Krishi Utsho– Small holder farmers’ one stop solution center

Agriculture remains a key sector of Bangladesh economy, contributing 19.6% to the national GDP and providing employment for 63% of the population. Over 76% of the country's farmers are small and marginal with limited access to agriculture resources and opportunities. The situation is more detrimental for women farmers in rural Bangladesh. At present, 46% of the total farming population in Bangladesh are women. Despite their contribution, women farmers get less access to markets, productive agriculture resources, credit and technology due to discrimination based on lack of recognition and gender inequality, impacting national agriculture output and food security. To mitigate this challenge, CARE Bangladesh has developed an innovative agro supply chain ‘Krishi Uthso’ (KU) that offers quality agro inputs and services from top manufacturers through a network of smallholder input shops. KU supports marginalized farmers, especially women, to increase their yield and income, thus contributing to food security and economic empowerment.

Bangladesh is a densely populated country of more than 163 million people. Over 70% population lives in rural areas and 87% of rural households rely on agriculture. Nearly two-thirds of the labor force are directly employed by agriculture and contribute to the country’s food security, including smallholder farmers. Yet, these smallholder farmers, particularly women, have limited access to productive inputs, assets, formal agro markets and finance that constrain their agriculture output and incomes, and, ultimately, economic growth.

The lack of resources and opportunities impacts a significant number of the population dependent on agriculture. 50 million rural people are suffering from food insecurity and extreme poverty due to low agricultural yield and income. Factors contributing to the problem include:

1)Smallholder farmers are largely overlooked by both private and public sector due to their perceived risks and skepticism about their commercial viability, constraining their productivity and income potential

2)Due to smallholder farmers’ limited purchasing power and market knowledge – they often fall prey to exploitative informal intermediaries, paying higher prices for agricultural inputs in remote areas

3)Agricultural gender inequalities put women farmers at a higher risk of food insecurity Smallholder farmers, especially women, are disproportionately affected by climate change and natural disasters

Krishi Uthso supply chain has been designed to reach rural farmers, especially women, through network of input shops to meet their agro needs on time. CARE Bangladesh established KU using a Human-Centered Design (HCD) model to increase its acceptance. To understand farmers’ needs, KU conducted seminar and awareness sessions at farmers’ doorstep to analyze the gap in availability of agricultural resources. Based on demand from smallholder farmers, customized product and services packages are prepared for delivery at input shops by sourcing from different agro input suppliers. KU is also developing a Customer Relationship Management (CRM) system to monitor farmers’ purchase behavior analysis to further cater to their needs.

Krishi Utsho is a market-based solution that brings agricultural innovations to smallholder farmers by:

1)Providing quality agriculture inputs on time

2)Providing technical knowledge and extension services

3)Offering fair price by acting as the ‘ missing middle’

4)Offering financial services by engaging formal financial institutions and providing loan with climate resilient insurance

5)Recognizing women’s limited mobility and access to markets by delivering to women farmers’ doorstep through home based women entrepreneurs

6)Mitigating the shocks of climate change and natural disasters through maintaining buffer stocks to increase farmers’ resilience

Krishi Utsho is an emerging social enterprise that is serving 63,000 farmers through 279 franchised shops in rural Bangladesh and brought progressive social advancement since 2014. The model essentially comprises of four components, whose functions are managed by KU:

(a) 25 Private and Public Partners who supply quality agro based products to rural markets and provide technical knowledge transfer as well as extension services; (b) 279 agro input shops that are local rural entrepreneurs, or microfranchisees selling private sector products to rural smallholder farmers and providing embedded services such as technical knowledge or access to credit; (c) Smallholder marginalized rural farmers who are benefiting from the purchase and use of improved agro based input products and services from KU franchisees; (d) A Third Party Operator, or business intermediary supporting KU in warehouse maintenance and transportation of products;

KU as the emerging social business that is acting as the Franchiser managing the operations of the franchisee network; adding value to products and services; ensuring quality control; facilitating multi stakeholder engagement; fostering innovation; measuring results; and using ICT based applications to collect and analyze real time data to ensure adaptive management for enhanced enterprise efficiency.

The solution is governed by a Standard Operational Procedure (SOP) to ensure quality of services provided by the project and the input shop owners. The supply chain management is operated through a software based Point of Sales (PoS) and Inventory Management System (IMS) scheme while the procurement and finance is supported by an accounting software. Additionally, KU has piloted a comprehensive Artificial Intelligence (AI) based Customer Relationship Management (CRM) system that is backed by a call center to support smallholder farmers with direct access to the sector specialist team.  CRM software is able to collect, store, and analyze data on KU customers to help manage expansion as well as to develop a ‘big data platform’. Proper analysis of this data will allow KU to understand trends in purchasing behavior, support operations, market penetration, and customer segmentation to improve inventory management and planning, and to anticipate and meet the needs of smallholder farmers, particularly women. Improving smallholder access to affordable resources can improve the productivity and livelihoods of smallholder farmers and ultimately stimulate economic growth.

