Making Markets Work for the Poor:

Market-Based Approaches to Poverty Alleviation as

Institutional Leveraging and Redistribution of Social Control

Kevin McKague

A dissertation submitted to the Faculty of Graduate Studies

in partial fulfillment of the requirements for the degree of

Doctor of Philosophy

Graduate Program in Business AdministrationSchulich School of Business

York UniversityToronto, Ontario, Canada

September 28, 2012

© Kevin McKague, 2012

1

Abstract

Interest in market-based approaches to reduce poverty has grown

substantially in the last decade. To date, however, explanations

in the management literature of how this can be achieved have

focused on viewing the poor as consumers at the base of the

economic pyramid, as microentrepreneurs in need of microfinance

loans, and as potential employees of local small and medium-sized

enterprises. Missing from the core of the management conversation

has been an adequate understanding of the poor as primary

producers and an explanation that situates them within their

broader market and institutional context. Drawing on an in-depth

study of market-based poverty alleviation initiatives for

smallholder farmers by a non-governmental organization in a least

developed economy, this dissertation offers the first theoretical

model to explain the process by which a non-state organization

can strategically enhance market practices in ways that reduce

poverty for poor producers and improve overall market

functioning. Findings suggest that meaningful improvements in

income can be explained by the enhancement of market practices

that redistribute social control toward poor producers in ways that

i

reduce market and government failures. In addition, data revealed

that the effectiveness of market development and poverty

alleviation strategies is moderated by the extent of institutional

leveraging to incentivize market changes in alignment with existing

norms and logics. The model offers an integrated explanation of

how market-based approaches can alleviate poverty and grow

inclusive markets for poor producers. Findings suggest a number

of business implications, including the importance of rebalancing

power relations and enhancing productivity throughout an entire

value chain. In addition, findings contribute to the literatures

on business and poverty alleviation and the literatures on

institutional change.

Epigraphs

“Market society has produced more income, wealth, goods, andservices than any other form of human social organization.”

Neil Fligstein, The Architecture of Markets

ii

“Markets can enable people to lift themselves out of poverty andtransform their lives, but in too many cases the concentration ofpower within markets prevents the benefits of growth from everreaching poor people. Redistributing power in markets at alllevels is essential to making growth work for poor people.”

Duncan Green, From Poverty to Power

“All it would take to eradicate poverty is a 1.3 percent shift inthe global income distribution.”

Aneel Karnani, Fighting Poverty Together

iii

Dedication

To my beloved wife

Rebecca Langstaff

I dedicate this dissertation

To whom much is owed

And to Isaac, Miriam and Bernadette

Their world

iv

Acknowledgements

Many people have made important contributions to bringing

this study and my PhD education to completion. I would first like

to thank my dissertation committee chair, Christine Oliver, for

her intellectual horsepower, mental energy and attention to

detail that she selflessly brought to this research project as

well as her unwavering support for my scholarly and personal

development. I would also like to thank my committee members:

Chris Bell for his enthusiasm and engagement in a promising line

of non-traditional research, and Dirk Matten for his collegial

guidance and feedback attuned to navigating the business of

scholarship in the field of global social issues in management.

Thanks to David Wheeler for creating innumerable

opportunities to pursue common interests together in social and

sustainable enterprise and development with leading researchers,

practitioners and collaborators from Africa, Asia, Latin America,

Europe and North America. Thanks also to Farouk Jiwa for his

skill in connecting people and opportunities and for a tireless

v

commitment to excellence and innovation in market-based

approaches to poverty alleviation. At CARE I would like to thank

Muhammad Siddiquee, Christian Pennotti, Toufique Ahmed, Nick

Southern, Christine Svarer, and Asif Ahmed for their intellectual

curiosity and openness to research collaboration.

The iterative feedback and ongoing support of Schulich

faculty and PhD colleagues helped this research to take shape as

did feedback and encouragement from Samer Abdelnour, Moriah

Meyskens, Lisa Jones-Christensen and Courtenay Sprague. My

dissertation would not have achieved its final form without the

design of the diagrams, editing and formatting by Rebecca

Langstaff as well as the copyediting assistance of Stephanie

Halldorson and Johanna Skelly. The art and rigor with which

Heather Krause applied her deep knowledge of statistical analysis

was invaluable in gleaning insights and answers from the

quantitative data. Financial assistance from the Social Sciences

and Humanities Research Council of Canada, the Ontario Government

and the Schulich School of Business is also gratefully

acknowledged.

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I would like to thank my parents for their inspiration,

openness, curiosity and love of the world which has made this

journey possible and enjoyable. And in Bangladesh, I am grateful

for the hundreds of farmers and interviewees from numerous

organizations throughout the dairy sector that generously gave

their time and insights to contribute to this study.

Member of the Jungle Khamar Dairy Producer Group and hisdaughter,

Jungle Khamar, Ullahpara, Sirajganj, Bangladesh

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Table of Contents

INTRODUCTION.........................................................1

Research Question and Knowledge Gap.................................2

The Poor as Producers...............................................3

LITERATURE REVIEW....................................................7

Business Approaches to Poverty Alleviation..........................7

Institutional Theory...............................................11

Institutional Change...............................................14

Varieties of Capitalism and Business Systems.......................16

Markets as Institutions............................................18

The Market in Economic Theory......................................19

Market Enhancement in Low-Income Economies.........................22

Views of Market Coordination.......................................24

Ethical Rationale for Poverty Alleviation..........................25

METHOD OF THEORY CONSTRUCTION.......................................28

Theory and Theorizing..............................................28

Qualitative Research Design........................................31Grounded Theory Method..................................................32Case Study..............................................................33Case Selection..........................................................33Single Case Design......................................................36

Empirical Setting..................................................36Bangladesh as a Least Developed Country.................................36Bangladeshi Dairy Sector................................................37Enhancing Market Practices Through a Market-Based Approach..............39

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Data Collection....................................................40Interviews..............................................................41Documents...............................................................42Observation.............................................................42Quantitative Data.......................................................44

Qualitative Data Analysis..........................................44Iteration...............................................................44Triangulation...........................................................45Coding..................................................................46Memoing.................................................................48Emergence of Constructs, Relationships and Theory.......................49Closure.................................................................49

Ethical Procedures.................................................49

Validity and Trustworthiness.......................................49

Quantitative Data Analysis.........................................52

FINDINGS............................................................54

How Might Success in Reducing Poverty for Poor Producers Be Explained?.........................................................54

Elements of Social Control.........................................57

Market Practice Enhancements.......................................59Collective Action.......................................................59Participation...........................................................60Capability Enhancement..................................................62Access to Inputs........................................................64Access to Markets.......................................................66Transaction Transparency................................................68

Market Structure Changes...........................................70Increased Productivity..................................................70Restructured Power......................................................71Reduced Information Asymmetries.........................................71Reduced Risk............................................................72

