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| Enhancing the Supply-side of the Maize Market, Katalyst 2006 |
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| Country(ies) | Bangladesh |
| Implementing agency(ies) | GTZ, Swisscontact (SC) |
| Funding agency(ies) | CIDA, Department for International Development (DFID), SDC, Sida |
| Date completed | July 2006 |
| Geographic setting(s) | Rural |
| Sub-sector(s) | Agriculture (general) |
| Issues/challenges | Poverty alleviation efforts in Bangladesh need to be accelerated to tackle the low rates of human development in this country of 140 million people. Economic growth – vital for poverty reduction – is based on the private sector which comprises of 6 million SMEs, and contributes to 25% of national income. The millions of commercial farmers also play a key role. These enterprises continue to grow but face increasing competition from a more global market place. Therefore, improving the competitiveness of selected sectors where the poor participate as producers, employees and consumers is essential for both private sector growth and impact on the poor.
Despite favorable returns, output in the Bangladesh maize sector has been lagging behind demand, with the shortfall met by imports. Consequently, the potential of maize – still a new crop in the country - to contribute to growth and poverty reduction has not been realised to its full extent. This case deals with the experience of KATALYST and its partner, Winrock International (WI), in addressing the underlying causes of this poor performance in the Rangpur region. The results from their series of interventions show positive, significant change in the maize market system and greater benefits for key players within it – producers, retailers, farmers and the poor. |
| Web site | For more information, visit Katalyst's website |
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Description
Following its market development approach to business services, the focus of KATALYST’s work has been on addressing a number of core constraints – weak information flows on the “know how” of growing, poor linkages to markets, an inability to take maize into farmers’ 3-crop cycle and declining soil fertility. In each case its interventions have been marked by a number of common features:
• Bringing in new ideas – identifying potential business service solutions to market constraints – contract farming, short duration T-Aman (STA) rice and more effective organic composts – that were present but had not been adopted on a large scale.
• Working with key partners: identifying partners that can champion the new idea who are at the producer level in the market, in a leading position and with appropriate motivation and credibility.
• Building ownership in the process: undertaking tasks with (and not for) partners and sharing costs to test their commitment.
• Crowding in: encouraging other input providers to invest in knowledge and information and thereby promote wider change.
A range of activities were undertaken over the 12-month intervention period, with the emphasis being on technical assistance rather than financial inputs (total intervention costs were $81,000).
Summary of results
Among the key direct impacts were major change and expansion in the business models of each partner (with more being invested in knowledge and information services) and more – but still mixed - adoption of new techniques by farmers.
KATALYST’s work has clearly contributed to major performance improvement in the maize sector in Rangpur. Even in a context of strong growth nationally, Rangpur’s share of production has increased from 13.6% to 17%. In two years, Rangpur’s output grew by 140%. Farmers switching to maize from other crops have typically doubled their incomes, with those involved in contract farming often gaining more than this.
The poor have benefited – as consumers and labourers - from the general increase in activity arising from more maize growth. However, the biggest gains are for those involved in maize growing directly, often through informal sharecropping arrangements, and who constitute around 5-10% of maize farmers.
The case highlights the potential benefits from adopting a market development approach and useful lessons in relation to the “how to” of intervention, especially achieving successful collaborations between organisations. It also sets out key challenges in the process – how to ensure that the poor are at the centre of intervention strategies, how to build the learning capacity of market systems and how to crowd in other players.
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