Bangladesh

Livestock Development-based Dairy Revolution and Meat Production Project (DRMP)

Identification Mission March 27-April 6, 2017

Aide Memoire,

Introduction

1. A World Bank mission1 undertook an Identification Mission from March 27-April 6, 2017 for

the Livestock Development-based Dairy Revolution and Meat Production Project (DRMP). The overall

objective of the mission was to discuss key activities for the proposed project and to agree on activities

to be financed under the envisaged Project Preparation Advance. The specific objectives were to: (i)

review the design of the Project; (ii) outline the description of the project; (iii) analyze the feasibility

for the development of an insurance market for the livestock sector; (iv) identify business and private

sector investment opportunities in the dairy and meat production sub-sectors; (v) review the main

livestock production systems and value chains policy and regulatory environment around the sector;

(vi) launch a Climate Smart Agriculture (CSA) analytical work covering the livestock sector in

Bangladesh and design a Pilot Climate Smart Investment Plan (CSIP) under the project; (vii) discuss

possible partnerships with the private sector; (viii) analyze environmental and social safeguard policies;

and (ix) set up a road map for project preparation.

2. The main activities of the mission consisted of a full-day plenary stakeholder consultation with

government, the private sector and development assistance partners; field visits to meat, dairy and feed

processing facilities and producers in Joydebpur, Shreepur and Mawna of Gazipur, Potajia and Harni

Bathan of Shahjadpur, Sathia of Pabna and Shalikha of Magura; and, visits to key government

veterinary, cattle breeding and goat facilities in Savar and old Dhaka. The mission held additional

consultation workshops with selected stakeholders specifically on value chains, livestock insurance,

and CSA. The mission met with staff from development partners and NGOs working in the sector.

Meetings were also held with Government counterparts in the Ministry of Finance and Planning,

Economic Relations Division (ERD), Ministry of the Environment, and numerous staff from the

Ministry of Fisheries and Livestock (MoFL).

3. The World Bank team would like to express its sincere appreciation to the Government of

Bangladesh, line department officials for their cooperation and active participation, including the local

law enforcement officers who provided support to members who visited the field. The mission findings

outlined in this Aide Memoire were discussed on April 5 and April 10, 2017 at wrap up meetings chaired

respectively by Ms. Mahmuda Begum, Additional Secretary, ERD, and Mr. Md. Maksudul Hasan

Khan, Secretary MoFL. This Aide Memoire will be classified as a public document under the Bank’s

Access to Information Policy.

1Composition: Messrs./Mmes. Manievel Sene (Senior Agriculture Specialist, Task Team Leader of the Project); Francesca Lo Re (Senior

Financial Sector Specialist, Co-Task Team Leader); Pierre Gerber (Senior Livestock Specialist, Co-Task Team Leader); Rohan Selvaratnam

(Operations Analyst); Hosna Sumi (Private Sector Specialist; Aneeka Rahman (Senior Social Protection Economist,); Bushra Binte Alam

(Senior Health Specialist,; Omar Lyasse (Senior Agriculture Economist,); Tobias Baedeker (Agriculture Economist Minna Maria Kononen

(Country Relations Officer,); Mohammad Atikuzzaman (Financial Management Specialist,); Arafat Istiaque (Procurement Specialist,); Md.

Istiak Sobhan (Environmental Specialist- Md. Akhtar Zaman (Social Development Specialist,); Jinia Sultana (Program Associate); Chase

Palmeri (Economist, FAO); Steven Watkins (Agricultural Officer, FAO), Helen Leitch, (Livestock Specialist, FAO); Vinod Ahuja(Livestock

Policies and Government institutions, FAO); Imanum Nabi Khan (Livestock Producer Organizations, FAO); Virtual Support: Katie Kennedy

Freeman (Agriculture Economist, GFA04); Valentina Paskalova (Senior Operations Officer, GFA02).

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Context and Background

4. The livestock sector in Bangladesh is framed within the context of an economy with a strong

GDP growth rate, exceeding 7% in 2015-2016, and with a strong track record for poverty reduction. In

Bangladesh the agriculture sector at large has accounted for 90% of poverty reduction between 2005

and 2010. However, 28 million people still live extreme poverty, mostly in rural areas. Amongst rural

households, over 70% own livestock, including the landless, marginal and small-scale farmers, many

of them women. However, their productivity and profitability remain unnecessarily low, failing to

reach their potential due to low levels of knowledge on animal health issues that play a major role in

productivity, this low level of knowledge can result deleterious impact on animal and public health, and

investment and fueling food and human health risks, posing environmental challenges including

greenhouse emission (GHG).