Reduction of Market and Government Failures........................73Market Failures.........................................................73Government Failures.....................................................75

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Institutional Leveraging...........................................77Provision of Evidence...................................................80Contextualization of Production Knowledge...............................82Legitimation of Transactions............................................84Expansion of Relationships..............................................87

Learning Strategies of Market Development and Institutionalization.89Needs Assessment........................................................89Performance Measurement.................................................90Continuous Impact Evaluation............................................90

DISCUSSION..........................................................92

Management Implications............................................92

Business Motivations for Inclusion of the Poor in Value Chains.....94

Potential Drawbacks to Market Enhancement..........................95

Theoretical Implications for Market-Based Approaches to Poverty Alleviation........................................................96

Theoretical Implications for Institutional and Market Perspectives105

Limitations.......................................................111

Future Research...................................................112

CONCLUSION.........................................................115

REFERENCES.........................................................117

APPENDICES.........................................................139

APPENDIX A: Bangladesh Dairy Value Chain..........................140

APPENDIX B: Geographic Study Area.................................141

APPENDIX C: Formal Sector Milk Processors.........................143

APPENDIX D: Qualitative Data Sources..............................145

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APPENDIX E: Quantitative Data Sources.............................148

APPENDIX F: Baseline Survey.......................................192

APPENDIX G: Impact Indicators.....................................196

APPENDIX H: Milk Income and Gender................................197

APPENDIX I: Group Savings.........................................198

APPENDIX J: Milk Income and Knowledge.............................199

APPENDIX K: Milk Income and Access To Inputs......................200

APPENDIX L: Milk Income and Access To Markets.....................201

APPENDIX M: Evidence of Institutional Leveraging..................202

APPENDIX N: Performance Measurement...............................204

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INTRODUCTION

Markets and organizations are social innovations that have

created unprecedented wealth where the practices underpinning

them have taken root. As Fligstein (2001: 3) has noted, “Market

society has produced more income, wealth, goods, and services

than any other form of human social organization.” However, the

benefits of markets and wealth creation are not evenly

distributed, many have been left out, and calls for more

inclusive markets and business models are on the rise (Bruton,

2010; Pearce, 2005; Porter & Kramer, 2011; World Economic Forum,

2009). The typical path of market development has been for

functional nation-states to combine market forces with effective

government policy to coordinate the creation and distribution of

value (Hall, 2010). But what of contexts where markets fail and

states are unable to coordinate inclusive market development,

such as in rural areas of least developed economies where poverty

is most acute? In his book The Bottom Billion, Paul Collier (2007)

separates the world’s poor into those who are fortunate enough to

live in countries that respond to traditional approaches to

market development and the reduction of poverty and those who

1

live in countries where such approaches have failed. Despite

enormous investment to reduce global poverty in recent decades,

the number of people living on under $2 per day has increased in

every region of the world except China in the last 30 years, and

currently stands at 2.6 billion or 38 percent of the world’s

population (Karnani, 2011). Poverty severely constrains people’s

ability to afford basic human needs, participate effectively in

society and pursue a life that they value (Sen, 1999). Seventy

percent of the world’s poor live in rural areas where subsistence

methods of agricultural production and exchange persist, with

limited connections to larger national or global economies

despite the increasing price of, and demand for, food (Chen,

Ravallion & Sangraula, 2007; IFAD, 2011). Smallholder farming and

other primary production activities are by far the most prevalent

sources of income for working-age individuals earning under $2

per day, as illustrated in Figure 1.

Figure 1: Primary Occupation of the World’s Poor

2

Source: Adapted from the Bill and Melinda Gates Foundation, Financial Services for the Poor Strategy Overview, November 2010, based on data from the United Nations andthe World Bank.

Research Question and Knowledge Gap

To allow the power of markets to create wealth and reduce

poverty in bottom billion economies, market practices need to be

introduced and institutionalized, even in the absence of

government willingness or ability to do so. Surprisingly, given

studies on poor producers in development studies and

anthropology, little attention in the management literature has

been paid to how non-state organizations contribute to market

development and poverty alleviation in least developed country

contexts among poor producers. Weak states, characterized by

3

institutional voids, lack of support for market institutions,

market failures and widespread poverty are characteristic of

least-developed countries where poverty alleviation is most

challenging (Mair & Marti, 2009; Khanna & Palepu, 2005). Thus, my

research question: How is an organization able to enhance market

practices to make markets work for poor primary producers in

least developed countries?

The Poor as Producers

By poor producers, I mean individuals with incomes under $2

per day engaged in the “primary sector” (Fisher, 1939) of the

economy who make direct use of natural resources including land

for agricultural production of livestock and crops. National

economies can be divided into sectors roughly corresponding to

their relative distance from raw materials, with the primary

sector directly engaged in farming, fishing, herding and other

primary production activities, the secondary sector comprised of

manufacturing, processing and the creation of finished goods and

the tertiary sector consisting of services. Very few individuals

are categorized as primary producers in developed economies

4

whereas in least developed countries primary producers often

account for the majority of the population. Poor primary

producers include the 610 million smallholder farmers and 80

million fishermen and pastoralists who collectively comprise the

largest segment of the working age population earning under $2

per day (see Figure 1). Importantly, I believe that a close

empirical analysis of the poor as producers might provide answers

to some of the challenging problems of strategic implementation

that business, non-governmental organizations (NGOs) and other

organizations encounter in attempting to succeed by doing

business with the poor in low income economies.

Although a handful of studies on poor producers from a

market-based perspective are beginning to emerge, few have

studied the phenomena in depth from a theoretical perspective.

Ramachandran, Pant and Pani (2012: 50) produced a typology of

three substantive outcomes – access to market, access to

organization and access to ecosystem – which they found important

for the relationship between low-income handloom artisans and a

major retailing organization in India, but called for more

research on “how the value generated from such economic exchanges

5

is shared.” London, Anupindi and Sheth (2010) identified a model

of constraints to value creation and capture faced by poor

producers and the ventures that aim to serve them. The stream of

literature on subsistence marketplaces has also made important

contributions to understanding “individual, communal, and

cultural factors that influence consumers and entrepreneurs who

live at or near subsistence,” adding insights on consumer

literacy, entrepreneurial literacy and buyer and seller behavior

at the micro-level of economic transactions (Viswanathan & Rosa,

2010: 535). Karnani (2011), in addition to his primary focus on

the provision of employment to reduce poverty, has recognized the

importance of making markets more efficient for poor producers.

Peredo and Chrisman (2006) identify determinants, characteristics

and consequences of community-based enterprise. However, none of

these studies offer a broader explanatory model of the mechanisms

by which market interventions by an organization lead to the

reduction of poverty for poor producers.

