Grant Assistance Report

Project Number: 38631 November 2005

Proposed Grant Assistance Government of Viet Nam: Nutritious Food for 6-24 Month Old Children Vulnerable to Malnutrition in Poor Areas (Financed by the Japan Fund for Poverty Reduction)

ii

CURRENCY EQUIVALENTS (as of 30 November 2005)

Currency Unit - dong (D)

D1.00 = $0.000063 $1.00 = D15,904

ABBREVIATIONS

ADB – Asian Development Bank CDC – centers for disease control CIP – country investment plan CSPU – country strategy and program update GOV – Government of Viet Nam GRET – Groupe de Recherche et D'Echanges Technologiques HIV/AIDS – human immunodeficiency virus/acquired immune deficiency

syndrome IRD – Institut de Recherche pour le Development JFPR – Japan Fund for Poverty Reduction JICA – Japan International Cooperation Agency MOH – Ministry of Health MOWA – Ministry of Women’s Affairs NGO – Nongovernment organization NIN – National Institute of Nutrition PCU – project coordination unit PDWA – provincial department of women’s affairs PEM – protein-energy malnutrition PMU – project management unit SC – steering committee SME – small- and medium-sized enterprise TA – technical assistance UNDP – United Nations Development Programme UNICEF – United Nations’ Children’s Fund VWU – Viet Nam Women’s Union WDC – women’s development center WID – women in development

NOTES

(i) The fiscal year of the Government of Viet Nam ends on 31 December. (ii) In this report, “$” refers to US dollars.

Vice President L. Jin, Operations Group 1 Director General R. Nag, Mekong Department (MKRD) Director S. Lateef, Social Sectors Division, MKRD Team leader L. Studdert, Health Specialist, MKRD

JAPAN FUND FOR POVERTY REDUCTION (JFPR)

JFPR Grant Proposal

I. Basic Data Name of Proposed Activity Nutritious Food for 6–24 Month Old Children Vulnerable

to Malnutrition in Poor Areas

Country Viet Nam

Grant Amount Requested $1,994,900

Project Duration 3 years

Regional Grant Yes / X No

Grant Type X Project / Capacity building II. Grant Development Objectives and Expected Key Performance Indicators Grant Development Objectives: The goal of the project is to reduce the incidence and severity of malnutrition among low-income, vulnerable, and primarily rural children by expanding access to improved feeding practices, including giving fortified complementary foods to children 6-24 months of age. Based on an alliance of government, food producers, and nongovernment organizations (NGOs), the project will enable the National Institute of Nutrition (NIN) to further develop an innovative model for increasing production capacity by expanding sales, reducing unit costs, and lowering the price to consumers, thereby improving the prospects for sustainability. Specific objectives are to (i) expand localized, commercial production of a fortified, low-cost complementary food; (ii) develop and expand the system of community-based complementary food sales, distribution, and enhanced nutrition education; (iii) address barriers to accessing complementary food among the most poor and vulnerable; and (iv) address policy development and advocacy for long-term support for fortified complementary food (as part of a range of options that should be available for addressing malnutrition). The expected outcome of the project is increased access of approximately 325,000 poor children to fortified complementary food. Indicators of project impact include child nutritional status and mother’s nutrition knowledge. Baseline values will be adopted from the most recent Government of Viet Nam’s National Nutrition Survey for selected provinces and districts. Expected Key Performance Indicators: (i) Four new production lines increase access to fortified complementary food. (ii) Food distribution and nutrition education reach approximately 325,000 low-income, primarily rural

mothers of 6–24 months old children via Viet Nam Women’s Union (VWU) nutrition education networks.

(iii) At least three alternative distribution channels for complementary foods are identified and tested. (iv) Enhanced evidence base and policy analysis for Government of Viet Nam’s guidelines and action

plans enhance the growth, health, and survival of infants and young children. III. Grant Categories of Expenditure, Amounts, and Percentage of Expenditures

Category Amount of Grant Allocated in $ % of Expenditures 1. Civil Works 8,000 0.4 2. Equipment and Supplies 241,000 12.1 3. Training, Workshops, Campaigns 711,900 35.7 4. Consulting Services 117,000 5.9 5. Management, Monitoring, and Evaluation

590,300 29.6

6. Others 207,300 10.4 7. Contingencies 119,400 6.0

TOTAL 1,994,900 100.0

Incremental Cost 60,000

2

JAPAN FUND FOR POVERTY REDUCTION

JFPR Grant Proposal Background Information

A. Other Data Date of Submission of Application

30 August 2005

Project Officer Lisa J. Studdert, Health Specialist Project Officer’s Division, E-mail, Phone

Viet Nam Resident Mission, lstuddert@adb.org, (844) 933 1374 (ext. 102)

Other Staff Who Will Need Access to Edit/Review the Report

Sector Health, nutrition, and social protection Subsector Nutrition Theme Inclusive social development Subtheme(s) Human development Targeting Classification Targeted intervention Was JFPR Seed Money used to prepare this grant proposal?

Yes [x] No [ ]

Have SRC comments been reflected in the proposal?

