**Agro-based Industries and Technology Development Project-Phase II**

**(ATDP-II)**

######## ANNUAL REPORT 2002

> **Prepared by**

![](media/image1.wmf)

**The Louis Berger Group, Inc.**

**1819 H Street, NW**

**Suite 900**

**Washington, DC 20006**

######### 

######### January 2003

###### Table of Contents

[Executive Summary 1](#executive-summary)

[II. Major Accomplishments Compared to Planned Activities in 2002
8](#major-accomplishments-compared-to-planned-activities-in-2002)

[A. INTERMEDIATE RESULT ONE: IMPROVED COMPETITIVENESS IN AGRIBUSINESS
8](#intermediate-result-one-improved-competitiveness-in-agribusiness)

[*GRAINS* 8](#grains)

[*FISHERIES* 8](#fisheries)

[*HORTICULTURE* 11](#horticulture)

[*POULTRY* 12](#poultry)

[*OTHER: DAIRY* 12](#other-dairy)

[B. IMMEDIATE RESULT TWO: IMPROVED AGRIBUSINESS SUPPORT INSTITUTIONS
14](#immediate-result-two-improved-agribusiness-support-institutions)

[C. INTERMEDIATE RESULT THREE: MORE MARKET ORIENTED POLICIES, LAWS,
REGULATIONS AND INDUSTRY STANDARDS
14](#intermediate-result-three-more-market-oriented-policies-laws-regulations-and-industry-standards)

[Leveraging Other Resources 16](#leveraging-other-resources)

#  

#  

# Executive Summary

Agro-based Industries and Technology Development Project-Phase II
(ATDP-II) is the second phase of a project that completed its initial
work in June 2000. Primary funding for the project is provided by the
United States Agency for International Development (USAID). Some local
funds are provided by the Government of Bangladesh (GOB). These funds
are derived from the interest generated from the Agriculture Credit
Fund, a \$21 million US credit facility initially created with USAID
funds.

The project is managed by The Louis Berger Group, Inc., a private US
business and economic development consulting company. Project partners
are Cargill Technical Services (a branch of Cargill Inc., the world's
largest private agribusiness company) and Land O\' Lakes, the largest
cooperative in the United States.

Developing competitiveness is the imperative that serves as the basis
for the project's goal of promoting the growth of privately owned
agribusiness that can succeed in an open, competitive market
environment. The project's objectives are to:

1.  Provide direct enterprise assistance to selected agribusinesses;

2.  Strengthen key financial and non-financial agribusiness support
    institutions;

3.  Achieve improvements in relevant policies, laws, regulations and
    standards through both government-level and industry-level
    interventions.

Economically the project is charged with:

-   Increasing domestic agribusiness sales by US \$154 million;

-   Increasing export sales by US \$59 million.

Functioning as a consulting firm, ATDP-II provides consultation and
training in areas such as pre-investment studies, writing business
plans, marketing, sales, financing, market research, troubleshooting and
management. Entrepreneurs pay for these services on a cost-sharing
basis. Business is conducted throughout the country with Agribusiness
Centers of Excellence in Dhaka, Khulna, Chittagong, Bogra and Sylhet.

ATDP-II set up a separate Seal of Quality (SOQ) office for the shrimp
industry. The SOQ Program is designed to assure buyers that products
marked with the seal meet the highest sanitary, environmental, human
rights, and labor standards. The ultimate objective of the SOQ program
is to improve the competitiveness of Bangladeshi shrimp in world
markets. Following intensive consensus-building within and technical
assistance to the industry, a strategy for privatizing the quality
assurance and extension system has been prepared and agreed upon by the
major donors and key players in the industry.

Extensive discussions have also been held with the Ministries of
Commerce, Fisheries and Livestock, Finance, the Export Promotion Board,
and others in government. A meeting with the major buyers, trade
associations and NGO's in the European Union and the United States has
been held. The Seal of Quality unit is working to unite the entire
shrimp industry to meet the global certification standards being put in
place by these buyers, trade associations and NGOs.

Actual achievements and results are shown in the tables below.

+------------+------+---------+----------------------+------+--------+
| **INCREASE |      |         |                      |      |        |
| IN         |      |         |                      |      |        |
| DOMESTIC   |      |         |                      |      |        |
| AND EXPORT |      |         |                      |      |        |
| SALES (US  |      |         |                      |      |        |
| \$)**      |      |         |                      |      |        |
|            |      |         |                      |      |        |
| **AND      |      |         |                      |      |        |
| NUMBER OF  |      |         |                      |      |        |
| JOBS IN    |      |         |                      |      |        |
| 2002**     |      |         |                      |      |        |
+------------+------+---------+----------------------+------+--------+
| **Sub      | **   |         | **Export Sales**     | *    |        |
| sector**   | Dome |         |                      | *No. |        |
|            | stic |         | ***(Million US\$)*** | of   |        |
|            | Sal  |         |                      | Jo   |        |
|            | es** |         |                      | bs** |        |
|            |      |         |                      |      |        |
|            | ***  |         |                      |      |        |
|            | (Mil |         |                      |      |        |
|            | lion |         |                      |      |        |
|            | US\$ |         |                      |      |        |
|            | )*** |         |                      |      |        |
+------------+------+---------+----------------------+------+--------+
|            | **   | **Ind   |                      | **   | **Indi |
|            | Dire | irect** |                      | Dire | rect** |
|            | ct** |         |                      | ct** |        |
+------------+------+---------+----------------------+------+--------+
| **F        | 2.04 | 7.89    | (24.58)              | 8    | 10,410 |
| isheries** |      |         |                      | ,271 |        |
+------------+------+---------+----------------------+------+--------+
| *          | 2    | 11.52   | \-                   | 686  | 231    |
| *Poultry** | 3.04 |         |                      |      |        |
+------------+------+---------+----------------------+------+--------+
| **Grains** | 1.28 | 1.25    | \-                   | 90   | 30     |
+------------+------+---------+----------------------+------+--------+
| **Hort     | 0.16 | 0.57    | 2.59                 | 227  | 530    |
| iculture** |      |         |                      |      |        |
+------------+------+---------+----------------------+------+--------+
| **L        | 0.01 | \-      | \-                   | 135  | \-     |
| ivestock** |      |         |                      |      |        |
+------------+------+---------+----------------------+------+--------+
| **         | *    | **      | **2.59**             | *    | **11   |
| Subtotal** | *26. | 21.23** |                      | *9,4 | ,201** |
|            | 53** |         |                      | 09** |        |
+------------+------+---------+----------------------+------+--------+
| **Total    | *    |         | **(21.99)**          | **   |        |
| Direct &   | *47. |         |                      | 20,6 |        |
| Indirect** | 76** |         |                      | 10** |        |
+------------+------+---------+----------------------+------+--------+