Outside the management discipline, the literature on rural

development has described market-oriented poverty alleviation

initiatives by NGOs and other organizations through an inclusive

6

or pro-poor value chain approach (Altenburg, 2007; Humphrey &

Navas-Alemán, 2010; Munir, Ansari & Gregg, 2010). This value

chain approach provides guidance for “understanding how poor

people in rural areas of developing countries can engage, or

improve their terms of engagement with, domestic, regional or

international trade” (Mitchell, Keane & Coles, 2009: iv). This

approach has its roots in Porter’s (1985) emphasis on the

importance of understanding how value is created and distributed

at each step of a product’s transformation and exchange both

inside and outside a firm. A related stream of research on fair

trade has similarly focused on equitable social and economic

relations between developed country consumers and developing

country producers (Moore, 2004; Reynolds, 2000). A value chain

approach focusing on improving market opportunities and practices

for poor producers has been increasingly adopted by multilateral

organizations such as FAO (2012), ILO (Herr & Muzira, 2009) and

UNIDO (2011), major donors such as the Bill and Melinda Gates

Foundation, USAID (2012), DFID (2008), and IDRC (Kaplinsky &

Morris, 2001), and companies such as Unilever (Clay, 2005),

SABMiller (2011) and SC Johnson. The structure and enhancement of

7

a value chain for agricultural products, for example, determine

how value is created and distributed at each point in the chain.

As a result of its practical orientation, much of the literature

on the inclusive and pro-poor value chain approach to poverty

alleviation focuses less on overarching theory and more on

guidance for field workers (Kaplinsky & Morris, 2001; McVay &

Snelgrove, 2008), typologies of strategies for value chain

upgrading (Kaplinsky & Morris, 2001; Mitchell, Keane & Coles,

2009), or evaluations of existing value chain interventions

(Mitchell & Coles, 2011) and remains a field where further theory

development would be welcomed (Altenburg, 2007). My contribution

in this direction is a theoretical explanation of market

enhancement with particular attention to the uneven power

relationships embedded in value chains and the role of a focal

organization as a catalyst for increasing the power of poor

producers. I also seek to add new insight to our understanding of

institutional change by examining how institutional change may be

effected in a resource-constrained environment in ways not

explained by the current institutional literature (DiMaggio and

Powell, 1991; Greenwood, Oliver, Sahlin & Suddaby, 2008; Scott,

8

2008). In particular, I am interested in shining light on one of

the central questions of institutional change, namely the

“paradox of embedded agency” (Battilana, Leca and Boxenbaum,

2009) which asks how it is possible for actors to change the

institutional contexts within which they are constrained and

conditioned (Seo & Creed, 2002).

My work seeks to address these gaps in our understanding of

how market initiatives – at the level of execution – lead to

durable increases in income among poor producers in least

developed country contexts. I examine this gap through the in-

depth study of an NGO, CARE Bangladesh, which has succeeded in

improving the incomes of subsistence-level farmers in the

Bangladeshi dairy sector. CARE has been working in Bangladesh

since 1955 on improving the lives of the extreme poor and

marginalized and currently serves over one million beneficiaries

in the country annually. I chose an NGO as a suitable and

appropriate organization for this study because the innovations

of market-based NGOs have been successfully adopted by for-profit

companies as well as hybrid social purpose businesses and other

NGOs (Chesbrough, Ahern, Finn & Guerraz, 2006; Mendoza and

9

Thelen, 2008; Teegen, Doh, & Vachani, 2004). To anticipate the

results, I found that poverty alleviation for poor producers can

be explained by the redistribution of social control towards the poor in

ways that overcome market and government failures. I argue that

the effectiveness of enhanced market practices is moderated by

the extent of institutional leveraging which positions changes in

market practices relative to existing norms and institutions.

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LITERATURE REVIEW

In this section I review the literatures relevant to the

interpretation of my results. Reviewed are the literatures on

business and poverty alleviation, institutional theory and

markets as social and economic phenomena. This section concludes

with a discussion of philosophical views of the role of market

coordination in society and the ethical rationale for poverty

alleviation.

Business Approaches to Poverty Alleviation

In the last ten years, the question of how organizations can

contribute to poverty reduction through market-based approaches

has been increasingly explored by management practitioners and

researchers. As a result, diverse streams of enquiry have emerged

exploring different aspects of the phenomena at different levels

of analysis with different focal organizations. This work has

included studies of subsistence marketplaces (Rosa & Viswanathan,

2007; Sridharan & Viswanathan, 2008; Viswanathan & Rosa, 2010),

cross-sector partnerships for poverty alleviation (Rivera-Santos,

11

Rufin & Kolk, 2012; Dahan et al., 2010; London & Anupindi, 2011;

Oetzel & Doh, 2009; Brugman & Prahalad, 2007; Perez-Aleman &

Sandilands, 2008; Kolk, van Tulder & Kostwinder, 2008),

community-based enterprise (Peredo & Chrisman, 2006), social

entrepreneurship focused on poverty alleviation (Seelos & Mair,

2005; Robinson, Mair & Hockerts, 2009), social business (Yunus,

2007; Humberg, 2011), sustainable local enterprise networks

(Wheeler, et al., 2005), inclusive markets (Mendoza & Thelen,

2008) and inclusive business models (Gradl, C. & Knobloch, 2010;

Gradl, Krämer & Amadigi, 2010; Jackman and Breeze, 2010). In

addition to, and substantially overlapping with, these streams of

enquiry, three main approaches have been the most prominent in

the current management conversation on business and poverty

alleviation: the base-of-the-pyramid (BoP) approach, the

microfinance approach and the small and medium sized enterprise

(SME) employment approach.

The base (or bottom) of the pyramid approach popularized the

conversation on business and development into the management

literature by offering a business case for multinationals to view

the poor as an untapped and potentially profitable market

12

opportunity (Prahalad & Hart, 2002; Prahalad, 2005). The core

logic of the base-of-the-pyramid approach is that poverty can be

reduced by companies profitably selling goods and services to the

poor in ways that are more affordable and accessible than

alternative market offerings. Subsequent research has been

conducted on the capabilities, partnerships and business

processes needed to establish new ventures in low-income markets

(Hart, 2010; London & Hart, 2004, 2010). However, recent work to

understand the causes of a number of failed ventures at the base-

of-the-pyramid suggests that more explicit research is needed to

understand the broader nature of market creation and the

relationship between market practices and poverty alleviation

(Simanis, 2010; Simanis & Hart, 2009). Calls have been made from

within this research stream for greater attention to viewing the

poor as producers given the existing focus on the poor as

consumers (London, Anupindi & Sheth, 2010; Ramachandran, Pant &

Pani, 2012). The base-of-the-pyramid literature has also been

criticized for its underlying libertarian ideology and utopian

optimism that large multinationals should play the leading role

in global poverty reduction (Karnani, 2011). Claims that it

13

romanticizes the poor (Banerjee and Duflo, 2007; Karnani, 2009),

marketizes social welfare at the expense of governments and civil

society organizations (Kamal, Ansari & Gregg, 2010) and generates

non-essential consumer needs rather than genuinely serving

essential needs (Davidson, 2009) have led to concerns that if

unchecked, base-of-the-pyramid strategies may be exploitative and

harmful to the poor (Karnani, 2007). These concerns have led to

searches for alternative approaches.