Krishi Utsho’s innovation is to adopt a comprehensive, market-based approach to sustainable agricultural production, using a self-sustaining model that goes beyond conventional development projects. KU’s intervention uniquely adopts a multi-stakeholder, engagement-driven participatory approach, in which the interests and incentives of the private sector, financial institutes, government extension agents, rural shops (KU franchisee), and rural farmers are interconnected and carry different services under one umbrella at the most remote parts of Bangladesh. KU model builds on interactions with the formal market, identifying critical agricultural needs of smallholding farmers and providing them with support as one-stop solution center.

In this solution, the enterprise model places highest emphasis on ensuring supply of quality products and service offerings at last mile. This is ensured by developing and following a strict set of standards, beginning from selection of franchisees, maintaining quality of products to branding, marketing and running the entire supply chain operation. This enhances the efficiency of franchisees at a pace that they are suitable to address the needs and demands of smallholding rural farmers in day-to-day operation. The overarching reason behind consciously adopting this strategy is to ensure continuity, consistency and sustainability of the emerging social enterprise.  KU, as an emerging social enterprise, is bridging agriculture resource gaps and supporting project beneficiaries to uplift a large segment of rural populations’ livelihood. However, till to date the solution has reached a limited number of smallholder farmers. Hence this proven solution has high opportunity of scaling up and reaching the untapped agro-input market in rural Bangladesh.

The ultimate goal of KU is to contribute to  economic prosperity and food security of 250,000 smallholder farmers, including 35% women by the year 2020.

To achieve this outcome, KU has established a “micro-level last-mile supply chain system” that is offering agriculture and livestock inputs as well as advisory services and information to smallholder farmers at their doorsteps to improve their yield and income. This system is supported by a necessary ICT based tools including a software based Customer Relationship Management system to ensure excellence in service delivery.

Based on an assessment conducted in December 2018 it was determined that KU’s franchisees, private sector suppliers, and strategic partnerships with government extension agents provided technical support and information to 51,788 farmers (27% women). KU also ensured employment generation, additional income, and different social securities of beneficiaries through the supply chain model. The farmers’ income level increased by 70% within 3 years of joining this network. Additionally, project also empowered rural women by increasing their participation in agri-business. And, 59% household decisions are taken jointly by the male and the female in the household, which increased by 20%, compared to 2017 assessment. Consumption of nutritional status was 8% and food diversity score found was 14.77 (FAO guideline: 16). In addition farmers experienced higher productivity and crop production due to access to quality agricultural inputs, technical knowledge on farming practices, extension services, and affordable credit management system.

Currently, Krishi Utsho is serving 63,000 farmers through 279 franchisees in 6 Districts from the Northwest and the Southwest regions of Bangladesh. There are 52 home based female entrepreneurs in the network who are serving mostly to the women farmers with limited mobility. The project has planned to increase its coverage both in terms of product portfolio and number of customers per shop. Thus, the project has targeted to serve 100,000 farmers in the consecutive year through 300 shops. On an average, each shop will serve more than 330 farmer customers through a broad line of products, services and necessary information comprising relevant sectors like livestock, agriculture, aquaculture and beyond. 

KU has developed a summarized Business Modelling Canvas as well as an elaborated business plan in 2018. As suggested by the business plan, KU has embattled to develop a base of 250,000 farmer customers through a network of 500 franchised shops by next five years.

As stated earlier, by next year KU will increase its customer coverage by 58% through 300 franchisees. To acquire this additional number of customers KU will work on restructure of the supply chain model as well as its product portfolio. Operational expenditure will be optimized by restructuring the model and additional customer visit per shop will be ensured through maintaining a large variety of product. Therefore, the model will offer minimum input with maximum output in immediate operation. 

In the next five years, KU plans to transform into a commercially viable social enterprise to increase the farmers reach with quality inputs for growing their yield and income. The innovation aims to develop a model food secured society by  facilitating as the "missing middle” in agro input market and allowing a broad cross-section of women to comfortably get access to this market system through female franchisees. Proper usage of CRM platform will ensure a high degree of control on network’s operations and service quality. 