The total domestic sales growth created by the clients of ATDP-II in
2002 is US \$48 million, of which US \$27 million is directly from the
clients. The total growth in jobs created by ATDP-II clients in 2002 is
20,610, of which 9,409 come from the clients directly; the rest result
from the demand in the supply chain created by the clients.

The shrimp sector was expected to lead the growth in export sales.
However, exports were adversely affected by the sharp decline in the
world price of shrimp. Thus, although the volume of shrimp exports did
increase, their value decreased by US \$25 million compared to 2001.
Even with this decline, however, 16 out of 30 ATDP-II clients increased
their export sales by US \$26 million over 2001. The decline was also
far less than the 2001 decline of approximately US \$80 million.

Through charts, tables and analysis, this year-end report highlights the
work in each subsector. This work serves as the basis of our continued
growth in 2003.

I.  **Annual Report 2002 in Charts**

```{=html}
<!-- -->
```
A.  Sales and Jobs Growth

+--------+-----+------+--------------+----+-----+-------+-------+-----+
| **[In  |     |      |              |    |     |       |       |     |
| crease |     |      |              |    |     |       |       |     |
| in     |     |      |              |    |     |       |       |     |
| Do     |     |      |              |    |     |       |       |     |
| mestic |     |      |              |    |     |       |       |     |
| Sales  |     |      |              |    |     |       |       |     |
| and    |     |      |              |    |     |       |       |     |
| E      |     |      |              |    |     |       |       |     |
| xports |     |      |              |    |     |       |       |     |
| and    |     |      |              |    |     |       |       |     |
| In     |     |      |              |    |     |       |       |     |
| crease |     |      |              |    |     |       |       |     |
| in     |     |      |              |    |     |       |       |     |
| Number |     |      |              |    |     |       |       |     |
| of     |     |      |              |    |     |       |       |     |
| J      |     |      |              |    |     |       |       |     |
| obs]{. |     |      |              |    |     |       |       |     |
| smallc |     |      |              |    |     |       |       |     |
| aps}** |     |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| *      | **  |      |              |    |     | **T   |       |     |
| *Subse | Ach |      |              |    |     | arget |       |     |
| ctor** | iev |      |              |    |     | for   |       |     |
|        | eme |      |              |    |     | USAID |       |     |
|        | nts |      |              |    |     | 2     |       |     |
|        | in  |      |              |    |     | 002** |       |     |
|        | y   |      |              |    |     |       |       |     |
|        | ear |      |              |    |     |       |       |     |
|        | 200 |      |              |    |     |       |       |     |
|        | 2** |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
|        | **I |      |              |    |     | **    |       |     |
|        | ncr |      |              |    |     | Incre |       |     |
|        | eas |      |              |    |     | ase** |       |     |
|        | e/D |      |              |    |     |       |       |     |
|        | ecr |      |              |    |     |       |       |     |
|        | eas |      |              |    |     |       |       |     |
|        | e** |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
|        | *   |      | **Export     | *  |     | **Dom | **E   | **  |
|        | *Do |      | Sales        | *N |     | estic | xport | No. |
|        | mes |      | Million \$** | o. |     | Sales | Sales | of  |
|        | tic |      |              | of |     | Mln   | Mln   | Job |
|        | S   |      |              | Jo |     | \$**  | \$**  | s** |
|        | ale |      |              | bs |     |       |       |     |
|        | s** |      |              | ** |     |       |       |     |
|        |     |      |              |    |     |       |       |     |
|        | **M |      |              |    |     |       |       |     |
|        | ill |      |              |    |     |       |       |     |
|        | ion |      |              |    |     |       |       |     |
|        | \   |      |              |    |     |       |       |     |
|        | $** |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
|        | *   | **In | **Direct**   | ** | **I |       |       |     |
|        | *Di | dire |              | Di | ndi |       |       |     |
|        | rec | ct** |              | re | rec |       |       |     |
|        | t** |      |              | ct | t** |       |       |     |
|        |     |      |              | ** |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| *      | 2   | 7.89 | (24.58)      | 8  | 10, |       |       |     |
| *Fishe | .04 |      |              | ,2 | 410 |       |       |     |
| ries** |     |      |              | 71 |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| **Pou  | 23  | 1    | \-           | 6  | 231 |       |       |     |
| ltry** | .04 | 1.52 |              | 86 |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| **Gr   | 1   | 1.25 | \-           | 90 | 30  |       |       |     |
| ains** | .28 |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| **Ho   | 0   | 0.57 | 2.59         | 2  | 530 |       |       |     |
| rticul | .16 |      |              | 27 |     |       |       |     |
| ture** |     |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| **     | 0   | \-   | \-           | 1  | \-  |       |       |     |
| Other: | .01 |      |              | 35 |     |       |       |     |
| D      |     |      |              |    |     |       |       |     |
| airy** |     |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| **T    | 26  | 2    | (21.99)      | 9  | 11, | *     | **9** | *   |
| otal** | .53 | 1.23 |              | ,4 | 201 | *24** |       | *13 |
|        |     |      |              | 09 |     |       |       | ,00 |
|        |     |      |              |    |     |       |       | 0** |
+--------+-----+------+--------------+----+-----+-------+-------+-----+
| *      | **4 |      | *            | ** |     |       |       |     |
| *Grand | 7.7 |      | *(21.99)\*** | 20 |     |       |       |     |
| T      | 6** |      |              | ,6 |     |       |       |     |
| otal** |     |      |              | 10 |     |       |       |     |
|        |     |      |              | ** |     |       |       |     |
| ***(   |     |      |              |    |     |       |       |     |
| Di     |     |      |              |    |     |       |       |     |
| rect + |     |      |              |    |     |       |       |     |
| Indire |     |      |              |    |     |       |       |     |
| ct)*** |     |      |              |    |     |       |       |     |
+--------+-----+------+--------------+----+-----+-------+-------+-----+