Microfinance has also become a prominent feature of the

management conversation about poverty alleviation and one of the

most readily cited examples of a market-based approach to

development. Microfinance is now undertaken by numerous NGOs and

commercial financial organizations world-wide, serving over 150

million clients (Roodman, 2012). The logic of microfinance

proposes that the provision of small loans to poor individuals

overcomes capital constraints and allows people to start or grow

a microenterprise business that will allow them to work their way

out of poverty (Yunus, 2003; Robinson, 2001). This logic is

focused on reducing particular market failures – missing credit

markets, the lack of information that lenders may possess about

14

borrowers, the high transaction costs of small loans – and

addressing these with a group-lending approach where loans are

guaranteed by social capital and group joint liability rather

than physical collateral. However, as the microfinance industry

has matured and more rigorous randomized controlled studies have

attempted to concretely establish a link between microfinance

provision and poverty reduction, a more mixed picture has begun

to emerge (Banerjee and Duflo, 2011). Most microfinance loans are

taken for purposes of consumption, rather than growing a

business, and most microenterprise businesses run by the poor

lack the differentiation, economies of scale and capacity to

provide a reliable route above the poverty line (Bateman, 2011).

If microfinance is based on a model of entrepreneurship, it may

be limited in its ability to create scale and reduce poverty for

poor producers with low entrepreneurial capacity, market

information or ability to assume significant additional risks.

The third prominent explanation in the management literature

of how organizations can reduce poverty through a market-based

approach focuses on reducing poverty through employment by local

SMEs (Karnani, 2011). The logic of this approach suggests that

15

poverty can best be reduced by SMEs if they can create employment

opportunities for low-skilled, low-income workers, especially in

least developed countries, because local SMEs are more labor-

intensive, less capital-intensive, more flexible and more

geographically dispersed within a country than large businesses

(Karnani, 2011). At the same time, local SMEs are more productive

and competitive than microenterprises. Aneel Karnani has written

extensively on this approach and has frequently emphasized the

importance of viewing the poor as producers, primarily, but not

exclusively, in order to contrast reducing poverty through SME

employment with other approaches focused on selling goods to the

poor. Karnani most commonly equates being a producer with being a

potential employee, arguing that productive employment is the

solution to poverty reduction. And the best way to create

employment opportunities for the poor, he argues, is through

local SMEs. However, this approach tends to assume that

governments will take up their responsibilities to create a

business-enabling environment for SMEs and work to counteract

market failures and enforce necessary regulations. Unfortunately,

this may be unlikely in many least developed countries where

16

poverty is most severe and where the majority of people living on

under $2 per day are likely to be smallholder farmers.

Taken together, the dominant managerial approaches to

poverty reduction in least- developed countries – the base-of-

the-pyramid approach, microfinance, and the SME employment

approach – primarily emphasize the role of the poor as consumers,

microentrepreneurs, and employees, respectively. Notwithstanding

considerable research in related work on development among the

poor (Bebbington, 1999; Chambers, 1983; Nussbaum, 2011; Scoones,

1998), what is missing from the center of the management

conversation is a model that explains how poverty can be

alleviated for the poor as producers by an organization adopting

a comprehensive market-based approach.

Institutional Theory

Institutional theory has been immensely valuable in

conceptualizing markets and market practices as institutions. In

the context of a least developed country where patterns of

production and exchange are often shaped by social forces such as

tradition, informal rules, and social expectations as well as

17

economic incentives, institutional theory offers helpful insights

into the process of market creation and enhancement.

The origins of new institutional theory in management

studies date from the 1970s. By the mid-1970s, by far the

dominant account of social and organizational behavior in the

management literature was one where rational actors in full

control of their actions strategically and freely chose the most

efficient means to meet instrumental organizational objectives

(Scott, 2008). Then, in the late 1970s and early 1980s, Meyer and

Rowan (1977), Zucker (1977), DiMaggio and Powell (1983) and Meyer

and Scott (1983) successfully introduced an institutional

approach into management theory as a challenge to the dominant

rational agency view.

Institutional theory recognizes the various layers of

meaning and logics that individuals and organizations are

embedded in and draw upon and which shape interests, motivations,

strategies, identities and assumptions about markets and market

practices (Scott, 2008). When market practices and market changes

are seen through an institutional lens, the way in which they

derive their legitimacy is highlighted (Barley & Tolbert 1997;

18

Jepperson & Meyer 1991). Institutions in this sense are not types

of organizations (schools, businesses, hospitals) nor broad

social categories (families, religion, the state) but are the

“more-or-less taken-for-granted repetitive social behavior that

is underpinned by normative systems and cognitive understandings

that give meaning to social exchange and thus enable self-

reproducing social order” (Greenwood, Oliver, Sahlin & Suddaby,

2008: 5). Metaphors and images of institutions include logics,

rule systems, social structures, frameworks, orders, patterns and

templates for action. An institution denotes the logics or rule

systems themselves and institutionalization is the process by

which the logics or rules become established and more or less

taken-for-granted (Jepperson, 1991).

From an institutional perspective, behaviors and practices

have both practical and symbolic content. Activities such as

group meetings, certifications, branding, financial accounts, and

contracts involve both real social relationships, through which

instrumental economic ends are accomplished, as well as a

dimension of symbolism and meaning beyond their instrumental

value (Friedland and Alford, 1991). Relationships and symbolic

19

meanings are mutually constituted as illustrated in Fligstein’s

(2001: 48) definition of institutions as the “rules and shared

meanings… that define social relationships.”

Scott’s (2008: 48) integration of the institutional

literature in organization studies produced his often cited

distinction that institutions are comprised of “regulative,

normative and cultural-cognitive elements that, together with

associated activities and resources, provide stability and

meaning to social life.” Institutions can exist at multiple

levels (individual, group, organization, institutional field,

market, society) and their scope can be narrow (covering the

activities of an individual or group) or broad (covering large

portions of a national or global population) (Barley, 2008;

Greenwood, Oliver, Sahlin & Suddaby, 2008). Within institutional

approaches to explaining behavior, various accounts give

differing emphases on different levels of analyses (from micro to

macro), the importance of regulative, normative and cultural-

cognitive elements of institutions, and the accommodation of

individual agency (DiMaggio & Powell, 1991; Scott, 2008).

