Bangladesh: Second Crop Diversification Project

Sovereign Project | 40534-013 Status: Active


The project will foster commercialization of agriculture through interventions to promote diversification into high-value crops (HVCs) and value addition, gender mainstreaming, and

climate change adaptation. The project is market oriented and demand driven, and will increase farmers' incomes and enhance food security in Bangladesh.

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Project Name Second Crop Diversification Project
Project Number 40534-013
Country Bangladesh
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2649-BAN: Second Crop Diversification Project
Concessional ordinary capital resources / Asian Development Fund US$ 40.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development - Agricultural production

Finance - Inclusive finance

Gender Equity and Mainstreaming Gender equity

The project will foster commercialization of agriculture through interventions to promote diversification into high-value crops (HVCs) and value addition, gender mainstreaming, and

climate change adaptation. The project is market oriented and demand driven, and will increase farmers' incomes and enhance food security in Bangladesh.

Project Rationale and Linkage to Country/Regional Strategy

Land, and its cultivation, is Bangladesh's most basic resource with more than 75% of the population directly or indirectly engaged in agriculture. Rice is the dominant crop contributing most to self-sufficiency in food grains and hence food security. However, the emphasis on rice production has resulted in increased dependency on imported food, particularly HVCs including fruit, which remain unaffordable to many poor consumers. Therefore, increasing HVC production is of critical importance for reducing imports and enhancing affordable and varied nutritious diets for the poor. Fertile and well-drained soils, a varied climate that favors a range of crops, and low daily wage rates contribute to the comparative advantage for growing HVCs in Bangladesh.

The Second Crop Diversification Project directly supplements government policies on food security and agriculture sector growth. The government's overall objective in the National Agriculture Policy is to make the nation self-sufficient in food and ensure a dependable food and nutrition security system by increasing production of all crops, including HVCs.

The Asian Development Bank (ADB) is supporting inclusive economic growth and poverty reduction in Bangladesh through its strategic priorities as identified in the country strategy and program for 2006-2010. The project is a follow-on to the successful ADB-assisted Northwest Crop Diversification Project (NCDP) completed in June 2009. The NCDP substantially raised the incomes of small and marginal farmers in the northwest region. The proposed project will build on the successful NCDP activities and expand into new areas, especially the southwest of Bangladesh. The project will complement the NCDP and other ADB support, such as the Agribusiness Development Project, particularly by promoting value addition to HVCs, strengthening value-chain integration by developing backward and forward linkages between farmers and consumers, and including service provision by private sector agribusinesses and technically and financially qualified microfinance institutions (MFIs) and wholesale banks.

The project is consistent with the ADB country strategy and in conformity with recommendations made in the recent country assistance program evaluation in Bangladesh. The evaluation found that lack of agricultural diversification is one of the country's binding constraints to growth, and confirmed that agricultural and rural development is one of the government's top priorities and key to reducing rural poverty. The project is alligned with the ADB Operational Plan for Sustainable Food Security, which suggests enhancing ADB's multisector food security engagement by increasing synergy and value addition in backward and forward linkages along the food and agriculture value chain, with particular attention to small farmers and farm households headed by women and other vulnerable groups. Also, the Project is fully consitent with the recent Country Investment Plan (CIP) of the Government on food security. Climate-resilient crop varieties, cropping patterns, and modern and appropriate technologies will be tested and disseminated to help farmers adapt to climate change.

Impact The impact will be increased rural income in 27 districts of the southwest and northwest of Bangladesh.