The table shows that the total increase in domestic sales of ATDP-II
clients is approximately US \$48 million. This constitutes 199 percent
achievement over the target (US \$24 million). The increased number of
employees working for clients and their associates is approximately
20,610, about 159 percent achievement over the target (13,000).

\***Although the shrimp industry experienced an overall decline of US
\$25 million in sales in 2002, 16 of ATDP's 30 shrimp processing clients
increased their export sales by US \$26 million. The 2002 decline is
less than a third of the 2001 decline of US \$80 million, but it could
increase once more if the Bangladesh shrimp industry fails to prepare
itself to meet coming international codes in human rights, labor
practices, environmental management, hygiene, and food safety. The
global recession adds to this vulnerability.**

B.  **Number of Clients Adopting Improved Management Practices and
    Technologies**

The table above shows that 78 clients have adopted improved management
practices, a 205 percent achievement against the target.

C.  **Number of Clients Introduced to New Markets**

+-----------+-------------------------------------+--------------------+
| #         |                                     |                    |
| ### Numbe |                                     |                    |
| r of clie |                                     |                    |
| nts intro |                                     |                    |
| duced New |                                     |                    |
|  Markets  |                                     |                    |
+-----------+-------------------------------------+--------------------+
| **        | **Achievement in year 2002**        | **USAID 2002       |
| Subsector |                                     | Target**           |
| name**    |                                     |                    |
+-----------+-------------------------------------+--------------------+
|           | **New market**                      | **20**             |
+-----------+-------------------------------------+--------------------+
| Fisheries | 7                                   |                    |
+-----------+-------------------------------------+--------------------+
| Poultry   | 5                                   |                    |
+-----------+-------------------------------------+--------------------+
| Grains    | 6                                   |                    |
+-----------+-------------------------------------+--------------------+
| Hor       | 4                                   |                    |
| ticulture |                                     |                    |
+-----------+-------------------------------------+--------------------+
| Other:    | 1                                   |                    |
| Dairy     |                                     |                    |
+-----------+-------------------------------------+--------------------+
| **Total** | **23**                              |                    |
+-----------+-------------------------------------+--------------------+

The table above shows that 23 ATDP-II clients entered 118 new markets in
2002, a 115 percent achievement against the target.

D.  **Value of Financial Resources Raised by ATDP-II Clients from All
    Sources**

+-----------+-------------------------------------+--------------------+
| ####      |                                     |                    |
|  Value Of |                                     |                    |
|  Financia |                                     |                    |
| l Resourc |                                     |                    |
| es Raised |                                     |                    |
|  BY ATDP  |                                     |                    |
| ii Client |                                     |                    |
| s From Al |                                     |                    |
| l Sources |                                     |                    |
+-----------+-------------------------------------+--------------------+
| **        | **Achievement in year 2002**        | **USAID 2002       |
| Subsector |                                     | Target**           |
| name**    |                                     |                    |
|           |                                     | ***(million        |
|           |                                     | US\$)***           |
+-----------+-------------------------------------+--------------------+
|           | ***(million US\$)***                |                    |
+-----------+-------------------------------------+--------------------+
| Fisheries | 1.66                                | **2**              |
+-----------+-------------------------------------+--------------------+
| Poultry   | 0.41                                |                    |
+-----------+-------------------------------------+--------------------+
| Grains    | 0.08                                |                    |
+-----------+-------------------------------------+--------------------+
| Hor       | 0.03                                |                    |
| ticulture |                                     |                    |
+-----------+-------------------------------------+--------------------+
| Other:    | 0.01                                |                    |
| Dairy     |                                     |                    |
+-----------+-------------------------------------+--------------------+
| **Total** | **2.19**                            |                    |
+-----------+-------------------------------------+--------------------+

According to the data available, the value of financial resources raised
by ATDP II clients from all resources is US \$2.19 million, about 110
percent against the target of US \$2 million. Acquiring financial data
has been difficult, as clients are reluctant to disclose such sensitive
information.

