Livestock and Dairy Development Project

Livestock is an integral component of the complex farming system in Bangladesh as it not only a
source of meat protein but also a major source of farm power services as well as employment.
The livestock sub-sector provides full time employment for 20% of the total population and part-
time employment for another 50%. The poultry meat alone contributes a substantial 37% of the
total meat production in Bangladesh (Begum et al 2011). The GDP contribution of this sub-
sector has been a modest 2.6% annually in the 1990s (IMF 2005) which was lower than the
previous estimates of 5% of total and 10% of agricultural GDP during the 1970s and 1980s
(FAO 1990; Planning Commission 1990). However, the sector’s actual contribution has been
consistently underestimated as the value added in draught power used in farm operation,
threshing, sugarcane and oilseed crushing, local transport, dung for cooking fuel and manure for
fertilization of crop fields were not taken into account. An estimate of the uncounted sectoral
contribution of livestock indicates a foregone value of three times the amount of official GDP
attributed to this sector (FAO 1990). Moreover, livestock products, namely, leather and leather
products, hides and skins are important exportable items contributing about 13% to total foreign
exchange earnings during the 1970s and 1980s (Rahman and Bhuiyan 1991). Therefore, given
versatile nature of the potential contribution offered by the livestock sector including curbing of
malnutrition prevalent in Bangladesh, we attempt to provide an evaluation of this sector by
examining its availability, distribution, growth, performance and future potential.

The objective of the Livestock and Diary Development Project is to improve productivity,
market access, and resilience of small‐holder farmers and agro‐entrepreneurs operating in
selected livestock value chains in target areas. There are four components to the project, the first
component being productivity improvement. The component’s objective is to raise on‐farm
productivity, and to increase efficiency, safety and profitability through climate smart livestock
management, better approaches to animal health, nutrition, and breeding. It will comprise two
sub‐components: producer organizations, and improved climate smart production practices. The
second component is the market linkages and value‐chain development. The objective is to
increase producers’ linkage to profitable markets, improve the volume, quality and safety of
livestock products being marketed, and decrease transaction costs along the value chains. It will
comprise three sub‐components: market linkages and Investments along the value chains, critical
and climate resilient public infrastructure for livestock development, and consumer awareness
and nutrition. The third component is the improving risk management and climate resilience of
livestock production systems. It will comprise four sub‐components: institutional capacity
development and knowledge platform, food safety and public health, livestock insurance, and
contingency emergency response. The fourth component is the project management, monitoring
and evaluation. This component will establish the Project Management Unit (PMU) at DLS
headquarters, with eight Project Implementation Units (PIUs), one in each Divisional Livestock
Office, and set‐up adequate fiduciary, governance, audits and accountability systems,
communication and monitoring and evaluation, coordination, and special evaluation studies. The
PMU/PIUs will establish capacities and work.

Project details
IDA Credit: US$ 500.00 million
Total Project Cost: US$ 578.66 million
Project ID: P161246
Approval date: December 6, 2018

Closing date: September 30, 2023

Team Leader: Christian Berger, Francesca Lo Re, Pierre Jean Gerber

Financing Plan at Board Presentation (US$ Millions)

Financier Commitments

International Development Association (Ida) 360,000,000.00

Local Farmer Organizations 5,300,000.00

Local Communities 26,000,000.00

 Borrower/Recipient 47,360,000.00

Detailed Financial Activity as of December 31, 2019

Period Financier Transaction Type Amount (US$)

Dec, 2018 IDA63300 Commitment 500,000,000.00
Mar, 2019 IDA63300 Disbursement 993,354.29
Jun, 2019 IDA63300 Disbursement 1,183,431.95
Aug, 2019 IDA63300 Fees 4,012.33
Aug, 2019 IDA63300 Interest and Charges 3,413.58
Oct, 2019 IDA63300 Disbursement 7,083,825.27

PROJECT DEVELOPMENT OBJECTIVE INDICATORS

INDICATORS BASELINE CURREN TARGET

T

Value Date Value Date Value Date

Farmers adopting 0.00 12-Jul- 0.00 12-Jul-19 500000 6-Dec-

improved agricultural 18 23
technology

Farmers adopting 0.00 12-Jul- 0.00 250000 30-

improved agricultural 18 Sep-23
technology - Female

Increase in market 0.00 12-Jul- 0.00 12-Jul-19 50 6-Dec-

access reflected in 18 23
incremental sales

Percentage increase for 0.00 12-Jul- 0.00 12-Jul-19 40 6-Dec-

female producers 18 23

Farmers and value chain 0.00 12-Jul- 0.00 12-Jul-19 150000 6-Dec-
actors have adopted 18 23
practices to improve
resilience to selected
risks

