Farmer to Farmer Special Program Support Project - Niche Projects Code No.: 1071-20-503-3

VOLUNTEER SCOPE OF WORK Improving the Dairy Product Line for Children and Youth in Central and Western Province and Introduction of Usage of Whey in SME Dairy Sector of Mongolia 1

Background

1.1 The Farmer to Farmer Program The Farmer to Farmer Program is a program established by the United States Agency for International development - Economic Growth and Trade (USAID/EGAT), Office of Agriculture. The program uses US volunteers to invest time overseas sharing their knowledge to increase productivity, improve trade and competitiveness and develop market opportunities of people in developing nations. The general program focus is on increased farmer income and enterprise profitability; increased institutional capacities; improved financial services and improved natural and environmental resource management. The FTF program approach emphasizes projects that offer the greatest potential for expanded economic impact on small and medium scale entrepreneurs. It is an effective, low cost program that blends two goals: providing good people-to-people level exchanges and enhancing sustainable economic and social development. Mercy Corps implements the Farmer to Farmer program in Mongolia as a sub grantee of Weidemann Associates Inc. (WAI). The host enterprises, Mongolian meat or dairy businesses, are the local beneficiaries receiving assistance from the volunteers. Program beneficiaries are individuals (business owners, suppliers, employees) and local consultants, providers of business development services. 1.2 Mercy Corps Mongolia Mercy Corps is an US/UK based international non-governmental and not for profit organization without political and religious affiliations. Through its worldwide programs in 30 countries, Mercy Corps strengthens the private, public and civil sector in order to enhance good governance, economic opportunity, health and well-being, sustainable 1

Mercy Corps Farmer to Farmer Mongolia SoW: SME Children’s Dairy Products resource management, access to information and respect of human rights. Keeping the focus on supporting the development of secure, productive and just communities, the three basic principles: participation, accountability and peaceful change are being pursued. In collaboration with several donors, Mongolian public, private and civic sector partners, Mercy Corps Mongolia is implementing several community development, agricultural and agribusiness value chain strengthening projects across almost entire rural Mongolia. 1.3 The Livestock Sector in Mongolia Almost 62% of the Mongolian population (2,7Mln) lives in the urban centers of the Aimags (provinces) and the capital Ulaanbaatar. Nevertheless identification with the nomadic lifestyle and the countryside is still deeply rooted in the country of steppe and blue sky and is a crucial part of the traditional heritage. Mongolia has less than two individuals, but 25 heads of livestock per square kilometer and is the country with the lowest population density in the world. Only 1% of the land is arable and about 10% of the surface is covered with forest. Besides the service, mining and industry sector, agriculture provides for about 21,2% of the GDP and livelihood for about 40% of the total population. Animal husbandry generates about 80% of the agricultural revenues. Mongolian Livestock Industry Livestock breeding in Mongolia is characterized by extensive nomadic pasture management with low external input of supplement feed. Herders move 2-4 times a year. Winter quarters with simple shelters for animals are often bedded into small valleys and summer camps are in open valleys and planes. Income generating livestock products are meat; dairy products; hides and wool from cashmere goats, sheep, camel and yak. After the political change in 1990, livestock in Mongolia was privatized. Through 1999 total livestock heads increased from 25.9 to 33.6 million. During the three subsequent years between 1999 and 2002 Mongolia faced a “dzud”, a severe weather conditions characterized by harsh winter with heavy snow fall covering standing hay – the main source of winter fodder - followed by late springs and dry summer, during which approximately 12.5 Mln animals died. The recent winter of 2009-2010 was one of the coldest the country has experienced in over three decades. High snow coverage combined with poor management of natural resources, low production of fodder crops and poor herd management led to the death of 8 million animals and reduced total livestock to approx. 35 million currently. Herders with 200 animals or less have been hardest hit. Inexperienced and ill-prepared for the harsh winter conditions, many have lost 50 to 60 percent of their livestock. UN estimates that this dzud forced at least 20,000 herders and their nomadic families to migrate to urban dwellings. It is assumed that to sustain an average Mongolian family a herd of minimum 200 heads is necessary. In 2009 some 170,000 households were recognized as herder families. This number has been relatively constant since 2006. 60% of those households had herds below 200 heads and almost 30% of households had a herd sized between 200-500 heads of which 47% goats, 42% sheep, 5% cattle, 5% horse. Sheep and goats account for 89% of total livestock in Mongolia. In the last 20 years, the number of goats increased from 20.1% to 44.6% of the national heard, due to the high global cashmere demand. Mongolian cashmere represents about 25% of world's cashmere production. 2

