A Report On Care International: Humanitarian Organisation

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A Report On Care International: Humanitarian Organisation

1.1 CARE International

Cooperative of Assistance and Relief Everywhere (CARE) is one of the largest private humanitarian organizations of the world. It began as a relief effort after the Second World War in 1945. From then onwards, CARE has helped with relief efforts during intracountry turmoils and post-war poverty, food and health problems after wars like the Korean War in 1951, Vietnam War in 1964, Liberation War of Bangladesh in 1972, the Cold War in 1988 and Civil War in Rwanda in 1994. Besides helping war victims, CARE has been intensively involved with major drought, famine and cyclone relief operations in Africa and Asia. These efforts have been running parallely to CARE’s continued work in health care, family planning, social justice, gender issues, livelihood promotion, employment generation, education and more. In addition, CARE has helped with national efforts in the USA with help in training of the Peace Corps to Latin America.

Over the years, CARE has transformed from working on behalf of a region to working as a neutral, humanitarian organization spreading all over the world irrespective of international boundaries. That is how CARE became CARE International comprising of member countries <href=”#Australia>CARE Australia, <href=”#Canada>CARE Canada, <href=”#Danmark>CARE Denmark (Denmark), <href=”#Nederland>CARE Nederland (Netherlands), <href=”#Deutschland>CARE Deutschland (Germany), <href=”#France>CARE France, <href=”#Japan>CARE Japan, <href=”#Norge>CARE Norge (Norway), <href=”#Osterreich>CARE Österreich (Austria), <href=”#Thai>CARE Raks Thai (Thailand), <href=”#UK>CARE UK, and <href=”#USA>CARE USA. The elaboration of the letters of CARE changed from being “Cooperative for American Remittances to Europe” to the present neutral “Cooperative of Assistance and Relief Everywhere”. This also reflects CARE’s changing scope of work and expansion over the years of operation, now in over sixty countries. Currently, CARE International has in total twelve thousand employees. Under the main member nations of CARE International, there are country offices in Afghanistan, Angola, Benin Bolivia, Brazil, Burundi, Caucasus, Democratic Republic of Congo, Côte d’Ivoire, Ecuador, El Salvador, Eritrea, Ethiopia, Ghana, Guatemala, Haiti, Honduras, India, Kosovo & Macedonia, Lesotho, Madagascar, Malawi, Mali, Nepal, Nicaragua, Niger, Pakistan, Peru, Philippines, Rwanda, Sierra Leone, Somalia, Sudan, South Africa, Sri Lanka, Tajikistan, Tanzania, Togo and Uganda.

1.2 Mission of CARE

CARE’s mission is to serve individuals and families in the poorest communities in the world. Through the organization’s global diversity, resources and experience, innovative solutions to development problems and global responsibility are promoted. CARE attempts to bring about lasting change by(quoting from mission):

  • Strengthening capacity for self-help
  • Providing economic opportunity
  • Delivering relief in emergencies
  • Influencing policy decisions at all levels
  • Addressing discrimination in all its forms

1.3 Organizational Structure

CARE International’s members are responsible for electing the board of directors at an annual meeting. The board of directors is the governing body of the organization and

all board members serve without compensation. The board of directors appoints CARE’s president, treasurer and secretary. The president appoints the rest of CARE’s executive team, including the chief operating officer, general counsel and senior vice presidents of finance, IT and administration, human resources, program, and external relations.

1.4 Scope of work

CARE works on project basis. All projects have a set of aims and a stipulated duration. CARE designs all its projects keeping in mind its sole purpose: elimination of the root causes of poverty and helping people to be self sufficient. CARE recognizes that women and children suffer disproportionately from poverty and hence at the core of CARE’s endeavours lies women involvement. This stems out of the fact that women are at the heart of social activities and CARE attempts to promote education, health and sanitation, conservation of resources and utilization of economic opportunities. CARE also provides emergency relief to survivors of war and natural disasters. These activities are carried out through a variety of projects in diverse fields.

1.4.1 Agriculture and Natural Resources

In this field, CARE works to promote livelihood of poor people through conservation of natural resources and higher food production. In 2001, CARE operated agriculture and natural resources projects in forty two countries. CARE worked with more than 2.6 million farmers to increase their crop and livestock yields through activities like planting new seed varieties, animal husbandry, home gardening and irrigation.

1.4.2 Cross-cutting Initiatives

CARE’s cross-cutting initiatives spread out across its activities trying to detect the underlying causes of poverty. Special emphasis is placed on working with women and girls and social injustice.

1.4.3 Economic Development

This section of CARE is directly linked to working through and with people to create economic development in individuals’ lives through rise in incomes, better livelihoods etc.

1.4.4 Education

CARE operates education projects in 36 countries. Education is one of CARE’s priority areas as it has a major influence on strengthening personalities and empowering people.

