Draft_Statement_of_Objective.pdf

DRAFT STATEMENT OF OBJECTIVES

USAID/Bangladesh Feed the Future Bangladesh Agricultural Growth Activity

1. Purpose

The purpose of this activity is to support the Government of Bangladesh (GOB) food security objective through increasing the private sector’s (especially agribusinesses) capacity to effectively link Bangladeshi smallholder and commercial farmers to the domestic and international market with responsibly produced safe food. The result will be a more effective, responsible, and profitable private sector, which leads to increased productivity and income of farmers and improved food security of Bangladesh.

2. Scope

USAID/Bangladesh intends to award a five-year activity with the purpose of developing a vibrant, prosperous, resilient, and inclusive agriculture sector. While the Activity primarily will work within the Feed the Future (FTF) Zone of Influence, it is expected that interventions will have the potential to scale in other regions and create nationwide impact.

The Feed the Future Agricultural Growth Activity will be a two-pronged approach to private sector engagement: It will support private sector firms to commercialize and scale-up proven business models, while also providing assistance to develop, test and pilot new and innovative market-based solutions. New private sector partnerships, markets, and beneficiaries will be facilitated throughout the activity implementation at all levels of engagement.

This Statement of Objectives (SOO) reflects the continuation of USAID/Bangladesh activities toward private sector-led growth by building the capacity of high-value crop related agro-enterprises’ profitability and competitiveness.

3. Background

The private sector (especially agribusinesses) is improving in Bangladesh. Many firms have strengthened their capacity to grow their businesses while also reaching farmers, providing the necessary education to help farmers’ apply new technologies and management practices and also to improve the quality of their produce. However, most agribusinesses lack the ability to effectively manage their businesses while also increasing their engagements at the farmer level.

Agribusinesses need to work more closely with farmer-clients, providing information that will increase farmers’ productivity, quality of production, and profitability, and thus, enhance

Bangladesh’s food security.

Increasing incomes for farmers through increasing productivity requires addressing a range of market system constraints as well as strategies tailored to different types of farmers, production zones, and market channels.

Farmers, especially small and marginal farmers, face a constellation of production related challenges: availability and access to quality inputs; low productivity; limited diversification;

environmental, land, and soil constraints; increasing labor costs, and limited off-farm sources of income.

On the marketing side, challenges include a lack of knowledge of post-harvest handling (PHH), temporary storage, and value-added services. The market system is further constrained by asymmetrical power structures between value chain actors, fragmented supply chains, poor infrastructure, the high cost of borrowing, an inefficient post-harvest and processing sector, and a challenging enabling environment.

USAID seeks to provide agricultural development support through facilitation and market systems approaches to catalyze systemic changes through partnerships with the private sector and local actors in Bangladesh technical assistance, services, and appropriate interventions

(which could include sub-grants) through The Feed the Future Bangladesh Agricultural Growth

Activity.

The Feed the Future Bangladesh Agricultural Growth Activity builds primarily upon past

USAID investment in the Bangladesh Agricultural Value Chains activity. The Feed the Future

Bangladesh Agricultural Growth Activity will be closely linked with other Feed the Future

Bangladesh activities currently underway: Rice and Diversified Crops Activity (RDC), Livestock

Production for Improved Nutrition (LPIN), Bangladesh Nutrition Activity (BNA), ACI-IRRI-

Public Private Partnership (PPP), Cereal Systems Initiative for South Asia (CSISA)

Mechanization and Irrigation project, Meeting the Undernutrition Challenge (MUCH), Institutionalization of Food Safety in Bangladesh for Safer Food (IFS-B), Policy Research and

Strategy Support Program (PRSSP) for Food Security and Agricultural Development in

Bangladesh, Biotechnology Partnership (Potato and Eggplant), and Bangladesh Aquaculture and

Nutrition Activity (BANA).

The Feed the Future Bangladesh Agricultural Growth Activity interventions must demonstrate measurable outcomes and a more sustainable trajectory, recognizing that Bangladesh’s rural population will remain dependent on agriculture for the foreseeable future. USAID/Bangladesh’s

Global Food Security Strategy Results Framework appears below:

The theory of change for USAID/Bangladesh’s Country Plan under the Global Food Security

Strategy (GFSS) is: Inclusive and sustainable agriculture-led economic growth through a market systems approach, strengthened resilience among people and systems, and improved access and consumption of safe and diverse food for the population, especially women and children, will lead to sustainable reductions in hunger, malnutrition, and poverty in Bangladesh.

The activity is integrated with the Mission’s Country Development and Cooperation Strategy

(CDCS), especially as it contributes to the high-level result expressed in Development Objective

(DO) 2: Food Security Improved. The activity will align with the “Global Food Security

Strategy”: Strengthened inclusive agriculture systems that are productive and profitable (IR 1), Strengthened and expanded access to markets and trade (IR 2), Increased employment and entrepreneurship (IR 3), and Increased sustainable productivity, particularly through climate-smart approaches (IR 4). The new activity will support the Global Food Security Strategy

Bangladesh Country Plan primarily through Objective 1, “Inclusive and sustainable agriculture-lead economic growth through a market system approach.”

A major component of the Global Food Security Strategy- Bangladesh Country Plan is to promote livelihoods and economic growth so that targeted populations will have greater access to safe food (through purchase or other means), improve family nutrition, and help pull the lowest income people out of poverty.

4. Place of Performance http://www.usaid.gov/sites/default/files/documents/1861/Bangladesh_CDCS.pdf

The Activity must work within the Bangladesh Zone of Influence, which includes: in the southwest, 21 districts in the Barisal, Dhaka, and Khulna Divisions; and in the southeast, the districts of Cox’s Bazar and Bandarban, with a majority of interventions focused in the southwest. If Offeror sees opportunities in the districts of Cox’s Bazar and Bandarban, they may add activities in this area.