Yes [x] No [ ]

Name of Associated ADB Financed Operations

Loan 2180-VIE: Preventive Health System Support Project

Executing Agency

Ministry of Health Viet Nam National Institute of Nutrition 48 B Tang Bat Ho St., Hanoi, Viet Nam

Grant Implementing Agencies

National Institute of Nutrition 48 B Tang Bat Ho St., Hanoi, Viet Nam Tel.: 84-4-9716058 Fax: 84-4-9717090 Email: nckhan@hn.vnn.vn Viet Nam Women’s Union, 39 Hang Chuoi Street, Tel 84-4-972 0056 Fax: 84-4-971 3143 Email: ngthihoabinh@yahoo.com

3B. Details of the Proposed Grant 1. Description of the Components, Monitorable Deliverables and Outcomes, and Implementation Timetable Component A Component Name Expanding and Building Localized Production of Low-Cost Nutritious

Complementary Food for Young Children Cost ($) 224,700 (including contingencies) Component Description Comprises two subcomponents: (i) establishing production units, and

(ii) capacity building for food production and quality control. Subcomponent (i) will support procurement and installation of equipment and site renovations for four new small-scale complementary food production facilities.1 This includes new production units in Nam Dinh and Than Hoa provinces and the expansion of production capacity in the Quang Nam and Hanoi units established by the National Institute of Nutrition (NIN) and Viet Nam Women’s Union (VWU)2 in the trial conducted between 1999 and 2004.3 Each production line will be semi-automated, consisting of a roaster, blender, extruder, and packaging machine and will increase production capacity from 140 kilograms (kg) per day to 365 kg per day. The additional capacity will enable distribution of complementary foods to 60 districts in 6 provinces. Production units will be owned by the entrepreneur that invests 50% of start-up costs. Subcomponent (ii) will support capacity building for food production units and provincial food control and public health authorities. Food technology and quality control specialist positions will be established at NIN for the period of the project to provide technical support and capacity building for the production units. NIN will train for operators and managers at production sites in food safety, hygiene and quality control measures. The component provides training of local food control and health units of the Ministry of Health (MOH) to build the capacity for regular, independent, quality control mechanisms including sampling, laboratory analysis, and other monitoring activities. Units are to be located to efficiently support development, from the three included in the trial phase in Quang Nam, Ha Tinh, and Ha Noi provinces to a total of nine provinces with the addition of Phu Tho, Vinh Phuc, Quang Ngay, Nam Dinh, Tay Binh, and Thanh Hoa.4 Districts will be identified at the inception phase following a review of budget and implementation arrangements, in consultation with local officials.

1 The food produced fills a niche in the market by being low cost and locally produced using local products. Other

fortified complementary food options are from international food companies, imported, expensive, and only available to upper-income groups.

2 The National Institute of Nutrition (NIN) is a government institute operating under the Ministry of Health and the Viet Nam Women’s Union (VWU) is a mass organization that operates as a nongovernment organizations (NGOs) under the provisions allowed by the Government of Viet Nam.

3 The trial was known as the Fasevie project implemented by NIN with technical inputs provided by the French NGO Groupe de Recherche et d’Echanges Technologiques (GRET).

4 These were selected in consultation with NIN and VWU based on a review of all provinces in Viet Nam using the following criteria: (i) percentage (at least 30%) or number of stunted children under the age of five; (ii) provincial per capita gross domestic product half the national average or less; (iii) population density and geographic features; (iv) proximity to established or planned production sites; and (v) inclusion in ADB's Preventive Health Services and Rural Health Project, thus establishing linkages and enhancing nutrition and health outcomes under these projects. See further details in Appendix 3.

4 Monitorable Deliverables and Outcomes

(i) 4 additional production sites established and operational, (ii) 12 staff of local production enterprise trained, and (iii) 8 local government food control unit staff trained.

Implementation of Major Activities: Number of months for grant activities

12 months

Component B Component Name Implementing Community-Based Complementary Food Sales and

Enhanced Nutrition Education Cost ($) 1,239,700 (including contingencies) Component Description This component is focused on enhancing the nutrition education skills

of VWU cadres while enabling them to offer fortified foods during their contact sessions. Under this component, NIN provides technical support to VWU cadres that implement activities with mothers. Over 3 years, the project will work to open community-based channels for distribution, marketing, and nutrition education in 6 provinces and 60 districts. The development will utilize VWU infrastructure reaching from the central, through provincial, district, commune, and village levels. At each level the VWU network will be activated for enhanced education of mothers using promotional tools and education materials focused on improved knowledge and practices about young child feeding. The capacity of 60 district VWU offices will be expanded to enable inventory of complementary food from provincial production units and distribution to the commune and village-based cadres. In addition to supporting additional VWU staff resources as needed to operationalize the project, the project will support two nutrition educators at NIN and a national coordinator at VWU to coordinate activities, conduct training, and build capacity during the life of the project. The component supports a number of provincial and district consultant positions necessary for project start-up including capacity building and training. Training and motivational activities are targeted to VWU’s network of village-based nutrition cadres who are already working with commune health centers to deliver a range of health services and information. The project focuses this community partnership on the critical needs of 6-24 months old children by providing additional tools, training, and the option of purchasing fortified complementary foods. With health centers, VWU cadres can identify all mothers of young children in the area. VWU, health centers and other volunteers will be trained and supported to provide counseling using educational booklets and other tools such as cooking demonstrations, competitions, and educational meetings. In addition, they are provided a modest financial incentive for the sale of complementary food. Following the model developed during the trial, the start-up product inventory for each cadre is provided free of charge, financed by the start-up costs invested by the local entrepreneur who owns and operates the production unit. This investment is used to establish a product revolving fund that supports ongoing sales. Central and provincial activities will be completed within the first 6 months of the project. The educational and sales network will phase in over 30 months with approximately 20% of communes and villages targeted for introduction in year 1, expansion to 40% in year 2 and

5final 40% in year 3.

