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The Indo-UK Forage Production Project was conceived to train and equip scientists of the Indian Grassland and Fodder Research Institute (IGFRI), Jhansi (India) to address technical needs of farmers within their socio-economic settings. The Project started in April 1994 and remained operative for 5½ years. It was funded by DFID, UK, and involved collaboration with the institute of Grassland Environmental Research, Aberystwyth (UK). During the project, a considerable number of scientists were trained in modern research techniques in various areas of fodder production and utilization, participatory research methods, Agricultural Research for Development (ARD) approach, Team Building, Process Management, and Project Management. The project provided equipment to increase research and IT capacity. These activities led to enhanced research capacity of IGFRI in assessing clients’ needs, and screening existing technologies against social equity, economic competitiveness and environmental sustainability. The impact assessment indicated that there is need to continue to develop skills in proposal writing, problem analysis, project design, monitoring and evaluation methods. When planned properly and implemented judiciously, externally funded projects can effectively enhance research capability of national agricultural research system.