Lebanon – Action for Sustainable Agro-Industry in Lebanon (ASAIL)

Strengthening Linkages in Targeted 'Growth Poles'

The conflict between Israel and Hezbollah in Lebanon in the summer of 2006 destroyed more than 900 small- and medium-scale enterprises and caused an estimated $200 million of damage to the private sector. Lebanon’s resilient people are aggressively rebuilding their economy to return the country to its place as a significant player in global markets by expanding their businesses to meet increasing domestic consumer demand and reach regional and diasporic markets for high-value products.

In January 2005, the Lebanese agricultural market began to enter a new phase of liberalization by opening its agricultural market to Syria and 14 other Arab states. Also, through the European Union-Mediterranean Free Trade Agreement, Lebanese products are able to access E.U. markets. Together with the agricultural sector, agribusiness in Lebanon constitutes 35 percent of the productive economy, and the government of Lebanon has prioritized the maintenance and creation of jobs for all players in the country’s rural and agricultural regions.

ACDI/VOCA’s Action for Sustainable Agro-Industry in Lebanon (ASAIL) project, a two-year $6.9 million program funded by USAID, is using a value chain approach to develop two main subsectors in Lebanon: niche Lebanese foodstuffs and small ruminant (goat and sheep) dairy products. By increasing the efficiency of input, production, processing and marketing businesses and by strengthening the linkages among each in three targeted “growth poles” of the country, ACDI/VOCA is raising the income and profitability of small- and medium-scale enterprises (SMEs) within these two selected agrofood value chains.

While ASAIL is working to strengthen the entire value chain for these subsectors, removing constraints and increasing transactional efficiencies to maximize returns to stakeholders, the project focuses interventions primarily on key constraints and opportunities common to each value chain.

Project objectives include:

• strengthening the capability of agricultural producers to manage their businesses by responding to market demands
• upgrading the technical and management capacity of small- and medium-scale agrofood businesses, including their links to suppliers of fresh raw materials
• reinforcing agrofood supply chain linkages to address policy constraints, develop joint marketing strategies and foster collaboration
• facilitating the integration of service providers into the targeted value chains, including input suppliers, technical assistance providers and financial institutions

The ACDI/VOCA team is using these business-oriented, market-informed activities to reinforce rural-urban and coastal-inland linkages, developing existing informal and fragmented linkages into strong demand-driven market channels, which will continue beyond the life of the project, catalyzing rural economic growth and employment creation and discouraging rural to urban migration.

Working closely with regional Chambers of Commerce, Industry and Agriculture, and ASAIL’s local partner, Vitech Consulting, ACDI/VOCA has conducted outreach to over 3,000 small-scale, remote producers and 164 SME processors and established strong long-term working relationships with a select 641 producers and 20 SMEs. Three pilot product development plants have begun operations, with a focus on honey/distillates (based in Tripoli), baked goods/sweets (based in Saida) and fruit and vegetable products (based in Zahle). ASAIL has had particular success in obtaining the buy-in of key Lebanese financial institutions to small, rural lending.

Because the summer’s hostilities impeded much of the harvest season, ASAIL is working even harder to prepare both beneficiaries and potential buyers for next season’s sales, offering enhanced services and training to SMEs (including ISO/HAACP, packaging and packing, promotional materials, trade show assistance, product diversification, business planning and access to loans) and producers (including fattening, vaccinations, transport logistics and group organization). During the course of the war, ASAIL continued to operate and was able to market products from clients to OFDA food aid initiatives and help in emergency efforts. Post-war, ACDI/VOCA conducted an assessment of the conflict’s impact on key herders, hallabs (milk middlemen), processors and financial institutions working with ASAIL in the north, south and the Beqa’a Valley. This assessment has allowed the project to respond to the changing needs of its resilient clients.

As a result of the ACDI/VOCA team’s ASAIL project, targeted businesses in the agrofood sector will be in a stronger position to manage their businesses, rural-urban and coastal-inland linkages will be strengthened, effective marketing systems will be established, and a model of industry competitiveness will be developed for replication.

Building on ACDI/VOCA’s unique combination of commercial and development experience, ASAIL is responding to the changing economic and political environment. There is a clear need for the infusion of business-oriented principles in the Lebanese development arena to match the entrepreneurial spirit of the Lebanese people. ACDI/VOCA’s approach ensures delivery of concrete results in terms of expanded market access for select value-added products through sustainable mechanisms flexible enough to accommodate a continuous process of market-driven innovation and entrepreneurship in the Lebanese agrofood sector throughout and beyond the life of the project. Despite the recent conflict, this program is achieving great progress towards expanding opportunities for strategic yet underserved participants in Lebanon’s economy.

For more information, contact Anna Cuny at acuny@acdivoca.org.

Updated: 10/07

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