Funded under the Feed the Future Initiative, the Agricultural Value Chain (AVC) Activity is working to enhance long-term food security in the impoverished Southern Delta region of Bangladesh. The Activity is applying a market systems approach to targeted agricultural value chains to increase rural incomes, support rural employment, and expand export sales.
Market systems focus
Total mango market size in Bangladesh is about $1 billion, and the share of the Southern Delta is approximately 12 percent. Field interviews suggest mango production growth in the Southern Delta is as high as 20 percent per year. Mango producers in the South can grow early season varieties and sell them on the market at the time when the price is at its highest, giving the region a competitive advantage. However, farmers in the FTF zone are not taking full advantage of the early growing season due to a range of issues including production, post-harvest, aggregation, and marketing challenges.
The majority of FTF farmers produce table or fresh potato varieties; however, the domestic market for fresh varieties is saturated driving down prices during the peak season. Long-term growth depends on FTF farmers increasing the supply of industrial variety potatoes to processors.
Despite consistent annual production growth of more than 10 percent, Bangladesh still imports tomatoes to meet summer demand. The Southern Delta lags behind the rest of the country in tomato production, sector growth, and land yield. However, a market opportunity exists around dyke tomato production, which is seen as a safer production method and can fetch premium prices from health-conscious consumers.
Summer Vegetable Basket
Approximately 245,000 southern farmers are engaged in summer basket crop cultivation on plain land and dikes. The demand for vegetables is growing at an estimated 4.75 percent each year in the domestic market and 29 percent in exports. Opportunities exist to create a brand around safe vegetables, but FTF farmers are not able to take full advantage of this opportunity due to supply chain traceability constraints, overuse of chemicals in production, improper pest management practices, and ineffective branding and marketing.
Pulses (lentil and mung bean)
Demand for fresh pulses in Bangladesh exceeds supply, resulting in high levels of import, despite domestic consumers preferring the taste and quality of the local variety. Two-thirds of total pulse production in Bangladesh takes place in the FTF zone, but farmers need access to better quality inputs and improved cultivation practices to increase yields and meet demand. There is a growing market for processed pulses, but local producers have limited access to industrial processors or regional mills.
Bangladesh produces approximately 50,000 tons of groundnuts per year, of which approximately 35 percent are produced in the southern regions. The demand for both fresh and processed groundnuts has been steadily growing and there is an emerging segment forming around premium-quality loose/packaged groundnuts in both urban and rural markets. The groundnut sector is still limited by weak relational networks, unresponsiveness to market incentives and demand due to traditional marketing approaches, limited private sector or commercial investment, and substandard production.
The flower sector is new and emerging in Bangladesh, but offers a significant opportunity as a high value crop. Farmers in the flower value chain are earning on average higher annual incomes than those in traditional, horticultural value chains, and flower offers a unique opportunity to engage women as women are represented in production, assembly, trading, and high-end retail. Constraints in the sector include limited domestically-produced seedlings requiring informal sourcing from Indian producers, a lack of permanent marketplaces leading to disorganization in the sector, and poor transportation and packaging resulting in a 10-15% post-harvest loss.
Natural Fibre (jute and coir)
Jute production alone engages 1.8 million farmers in the Southern Delta region and 400,000 traders, processors, and retailers, 60% of whom are in the South. Coir is an environmentally-friendly fibre that serves a variety of agricultural and industrial uses, including as a soil additive. Coir employs more than 25,500 workers, most which are women.
Natural Fibres offers potential for employment creation, gender integration, and a strong export potential; however, the competitiveness of the sector is compromised by poor quality inputs and inefficient processing techniques that reduce fibre quality.
- Work with firms to build trusted brands for safe mangoes in the Southern Delta to capture the attention and confidence of health-conscious consumers.
- Work with a range of input providers that provide important input for safer production to leverage improved marketing strategies (trial packs, testimonials, etc) to improve their customer retention, brand recognition and trust.
- Work with large Southern Delta agribusinesses to provide embedded training to supplier farmers in safe farming practices including integrated pest management, safe use of fertilizers and pesticides, and responsible post-harvest methods.
- Link agribusiness partners with marketing firms that can design targeted marketing solutions that improve consumer awareness and confidence in safe mango brands and generate demand.
- Facilitating private sector investment in agri-machinery and agri-technology that can improve production efficiency and reduce post-harvest loss.
- Facilitate contracts between farmers and processors for industrial grade potatoes.
- Build farmer, trader, and aggregator awareness of the quality and size requirements and proper post-harvest handling techniques for industrial potatoes.
- Facilitate the creation and implementation of quality control requirements at processing facilities.
- Supporting supply chain governance by third-party supply chain management firms, who are introducing improved seeds, contracting farmers, and overseeing aggregation and grading of potatoes in preparation for processing.
- Facilitate the testing and commercialization of input products and ripening technologies.
- Link retail chains with source farmers and aggregators to strengthen supply chain traceability and governance.
- Test and market Weather Based Insurance products to improve farmer resilience through weather-related shocks.