Mercy Corps Farmer to Farmer Mongolia SoW: SME Children’s Dairy Products Only about 1% of cattle and horses and 5-6% of goats and sheep are intensively managed. Khuvsgul, Overkhangai, Arkhangai, Tuv and Zavkhan provinces have the highest number of animals. The agricultural sector is supported by a total of 778 livestock specialists, 1,748 Veterinarians and 673 Agronomists. Some 2,800 tractors and 42,300 wells are in use. Mongolia has a potential international comparative advantage for producing “organic” or “clean&bio” meat and milk under extensive conditions, both for ecologically-conscious markets and for nearby markets in the region. But poor application of food safety assurance systems, livestock diseases, lack of good hygiene practices and cooling chains, irregular supply and obsolete processing technologies are crucial obstacles to access this international market segments. The Dairy Sector in Mongolia Nomadic herding and making of traditional dairy products are a central part of Mongolian society providing a significant share of national income and employment. Women play a leading role as they tend the animals and process the milk into traditional dairy products for winter foods as well as for earning income from selling the surplus for other basic family needs. To the Mongolian people milk is a sacred good and this, so called white food, forms a major part in the traditional Mongolian diet. Cows, yaks, mares, camels, goats and ewes are all milked, with approximately 80 percent of the milk produced in the short summer pasture growing period from mid-May to mid-September. Beside raw and pasteurized milk main local products are yoghurt (tarag), butter (maslo, tos), sour cream (tsutsgi), wet and dried milk curds (arz and aarul), cream-cheese collected from skin of boiled milk (urum), fermented and distilled mare’s and camel milk (ayrag, schim and hormog), ice cream (tsairmag) and a type of soft unsalted cheese (tsartsmag). Usage of whey is traditionally unknown. Mongolia yet has no food health standards for whey and most dairies dispose this raw material with the grey water. Mongolia has more meat breeding cows than milk breeding ones thus milk production of cows is very low at 367 liters per year. Currently Mongolia counts around 839,400 cows. In July the average Mongolian milk cow reaches a peak of 8.2 liters. Milk from local cows and yaks is typically rich. The fat content can vary up to 6.5-8.0% and protein levels range at 5-5.4%. 69% of the total milk is supplied in summer and autumn. Mongolia worked actively to hybridizing cows in milk breeding in 1950-1970, however it stopped from 1990. In 2009 493700 tons of milk were produced. According to a dairy assessment in 2006 milk quota is 60% from cow/yak, 30% goat/ewe, 9% mare, >1% camel. Consumption of milk and milk products was over 135 liter per annum and per person nationwide. Urban population consumes four times less milk than rural citizens due to lower availability and higher prices. Herders focus on self-sufficiency and the informal milk market is predominant. 70% of surplus milk and dairy products are sold and consumed locally. 20% is sold through cooperatives or directly to end users, changers or salesperson and shops in Ulaanbaatar. Urban consumers often purchase raw milk and yoghurt in open containers. Small dairies pack milk and yoghurt into soft plastic bags where as the big enterprises use tetra packs. In summer 2010 the price for one liter of raw milk varied between 300-800 MNT for dairies and was about 1000MNT for consumers. In winter 3