Farmers and value chain 0.00 12-Jul- 0.00 12-Jul-19 150000 6-Dec-
actors implement food 18 23
safety measures, system
for their animals

Livestock insurance 0.00 12-Jul- 0.00 12-Jul-19 2 6-Dec-

products and services 18 23
developed

Increased productivity 0.00 12-Jul- 0.00 12-Jul-19 35 6-Dec-

of targeted species by 18 23
direct beneficiaries

Dairy Cattle 0.00 12-Jul- 0.00 12-Jul-19 40 6-Dec-

18 23

Beef fattening 0.00 12-Jul- 0.00 12-Jul-19 35 6-Dec-

18 23
Small ruminant 0.00 12-Jul- 0.00 12-Jul-19 25 6-Dec-
fattening 18 23

Sonali Poultry 0.00 12-Jul- 0.00 12-Jul-19 20 6-Dec-

18 23

INTERMEDIATE RESULTS INDICATORS

INDICATORS BASELINE CURRENT TARGET

Value Date Value Date Value Date

Producer organization 0.00 12-Jul-18 0.00 12-Jul-19 5500 6-Dec-23

facilitated and operational

Producer organization 0.00 12-Jul-18 0.00 12-Jul-19 2750 6-Dec-23

facilitated and operational
- led by females

PPs established and 0.00 12-Jul-18 0.00 12-Jul-19 5000 6-Dec-23

financed

PPs established and 0.00 12-Jul-18 0.00 12-Jul-19 2500 6-Dec-23

financed - of female

Additional full jtime 0.00 12-Jul-18 0.00 12-Jul-19 150000 6-Dec-23

equivalent (FTE) jobs
created in project areas

Additional full time 0.00 12-Jul-18 0.00 12-Jul-19 75000 6-Dec-23

equivalent (FTE) jobs
created in project areas -
Females

Additional full time 0.00 12-Jul-18 0.00 12-Jul-19 30000 6-Dec-23

equivalent (FTE) jobs
created in project areas -
Youth

Improvement in the 0.00 12-Jul-18 0.00 12-Jul-19 60 6-Dec-23

management and delivery
capacity of livestock
services

Graduates/Trainees 0.00 12-Jul-18 0.00 12-Jul-19 4000 6-Dec-23

supported /trained through
project's assistance to
academic and vocational
training

Graduates/Trainees 0.00 12-Jul-18 0.00 12-Jul-19 2000 6-Dec-23

supported /trained through
project's assistance to
academic and vocational
training - Female

Farmers have received 0.00 12-Jul-18 0.00 12-Jul-19 19000 6-Dec-23

business development
siklls training, inputs,
marketing support and
financial services
Farmers have received 0.00 12-Jul-18 0.00 12-Jul-19 9500 6-Dec-23
business development
siklls training, inputs,
marketing support and
financial services - female

Slaughtering 0.00 12-Jul-18 0.00 12-Jul-19 700 6-Dec-23

facilities/milk
processing/cooling
facilities renovated and
made climate smart

Stakeholders (persons) 0.00 12-Jul-18 0.00 12-Jul-19 2000000 6-Dec-23

reached with food safety
information through
training, mobile apps,
SMS and video-based
tools

Primary National 0.00 12-Jul-18 0.00 12-Jul-19 3 6-Dec-23

Livestock Monitoring
Information System
established and
operational

Systems and devices for 0.00 12-Jul-18 0.00 43658 1000 6-Dec-23
renewable energy
production and energy
efficiency gains
established
Total farmers in the pilot 0.00 12-Jul-18 0.00 12-Jul-19 500000 6-Dec-23
areas receiving livestock
insurance awareness
and/or training

