USAID/LEBANON INDUSTRY VALUE CHAIN DEVELOPMENT (LIVCD) PROJECT QUARTERLY PROGRESS REPORT: QUARTER ONE 2013

The project will expand the number of Micro and Small and Medium Enterprises (MSMEs) that can compete in selected markets, improve linkages between those firms and other actors throughout the value chain, increase the gross value of products and services in local and export markets, and expand exports. The net effect of these activities will contribute to improved economic stability and food security for Lebanon, especially in rural areas, and decrease migration from rural to urban areas. The project will partner with local private sector companies to select value chains that have the potential to compete in regional and international markets. Fully functional and competitive value chains will increase income of the rural population as well as rural, peri-urban, and/or urban businesses including farmers, agro-processors, input suppliers, transporters, exporters, small businesses, service providers, retailers, and other entities involved in rural wealth creation. The project will be entirely market-based. The project's objectives include establishing a minimum of seven fully functioning, competitive value chains, increasing the number of businesses or micro-enterprises benefiting from horizontal and vertical linkages by at least 700, and benefiting at least 12,000 small and medium commercial growers from the dissemination of improved production and post-harvest technologies. The project also aims to establish at least 30 new export markets, niche markets, or distribution channels for selected value chain products and achieve an annual increase of at least 10 percent in the volume and value of exported agricultural products of selected value chains for each value chain. During the first quarter of the project, LIVCD initiated the assessment phase with the objective of defining seven to nine value chains that would achieve LIVCD's economic and project objectives. The team concentrated on defining the value chain universe, based on building an exhaustive list of potential value chains, and dividing them into two tracks, agricultural value chains, and non-agricultural value chains. Potential choices included products from the major categories of Lebanese agricultural GDP, ensuring the value chains were substantial in size and had notable market demand, included established private sector and organizational stakeholders to engage, and included a sizeable production base reaching both domestic and international markets. The team initially worked extensively on defining the value chain universe, and LIVCD, building on staff expertise and significant research, conducted a preliminary analysis of competitive products that had proven demand in domestic and international markets. Based on recommendations from discussions with stakeholders, a first set of 24 different value chains was established for further consideration. At the end of November, LIVCD shared with USAID an initial selection of evaluation criteria, refining the three key categories included in the proposal: Competitiveness, Development impact, and Feasibility. The team began to focus on gathering relevant documentation and assessments from several sources, including previous USAID programs, the EU, and the FAO. These reports included various marketing studies, strategic recommendations, baseline reports, statistical data, and historical prices and market trends related to various potential value chains. The LIVCD Library gathers several documents and reports providing from various sources. The project's start-up and mobilization phase included identifying and moving into the project office and recruiting staff members. The team worked extensively on defining the value chain universe, and LIVCD conducted a preliminary analysis of competitive products that had proven demand in domestic and international markets. The team began to focus on gathering relevant documentation and assessments from several sources, including previous USAID programs, the EU, and the FAO. The project's quarterly report documents the first three months of the project, from October 1st to December 31st. The report provides an overview of the operational start-up and mobilization phase of the Project, including identifying and moving into the project office and recruiting staff members. The report also summarizes key deliverables shared with USAID and examines the emerging challenges and opportunities from this quarter's implementation. Finally, the report provides an overview of the key activities and expected results for next quarter's implementation.