20

Institutional practices and behaviors can also vary in their

level of institutionalization. The more an activity is

institutionalized, the greater it takes on rule-like status

(Meyer & Rowan, 1977), the more objective and exterior it is seen

to be (Zucker, 1977), the greater the depth and spread of its

acceptance across space and over time (Barley & Tolbert, 1997)

with the greater chance it will be perpetuated, reproduced and

sustained through taken-for-granted activities whose social

origin is ignored (Jepperson, 1991). Taken-for-granted

institutions are perceived to have no appropriate alternatives

(DiMaggio & Powell, 1991) and have widely shared rationales or

explanations that account for them as functional fixtures of

their environment (Jepperson, 1991). Although in some accounts

institutions have been portrayed as totalizing and monolithic,

more often they are viewed as multiple, fragmented and

overlapping (Friedland and Alford, 1991). These multiple

institutional logics are available for individuals and

organizations to draw upon as bases for action (Friedland &

Alford 1991; Thornton & Ocasio, 2008). Institutions arise, are

maintained, and are challenged through ongoing human interaction

21

(Lawrence & Suddaby, 2006) and are in this sense “collective

enterprises” jointly produced and reproduced through ongoing

action and interaction (Barley, 2008: 496).

In summary, an institutional view of social and economic

phenomena extends beyond reductionist assumptions of rational

actor models and offers a purportedly more nuanced treatment of

individuals, markets and organizations as more than utility-

satisfying production machines (Lawrence, Suddaby & Leca, 2009).

An institutional approach examines how interests, identities and

choices are shaped by social forces in the environment such as

meanings, culture, social rules and beliefs. An institutional

approach highlights the interdependent and mutually constituting

nature of social contexts and individual action (Barley &

Tolbert, 1997; Giddens, 1984).

Within institutional theory are several streams of

literature with potential relevance to market enhancement for

poor producers in a least developed country. These literature

streams on institutional change, varieties of capitalism and

markets as institutions are considered next.

22

Institutional Change

Meyer (2008) argues that the institutional perspective is

much better positioned than other organizational theories to

capture and understand societal changes, such as those associated

with the introduction of new market practices. Greenwood and

Hinings’ (1996) framework for understanding institutional change

considers the processes by which organizations adopt or discard

templates for organizing, but does not focus on how actors change

their institutional context. Similarly, in their study of

professional associations, Greenwood, Suddaby and Hinings (2002)

develop a model of institutional change that focuses on the

stages of change, but not on the work of the actors to change

them. In Barley and Tolbert’s (1997) recursive model of change

based on Giddens (1984) concept of structuration, the authors

acknowledge that actors make conscious choices within the options

offered by their institutional context, but do not elaborate on

how actors identify and carry out the changes they pursue. Seo

and Creed’s (2002) dialectical perspective focuses on how

contradictions within institutional fields open up “reflective

23

shifts” in actor consciousness to motivate change processes, but

does not specify how actors go about achieving them.

Lawrence and Suddaby (2006) introduced the concept of

institutional work to explicitly focus greater theoretical and

empirical attention on how actors create institutions. Lawrence

and Suddaby (2006) define institutional work as “the purposive

action of individuals and organizations aimed at creating,

maintaining and disrupting institutions.” This approach extended

beyond the tendency of institutional entrepreneurship studies to

focus primarily on the creation of new institutions to instead

embrace all aspects of institutional change including how

institutions are disrupted or maintained, as well as created.

Although actors’ embeddedness within the institutionally-defined

logics of their fields is recognized, the emphasis in

institutional work studies is placed on how the practical actions

taken from within their context can change aspects of

institutions around them. In this way, the institutional work

approach “suggests culturally competent actors with strong

practical skills and sensibility who creatively navigate within

their organizational fields” (Lawrence & Suddaby, 2006: 219).

24

The emphasis of the institutional work approach therefore

brings to the fore the actions of organizations and individuals

and positions them within the ongoing recursive interaction

between institutions and action which Seo and Creed (2002: 223)

have called “the mutually constituted nature of structure and

agency.” In this view, institutions are simultaneously sources of

prohibitions and constraint as well as practices which can be

maintained and changed through purposive action (Barley &

Tolbert, 1997; Giddens, 1984). From this perspective,

institutions are not uniform, totalistic, homogeneous and

permanent but are heterogeneous and overlapping, dynamically

competing, conflicting and complementing each other (Friedland &

Alford, 1991).

Although institutional theory has begun to consider the role

of power in various institutional practices and changes, DiMaggio

and Powell (1991: 30) have noted that: “Power and interests have

been slighted topics in organizational analysis.” Where power and

control have been considered more generally, studies often focus

on field-level interventions by powerful central actors (with the

state or professions often playing lead roles) and describe

25

conflicts and competition between institutional practices. Little

work from an institutional perspective has looked at the

processes by which actors work with issues of power or control to

enhance market practices, especially in contexts of market

failure associated with least developed countries.

However, given the promise of the institutional work

approach to contributing to understanding how new market

practices emerge and gain traction, Lawrence, Suddaby and Leca

(2009: 10) emphasize, “relatively little is still known about the

concrete practices employed by actors in relation to

institutions.” Where studies have considered the activities and

work of actors to bring about institutional change and the

adoption of new practices, findings are typically presented in

lists such as Fligstein’s (1997) 15 types of social skills or

Aldrich and Fiol’s (1994) eight entrepreneurial strategies to

promote new industry development. Similarly, Lawrence and Suddaby

(2006) identified 17 forms of institutional work which have

subsequently been reconceptualized into seven categories by

Kraatz (2009) and into three overarching types of institutional

work by Lawrence and Suddaby (2006), with Perkmann and Spicer

26

(2008) proposing modifications. To date, a more theoretical

explanation of how purposive actors change institutions by

introducing new market practices remains underdeveloped. At the

same time, although institutional theory has begun to consider

the role of power in various institutional practices and changes,

very little work from an institutional perspective has applied

issues of power or control to market changes and, more

specifically, in contexts of market failure.

Varieties of Capitalism and Business Systems

Related literatures on varieties of capitalism and business

systems (Hall & Soskice, 2001; Whitley, 1999) also focus on how

organizations adapt to their institutional contexts. However,

whereas institutional theory in organization studies has studied

the diffusion of new practices across organizational fields and

national boundaries, the business systems approach pays special

attention to how the adoption of new practices are influenced by

national institutional frameworks (Tempel & Walgenbach, 2007).