E.  **Clients Contracted in 2002**

  ------------------------------------ ----------------------------------
  **Subsector**                        **Contracts signed in 2002**

  Fisheries                            10

  Poultry                              7

  Grains                               5

  Horticulture                         4

  Other: Dairy                         1

  Agribusiness Support Institutions    6

  **Total no of signed contracts**     **33**
  ------------------------------------ ----------------------------------

A total of 33 new clients signed contracts with ATDP-II in 2002.

F.  Technical Assistance Provided

  ------------------ ---------------- --------------- ------------- ------------- ----------------- -----------
  **Subsector**      **Focus Area of                                                                
                     TAs Provided in                                                                
                     2002**                                                                         

                     **Operations**   **Marketing**   **Finance**   **Human       **Association     **Total**
                                                                    Resources**   Strengthening**   

  **Finfish**        17               2               3             1             4                 **27**

  **SOQ**            5                2               1             2             3                 **13**

  **Poultry**        18               11              1             1             1                 **32**

  **Grains**         9                3               2             1             0                 **15**

  **Horticulture**   6                5               1             1             2                 **15**

  **Others-Dairy**   3                0               0             0             0                 **3**

  **Total**          **58**           **23**          **8**         **6**         **10**            **105**
  ------------------ ---------------- --------------- ------------- ------------- ----------------- -----------

The table above shows the areas in which technical assistance was
provided. A total of 105 TAs were provided.

G.  **[Training Provided]{.smallcaps}**

+-------------+----------+------------+-------+--------+-------------+
| **[T        |          |            |       |        |             |
| raining]{.s |          |            |       |        |             |
| mallcaps}** |          |            |       |        |             |
+-------------+----------+------------+-------+--------+-------------+
| **Training  | **[Plan  | **[A       | *     |        | **Total     |
| events**    | ned]{.un | ctual]{.un | *Part |        | Par         |
|             | derline} | derline}** | icipa |        | ticipants** |
|             | Courses  |            | nts** |        |             |
|             | p        | **No. of   |       |        |             |
|             | lanned** | Courses**  |       |        |             |
|             |          |            |       |        |             |
|             |          | **O        |       |        |             |
|             |          | rganized** |       |        |             |
+-------------+----------+------------+-------+--------+-------------+
|             |          |            | **M   | **Fe   |             |
|             |          |            | ale** | male** |             |
+-------------+----------+------------+-------+--------+-------------+
| Subsectors  | 41       | 34         | 1,575 | 127    | 1,702       |
|             |          |            |       |        |             |
| (           |          |            |       |        |             |
| In-country) |          |            |       |        |             |
+-------------+----------+------------+-------+--------+-------------+
| Overseas    | 10       | 13         | 44    | 2      | 46          |
+-------------+----------+------------+-------+--------+-------------+
| **Total**   | **51**   | **47**     | **1,  | *      | **1,748**   |
|             |          |            | 619** | *129** |             |
+-------------+----------+------------+-------+--------+-------------+

The table above shows that 47 of the 51 planned training courses were
implemented in 2002. This constitutes 92 percent achievement against the
target.

H.  **Cost Sharing**

  -----------------------------------------------------------------------------------------
  **Subsector**   **Number of **Total     **Cost                 **Amount      
                  formal      cost of TA  sharing %**            (\'000 Tk.)** 
                  TAs**       (\'000                                           
                              Tk.)**                                           
  --------------- ----------- ----------- ----------- ---------- ------------- ------------
                                          **ATDP-II   **Client   **ATDP-II**   **Client**
                                          %**         %**                      

  Finfish         **27**      **2,169**   **47%**     **53%**    **1,012**     **1,157**

  Poultry         **32**      **855**     **46%**     **54%**    **391**       **464**
  Subsector                                                                    

  Grains          **15**      **1,937**   **67%**     **33%**    **1,295**     **642**
  Subsector                                                                    

  Horticulture    **15**      **1,131**   **59%**     **41%**    **664**       **467**
  Subsector                                                                    

  Others: Dairy   **3**       **271**     **64%**     **36%**    **174**       **97**

  **Total**       **92**      **6,363**   **56%**     **44%**    **3,536**     **2,827**
  -----------------------------------------------------------------------------------------

ATDP-II introduced its cost sharing policy during the third quarter of
2001. All clients, no matter how small their sales revenues are, must
make a minimum cost share contribution. The percentage of cost sharing
is decided based on the client's annual sales revenue and ranges from
25% to 100%. Clients shared 44 percent of the total cost of technical
assistance in 2002.

I.  **Media Coverage of ATDP-II Activities**

  --------------------------------------- -------------------------------
  **Area of Work**                        **Number of Articles**

  SOQ                                     29

  Poultry                                 13

  Grains                                  06

  Horticulture                            17

  Fisheries                               09

  Agribusiness Center for Excellence      05

  Others                                  29

  **Total**                               **108**
  --------------------------------------- -------------------------------

In 2002, ATDP-II activities were widely covered by the media. Leading
Bengali and English language newspapers published 108 reports and
articles about the activities of ATDP-II.