Mercy Corps Farmer to Farmer Mongolia SoW: SME Children’s Dairy Products however, prices can be doubled – yak and camel milk can even reach up to 4000MNT/l. Milk import accounts for 4.6% in total consumption. According to the biggest dairy in Mongolia, imports account for 30% of the total market. Some herder families have manual centrifuges and starter for milk curds usually are very sour yoghurt or whey. Milk processed in dairies has increased annually by 38% in recent years but still only accounts for some over 3% of the annual milk production. Most dairies use the Danish Chr. Hansen starters – only few have starters from China or India. Most dairies have great problems in purchasing good quality milk. Arriving at the dairy, milk often is acidic; herders like to deliver already boiled and skimmed milk and changers tend to dilute it with water. A pricing system for quality milk is only used by a minority of dairies. Milk quality in terms of food security is in a critical situation. 60 out of 100000 Mongolians are annually infected by Brucellosis because of the lack of an effective control program in the livestock sector. A large survey conducted during 1990– ‘95 among herdsmen and other people who work with animals showed that 16% of the examined population was infected. The Brucella seroprevalence rate today in cattle is about 5-10% with some focal areas being close to 50 %. Also transmission of TB, which is the third most prevalent infectious disease in Mongolia with 230 cases in 100000 annually and toxic poisoning through raw milk products is recognized as main food safety issue. Since 2007 the National Dairy Program which involves a mix of Government, but mainly private sector investment, focuses on the actionable strategy in the milk sector and guides the National Dairy Task Force and Dairy Steering Group under the Mongolian Food Processors Association giving the industry a more powerful voice in promoting local milk by focusing on quality, safety and marketing strategies. With the support of FAO a dairy training center at the food technology college in Ulaanbaatar has been opened in 2009. Currently a milk sector strengthening project is implemented in cooperation with Japan. 68% of milk businessmen purchase milk directly from herders - mostly without any contracts. Few dairies collect milk directly from herders but most have it delivered by herders themselves or buy it from changers. In the Central province, Tuv Aimag 8469 enterprises produce ice cream. Besides sterilized milk and yoghurt for the national school lunch program this is an important product for many rural and urban dairies in summer – when schools are closed and consumers tend to buy cheaper milk and yoghurt directly from herders. In all rural areas only a total of 44 firms process pasteurized milk, 5 make cheese. Almost all dairies produce the traditional dairy products like tarag, arz and aarul. The few big milk processing enterprises are concentrated in Ulaanbaatar. The biggest and oldest dairy company purchases milk from 2500 herders and has an annual turnover of 14 Mln liters in fresh milk products and produces 350 tons of powdered milk for own production in winter. Many to most dairies have to resort to imported milk powder during winter and spring but some beverage factories in Ulaanbaatar newly processing UHT milk in tetra packs never rely on local milk.

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Mercy Corps Farmer to Farmer Mongolia SoW: SME Children’s Dairy Products 2

Objectives

2.1 Overall program objectives in Mongolia: “To increase the competitiveness and improve domestic market access of Mongolian rural milk and meat processing small and medium enterprises." Focus is set on the efforts of volunteers on increasing the technical, business management and marketing practices of Mongolian small, medium or big milk and meat processing companies serving as market outlets for poor, smallholder Mongolian herders. The work of the Farmer to Farmer volunteer will directly complement existing Mercy Corps project activities by providing expert technical advice to companies positioned as key market enablers in these value chains. The technical assistance will particularly focus on: building and developing raw material supply chains; adoption of food safety and quality standards; development of new products; increasing productivity and production efficiency as well as adoption of new marketing principles. The volunteer intervention will strengthen the capacity of beneficiaries to apply new innovations and maximize the utilization of local talent and other resources. 2.2 • • •

Assignment Objectives To improve quality of current production of children’s milk products and introduce new products targeting this market sector. To present different methods of usage of whey in small and medium dairy enterprises. To raise public awareness and disseminate information to particular interested parties on the character and accomplishment of the FTF Program in US State of residence.

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Locations of Assignment: Mongolian Capital Ulaanbaatar; Jargalant, Tuv Province (Central Mongolia); Jargalant, Khuvd Province (West Mongolia)

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Scope of work Directly consult the selected enterprises in improvement of current children’s line and introduction of new products with practical solution such as flavored, vitamin, mineral or cereal enriched milk-yoghurt-cream cheese or curds that match toddler’s, children’s and youth’s needs and enhance healthy development. Facilitate a two day workshop on the different options of usage of whey with presentation of a few simple methods of processing whey to marketable products at the Milk Training Center of the Food Technology College in Ulaanbaatar for 15 participant selected from different dairies and business development service providers in Mongolia. Cooperate closely with the assisting film team to produce a video clip on demonstrated techniques for outreach activities of Mercy Corps. Present findings and experiences in one of Mercy Corps Action Centers Against Hunger or during a public activity of a Whole Foods Market or of the Whole Planet Foundation once returned from the volunteer assignment in Mongolia.