Project Outcome

Description of Outcome The outcome will be improved efficiency and value addition of HVC production. The direct beneficiaries will be marginal, small and medium farmers with landholdings up to 3 hectares. Landless people will benefit through generated employment opportunities in rural areas.
Progress Toward Outcome The partner NGO (BRAC) was engaged to form, validate groups and to extend credit support for the interested group farmers. Targeted farmer's group formation on-going through validation and new selection. DAE in close collaboration with BRAC (NGO) is arranging technical training for the selected farmers on high value crops production and value addition, and making them eligible for credit support. As of 30 June 2016, total 12,000 farmer's groups formed (5,620 male group) enrolling total 251,927 members (138,852 male). Credit availed by 201,647 members (120,898 female) amounting Tk5,943.9 million (Tk3,831.8 million to female). BRAC has deployed qualified field staff for group mobilization, awareness raising, helping to arrange technical training and extending credit support. DAE field staffs in collaboration with BRAC are organizing field demonstration trials in the potential farmers field for the selected small farmer's groups to show potential production technologies. PMU is organizing capacity development training for field staffs to better serve the farmers, organized under small farmers group. Community facilitators have been recruited and deployed in the field.
Implementation Progress
Description of Project Outputs

(i) increased HVC production and commercialization;

(ii) Reduced HVC postharvest losses, improved product quality and value addition, and enhanced market


(iii) Enhanced capacity of public sector institutions and participating partners in supporting farmers to increase their incomes

(iv) Increased participation of women in commercial agricultural activities

Status of Implementation Progress (Outputs, Activities, and Issues)

For capacity development , technical training on high value crops (HVC) production provided to 151,417 of women farmers; 175 staffs are provided with Training of Trainers training on gender; total 1,564 number of Department of Agricultural Extension (DAE) and microfinance institute staffs received gender awareness training in HVCs and value addition.

The identification of 18 women in each Upazila is underway. At least 10 women actively involved in each On Farm Small Scale Infrastructure (OFSSI) investment and operations in under way. These outputs will accelerate establishing OFSSI. So far, construction of 25 OFSSIs completed, 8 OFSSIs are functional and operated by farmers marketing association (FMA).

As of 30 June 2016; 12,675 farmers are trained on climate change adaptability and improved farming practice of which 54% are female. Wives and husbands are cosigning the loan agreements. Approximately, 65% women manage the credit.

Total 104 sites selected for establishing OFSSI. 88 sites have been completed, bidding documents completed for 92 OFSSIs, 27 sites have been handed over to DAE and are expected to reduce the post-harvest loss by minimize the processing and price gap.

Awareness building on quality products, possibility of premium price and advantages of contract farming among project farmers are underway.

Credit provided to 201,647 with total Tk5,943.9 million. Need assessment, seasonal planning for HVCs cultivation is being undertaken on a continuous basis.

Award of contract for upgrading nine HDTCs approved by ADB. Works in all HDTCs completed.

Expert consultants are working to develop standards and certification systems suitable for the farmers.

Total 1,661 farmers field days organized at demonstration sites.

Field activities are ongoing. Implementation supports consultants fielded. The NGO (BRAC) engaged and qualified field staff deployed. Agreement between BRAC and wholesale banks (EBL Ltd. and BASIC Bank Ltd) signed. Bangladesh Bank as EA of Credit component is monitoring. Credit fund advanced to BRAC to extend credit support to the beneficiaries. Project is proceeding towards increased HVC production. As of 30 June 2016, about 76,736 ha of land converted for HVC production.

Farmers' training ongoing. As of 30 June 2016, total 286,775 farmers trained. Credit disbursed to 201,647 farmers amounting Tk 5,943.9 million.

Total 15,513 demonstration trials organized in the farmer's field to disseminate HVCs modern production technologies.

Actions regarding adaptation to the negative effects of climate change targeted through at least five replicable pilot projects established in the drought-prone areas of the northwest, and five in the southwest areas vulnerable to cyclones and salinity are underway.

Geographical Location Selected upazilas in the southwest and northwest of Bangladesh.