J.  **Major** **Documents**

The following major documents were produced in 2002:

1.  Training Manual on Commercial Layer Farm Management, Pellet Feed
    Formulation, and Quality Control

2.  Manual on Computerized Business Management

3.  Business Planning and Management Manual

4.  Post Harvest Training Manual on Fruits and Vegetables

5.  Health Hazard Analysis and Critical Control Point Training Manual

6.  The Prospects and Problems for Agribusiness in Bangladesh: The
    ATDP-II Experience

7.  Shrimp Brochure for Euro Seafood Show

8.  Diseases and Bio-Security Management in Poultry Breeder Farms and
    Hatcheries

9.  Key Note Paper on Hatchery Management

10. An Assessment of the Poultry Broiler Demand in Dhaka

11. Hygienic Broiler Meat Management

12. Diseases and Bio-Security Management on a Commercial Poultry Farm

13. Feed Formulation/Nutrition in Poultry Feed Mills and Breeder Farms

14. Alternative Strategy Paper on Seal Of Quality Program in Bangla and
    English

15. Comprehensive Strategy Paper on SOQ -- Questions & Answers

16. SOQ Newsletters ( June and July) in Bangla and English

17. SOQ Alert Notices

18. Training Manual for Fruit Processing for WEAB

19. Paper on the Feasibility of Branding Tea in Bangladesh

# Major Accomplishments Compared to Planned Activities in 2002

## INTERMEDIATE RESULT ONE: IMPROVED COMPETITIVENESS IN AGRIBUSINESS

## 

### *GRAINS*

> ATDP-II focused on institution strengthening and competitiveness in
> the grain sector. The Wheat Flour Millers Association was strengthened
> through training and technical assistance on computerized financial
> management and quality control of their products. New products were
> developed and entrepreneurs were introduced to modern technologies and
> product diversification through overseas training. As a result of
> ATDP-II's efforts in the corn industry, AFS Enterprise, an
> agro-machinery importing agency, has become the Bangladesh agent of GT
> Dryer Corporation. GT Dryer products set the standard for portable
> grain dryers worldwide.
>
> **Activity Highlights**

1.  ATDP-II worked with Satata Bakery to develop new products to be
    distributed in a new market outlet in Dhaka, to improve the quality
    of their existing products, and to reduce unit production costs by
    using different ingredients.

2.  Twenty members representing 14 mills associated with the Narayanganj
    Atta Mayda Mill Malik Samity received computerized management
    training to improve the financial management of their
    businesses**.**

3.  Famous Bread and Confectionery, with assistance from ATDP-II,
    developed four new biscuits, fine-tuned two existing biscuit
    products, and entered into one new geographic market.

4.  ATDP-II assisted Ananna Foods in Barisal to establish a new bakery
    plant for bread, biscuits, and cakes, to develop four new products,
    and to enter into one new geographic market area.

5.  The subsector consultant assisted Doyel Agro Complex to finalize its
    business plan and submit a loan application to Rajshahi Krishi
    Unnayan Bank for financial assistance for its corn project. They
    have received Tk 16 million in credit from RAKUB for their contract
    farming and have selected and trained 700 farmers working 4,000
    acres of land.

### 

### *FISHERIES*

> **[Seal of Quality Program]{.underline}**
>
> In 2002, ATDP-II introduced a Seal of Quality program for the shrimp
> industry -- the first such program in Bangladesh. ATDP-II organized a
> broad coalition of farmers, suppliers, hatchery owners, processors,
> buyers, donors and NGOs, who are working together to save the shrimp
> industry.
>
> Codes of Conduct in the areas of human rights, fair labor practices,
> sound environmental management, and food safety are being devised by
> international buyers, industry associations and NGOs. As these codes
> come into effect, producers who fail to meet the standards will find
> it exceedingly difficult, if not impossible, to market their shrimp.
> Competition in the shrimp industry is also increasing, with new
> countries entering the market that are capable of producing high
> quality shrimp in larger volumes than Bangladesh.
>
> The SOQ program is design to insure that Bangladesh does not lose an
> industry that earned US \$250 million plus in sales in 2002 and
> provides over 600,000 jobs. The SOQ program is an effort to Build,
> Operate and Transfer (BOT) an independent program providing third
> party certification. A vital part of this effort is to build an
> all-industry association. The greatest constraint to the success of
> the program is the difficulty in getting the Ministry of Fisheries and
> the leadership of the Bangladesh Frozen Food Exporters Association to
> understand the changing global market and the need to achieve
> transparency through a fully independent certification program that
> has creditability with buyers and consumers.
>
> **Activity Highlights - SOQ**
>
> **Business services to clients:**

1.  With support from ATDP-II, two farmers, two suppliers and two
    processors attended the 2002 European Seafood Exposition in
    Brussels. This visit was part of an organizing effort to talk to
    buyers, to understand their needs, and to introduce the SOQ.

2.  Farmers in Bagerhat district established regional and district level
    cooperatives to advocate the need to establish a Seal of Quality for
    the shrimp industry.

3.  The Supplier Associations of Rupsha and Nutun Bazar in Khulna have
    been working with ATDP-II to strengthen their existing associations
    under the umbrella of the SOQ project.

4.  A seven-member team of shrimp farmers and suppliers working with the
    Seal of Quality program visited Thailand to learn how its shrimp
    industry is preparing to meet coming international certification
    standards.