1.4.5 Emergency Relief

Natural disaster is to a great extent responsible for poverty. Emergency relief is a vital part of CARE’s work to create lasting solutions to poverty. Many poor communities in the developing world lack the basic resources to cope with the struggles of everyday life. When disaster strikes, that struggle becomes all but impossible without assistance.fight against poverty is

1.4.6 Health

Through its work on health, CARE seeks to ensure access to good health services of all individuals. CARE promotes this as a basic right of any person. Besides, health is a critical part of CARE’s work to help people overcome poverty. As communities solve their most threatening problems, they are able to embrace new economic and educational opportunities. Our health projects include reproductive health, children’s health, infectious disease, polio eradication, and water, sanitation and environmental health. CARE’s Health Unit staff is responsible for:

1.4.7 HIV/AIDS

The global AIDS crisis is a major challenge to mankind till date. CARE endeavours to spread awareness and help AIDS affected people all over the world.

1.4.8 Nutrition

The underdeveloped and developing worlds have majority of their populations living below the poverty line. These peoples’ nutrition is of critically low level as they hardly get to eat and when they do, the content is of almost zero nutritious content.

1.4.9 Water

For over five decades, CARE has recognized the link between poverty and the lack of access to water. The strategic goal of our program is to enhance the livelihood security of poor communities through equitable access, efficient use and sustainable management of limited and dwindling water resources.

1.5 CARE Bangladesh

CARE Bangladesh is a part of CARE International. CARE began work in Bangladesh in 1949 with CARE packages that the Americans sent to survivors of World War II in Europe and Asia. Currently, CARE focuses on networking with communities, community based organizations, the government and national NGOs to identify and confront root causes of the poverty. CARE Bangladesh shares CARE International’s areas of work including agriculture, education, health, water and sanitation, nutrition, infrastructure and small enterprise development. Through these programs CARE makes a difference in the lives of 12 million people in 64 districts of Bangladesh.

The cumulative value of all the projects of CARE Bangladesh stood at over 28 million USD in the fiscal year July 2004 to June 2005. More than 95 percent of the expended resources are stemmed towards program activities. Only 5 percent are spent on administration.

1.5.1 The core values of CARE

Quoting actual core values

Respect: We affirm the dignity, potential and contribution of participants, partners, donors & staff.

Integrity: We act consistently with CARE’s mission, being honest and transparent in what we do and say, and accept responsibility for our collective and individual actions.

Commitment to Service: We work together effectively to serve the larger community.

Excellence: We constantly challenge ourselves to the highest levels of learning and performance to achieve greater impact.

Diversity: We value, respect, and fully benefit from each individual’s unique qualities and abilities, in order to fulfill and strengthen our vision and mission.”

1.5.2 Strategic Planning of Organization

CARE Bangladesh at present has 916 staff working in its regional, field, team and hub offices in eighteen districts of Bangladesh.

The organization runs on a projects basis in line with its mission and objectives and regularly updates its strategies to attain the stated objectives. The most recent strategic planning framework is of January 2008 to be carried out till 2011. This is commonly referred to as “Long Range Strategic Planning” (LRSP). Through this process of strategic planning, since the development of the LRSP, CARE Bangladesh has furthered its understanding of, and approach to achieving its Mission. This progress is largely a result of the work in fiscal year 2007 to establish the foundation for making the critical organizational changes required for generating and using our knowledge to have greater, more sustainable impact on the lives of poor and marginalized people. Building on learning from our work over the past few years CARE Bangladesh is now able to articulate what needs to be done and/or not done, what obstacles need to be overcome, and what needs to change in order to achieve our mission and have the impact we seek. To that end, the types of systemic changes1 referred to under the original five-year program goal remain highly relevant.

Stemming down from CARE’s vision and mission are impact statements that in turn are led by strategic directions and programming principles.

1.5.3 Vision: CARE seeks a world of hope tolerance and social justice where poverty has been overcome and people live in dignity and security.

1.5.4 Mission: CARE strengthens the voices of the poor in ways that influence public opinion, development, and policy environment. CARE works as a link between the poor at the grass roots and the influential groups of the society like the civil society, government, and the private sector.

Based on these, four long term impact statements have been created keeping in mind four groups of people.

1.5.5 Impact Statements

1. Socially and economically marginalized women-CARE seeks to empower the most socially and economically marginalized women (while not excluding women more generally).

2. Marginalized groups in urban areas, who have limited livelihoods choices,

poor living conditions, and are subject to exploitation, social exclusion and discrimination. For them CARE seeks safer and more viable livelihoods and being increasingly treated as equal citizens by state and society. 3. Extremely poor people in rural areas whose well-being in political, economic and social realms obtains the “lowest” ranking3 and who are trapped in a set of unequal power relations. CARE’s vision is that these extremely poor people sustainably overcome the barriers that prevent fulfillment of their rights.

4. The most vulnerable people and communities prone to disasters and environmental change. CARE’s vision is that these people will build resilient livelihoods in the face of disaster and environmental change.

1.5.6 Strategic Direction

The impact statements are under the strategic directions of

  • Organizational Relevance
  • Economic Empowerment
  • Learning Culture

1.5.7 Programming Approaches

Having taken the above into consideration, design of CARE’s projects are based on “Programming Approaches”. All projects are based on a set of guiding principles. They are as follows:

Household Livelihood Security

This enables the programs within each region to identify the inter-relationships between one another, and break down the artificial, sectoral boundaries between the different interventions.