5. The potential, as yet unrealized, that the livestock sector could make to several of the country’s

top social and economic priorities provides the rationale for this investment. Resources invested in

livestock will help fuel economic growth and reduce malnutrition. They will help reduce poverty in

rural areas and will economically empower women. Furthermore, investments in the livestock sector

have the potential to make a significant contribution to reduce GHG emissions per unit of production –

thus contributing to achieving the national mitigation targets – and assist rural people to adapt to climate

change. Most urgently, investments in the livestock sector are required to reduce the alarmingly high

risk to public health from animal diseases and unsafe animal-based products and practices that the

country is currently facing.

6. In line with this context, the mission: (i) discussed the main activities of the proposed project

including development of livestock insurance market because only healthy animals can be insured; (ii)

analyzed livestock services, livestock farm organizations policies; (iii) discussed involvement of the

private sector as well as the Non-Government Organizations; (iv) reviewed the existing policy and

regulatory constraints impeding private sector growth; (v) reviewed preliminary results of the CSA

country profile analytical work in Bangladesh, covering livestock sector; (vi) discussed the main project

preparatory activities set-up and action plan for the preparation of the next mission scheduled in July

2017; (vii) reviewed priority activities to be implemented with the Project Preparation Advance (PPA)

to be prepared by the Government; and (viii) drafted the Project Concept Note (PCN).

Key findings, Conclusions and recommendations

7. Strategic approach: The proposed overall approach reflects the findings of “Dynamics of

Rural Growth (DRG) in Bangladesh” (DRG, World Bank 2016), which demonstrates that development

and establishment of a commercially viable small-holder livestock sub-sector will depend on: (i)

increasing the productivity of small-scale producers through improving feeding and husbandry

practices, and improving animal health (treatment and disease control); (ii) improving market linkages

for small and poor farmers and promoting value addition and product diversification; and (iii) enhancing

climate resilience of dairy and meat production systems. Achieving this would need to be underpinned

by: (i) strengthening relevant government institutions to provide effective extension advice and

training; and (ii) establishing an adequate incentive and regulatory framework to stimulate private sector

investments in dairy and meat value-chains.

8. Project Beneficiaries: The project beneficiaries are smallholder livestock farmers, especially

women, youth, poorest livestock producers, as well as small and mid-sized enterprises (SMEs).

Special attention will be given to gender balance in the producer groups. This includes assessing the

specific needs of women and youth for their effective participation in economic activities and the

organizational structure of producer organizations, and selection or creation of women-only groups

where appropriate. Women’s participation will be enabled by providing targeted awareness raising and

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outreach campaign on the possibilities and benefits of participation in the project, as well as on the

process and rules of selection of the project beneficiaries. For Poverty targeting, the proposed project

would explore the use of household data from the National Household Database being developed by

the Bangladesh Bureau of Statistics (BBS), supported under Safety Net Systems for the Poorest Project,

Credit No. 5281-BD, to identify poor households that could be eligible for various livestock

enhancement program’s support, including insurance premium subsidies. The team would coordinate

with BBS to ascertain data requirements and the necessary data exchange protocols. Updated demand

driven livestock data on animal origin protein, in particular, demand-supply gap calculation needs to be

done. Only SMEs engaged in livestock value chains with smallholders will be targeted by the project

to improve the business both for smallholders and MSMEs.

9. Gender dimension: The field visits, through interviews with women farmers confirmed that

women are fully engaged in smallholder dairy farming but have limited decision making ability,

especially when it comes to marketing and income control. Women reported only receiving training

through their husbands who had benefitted from the services provided by the cooperative. They reported

they were members of cooperatives only if there was no male in the household. The project would

contribute in closing gender gaps in women’s access to high-quality inputs and services as well as

creating job opportunities for women. It would seek innovative ways to improve women’s voice and

empowerment through collective action as well as to promote livestock technologies that reduce

women’s work burden and improve household’s nutrition. The activities targeting women would be

demand led and based on analysis of women’s and men’s constraints and opportunities through a sector-

specific gender gap assessment.2

10. Nutrition: Building on the successful experience of FAO supported regional technical

cooperation project, the MoFL is interested in investing in a School Milk Program for better nutrition

while supporting dairy farmers, as part of the project activities. Based on the consultations with project

stakeholders as well as initial field visits it is noticeable that malnutrition is still frequent in Bangladesh,

caused by a lack of diet diversity and low intake of animal products. Milk consumption remains very

low, with many families (with 5-7 family members) reporting only 2-3 cups of milk consumption a day.

