SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Leveraging Partnerships around Disruptive Technologies to Generate Systemic Change Introducing Digital Fat Testing Technology into the Dairy Market System in Bangladesh

Background Strengthening the Dairy Value Chain (SDVC) Project Phase II – funded by the Bill and Melinda Gates Foundation Gendered Value Chain Approach to generate systemic change – Generate price incentives for investment in improving productivity – Increase transparency in the dairy market system – Increase participation/rewards for women SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge

“Dairy Hub” Model Integrated model – Digital Fat Testing Technology at Collection Centers – Input Supply – Producer collectives – Savings and credit SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge

Introduce DFT CARE’s Perspective – Nurul Amin Siddiquee BRAC Dairy’s Perspective – Taufiqur Rahman Mollick Management Research Perspective – Dr. Kevin McKague; Cape Breton University Interactive Q&A SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Outline for the Session

Introducing the DFT SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge

SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge What the cows told us: A resilient business case for empowering producers Nurul Siddiquee, Technical Adviser, CARE USA SEEP network 2015

SDVC Goal: Empowering smallholder dairy farmers in northwest Bangladesh addressing the major challenges to improving smallholder participation in the value chain Targeted Beneficiaries: 50,000 smallholder dairy farmers and thousands of VC actors and service providers

The dairy value chain in Bangladesh: weak, informal and fragmented

What does this mean for business like BRAC dairy? Tangible BenefitsIntangible Benefits Growth Reduced risk and uncertainty Improved quality of goods Transparency Aggregation of demand, reduced distribution costs, production efficiency confronting shocks Product and service innovation Access to resources Social legitimacy Partnering with BRAC Promoting system change that generate incentives for women dairy farmers to invest in improved dairy practices targeting the formal market Scaling up DFT to 33% of BRAC Dairy’s supply chain by 2016 Using the business case to encourage other actors of the chain investment in the larger dairy pocket area of the country

The business case for empowering women Photo Credit: Dave Bradley:Dave Bradley What the cows told us: Investments in women’s empowerment DO pay off in tangible and intangible ways By empowering women farmers CARE’s work was able to: Improve milk quality by 30%; Increase milk delivery by up to 500%; and Reduce value chain risk and cost of aggregation while improving transparency and innovation Improved resilience to recurrent flood related shocks in the project districts Also, women’s dairy-related income increased by more than 100%.

Impact

Challenges: Promoting “Systemic change” that involves significant investments in technology and resources Slow Progress in structural changes around the sector

Thank You! Unless otherwise cited, all photos are copyright CARE International

SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Digital Fat Testing System Status Report

DFT Objectives Improve the milk collection system in rural and remote areas Increase production with improving access to inputs, markets, and services by mobilizing groups of poor producers and input service provider. Improve the breeding and artificial insemination network Ensure access to quality animal health services at the producer level

General Collection Model Collection point (1000) Producer Collection point (1000) Producer Collection point (1000) Producer Chilling ( ltr) Collection point (1000) Producer

DFT Collection Model Chilling 5000 to liters DFT Collection Point (~350l) Chilling 5000 to liters DFT Collection Point (~350l) Chilling 5000 to liters DFT Collection Point (~350l) Chilling ( ltr)

DFT Collection Impact Community level collection points, decreases transportation time and cost DFT (digital fat testing) systems enable variable pricing of milk based on fat content. This ensures: – Fair price for producers – High quality of milk collected

DFT Points and Producers

DFT Milk Collection and Fat Content

Role of CARE DFT machine provider Krishi Utsho: One stop shop at DFT point for farmer inputs Technical training for DFT operators Farm management, farmer health and animal husbandry training and monitoring Mobilizing farmer groups Policy advocacy

INNOVATION AND SCALING UP

Benefits of AMCU AMCU Ultrasonic Milk Analyzer with Stirrer for Fat%, SNF%, Added Water, Temperature, etc. tests Combined reading from Milk Analyzer and Weighing Scale (No manual entry) Multi-Tier Software based operation ERP with Integrated Support like AI, Vet, fodder, Vaccine, etc. More than 17 different types of Reports With GPRS connectivity to the main server Built-in camera High Security Basic software knowledge of the Operator is sufficient Milkotester Semi-Automatic Tests for Fat and SNF only No integration possible with the software High dependency on Operator’s skill

Leveraging Partnerships Around Disruptive Technologies for Systems Change Introducing Digital Fat Testing: Management Research Perspective Dr. Kevin McKague, MBA, PhD Assistant Professor of Entrepreneurship and Strategy Shannon School of Business, Cape Breton University, Canada SEEP Conference September 30, 2015

About the Research CARE’s Strengthening the Dairy Value Chain Project in Bangladesh – Focus of my PhD dissertation, – With Muhammad Siddiquee, published lessons learned in Making Markets More Inclusive (Palgrave, 2014)

Research Questions Context: There are many pressures to introduce new pro-poor technologies – lots of ICT out there Key Questions: How can new disruptive technologies be introduced in commercially viable ways? How do we work with companies to incorporate new technologies into their core business activities to deliver a pro-poor impact?

Answer Pro-poor technology + business case = potentially scalable and sustainable impact

What is a pro-poor technology? One that: Increases productivity Increases information (transparency) Rebalances power relationships Reduces risk For poor producers Source: McKague and Oliver (2012) Enhanced Market Practices: Poverty Alleviation for Poor Producers in Developing Countries

What is the business case? The technology has to help the company’s business. Process for business case discovery : Understand what company’s business needs are Understand how a technology can help them Look for mutual benefit for companies and poor producers Source: McKague and Siddiquee (2014) Making Markets More Inclusive

What is the business case? Business Benefits and Motivations: Benefits for Companies Sourcing from Poor Producers Growth Quality Reduced risk and uncertainty Reduced costs Transparency Innovation Benefits for Companies Selling to Poor Consumers Aggregation of demand Reduced distribution costs Product and service innovation Cross-Cutting Benefits Access to resources Social legitimacy

Thank you! Kevin McKague Shannon School of Business, Cape Breton University, Canada