Rights Based Approaches

All of CARE’s projects are based on the principle that people must be able to maintain dignity and have access to facilities and places in line with their basic rights.


CARE-Bangladesh is working to develop competency and build the capacity of others in the deliberate process of influencing those who make policy decisions.


All CARE partnerships are based on a shared vision regarding the objectives and purpose of the work undertaken together and shared contributions made and risks undertaken to benefit the society and working in line with stipulated objectives.

Capacity Building

CARE’s projects are aimed at creating sustainable development through capacity building i.e. enhancement of an organization’s or a society’s ability to achieve its purposes.

Direct/Indirect Service Delivery

CARE Bangladesh implements direct delivery of services on a limited scale.

Gender Equity

Empowerment of women and removal of gender discrimination is at the core of CARE’s work. Hence, all its projects take into account gender equity when designing programs.

1.5.8 The projects of CARE Bangladesh

Bangladesh Urban Development Initiative

The project works on developing appropriate capacity for CARE Bangladesh to support co-ordinate programs to ensure both immediate needs and underlying causes of the urban poor are addressed in a sustainable way.

Sanitation, Hygiene and Water Supply Program

This project aims to reduce mortality, morbidity and malnutrition due to water and excreta related diseases, especially among 600,000 un/under served poor women and children in urban slums in 19 Municipalities in Bangladesh.

Promoting Rights of the Disadvantaged by Preventing Violence Against Women (PROTIRODH)

The overall objective is to reduce violence against women and reinforce the fulfillment of women’s rights in four unions (lowest administrative structure) in rural Dinajpur, and among sex workers in Dhaka , Khulna , and Tangail cities in Bangladesh .

Establishing Community Support System (ECSS)

The overall goal of the project is to reduce maternal mortality and morbidity through identifying and removing barriers, which lie between women and the EmOC (Emergency Obstetric Care) facilities.

Save Motherhood Promotion Project

The purpose of the project is to make significant improvements in the maternal and neonatal health in the project areas.

Flood Reduction Activities in Sunamganj (FRRAS)

The goal of the project is to reduce flood risk and thereby protect and improve livelihood opportunities of the vulnerable and poor communities in six-selected sub-districts of Sunamgonj district.

Competitive Literacy Initiative-Education

The objective of this pilot is to provide functional literacy to the garment workers of a selected GAP factory in Bangladesh in order to raise their productivity and self-esteem and their capacity to read and write.

Adolescent’s Women’s Reproductive and Sexual Health Initiative (ARSHI)

Supported by the European Commission (EC), aims to decrease maternal mortality and morbidity of adolescent girls and women in Sunamganj district (Northwest of Bangladesh) in Sylhet division.

CEPZ Corporate Pilot Project (CCPP)

The CCPP Pilot Project works with the private sector to improve the lives of factory workers in the Chittagong Export Processing Zone (CEPZ).

Local Governance Program

Local Governance Program, a joint initiative of CARE Bangladesh and Intercooperation (IC), works with local governance institutions, especially, Union Parishads, the lowest tier of local government, and the communities to promote inclusiveness, transparency and accountability in local governance.

HIV and AIDS Prevention Project (HAPP)– Drug Users Intervention

The goal of this program is to reduce the risk, spread and impact of HIV and AIDS among injecting drug users in Bangladesh.

HIV Program Reflection and Learning Intervention

The program reflection and learning team links with staff to support effort to process data and information and convert it into knowledge learning that is share and used to influence CARE’s program and over time influences polices, resource allocation and programming for HIV n Bangladesh, thus moving closer towards being a resource organization.

Strengthening Household Abilities for Responding to Development Opportunities (SHOUHARDO)

The goal of the SHOUHARDO project is to sustainably reduce chronic and transitory food insecurity of 400,000 vulnerable households in 18 districts of Bangladesh by 2009.

Food Security for Sustainable Household Livelihoods (FoSHoL)

FoSHoL seeks to build the capacities of food insecure households in selected communities in the Barind Tract of northwest Bangladesh.

Strengthening the Dairy Value Chain in Bangladesh

The vision of success is that targeted landless and smallholding households in North and Northwestern Bangladesh have increased incomes and more sustainable livelihoods through incorporation into a strengthened milk value chain.

Learning from CARE Bangladesh’s Social Development Unit (Nijera)

This initiative is to support CARE Bangladesh’s efforts and experimentation on ‘learning’ and how structural as well as process factors in Bangladesh office can contribute to larger change in development practices and impact.

In a world stricken by increased social injustice, natural disasters, inequality of income and other prevalent economic, natural and social problems, existence and contribution of humanitarian organizations like CARE Bangladesh is very essential.

