1. M4P 26 November 2008, Katalyst From Agriculture to Health care: Applying M4P successfully in different market systems in Bangladesh -- Peter Roggekamp, Swisscontact - GTZ 26 November 2008

2. M4P 26 November 2008, Katalyst 2 The next 30 minutes: Small intro The project cycle in Katalyst in agriculture in retailer information to farmers in private health care

3. M4P 26 November 2008, Katalyst 3 Katalyst Donors: DfID CIDA SDC RDE Implementers: Swisscontact GTZ is Ministry of Commerce Budget: 9 Million USD / year

4. M4P 26 November 2008, Katalyst 4 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

5. M4P 26 November 2008, Katalyst 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

6. M4P 26 November 2008, Katalyst 6 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

7. M4P 26 November 2008, Katalyst 7 Project cycle Market selection Strategies Facilitation Monitoring Understanding * Markets * Impact

8. M4P 26 November 2008, Katalyst 8 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 Management Criteria Growth 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 SECTORS Vegetables 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

9. M4P 26 November 2008, Katalyst 9 The strategies sector 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. ?

10. M4P 26 November 2008, Katalyst 10 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

11. M4P 26 November 2008, Katalyst 11 Deal Making with intermediaries Strategy Knows how to engage Sector knowledge Katalyst POVERTY PROFIT But where is the invisible hand ? “Externalities and Enabling Environment prohibits” So why do you need our support? Misuse of market power, Disadvantage groups Market selection Strategies Facilitation Monitoring Understanding * Markets * Impact Risk Catch 22 Takes too long Access to knowledge

12. M4P 26 November 2008, Katalyst 12 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.

13. M4P 26 November 2008, Katalyst 13 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.

14. M4P 26 November 2008, Katalyst 14 BUT WHERE ARE THE POOR ? Daily labor Landless rural and urban poor

15. M4P 26 November 2008, Katalyst 15 Incidence of poverty by main source of income (UPL/%) Source: Poverty Monitoring Survey (2004) BangladeshUrbanRural Wages & Salary19.8718.7620.84 Agriculture (Self-employed)38.7148.6938.10 Non-agriculture (Self-employed)40.4140.5740.35 Agriculture (Daily Wage)71.3979.1371.05 Non-agriculture (Daily Wage)51.2658.5548.17 Pension20.1927.4517.32 House rent and other rent21.2710.2328.03 Donation, grant, charity and other30.3527.2730.77 Daily Wage Earners

16. M4P 26 November 2008, Katalyst 16 BUT WHERE ARE THE POOR ? “ New ” cash crops can end poverty Traditional small rice farmers Skilled jobs in certain sectors More local purchasing power Jobs for daily labor Landless rural and urban poor

17. M4P 26 November 2008, Katalyst 17 Agricultural Value Added (BDT/acre, BDT/capita) CostValue added (per acre, incl. labor) (per acre)( per capita) AGRICULTURE--9,643 Agriculture/Livestock--7,165 Oil seeds 4,0001,456 987 Major cereals 8,0002,523 1,777 Pulses 3,5002,398 1,821 Minor cereals 7,0002,957 2,124 Maize 10,1253,205 2,283 Spices 22,1215,177 3,381 Maize (contract farming) 12,56510,000 7,124 Vegetables 20,80013,008 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-30,028 Based on: Statistical Yearbook of Bangladesh (2004, 2005), Agricultural Sample Survey (2005), own data

18. M4P 26 November 2008, Katalyst 18 Cropping Patterns Poverty status MarginalSmallMediumLarge Boro-None-Ropa Amon1144 Oil seeds-Ropa Aus-Ropa-Amon1144 Vegetables-Aus-Ropa Amon1444 Boro-None-None1113 Mastard Oil-Ropa Aus-Ropa Amon1144 Boro/Wheat-Dhaincha-Ropa Amon1144 Wheat-Vegetables-Ropa Amon1444 Potato-Ropa Aus-Ropa Amon1444 Banana-Banana-Banana2444 Mastard Oil-Boro-Ropa Amon1144 Potato-Aus-Ropa Amon1444 Oil seeds-Ropa Aus-Ropa-Amon1144 Maize-None-Ropa Amon1144 ST.Amon-maize1444 ST amon-potato-maize1444 Fisheries1444 Source: Department of Agriculture, own data

19. M4P 26 November 2008, Katalyst 19 Market Development and Cash Crops

20. M4P 26 November 2008, Katalyst 20 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

21. M4P 26 November 2008, Katalyst 21 Agriculture and Market Development the intermediaries Retailers of Seeds Fertilizer pesticides Tradersprocessors 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

22. M4P 26 November 2008, Katalyst 22 Main IssuesIntermediariesSupport Low Productivity, due to:  Insufficient knowledge  Dysfunctional input markets  Limited 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 companiesTechnical support Improving Government regulations Development of distribution network o Contract farmingDeveloping 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

23. M4P 26 November 2008, Katalyst 23 Improving retailer – farmer relations in the vegetables market

24. M4P 26 November 2008, Katalyst 24 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.

25. M4P 26 November 2008, Katalyst 25 Agriculture and Market Development the intermediaries Retailers of Seeds Fertilizer pesticides Tradersprocessors Extension workers from Government or NGO’s Media ICT centers Sellers or lessors of equipment Lessors of land

26. M4P 26 November 2008, Katalyst 26 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

27. M4P 26 November 2008, Katalyst 27 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

28. M4P 26 November 2008, Katalyst 28 Facilitation: Retailer training programs Market selection Strategies Facilitation Monitoring Understanding * Markets * Impact KatalystSyngenta Initiated100% Training conceptsJoint Design of trainingSupportedLead Organizing and executing trainings -100% Cost of training60%40% Gender specialist100% Monitoring100%

29. M4P 26 November 2008, Katalyst 29 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.

30. M4P 26 November 2008, Katalyst 30 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.

31. M4P 26 November 2008, Katalyst 31 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 20052006 No of clients600800 Total sales2,308 USD3,846 USD

32. M4P 26 November 2008, Katalyst 32 Results, farmers Market selection Strategies Facilitation Monitoring Understanding * Markets * Impact 20052006 Land used16.5 dec30 dec Cost of seedsUsed their own 1,500 BDT Cost of pesticides none750 BDT Cost of fertilizersnone750 BDT Van cost350 BDTnone Toll for selling at market 350 BDTnone Yield1,000 pieces2,000 pieces Revenue6,020 BDT23,200 BDT Profit82 USD311 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

33. M4P 26 November 2008, Katalyst 33 Commercial Health care

34. M4P 26 November 2008, Katalyst 34 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.

35. M4P 26 November 2008, Katalyst 35 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%.

36. M4P 26 November 2008, Katalyst 36 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.

37. M4P 26 November 2008, Katalyst 37 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

38. M4P 26 November 2008, Katalyst 38 Activities: Health Care Katalyst support: Market selection Strategies Facilitation Monitoring Understanding * Markets * Impact Courses forCourse duration BSc nursing4 years Health technology3 years Medical assistant3 years Community health worker 1 year Paramedics1 year Community paramedics 2 years

39. M4P 26 November 2008, Katalyst 39 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.

40. M4P 26 November 2008, Katalyst 40 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 Not required

41. M4P 26 November 2008, Katalyst 41 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.

42. M4P 26 November 2008, Katalyst 42 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)