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Objectives
The main objectives of the project were:
- to lay the foundations of small-scale, private-sector, market-oriented
agriculture so as to generate the necessary surpluses to promote and
maintain growth in the agricultural sector
- to improve the livestock genetic material over the long term.
Activities
Activities The project had four components:
- livestock activities
- agricultural machinery
- a pilot credit scheme
- institutional and implementation support.
Outcome
A total of 11 401 pedigree in-calf heifers, mainly of the
Simmental breed, and a total of 12 343 sheep of the Pramenka breed or
Pramenka crosses were procured during the project and given on a credit-in-kind
basis to private farmers. According to the Completion Report, the project
was very successful in achieving targets, particularly in terms of the
animals imported or procured locally and distributed to farmers. It also
had a major impact on the restocking of livestock, employment, the production
of meat and dairy products, incomes, food security and nutrition. Benefits
are likely to increase post-project as the advisory extension and health
services and marketing infrastructure improve.
While the breeding and investment aspects were highly successful, the
marketing opportunities for dairy products remained limited. Consumers
have low incomes, and they are low-price oriented. The uncontrolled importation
of milk through unprotected borders complicates the markets. Farmers selling
milk to processors, especially to monopolistic dairy enterprises, get
their payments late and sometimes get no payments at all.
The project enabled the beneficiaries to reach self-sufficiency in milk
consumption.
The major drawback has been the low credit recovery rate. According to
the Completion Report, the reasons for the very poor recovery rates include:
(a) political interference and the lack of a clear policy with respect
to loan delinquency; (b) the absence of in-depth involvement by the commercial
bank in following borrowers and recovering installments as they fell due
because it had not been a part of the beneficiary selection process and
did not carry any risk; (c) the absence of linkages between the beneficiaries
and dairy plants, milk collection points, or meat and milk markets; (d)
because of the selection of the beneficiaries by municipalities, it was
mistakenly thought that the project was distributing the animals on a
grant basis.
Organizations
and people
| The limited linkages among farmer associations, extension
services and livestock veterinary institutes were severed during the
war |
| Planned |
|
Achieved |
| To provide funds for the re-establishment of institutional linkages.
To provide assistance to the Project Implementation Unit in the
Federation and the Project Coordination Unit in the Republic of
Srpska for project execution.
To provide a training programme on three levels: local instructors
(training of trainers, mainly university professors), local trainers
(local project consultants and municipality extension workers) and
farmers (project beneficiaries). Training would include animal husbandry,
feeding and health care.
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The Project Implementation Unit in the Federation and the Project
Coordination Unit in the Republic of Srpska were established and
staffed.
Training in the Federation was provided to local trainers (54
trainers from 17 municipalities) and the farmers (245 training courses
were attended by over 5 000 farmers) who received livestock. Training
for local instructors was not provided because foreign experts could
not reach the Federation due to air strikes by the North Atlantic
Treaty Organization against Yugoslavia and the closed air space
over Bosnia and Herzegovina.
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Access
to inputs and infrastructure
| Republic of Bosnia
and Herzegovina was part of the former Yugoslavia and became independent
in 1992. Soon after gaining independence, the country was thrown
into a long and devastating civil war, during which about 250 000
people were killed. The war led to a massive destruction of infrastructure
and facilities. Estimates of livestock numbers as of end-1995 indicated
a possible reduction of livestock to only 30% of pre-war levels.
The great majority of Bosnia and Herzegovina’s
population continue to be highly vulnerable to food insecurity,
unemployment and lack of basic services, particularly with regard
to housing, health care and power for heat and light.
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| Planned |
|
Achieved |
| To procure 7 520 cattle, 5 775 sheep,
350 goats and 300 pigs. The animals will be distributed in the form
of ‘subsistence’ and ‘commercial’ packages
(proportion of 50:50%). A subsistence package was expected to comprise
one pregnant heifer or five small stock, while a commercial package
was likely to be up to 25 small stock or three dairy heifers.
