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M4P 2
6 N
ovem
ber
20
08,
Kata
lyst
From Agriculture to Health care:
Applying M4P successfully in differentmarket systems in Bangladesh
-- Peter Roggekamp,
Swisscontact - GTZ
26 November 2008
M4P 2
6 N
ovem
ber
20
08,
Kata
lyst
2
The next 30 minutes:
Small intro The project cycle in Katalyst in agriculture in retailer information to
farmers in private health care
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Katalyst
Donors:
•DfID
•CIDA
•SDC
•RDE
Implementers:
•Swisscontact
•GTZ is
•Ministry of Commerce
Budget:
9 Million USD / year
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PSDPSDPSD
Economic growth is key to poverty
reduction
The private sector mainly enriches the
better off.
People are capable to
determine their own future
These poor people need help, they cannot do it on their own
Best solutions can often be achieved
by building on local system
People need protection from the system; better to design a parallel system
There are enough private sector
intermediaries to work with
Intermediaries exploit, have different interest or at best are too weak
M4P 2
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QUESTIONS LIKE:
o Where do I get good seeds ?
o Where to hire good labor ?
o How do I deal with diseases?
o Should I use fertilizer?
o Should I buy a maize sheller?
o What price can I get for my crop in the next village ?
o Why are my neighbors’ yield higher ?
o
o
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Where do I get good seeds ?
Hire good labor ?
How do I deal with diseases
What price can I get for my crop in the next village ?
Should I use fertilizer ?
Why are my neighbors yield higher ?
Should I buy a maize Sheller ?
3 key project decisions…..
1. Which value chains or markets should the project select ?
2. What is the growth and poverty reduction potential of the value chain or market and what need to change to unlock these potentials?
3. How to interact with the private and public sector to unlock these potentials ?
Market selection
Strategies
Facilitation
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Project cycle
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
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o Efficiency, ….
.. accepting the speed of the private sector,
o In a light touch way
o Risk,
o Unclear upfront where BIG HITS will be,
o Specific requirements from (4) donors.
Portfolio ManagementCriteriaGrowth potential
Pro-Poorness
Gender, Environment
Impact and outreach
Government policy
Urban and rural development balance
Synergies between the sectors,
Potential for innovation
High potential / high risk versus lower potential / lower risk
Internal capacity
Duration of interventions and Cost
Private sector partners and absorption capacity
Interest and capacity of implementing partners
Katalyst’s existing competences
SECTORSVegetables
Maize
Pond fish
Shrimps
Input markets
Poultry
Plastics
Furniture
Health care
Recycling
Media
ICT
Government services
Marketing
Distribution
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
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The strategies
sectorsector
Now. In 5 or 10 years time
?
Reducing systemic constraints,
Stimulating innovations.Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
•Better irrigation,
•Trust,
•Availability of inputs,
•Product quality,
•Access to information.
?
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Improving market functioning
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
No direct support to farmers and SMEs Low reach not efficient and not fair. Support not sustainable
But mainly work with commercial or public intermediaries, for example: Associations Input suppliers Mold makers in plastics Nursery owners in pond fishery Seed producers Traders Soil testers ICT centers Media
Efficient
Sustainable
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Deal Making with intermediaries
StrategyStrategyKnows how to engage Knows how to engage Sector knowledgeSector knowledge
Katalyst
PO
VER
TY
PR
OFI
T
But where is the invisible hand ? “Externalities and Enabling Environment prohibits”
So why do you need
our support? Misuse of market power, Disadvantage groupsMarket selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Risk Catch 22Takes too longAccess to knowledge
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Principles of facilitation
• Competitiveness and its reincarnation productivity is the key to sector growth; is the key to poverty reduction
• We are not part of the private sector… …and only there temporarily,• We have to be as neutral as possible in the market,• We always demand cost sharing to assure
commitment,• Crowding in is a core part of market development,• Environment, Gender, Working conditions are
important.
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Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Monitoring and understanding impact
•Integral part of our approach,
•Work with impact logics for each intervention,
•Learning moments built in,
•Owned by staff and M&E specialists,
•90 % improving, 10% proving,
•Financial incentive for all staff,
•First system audit last month.
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BUT WHERE ARE THE POOR ?
Daily laborLandless rural and urban poor
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Incidence of poverty by main source of income (UPL/%)
Source: Poverty Monitoring Survey (2004)
Bangladesh Urban Rural
Wages & Salary 19.87 18.76 20.84
Agriculture (Self-employed) 38.71 48.69 38.10
Non-agriculture (Self-employed) 40.41 40.57 40.35
Agriculture (Daily Wage) 71.39 79.13 71.05
Non-agriculture (Daily Wage) 51.26 58.55 48.17
Pension 20.19 27.45 17.32
House rent and other rent 21.27 10.23 28.03
Donation, grant, charity and other 30.35 27.27 30.77
Daily Wage Earners
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BUT WHERE ARE THE POOR ?