1.6Project : Strengthening Dairy Value Chain in Bangladesh (SDVC)

The Economic Development Unit at CARE Bangladesh, with the support of Bill & Melinda Gates Foundation, USA, have initiated titled Strengthening the Dairy Value Chain in Bangladesh that aims to provide access to income and means of sustaining livelihood for 35,000 rural smallholding and landless households (175,000 individuals) in North and North-western Bangladesh by incorporating them into the various stages of a strengthened milk value chain- expecting to increase household incomes from a current $18-30 per month to $40-50 per month by project end. Donation from the Bill and Melinda Gates Foundation for this project is 5.25 Million USD. The project began in October, 2007.

1.6.1 Objectives

The main objectives of this project are:

1. Improve milk collection systems in rural and remote areas;

2. Improve access to inputs, markets, and services by mobilizing groups of poor farmers, producers,andchar dwellers

3. Improve the milk transport network;

4. Ensure access to quality service at the producer level; and

5. Improve the policy environment.

1.6.2 Target Areas of SDVC

The project is operating in the districts of North and North Western Bangladesh:

Sirajganj, Bogra, Naogaon, Joypurhat, Gaibandha, Rangpur, Dinajpur, Kurigram and Nilphamari

1.6.3 Target Beneficiaries

This is a pilot project and for the four years the project intends to work. Within and beyond this period, SDVC’s target beneficiaries will include milk-producing landless farmers who own an average of 2 cows and produce about 10% of the milk in the region, and small-scale farmers who own an average of 2.9 cows and produce about 80% of the milk. Other direct beneficiaries will include 165 paravets and 350 milk collectors, of which at least half will be female, as well as fodder growing households. Target beneficiaries will also include extremely poor households that cannot afford to raise cattle, for whom employment opportunities will be created through milk collection and chilling plants. The time saved as a result of door-to-door collection will increase household productivity; women and girls, who care for cattle, will benefit from higher household income as well as reduced workload due to improvements in cattle management suggested by paravets. The skills that farmers’ groups will learn through mobilization, training, and participation in the project have the potential to provide widespread benefits to rural communities, who will learn the power of group initiative and collective bargaining. Indirect beneficiaries are expected to include medicine suppliers, feed suppliers, milk transportation network personnel, private sector investors, processors, and consumers, who will benefit from increased milk availability and a projected price reduction of 2-3 taka/liter.

1.6.4 Expected Outcomes

SDVC has certain expectations out of the project after the four years are over. The expectations are as follows:

– Self Sustaining Rural Milk Collection system with350 collectors and 21 collection/chilling facilities

– Spoilage reduced from 27% to less than 15%

– 35,000 Households enjoy better access to Inputs & ancillary Services

– Collection system is connected with formal/informal Milk markets

– Increased Participation of Women in majority aspects of Value Chain ensured

– Training and skills development on Best Practices promise higher returns for farmers

– Efficient and Self-supporting Milk Transportation Network formed

– Paravets provide fee-based quality service to farmers

– Favorable policies advocated with Govt. Agencies

– Lessons learnt from project shared with all Stakeholders

Should this project be successful, by project end it should be possible for innovations and improved systems introduced through the project to benefit an additional 200,000 local farmers in the north and northwest. Project innovations and involvement of the private sector should easy to replicate in the region, as entrepreneurs and other farmers’ groups learn about and gain confidence from the project’s successes and income potential. If the project were scaled across Bangladesh, it would be possible to benefit 2,000,000 households. The project will work closely with the Department of Livestock, the private sector, and small NGOs to create a few best practice models that address the major bottlenecks in the dairy sector and demonstrate environmentally friendly practices. CARE also plans to strengthen the capacity of important actors in the value chain so that they can take the lead long-term scale up of the project. This will substantially reduce the costs of scale up, which we would estimate at $50-60 million. The cattle registration system, collection and transport system innovations (especially barge-mounted chilling), and paravet training are all relevant innovations with potential for scaling across South Asia.

1.6.5 Project’s Scope

Should this project be successful, by project end it should be possible for innovations and improved systems introduced through the project to benefit an additional 200,000 local farmers in the north and northwest. Project innovations and involvement of the private sector should be easy to replicate in the region, as entrepreneurs and other farmers’ groups learn about and gain confidence from the project’s successes and income potential. If the project were scaled across Bangladesh, it is expected to benefit 2,000,000 households. The project’s visible benefits should encourage adoption of similar practices elsewhere and thus facilitate sustainable development in the rural agricultural sector.



Some Key Outcomes
· Access to market for rural producers.

· Spoilage of milk due to poor collection system.

· Low price for the producers in remote areas.

· Inadequate supply of milk to processors.

1) Improve milk collection systems in rural and remote areas. · Self-sustaining rural collection system involving at least 350 collectors and 21collection/chilling facilities in areas previously lacking access.

· Business relationships established between farmers, chilling plants, and processors.

· Producer’s income increased by 3 taka/liter or $40-50 per month.

· Collector’s income increased by 1 taka/liter or average of $33.60 per month.

· Spoilage is reduced from 27% to less than 15%.

· Lack of organized producers group.

· Lack of access to remote areas where bulk of milk is produced.

· Lack of better feeding and group management practices among the producers.

· Lack of access to veterinary services.

