SEEP Annual Conference 2015Inclusion 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 2015Inclusion 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 2015Inclusion 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 2015Inclusion and Resilience: The Next Challenge

Outline for the Session

Introducing the DFT

SEEP Annual Conference 2015Inclusion and Resilience: The Next Challenge

SEEP Annual Conference 2015Inclusion 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 Benefits Intangible 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:

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 2015Inclusion and Resilience: The Next Challenge

Digital Fat Testing SystemStatus 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

Producer

ProducerProducer

ProducerCollection

point (1000)

Producer

Producer

ProducerProducer

Producer

Collection point

(1000)

Producer

Producer

ProducerProducer

Producer

Chilling (5000-

15000 ltr)

Collection point

(1000)

Producer

Producer

ProducerProducer

Producer

DFT CollectionModel

Chilling5000 to

15000 liters

DFT Collection

Point (~350l)

DFT Collection

Point (~350l)

DFT Collection

Point (~350l)

Chilling5000 to

15000 liters

DFT Collection

Point (~350l)

DFT Collection

Point (~350l)

DFT Collection

Point (~350l)

Chilling5000 to

15000 liters

DFT Collection

Point (~350l)

DFT Collection

Point (~350l)

DFT Collection

Point (~350l)

Chilling (5000-

15000 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

2012 2013 20140

5

10

15

20

25

30

35

40

45

50

0

500

1000

1500

2000

2500

DFT Points Producers Served

Prod

ucer

s En

gage

d

DFT Milk Collection and Fat Content

2012 2013 20140

2000

4000

6000

8000

10000

12000

14000

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Averge Fat %Milk Collected

Year

Milk

Col

lecti

on (l

iter

s)

% F

at

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, PhDAssistant Professor of Entrepreneurship and Strategy

Shannon School of Business, Cape Breton University, Canada

SEEP ConferenceSeptember 30, 2015

About the Research

• CARE’s Strengthening the Dairy Value Chain Project in Bangladesh– Focus of my PhD dissertation, 2008-

2014

– 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 riskFor 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 Kevin_McKague@cbu.ca

Shannon School of Business, Cape Breton University, Canada