Monitorable Deliverables and Outcomes

(i) 6 provincial offices and steering committees established, (ii) 60 districts offices and steering committees established, (iii) 1,437 commune committee and operations established, (iv) 325,000 mothers contacted through home visits, (v) 325,000 nutrition education booklets printed and distributed,

and (vi) 4 product revolving funds established.

Implementation of Major Activities: Number of months for grant activities

36

6 Component C Component Name Developing Innovative Approaches for Expanding Distribution and

Access to Reach the Poorest and Most Vulnerable Cost ($) 219,400 (including contingencies) Component Description

This component will focus on identifying other marketing and distribution options to increase revenue, enhance sustainability, and expand access to the poorest and most vulnerable. Expansion options will be based on detailed research to be conducted in the first year of the project to better understand market reach (who is buying the food now and why) and the barriers to access among those not buying, especially the poorest and most vulnerable. This analysis will enable and support (i) refining marketing and education tools and messages for optimal effectiveness; (ii) expanding commercial sales to retailers at provincial and district level for higher production volumes and revenues, thus enhancing sustainability; (iii) developing new education, distribution, and financing models for reaching acutely vulnerable groups that are not accessing the fortified complementary foods under current conditions; and (iv) implementing comprehensive and strategic policy advocacy to secure long-term support for this approach to be part of the Government’s strategy for improving infant and young child feeding. Market research is expected to develop pricing, packaging, and promotional opportunities for bulk sales to the small but growing food retail sector in rural Viet Nam. Expanding into commercial networks at the provincial and district level offers key revenue- generating opportunities. Options for expanding program reach, especially among the poor, include opening distribution channels via the Government of Viet Nam’s Protein Energy Malnutrition (PEM) Control Program; developing opportunities with provincial government food distribution programs (for example, the Provincial People’s Committee sponsors one such program in the Quang Nam area); and building relationships with international and relief nongovernment organizations (NGOs) working in project provinces. Additionally, this component will support testing of a voucher program—integrated into the overall nutrition education component—to expand purchases of the complementary fortified food among the poorest for whom price remains a barrier. Market research, strategic planning, advocacy, and other activities will be implemented by NIN and VWU with the support of domestic and international program development, policy, and marketing experts.

Monitorable Deliverables and Outcomes

(i) consumer and market research analysis, (ii) pilot complementary food voucher program tested, (iii) at least two other alternative food distribution systems tested, and (iv) National Advocacy and Policy Workshop and Report.

Implementation of Major Activities: Number of months for grant activities

36 months

7 Component D Component Name Project Management, Monitoring and Evaluation Cost ($) 311,100 (including contingencies) Component Description This component will support the establishment of a national project

management unit (PMU) at NIN to coordinate with VWU at the national level as well as work at all levels to manage capacity building and procurement activities; support technical assistance to production units and the VWU network (from other project components); and implement market research, piloting, advocacy, and communications activities (particularly those in component C). The PMU will consist of a project director from NIN regular staff, project coordinator, food technology advisor, three nutrition education specialists, an evaluation specialist, and support for financial and grants administration. Capacity building and management support for the unit will be provided through international experts—including a program planning and implementation expert at the inception phase—and ongoing management capacity building for each project component. While the PMU will be supported by the project, it will be integrated into NIN's organizational structure in the long term with staff positions regularized so as to establish long-term institutionalization, support, and sustainability. The PMU will be responsible for project inception, midterm, and evaluation meetings; regular meetings of a national steering committee (twice per year); ongoing collaboration at the national level among NIN, VWU, and other partners; program support functions for training, capacity building, and other project activities implemented at provincial and district levels; and management and implementation of activities outlined in component C. The PMU will produce a final report and evaluation defining results and next steps toward expansion, sustainability, and improvement of the project — consistent with Viet Nam’s 10-Year Country Investment Plan recommendations to expand the Fasevie model on a national basis to reach 25% of all vulnerable 6–24-month olds. The PMU will be responsible for management, monitoring and reporting, including audits and procurement (including of consulting services).

Monitorable Deliverables and Outcomes

(i) 6 national steering committee meetings, (ii) 6 project newsletters produced (biannual), (iii) report to NIN and VWU on training and capacity building, (iv) 3 annual sales reports, and (v) 3 external audits.