In fact, the average daily milk consumption in Bangladesh is at 34ml compared to the national

recommendation of 130ml3, because of affordability, access to liquid milk and food quality and safety

concerns. Accordingly, the project would invest in a large-scale school milk program specially targeting

rural schools and linking the procurement of fresh milk from local / national producers.

11. Food safety and standards: Growing use of antibiotics, lack of standards for adulteration,

limited cold chains, poor hygiene and sanitation of slaughter and processing, and density of markets,

put farmers and local consumers at risk. Further, Bangladesh still faces significant challenges to attain

international quality standards for export of its livestock products. The country has not yet reached the

full capability to meet the recommended safety level of the quality standard for livestock products for

Sanitary and Phyto-sanitary measures regulated by the World Organization for Animal Health and

Codex Alimentarius Commission. Milk collection facilities lack proper cooling mechanisms along the

cold chain. Slaughtering and dressing operations are not modernized. Slaughter houses 4 generate

valuable by-products such as blood, bones, hoofs, rumen and visceral content, hair, etc. The major

portion is drained away or thrown in open places causing environmental pollution and economic loss.

Moreover, it leaves animal and human health at more risk.

2 With the support of the gender team at the Agriculture Global Practice central unit. 3 Annual monitoring report for the National Food Policy Plan of Action and Country Investment Plan (2015). 4 There are about 192 slaughter houses at district level, 1,215 at upazila level and more than 3,000 slaughtering points in rural market places,

cities and towns.

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12. Opening markets for private sector: Private sectors, including large, small and medium

enterprises play a vital role in the formal market structure and are main drivers for value addition,

linkages to end market and quality improvement for local and export markets. However, growth,

business expansion and new investments have been constrained by several policy and regulatory

barriers, as highlighted during the stakeholder consultations and meetings by the sector players.

Restriction on highly productive breed import, unclear approval process to perform Artificial

Insemination (AI), tariff issues related to primary inputs, feed, vaccines, raw material for processing,

and overall week public- private dialogue mechanism for policy formation have resulted in limited

number of private sectors and low investments. The proposed project would support institutional

capacity building for better regulations in the sub-sectors through identifying specific policy and

regulatory issues, and help establish mechanisms for effective coordination between public and private

sector for sustainable reforms.

13. Piloting Insurance: Rural households in Bangladesh are highly exposed to severe losses,

including loss of livestock, associated with cyclone and flood events and major disease outbreaks. Dairy

and meat cattle insurance could help reduce the vulnerability of small and medium scale dairy and meat

producers by protecting them against the death of their cattle, thereby protecting their livelihoods and

incomes. Effective insurance solutions require good-quality data to develop in a sustainable manner.

Identifying and tagging individual livestock animals, vaccinations, animal pre-inspections, health

check-up and certification, health track record and are among the pre-requisites for issuing insurance

policies alongside maintaining a national database of livestock mortality for reporting and recording.

Cattle insurance could also have significant ex ante impact in facilitating investments in higher-

productivity dairy/meat cows and introducing minimum standards of animal husbandry practices,

thereby reducing accidents and mortality. The livestock insurance market is subject to inefficiencies

including: (i) the availability of reliable insurance data; (ii) challenges to reach small and medium

potential policyholders; (iii) low support for the risk financing of the catastrophic layer of reinsurance;

and (iv) limited availability of insurance products; and (v) poor enabling legal and regulatory

environment. The project would pilot a livestock insurance market development program for risk

mitigation and to enhance livestock sector’ resilience. For more details, see Annex 1.

14. Climate change: The project would help tackle the climate change challenges to the livestock

sector and support the client in advancing its Intended Nationally Determined Commitments to the

United Nations Framework Convention on Climate Change. It is expected to have substantial climate

co-benefits, both for climate change adaptation and mitigation. The project would mainstream CSA by

promoting resilience building measures, introducing livestock management practices and other

measures leading to a lower GHG intensity of production as well as build client capacity and knowledge

around climate change including on the monitoring, reporting and verification of emission benefits. It

would support renewable energy technologies for producers – including biodigestors, with the proven

ability to reduce manure related GHG while providing a clean energy source for rural households as

well as other renewable energy and energy efficient technologies further down the supply chain,

including for chilling and processing purposes. The project would support effective management and

control of emerging and re-emerging diseases, many of which are exacerbated by climatic conditions

in the country (in particular parasitic diseases), including infectious transboundary diseases, and to give

higher profile to parasitic challenges of cattle, sheep and goats and poultry.

15. Project development objective (PDO): The project development objective is to support small-

holder farmers and agro-entrepreneurs to improve productivity, market integration, and risk

management and resilience of selected livestock systems and value chains in the project target areas.