The varieties of capitalism and business systems approach make

comparisons between countries because nation-states play an

27

important formal and informal role in influencing the relative

strength of markets and government coordination within their

borders (Morgan, Campbell, Crouch, Pedersen & Whitley, 2010;

Morgan, Whitley & Moen, 2005). National capitalisms are

structured according to the relative balance of power between

capitalists, workers and governments at the time of entry into

modern industrialization to establish and enforce market

institutions such as property rights, rules of exchange,

governance structures and conceptions of control (Fligstein,

2001). Where organizational institutionalism has traditionally

tended to focus on isomorphism and the convergence of practices

(DiMaggio & Powell, 1983), the business systems approach pays

attention to the continued persistence of differences in

practices across countries (Whitley, 1999). The more the

particular national patterns of economic coordination are closely

integrated with other elements of society, such as educational

systems and social norms, the more that new practices introduced

into that context will be affected and shaped by them (Whitley,

1999). The varieties of capitalism approach also tends to

distinguish between two types of national economic coordination:

28

liberal market economies (such as the United States) and more

coordinated market economies (such as Germany) (Djelic, 1998;

Hall & Soskice, 2001). Most advanced capitalist countries combine

the two to a certain extent; however the particular mix

determines a country’s place on a continuum between the two ideal

types (Hall & Gingerich, 2009). The national business system

approach has been successfully used to explain differences in

corporate social responsibility practices across countries

(Matten & Moon, 2008). However, to date, the business system

approach has tended to focus on developed OECD economies rather

than least developed countries. In addition, some have argued

that the business system approach does not adequately account for

the social and political dimensions of institutional change (Hall

& Thelen, 2009). As Hall and Soskice (2001) indicate, the type of

coordination within a country depends on the institutions within

a country to support them. Where market coordination and

coordination by governments or strong private sector actors are

lacking, such as in least developed country contexts, the task of

initial market coordination may fall to non-state intermediary

actors, an under-explained area in the literature.

29

Markets as Institutions

That markets are socially structured, characterized by

social relationships, and infused with social norms is a starting

point for institutional theory and sociological approaches to

understanding markets (Aspers, 2011; Biggart & Beamish, 2003;

Biggart & Delbridge, 2004; Burt, 1992; Fligstein & Dauter, 2007;

Fourcade, 2007; Granovetter, 1985; Swedberg, 2005; Uzzi, 1997;

Uzzi & Lancaster, 2004). Market norms, practices and

relationships include what and how things are done, the scripts

for price setting, and the rules of exchange, cooperation and

competition (Aspers, 2011). My understanding of markets as

institutions is consistent with Coase’s (1988: 8) definition of a

market as a “social institution which facilitates exchange” and

White’s (2002: xiii) understanding of markets as “interactive

social constructions.” I define markets as “not simply an

allocative mechanism but also an institutionally specific

cultural system for generating and measuring value” (Friedland &

Alford, 1991: 234).

30

With an institutional view, even highly instrumental,

efficiency-focused economic interactions and changes are

“enmeshed in and freighted with” the expectations of social

relationships and pressures (Owen-Smith & Powell, 2008: 603).

From an institutional perspective, it is not possible to fully

understand individual, organizational and market practices

without attention to how they are shaped by social and

institutional forces. An extended quote from Thornton & Ocasio

(2008: 119) with reference to the important work of Fligstein

(1996) further captures the concept of markets as institutions:

While markets are economic structures – they are also institutions. They function because of a set of formal laws and normative expectations about them and these normative expectations have changed through time and space. A market in one historical and cultural context is not the same as a market in another (Fligstein, 1996).

The institutional account of market practices argues that

institutionalized rules and logics become social facts which

shape interests and choices by assigning levels of legitimacy or

appropriateness to various options (Meyer & Rowan, 1977; Zucker,

1977). A widespread and deeply held institutional practice within

31

an area of influence will tend to elicit similar responses

leading to isomorphism or similarity (DiMaggio & Powell, 1983).

The Market in Economic Theory

Modern economic theory usually implicitly assumes the market

to be a price-making and resource-allocating mechanism central to

coordinating production and distribution in society. A frequently

cited economic definition of the market that was prevalent in the

19th century and continues to be referenced today is:

“Economists understand by the term Market, not any particular market place in which things are bought and sold,but the whole region in which buyers and sellers are in suchfree intercourse with one another that the prices of the same goods tend to equality easily and quickly.” Cournot (1838/1927) cited by Marshall (1920/1961) cited by Swedberg (1994: 259).

However, around the end of the nineteenth century,

mainstream economic theory rejected social, historical and more

empirical approaches to understanding markets in favor of the

analytical power that was perceived in the study of abstract

exchange markets that were characterized by having perfect

information and perfect competition (Swedberg, 1994). Although

32

this classic economic view is attractive for its reductionist

simplicity, a more sociological approach to markets cautions that

this elegance comes at too high a cost to adequately explain the

reality of complex market and organizational phenomena as it is

empirically observed and experienced (DiMaggio & Powell, 1991).

Similarly, Aspers (2011) argues that economic theory has been too

reductionist, resulting in a theory that is distorted and focused

on modeling. This explanation may account for observations by a

number of contemporary scholars examining the role of markets in

economic theory. For example, economic historian Douglass North

(1977: 710) has noted a common shortcoming regarding more fully-

developed understandings of the market’s role in the economy and

society, stating “it is a peculiar fact that the literature on

economics… contains so little discussion of the central

institution that underlies neo-classical economics – the market.”

Ronald Coase (1988: 7) has made similar observations, stating

that “Although economists claim to study the market… in modern

economic theory the market itself has an even more shadowy role

than the firm.” Similarly, Biggart and Delbridge (2004: 29) have

observed, “modern economists view the market as a price-setting

33

mechanism and have left its workings implied rather than

explicitly discussed.” Since economics tends to take markets as a

given, it overlooks how market transactions are shaped,

structured and influenced by social and institutional contexts,

norms and expectations. As noted by White (2002: 9): “Because the

market is a tangible social construction opaque to tools familiar

to economists… the market has remained a mystification” from the

perspective of mainstream economics.

Theories of social action, such as those based in economics,

accord explanatory primacy to individuals who are endogenously

motivated by utility-maximizing self-interest. These individuals

make rational choices from a wide range of informed options. This

view leaves unexamined the power of social and institutional

forces in shaping interests, rationality and utility in the first

place. Instead, the motivations for action are assumed to be

universal and ahistorical and aligned with modern economic

society. From the rational economic choice perspective,

unconstrained and unquestioned individual choice is the primary

cause of social arrangements; institutions are merely the sum of

34

individual interactions (DiMaggio & Powell, 1991; Friedland &

Alford, 1991).

Economic theory takes markets as natural phenomena that

emerge spontaneously and order themselves to create equilibrium

as an unintended result of individual self-interest within rules

of law, property and contract (Aspers, 2011). Markets from the

perspective of economic theory are taken for granted “givens”,

(Sarasvathy & Dew, 2005) and therefore a starting point “used to

explain other phenomena rather than considered as objects in need

of explanation” (Aspers, 2011: 40). In this view neither the

state nor organizations participate in the making of markets;

indeed, from the perspective of much economic theory,

intervention by the state or other actors is often seen as

inherently reducing the natural ability of markets to reach

equilibrium.