2) Improve access to inputs, markets, and services by mobilizing groups of poor farmers, producer and char dwellers. · 35,000 smallholding and landless farmers have increased, sustainable access to input suppliers and collection system linked with formal and/or informal milk markets.

· Increased participation of women in the community groups and milk value chain; at least 50% of community collectors are female.

· Collective bargaining, marketing, and leadership by farmers’ groups achieve better services and improved rates of return.

· Poor transport network.

· Access to remote areas lacking.

· Poor cooling facilities.

· Lack of private sector investment.

· Lack of innovative transportation system for remote/riverine areas, for example boat-mounted chilling plants.

3) Improve milk transport network. · Private sector investment in transport to collect and chill milk in remote areas increased by 40%.

· 50% increase in supply of quality milk to the processors.

· New technologies utilized for chilling and cold transport.

· Lack of skilled paravets who can educate producers on proper feeding, health care and breeding.

· Lack of linkage between producers and private sector artificial insemination firms.

· Lack of production of quality feed in the community level.

4)Ensure access to quality services at the producer level. · Production of milk increased from 1.5 to 3.4 liters per cow.

· Dairy cattle mortality in target households reduced by 40%.

· Increased average fat content in the milk from 1.4% to at least 3.75%.

· At least 165 paravets (50% or more female) delivering fee-based services and achieving average $120 per month incomes.

· 80% of the farmers showing repeat purchase of paravet services at a commercial rate

· 30% of farmers using AI introduced by paravets.

· 90% of farmers are covered by tele paravet solution program.

· Policy environment does not adequately support and promote smallholding dairy farmers’ incorporation into the value chain 5) Improve the policy environment · Policy positions defined and briefing papers with recommendations shared with relevant government agencies.

· Paravet training system promoted to DLS and Ministry of Youth Development.

· Lessons learned shared with government, NGOs, private sector, other key stakeholders.

1.6.6 Management of project

The project will be staffed by five key personnel based at CARE offices in Rangpur and Bogra. The total number of staff in SDVC is 60. This includes a Project Coordinator, a Technical Coordinator for M&E, A Finance Manager, two regional coordinators and officers for Administration, Finance, Documentation and Communication, Technical support field facilitators. A Technical Advisory Team will support and advise the project team. Foreign and local consultants have worked on carrying out research on the dairy value chain in Bangladesh.. Monitoring and Evaluation of the project has been subcontracted.

Overall, at CARE and especially in SDVC, formal leadership is practiced. However, the style of leadership is in the range of democratic to laissez-faire. Complete laissez-faire style is not pursued. However, SDVC staff work in groups and solve issues through delegated tasks within the authority designated by their individual posts. A Steering Committee has been formed with members of SDVC and important members of CARE in general i.e. The Deputy Country Director and the Economic Empowerment Coordinator. The steering committee holds a meeting every month by rotation in all three offices of SDVC i.e. CARE Bangladesh Head Quarters in Dhaka, Bogra Field Office and Rangpur Regional Office. These meetings review work done in SDVC each month, suggest solutions to critical issues, problems or challenges and design operational and sometimes intermediate plans.

1.6.7 Tasks completed so far

The CARE project has established relationships and will initially work with PRAN, AKIJ, Milk Vita, and DANONE, as well as the various cooperatives, businesses, and NGO efforts, and complement their work by: ensuring that farmers and paravets are connected to MFIs to ensure access to finance for the farmers as required; connecting the collection points and chilling facilities that will be established during the project period with the formal sector’s milk processing facilities – for example, DANONE has already expressed willingness to purchase an initial 3000 liters per day from CARE’s collection points, and their level of demand is expected to grow over the life of the project; creating access to the paravets trained by CARE for other small farmers covered by NGOs working in the sector; and sharing knowledge and best practices with other key placers to ensure scale-up and replication.

CARE Bangladesh has facilitated two pilot projects in the milk sub-sector. The first engaged 700 households in the northwest and linked small producers with milk processing plants; associations collected milk from villages daily and sent it to chilling centers. The pilot was not scaled up due to losses resulting from delays in milk delivery and corruption among association managers. The lessons learned from this project have shaped the design of the second pilot, which included more effective collection, chilling, and transport arrangements than in the failed pilot.

In the second pilot, CARE is promoting three mini milk-chilling plants, each owned by local private investors. The capacity of these plants is between 1,000 and 2,000 liters/day; each plant engages 800 to 1,600 poor milk producers. Milk is collected from producers and transported to the chilling plant in 40 liter bottles, cooled to 5°C, and then carried by dairy companies to their processing plants or delivered to informal-sector purchasers.

CARE also facilitated the development of veterinary services for cattle in these areas by training 165 villagers as paravets. These paravets, many of whom are women, were trained and coached by a veterinarian to provide animal health services on a fee-for-service basis to 320-400 households, facilitating improved and sustained milk production. This strategic support to farmers has significantly improved milk quality and production levels and reduced spoilage. The services offered by the paravets are not subsidized, and early income data indicates a high return from service delivery, averaging $15 per month for vaccination and $7.50 per month for treatment. Their high quality is also indicated by repeat use – 80% of farmers have purchased these paravet services three times or more.

