Credit, Knowledge, Infrastructure - A Winning Mix

Result | 27 January 2010

A project in rural Bangladesh provides farmers with training, data, and price information to help them maximize returns and increase the quality of produce.

Niyamatpur Village, Bangladesh - Spinach, mangoes, ginger, and a vast array of other vegetables, fruits, and spices are turning around the lives of tens of thousands of small-scale farmers and their families in northwestern Bangladesh.

Growing rice has been the traditional small farming activity in one of the country's poorest regions for as long as anyone can remember. But the Northwest Crop Diversification Project (NCDP), supported by the Asian Development Bank (ADB), is helping households switch to more lucrative crops by providing production know-how, extension services, and credit.

Until the project got underway in 2001, small-scale farmers typically eked out a marginal living by growing mostly rice on plots with an average area of 1.2 hectares, and some livestock. The farmers lacked the knowledge and opportunity to produce higher value crops that could increase their incomes.

"Ignorance of new business opportunities and a lack of support made farmers stick to their tradition of growing rice," said Abu Hanif Miah, project director, NCDP.

The farmers were also hamstrung by a lack of access to rural credit services, with banks unwilling to lend without significant collateral and nongovernment organizations (NGOs) focusing on helping marginal farmers, with much smaller holdings, and landless agricultural workers.

An Integrated Approach

The NCDP has helped thousands who were left out. About 180,000 farmers have received credit through a partnership between the government and NGOs. Along with start-up micro credit, the project - which is being implemented by the government in partnership with NGOs - is providing farmers with training, crop research data, and up-to-date price information to help them maximize returns and increase the output and quality of produce.

Physical infrastructure is being developed with improvements to market access roads, and the provision of covered sales, storage, and loading/unloading facilities. Marketing groups have been established to organize the sale and transport of goods both locally as well as to Dhaka and other major cities.

About 250,000 small-scale farmers, roughly half of them women, are now producing crops that can earn them more than even high-yielding varieties of boro (winter) rice.

"I have already paid back initial loans of 30,000 taka (US$430) which I used to produce eggplants, spinach, country beans, and other vegetables and we have a far better life now with the extra income," says 25-year-old Hazera Begum, a member of the marketing group in Niyamatpur village.

Hazera Begum, who has three children, earns about 3,000 taka (US$43) a month from her new enterprise, double the amount that her husband brings home as a rickshaw driver.

"We are very happy now as my children can go to school, we have renovated our house, and I am looking for an extra lot to produce leeks, tomatoes, and other high value vegetables," she said, adding that she is also selling composite soil to other project farmers.

Partnering with NGOs

"This is a model project and through it we want to show other small-scale farmers how to cultivate many different crops which can help them earn extra income," said Abu Hanif Miah.

A total of 33 high-value crops have been identified for project support including potatoes, maize, cabbages, tomatoes, country beans, spinach, okra, pumpkins, cucumbers, mangoes, tamarind, ginger, and onions.

Among the NGOs involved in the project are Bangladesh Rural Advancement Committee (BRAC), Grameen Krishi Foundation (GKF), PROSHIKA and Rangpur Dinajpur Rural Service (RDRS) Bangladesh. NGOs are estimated to have provided about US$25 million in credit to farm households by the end of 2009.

A Bridge to Opportunities

The project area covers 3.2 million farming families, of which more than half live below the country's poverty line, and in the past their plight has been exacerbated by the physical isolation of the region which is separated from the rest of the country by the Jamuna River to the east and Padma River to the south.

The opening of the Jamuna Bridge in 1998, however, now provides a vital link between the northwest and the rest of Bangladesh, and has also opened up a broad range of new economic opportunities. The Jamuna Bridge was built with financial assistance from ADB, World Bank, Overseas Economic Cooperation Fund, and the Government of Bangladesh.

The project seeks to take advantage of the region's increased accessibility, and an ADB study has identified agricultural development as one of the main ways northwestern Bangladesh can promote economic growth and reduce poverty.

ADB's contribution accounts for 70% of the US$66 million NCDP, with the rest made up by the government and project beneficiaries.

Empowered Women

The project also seeks to ensure women are fully included in income-generating activities, given the crucial role they play in rural communities in Asia, particularly in small landholding families.

More than 10% of households in the project area are headed by women and a major focus is put on ensuring they have access to training, information, and credit programs.

In Gochirampur village, where the project beneficiaries are nearly all women, weekly meetings are held where they can discuss their enterprises, pay back loans, and talk about other issues of concern.

"These weekly meetings give us opportunities to talk about our children's education, health, irrigation, and other matters, and we try to help each other solve problems," said 40-year-old Zaheda Islam.

"With this advice from other women I have been able to improve my business and for the first time I have been able to engage in discussion with my husband about important family matters," she said.