Strengthening the Dairy Value Chain in Bangladesh through Private Sector Partnerships

Muhammad SiddiqueeProject Director

Strengthening the Dairy Value ChainCARE Bangladesh

Schulich School of Business, October 20, 2011

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Presentation Objectives

Objectives

•Introduce CARE, CARE-Bangladesh and Strengthening the Dairy Value Chain (SDVC) project

•Framework for private sector engagement

•Examples of our work with the private sector

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Global emergency response and development organization

Created in 1946, 60 plus years

Network of 12 national members

Operates in 70 countries

1000 projects, 14,500 staff

over 95% nationals.

50 million plus beneficiaries each year

We seek transformational changes

Partnerships with multiple stakeholders

90% resources support program activities.

CARE offices around the world

CARE – An Overview

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CARE – In Bangladesh

BASIC FACTS

- In Bangladesh for 55 years !!!

- Working in Poorest districts - One third of geography

- Close to a Million BoP poor clients

They build in trust with CARE in Bangladesh:

PROGRAMMING STRENGTHS: We

- Analyze underlying causes of poverty

- Are guided by “theories of change’

- Foster a learning atmosphere

- Encourage bottom-up Innovation

Private Sector

Civil Society Organizations

Government Academics

- Over 50 PARTNERSHIPS

PROGRAMS Health / Education / Food Security / Economic Dev / WATSAN

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Our Impact Groups

Marginalized women & girls

Extreme poor people in rural areas

Marginalized groups in urban areas

Climate change and disaster vulnerable poor

CARE Bangladesh amplifies the voices of the poor and marginalized in ways that influence public opinion, development practice, and policy at all

levels.

This happens as knowledge drawn from our grassroots and global experience is

channeled through purposeful relationships with civil society, government, and the private sector.

How do we do it? CARE’s Mission

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Strengthening the Dairy Value Chain

• Bill and Melinda Gates Foundation funded dairy value chain project (2007-2012) to double-dairy related incomes of 35,000 small farmers in northwest Bangladesh

• Working with the private sector at all levels of the value chain towards sustainable solutions

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SDVC Project Region

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Target Dairying Households

• Hamida Begum is married, has three children, works as a day laborer and tends her family’s two cows

• Average Household:

– Very poor

– Own 0.75 acres of land

– $25 monthly income

– 1-3 cows

• 79% of SDVC farmers are women

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Bangladesh Dairy Value Chain

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Challenges in the Dairy Sector

• Bangladeshi Dairy Sector/Livestock

– Part of a large agro economy/ agro residue based

– Smallholder farmers account for majority of national production,

but rely on subsistence methods

– 30% of national milk demand met by imported powdered milk

– Limited access to productivity enhancing inputs and markets

– Collectors and collection systems reduce trust and milk quality

– Gender norms

– Lack of a supportive policy environment

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Theory of Value Chain Enhancement

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Target and impact group

Current (% of women)

Total milk producing (participating) Household

36,397 (83%)

Total milk producer group 1182

Farmer Leader 3425 (71%)

Milk Collector 308 (9%)

Livestock Health Worker (LHW) 201 (23%)

Information Service Center (ISC) 48

Community Agri-Shop (CAS) 102

HHs' Avg. production increase 75%

HHs' milk consumption increase 40%

# of groups engaged in savings 538

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Private Sector Engagement Framework

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Private Sector Engagement

BRAC•BRAC Dairy

•AI

•Transaction Transparency

CDVF•Intermediary organization

•Aim to provide community veterinary service

•Links to markets

Microfranchised Village Input Shops•One-stop service centers

– Feed– AI– Animal health services– Medicines– Information

Challenges•Unwillingness of private sector to reach the bottom of the pyramid•Limited access to inputs and markets•Lack of transparency and trust

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CDVF Gateway Agency

Opportunity– Community Dairy Veterinary Foundation– Successful gateway agency brokering between

informal and formal sector

– Currently operating with donor funding

– Potential to scale through a financially self-funding model

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CDVF Gateway Agency

Response– Built relationship with CDVF founder– Replicated model amongst poorest farmers– Co-funded a business plan and strategic plan to

transition from donor organization to financially self-reliant social enterprise

Challenge– Couldn’t make the case to the private sector– Ultimately walked away

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Value Chain Transaction Transparency

Challenges– Lack of transparency

across the dairy sector in formal sector purchasing practices

– Collectors and collection practices

– Disincentive for quality milk production

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BRAC Dairy and VC Transparency

Response and Results– Worked with BRAC to understand their

constraints– Risk for BRAC to acknowledge problem

(a destructive innovation)– Trust building and patience– Piloted fat testing meters, expanding– Potential to transform purchasing

practices across the sector, benefiting smallholders, quality

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Micro-franchised Diary Input Shops

Challenges– Lack of access to inputs

• concentrate feed• animal health services• medicines• artificial insemination

– Gap in the value chainBusiness relationship

versus partnership

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Micro-franchised Dairy Input Shops

Response and Results– Worked to ensure input shop

owners are trusted– Community members (farmer

leaders, paravets)– Provided business and

technical training– Moving toward a micro-

franchise model– Farmers willing to travel

further to get inputs from someone they trust

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Micro-franchised Dairy Input Shops

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Thank You

Muhammad SiddiqueeProject Director

Strengthening the Dairy Value ChainCARE Bangladesh