Kevin McKague

Monitoring, Evaluation, and Learning

When accepted in 2007, CARE’s proposal to the Gates Foundation included 120 different milestones—many times more than were needed. This ambitious approach was a reflection of the pilot nature of the project and a feeling that comprehensive monitoring was necessary to identify leverage points within a relatively broad strategy. There were three fundamental challenges to this undertaking that had to be factored into the new project. First, CARE Bangladesh’s earlier foray into the dairy sector several years previously had resulted in the construction of a couple of milk chilling plants that sat empty—classic symbols of a well-intended intervention that had failed miserably. Second, there was limited data on the dairy sector available from government sources, and information that was available was of questionable accuracy.1 Third, CARE had never done a value chain initiative of the size proposed, and their monitoring and evaluation (M&E) staff, having experience primarily with traditional development projects, were unsure of how best to proceed.

Strengthening the Dairy Value Chain in Bangladesh

Many of us dream of a world free of poverty, but how can this be realistically achieved, especially for farmers who make up the majority of the world’s poor?1 Traditional aid redistributes resources to many who are in need, but too often falls short of allowing poor producers to increase their productivity and reduce income poverty in a self-reliant and sustainable way.2 CARE has pursued a route different from traditional aid approaches. Simultaneously working with smallholder farmers—mostly women—to improve their productivity and working with others within the entire market system to ensure that incomes are distributed as fairly as possible, CARE has put farmers, markets, and incentives at the center of its work. CARE has taken a value chain approach—one that focuses on working with farmers, companies, traders, and entrepreneurs end to end along a commodity’s chain—to remove obstacles and to improve the creation and distribution of value. A value chain approach (also known as value chain facilitation, inclusive market development, or pro-poor value chain development) works with market forces and commercial value chain actors to grow the economic pie and ensure that all parties, especially the most vulnerable, have as much information and market power as possible.

Strengthening Value Chain Relationships

The dairy value chain in Bangladesh has been characterized as fragmented and disconnected with limited trust, which reduces cooperation, coordination, and flows of information. A central objective of CARE’s approach to value chain development, therefore, was strengthening mutually beneficial relationships between value chain actors. In underdeveloped value chains, trust and coordination are often low. This can be due to a variety of reasons, including a lack of leadership, mistrust of competitors, a zero-sum outlook, or simply an inability of actors to see the long-term benefits for cooperation.1 To work more effectively, value chains require coordination. In the absence of coordination by markets or governments, nongovernmental organizations (NGOs) such as CARE have an important role in the facilitation of mutually beneficial exchanges and learning. Stronger and more trusting value chain relationships are an important element of achieving this because greater trust and coordination promotes cooperative behavior, reduces transaction costs, enables rapid problem solving, reduces conflict, enables flexibility and adaptability, increases information flows, and reduces risk.2

Productivity and Producer Groups

Productivity, meaning the efficiency of converting inputs into outputs, can be approached in a variety of different ways and at any point in the value chain. For a facilitation organization working at increasing the value created throughout the value chain, however, the focus often turns to one of the weakest links in the chain—the producers. After analyzing the Bangladeshi dairy value chain, CARE decided to dedicate significant efforts to improve the productivity of smallholder farmers not only because of its mandate to improve the livelihoods of the poorest producers, but because strengthening the first link in the chain would be a strategic investment to enhance the dairy sector as a whole. This is not to say that farmers and farmer groups became the sole focus of the project. It is imperative that value chain development keeps a holistic overview of the entire chain. However, the focus on farmers was undertaken with the knowledge that strengthening value chains for the benefit of farmers requires working with other market actors who also benefit. In Bangladesh, dairy farmers are often disconnected from information, services, and access to markets. This isolation affects farmers at all levels: economic, social, and political. CARE began, then, by setting out to help farmers organize into groups (or, in some cases, strengthen groups that the farmers may have already organized).