Implementation of Major Activities: Number of months for grant activities

36 months

8 2. Financing Plan for Proposed Grant to Be Supported by JFPR

Financier Amount ($) JFPR 1,994,900 (including contingency of 6%)

Government 123,000 (in kind)

Other Sources (Please identify) 35,000 (local matching funds for start-up investment)5

Total 2,152,900

3. Genesis Children aged 6–24 months suffer the highest rates of malnutrition of any age group in Viet Nam. The prevalence of underweight children nearly triples in this critical period while the prevalence of wasting (low weight-for-height) and stunting (low height-for-age) doubles from age 12-24 months.6 A 1995 survey found the prevalence of anemia in Viet Nam to be 60% for 2–24-month-olds.7 The consequences are devastating for survival, health, and growth and for economic and physical productivity. Traditional home-prepared foods─that are fed as a porridge or gruel to children─are of low nutrient density and cannot meet the nutritional needs of these vulnerable children. While fortified complementary foods, also prepared as a gruel but with greater nutrient density, offer an approach to addressing these at-risk low income children, there is no large-scale domestic production capacity and NIN surveys indicate that due to limited availability and high cost, only 5-10% of children have access to fortified complementary foods. In 1995 with technical assistance from GRET-Institut de Recherche pour le Development (IRD),8 NIN initiated a trial of low-cost fortified complementary food designed to be affordable and accessible to the poor. The trial, known as Fasevie, aimed to develop small-scale local production that was technically and commercially sustainable while targeting sales to poor households through community based distribution mechanisms. The trial was implemented in seven districts of three provinces (Hanoi, Ha Tinh, and Quang Nam).9 The product developed is an instant flour of soybean, rice, sugar, and sesame seeds fortified with commercially produced vitamins and minerals. From December 2001 to November 2003, IRD conducted an efficacy study of the nutritional impact of the consumption of Fasevie products compared with traditional gruel consumption over 6 months. Among children consuming the fortified complementary food, hemoglobin measures improved significantly, prevalence of anaemia decreased, and stunting was significantly less. Production is at small units with a capacity of 60 kg per hour and involves drying, roasting, extrusion, mixing, and packaging in light moisture-proof materials. Complementary food has proven acceptable in taste, preparation and packaging, and price.10 NIN, with support from GRET, provided technical support to local entrepreneurs as well as training to the provincial food control units to monitor quality and safety. The Fasevie model uses the VWU infrastructure that reaches from provincial and district to commune and village levels, offering channels of communication, education, and distribution reaching tens of thousands of “nutrition collaborators” at the village level. District-level VWU offices 5 Provided by local entrepreneurs that undertake to establish the production facilities and who will pay 50% of the

investment costs (site development and equipment) with the funds put toward a product revolving fund for local VWU cadres.

6 Ministry of Health, Government of Viet Nam. 2003. National Nutrition Survey. {City.} 7 The survey was a joint effort of NIN, the United Nations Childrens Fund (UNICEF) and the centers for disease

control (CDC) of the United States Government. 8 Technical inputs and implementation oversight from GRET and Institut de Recherche pour le Developpement (IRD)

with financial support from the European Union, French Ministry of Foreign Affairs, Council of the Nord-Pas-de-Calais Region, and the French Committee for UNICEF.

9 The products vary in name according to the province where they are produced, but are perhaps most commonly known as Favina and Fasevie. Favina is a product that is mixed with water and fed as a nutritionally complete meal, while Fasevie is a concentrated enriched additive to home cooked foods.

10 Evaluation data from the pilot project show that an average of 22% of the mothers visited by the nutrition collaborators are buying at least some of the complementary food products (for mothers of children 6–8 months the figure is 28% and for mothers of children 9–11 months the figure is 25%). More work is needed to understand the profile of those that are buying (or not buying) and this activity is planned for under proposed project component number 3. The current price of the product (currently D12,000 per 400 g or approximately $0.75 per 400 g) is expected to be a barrier to the poorest mothers, and the project aims to develop mechanisms for addressing this. However, given the poverty profile of the targeted provinces and districts, project implementers and planners can be confident that the product is already reaching poor and vulnerable households and children, if not the poorest.

9coordinate, train personnel, and distribute product and educational materials to commune and village collaborators who make home -visits targeting mothers of young children with education and, when appropriate, the Fasevie complementary food product. The nutrition collaborators are part of an existing national network that delivers a range of health services and information to households. In the trial, they received enhanced nutrition education training and materials for distribution to mothers. Through the trial nutrition collaborators were able to offer low-cost, commercially prepared food for sale, and received a small commission as incentive. In 2003, an average 8,500 400-gram boxes were sold monthly. Viet Nam’s Country Investment Plan (CIP) for food fortification prepared under the ADB’s regional technical assistance (TA) project 5944,11 outlines a 10-year expansion of this model to sustainably reach up to 25% of vulnerable 6 to 24-month-olds on a national basis. This project is a strategic first step in the expansion, with a focus on developing strategies for scaling up and sustainability as well as ensuring that the product and project benefits reach the poorest and most vulnerable.

4. Innovation The project proposes to develop and test strategies for scaling up and to establish the sustainability of an innovative and tested public-private partnership involving national, provincial, and local governments along with People’s Committees and local food producers and entrepreneurs. The core of this partnership is the Ministry of Health’s (MOH) NIN along with the VWU, one of the nation’s largest NGOs. This project aims to address the limitations encountered in many developing countries in the traditional production and distribution models for delivering complementary foods and young child and infant feeding options, with a number of innovative approaches. While large-scale commercial models usually reach only a small portion of the urban and the affluent, this project explores new avenues for community-based production, distribution, and education reaching into rural and remote areas. Innovative features include the following:

(i) Local production in provincial or district centers, which integrates the project with local suppliers and the community (each production unit creates 3–5 local jobs), making for a true example of a public–private partnership. The small-scale operation minimizes initial site and equipment start-up costs. The shorter supply and distribution routes lower the costs of getting the products to rural markets.