Safeguard Categories

Environment B
Involuntary Resettlement C
Indigenous Peoples B

Summary of Environmental and Social Aspects

Environmental Aspects Likely to have adverse environmental impact that are less adverse than those of Category A projects
Involuntary Resettlement Has no involuntary resettlement impacts. No further action is required.
Indigenous Peoples Likely to have limited impacts on Indigenous Peoples that are being addressed during project implementation
Stakeholder Communication, Participation, and Consultation
During Project Design During the PPTA regular contact and consultation was maintained with the Government, particularly, the Ministry of Agriculture (MOA), DAE, Department of Agricultural Marketing (DAM), Planning Commission, Bangladesh Bank, and the Local Government Engineering Department (LGED). Stakeholder participation and consultation has been undertaken through (i) meetings with a wide range of NGOs and banks; (ii) current international donors active on the agricultural sector, particularly the Danish International Development Agency (DANIDA), International Fund for Agricultural Development (IFAD), the United States Agency for International Development (USAID), and the World Bank; (iii) workshops held in Dhaka and Jessore, and a private agribusiness sector marketing workshop in Dhaka; (iv) extensive field trips to the proposed project areas and focus group meetings held with farmers, farmers groups, and women. The major findings from consultations were (i) the Project must be demand and market driven with improved capacity building of farmer capacity in value addition; (ii) value chain integration is critical and must be led by involving private sector agribusiness, not the Government; (iii) farmer community group activity in value addition and marketing is the key to improving farmers? incomes; (iv) access to affordable rural credit is critical; (v) active involvement of women in commercial agriculture is essential to make the optimum use of human resources.
During Project Implementation Regular stakeholder participation and consultations are arranged during implementation. The PMU is organizing and conducting regular workshops with DAE officials, MFIs, and service providers to review progress, identify problems, and discuss remedial action. Participatory and focus group sessions will be held regularly with farmer communities and women's groups to assess their needs and discuss project progress and activities.

Business Opportunities

Consulting Services All consultants to be recruited according to ADB's guidelines on the use of consultants
Procurement The procurement will be done as per Government's public procurement rules, 2008 and ADB's procurement guidelines.

Responsible Staff

Responsible ADB Officer Alam, Md. Shahidul
Responsible ADB Department South Asia Department
Responsible ADB Division Bangladesh Resident Mission
Executing Agencies
Bangladesh Bank
Mr. S. M. Moniruzzaman
Bangladesh Bank Component
Department of Agricultural Extension
Mr. Md. Saydur Rahman Salim
Khamarbari, Farmgate, Dhaka


Concept Clearance 08 Mar 2007
Fact Finding 08 Nov 2009 to 22 Nov 2009
MRM 03 Mar 2010
Approval 30 Jun 2010
Last Review Mission -
PDS Creation Date 05 May 2010
Last PDS Update 16 Aug 2016

Loan 2649-BAN

Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Jun 2010 13 Oct 2010 10 Jan 2011 31 Dec 2016 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 45.81 Cumulative Contract Awards
ADB 40.00 30 Jun 2010 39.25 0.00 96%
Counterpart 5.81 Cumulative Disbursements
Cofinancing 0.00 30 Jun 2010 40.82 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - Satisfactory - Satisfactory
Title Document Type Document Date
Second Crop Diversification Project: Procurement Plan Procurement Plans Aug 2016
Project Agreement for Second Crop Diversification Project between Asian Development Bank and Bangladesh Bank Project/Program Agreement Oct 2010
Loan Agreement for Second Crop Diversification Project between People's Republic of Bangladesh and Asian Development Bank dated 13 October 2010 Loan Agreement (Special Operations) Oct 2010
Second Crop Diversification Project Design and Monitoring Frameworks Jun 2010
Second Crop Diversification Project Reports and Recommendations of the President Jun 2010
Second Crop Diversification Project Summary Poverty Reduction and Social Strategies Jun 2010
Second Crop Diversification Project Gender Action Plans Jun 2010
Second Crop Diversification Project Project/Program Administration Manual Jun 2010
Second Crop Diversification Project Design and Monitoring Frameworks May 2010

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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