The targeted species are cattle, buffalo, goats, sheep and chicken considered strategic for both food

security/nutritional supply and for their comparative advantage on the regional markets and associated

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income generation potential. The project would therefore target livestock farmers in areas with cattle,

buffalo, sheep, goats, and poultry systems.

5. The project would comprise four components (see preliminary project description in Annex 2):

6. COMPONENT A: Productivity Improvement and Innovation. The objective of this

component would be to raise on-farm productivity, reduce the costs of production and increase

profitability through better livestock management, especially better approaches to breeding, animal

health, and animal nutrition. Component A would include two major activities: (i) Support to Producer

Organizations (POs); and (ii) Support to Improving Production. These would cover: Breed

improvement, including: (i) enhanced capacity for production of quality semen; (ii) expansion of semen

delivery infrastructure; (iii) open nucleus improvement program for quality bucks and rams; (vi)

capacity development for delivery of quality chicks. Disease prevention and control encompassing: (i)

capacity development for production of key animal vaccines, disease surveillance, diagnosis and

reporting; (ii) expanded capacity for biosecurity including border check posts, quarantine facilities, and

facilities for producing semen, feed, and vaccines; (iii) capacity development for regular sampling,

testing, reporting and certification of slaughterhouses, milk collection and processing facilities. Feeding

and nutrition, including: (i) feed and soil analysis facilities; (ii) an on-farm feed optimization and ration

balancing program; (iv) training on production of fodder seed, fodder nurseries, fodder demonstrations,

including climate smart alternatives; (vii) production of protein/mineral/vitamin mixes, and (viii)

demonstrations for feed and fodder storage options. Housing and management including: (i) developing

and promoting low-cost housing designs to improve productivity and reduce diseases; (ii) upgrading

shelters; (iii) promoting biogas converters to manage manure; (iv) promoting processing options to add

value to manure; (v) water analysis kits for low cost filtration equipment.

7. COMPONENT B: Linking Livestock Producers to Markets and Value-Chain

Development. The objective of this component would be to link producers to markets so as to increase

the volume and quality of livestock products being marketed and consumed. Investments would revolve

around improved processing and marketing arrangements, reducing financial risks for producers and

improving nutrition from increased consumption of livestock products. Infrastructure investments

would be fundamental to each of these efforts and while working to safeguard public health and increase

food safety for consumers. The component will include three sub-comments as follows: (i) Linking

Farmers to Markets through Productive Partnership Scheme; (ii) Basic Infrastructure for Livestock

Development; and (iii) Consumer Awareness and Nutrition.

8. COMPONENT C: Improving Risk Management and Resilience of Livestock Production

Systems: The objective of this component would be used for investments to foster an enabling

environment for livestock sector growth, by developing the capacity of public sector institutions and

their private sector partners. The component will include four sub-comments as follows: (i) Capacity

Development of the Department of Livestock Services; (ii) Institutional Capacity Development and

Knowledge Platform; (iii) Food safety and quality assurance; and (iv) Livestock Insurance Pilot

9. COMPONENT D: Project Management, Monitoring and Evaluation. The objective of this

component would establish the Project Management Unit at the Department of Livestock Services

(DLS) headquarters with eight project implementation units, one in each Divisional Livestock Office

where, by virtue of post, the Deputy Director of DLS for the Division would work as coordinator for

harmonizing the project activities including adequate fiduciary systems; communication on related

activities; governance and accountability actions; monitoring and evaluation and third party audits;

stakeholder coordination; and special evaluation studies. PMU activities would be overseen by the

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MOFL. Field activities would be monitored by divisional, district and sub-district livestock offices to

ensure a successful implementation of the project.

Agreed Actions

16. The following key actions were agreed upon:

Project Preparation Advance (PPA). The PPA would support preparation activities and effectiveness-

related activities of the project including: Creation of the PMU; Preparation of the project manuals, and

safeguards documents; implementation of key studies (see Annex 3) on e.g.: livestock investment plans

for selected supply chains (including analysis of livestock systems, value chains and markets and design

of comprehensive business plan models at farm and processing/distribution levels, ii) large livestock

infrastructure investment models (including roads, transportation, collection centers, slaughter houses,

processing plants), (iii) policy review (identifying enabling environment and barriers of existing

policies and areas where new policies are possibly needed), and (iv) mapping and capacity assessment

of livestock services.

Veterinary Public Health and Nutrition. A multi-sectoral approach (including relevant line ministries)

would be applied in the design of the Project. During the upcoming project preparation mission a

stakeholder consultation would be organized with participants from the Government, development

partners (FAO, WFP, and Netherlands Embassy), NGOs, as well as private sector (milk producers).