(ii) Economic and political integration of production units into the community through ties to VWU, with a view to developing expanded programs through government financing. This is already being done to some extent in Quang Nam province where the local government has established nutrition programs that target young children and in so doing has become a major purchaser of the complementary foods produced by the Fasevie production unit.

(iii) Use of the established VWU networks to distribute and sell fortified foods plus provide nutrition education to poor mothers. Using the VWU and MOH channels to target poor mothers in rural areas lowers costs and improves access through credible sources at the grassroots level. The model makes optimal use of the VWU network of collaborators, enabling enhanced one-on-one communication to mothers. The project offers VWU an opportunity to be involved in an activity consistent with its mission of improving the status of women in Viet Nam by mobilizing cadres with enhanced community responsibilities.

(iv) New mechanisms for financial sustainability. Using the strengths of public–private partnership, the initial stock of complementary foods is provided free of charge to the village cadre through a revolving fund established by the local entrepreneur that establishes the production unit. The revolving fund,12 managed by VWU, and which should equate to 50% of the value of the site renovation and equipment, represents the commitment made to the project by the local production entrepreneur. Other innovative

11 ADB. 2000. Regional Technical Assistance for the Regional Initiatives to Eliminate Micronutrient Malnutrition

through Public-Private Partnerships. Manila. RETA 5944, approved October 2000 for the amount of $1.3 million. 12 Guidelines on the management of the revolving fund will be prepared by the project management unit in

consultation with VWU. With proper sustainability, the revolving funds should continue to operate beyond the life of the project.

10 financial mechanisms include a small commission to the local cadre, providing a sustainable incentive for village-level workers.

(v) A comprehensive view of young child and infant feeding while offering a complementary food product (with established efficacy). The project is based on the understanding that to get nutritional impact, a complementary food product goes hand in hand with education for child feeding and care. A significant part of the proposed budget is devoted to the educational component, training VWU collaborators and producing materials to enhance mothers’ nutrition skills and options─so that child benefits should accrue even if the mother does not purchase this particular complementary food product. While expanding an innovative local production and distribution model, the project also aims to undertake a detailed analysis of how distribution can be expanded to reach the poorest and most vulnerable.

5. Sustainability A key objective of the project is to develop a financially and institutionally sustainable complementary food production and distribution operation focusing on rural areas and low-income populations. It should be noted that one of the three current trial areas achieved revenues that will result in sustainable operations. The experiences of the trial indicate that achieving sustainability will require higher volumes and sales, to allow more efficient use of the 60 kg per hour capacity, resulting in lower unit costs to the producer and more affordable prices to the low-income consumer. To maximize prospects for sustainability, the project will strategically expand the production capacity of established sites as it develops new capacity in “non-competing” areas. Simultaneously, the project will work to develop additional distribution opportunities in both the public and private sectors including (i) expanding VWU/MOH community networks serving each individual production unit, (ii) opening distribution to retail stores in provincial and district capitals, and (iii) developing government and NGO distribution channels targeting the poor and most vulnerable. While component A will develop the capacity for additional production volume, other project components work to expand distribution and sales to the level needed for sustainability. Access to wide markets should enable production units to increase volume and revenues. Component B will enhance the already operating VWU network in nine provinces to reach a projected 325,000 low-income rural mothers or children. These face-to-face contacts will raise awareness of the importance of young child feeding and work to create a sustainable demand for fortified complementary foods. Component C applies a rigorous evaluation of the pilot project along with additional market research to better understand the consumer and political environment. The research will inform pricing, packaging, and promotional strategies in approaching the commercial sector. But sustainability is not simply a function of the commercial market. Component C also works to build political sustainability by conducting policy research, program development, and advocacy activities aimed at institutionalizing complementary feeding as an integral part of the strategy to improve young child nutrition and health. Component D will establish a PMU within the regular staffing structure, and necessary staff positions will be regularized within the period of the project. Specialist inputs during the project will aim to build capacity to ensure long-term capacity, support and sustainability. 6. Participatory Approach The Government has undertaken a number of participatory policy development processes, which have identified the need for a comprehensive strategy to address young child malnutrition. The processes include adopting the World Health Organization’s global strategy for infant and young child feeding13 and working with a number of sectors to develop MOH's food fortification strategy (2001–2005), which specifically addresses the need to develop fortified complementary foods. A national multisectoral team formed under ADB's regional TA project 5944 developed a CIP for food fortification that endorsed the Fasevie trial as the most promising approach to improving young child nutrition through improved access to fortified complementary foods. The project itself will be implemented through a number of partnerships among food producers, public health and food control agencies, local governments, organizations, and NGOs. Steering committees and other channels for participation will be established at the national, provincial, district, and commune levels. Most important, at the core of this project are activities encouraging local participation, 13 World Health Organization and UNICEF. 2003. Global Strategy for Infant and Young Child Feeding. Geneva.

11ownership, and input including district-level newsletters and cooking competitions, commune– and district–level discussion groups, cooking demonstrations, and other grassroots activities. Ultimately the project is based on the active participation of more than 13,000 village collaborators and cadres.

Primary Beneficiaries and Other Affected Groups and Relevant Description

Other Key Stakeholders and Brief Description

More than 300,000 vulnerable children 6–24 months old in nine provinces (Ha Noi, Ha Tinh, Nam Dinh, Phu Tho, Quang Nam, Quang Ngay, Tanh Hoa, Tay Binh, and Vinh Phuc ) will be offered improved feeding and care, including fortified complementary food for improved health, growth, and survival (Appendix 1).