“New” cash crops can end povertyTraditional small rice farmers
Skilled jobs in certain sectors
More local purchasing power
Jobs for daily laborLandless rural and urban poor
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Agricultural Value Added (BDT/acre, BDT/capita)
Cost Value added Value added
(per acre, incl. labor)
(per acre) ( per capita)
AGRICULTURE - - 9,643
Agriculture/Livestock - - 7,165
Oil seeds 4,000 1,456 987
Major cereals 8,000 2,523 1,777
Pulses 3,500 2,398 1,821
Minor cereals 7,000 2,957 2,124
Maize 10,125 3,205 2,283
Spices 22,121 5,177 3,381
Maize (contract farming) 12,565 10,000 7,124
Vegetables 20,800 13,008 8,203
Potato - 80,000 50,000
Fruits - 20,494 15,308
Poultry (commercial) - - 37,796
Forestry - - 25,268
Fishing/ Pisciculture - 50,506
NON-AGRICULTURE - 30,028Based on: Statistical Yearbook of Bangladesh (2004, 2005), Agricultural Sample Survey (2005), own data
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Cropping Patterns
Poverty status
Marginal Small Medium Large
Boro-None-Ropa Amon 1 1 4 4
Oil seeds-Ropa Aus-Ropa-Amon 1 1 4 4
Vegetables-Aus-Ropa Amon 1 4 4 4
Boro-None-None 1 1 1 3
Mastard Oil-Ropa Aus-Ropa Amon 1 1 4 4
Boro/Wheat-Dhaincha-Ropa Amon 1 1 4 4
Wheat-Vegetables-Ropa Amon 1 4 4 4
Potato-Ropa Aus-Ropa Amon 1 4 4 4
Banana-Banana-Banana 2 4 4 4
Mastard Oil-Boro-Ropa Amon 1 1 4 4
Potato-Aus-Ropa Amon 1 4 4 4
Oil seeds-Ropa Aus-Ropa-Amon 1 1 4 4
Maize-None-Ropa Amon 1 1 4 4
ST.Amon-maize 1 4 4 4
ST amon-potato-maize 1 4 4 4
Fisheries 1 4 4 4Source: Department of Agriculture, own data
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Market Development and Cash Crops
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Strategy for most of Agriculture
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
•Access to information on cultivation
•Better functioning input markets
Lead to:
•Increased productivity and profitability
•Less risk
Lead to:
•Increase income for existing farmers
•Cash crops more attractive for new farmers
•More jobs for landless
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Agriculture and Market Development the intermediaries
Retailers of Seeds
Fertilizer
pesticides
Traders processors
Extension workers from Government or NGO’s
Media
ICT centers
Sellers or lessors of equipment
Lessors of land
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
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Main Issues Intermediaries Support
Low Productivity, due to: Insufficient knowledgeDysfunctional input marketsLimited access to resources
o Embedded information through:
Retailers Nurseries
Training development Initial risk sharing Demonstration
o Rural ICT Centers: Testing the model Risk sharing Awareness creation Wider system development
o Services providers in market places
Improving availability and functioning of services
o Local Government on leasing of public water bodies
Changing government rules and improving implementation
o Compost fertilizer companies Technical support Improving Government regulations Development of distribution network
o Contract farming Developing models Adoption of the business model Risk sharing and Demonstration
o Seed companies on quality seeds
Quality and trust Improving wider systems Creating awareness Assisting in contract seed production
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Improving retailer – farmer relationsin the vegetables market
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Market selection: Vegetables
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
•One of the “out of poverty” cash crops,
•Outreach of potentially many millions,
•Great potential for job creation,
•Fits in Millennium Development Goals,
•In line with Government PRSP.
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Agriculture and Market Development the intermediaries
Retailers of Seeds
Fertilizer
pesticides
Traders processors
Extension workers from Government or NGO’s
Media
ICT centers
Sellers or lessors of equipment
Lessors of land
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Facilitation: Retailer training programs
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Situation analysis in 2003:
Farmers:
Low productivity
Distrust and dislike retailers
Retailers:
Product knowledge
No cultivation knowledge
Distribution network:
No cultivation knowledge
Only focus on logistics
Large companies HQ:
Have cultivation knowledge
Some are concerned about reputation, ..
