The Context: Bangladesh, the most densely populated country in the world with about 170 million people, has maintained an impressive track record of over six percent economic growth rate over the past decade, coupled with remarkable improvements in human development (World Bank 2017). Despite significant economic progress and poverty reduction, about 35 percent of its population remains food insecure especially in the areas with high poverty incidences (NIPORT et al. 2013). The chars formed by major rivers, the wetland areas in the northeast, and the coastal areas in the south are considered as pockets where poverty is still concentrated. Chars are riverine (is)lands, susceptible to flood and river erosion, which remain disconnected from the mainland seasonally or throughout the year. Loss of arable land, rising sea levels, frequent flooding, erosion, draught, and extreme weather patterns, due in part to climate change, compound threats of food security and vulnerability. Approximately 800,000 people live in the chars of Kurigram, the poorest district of Bangladesh, who mainly depend on agriculture (crops, livestock) and seasonal labor opportunities for their livelihoods.
Challenges and Initiatives till date: The geographic challenges of communication to the chars; the lack of information on the households, their livelihoods, production and consumption; higher costs of operation and associated risks of investing on the chars; lack of network and relationship between value chain actors; and lack of resources and incentives deterred both public and private sector to expand their services to the chars. Over the last decade, initiatives from donors, public agencies, NGOs and private sector have enhanced resource base, capacity and connectivity of the northern char dwellers; two mentionable initiatives are: CLP (Chars Livelihoods Programme funded by DFID and AusAid) and M4C (Making Markets Work for the Chars funded by Swiss Agency for Development and Cooperation). These initiatives have created opportunities for increased investment and income generation for farmers as well as actors across the agricultural value chain. Due to rapid capital formation and transformation (particularly financial, physical, human and social) the cha dwellers are now better equipped to deal with vulnerabilities e.g. improved access to knowledge and inputs to cultivate low-risk crops, increased income and access to appropriate loans post-disaster to invest in agriculture and rehabilitation, etc.
Remaining Challenges and Our Solution: The potential for business and social impact is now recognised but penetration is still very low e.g. less than 20% farmers access quality agri-inputs; less than 5% access better markets or agri-finance. In the recent years, understanding of the target market has somewhat improved and relationships with value chain partners have been established; however, expansion of existing/ new market actors (agri-input, agro-processing companies, MFIs, etc.) faces the challenges of higher initial investment and costs of operation. The good results achieved in course of project implementation may not be sustained beyond the project period and we realise that this requires creation and sustenance of a business entity that work with multiple public and private sector organisations and combine delivery of products and services through an integrated business model. Therefore, some ex-CLP and M4C project staff, utilising years of experience of working on the chars, decided to come together to form bhalo social enterprises ltd.bhalo’s core business model aims to tackle these challenges through an integrated commercial operation combining agri-input distribution, agri-product sourcing and agri-financing, while the extended business model looks at delivering market-based solutions for wash, nutrition, health, education, etc. In discussion with our business partners, we are about to start our operation from September 2019 aligning with the key agricultural seasons of the chars; we will start from Kurigram and gradually expand to other hard-to-reach areas of Bangladesh. However, as you may assume, successfully running an operation like this will require huge investment in the form of start-up and working capital, and to cover operational losses (staff salaries, logistics, etc.) in the initial years until we break-even. We were in the process of reaching out to possible organisation for grants (donors/ GoB/ foundations), impact investments or feasible loans (individuals/ banks/ NBFIs) and this application is one of such reach-out efforts.
About bhalo-Krishi: If selected, with your funding we will support our core business model which is an integrated business model combining:
bhalo agricultural inputs sales/distribution: source good quality agri-inputs (seeds, fertilisers, crop protection solutions) from reputed agri-input companies, and sell/ distribute those agri-inputs to last-mile retailers and farmers.
bhalo agricultural produce sourcing: source good quality agri-produce (maize, peanut, etc.) from farmers and traders, and supply to large buyers/ agro-processing companies.
bhalo advisory services: promote use of good quality agro-inputs and good agricultural practices (cultivation, post-harvest, processing, etc.) through partner retailer, trader and extension workers to improve productivity and quality of agricultural production.
bhalo agri-financing: facilitate distribution and promotion of agricultural loans among farmers, retailers, traders and related service providers.
bhalo-Krishi will generate revenues for us and as bhalo adds more products/ services in its portfolio it will attain higher business volume and commercial feasibility. As an intermediary, within the first years of operation, bhalo will establish relationship with multiple business partners on both ends of the value chain (lead firms, retailers, etc.) and necessary processes to continue its operation. The scale-up will happen through bhalo’s expansion within the existing Upazillas (reaching more retailers and farmers) as well as to neighbouring Upazillas. We will utilise your support to expand and strengthen our operation for a year, which is to improve access to good agri-inputs, knowledge, finance and better markets, and help 5,000 households (25,000 women, men and children) in realising higher income from better productivity and quality of their produce (crops and cattle). The initiative will contribute to Rural Transformation and Zero Hunger challenge and SDG1, SDG2, SDG3, SDG5 and SDG8.
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