The project would build on the lessons-learned from the FAO’s Technical Cooperation project

“Enhancing milk consumption and livelihoods through school milk programmes linked to smallholder

dairy operations (2012-2015) and FAO-Rabobank pilot project on “Linking School Milk with

Smallholder Dairy Development in Tala, Satkhira, Bangladesh” (2012-2015). In addition to the School

Milk program, the project would also focus on improving feeding and caring practices by promoting

Behavior Change Communications, awareness building on zoonoses and public health, providing

nutrition education to farmers groups, and promoting simple household labor-saving and drudgery-

reducing technologies for women to liberate time for self and child care.

Insurance5. First, Animal Health Checking, tracing records and Certification set up as preconditions for

cattle insurance: MoFL and the mission team agreed that support needs to be provided to the

Government in: (i) identifying and tagging individual livestock animals, vaccinating and conducting

pre-inspections to set up the pre-requisites for issuing insurance policies, (ii) maintaining a national

database of livestock mortality for reporting and recording. Second, Operational and distributional

options in which a partner agent model would be implemented where product development and policies

underwriting would be done by the insurance companies while Micro-Finance Institutions (MFIs)/dairy

producers would be the delivering channels to distribute the policies and raise awareness. Fiscal cost

and premium subsidy would be factored. In the piloting phase, assistance in product design and pricing

would be likely provided to Sadharan Bima Corporation and Palli Karma-Sahayak Foundation would

act as partner agent. Further assessment would be conducted for involvement of private insurance

companies and adoption of partner agent models, including MFIs and dairy processors as distribution

channels.

Value chain development. The project would build on existing experience (e.g. FAO, UNDP, CARE,

Heifer Itnl, Solidaridad) in inclusive value chains linking smallholders with a buyer agro-industry, and

mobilizing and empowering women farmers. For example, during the meeting with project stakeholders

on the livestock value chains, CARE Bangladesh presented their experience from the recently finished

“Strengthening the Dairy Value Chain project”, which was implemented jointly with the private sector

5 In 2014/2015the World Bank Group at the request of Bank and Financial Institutions Division of the Bangladesh Ministry of Finance

conducted a comprehensive study on agricultural insurance including crops, livestock, aquaculture insurance and fully subsidized for the

poorest insurance options: “Bangladesh: Agriculture Insurance Situation Analysis”, “Bangladesh: Agriculture Insurance Solutions Appraisal

Technical Report”, and “Bangladesh: Policy Options for Agriculture Insurance Solutions”.

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(BRAC Dairy). This project aimed to increase women’s employment throughout the value chain as

producers, input suppliers including livestock health workers, and other jobs where they are typically

underrepresented (for example, AI specialists, milk collectors, loan officers, and transport positions).

Similarly, FAO and Common Fund for Commodities recently completed a project targeting 3,000

smallholder dairy farmers implementing a series of interventions enhancing milk productivity, quality,

addressing production diseases, strengthening market access through producer organizations, women

centered outreach training, and technical capacity development at all levels of the value chain. These

interventions resulted in 40% increase in milk productivity (Kg/cow/day) and 50.7% increase per

lactation period and enhanced market access for over 2,000 women dairy farmers.

Next Steps/Roadmap

17. The Bank team reviewed and discussed the proposed processing time line below and an action

plan outlining the key activities with the Government (see Annex 3). Time line is as follows: (i) Concept

Review: 31 May, 2017; (ii) Pre-appraisal: 2 September, 2017; (iii) Quality Enhancement Review: 16

October, 2017; (iv) Decision Review Meeting: 20 November 2017; (v) Appraisal: 27 November 2017;

(vi) Negotiations: 15 January, 2018; and (vii) Board approval: 19 April 2018.

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Annex I

Livestock Insurance Main Features

The mission consulted with the Ministry of Fisheries and Livestock, Bank and Financial Institutions

Division (BFID) of the Ministry of Finance, state-owned and private commercial insurance companies,

microfinance sector, and dairy producers to identify the major constraints and discuss options to develop

livestock insurance in Bangladesh.

Rural households in Bangladesh are highly exposed to severe losses, including loss of livestock, and

livestock insurance could help reduce the vulnerability of small and medium scale dairy and meat

producers. In Bangladesh, insurance companies are the only entities authorized to provide insurance

services and are regulated by the Insurance Development and Regulatory Authority (IDRA).

