Name: Strengthening The Dairy Value Chain Project
Key information: About 80 percent of Bangladesh's population of 147 million lives in rural areas
and over 80 percent rural farming households are small-scale farmers or landless. Progressive
development can therefore only be sustained through development of the rural mass. Dairy
farming represents a major source of employment and income for the poor in rural Bangladesh.
According to a report by the Department of Livestock in Bangladesh, the sector generates
approximately 20 percent of full-time employment. Furthermore, Bangladesh has the 3rd
largest cattle population of any nation in Asia and the 12th largest in the world. In light of everincreasing demand for dairy products nationally, the development of Bangladesh's dairy sector
holds tremendous potential for enabling economic empowerment for the rural poor. In this
context, CARE is working to redefine the way milk is produced, collected and marketed in rural
Bangladesh. Poor smallholder dairy producers in Bangladesh typically have between one and
three cows, which often represent the most important, valuable, and potentially profitable
assets that rural households especially women own. The industry is plagued however by poor
production quality and volumes, fragmentation of supply, a lack of access to quality inputs and
animal health services and distrust between producers and buyers. To maximize the value of
assets and support the evolution of a competitive national dairy industry that provides
opportunities for poverty alleviation, these issues must be overcome. The project aims to double
the income of 35,000 targeted smallholding and landless milk producer households from a current $18$30. The project will also create employment opportunities for extremely poor households especially
women through various activities along the value chain. In order to achieve this target the project
not only focuses on the dairy producers, but also investigates the entire dairy value chain and
actively facilitates an improved milk collection system; enhanced access to inputs, markets and
services; and an ameliorated policy environment.
Geo Profile: The project is working in the nine districts of Northern Bangladesh Bogra,
Shirajganj, Naogaon, Jaypurhat, Gaibandha, Rangpur, Dinajpur, Nilphamari and Kurigram. In
these areas 80% of rural farming households are small-scale dairy farmers, milk production
remains predominantly in the hands of small scale farms and landless farmers, who produce
over 90% of the milk in the country. An estimated 85% of the population faces an acute
shortage of milk as the outputs from cattle fall far short of meeting the country's need for milk.
Target population: 36,400 rural smallholding and landless dairy farmers, in 9 District in
northern Bangladesh Most of those farmers are landless and having at least 1-3 dairy cows and
income in between $18-$30 USD, 82 percent women. Also 201 livestock health worker, 350
collectors, 150 input shop owner and 56 AI worker.
Duration: 5 years (2007-2012)
Donor : Bill & Melinda Gates Foundation
Budget: 5.8 Million USD
Relation to Long Term Programming: The project components contributed of CARE Bangladesh
Theory of change on Extreme poor and marginalized women through:
a. Better access to, and use of, resources and services by developing employment
opportunities, organizing them into informal groups, building their capacity and
linkages, their recognition in the formal economy and access to quality services.
b. Active engagement with the poorest in local government and development processes
has been facilitated by increasing representation in local government, held other duty
bearers accountable in the sector while increasing their bargaining capacity
c. The project contributed to reduced exploitation and dependence on others bu
organizing them into strong savings group, written agreement in place on milk
transactions and price, reduction of cost, aggregation of products and ensuring service
provider's accountability
Challenges: The most important problem in the production side is that the current average
production is just over a liter of milk per cow per day and therefore a significant gap exists
between production and demand for milk. The reason behind is shortages of inputs such as
quality feed, fodder and medicine, poor housing and animal management practices, suboptimal
cattle nutrition, indigenous and non-descript breed varieties, inability to afford adequate
breeding system and productive cattle, limited access to veterinary care, lack of access to
information etc. Also most milk producer rear dairy cattle traditionally - very few of them do it
commercially. Additionally, there are also some major problems such as unstructured milk
collection, transportation and marketing system and shortage of finance and investments in the
venture. In response to these, SDVC project of CARE Bangladesh is facilitating different market
based solutions for the improvement of the dairy sector of Bangladesh.
CARE's response: Engaging Smallholders

Organizing smallholders into groups and facilitated training on cattle nutrition and health.

Facilitating smallholder access to productivity-enhancing inputs by linking producer
groups to vets, animal health outreach workers, agro input shop owners, feed sellers,
and artificial insemination service providers.

Educating producers on opportunities and price ranges for selling their milk
beyond their local market.

Developing milk aggregation models that enable smallholders to attract commercial
buyers and increase their bargaining power.

Introducing new technology based model such as Digital Fat Testing Initiatives where
producers could adequately assess milk quality and establish a basis for sales prices.
Engaging Other Market Actors

Developing a network of milk collectors, which are linked to producers' groups.

Creating linkages between producers and collectors to formal processors (via
chilling plant facilities) and traditional informal processors.
Innovating technology based milk collection system (Digital Fat Testing model)



Introducing new model to ensure access to input for the poor farmers.
Fostering the development of a network of livestock health workers (LHWs) that
provide primary health care services to livestock as well as information on artificial
insemination (AI) services and the right combination of feed and fodder usage on a
fee-for-service basis to ensure sustainability.

Working with both the government and private Al service providers to build a
commercial linkage with the small-scale farmers that ensures good breeding
facilities.