So far identification of all beneficiaries of the project has been accomplished through extensive fieldwork involving general meetings in individual villages of the focus area with participation of villagers. These meetings involved introduction to the villagers. This was followed by well being surveys which also included meetings but for a different purpose. Through the villagers’ participation in these meetings, detailed physical map of each village was constructed with the villagers help. Subsequently, profile of each villager was drawn up and information was collected on the economic and livelihood status of each household and cattle ownership data, through the villagers’ opinion. Door-to-door well being surveys followed next. These are still in the process and involve cross checking of the data collected through, meetings by actually visiting each household to check their economic wellbeing and cow ownership information. This survey is also helping CARE identify the interested participants of SDVC.


1. Origin

The world economy is highly dynamic. Moreover, an interdependence of nations resulting from specialization and required regional cooperation has made it essential for every country to be at par with the rest of the world. The key to dynamism and persistent development and growth is raising investment. Bangladesh being one of the youngest nations of the world is still ranked as a developing country with 80% of the population living in the rural areas with 44% living below the poverty line even till as late as 2000 (source: Finance ministry, Bangladesh).The GDP per capita was only US$ 452 (Source: UNdata) as of 2005. Nevertheless, the country has gradually been coming up with rising investment level that grew at the highest rate of 23% in 2003 (Source: BBS). However there still are problems with identification of thrust sectors and scope of investment exists in unexplored and neglected areas that may yield potentially high returns. One such area is the Dairy Industry. The growth of the economy could be helped with higher investment especially in thrust sectors resulting in more development of the economy and the quality and standard of living.

At birth, Bangladesh had the tendency to encourage a dominant public sector. Nevertheless, since the late 1970s, private sector investment began to rise. This contributed considerably to sectoral and hence GDP growth. The overall economic activities of Bangladesh have been classified into fifteen distinct sectors namely, Agriculture; Fishery; Mining and Quarrying; Manufacturing Industry; Electricity, Gas and Water Supply; Construction; Wholesale & Retail Trade; Hotel & Restaurant; Transport; Storage & Communication; Financial Intermediaries; Real Estate, Renting & Business Activity; Public Administration & Defense; Education, Health & Social Services and Community & Personal Services. Some of these sectors have been identified as thrust sectors by the government and accordingly, investor incentives and provided intensively in these sectors. Foreign Direct Investment holds a major share of total investment in the country. To encourage overall investment, the government has set up Export Processing Zones with uninterrupted supply of utility services at subsidized prices. Fiscal incentives like tax holidays are also provided to many thrust sectors.

Nevertheless, although GDP growth rate has not been below 5% in recent years, the required level of investment has still not been reached. Due to various political and social problems, and labour unrests especially in the Ready Made Garments Industry, foreign as well as local investors tend to be discouraged. Foreign direct investment has not risen considerably in the country. Investment tends to be focused on the thrust sectors and a few new business ideas that seem quite lucrative from other investors’ endeavours. Most investors in the country lack the proper insight and education to come up with own business ideas and tend to follow those few who have been successful with their own ideas resulting in narrowed focus on one shared business idea. This eventually saturates the type of business being focused upon resulting in lower returns that in due course leaves the un innovative investor hopeless and that marks the end of his investment. These are increasingly impacting sectoral growth in Bangladesh. Had investment been more planned and sustainable, GDP growth would have been much higher and the export basket richer.

Besides raising GDP and export earnings, there are many other advantages of higher and planned investment. In a country of a large number of unemployed youth, a high level of planned investment could result in creation of more job opportunities. This could considerably reduce the level of crime thus raising overall security of the country, ultimately enhancing the quality of life and reducing public expenditure on law and order and security forces. The quality of life would be farther enhanced by shifting of the government’s high allocation of budget for defense to education, health, community and public services. With lower taxes, and better government provided health, education and social services, people would have more discretionary income which would raise their purchasing power simultaneously resulting in more revenue for business and hence more retained profits for reinvestment as well as higher economic growth. This will in turn raise tax revenues for the government. At the same time, with higher discretionary income, peoples’ propensity to save will also rise resulting in creation of capital for investors. Following higher purchasing power, higher discretionary income and demand for better quality products arising out of a higher standard of living, a stable market would be created. This may as well encourage foreign direct investment. The chain of activities will continue likewise resulting in a cycle which would promote investment and economic growth.

One major thrust industry that lacks sufficient investment is the Dairy Industry of the Agriculture sector of Bangladesh. Given sufficient investment, this sector could help alleviate poverty from the lives of millions of farmers, besides reducing imports and contributing to the export basket, as well as promoting the overall health of the people of Bangladesh with fresh dairy milk.

The north of Bangladesh is one of the most poverty-stricken areas of the country. This is the Rajshahi Division, the area lying west of the Jamuna River and north of the Padma River, and includes the Barind Tract. The underdeveloped Northern Bangladesh is the result of mainly the lack of exploitable natural resources in the area and also lack of employment opportunities resulting from an unindustrialized and underdeveloped locality. Yearly famines like “Monga” hit North Bengal to make the situation worse. Monga is a state of extreme poverty when people have no income or food.