Value Chain Development

Late Lawson-Lartego, director of the economic development unit at CARE USA, who was responsible for developing the initial proposal to work in the dairy sector in Bangladesh, offers a view of CARE’s approach: “A value chain approach is really an exercise in seeing the entire economic and social market system. As we see it, developing, strengthening, or upgrading a value chain is the process of increasing the value that is created and ensuring that value is distributed as equitably as possible, with emphasis on benefits for participants that are the least well-off, and especially women.”1 For CARE, the value chain approach takes a systems perspective and is holistic; quite simply, CARE sees a chain in which each link is as important as any other and, therefore, one must identify the weakest links and their obstacles or constraints and devise strategies to strengthen them in partnership with other value chain actors. It looks holistically at various pieces—the adoption of updated agricultural methods, gender, access to services and inputs, and relationships between other value chain actors—and looks for leverage points that can be addressed to improve the functioning and competitiveness of the entire chain.

Value Chain Selection and Mapping

In 2011, CARE began planning to extend its value chain development experience to different agricultural value chains in six countries—Bangladesh, Ghana, India, Malawi, Mali, and Tanzania. CARE’s particular expertise in working with women led them to focus on improving the role and incomes of women in agriculture in these countries. One of the first things they needed to do was select which value chains they would focus on. CARE knew that this choice would determine to a great extent the ultimate impact of a project’s activities, as depending on growth potential and pro-poor impact, some value chains have a greater potential for return on investment than others.

Value Chain Intervention Strategies

Having identified a value chain with the potential to create and distribute value toward disadvantaged producers, CARE’s next step was to design and facilitate specific intervention strategies. Generally, interventions are enhancements in the value chain that overcome constraints and obstacles for creating more value and for distributing value more fairly toward poor producers. Value chain interventions that are meant to be self-sustaining require that a sufficient number of value chain actors find it in their self-interest to implement and maintain them. This means research and experimentation, as well as a willingness to make changes or otherwise accommodate actors to keep them motivated and engaged in the process.

Increasing Access to Inputs

For smallholder farmers in agricultural value chains, access to productivity enhancing inputs is essential in allowing them to improve the quality and quantity of their production and increase their incomes. Too often, however, poor farmers face multiple constraints—remoteness, lack of infrastructure, lack of information, and lack of market relationships. Women, who do the majority of work in dairying in Bangladesh, also face constraints of mobility and time. While strategies for value chain development organizations to increase access to inputs for smallholder farmers will vary depending on the nature of the input and the context of the farmers, many of the lessons learned by CARE in the dairy sector in Bangladesh are broadly applicable to other value chains in other countries. For the dairy farmers in Bangladesh, types of inputs fell into four broad categories: (1) feed and medicines; (2) animal health-care services; (3) artificial insemination services; and (4) financial services.

Increasing Access to Markets

Even if farmers and other value chain actors can increase their productivity and acquire the inputs they need, the creation and distribution of value will still be constrained if they have limited access to markets. It might seem that increasingly wealthy urban populations and increased demand for food would be a natural way that poor farmers in low-income countries could enhance their livelihoods, but there are often major challenges for smallholder farmers to connect to growing sources of demand. Processors of agricultural inputs, on the other hand, although already connected to growing and wealthier urban markets, often face constraints in securing inputs from farmers at the volumes and quality they need. Some of the challenges that processors face include efficiently sourcing enough inputs from farmers that are free of contaminants or spoilage, weak infrastructure (such as roads and electricity networks), and limited farmer knowledge (on productivity enhancing agricultural techniques, for example). Farmers also suffer from a lack of knowledge and face limited information about market prices and opportunities that would allow price signals to make markets more efficient. Farmers are also often disbursed throughout rural areas, which increases transaction costs with buyers (see Box 7.1).

Improving the Enabling Environment

An important factor in the ultimate competitiveness and development of a value chain is its business enabling environment. The business enabling environment is best defined as all of the government-influenced macro-level factors that affect enterprises throughout the value chain. Improving the business enabling environment can, therefore, benefit many organizations within it. Although there are many macro-level factors that may affect enterprises, they can be broken down into four categories, as described below.1