Engaging other input and service providers such as feed and fodder sellers,
veterinary medicine producers and sellers and financial service providers through a
range of different pilot initiatives to test potential further enhancements to the
sector.
Engaging with Policymakers
On a national policy level, CARE actively participates as the only international NGO
member of the Dairy Development Board, which is otherwise comprised of
representatives of government ministries and research institutes. CARE is contributing to
an improved policy framework and enabling environment for the dairy sector by
involving various stakeholders in common platforms in open dialogues. The project is
advocating for innovative financial products and services catered to meet the
requirement of the dairy sector. Dairy producer association are being strengthen in order
to protect their interest and representation at the national level and mass awareness
raising initiatives on increase milk consumption, specially among children and women,
are being undertaken. Combined, these efforts are intended to enhance collaboration
and advance the development of a regulatory environment that supports the integration
of small holders in a competitive Bangladeshi dairy sector.
Outcomes & Results: A 50 percent increase in average daily milk production when compared to
the baseline data from August 2008. Average income from milk sales has achieved a significant
(97 percent) increase. Daily productivity of milking cows increase from 1.73 liters to 2.28 liters
(a 32 percent change). Cross-bred cows have also seen a 37 percent rise in production. A total
of 18,531 decimals (185.31 acres) of land were changed over to fodder cultivation. 79 percent
of groups have enjoyed access to improved feed supply.
Average monthly income for Livestock Health Workers (LHWs) is US$234, significantly
surpassing targets of US$120. The 201 LHWs are providing scheduled animal health services
consisting of vaccinations, de-worming, primary health services, and learning sessions about
primary cattle health for the farmers. Women LHWs are earning more than US$100 per month.
Client satisfaction rates are also high. Data shows that on average, 87 percent of LHWs are
surpassing project expectations and targets, and only 13 percent of the LHWs are not meeting
project targets.
The project trained milk collectors have significantly increased their daily collection and income.
Daily collection has increased from 84 to 92 liters and daily income has risen from US$36 to
US$41. In addition to milk collection, collectors are also conducting learning sessions around
hygienic milking practices. A number of bilateral agreements between collectors and producer
groups indicate increased trust and stronger business relationship between the two.
The community level digital fat testing (DFT) pilot initiative has been implemented for the first
time in Bangladesh. The initial results validate the assumptions of DFT facilitating greater
transparency and price incentives for farmers along with quality incentives for the processors.
An average 16 percent increase in price for farmers has been noted in the initial few weeks of
operation. Average milk collection and sales income for DFT collectors has been extraordinary
(198 lit/day and US$124 per day).
819 groups (70 percent of all groups) are engaged in group savings activities and have saved a
total of $106,020 USD during the reporting period (on average US$129 per group). 63 percent of
the savings groups reinvested their money in dairy and non-dairy activities. The group savings
efforts have also catalyzed the increase of regular attendance at group meetings.
A total of 9,138 cross breed calves were born in the project area as a result of Artificial
Insemination (AI) service delivery to 13,561 farmers. In order to create and expand the access of
quality AI services and access to quality semen, the project has provided refresher AI training in
collaboration with the BRAC AI program to 22 selected AI workers. They are providing regular AI
services to the producer groups. Thirty-four new AI technicians have also been identified and are
preparing for a one and half month long AI training course from Bangladesh Agriculture
University, which will join the project as a technical partner to provide more efficient AI service
delivery in the project area.
The incorporation of women in value-chain initiatives of the SDVC project has been exceptionally
successful. Eighty-two percent of farmers and 71 percent of farmer leaders are women, which is
significantly higher than the target of 50 percent. The project has successfully overcome mobility
and societal challenges for women entrepreneurship in the dairy value chain and has
successfully established 45 women livestock health workers (22 percent), 31 women input shops
owners (19 percent) and 29 women milk collectors (9 percent). Women LHWs earned a monthly
income of US$101 and women collectors earned US$360.
SDVC project dashboard (As of April 2012)
Area of operation
Total participating Household
District
Upazila
Union
Village
Base Line
Current
X
36,400
9
24
108
494
Target
35,000
Farmer Leader
X
3,425
3,500
Milk Collector
X
333
350
Livestock Health Worker (LHW)
X
201
165
Farmers’ organized into groups (Up to Year 4)
X
36,400
35,000
Farmers received training
X
36,400
35,000
Information Service Center (ISC)
X
50
50
Branded shops (Includes ISC)
X
15
-
Community Agro-Shop (CAS)
X
105
-
Artificial Insemination (AI)
X
13,651
12,000
Milk Bar establishment
X
15
--
1.2
(lit/day)
0.28
(lit/day)
22.51
(Tk/day)
14,999
(Tk/M)
X
1.8
(lit/day)
0.41
(lit/day)
44.39
(Tk/day)
22,000
(Tk/M)
18,729
(Tk/M)
Informal
20,343 (56%)
2.1
(lit/day)
--
Household’s average daily production
Household’s milk consumption
(Milk producing HHs only)
Household’s average milk sales income
Average income of Input shops
Livestock Health Worker’s income
Farmers linked to market
Formal
16,057(46%)
45.02
---
Aspirations: SDVC is the first dairy project in Bangladesh embracing a value chain approach,
which looks in to the entire dairy sector for sustainable growth. Throughout the lifetime of the
project, CARE is documenting the most successful interventions and refining its approach in
anticipation of significant scaling up in the future. The innovation and technology based
platform the project established today will be the hallmark for other development organization
to intervene the same. Based on the result to date CARE expects that final model, if taken to
scale has the potential to benefit 2,000,000 households across the country which also
encouraging others to adopt similar practices advancing sustainable development in the rural
agricultural sector.
Contact of Team Leaders or Key Staff:
Name:
Nurul Amin Siddiquee
Email Address
siddiquee@bd.care.org
Position:
Team Leader
Phone:
+880-02-9112315(118)
Cell:
+880-01190161686
Work Station: CBHQ