In such a state, as an attempt to raise the standard of living of the landless, resource less poor people of North Bengal, CARE Bangladesh began its project to concentrate on the existing dairy resources of the people of North Bengal. This project, funded by the Bill and Melinda Gates Foundation is worth US$5.25 million and was begun in 1st October, 2007, for duration of four years. The project aims to strengthen the dairy value chain so that the ultimate high income from sale of fresh milk in the cities actually reaches the primary producers of dairy milk, the dairy farmers of North Bengal. In so doing, CARE’s project “Strengthening Dairy Value Chain” (SDVC) aims to raise the dairy farmers’ household incomes besides making dairy farming livelihoods sustainable.

From the rather low incomes of dairy farmers, it is evident that there is a lack of investment in the informal fresh milk sector besides problems with the dairy value chain. The milk market is dominated by processed and powdered milk from multinational companies. Household demand for milk is concentrated in the powdered milk sector whereas urban infants invariably are fed on infants’ processed milk from multinational brands like Nestle’s Nido, Danish Full Cream’s Dano etc. This shift in demand from fresh milk to powdered milk has resulted from lower yields in fresh milk by local cows leading to deterioration in quality worsened by adulteration of milk to increase volume to meet demand. All these, reinforced by an increase in the variety and quality of nutritious and widely promoted powdered milk by large companies, mainly multinationals, have led to a lack of interest in fresh milk. Consequently, this decrease in demand worsened by other factors like increased competition, problems with market intermediaries and insufficient dairy-related services including veterinary care and farmer training, has led to an overall decrease in the attractiveness of the fresh milk sector to investors. This has been highlighted as a major reason for the gradual shrink of the local fresh dairy milk market resulting in very low incomes for the dairy farmers. With a ripple effect this is adding to the development problems of the north.

Investment in the fresh dairy milk sector must be raised if a sustainable livelihood is to be created for the dairy farmers of North Bengal. This will in turn help develop North Bengal with higher standards of living. On the other hand, with better quality milk, if urban demand for fresh milk can be raised, overall family health may benefit. At the same time, with the development of the dairy sector, imports of fresh milk that accounts for 30% of the total domestic demand for milk, can be reduced and milk production can as well exceed local needs to be exported, thus helping the balance of payments of the country.

Currently, fresh milk in Bangladesh is marketed only by Milk Vita, Rangpur Dairy, Akij Group, Pran and BRAC. However, this sector has a vast potential and can be helped by a considerable rise in investment.

The study therefore shall be carried out to realize the impacts of investment on sectoral growth and deterrents to investment in the dairy industry of Bangladesh and also outline the factors that would encourage potential investors.

2. Objectives

The general objectives of the research on “Prospects and Problems of the Dairy Industry of Bangladesh” are as follows:

  1. Identify Dairy industry as a major thrust sub-sector unrecognized by the government of Bangladesh.
  2. Study the background of the Dairy industry of Bangladesh, point out the major features and analyze the current scenario.
  3. Determine possible problems hindering local and foreign direct investment growth in each economic sector with particular focus on the Dairy Industry.
  4. Unearth and suggest ways of encouraging potential investors especially in the Dairy Industry.

The specific objectives of the project are to explore:

1. Current and past investment sources

2. Study background of investors i.e. processors

3. Aspects of dairy neglected by investors

4. Average returns from dairy received by current and past investors

5. Benefits in terms of employment- Population involved in dairy, creation of employment opportunity and potential rise in income of farmers from increased investment, sustainability of business, society/health- Health of the people of Bangladesh who can shift consumption to fresh milk from powdered, processed milk, balance of payment- Decrease in import of fresh milk if domestic consumption can be met by the local dairy industry, economic output- Increased milk yield etc.

3. Scope

This study will cover information on different aspects of the dairy industry of Bangladesh, giving main focus on liquid milk production and processing and point out the problems and prospects. Dairy farmers in the project target area of Strengthening Dairy Value Chain in Bangladesh (SDVC) of CARE Bangladesh i.e. Northern Bangladesh especially Sirajganj, prominent milk processors and their chilling plants, other NGOs working on dairy and a powder milk importer in Dhaka have been within the scope of this report in terms of information gathering.

4. Methodology

This is an exploratory research that attempts to find out problems and prospects of the dairy industry of Bangladesh.

This exploratory research would consist of three main parts:

  1. Diagnosing the situation: This part would include all the details about the background the study i.e. the existing situation of the macroeconomic variables and the Dairy industry with respect to investment.
  2. Analysis of the situation to detect problems: This part would include weighing out the pros and cons of the existing situation and finding the problems and their causes.
  3. Discovering new ideas and suggestions: This part would include the conclusion about the existing situation, work out possible solutions to the problems found in the previous section and attempt to make suggestions.