The project will strengthen cooperation among key national stakeholders including MOH, NIN, and VWU, and will work to expand participation in young child nutrition activities among other government agencies, civic institutions, and NGOs. At provincial and district levels, the project includes food producers, local government, public health and food control authorities, and local VWU chapters. Project resources focus on building the capacity and awareness of community-level stakeholders, upon whose success the program is based.

7. Coordination MOH, NIN, and VWU are the key agencies to collaborate with ADB in project implementation. Universities or research institutes will be engaged to assist with analyzing constraints to access and to collect other information necessary to improve distribution and nutritional impact. Japanese aid agencies are not currently involved in nutrition activities of this kind in Viet Nam and the World Bank is implementing a similar food fortification activity focused on fortifying fish sauce with vitamin A (also derived from the ADB-supported RETA Country Investment Plan for Food Fortification. See Section C1). 8. Detailed Cost Table Please refer to Appendix 2 for the detailed cost estimates, and Appendix 3 for the proposed fund flow arrangements. C. Linkage to ADB Strategy and ADB-Financed Operations 1. Linkage to ADB Strategy

Document Document Number

Date of Last Discussion

Objectives

ADB Policy for the Health Sector

1999 Identified food fortification as a key priority health intervention with proven cost-effectiveness.

Viet Nam Country Strategy and Program 2004-2006

2005 (CSPU) Identified “inclusive social development, with emphasis on health and education” as a priority area for ADB’s country program.

OED Special Evaluation Study on Nutrition and Food Fortification (2005)

2005 Recommended increased effort to implement the outputs of ADB-sponsored TAs so as to increase the effectiveness and impact of the TA. This project proposal is a direct response to this recommendation.

Government of Viet Nam’s Country Investment Plan for Food Fortification.14

Publication Stock No: 100703.

2002 Identified further development of this model for enhanced child nutrition as highly cost-effective.

2. Linkage to Specific ADB-Financed Operation Project Name Preventive Health System Support Project

Project Number 34348-VIE

Date of Board Approval 25 August 2005

14 In ADB and Keystone Center. 2003. Food Fortification in Asia: Improving Health and Building Economies. Manila.

12 Loan Amount ($ million) 37.9 including 10.0 ADF Grant.

3. Development Objective of the Associated ADB-Financed Operation The Preventive Health System Support Project has the goal of improving the health status of the targeted populations and aims to assist in achieving health-related Viet Nam development goals, specifically, to substantially reduce communicable diseases and reduce child mortality rates. Specific communicable diseases of concern include gastrointestinal diseases (especially those causing diarrhea) tuberculosis, malaria, and leprosy. The Preventive Health System Support Project targets similar poor and vulnerable populations. The proposed JFPR project has a similar target group and focuses on developing an intervention for the most at-risk segment of this poor rural population—6-24 months old rural children—and will seek to address one of the key underlying causes of disease and mortality in this group (malnutrition). The project will build on the community MOH infrastructure by integrating additional activities for VWU and other local government organizations and NGOs. Lessons learned from the project can be integrated into ongoing reform and the health care system. 4. List the Main Components of the Associated ADB-Financed Operation

No. Component Name Brief Description 1. Strengthening the surveillance

system and priority health issues Expand the existing provincial surveillance system, establish training programs, and enhance the capacity for utilizing information. Also, develop province-specific priority action plans for disease control.

2. Strengthening the preventive health system

Provide basic equipment needs for provincial preventive health centers and national public health institutions.

3. Developing human resources Develop and deliver training programs for national, provincial, and district health personnel for community-focused preventive health and waste management as well as for field epidemiology.

5. Rationale for Grant Funding versus ADB Lending The Preventive Health System Support Project will build capacity aimed at assisting Viet Nam to adapt to changing epidemiological patterns. The scope and activities of the project are, however, not specifically aimed at reaching the children that remain vulnerable to malnutrition in the critical period from weaning to 2 years of age. International experience has shown that specific interventions are required to reach this group and that the interventions must be tailored to specific cultures and circumstances. There is as yet no widely proven and promoted mechanism for doing this in Viet Nam, which is why this project is important. The Government is unlikely to borrow to promote a national strategy for preventing malnutrition in young children until there are models proven to be effective in this country, particularly, for reaching the poorest and most vulnerable. This project will be an important step in establishing this knowledge and setting the path for eventual scaling up through domestic or aid financing (grant or loan). D. Implementation of the Proposed Grant

1. Provide the Name of the Implementing Agency

National Institute of Nutrition 48 B Tang Bat Ho St., Hanoi, Viet Nam Tel.: 84-4-9716058 Fax: 84-4-9717090 Email: nckhan@hn.vnn.vn

The Executing Agency is the Ministry of Health (MOH) as MOH is responsible for the Government of Viet Nam's goals for improving child health and survival Appendix 4. The Implementing Agency will be NIN of MOH, given its specific responsibilities and experience in advancing the Government's objectives for reducing child malnutrition and increasing access to fortified foods. This implementation arrangement