> **Campaigning**

1.  Meetings to discuss SOQ activities and to link industry
    representatives and donors interested in the Bangladesh fisheries
    sector were held with DFID, the Dutch Embassy, DANIDA, FAO, and the
    World Bank.

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2.  Meetings were held with the Ministry of Commerce and the Ministry of
    Fisheries and Livestock at which it was decided that ATDP-II, in
    conjunction with industry associations, would submit a comprehensive
    SOQ proposal. This proposal was presented at a joint ministerial
    meeting in January 2003.

3.  In December 2002 a six-person team from Bangladesh met with the
    leading European shrimp importers, distributors, retailers and NGO's
    in the Netherlands, Belgium and the United Kingdom.

> **GIS Activities**
>
> Geographical mapping has begun with the collection of information on
> the geographical distribution of shrimp industry units such as depots,
> feed mills, ice plants and processing plants.
>
> **SOQ Publications**
>
> Three SOQ newsletters were published along with a supplement. 3,000
> Bangla copies were distributed.
>
> **[Fin Fish Program]{.underline}**
>
> In 2002, fin fish consultants worked to

-   diversify and improve existing business procedures

-   establish marketing networks

-   develop value added products

-   strengthen organizational procedures

-   provide better member services

-   improve management skills

-   provide technical assistance to improve the quality of edible fish

-   improve fish breeding techniques and develop better fish seed
    marketing

-   improve feed formulation

> **Activity Highlights -- Fin Fish**
>
> 1\. ATDP-II completed a market study with ABC Fisheries in Sylhet to
> improve their business practices and capture new markets. The client
> began vegetable cultivation on pond embankments to introduce
> appropriate new technologies. ATDP-II also provided training to 19
> members on pond preparation and water management.
>
> 2\. Technical support has been provided to the women's organization
> Nari Uddag Kendra to execute a business plan for their fish farming
> project. They have introduced commercial pen culture as an appropriate
> technology with technical support from ATDP-II. Fifty-eight
> participants received training on pen fish culture and management.
>
> 3\. A poly culture consultant was provided to Galda Chinri-o-Matsha
> Chasi Samabay Samity, Phulpur to do a market study as a first step in
> preparing a business plan. Training was provided to 37 members on
> sampling of fish, shrimp and live foods
>
> 4\. Training has been provided to 299 members of the Nazirertek
> Matshya Babosyaee Bahumukhi Samabay Samity in Cox's Bazar on
> "Organizational Strengthening and Member Services" and "Hygienic Dry
> Fish Production."
>
> 5\. 83 members of Motso Pona Baboshahi Kollayan Somoti were trained on
> over-wintering, collecting, packaging and transporting fish seeds and
> on breeding problems.

### *HORTICULTURE*

> In 2002, the horticulture sector concentrated on developing the
> clients' ability to produce quality products and establish domestic
> and export market linkages. A survey of the value chain of the
> horticulture industry gathered information that will be used to
> identify good future clients. The subsector consultant worked with
> four groups of potential clients: exporters, processors, aggregators
> and specialized cold storage operators.
>
> **Activity Highlights**

1.  Fifteen members of the Women Entrepreneurs Association of Bangladesh
    (WEAB) were trained on fruit and vegetable preservation. Members of
    the association developed 11 new products and entered into one new
    geographic market.

2.  Four members of the Bangladesh Fruit, Vegetable and Allied Food
    Products Exporters Association attended the Asia Fruit Congress 2002
    in Singapore, where five marketing linkages were established.

3.  Training programs on post-harvest handling were organized for 100
    fruit and vegetable aggregators from the Organization for the Poor
    Community Advancement.

4.  The survey on value chain and market research for seasonal fruits
    and vegetables of Bangladesh was completed.

5.  Business services were provided to Gharoa Food and Beverage Co. to
    develop a new orange drink. These services included:

-   Information on the source of raw materials, chemicals, and packaging
    materials;

-   Product formulation;

-   Product testing and rectification;

-   Commercial product launching; and

-   Supervising commercial production.

> 6\. Technical support for producing spice in paste form was provided
> to Janata Food Products of Sylhet, including information regarding:

-   Sources of chemicals;

-   Product formulation;

-   Trial production of chili paste; and

-   Trial production of turmeric paste.

### 

### *POULTRY*

> ATDP-II 's major focus was on providing training and technical
> assistance to poultry sector clients while continuing to identify
> potential clients, assess their needs and organize services to address
> those needs. Training programs and consultancies were developed to
> focus on improving the quality of day-old chicks and poultry feed.
> Assistance is being provided to poultry processors, feed manufacturing
> companies, a company manufacturing veterinary drugs, and a company
> exporting duck feathers.
>
> **Activity Highlights**

1.  The subsector consultant provided consultant services on a monthly
    basis to Euro Bangla on breeder management, poultry husbandry, bird
    health and litter management.

2.  Thirty-four pellet feed agents in the Chittagong area were trained
    on best practices, management, disease control and nutrition.

3.  Twenty selected members of the Chittagong Chamber of Commerce
    received training on improved breeder farm and hatchery management.

4.  Kazi Farms, VIP Shahadat Hatcheries, Northern Hatcheries and Usha
    Farms received individualized training on improved breeder farm and
    hatchery management.