KU business plan stated that, within five years the project will be established as a replicable business model that can be further scaled up by other organizations from private and public sector. CARE has its operation in other countries with similar context; seven other country offices from Asia and Africa are closely learning from KU model and eager to expand their work with input retailers to serve millions of farmers in the two continent.

Krishi Utsho model is innovative but at the same time it is still a subsidized micro-level supply chain system. The model was initiated as an unconventional project in the development sector to supplement the nontraditional agri-business approach. KU has developed a business plan for transforming the project into a viable social enterprise (break-even year is 2023). Currently, KU faces financial barriers to maintain subsidized supply chain, sales operation, and rural warehouses. KU receives a partial income from its business operation, but current income from the mark up of product is limited due to lower negotiation power, and lower volume requirement.

The formal agro-market in Bangladesh predominately follows conventional business practices. This challenges the agro-input sector since there is saturation of low price adulterated products due to the limited control mechanism in rural and hard to reach areas of Bangladesh. With limited resources, the public sector is unable to ensure quality of product in rural market. 

This formidable barrier not only creates an obstacle for KU to transform into a viable social enterprise, but also deprives a large number of rural farmers from quality inputs and services at affordable price. However, to overcome this obstacle, KU will work in upcoming years to establish its model as a proven change-maker solution for last mile farmers. 

Krishi Utsho  has developed itself into a proven supply chain to serve farmers with agro-inputs and developed a brand value at farmers’ level since 2015. Using this brand value and commercial business plan, KU has planned to increase its net income with different strategies such as: 

1) Increment of customers per shop to lower the distribution cost as well as increase net income of KU.

2) At present, KU is occupying around 35% shelf space of each of the franchisees. Inclusion of latest technological and environment friendly product will help  increase the market share and eliminate low quality products from the marketplace. 

3) KU introduced its branded products into market in 2018. Cattle feed, the star product of KU, is being manufactured by its own management hence optimizing production technology and volume l leading to higher margin.

4) KU has planned to import agro-tools enabling the rural communities to source seeds and fertilizers to increase the profit margin. KU has planned to increase farmers’ number in present shops and designed to reach the untapped agro-market in the rural area through horizontal expansion.

5) Correspondingly, KU has planned to rearrange the distribution chain to reduce the subsidy in delivery. These initiatives support reducing operational expenditure by 25% and increase the income by 20% to reach the break-even by the year 2023. 

6) Once spun off and registered as a separate business entity, KU will achieve more bargaining power to get additional benefits by crowding in new partners and serving existing partners.

Krishi Utsho is operating as a development project of CARE Bangladesh. 

CARE Bangladesh has more than 65 years of experience in eliminating extreme rural poverty. By engaging  women and youth groups into market system and value chain, CARE is continuously working to build a secured society with sustainable economic empowerment. 

CARE Bangladesh has successfully created opportunities for the rural farmers to increase their productivity, economic resilience and better sustainability. A number of flagship projects have been implemented by CARE to reshape the entrepreneurship model in Bangladesh over the past decades. 

Apart from traditional development projects, CARE has incubated a number of potential initiatives those transformed into sustainable social business in the later part. JITA and Living Blue are two prominent initiatives of CARE Bangladesh working in FMCG and Craft sectors respectively. These two projects have been spun off from CARE and continued as social enterprise having separate legal entity. 

Krishi Utsho (KU) is currently working as a traditional development project of CARE Bangladesh with an aim to be transformed as a commercially viable social enterprise with its own legal identity.

Krishi Utsho team consists of seven core staffs while there are other twelve outsourced staffs to carry out regular operational activities. 

This project is led by one coordinator from the core team. Other core staffs are responsible for partnership management, product and business development, monitoring, IT, accounting and Finance. Third party staffs are responsible for running the warehousing and distribution operation.

Krishi Utsho has structured the team by considering its sustainability and future transformation as a successful agro-based social enterprise.

1. Maruf Azam- Project Coordinator: With background in business administration, Maruf has 16 years’ experience and skill on strategic planning, supply chain, budgeting, project management, transformation and organizational development. 

2. Md Salim Hosain- Project Manager: With the background in business administration, SCM; certification in Six Sigma and Prince2, Salim has 13 years of experience in program implementation, Operation management, process development, big data analysis, private sector partnership and lean-management process.

3. Mridha Rashedul Islam- MIS Administrator: With background in Engineering; certification on Python and big data analysis, CCNA, ITIL, CDCP, Rashed has 8 years’ experience in software development and Data-analysis.

4. Hamidur Rahman- Sales and Distribution Officer: with background business administration, Hamid has 9 years’ experience in  sales and distribution, Accounting and social development.

5. Delwar Hossain- Business Development Officer: with background in marketing, Delwar has 9 years’ experience in business and rural market development, market linkage and social development.  