Microfinance Institutions are allowed to provide insurance services to their members based upon

approval of the Microcredit Regulatory Authority (MRA). At the moment a limited number of

practitioners, PKSF and few MFIs, are marketing livestock-investment loan insurance to their members,

however the scale is small. The major drawback is that micro-insurance programs are not eligible for

formal reinsurance and are therefore exposed to catastrophe losses. Conversely, private and public

insurance companies have been reluctant to invest in developing livestock insurance products and

services mainly due to lack of rural distributional networks and pricing issues.

Ministry of Fisheries and Livestock and the mission team agreed that support needs to be provided in:

1. Establishing preconditions for cattle insurance Effective insurance solutions require good-quality data to develop in a sustainable manner.

Support would be provided to MFLS-DLS in: i) identifying and tagging individual livestock

animals, vaccinating and conducting pre-inspections to set up the pre-requisites for issuing

insurance policies, 2) maintaining a national database of livestock mortality for reporting and

recording.

2. Developing operational and distributional options A partner agent model would be implemented where product development and policies

underwriting would be done by the insurance companies and MFIs/dairy producers would be

the delivering channels to distribute the policies and raise awareness by leveraging the existing

outreach in the rural areas and engagement with local communities. Fiscal cost and premium

subsidy support would be factored to lower the premium rates and gradually promote up taking

of livestock insurance among small and medium farmers.

In the beginning, assistance would be provided to Sadharan Bima Corporation in product design

and rating/pricing and in low-cost operating systems and procedures’ design. Technical support

to strengthen the state-owned company in livelihood insurance would be provided in

coordination with the World Bank undergoing “Bangladesh Insurance Sector Development

Project”. Palli Karma-Sahayak Foundation (PKSF) is identified as suitable partner agent for

livestock insurance products’ distribution as the wholesale lender can leverage the successful

experience in product development, distribution and risk mitigation for livestock insurance and

the large MFIs network operating in the rural areas.

Viability of business models would be further assessed for product development and

underwriting with private insurance companies alongside partner agent models to distribute

cattle insurance through the MFIs/NGOs, banks and/or major dairy cooperatives/social

enterprises/companies.

3. Awareness and popularization of livestock insurance schemes

The livestock insurance scheme would be formulated with the objective of demonstrating the

benefit of insuring livestock to the people and popularizing it. Financial literacy campaigns

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would be conducted and awareness raised among smallholders on the benefits of livestock

insurance schemes.

4. Enabling environment

The project would work in close coordination with the World Bank “Bangladesh Insurance

Sector Development Project”, which is currently working to strengthen the institutional

capacity of the regulator and state-owned insurance corporations and to increase the coverage

of insurance in Bangladesh.

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Annex II

Preliminary description of the Components

COMPONENT A: Productivity Improvement and Innovation:

The objective of this component would be to raise on-farm productivity, reduce the costs of production

and increase profitability through better livestock management, especially better approaches to

breeding, animal health, and animal nutrition.

Sub-component A1: Support to Producer Organizations would group farmers around a commodity

of common interest. This approach has been utilized extensively as the initial step in on-farm

productivity improvements, which provides an effective means to deliver training, inputs and

marketing support to smallholder farmers. The project would facilitate the formation, or consolidation,

of farmer groups into more formal structures, if desired by group members. The project would provide

basic business development skills training in areas such as negotiation, marketing and business

planning. Gender would be an important consideration in assessing their specific needs for

inclusiveness such as women-only producer groups as a viable means to promote gender balance.

Sub-component A2: Support to Improving Production Practices would finance inputs, services and

training, that livestock producers currently require in order to improve productivity, meet hygiene

requirements, and reach the quality standards to meet market needed benefit from improved market

access.

These would cover: Breed improvement, including: (i) enhanced capacity for production of quality

semen; (ii) expansion of semen delivery infrastructure; (iii) open nucleus improvement program for

quality bucks and rams; (vi) capacity development for delivery of quality chicks. Disease prevention

and control encompassing: (i) capacity development for production of key animal vaccines, disease

surveillance, diagnosis and reporting; (ii) expanded capacity for biosecurity including border check

posts, quarantine facilities, and facilities for producing semen, feed, and vaccines; (iii) capacity

development for regular sampling, testing, reporting and certification of slaughterhouses, milk

collection and processing facilities. Feeding and nutrition, including: (i) feed and soil analysis

facilities; (ii) an on-farm feed optimization and ration balancing program; (iv) training on production

of fodder seed, fodder nurseries, fodder demonstrations, including climate smart alternatives; (vii)

production of protein/mineral/vitamin mixes, and (viii) demonstrations for feed and fodder storage

options. Housing and management including: (i) developing and promoting low-cost housing designs

to improve productivity and reduce diseases; (ii) upgrading shelters; (iii) promoting biogas converters

to manage manure; (iv) promoting processing options to add value to manure; (v) water analysis kits

for low cost filtration equipment.