..all about market share
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Facilitation: Retailer training programs
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Initial Activities:
• We offered support to all major companies
• Syngenta agreed to test with 480 retailers in 2004
3 days course about farming knowledge
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Facilitation: Retailer training programs
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Katalyst SyngentaInitiated 100%
Training concepts Joint
Design of training Supported Lead
Organizing and executing trainings
- 100%
Cost of training 60% 40%
Gender specialist 100%
Monitoring 100% 100%
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Facilitation: Retailer training programs
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Initial Activities:
• We offered support to all major companies
• Syngenta agreed to test with 480 retailers in 2004
3 days course about cultivation knowledge
Next level of Activities:
• Similar deals with Bayer Crop science and East West seeds: additional 900 retailers in 2005
•Deal with AR Malik, Lal teer, Mollika, Metal and United, more focused on seeds.
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Results
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Service market change:• Completely different business model;
•High interaction between retailers and farmers
•Overall perceived as positive by all
•Retailers and organization all report increased revenue
• 2/3 of 1380 retailers are giving cultivation advice.
• Companies continue to invest in their retailer network.
Farm level change:• Improved practices for ca. 230.000 farmers directly.
• If crowding in is considered, probably more than 3 Million farmers affected
• Increased yield, but also increased quality higher income
• More new farmers in areas where training took place.
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Results, a retailer
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Change after receiving training:
•Got knowledge on farming
•Understood importance of giving advice
•Worked on good relation with farmers
Md. Babul Akhtar, 38
2005 2006
No of clients 600 800
Total sales 2,308 USD 3,846 USD
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Results, farmers
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
2005 2006
Land used 16.5 dec 30 dec
Cost of seeds Used their own
1,500 BDT
Cost of pesticides
none 750 BDT
Cost of fertilizers none 750 BDT
Van cost 350 BDT none
Toll for selling at market
350 BDT none
Yield 1,000 pieces 2,000 pieces
Revenue 6,020 BDT 23,200 BDT
Profit 82 USD 311 USD
Monjuara (27) and Md. Kalam Sarkar (35)
Change after advice from retailer:
•Packaged seeds instead of own seeds
•Changed use of pesticides and fertilizer
They bought a cow
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Commercial Health care
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Market selection: Commercial Health care
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
• One of the biggest service markets,
• Excellent growth potential,
• Skilled jobs for women.
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Commercial Health care How does the sector looks
like? Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
• 150 000 000 people need healthcare in Bangladesh,
• Doctors 1 – 10 000,
• 2/3 of healthcare paid directly by households,
• 500 000 individuals travel overseas for treatment annually,
• Government hospital occupation rate is > 100%,
• 80% of healthcare is from commercial providers,
• contribution to GNP in 2004 – 2005 :
•Private health care 2.33%
•Public healthcare 0.77%.
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Health care is special….
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
•Main access for poor people is private health care,
•Public and private delivery not separable,
•Large donor support for public, none for private,
•Ethics are different.
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Strategy: Commercial Health care
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Quality improvements through:
oBetter medical workers:
Government regulations,
Capacity of commercial training institutes.
oChange in attitude of hospitals and diagnostic centers. FAILED
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Activities: Health CareKatalyst support:
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Courses for Course duration
BSc nursing 4 years
Health technology 3 years
Medical assistant 3 years
Community health worker
1 year
Paramedics 1 year
Community paramedics
2 years
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Activities: BSc Nursing
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
If you do not address the quality and availability of nurses:
STAY OUT OF HEALTH CARE!
The situation:
•Ratio Doctors-Nurses 3 : 1, should be 1 : 3,
•No 4 year courses,
•Low status of nurses in hospitals and clinics,
•Law prohibited private universities to train.
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Activities: Health Care (2 but last slide)
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
Activities:
• We found a good implementing partner,
• We organized interested universities to lobby for change in regulations,
•We assisted universities to develop new curriculum,
•We assisted in demand creation.
Successful
Successful
Successful
Not required
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Initial results: Health Care(one but last slide)
Market selection
Strategies
Facilitation Monitoring
Understanding* Markets * Impact
•8 Universities have received a license for BSc Nursing,
•300 Students have enrolled in 2007 – 2008,
•15 Private institutions are in pipeline to obtain approval,
•Too early to say anything about change in the sector.
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Last slide:
• M4P can be very effective, also beyond the obvious sectors
• Projects will look different in different countries, but the basics remain valid.
• Is also applicable in remote, weak markets (see afternoon with Alwyn Chilver)
• It takes time, flexibility and good staff (See afternoon with Manish Pandey)