13mirrors a recent $3 million grant from the Global Alliance for Improved Nutrition, administered by the World Bank in Viet Nam. NIN will continue to work with the technical and management support and capacity-building services provided for the pilot project by GRET. VWU, in conjunction with MOH at national, provincial, and local levels, will be a key implementing partner through its network of nutrition collaborators at the village level. Under the project, VWU will facilitate a process of enhancing the nutrition education training and knowledge of the nutrition collaborators to ensure that mothers receive information about best nutritional practices and introduce access to fortified complementary food where appropriate. The guidance of the provincial VWU leaders will be critical for this and to facilitate intensive inputs, it is proposed that the project support the purchase of a motorbike for the use of the provincial supervisor and project leader. The motorbikes (6 in total, one per province) will be the property of the VWU provincial office at the end of the project, but will be designated for use in supporting the continuation of the program of nutrition education and complementary food sales as established by this project to be sustainable in the long term. A steering committee (SC) will be established at the national level to provide oversight and multi-sectoral and multiagency coordination to project implementation. The SC will meet by the end of the first month of project implementation and thereafter twice a year. Members of the SC will be senior staff from MOH, NIN, and VWU as well as observers from GRET and IRD (given their technical knowledge and experience) and ADB. In provinces where there are production units and/or fortified food sales from the NIN production units, there will also be provincial- and commune-level SCs to oversee the training processes and sales administration. The project will support the establishment of a PMU in offices provided by NIN in Hanoi. The PMU will be responsible for implementing the project, including day-to-day project administration and implementation, targeted technical inputs and capacity building across all sites; liaising with stakeholders and reporting, providing of office space and logistic support, organizing workshops, hosting counterpart staff and consultants as needed and appropriate, and other matters. At the provincial and district levels, project offices will be established in conjunction with chapters of VWU. At local levels, project coordinators will work in conjunction with production units, VWU members, local political organizations, and other local groups to assist in training and other activities cascading to the commune and village levels. The PMU may propose that ADB engage consultants for specific aspects of the project's implementation. International and domestic consultants will be contracted as individual consultants in accordance with ADB's Guidelines on the Use of Consultants or other arrangements acceptable to ADB (in the case of domestic consultants). ADB will approve all terms of reference for consultants to be appointed. Minor equipment and office supplies will be procured in accordance with ADB’s Guidelines for Procurement. 2. Risks Affecting Grant Implementation

Type of Risk Brief Description Measure to Mitigate the Risk Sustainability is not established.

Marketing to low-income and rural population may not be sufficiently profitable for private production enterprises.

The project will work through public-private partnerships to keep production and distribution costs low. The small-scale approach will keep overhead costs low.

Consumer habits, affordability, and awareness do not change.

Given that most poor families currently prepare complementary foods from the traditional “family pot,” a packaged complementary food represents a new product and a new cost. In addition, they are not aware of the specific vulnerabilities of 6-24 months old children.

The Fasevie formula used in the trial that precedes this project was based on local ingredients and marketed by local people with local preferences in mind. This project will similarly be based on small-scale production and community networks to keep costs as affordable as possible.

14 Product promotion will be integrated with nutrition education for mothers.

Political awareness is lacking.

Policy makers do not come to sufficiently appreciate the critical importance of child nutrition to health, growth, survival, and economic development.

The project includes a policy research and development component followed by advocacy activities.

3. Incremental ADB Costs

Component Incremental Bank Cost

Amount requested $60,000

Justification

Intermittent staff consultant inputs are needed to assist with project initiation and management to ensure smooth integration of the project with the completed trial activities, and a rapid start-up, as well as to assist at midterm with documenting experiences and knowledge learned to ensure international dissemination and appropriate sharing with national and international policy development processes.

Type of work to be rendered by ADB Initiation workshop and midterm review 4. Monitoring and Evaluation

Key Performance Indicator Reporting Mechanism Plan and Timetable for M&E

4 production lines established and operational at full production capacity (365 metric tones per day)

1. Final memorandum of understanding with local entrepreneurs

2. NIN procurement records 3. NIN installation and training

activity reports

6 monthly and annual reports (to be completed within the first 6–12 months) and midterm review

325,000 mothers of young children reached through food distribution and nutrition education networks in 60 districts in 6 provinces

1. VWU training mobilization reports and records

2. Inventory reports from VWU district offices

3. Field reports of activities conducted by collaborators

4. Product distribution and sales records from VWU district, commune, and village

6 monthly and annual reports with the following targets: Year 1: network built and 20% of in-home visits made Year 2: 40% of in-home visits made Year 3: 40% of in-home visits made

At least 3 alternative food distribution or sales mechanisms investigated and tested

1. Marketing and audience research reports

2. Reports of trials and lessons learned

3. Report of advocacy meeting

4. Sales records to commercial sector

5. Additional NGOs and institutions committed to purchases from program

6 monthly and annual reports with the following targets: Year 1: Market research and policy development completed Year 2: Market development and trials completed Year 3: Policy documents and commitments to program

15Policy paper for government on complementary food options as tested under this project.