However, in less developed countries, obstacles to the

“natural” formation of markets have been well documented (Datta-

Chaudhuri, 1990; Stiglitz, 1989) and in developed economies,

market failures resulting in economic recession have led to

greater questioning of the assumptions underlying mainstream

35

economic theory (Stiglitz, 2010). Many national economies exist

with badly distorted productive and distributive efforts

(Heilbroner & Milberg, 2008). So it is unusually striking that

markets – for all of their centrality to the promise and

challenges of current prosperity and future development and their

place at the heart of the discourse on economic development –

remain so relatively under-explained from the view of economics.

This is even more so in a world where social arrangements are

becoming more complex, where economic and ecological crises have

called into question the underlying power of rational choice

market models, where individuals and organizations from

developing and emerging economies with diverse institutional

histories are increasingly playing a role in national and global

markets, and where poverty alleviation through market development

is a high priority for many organizations.

To summarize, although economic perspectives have

contributed important insights to understanding markets, there is

still much to be learned about how they work and how their

functioning is enhanced. I have therefore adopted an

institutional view which is particularly appropriate in

36

understanding markets in the different institutional context of

low-income subsistence marketplaces.

Market Enhancement in Low-Income Economies

The process of market development or market creation refers

to expanding and formalizing a “nascent” but potentially viable

market by institutionalizing market practices. “Nascent markets

constitute unstructured settings with extreme ambiguity…ambiguity

arises from unknown cause-effect relations and lack of recurrent,

institutionalized patterns of relations and actions” (Santos &

Eisenhardt, 2009: 644). Institutionalized beliefs about what is a

viable market define the meaning of acceptable economic exchange

and dictate the extent to which local actors will even entertain

the possibility of market transaction (Oliver, 1996). I share

Biggart and Beamish’s (2003: 448) assumption that

“‘institutionalized’ understandings and arrangements facilitate

economic action by providing agreed-upon, often tacit, ways of

conducting business” and that markets tend to be socially

constructed by those most influenced by and engaged in them.

37

Essential prerequisites for market order are rules governing

what to do and what not to do in the market, encompassing the

beliefs, norms, culture and appropriate practices relating to

production, competition and exchange (Aspers, 2011). Objects of

trade and the rules for exchange of property rights must be

morally legitimate. Market exchange must be voluntary, with

actors getting something in return for that which they give up. A

viable market is one that possesses a product (or service),

demand for and supply of that product and the potential for

efficient exchange. Markets need institutions to enhance trust,

information, certainty, shared cognitive frameworks, rules,

competition and a balance of power. We can also gauge the

viability of a market by what it is not. If the terms of exchange

are involuntary, unclear, and unpredictable or exclude openness

to new market participants, if property rights, transaction

transparency and rule of law are lacking, and if market and price

information is unattainable, too costly or unreliable, these

exchange forums are generally classified as non-viable markets

(Menard, 1995). Nascent markets are characterized by

significantly compromised efficiency between buyers and sellers

38

and low levels of productivity by producers. For a market to

function properly, the institutions underpinning them have to be

created or enhanced. However, as Aspers (2011: 63) reinforces,

“there are few recipes” for the process of market creation.

Questions about the emergence of collective enterprises such as

markets and organizations are generally understudied. Even more

so, insufficient research has been conducted on market creation

or on how intermediary organizations navigate the subtleties of

institutionalized beliefs and values in establishing new markets

in least developed country contexts.

Traditionally, questions about market development have been

focused at the macro level of analysis in the disciplines of

economics, sociology and political science. These approaches have

emphasized the importance of the state in regulating and creating

the enabling environment for markets and how new market practices

emerge as a result of political or regulatory changes (Sarasvathy

& Dew, 2005). The emergence of new market practices has also been

explained by opportunities opening up as a result of new

technologies or scientific discoveries (Fligstein & Dauter,

2007). However, these lines of inquiry have shed little light on

39

the emergence of market practices as a result of organizational

actions in the absence of functioning or effective governments in

some of the least developed countries. My study therefore looks

at how an organization can take action to enhance and develop a

market for the benefit of poor producers.

Views of Market Coordination

In addition to the specific question about organizational-

level approaches to enhancing market practices in a specific

industry, more abstract theoretical questions could be raised

about how the growth of market systems and coordination by market

mechanisms impact a society in broader terms. If smallholder

farmers are transitioning from more traditional subsistence

methods of production and exchange to a more formalized and

efficient market, how are markets (and the assumptions that go

along with them) likely to impact communities and society more

generally? What are the implications of a greater presence of

markets in rural Bangladeshi society?

An evaluation of the moral and cultural implications of

market-based methods of coordination, production and exchange

usually depends on whom a market is seen to benefit and how

40

inequalities are distributed. Longstanding debates about the

positive and negative role of markets in society have been

ongoing for at least the last 300 years (Fourcade & Healy, 2007;

Muller, 2002). Critics of markets emphasize their potential

negative effects such as alienation and exploitation of workers

and producers (Marx, 1867), conspicuous consumption (Veblen,

1899), inequality (Polanyi, 1944) and the fostering of negative

virtues such as greed, self-interest and competitiveness

(Bordieu, 1984). On the other hand, however, equally persuasive

arguments have been put forward for the positive influences of

markets on society such as satisfying individual needs (Smith,

1776), the efficient allocation of resources (Walras, 1874),

nurturing the virtues of honesty, integrity and cooperation

(Smith, 1776), enhancing individual and political freedom (Hayek,

1944) and supporting creativity and innovation (Schumpeter,

1944). Contributing to this longstanding philosophical debate is

beyond the scope of the current study. However, a series of

recent experiments in 15 small-scale societies around the world –

primarily agricultural, fishing and nomadic peoples – found that

the more that markets played a role in their lives, the greater

41

those communities developed a sense of fairness with respect to

their interactions with others (Henrich et al., 2010).

Ethical Rationale for Poverty Alleviation

The ethical rationale for poverty alleviation recognizes

“the essential needs of the world’s poor, to which overriding

priority should be given” (Bruntdland, 1987: 43). The normative

imperative for poverty alleviation rests on a number of ethical

foundations. One foundation is Kant’s (1785/1993: 30) categorical

imperative to: “Act only according to that maxim whereby you can

at the same time will that it should become a universal law.”

This principle calls for the duty that all individuals have as

moral individuals to take action to benefit others as they

themselves would hope to receive assistance if in need. In this

way, Kant’s categorical imperative is consistent with “the golden

rule” principle found in many religions such as Christianity,

Islam, Buddhism, Hinduism, Judaism, Confucianism and First

Nations spirituality amongst others (Crane & Matten, 2010). The

difference between Kant’s categorical imperative and religious

principles is that religion grounds the golden rule in the

42

supreme authority of an ultimate eternal divinity, whereas Kant’s

approach is based on his assumption that humans are capable of

understanding what would be morally right and wrong in a given

situation without recourse to divine authority (Crane & Matten,

2010).

The ethical rationale for poverty alleviation also rests on

Rawls’ (1971: 302) theory of justice, especially as set out in

his second principle to determine if an action can be understood

as just: “Social and economic inequalities are to be arranged so

that they are… to the greatest benefit of the least advantaged.”