6. Ruzdana Hossain- M&E Executive: with the background in development study, Ruzdana has one year experience in M&E and quality assurance.

7. Hosne Ara- Community Facilitator: With background in social science, Hosne has 13 years’ experience in women empowerment, rural development and community mobilization.

Apart from above KU has an outsourced team of 12 members having an average experience of 3-5 years and skilled with sales, agribusiness, marketing and inventory management. This team is dedicated to run the business operation of KU.

Krishi Utsho is currently working with twenty four organizations from private sector and rural community level. The national level organizations are from agro-inputs manufacturing and financial sector. Agro input manufacturers are enriching the product portfolio of KU while financial institutions are providing access of the rural farmers to formal financial sector by providing them with finance and insurance. As a business partner, KU is acting as their distribution channel support to take them to the last mile where KU has vast experience and acceptance. From community level, KU has two partner organization formed by rural women community. KU has provided these organizations with production technologies and quality control mechanism so that they can be able to supply KU with different agricultural inputs like seed and organic fertilizer.

Additionally, KU has strategic partnerships with local government agencies (Livestock, Agriculture Offices and other agencies) to provide technical support and services to farmers through KU shops. Besides, KU has a partnership with autonomous organization named Rural Development Academy (RDA) for capacity building of franchisees on updated agricultural technology. 

During inception of Krishi Utsho, the project has developed a business modelling canvas (BMC) concentrating on smallholder farmers to serve them with quality inputs and services. The canvas is developed by incorporating high level issues in KU model and suggests future plan for this operation.

Started with the problem statement and solution, KU BMC states other parameters like value proposition, key metrics; describes the scaler and users and how to reach them through KU. The BMC also proposes potential customer segments and proper channels to reach them. Strength of CARE as the parent organization of KU is also been described in the BMC.

Apart from strategic issues, KU BMC also suggests estimated cost to run the operation, revenue sources and other non-financial resources offered by core team and the parent organization to transform this initiative into a sustainable social enterprise.

KU BMC is attached below for ready reference:

KU has worked on several opportunities towards financial viability of this potential social enterprise. The most challenging part is to play as a market actor while keeping the natural market harmony.
To meet financial sustainability and proper utilization of the core funding, KU is working to increase the sales as well as to find potential income generating activities. The project will utilize donor funding to continue the operation and follow income growth as per the business plan. In addition, the project will work for optimizing operational cost, reducing the production cost on KU own production and enable sourcing seed and fertilizer from rural farmers’ community. This model will not only ensure financial sustainability of the project but also support the rural farmers for connecting to a regular backward and forward market linkage system.

The Tiger Challenge is aimed to support and bridge technology and innovation to aid different societal and environmental issues. Tiger IT foundation is also investing towards positive changes for large number of rural and deprived population. Besides, MIT-Solve is dedicatedly working for multiplying the impact to mitigate social needs with positive outcomes.

As a part of CARE Bangladesh, Krishi Utsho is working for similar goals as Tiger Foundation and Solve MIT. KU is not only offering one stop solution but also developing a system that can be a role model to overcome agro-related challenges in Bangladesh. The mission of “Tiger IT foundation, SOLVE MIT and KU is associated with social causes and overlapped in core strategies, KU is probing Tiger IT foundation and Solve MIT to take this opportunity by providing this initiative with financial support to leverage agro-sector.

KU is working to alter the rural agro-input market system into a formal mechanism. Currently, KU is struggling with operational investment to continue its operation. KU has passed certain milestones towards its financial break even however there is a long way to go to achieve full commercial viability. Tiger IT foundation’s challenge fund will support KU to continue serving those rural women farmers to live a dignified life in their society where they can raise their voice for rights, make own decision and have control on resources. This can only be possible through economic empowerment where KU is supporting them.

Krishi Utsho is an agro-based micro franchise model that provides rural farmers with access to quality inputs and services. The model has already been piloted in rural market of Bangladesh in partnership with 25 private and public stakeholders. In the next phase, KU will do further partnership with the Bangladesh Rice research institute (BRRI), Bangladesh Livestock research institute (BLRI) and Rural Development Academy (RDA) in research and development and improved technology to introduce updated techniques to the farmers with technological challenges.

Moreover, the institutions will be able to get the field level reach to do the necessary research to develop groundbreaking products that will sustain future climatic catastrophes. The project will sign a Memorandum of Understanding (MOU) with Bangladesh Metrological Department to receive real time weather update which will be incorporated in KU CRM system. This will give leverage to the farmers’ on getting proper weather based business forecast on farming technology.