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On a credit-in-kind basis, 11 401
pedigree in-calf heifers, mainly of the Simmental breed, and a total
of 12 343 sheep of the Pramenka breed or Pramenka crosses were distributed
to farmers. Farmers showed greater interest in subsistence rather
than commercial loan packages (80:20%). Reasons for low interest
of farmers in commercial packages were: small farm size, marketing
problems, large number of refugees and displaced persons having
no social security, slow shifting of farmers attitude from planned
economy to market economy, etc.
Because of limited availability of artificial insemination, 25
breeding bulls were procured and distributed to farmers in villages
far away from local veterinary stations.
Goats were not procured because the beneficiaries were not interested
in receiving them. Lack of interest in goats was most likely due
to the negative results (high abortion and mortality rate) during
the previous Emergency Farm Reconstruction Project.
Pigs were not procured since the prices on the international market
were too high. Funds intended for pig supply were reallocated to
the supply of heifers.
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Risk
management
| Marketing possibilities
for milk were very limited partly due to lack of compressors and
cooling equipment at the milk collection centres.
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| Planned |
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Achieved |
| To facilitate and finance insurance
to protect the farmer against accidental death of the cow or offspring.
The insurance protects the investment, as well as ensuring the farmer’s
ability to pay back his loan.
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The purchase price for each heifer
included a one-year insurance for the animal. |
| To support re-establishment of the supply chain for fresh milk by
re-equipping six milk collection centres in Republic of Srpska with
compressors and cooling equipment. |
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For milk collection, 16 cooling tanks were procured. |
| To finance a study to develop a strategy to accelerate the recovery
of a special Pramenka sheep industry. The Pramenka breed is known
for its good milking capacities, soft white cheese and spring lambs. |
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A study, ‘Quality of Sheep Fatty Tissue from the Hilly-Mountain
Region of Central Bosnia’, was conducted to explore different
possibilities for the use of sheep fat. |
| To finance pilot credit activities to support small-scale, private
agricultural and horticultural producers, especially those who are
ultra-poor and unable to take up the livestock benefits of the Small
Farm Reconstruction and Development Project. |
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The pilot credit scheme was cancelled because the USD 1 million UN
Development Programme grant was not available. |
Rangeland resources
| Because grazing
areas were neglected for a number of years, pastures degenerated,
legumes were lost entirely from the complex (due to lack of phosphate
applications on deficient soils), and desirable grasses were suppressed
by the growth of undesirable weeds. Fields remain heavily mined,
putting the lives of farmers and livestock at risk.
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| Planned |
|
Achieved |
| To re-establish and improve natural
pasturelands through the purchase of pasture seeds. |
|
Very limited improvement of meadowlands
was achieved through procurement of seeds and mineral fertilizers
for demonstration purposes. The pasture improvement programme was
discontinued because the implementing partner (the Republic of Srpska
Agricultural Institute) lost interest in the issue. |
Livestock production
| The general management
system for cattle was based on a cycle of six months of summer grazing,
followed by winter enclosure in stalls in the immediate vicinity
of the farmhouse. Cattle were fed hay and limited amounts of crop
by-products, including undersized potatoes, stock beet and milled
maize. The production strategy of most cattle-owners involved producing
with few inputs.
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| Planned |
|
Achieved |
| To provide animal-husbandry extension
services to farmers through the financing of brochures on husbandry,
rations and health care. |
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In the Republic of Srpska, 5 000 copies
of ‘Farmers Booklets’ were distributed free to project
beneficiaries, local veterinarians, livestock officers and agricultural
engineers. The booklet includes information about animal husbandry,
breeding, forage production and credit conditions. In the Federation,
two different extension bulletins, one for livestock specialists,
agricultural engineers and veterinarians and the other for farmers,
were published and distributed among beneficiaries. |
Livestock health
| Each municipality
had a municipal veterinary station that provides animal health care
services and is responsible for artificial insemination of cattle.
The stations were each usually staffed by one veterinary officer
and two or more animal health technicians. During the war, veterinary
and artificial insemination equipment and infrastructure at the
stations were badly damaged.