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Mercy Corps Farmer to Farmer Mongolia SoW: SME Children’s Dairy Products 5 Deliverables A report consisting of following information is to be submitted at the end of the assignment in Mongolia to the Mercy Corps Mongolia FTF Coordination Team: • Situation found on place of assignment • Activities - planned and accomplished with data on direct beneficiaries, experienced outcome and intended impact • Findings and recommendations for hosts and Mercy Corps’s FTF program coordination • If available: Templates of training material for further extension work At least one public outreach presentation in US State of residence. 6

Support during the Assignment

6.1 Financial Support This volunteer assignment includes NO SALARY. Visa costs, international and national transportation costs, standard accommodation and per diem in Mongolia and supply of technical material for trainings and documentation are provided by Mercy Corps. 6.2 International Logistics Mercy Corps Headquarter in Portland, Oregon, consults and assists in insurance, transport and Visa issues. 6.3 In-country Support and Logistics Mercy Corps Mongolia is responsible for organization of smooth collaboration with host enterprises, in-country transportation; provision of safe and appropriate accommodation1; giving accurate Mongolia country information as well as profiles of the selected host businesses/beneficiaries and workshop participants; linkage to key partners and assistance with technical/professional support like equipment for documentation, laptop, mobile phone, translation and printing of training material. During the full assignment the volunteer will be accompanied by a translator. At the location of assignment the hosts are responsible for smooth flow of work, participation of beneficiaries and assist in organizing daily provision, local transportation and accommodation of the volunteer. 7 Time frame and proposed level of effort The assignment shall take place between January to March but not in the first two weeks of February, as Mongolia will celebrate the lunar New Year Tsagan Sar in that month. Official working days in Mongolia are Mon-Friday, 9am-1pm + 2-6pm, 8h/day. Private sector mostly works 6-7 days/week.

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Accommodation facilities and restaurants in rural Mongolia are in general very basic and on very low service standard

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Mercy Corps Farmer to Farmer Mongolia SoW: SME Children’s Dairy Products Time effort of the assignment is: Country induction in Ulaanbaatar Assignment at Khan Yembuu Dairy in Jargalant, Tuv Aimag Assignment at Khovd Sky Dairy in Jargalant, Khovd Aimag with Undrakh Sunder Dairy from Erdensant, Tuv Aimag as tandem participant Preparation and facilitation of whey workshop in Ulaanbaatar Travelling/Rest (car ride UB-Jargalant 2h; flight UB-Khuvd 3h) Report and debriefing at Mercy Corps Ulaanbaatar Total

1day 5 days 5 days 4 days 4 days 1 day 20 days

8 Liability During assignment in Mongolia the volunteer submits to the code of conduct of Mercy Corps; complies with US policies on prostitution, substance abuse and terrorism and respects USAID environmental guidelines and policies in branding. 9 Application submission requirements Letter of motivation and Curriculum Vitae. No records or certificates have to be submitted for application but might be requested as supplement in the recruiting process. 10 • • • •

Criteria for consideration US citizenship or US residency Level of expertise in relation to technical needs of host and/or beneficiaries Ability to swiftly assess challenges and engage in technical discussion with counterparts Perceived ability to function in a cross-cultural environment

For applications and questions regarding this assignment please contact: Gene Kunze Farmer to Farmer Program - Mongolia International Headquarter Mercy Corps Telephone: +1 (503) 450-1964 [email protected] Fax: +1 (503) 796-6844 or Jeton Starova Farmer to Farmer Program – Mongolia Mercy Corps Mongolia Tel. (976) 11 46 11 45 Fax. (976) 11 46 10 48 [email protected]

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