Advisory services, breeding services, health services and training to support producers in improving

their production processes would be provided through varying delivery mechanisms to be developed

in collaboration between the public and the private sector, with emphasis on sustainability of service

provision and cost recovery.

COMPONENT B: Linking Livestock Producers to Market and Value-Chain Development:

The objective of this component would be to link producers to markets so as to increase the volume

and quality of livestock products being marketed and consumed. Investments would revolve around

improved processing and marketing arrangements, reducing financial risks for producers and

improving nutrition from increased consumption of livestock products. Infrastructure investments

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would be fundamental to each of these efforts and while working to safeguard public health and

increase food safety for consumers.

Sub-component B1: Linking Farmers to Markets through Productive Partnership Scheme would

establish Productive Partnerships (PP) between livestock Producer Organizations (POs) or farmer

groups, traders, processors and other downstream agribusinesses including SMEs. PPs would be based

on: (a) agreement on product quality and characteristics; (b) quantity to be produced and purchased;

(c) delivery modalities: how the product would be delivered, when, and in what condition; (d) payment

and price determination criteria; and (e) each partners’ contribution to the partnership. PPs would be

supported by entering in to co-financing arrangements with business entities, selected through a

competitive process. They seek to encourage bidders to devise market-based solutions that would be

linked with small-scale, marginal and landless producers. Partnerships for co-financing would be

targeted at (i) large scale enterprises; and (ii) small and mid-sized enterprises (SME) including POs.

The partnerships would typically be based on clearly defined marketing strategies and provide of a

package of services and inputs to new growers in return for selling high quality livestock grown to

processor specifications. Co-financing with SMEs would encourage new and innovative approaches

to livestock production and processing along value chains that could provide improved services,

equipment, technologies, linkages or other value addition to existing livestock produce. Criteria for the

selection of partnerships for financing would include requirements for inclusion of women producers.

Sub-component B2: Basic Infrastructure for Livestock Development would finance investments

in basic livestock producing/processing and marketing infrastructure including slaughterhouses, roads

and markets. The purpose would be to address current constraints to sector development in the

processing and marketing of livestock, with paramount consideration to market access and food safety.

It would upgrade or replace dilapidated and decaying buildings (e.g. markets and post-harvest plants)

that lead to chronically bad hygiene and pose a significant hazard to the health and welfare of workers,

livestock, consumers and the wider environment. Infrastructure would also include upgrading of

selected farm to market and feeder roads. Investments would be based on feasibility studies and

business plans for each facility. Planned investments would be made with special attention to gender-

related issues pertinent to the access and use of facilities. Investments would include provisions for

private sector participation, including cost-sharing and contracting, leasing or other partnership

arrangements with the private sector for the operation of any new or upgraded Government-owned

facilities.

Sub-component B3: Consumer Awareness and Nutrition would finance a behavioral change

communication campaign through various media outlets to highlight different aspects of dairy, beef,

broiler management, food safety as it relates to public health, value added products processing,

nutritional aspects of milk-meat and its products, long term impacts or benefits of regular intake, etc.

In addition, a school milk program would be financed to further stimulate demand and behavioral

change as it pertains to livestock product consumption. This would target rural schools for better

nutrition while supporting dairy farmers through local procurement of fresh milk from producers. This

program would be designed and implemented through a multisectoral approach, including all the

relevant line Ministries. The program would build on the lessons-learned from the FAO-Rabo Bank

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pilot project on “Linking School Milk with Smallholder Dairy Development in Tala, Satkhira,

Bangladesh” (2012-2015).

COMPONENT C: Improving Risk Management and Resilience of Livestock Production

Systems:

The objective of this component would be used for investments to foster an enabling environment for

livestock sector growth, by developing the capacity of public sector institutions and their private sector

partners. The component is comprised of four sub-components, as follows.

Sub-Component C1: Capacity Development of the Department of Livestock Services would include

assistance for the development of the capacity of DLS to support livestock producers and to support

the sector development overall. The project would improve evidence-based policy development

capacity at the Ministry of Livestock and Fisheries (MoFL) by analyzing the production and market

conditions in the livestock sector so as to articulate required new policies or shifts in existing policies

in response to changes in production conditions and in the economy at large. DLS would be

strengthened to oversee operational policy formulation and elaboration of related regulations,

procedures and manuals, fully taking into account environmental considerations such as pollution

control, as well as establishment of sustainable system to establish pre-conditions for livestock

insurance such as tagging system, pre-inspections, mortality database, etc. Activities would be planned

based on the findings of a comprehensive Capacity Needs Assessment of DLS to be undertaken with

funds from the Project Advance. It would develop a Livestock Information System under DLS in

collaboration with the Bangladesh Bureau of Statistics to meet the country’s needs to track sector wide

indicators.