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| Planned |
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Achieved |
| To finance post-delivery services
during the first 12 months by reaching agreements between municipal
veterinary stations (or private veterinarians) and the project. |
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In the Republic of Srpska, the project
entered into a one-year contract with municipality veterinary stations
to cover all required veterinary care, including artificial insemination,
pregnancy testing and all veterinary and livestock extension advisory
services. In the Federation of Bosnia-Herzegovina, one qualified
veterinarian was hired to provide advice and training to farmer-trainers
and farmers themselves through project implementation. |
Lessons learned
- In post-disaster projects, the rehabilitation work should not be
confused with development, which requires rural credit and normal commercial
operations. In situations such as post-war Bosnia and Herzegovina, a
grant component, together with a loan, should have been put in place.
- It is important to provide proper information to the livestock recipients
indicating that animal distribution is a credit programme. Moreover,
government commitment is essential to make sure that people understand
the credit programme. Also, livestock loan repayment programmes should
allow for sufficient grace periods to help borrowers pay their loans
back. Many beneficiaries thought that this IFAD programme was a grant
programme similar to others going on at the same time in the Federation
of Bosnia-Herzegovina.
- The project provided loans to borrowers and used an agent bank to
collect repayments. The agent bank was not very motivated to follow
up on the borrowers since the money did not belong to it. In the future,
agent banks should obtain funds as loans and should on-lend these, at
their own risk, to final borrowers. The choice of an agent bank turned
out to be a high-risk issue.
- The credit package given to beneficiaries should have been planned
in a way that would have enabled the beneficiaries to repay their loans.
Even though the financial model showed evidence of profitable income-generation
through the redistribution of livestock, more attention should have
been given to individual cases. In this project, many beneficiaries
were each given only one heifer, and this did not enable the beneficiaries
to create sufficient income for credit repayment.
- It is essential to analyse and ensure the existence of milk markets
before dairy cows are distributed to beneficiaries.
- It is important to help farmers become organized into producer associations
and other groups so as to improve their weight in the market.
- Farmers need advice and training in certain aspects of practical livestock
management so they can safeguard the health and productive potential
of their animals.
- The lack of adequate extension and animal health services can seriously
undermine the capacity of project beneficiaries to absorb new technologies,
including those related to improved livestock breeds, improved seeds
and other specialized inputs.
- In circumstances similar to those in post-war Bosnia and Herzegovina,
farmers should be offered alternative income-generating activities as
well (in addition to livestock production). Diversified production is
an advantage because it can provide flexibility to farmers earning incomes
from different sources.
- For restocking projects in areas where there are sufficient numbers
of animals and functioning financing systems, cash loans are a better
alternative than in-kind loans. Cash loans allow each farmer to choose
the animals they want to purchase. However, sufficient technical support
to assure the purchase of suitable and healthy animals should be provided
to the farmers.
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| Project information |
Total cost: USD 16 million
Livestock cost (as percentage of total): n/a
IFAD contribution: USD 14 million (Cofinancing organizations:
World Bank and UN Development Programme)
Duration: The project was approved in April 1997, and it
was closed in September 2001.
Area: The project area was within the territory of Bosnia
and Herzegovina. The area covered both the Federation of Bosnia-Herzegovina
and the Republic of Srpska.
Beneficiaries: The target group was small-scale private farmers, including
the displaced and their families, operating farm enterprises based principally
upon livestock production. A total of 5 267 poor farm families, or 25
000 people, were expected to benefit initially and directly from livestock
provided through the project.
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| References |
Project Appraisal Report, March 1997
Report and Recommendation of the President to the Executive
Board, April 1997
Follow-Up Report, February 1999
Visit to Bosnia-Herzegovina, 24-26 February 1999, Back
to Office Report
Supervision Report, June 1999
Supervision Report, August 2000
Technical and Financial Audit, IFAD Projects in the Federation
of Bosnia-Herzegovina, January 2001
Investigations into The Animal Health Issues during Livestock
Restocking in Bosnia and Herzegovina, July 2002
Project Completion Report, September 2002 |
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