5.  Continuous support has been provided to M.M Agha on pellet feed
    formulation and its marketing as a new product.

6.  A market study titled "An Assessment of the Poultry Broiler Demand
    in Dhaka" was completed.

7.  Anamica Feathers participated in the 4^th^ SARC trade show in
    Katmandu, Nepal. ATDP-II poultry sector consultant accompanied the
    client to help build relationships with prospective buyers. The
    client sold US \$4,500 worth of products at the show, selling out
    his entire display.

### 

### *OTHER: DAIRY* 

> Because the subsector analysis indicted that the project can not
> expect to have a major impact on commercial dairying in Bangladesh,
> our work in this sector is limited. ATDP-II has been working
> successfully with Sylhet Dairy Milk to introduce milk pasteurization
> and to improve the new products (mozzarella, cheddar and feta cheeses)
> it developed in 2001. Training was also conducted on Artificial
> Insemination techniques, using world-class semen to breed cattle that
> can produce higher amounts of milk under conditions found in
> Bangladesh.

***Sylhet Dairy- A Success Story***

In 1995, five local dairy owners, with only 250 cows among them,
invested Tk 400,000 to establish Sylhet Dairy to supply fresh milk to
the local market. Today, their dairy has three sales outlets and a
strong home delivery system. Sylhet Dairy Milk (SDM), a subsidiary
company formed in early 2002, has introduced packaged liquid milk to the
Sylhet market, diversified the parent company's products, and expanded
its technical capacity to improve product quality. The company owns 500
cows producing 1,200 liters of milk a day; eight contract farmers with
250 cattle supply an additional 600 to 800 liters of milk per day.

Sales were Tk 4,900,000 in 2001. Near the end of 2002, the company's
annual sales stood at Tk 5,575,463, with Tk 310,000 net profit per
annum. That success did not come easily, and may not have come at all
without assistance from ATDP-II to solve the many problems the company
faced in its efforts to expand.

Because they lacked a pasteurization plant, SDM started out selling raw
fresh milk. The milk that didn't sell immediately was often wasted. To
address this problem, SDM began producing various value added milk
products, including sweetmeats, ghee, butter, yoghurt and cottage
cheese. These new products sold well, but the demand for fresh milk was
also increasing, and the need for a small milk pasteurization plant
became even more pressing. SDM contacted ATDP-II in September 2001,
requesting support to obtain a pasteurization plant using their own
resources.

The ATDP-II team began searching for appropriate equipment in countries
around the world, including India, the UK, Kenya and the US. Milkpro, a
South African company, was favored because its equipment had a proven
track record in other developing countries with conditions similar to
those in Bangladesh. Convinced that, with some modifications, the
equipment would be suitable, a Letter of Credit was opened to import a
mini milk pasteurization plant from South Africa. ATDP-II played an
important role in identifying the required modifications and persuading
Milkpro to customize the equipment according to SDM's particular needs.

Installation of the equipment was completed in January 2003. .ATDP-II
provided a short-term dairy consultant to help install the
pasteurization plant and to train the staff in its use. ATDP-II also
helped SDM import a cream separator and equipment to test milk fat from
India, and to purchase a homogenizer and other small equipment and
chemicals from Dhaka markets.

While waiting for their pasteurization equipment, SDM began processing
milk using traditional methods. With technological support from ATDP-II,
SDM fabricated stainless steel vats to heat and cool sealed packets of
milk in water, had a cold storage unit built locally, and trained its
staff in traditional milk processing. "This will help create a market
for the increased milk production we anticipate when the new equipment
is installed," said Managing Partner Hilal Uddin Chowdhury.

The company is now selling about 1,200 liters of processed liquid milk a
day and has expanded its marketing network to Bianibazar and Golapganj
upazillas. It plans to expand into four more upazillas once the new
pasteurization plant is running at full capacity. Since it began to
market processed liquid milk, SDM has developed linkages with 30 more
shops in Sylhet. The number of shops is expected to increase to 200
soon.

At ADTP-II's suggestion, Sylhet Dairy also plans to import superior
quality semen to improve its cattle herd. This is the first such
initiative in the private sector in Bangladesh. ATDP II will train the
workers in the proper handling of imported frozen semen and the
artificial insemination process.

SDM decided to produce cheese after an informal market assessment
revealed that it would have a good demand in the Sylhet region, which
has a large number of local residents working abroad. These people visit
Bangladesh frequently, bringing different eating habits and new taste
preferences with them. Consequently, SDM requested help in manufacturing
feta, mozzarella and cheddar cheeses to further diversify their product
line and attract new customers. SDM soon started successfully marketing
mozzarella cheese in local markets. ATDP-II displayed the cheese at its
stall during American Trade Fair in Chittagong in September 2002, where
it was a big hit.

Before ATDP-II began its intervention with SDM in 2001, the company's
sales were Tk 415,000 per month. The sales rate rose rapidly once the
project's assistance began, to Tk 7,28,000 per month in November 2002.
Sylhet Dairy Milk is an impressive example of what the initiative of a
small group of business people can accomplish in a very short time, and
in an agriculture sector historically underdeveloped in Bangladesh.

