Bangladesh Livestock & dairy

Key features

Effective governance

While the Grameen Foundation is the primary governor of the chain, the beneficiaries have a significant voice in decision-making through elected leaders, and they also share in the profits of the milk-chilling operations on a 70:30 basis. The fact that GFLF has a stake in the chain ensures that the programme will be successful and sustainable in the long run.

Coordinated delivery of services

The fact that all the relevant tasks are handled by one administrative structure ensures timely delivery of services, including assistance for the procurement of cows, artificial insemination services, health care services by veterinary doctors and other skilled staff, livestock insurance, inputs, etc.

Value added/Vertical integration

Value-addition is assured by milk collection centers and chilling plants that are 70% owned by the beneficiaries).

Information flow

Farmers’ participation in the selling activities and proximity to the market, gives them ready access to up-to-date market pricing information.

Trust

There appears to be a high level of trust between the farmers and GFLF based upon a long and transparent history of mutually satisfactory dealings.

Horizontal integration

Most of the groups formed are made up of dairy cow farmers (mostly women). Relations between group members are strengthened by the obligation to attend bi-weekly meetings for loan recovery. Inter-group relations are actively fostered by GFLF through frequent meetings and events.

Provision of credit

The groups of dairy cow farmers meet bi-weekly to repay their loans. The latter are issued for three years at a 10% annual interest. The total loan amount includes USD 18 for shed construction and repair, and USD 18 for feed. Included in the loan package are 3% for livestock insurance, 2.0% for the livestock development fund used to assure group members of access to vaccinations, three months of feed, training on feed management and special care for pregnant cows.

Diversification

This project represents a significant diversification of income sources for the beneficiaries, most of whom were landless labourers.

Capacity building

Beneficiaries are trained on livestock and dairy management.

Chain efficiency/Competitiveness

The chilling centers have reduced losses, resulting in significant improvements to chain efficiency. Milk produced by the beneficiaries is sold to private companies, at prices that compare favourably with those of other suppliers.

Inputs

Farmers are provided with USD 18 worth of feed from GFLF-run mills that are 70% owned by members, and 30% by GFLF.

Technology transfer

Efforts are being made to boost milk productivity through artificial insemination.

Market linkages

Sales contracts have been signed with several milk processing companies (Milk Vita, Bikrampur dairy and others).

Sustainability

The project is now totally self-sustaining, representing a “win-win” situation for both the Foundation and the beneficiaries. The insurance scheme is also self-sustaining, because livestock mortality rates have decreased and the premiums exceed total claims. Prospects of sustainability are, however, excellent because GFLF has a vested interest in the venture and it is backed by a financially powerful social entrepreneur (Grameen Bank) with an excellent record.