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Project duration: 2003-2008
Budget: C$ 8.675 M
Partners: Community-based Organizations (CBO's) and NGO's
Location: Jumla, Dadeldhura, Baitadi, Surkhet and Dailekh Districts


Background
In 1989, CIDA funded a Community Participation Initiative Project (CPI) in Nepal, implemented in partnership with the Canadian Centre for International Studies and Cooperation (CECI). The project became a successful replicable model for community-driven hill economic development. Based on the lessons learned from CPI, CECI developed the Community Based Economic Development (CBED) project in Baitadi, Dadeldhura and Jumla districts. With financial support from CIDA, this project was implemented from 1995 to 2002. A complementary Community Health Initiatives (CHI) project was implemented from 1998 to March 2003 with support from CIDA's Multilateral Food Aid / Programme Against Hunger, Malnutrition and Disease. Also, from 1997 to 2002, CECI implemented the Market Access for Rural Development (MARD) project in Surkhet and Dailekh districts with similar components. These projects resulted in important achievements in basic community health, fostering growth of local economies and strengthening community based organisations (CBOs).

One of the major lessons learned was that development in remote hill communities was best addressed through holistic and integrated projects. CECI proposed the new integrated project SAHAKARYA - working together to build self reliant communities in the hills of Nepal - to build on the achievements of CBED, CHI and MARD and to consolidate the sustainability of the development initiatives supported by these projects. The governments of Canada and Nepal signed a Memorandum of Understanding (MOU) for SAHAKARYA in September 2003.


Project Goal
To contribute to poverty reduction in the Mid and Far Western regions of Nepal

Expected Impact
Improved and sustainable economic and social well-being of hill communities in Mid and Far Western regions of Nepal.

Project Purpose
To improve the socio-economic conditions of 30,000 households and 1000 community-based organisations in 500 hill communities of Nepal.



Outcomes and Outputs

I. Community health - Health status of project communities improved

II. Economic development - Competitiveness of community based economic actors in targeted sub-sectors enhanced.

• Market access of proven and new sub-sectors improved
  
• Production of proven and new sub-sectors increased
  
• Access to financial services for productive and commercial purposes in project communities enhanced

III. Institutional development - Democratic governance and effectiveness of member-based organisations in meeting members' needs strengthened

IV. Policy feedback and lessons learned dissemination - Member-based organisations' access to public services and resources increased

V. Management of project - Practical knowledge on how to manage projects in conflict situations increased

Reach and Beneficiaries:
District coverage: To build on the achievements of previous projects (CBED, CHI and MARD), SAHAKARYA will be implemented in the following districts: Dadeldhura, Baitadi, Jumla, Surkhet and Dailekh.

VDC coverage: The project will start working in the CBED, CHI and MARD participating VDCs of the project districts. Later on, it will expand into other VDCs by considering the data on disadvantaged groups available at the local level and the proximity of the new VDCs to the current VDCs (for logistical and efficiency reasons).

Beneficiaries: Within the five districts, the following points summarise the potential project beneficiaries:

Main Project Strategies

Project Advisory Committee

Sustainability
The elements of the SAHAKARYA project strategy that address sustainability include:

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DDP

The contribution of the Dairy Sector in the national GDP of Nepal is over 5 percent, and nearly 50 percent of the livestock GDP. Above 100,000 dairy farmers deliver milk, with a large number engaged in the milk processing industry in both rural and urban areas. Similarly, thousands of people are engaged in production and marketing of indigenous dairy products like Ghee, Hard Cheese, Khoa, etc. Buffalo milk accounts for 70 percent of Nepal's total output, with cow milk making up the rest. About 90 percent of the total production is marketed through local, informal markets. The rest is sold to the 'formal' dairy industry, which comprises the state-owned Dairy Development Corporation (DDC) and several small private dairies. District milk Producers' Cooperative Union, Dadeldhura (DMPCUD) was established in 2002 with the financial support of Canadian Cooperative Association (CCA) and technical supports from the Canadian Center for International Studies and Cooperation (CECI) and Central Milk Producers' Cooperative Union (CMPCU). From the very beginning of its establishment, the DMPCUD has been carrying out buying and selling business of milk and milk products in Dadeldhura district. Until recently, DMPCU in its fold had nine Milk Producers' Cooperative Societies (MPCS) but now the number is gradually growing and has reached to 13.