Of which females 0.00 12-Jul-18 0.00 12-Jul-19 250000 6-Dec-23

Farmers have accessed 0.00 12-Jul-18 0.00 12-Jul-19 1000000 6-Dec-23

livestock services, CSA
technoligies and practices

Of Which Female 0.00 12-Jul-18 0.00 12-Jul-19 400000 6-Dec-23

Number of cattle included 0.00 12-Jul-18 0.00 12-Jul-19 200000 6-Dec-23

in the pilot animal
identification and
recording system

Farmers reached with 0.00 12-Jul-18 0.00 12-Jul-19 2000000 6-Dec-23

agricultural assets or
services

Farmers reached with 0.00 12-Jul-18 0.00 Invalid 1000000 30-Sep-

agricultural assets or 23
services female

Students under School 0.00 12-Jul-18 0.00 12-Jul-19 360000 6-Dec-23

Milk Program

Students under School 0.00 12-Jul-18 0.00 12-Jul-19 180000 6-Dec-23

Milk Program ,girls
Benefits
The World Bank approved $500 million to boost livestock and dairy production in Bangladesh
so that

 The country could meet its growing demand for eggs, meat and milk to improve the
nutritional intake of its citizens.
 The livestock and dairy development project would improve agricultural productivity and
market access of 2 million smallholder household farmers and small and medium-scale
agro-entrepreneurs
 By stimulating growth and improving livestock production systems, livestock farmers in
Bangladesh would have better access to livestock services and practices
 By increasing livestock productivity, Bangladesh will be better able to meet the food
demands of its population
 Livestock development also has the potential to create more and better jobs for women,
youth, and the vulnerable in rural areas
 The livestock sector employed 14 per cent of the total labour force but more than 70 per
cent of rural households were engaged in livestock production
 Currently, 68 per cent of the agricultural labour force were women and they were mainly
involved in livestock and poultry production

It was anticipated that by 2021, there would be annual shortages of 1.5 billion eggs, 0.5 million
tonnes of meat and more than 5.9 million tonnes of milk. In 2015-2016, imports of dairy reached
$248.8 million, the agency revealed. Young children, pregnant women and new mothers were
particularly vulnerable to nutritional shortfalls.

The project aimed to provide at least two million people with food safety information through
training, mobile applications and other multimedia tools.

The credit from the bank’s International Development Association, which provided grants or
zero interest loans, had a 30-year term, including a five-year grace period.
Internal Sources of Financing for Dairy Farmers

In 2016 an initiative was taken by handing over cheques from 13 banks and financial institutions
to 13 farmers during an event at the Krishibid Institution in Dhaka. Banks will lend to dairy
farmers at an interest rate of 5 percent by borrowing from Bangladesh Bank's Tk 200 crore
refinancing fund. The central bank formed the fund in June last year, to encourage dairy farming
and cut malnutrition and milk powder import bills.

BRAC Bank is providing easy loan facilities to the farmers for producing milk. Under
Refinancing Scheme of Bangladesh Bank (BB), BRAC Bank offers loan to small farmers at 5%
interst rates. Prime Minister Sheikh Hasina formally inaugurated the "Refinance Scheme for
Milk Production and Artificial Insemination" on January 13,2016. BB with the support of
Ministry of Fisheries and Livestock arranged a Re-finance Scheme of Taka 200 crore for
participating Banks and NBFIs. BRAC Bank has signed an agreement with BB in September
2015 to participate in the Re-finance Scheme. It has already financed Taka 66.50 lac to 40
farmers of Vhangura and Faridpur union of Pabna district.

Comparative advantages of IDA than internal Souces of Financing

for Livestocks & Dairy Productions

 The first 10 years of WB credit that has been cancelled carried only 0.75 per cent service
charge and 40 years maturity period, including a grace period of 10 years, meaning that
the country would not be required to pay any amount during the first 10 years. During the
next 10 years, the country would have repaid 2.0 per cent of the borrowed amount every
year and for the remaining 20 years 4.0 per cent of the original amount every year.
 IDA gave US $500 million with zero interest rate for 30 years with 5 years grace period
where BD internal source give loan to the livestock & dairy farmers give the loan with
5% interest rates
 BRAC Bank is providing easy loan facilities to the farmers for producing milk only but
IDA loans have no specific conditions like that. That loan is given for all over the
improvements of live stocks & dairy productions.
 Internal sources of financing are not as much capable of IDA for reducing the financing
problem in livestock & Dairy farm as it has many future potentiality.
 Long term benefit for the country as it gives the loan not only for the present decades but
also for the long term period.
 Internal sources of funds collections are in lengthy process where IDA gives the loan for
very short notices if that country has good relationship with WB & IDA.
 Internal Sources of financing will destroy the national private sector where IDA loan will
increase the liquidity & foreign currency in Bangladesh which can reduce the
unemployment & contribute in GDP
 Internal sources of financing will create higher interest & inflation rate on the economy.