Sub-Component C.2: Institutional Capacity Development and Knowledge Platform would focus on

the capacity of universities and vocational training institutions to produce a cadre of high-quality

graduates with the knowledge and professional skills needed to fulfill basic roles and responsibilities

in the public and private sector for development of the livestock sector. A feasibility study would be

undertaken to target investments and outline institutional development plans with respect to new and

refurbished teaching facilities, curricula, and faculty development to support vocational,

undergraduate, and graduate education. The investments would be designed to significantly increase

the participation of women professionals in the sector.

Sub-Component C.3: Food safety and quality assurance would improve food safety and quality

assurance, to dovetail with on-going efforts of the Ministry of Food, the Bangladesh Food Safety

Authority, and the Ministry of Health and Family Welfare with support from the Netherlands, USAID

and FAO among others. A considerable share of the infrastructure investments made in Component

B would be made for the purpose of improving food safety. In addition, this sub-component would

focus on the institutional dimension of food safety. It would focus on: (i) improving regulations,

quality standards for dairy and meat products, and feeds; (ii) developing standard operating procedures

for control and certification of operators, facilities, dairy and meat products and feeds; (iii) introducing

traceability systems for selected supply chains; (iv) establishing greater capacity for sampling and

expanding laboratory capacity at central and regional level for testing food and feed samples; and, (iv)

training and materials for stakeholders including farmers, service delivery agents, DLS staff,

processors, retailers.

Sub-component C4: Livestock Insurance Pilot aims to support the GoB in Establishing preconditions

for cattle insurance. This would include support to DLS to set up a sustainable system to: (i) identify

and tag individual livestock animals, provide high quality and proximity vet services, vaccinate and

conduct pre-inspections, (ii) develop and maintain a national database of livestock mortality for

reporting and recording; Support would also be provided for Developing operational and distributional

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options. A partner agent model would be implemented where product development and policies

underwriting would be done by the insurance companies while Micro-Finance Institutions

(MFIs)/dairy producers would be the delivering channels to distribute the policies and raise awareness.

Fiscal cost and premium subsidy would be factored to lower the premium rates and gradually promote

up taking of livestock insurance among small and medium farmers. In the piloting phase, assistance in

product design and pricing would be likely provided to Sadharan Bima Corporation and Palli Karma-

Sahayak Foundation would act as partner agent. Further assessment would be conducted for

involvement of private insurance companies and adoption of partner agent models, including MFIs

and dairy processors as distribution channels. Included in investments would be activities for Raising

awareness and popularizing livestock insurance schemes

COMPONENT D: Project Management, Monitoring and Evaluation:

The objective of this component would establish the Project Management Unit (PMU) at DLS

headquarters with eight project implementation units (PIUs), one in each Divisional Livestock Office

where, by virtue of post, the Deputy Director of DLS for the Division would work as coordinator for

harmonizing the project activities including adequate fiduciary systems; communication on related

activities; governance and accountability actions; monitoring and evaluation and third party audits;

stakeholder coordination; and special evaluation studies. PMU activities would be overseen by the

MOFL. Field activities would be monitored by divisional, district and sub-district livestock offices to

ensure a successful implementation of the project.

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Annex III

Action plan for project preparation

Activities Timeline By Whom

Preparation of TORs for key Staff at PIU 15 May, 2017 DLS

Preparation of TORs for procurement (consultants, non-

consultants, goods and works) under the PA 15 May, 2017 DLS

Draft PA 15 May, 2017 DLS/MoFL

Submission of PA for Bank’s approval 15 May, 2017 DLS/MoFL

All clearances and approval of PA 01 June, 2017 World Bank

Study on Livestock Sector Review (including production

system models covering technical, economic and infrastructure

of production systems)

31 August, 2017 DLS

Study on Livestock Sector Infrastructure Review: Markets,

Slaughter Houses, Processing Facilities

31 August, 2017 DLS

Livestock Policy Review 31 August, 2017 DLS

Livestock services assessment 31 August, 2017 DLS

Preparation of Project manuals 31 August, 2017 DLS

Preparation of Safeguard Documents 31 August, 2017 DLS

Preparation of the Procurement procedures document strategy 31 August, 2017 DLS

Pre-Appraisal 02 September, 2017 World Bank/

DLS/MoFL