All milk supplied to the dairy industry is collected by Milk Producers' Cooperative Societies (MPCS), primary cooperatives with a minimum of 25 individual members each. Most MPCSs are engaged in milk collection, quality testing and distribution of milk payments. Some MPCSs operate input supply, veterinary services, and consumer goods outlets for members.

The project goal was to improve livelihoods of dairy farm households in Dadeldhura District.

The purpose of the project was to develop dairy farming in Dadeldhura district through strengthening dairy producers' primary cooperatives and promoting a market approach.

Outcomes:
Improvements in the livelihoods of members: Number of households benefiting increases from 75 to 250, average income increases from Rs 29000 to Rs. 36000
·Greater sustainability of co-ops serving members (Co-op development): Number of co-ops having a self-paid manager cum accountant increases from 3 to 7, number of liters sold through DMPCUD increases from 105 liters to 500 liters per day, total DMPCUD sales revenues increases from Rs 766, 000 Rs 1,650,000, number of products marketed by DMPCUD increases from two (milk and ghee) to five (milk, ghee, curd, Cottage cheese, chhurpi (hard cheese) depending upon feasibility study and business plan developed, quantity of products increases from 180 kg to 1000 kg depending on business plan that will be developed later.
·Improved access of households to the benefits of co-operatives: women co-op members increases from 74 to 104, men co-op members increases from 230 to 275, dairy co-ops increases from 7 to 10, farm households using dairy co-ops' using animal health services increases from zero to 250, litres of milk sold directly by households' increases from 900 to 1000 litres per day, farm household's annual revenue from milk increases from Rs 29000 to 36000
Increased efficiency and management effectiveness of the co-operatives: co-ops with annual audited financial statements increases from zero to ten, number of other disadvantaged groups in decision-making positions increases from zero to five
Best practices documented and disseminated: Three success stories documented and published, 10 officials participating in field visits each year, 20 planners and policy-makers have access to the information on best practices, replication of best practices in CECI's other program areas

The first district-level union of the Far Western Development Region was created to support the MPCSs (milk producer cooperative societies) for dairy business. Ten milk producer cooperative societies have been formed and registered and three more (
MPCSs are in the process of registration. There are currently 565 MCPS members, of which 234 are women.

The main activities of the second phase were as follows:
· Training on Village Animal Health Worker, livestock rearing practices, milk quality control and cooperative and account management.
· Mobilization and training on Milk Producers' Cooperative formation & development
· Facilitation for market linkage of dairy products (both for Forward and backward market linkages)
· Forage and fodder planting materials distributed and available in the coops members
· Cooperative expansion and strengthening
· Enhancing of processing capacity
· Product diversification
· Market expansion
· Business plan development

Impact
Improvement in productivity and quality of milk
Through the training, the knowledge in livestock rearing, clean milk production, feeding schedules, balanced diets and shed management has been increased to a great extent.

Product Diversification and Marketing Linkages
Though the study has identified items such as ice Cream, paneer (cottage cheese), churpi and butter as probable products, the present low purchasing power of the consumers as well as weak marketing linkages may limit mass production. In spite of all these impediments, DMPCU has made notable progress in Product diversification leading to customer satisfaction.

Human resource development and capacity building in milk and milk product processing
Each MPCS are now able to test the quality of milk and pay their member supplier the value of milk by pricing on the basis of fat and SNF contents. Each MPC is able to separate cream from the fresh milk and minimize the problem of selling milk on the bandh days.

Enhancing knowledge on breed improvement and animal health management
Farmers are now well versed with the fact that the health of animal is equally important to produce quality milk for human consumption. Practices on animal feed management have changed from dry straws during winter and lean seasons to forage and fodder cultivated in the farm land.

Social and Economic Enlightenment of Dalits and Marginalized communities
With the creation of the dairy cooperative movement, the Dalits who were hitherto coping with a grim existence, now in addition to a better standard of living, the level of their social acceptability has considerably risen. Out of 565 cooperative members 10 dalits taken the membership and involved in dairy business.

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Jaivik Jadibooti

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