5. Performance Objectives

Overall Objective: A prosperous, resilient, and inclusive agriculture sector.

● Sub-Objective 1: Improve productivity, profitability, and quality of selected agricultural market systems, including crops listed below and relevant private sector entities

● Sub-Objective 2: Strengthen competitiveness, resilience, and inclusiveness of selected agricultural market systems

● Sub-Objective 3: Improve select policy/regulatory issues that impact selected agricultural market systems

● Cross-cutting Objective and Overall Market Systems Approach:

○ Achievement of all the above objectives should be conducted by using facilitation and market systems approaches, designed to be sustainable and led by the private sector actors. Using a facilitation and market systems approach aims to stimulate systemic change, without taking a direct role in the market system by the donor activity, involves working through market private sector participants and ensuring that they are drivers of the change process.

○ This activity should be inclusive, reaching women as well as men, smallholder farmers in addition to larger farmers, and populations otherwise not reached by the private sector.

○ Collaboration, learning, and adaptation to market systems development must be integrated into the approach.

Although the above represents the core of the Feed the Future Bangladesh Agricultural Growth

Activity’s Purpose and Objectives in line with Objective 1 of USAID/Bangladesh’s Global Food

Security Strategy Results Framework, interested Offerors are encouraged to consider how their proposed approaches can contribute to both Objective 2 and Objective 3 of the same Results

Framework.

Crop Description (note: crops are not listed in any type of priority order)

Potatoes (processed grade)

In mature stage of development; opportunities for innovation, technologies, processing; challenge includes linking smallholder farmers to private sector buyers/processors; contract farming opportunities

Vegetables In semi-mature stage of development; challenges include food safety due to increasing demand of domestic consumers, and linking smallholder farmers to private sector buyers/processors; special efforts should address supermarkets and their linkage/potential linkage to farmers; this may include future work with commercialization of biotech products such as Bt eggplant

Mango In middle stage of development; challenge in moving to the next stage, with improved quality and ability to export

Bananas In primary stage of development; challenges include new varieties, tissue culture, new production methods, post-harvest handling

Flowers In primary stage of development; challenge include planting materials, improved marketing

Natural fibers (jute, coconut coir)

In primary stage of development; challenge in quality and environmental impact of processing

Crops/sectors to add, exclude or ‘graduate’

USAID will consider additional crops, justified either in the proposal or proposed by the successful applicant in future years during activity implementation as presented in the work plans. Offeror may propose crops to be excluded, which will be considered given strong justification.

Also, the successful Offeror may propose crops to be ‘graduated’ during activity implementation.

Note: USAID will approve sectors (crops) with which the Offeror proposes to focus on or ‘graduate’ from the activity; additionally, USAID may direct Offeror to initiate work with a biotech crop if registration is achieved.

Crops that are not to be included

Field crops, including rice, pulses, oilseeds, maize (corn), wheat, groundnuts (peanuts)

6. Core Indicators

In line with the activity objective and the intermediate results listed above, it is suggested that

Offerors propose appropriate USAID standard F indicators as well as custom indicators to capture expected results. An illustrative list of indicators is given below. Offerors need to ensure that the selected indicators are aligned with the proposed technical approach and interventions.

The indicators are:

1) EG.3-2: Number of individuals participating in USG food security programs

2) EG.3-10,11,12: Yield of targeted agricultural commodities among program participants with USG assistance

3) EG.3.1-14: Value of new USG commitments and private sector investment leveraged by the USG to support food security and nutrition

4) EG.3.2-24: Number of individuals in the agriculture system who have applied improved management practices or technologies with USG assistance

5) EG.3.2-25: Number of hectares under improved management practices or technologies with USG assistance

6) EG.3.2-26: Value of annual sales of farms and firms receiving USG assistance

7) EG.3.2-27: Value of agriculture-related financing accessed as a result of USG assistance

7. Quality Assurance

The Contractor will be required to submit a Quality Assurance Plan tied to the performance requirements, and a Quality Assurance Surveillance Plan for USAID’s use that describes how the

Contractor’s performance will be measured.

8. Theory of Change and Approach

If Bangladesh’s agriculture-related private sector is able to manage, market, advance and grow their businesses and clientele, agricultural productivity and food security will increase. The

United States Government (USG) will implement this strategy using an inclusive market systems approach. This approach looks at systemic changes at the micro, meso, and macro levels that are necessary for effectively addressing underlying constraints. Transformation of the agriculture sector in Bangladesh will not only require increases in agricultural intensification and diversification, but also strengthening of the market system. This market system is complex and includes production systems, end markets, support services (e.g. financial, business development services, mechanization), value chain governance, the natural ecosystem, and the socio-cultural context.

9. Key Constraints

The activity will have to take into account several operating constraints, which include, but are not limited to:

● While production growth rates in Bangladesh agriculture in the past decade have increased, agriculture generally remains characterized by subsistence-level production with low input and low output systems. Choosing the right crop and increasing productivity in a way that helps smallholder farmers to both produce enough food to meet their own food needs and have surplus to sell in the end-market is still a challenge;

● Weak linkages with input and output markets, and inadequate post-harvest, storage, processing and packaging services translate into high losses and/or poor quality products that limit the competitiveness of value chains;

● Lack of access and availability of agricultural finance and agricultural insurance for boosting desired increase in productivity;

● Gender mainstreaming in implementation through identifying appropriate interventions remains a major challenge in activities following value chain and market system approach.

10. Grants under Contract

An innovation grant fund may be part of a successful implementation strategy in so much as it facilitates the easing of system bottlenecks and does not unduly distort markets and/or create dependencies.

11. Budget Estimate

$19M over five years is estimated for this activity.