Cereal Systems Initiative for South Asia (CSISA) Phase III in Bangladesh, led by the International Maize and Wheat Improvement Center (CIMMYT) and implemented jointly with International Food Policy Research Institute (IFPRI) and International Rice Research Institute (IRRI), has finalized a series of joint venture agreements with Eco Social Development Organization (ESDO) and Thengamara Mohila Sabuj Sangha (TMSS), key microfinance institutions in northern Bangladesh. The partnerships will help ensure timely access to finance for local service providers in Thakurgaon and Dinajpur districts, and provide a much-needed ‘shot in the arm’ for adoption of scale-appropriate mechanization among smallholder farmers in the area.

A local service provider signs necessary documents for obtaining funds to buy an agricultural machine.

These recent agreements result from the groundwork already laid out by CSISA-Mechanization and Irrigation (CSISA-MI), a complementary investment to the larger, regional project that is funded by the U.S. Agency for International Development as part of Feed the Future – the U.S. Government’s initiative to address global hunger and food security. CSISA-MI’s overarching goal is to reach a tipping point – 15 percent of the total potential beneficiary base of local service providers and farmers in the Feed the Future zone – at which point a spontaneous private sector-led uptake is expected to take place.

CSISA-MI has been forging critical linkages in southern Bangladesh through, among others, public-private partnerships and by piloting self-sustaining business models. This approach follows an innovative private sector engagement model to create value chains that can and will continue to deploy equipment on a continued basis, ensuring long-term replication of the project’s scaling efforts.

Through joint venture agreements, CSISA-MI’s implementing partner iDE has so far established linkages with a number of established and emerging machinery manufacturers and importers, such as Advanced Chemical Industries, Rangpur Foundry Limited Group, and Janata Engineering. These enterprises and their service provider clients have invested their own funds towards the purchase, import, distribution, and marketing of equipment and use of machinery services – contributing an estimated value addition to the project of US$ 1.6 million.

A joint venture agreement is signed by Action in Development (AiD) and iDE.

As the spread of agricultural machines grows in Bangladesh, the need for access to affordable rural finance grows as well. This is an especially pertinent challenge for service providers, whose potential for increased earnings depends largely on their ability to purchase relevant agricultural machines. Therefore, CSISA Phase III is replicating the successful joint venture agreement model to forge partnerships with microfinance institutions that will help ensure that farmers in the North interested in purchasing relevant machinery can do so. Under this modality CSISA, through the microfinance institutions, has helped create a total credit availability of approximately US$ 90,000 for service providers to purchase machines.

CSISA Phase III has recently completed an orientation session for TMSS staff to iron-out the details of the joint venture agreement, to apprise them of technical issues commonly faced by service providers, and to familiarize them with technologies supported by the project. A similar exercise is planned for ESDO in the near future.

This article is authored by M. Shahidul Haque Khan, Communications Officer, CIMMYT-Bangladesh and Abir Ahmed Chowdhury, Officer-Communications, iDE.

Owing to the timely support that CSISA-Mechanization and Irrigation (CSISA-MI) provided to dealers, power tiller operated seeder (PTOS) sales in Bangladesh have sharply increased. Between October and December 2015, 245 service providers bought the PTOS, more than the last two years’ sales combined. These newly purchased seeders alone accounted for approximately 1,500 hectares of land covered by service providers during the last boro (dry) season – an indication that farmers and service providers alike see value in the technology. The project also tracked other enterprises that contributed to another 660 seeders being sold, which accounted for an additional land coverage of approximately 4,200 hectares.

To boost PTOS sales, CSISA-MI included agricultural machinery dealers in activities such as demonstrations, learning visits and potential buyers’ gatherings. Through such events, the dealers had an opportunity to identify potential customers and establish direct linkages with them.

According to Dinesh Chandra Majumder, a local machinery dealer, the increase in PTOS sales was foreseen. He explained, “CSISA-MI calculated the monetary benefit for farmers of using the PTOS and shared these calculations during their events and demonstrations.” Majumder used to be a mechanic in Tambolkhana Bazaar of Faridpur district. Last year, he participated in a CSISA-MI training for local mechanics and learned about the PTOS. With his interest piqued, Majumder participated in further demonstrations organized by CSISA-MI. Seeing the interest among farmers in the benefits of the technology, and among service providers to make money from it, he was convinced. He became the local dealer for RFL, an agricultural machinery importer and manufacturer.

Majumder said, “Last year alone I managed to sell 55 PTOS and 11 axial flow pumps. This brought me money and another dealership of ACI Motors Ltd. Thanks to CSISA-MI, PTOS dealers like me are more financially sound. And through us they are ensuring the machine’s benefits reach the farmers as well.”

Local farmer and service provider Mohammad Ali is one such beneficiary. He has 2 hectares of farmland and purchased a PTOS last year to complement the power tiller he already owned. With the PTOS he sowed wheat and jute on his land and also provided the machine as a service to his neighbors, covering an additional 10 hectares.

“I made enough profit with my new PTOS that I now plan to buy another power tiller and PTOS. Not only will I be able to provide support to other farmers, it will also make me rich,” said Ali. In addition to his own land, he expects to sow jute and onion on 14 hectares in the coming season as a service provider.

According to Ananda Kumer, Sub Assistant Agricultural Officer, Department of Agricultural Extension, Saltha, “Like many others in this area, Ali is a progressive farmer and a very active local service provider. By using modern agricultural technology he is able to improve his economic and social condition. CSISA-MI’s value chain activities are helping such farmers further develop their livelihoods.”

This article is authored by M. Shahidul Haque Khan, Communications Officer, CSISA-MI and Md. Salahuddin, Officer, Business Facilitation, iDE.