1. Marketing and audience research reports

2. Reports of trials, lessons learned

3. Report of advocacy meeting

4. Inclusion of complementary feeding into nutrition and policy documents

5. Additional institutions committing to partnership or purchases from program

6 monthly and annual reports with the following targets: Year 1: Market research and policy development completed Year 2: Market development and trials completed Year 3: Policy documents and commitments to program

5. Estimated Disbursement Schedule

Fiscal Year (FY) Amount ($) FY 1 544,000

FY 2 730,000

FY 3 720,900

Total Disbursements 1,994,900 ----------------------------------------------------------------------------- Appendixes

1. Provinces Identified for Project Implementation 2. Detailed Cost Estimates 3. Fund Flow Arrangement 4. Project Implementation and Institutional Arrangements

Appendix 1 16

PROVINCES IDENTIFIED FOR PROJECT IMPLEMENTATION

Province Region Stunting

(% of children under 5 years)

Number of Stunted Children Under 2 Years (estimated)

Gross Domestic Product

($ per person per year)

Phu Tho North East 35.9 10,688 179 Vinh Phuc North East 37.8 13,818 176 Quang Ngay South Central Coast 36.6 14,730 161 Nam Dinh Red River Delta 32.8 7,150 185 Tay Binh Red River Delta 31.6 18,888 223 Thanh Hoa North Central 35.1 42,733 176

Sources: National Institute of Nutrition and UNICEF. 2003. Viet Nam 2000–2002: A Review of the Nutrition Situation. Hanoi; and GRET-IRD. 2005. Population, Nutrition, Social and Economical Status of Vietnamese Provinces. Hanoi.

DETAILED COST ESTIMATES

($)

17 Appendix 2

CF= complimentary food, NGO= nongovernment organization, NIN= National Institute of Nutrition, VWU= Viet Nam Women's Union. Source: Asian Development Bank estimates.

18 Appendix 2

Table A2: Summary Costs Table ($)

Source: Asian Development Bank estimates.

Appendix 2 19

Appendix 3 20

FUND FLOW ARRANGEMENT

1. Funds will be disbursed under the terms of a contractual arrangement with the Ministry of Health and National Institute of Nutrition, which will maintain an imprest account at a bank acceptable to the Asian Development Bank (ADB). The project management unit will channel funds to implementing partners, following appropriate requests and liquidation procedures. The imprest account will be established, managed, replenished, and liquidated in accordance with ADB's Loan Disbursement Handbook and detailed arrangements agreed on between the Government and ADB. The initial advance will be based on estimated expenditures for the first 6 months or 10%of the total grant amount, whichever is lower. The statement-of-expenditure (SOE) procedure will apply to all payments and transactions under $5,000 to ensure speedy project implementation. 2. The use of the account and SOE will be audited annually by auditors acceptable to ADB.A separate audit opinion on the use of the account should be included in the annual reports. All procurement under the Project will be conducted in accordance with ADB's Guidelines for Procurement. Consultants will be hired in accordance with ADB's Guidelines on the Use of Consultants or other arrangements acceptable to ADB. 3. Interest earned on the Japan Fund for Poverty Reduction imprest account can be used for the project subject to ADB’s approval, within the approved total amount of JFPR. Upon completion of the JFPR project and before closing of the JFPR account, any unutilized interest should be returned to the JFPR account maintained at ADB. If the remittance fee and other bank charges are higher than the amount of interest earned, there will be no need to return such interest to the JFPR account maintained at ADB.

Figure A2: Fund Flow Arrangements

ADB Grant

State Bank of Viet Nam

Ministry of Health (Executing Agency)

Project Management Unit (PMU):

National Institute of Nutrition

Project Implementation Unit at

Viet Nam Women’s Union

Source: Asian Development Bank.

Appendix 4 21

PROJECT IMPLEMENTATION AND INSTITUTIONAL ARRANGEMENTS

Figure A3: Organizational Structure

4 New Production Units and Lines

Private Sector

Partners

NGO Partners

VWU Central Committee

Provincial Committee

District:2 Main Trainers

3 Commune Leaders/Distributors

Volunteer/Village

20–30 Families with 6-24 Month Olds

MOH

Provincial Health Services

District Health Services:

Commune Health Service

Volunteer/Village

Steering Committee

Steering Committee

Steering Committee

Steering Committee

Executing Agency: MOH Project Steering Committee:MOH, VWU, GRET/IRD, ADB

NIN and Provincial Programs

(PEM)

NIN: Project Management Unit

Food TechnologyTraining

Nutrition Education and

Monitoring

Grant AdministerAuditingInternational

CapacityBuildingServices

Nutrition EducationFood and Distribution

Consensus BuildingMOH Services

Beneficiaries and CustomersViet Nam Women’s Union

ADB=Asian Development Bank, GRET=Groupe de Recherche et D'Echanges Technologiques, IRD=Institut de Recherche pour le Development, MOH=Ministry of Health, NGO=nongovernment organization, NIN=National Institute of Nutrition, PEM=protein-energy malnutrition, VWU=Viet Nam Women’s Union Source: Asian Development Bank and National Institute of Nutrition.

A. International Consultant Inputs 1. Some specific technical inputs will be required. The project management unit will propose that ADB engage consultant. When ADB approves the consultant’s terms of reference, the EA will select consultant in accordance with ADB’s Guidelines on the Use of Consultants or other arrangements acceptable to ADB. 2. The proposed international consultant will be a program and marketing specialist (3 person-months) who will assist in analyzing the market for complementary foods, with particular attention to characterizing those accessing the fortified complementary food and those not accessing. The specialist should have strong qualitative and quantitative research skills, survey design and management skills, and team management skills and experience.