4.1 Sources of Information

The following sources of information have been used in the project:

Secondary source of information

· Internet

· Existing, accessible reports and data on the dairy sector of Bangladesh, of the Strengthening Dairy Value Chain (SDVC) Project of CARE Bangladesh

Primary source of information

· Key informant interviews- academicians working on livestock research, existing investors, potential investors, multinationals marketing powdered milk, and CARE staff working on the SDVC project

· Survey of selected dairy farmers

4.2 Information gathering Techniques

Information will be gathered from the above sources of information using the following techniques:


There are certain classifications under this technique:

  1. Experience surveys- This will include informal discussions with faculty members, economists and CARE Bangladesh staff. This part will help develop an understanding of the issues to be covered in the research and provide a background guiding the next course of action.
  2. Secondary Data Analysis- This would include collection of all existing relevant data from the secondary sources of information
  3. Key Informant Interviews- These would help find out critical issues and would also help reveal different perspectives unnoticed earlier. The interviews can be of government officials working on economic aspects, members of development oriented organizations, economists etc.
  4. Focused Group Discussions- These would be carried out with members of CARE staff working on SDVC, potential and existing investors, government officials and members from NGOs.


Sample Surveys- These would be formal questionnaire oriented surveys and respondents were dairy farmers. The method of sampling to be pursued was random sampling. The sample size was thirty dairy households.

Possible sampling and research errors

The following errors may have occurred beyond the control of the surveyor while working on the project:

· Random sampling error-

There may be a difference between the response of the sample and the actual data that would be revealed if a census was to be carried out.

· Response bias/Deliberate falsification/Social desirability bias-

The farmers were of two extreme natures. One group tended to overstate their expenses and understate incomes out of the subconscious feeling that in doing so they may be helped by the NGO. On the other hand, the other extremists tended to overstate their incomes. This stemmed out of an attempt to maintain ego and dignity. These may have hampered finding to a certain extent.

5. Limitations

A number of limitations were faced while carrying out this project. Those limitations are as follows:

  • Lack of access to relevant information from processors, retailers and multinational companies during key informant interviews
  • Validity limitation of conclusions drawn from this project for farther analysis as the economy is highly dynamic and so is the dairy industry with increasing involvement of stakeholders and NGOs

6. A Perspective into the Economic Sectors of Bangladesh

The economy of Bangladesh is largely agrarian. The country started off at its independence with a dominant role of the public sector. However, since the mid-seventies, the country transcended from being dependent on the public sector towards establishing a market economy with emphasis on private sector-led economic growth.

The agricultural sector still plays a dominant role in the GDP growth rate. In Bangladesh, the GDP growth rate fluctuates due to the variability in production in the agricultural sector. But the contribution of the service sector dominates the GDP.

Table 1: Inter-country Comparison of GDP Composition

Country Agriculture Industry Services
1980 1990 2001 1980 1990 2001 1980 1990 2001
China 30.1 27.0 15.2 48.5 41.6 51.1 21.4 31.3 33.3
India 38.1 31.0 24.7 25.9 29.3 26.4 36.0 39.7 48.8
Thailand 23.2 12.5 8.6 28.7 37.2 42.1 48.1 50.3 49.3
Bangladesh 31.7 30.4 22.7 20.9 21.7 26.4 47.4 47.9 50.9

Source: Key Indicators 2002, Asian Development Bank and BBS

The above shows the decreasing dependence of Bangladesh on agriculture and rising GDP from industry and mostly service. The above table also shows the dominance of the service sector of Bangladesh, compared to those of China that has the highest GDP from industry and the lowest from agriculture. Bangladesh is more in line with the trend of India in terms decreasing agriculture, stagnant industry and even decreasing industry and soaring service sector. Thailand on the other hand has a strong industrial sector besides having a big service sector and very little agricultural activity.

6.1 Inflation

Inflation in Bangladesh in the year 2007 was 6.9 percent. Though this is quite high compared to inflation rates in previous years, compared to those of India, Pakistan and Sri Lanka where inflation rates in the same period were 6.9 percent, 8.1 percent and 19.3 percent respectively, Bangladesh is not in too adverse a situation. Two distinctive features have been observed of the recent inflationary trend: food inflation is higher than nonfood inflation and rural food inflation is higher than urban food inflation. In the graphical representation below, it can be observed that the red line representing inflation in food items is higher than that of general items.

Source: CPD- IRBD

Figure 1: Trend in National Inflation of Bangladesh

The diagram below shows the higher and erratic rural food inflation compared the lower and steadier urban food inflation. Rural food inflation reached a peak of nearly 16 percent in October 2007 whereas the urban food inflation at the same point of time was a little over 8 percent only. On the other hand, inflation in non food items though lower than that in food items, still follows the same trend with higher inflation in rural areas than in urban areas.

Source: CPD-IRBD

Figure 2: Trend in Food and Non-food Inflation in Bangladesh, FY 2007

Whereas the reason for higher inflation in food can be attributed to the global food crisis followed by adverse weather conditions both in the international and national levels, the higher inflation in rural areas may be the result of lower supply to those areas following a the high demand pressure from urban areas for food which is already low in supply. Urban areas would get first priority and market forces also drive resources to areas where there is higher demand and