to-drink indigenous and niche products

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Driver Categories with Sub-Factors

Demand Conditions

Market Structure & Governance

Factor Conditions

Related and Supporting Industries

Business Enabling Environment

Market size and growth

Domestic Market Herd Value-Added Processing

National

Consumption patterns

Governance Breed Transportation and

Distribution Sector Regulation

Sophistication of consumers

Market Chain Human Capacity Producer servcies Formal sector support

Receptivity to new products

Lead Firms Distribution-Infra

Capacity Specialized inputs Provincial/Local

Price elasticity Barriers to Entry &

Rents Processing

Specialized finance & credit

Formal Private Governance

Impact of market opening and imports on local demand International Market

Land Supply & Utilization

Relevant research capacity & utilization

Donor/NGO

  Credit-Finance Market

   

External Economies Ref: Brian Dugdill, Dairy Development Specialist, FAO, Nancy Morgan, Livestock Policy Officer, FAO, Bangkok. Smallholder dairying in the Asia-Pacific region Based on synthesis of nine country lessons learned studies from Bangladesh, China, India, Mongolia, Pakistan the Philippines, Sri Lanka, Thailand and Viet Nam

Food and Agriculture Organization of the United Nations

Food and Agriculture Organization of the United Nations

PROSPECTS FAO IN MONGOLIA

CPF: a joint framework for strategic cooperation between the Government of Mongolia and FAO assistance in support of the attainment of the national development policy objectives in the fields of agriculture, fisheries, forestry, and natural resources, 2012-2016

Priority Area 1: Promotion of sustainable livestock development through improved quality, health, and productivity of livestock and increased pasture, feed, fodder, and water supply

Priority Area 3: Promotion of sustainable natural resource management as techniques for adaptation, mitigation, and management for the impacts of climate change

Priority Area 2: Introduction of environment-friendly technologies, better irrigation and rotation schemes, and crop diversification strategies to improve crop production

Priority Area 4: Development of value chain: improvement of food products, food safety standards, and food marketing

What can be done to ensure achievements and sustainability of agricultural development

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Public & private service providers( through whole

chain)

More power and reduced vulnerability for small producers in Scenario B as opposed to Scenario A - as finance gives them staying and bargaining power, reduces their risks and enables them to get rewards/returns commensurate with and effort they put in. The “B” with more players and more choices

Value chain finance for agriculture a topic of interest for FAO and other development agencies

Value chain financing Food and Agriculture Organization of the United Nations

If designed well, AgVCF interventions can increase the competitiveness of small producers, and agribusiness enterprises

Consideration of previously started

…

Sustainability

CoordinationSector wise/ Inter

sectorial

Responsible governance

Coordination of donors

Research & extension

M &E mechanism

Investmentfor sustainable

AgVCdevelopment

FAO can facilitate

Food and Agriculture Organization of the United Nations

Food and Agriculture Organization of the United Nations

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