## IMMEDIATE RESULT TWO: IMPROVED AGRIBUSINESS SUPPORT INSTITUTIONS

> ***POLICY, AGRIBUSINESS SUPPORT INSTITUTIONS & GOVERNMENT RELATIONS***
>
> In 2002, ATDP-II's created a Policy, Agribusiness Support Institutions
> (ASI) and Government Relations Unit. The major focus of this unit is
> to coordinate and drive ATDP-II's work in policy related matters and
> to provide assistance to institutions supporting agribusiness
> development in Bangladesh.
>
> Because this unit works with the subsector consultants, many of its
> activities have already been described in the subsector activity
> highlights. The unit has been working intensively with 15 agribusiness
> support institutions. Working with the respective subsector
> consultants, the unit has also provided support to clients in
> reviewing business plans, providing loan advice and introducing
> clients to banks.
>
> **Activity Highlights**

1.  ATDP-II provided consultancy services to the Chittagong Chamber of
    Commerce & Industries (CCCI) to establish an agribusiness support
    cell. A CCCI senior staff member works closely with ATDP-II, using
    suggestions and business services from ATDP-II to provide member
    services more efficiently.

2.  As a result of consulting services, The Organization for Poor
    Community Advancement (OPCA) established a new self-financed,
    independent office supported by a full time staff. The management
    has selected three individuals from the staff to develop as local
    experts who will provide hands-on training to members engaged in
    agricultural production. In 2002, OPCA received Tk 1.6 million from
    the Canada Fund for Local Initiative to set up four sales centers,
    including a transit storage facility for vegetables produced by
    their members.

3.  With technical assistance from ATDP-II, Trinomul Manobik Unnayan
    Sangstha accomplished the following as a part of its institutional
    capability strengthening.

-   Began to operate a self-financed, independent office;

-   Developed its own expertise to undertake need analyses of the
    agribusiness subsector, to prepare project papers and concept papers
    for donor financing, and to set up its own monitoring system.

## INTERMEDIATE RESULT THREE: MORE MARKET ORIENTED POLICIES, LAWS, REGULATIONS AND INDUSTRY STANDARDS

The Policy, Agriculture Support Institutions and Government Relations
unit has been working closely with the SOQ program, in particular by
trying to explain to the government the current realities in the
international marketplace and the pressing need to develop an
independent certification program.

At the request of the Secretary of Commerce, a feasibility paper on tea
branding was developed and provided to the Ministry. Work also continues
on an Agribusiness MBA program and an Agribusiness Center for Excellence
was started.

**Activity Highlights**

1.  **Agribusiness Human Resources Development Policy Initiative -** In
    2002, ATDP-II conducted a feasibility study to determine the
    viability of an Agribusiness MBA program. The findings of the
    feasibility study were positive and a preliminary survey indicated
    that there were universities in Bangladesh interested in and capable
    of running an MBA program. In 2002, three expatriate consultants
    along with ATDP-II consultants worked with prospective stakeholders,
    including over 30 agribusiness chief executive officers from various
    subsectors, to design a two-year course curriculum focused on
    strategic management, functional management and sector management.
    The team selected the American International University of
    Bangladesh (AIUB) as the domestic partner in the development of an
    Agribusiness MBA program. ATDP-II management is now reviewing the
    draft report.

2.  **Agribusiness Plan Competition** - A proposal for a sustainable and
    innovative agri-business plan competition is in process. The purpose
    of this competition is:

-   To create general awareness of the scope and potential of
    agribusiness in Bangladesh; and

-   To develop skills in preparing agribusiness and financial plans for
    successful project implementation.

3.  **Agribusiness Center for Excellence -** Recognizing the need for
    human resource development in agribusiness, ATDP-II launched the
    Center for Agribusiness Excellence in Dhaka in 2002. This center has
    started coordinating a series of lectures and workshops for CEOs and
    middle managers. The following activities have been completed under
    this program so far:

    -   A horticulture Adda was held with participants from the private
        sector, the government, WEAB, Hortex and USAID. A horticulture
        entrepreneur from India shared his view of the opportunities for
        and constraints on the horticulture sector in Bangladesh after
        he visited various sites.

    -   A seminar on aquaculture feeding, held in collaboration with the
        Asian Soybean Association in Bangladesh, was attended by over
        100 people.

    -   A CEO- Investor Roundtable on "New Food Technology" was hosted
        at the Sonaogaon Hotel with Dr. N. M. Riaz, a food extrusion
        technology expert from Texas A&M University, serving as the
        facilitator.

4.  **Policy Tours** -- ATDP-II organized two US study tours on
    agribusiness for the Secretary of the Ministry of Agriculture, six
    senior government officials, and the General Manager of Bangladesh
    Bank. Three civil servants were selected for long-term training and
    were accepted at universities in Australia and the United Kingdom.

# Leveraging Other Resources

ATDP-II's impact and results have been enhanced by contacts with other
donors, including DFID, the Dutch Development Agency. Swiss Contact, and
the European Commission. Through the Seal of Quality Program, ATDP-II
has regular contact with most of the donors working on technical and
environmental issues, including DFID, FAO, DANEDA, the European Union,
CBI (a Dutch NGO), the Network of Aquaculture Centres in Asia-Pacific,
the World Bank, Winrock, Carita, Save the Children (UK), Oxfam UK, the
Ethical Trades Initiative, JOBS, the Global Aquaculture Alliance and the
World Wildlife Fund.

ATDP-II has used Winrock volunteers to deliver technical assistance to
the grains and poultry sectors. The fisheries consultant has had idea
exchanges with the ICLARM project, especially in the area of fresh water
shrimp production. The grains consultant has held discussions with
CIMMYT (the International Maize and Wheat Improvement Center) on maize
drying.

Finally, in 2002, ATDP-II participated in the American Week Program in
Chittagong, a US Embassy sponsored event highlighting current US
development activities in Bangladesh. The event generated interest in
ATDP-II activities and attracted potential clients.