- Work with large Southern Delta agribusinesses to provide embedded training to supplier farmers in input use and post-harvest handling through.
Summer Vegetable Basket
- Work with small to medium agribusinesses to improve their supply chains for purchasing and distribution networks for selling summer. vegetable by providing training to their supplier small-scale farmers in improved cultivation practices and post-harvest management to meet safe production standards and improve source traceability.
- Support large seed companies and input suppliers to increase farmers’ awareness of the benefits of using better quality seeds and to improve knowledge and training on proper application and use of seeds for optimal performance.
- Partner with key value chain actors to develop market channels for safe vegetables through investments in industry standards and brands supported by quality standards and safety testing.
- Promote the commercialization of needed agri-technologies, especially in integrated pest management (IPM), to generate sales networks for IPM products and technologies to reach producers.
- In addition to working with core actors along the value chain, AVC is also working to build support markets including cost effective cold chain, ICT, marketing, and financial services.
- Sponsor mung bean promotional fairs to build a brand around mung beans produced in the FTF zone
- Strengthen the Southern Delta’s link to regional and national industrial processors.
- Support agri-machinery firms to promote crop-specific equipment and financing options to dealers and farmer groups.
- Facilitate processor, seed company, and farmer contract models to strengthen value chain linkages.
- Facilitate business to business contracts between producer groups and processors for a consistent supply of quality processing-grade groundnuts.
- Work with large Southern Delta agribusinesses to provide embedded training to supplier farmers in advanced production techniques and input use.
- Leveraged commercial contracts to support re-investing in upgrading production practices, inputs, and equipment.
- Sponsored two annual national consumer flower shows in Dhaka, to build customer relationships and generate investments in modern technology for production, precision farming, and marketing, attracting over 10,000 visitors each.
- Sponsored regional consumer flower initiatives including a flower fair organized by the local trader association, which attracted over 15,000 visitors, and a Mini Mobile Flower Festival, organized by five groups of female entrepreneurs which sold over 4,000 flowers in two days.
- Supports flower sector market actors in generating demand for locally grown flower varieties.
- Facilitate the establishment of unique support mechanisms that can link female stakeholders across sectors to address biases, constraints, and shared issues, and tap into under-utilized resources to resolve ongoing issues.
- Identify local organizations of empowered women entrepreneurs and business owners that can serve as leverage points to break down barriers and biases for women working in floriculture.
- Contract farming for improved jute and coir seeds.
- Supporting the emergence of a more robust and structured supply chain to procure raw materials.
- Facilitating the formation of raw fabric processing centres to separate coir and pith prior to transportation so that raw materials are transported more easily and with less damage.
- Opening marketing channels to promote domestic jute and coir products.
- Facilitating access to required machinery to open up opportunities for diversified product development through in kind procurement, capacity building, and access to leasing schemes.
- Improving knowledge of international and domestic demand through participation in trade expos both domestically and abroad.
Notable results (systemic change, poverty impact)
- Forged partnerships with 25 private sector companies and cooperatives to ensure sustainable supply of inputs and transfer of appropriate technologies and management practices to farmers and also to increase market access for farmers produce.
- Reached 74,000 new farmers in the third year of the project, a 393 percent increase over the second year.
- Introduced high-yielding and disease-resistant variety of nutritious mung bean, leading to a 4 percent yield increase per hectare, reduction of post-harvest loss by 6 percent, and increase in average net income per farmer by $64, or 78 percent per hectare.
- Linked safe mango growers to two private sector enterprises; assisted those enterprises to develop a sustainable supply and marketing channel for safe mango through a local supermarket and local e-commerce platform, availing urban consumers of 500 metrics tons of graded premium quality mangoes.
- Introduced improved marketing and customer targeting to Integrated Pest Management (IPM) firms to accelerate smallholder adoption of bio pesticides and pheromone traps, reducing chemical and fertilizer spray by 70 to 75 percent, reducing environmental impact, improving food quality and safety, and reducing smallholder seasonal input costs by as much as $750 per hectare.
- IPM firms reported a 70 percent increase in repeat customers, indicating a significant increase in farmer adoption. Farmers contracted by DAI-partner input firms to test improved seed varieties reported 150 percent increases in harvest yields this year.
- Supported input firms in launching embedded training for orchard spraying resulting in the formation of highly trained service provider groups, creating a new source of income for 165 spray men, who witnessed a 12% growth in their incomes.
- Sponsored a national consumer fair for flowers, Flower Fest 2017, which attracted over 50,000 visitors in three days; and sponsored consumer fairs around flowers, mango, and mung beans self-organized by producer and trader groups. These events attracted tens of thousands of customers, resulted in huge single-day sales volumes, and led to bulk purchase deals with processors and retailers. The Mango Fair organized in Barisal reported total sales of $6,900 in just two days.
- Facilitated the extension of credit to over 4,000 MSMEs, including farmers by supporting the development and piloting of new ag-finance products.
- Facilitated bringing 500 vegetable farmers into a weather-based insurance program, which will be scaled up to reach 3,700 farmers next season.