Rawls’ theory of justice acknowledges that in a free and

competitive society, inequality can be acceptable as it allows

effort, merit and capability to be compensated and incentivized

given equal opportunities for all, but also ensures that any

inequalities take special consideration to benefit the least

advantaged (Hahn, 2009).

Consistent with Rawls theory of justice, the UN’s Universal

Declaration of Human Rights (1948) enshrines basic fundamental

human rights as “natural rights” (Locke, 1690): unalienable

entitlements that should be upheld and protected in all

43

circumstances. The Universal Declaration of Human Rights (UN,

1948) states that:

Article 3: Everyone has the right to life, liberty and security of person.Article 22: Everyone, as a member of society, has the right to social security.Article 25: Everyone has the right to a standard of

living adequate for the health and well-being of himself and of his family, including food, clothing,housing and medical care and necessary social services.

The universal rights set forth in the UN declaration set a

global minimum standard which is still not met for most

individuals living in poverty around the world. Approximately 50

percent of the 852 million people in the world who are

chronically hungry and malnourished are smallholder farming

households unable to grow or buy enough food to meet their

family’s nutritional requirements (Sanchez & Swaminathan, 2005).

An additional twenty percent of the hungry are rural landless

households with 10 percent of the hungry being pastoralists and

fishermen. The remaining 20 percent of the hungry live in urban

areas. Hunger, like poverty, is concentrated in rural areas where

subsistence methods of agriculture persist with limited

44

opportunities for increased access to productivity and market

opportunities (IFAD, 2010). Poverty is a multidimensional

concept, encompassing material incomes and assets as well as

social factors such as marginalization, vulnerability,

insecurity, lack of opportunity and disempowerment (Bourguignon &

Chakravarty, 2003). As described by the World Bank:

Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not being able to go to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom. (WBCSD 2004: 11).

With the current global reality of over one third of the

world’s people earning under $2 per day and the situation not yet

up to the standards of the Universal Declaration of Human Rights,

from a Kantian perspective this reinforces the duty that all

people have, based on their inherent capabilities for rational

and moral thought, to take action to assist the poor in securing

their basic rights, opportunities and freedoms.

However, to what extent are organizations that are

structured as for-profit companies obligated to create

opportunities to assist the poor in meeting their basic human

45

needs? The preamble to the Universal Declaration of Human Rights

calls on “every organ of society… to promote respect for these

rights and freedoms” thus including private sector organizations.

Indeed, companies may have greater obligations to see that basic

human rights and freedoms are realized for the poor within their

sphere of influence due to their growing power in regions where

poverty is prevalent, growing social expectations on companies to

demonstrate corporate citizenship and sustainability and

instances of governments unable or unwilling to uphold their

obligations to improve the lives of their poorest citizens (Crane

& Matten, 2010; Hahn, 2009; Matten & Crane, 2005).

46

METHOD OF THEORY CONSTRUCTION

Theory and Theorizing

Theories arise from our human need to order and make sense

of our complex world (Dubin, 1969; Weick, 1989). A theory informs

and aids judgement. Theories are developed so we don’t have to

start from scratch in answering questions. A theory answers

questions about how something unfolds (Langley, 1999) or why

something is (Sutton & Staw, 1995). Theories are “the base for

knowledge and understanding of important relationships” and

constructs (Hitt & Smith, 2005a: 1). Theories are explanations.

They help us understand phenomena. Theories explain relationships

and offer meaning, cohesion and stability in the face of

ambiguity (Czarniawska, 1997). Theories create and reflect our

expectations of the world and its myriad phenomena and therefore

provide practical guidelines for thought and action (Van de Ven,

1989). Making a theoretical contribution clarifies or enhances

current explanations and answers to questions. New explanations

that are interesting challenge our conventional ways of thinking

47

and add value to existing ideas (Weick, 1989). Good theory should

allow someone to see the world with new eyes (DiMaggio, 1995).

The occasion for theorizing can be a problem, a gap in

knowledge, an unanswered question, a puzzle, a paradox, a

contradiction, an anomaly, or something that does not make sense

given current assumptions (Weick, 1989). Theories are

“approximations” (Weick, 1995). They are approximations of the

world around us wherever we may fall on the ontological continuum

between believing that an objective external reality is knowable

or believing it is socially constructed (Morgan & Smircich,

1980). Theories are abstractions – the pictures we paint or the

maps we draw to represent the world that we experience from our

particular frame of reference (Burrell & Morgan, 1979).

Although a substantive review of the perspectives of leading

management theorists concluded that “there is a substantial

amount of variation in viewpoints among scholars about what good

theory is and how it should be developed” (Hitt & Smith, 2005b:

587), a number of distinctions have been made. Distinctions can

be drawn between description – answering the question of what is

happening – and explanation – answering the question of how or

48

why something is happening. Most often, description is not

considered the focus of theory (Bacharach, 1989; Sutton & Staw,

1995). However, description can aid in understanding a phenomenon

by reducing it to its component parts (Bernard, 1988) and can

combine with explanation to form a theory (Whetten, 1989). Theory

then provides an answer to how and why the parts fit together and

are interrelated (Miles & Huberman, 1994). Distinctions can also

be made between theorizing at the level of grand theory, such as

the work of Marx, Smith, Darwin or Freud, and theorizing at the

mid-range level which would encompass many of the more modest

theories of management and organizations (Miles & Huberman,

1994).

In organization and management studies, various approaches

to understanding the process of theorizing have been put forward.

Drawing on Weber’s (1949) concept of ideal types, it is possible

to outline two general approaches to theorizing summarized in

Table 1 below.

Table 1: Two Stylized Ideal Types of Approaches to Theorizing

Strategy of Developing Predictions in Closed Systems

Strategy of Developing Generalizations in Open Systems

Source of Distinction

49

Variance Process Mohr, 1982Problem solving Sensemaking Weick, 1989Covering laws Narrative DiMaggio, 1995Analytical Synthetic Werner & Schoepfle, 1987Variable-oriented Case-oriented Ragin, 1987Cause Pattern Weick, 1999Matrix display Network display Miles & Huberman, 1994Deductive Inductive Weick, 1989

Although these two types are necessarily and perhaps overly

simplified, the first column represents what Weick (1989: 518)

describes as “a strategy of developing predictions in

hypothetical or artificial closed systems” with the second column

a “strategy of developing generalizations in open systems through

the use of inductive abstraction.” The first approach is often

associated with testing and confirming existing theory, while the

second can be employed to explore emerging phenomenon and develop

new theory (Miles & Huberman, 1994). Hitt and Smith (2005b)

suggest that the first column may be more suitable for

theoretical concepts that are more easily measured, while the

second column may be more applicable when theoretical concepts

are harder to measure. The second column assumes a world of

complexity and ambiguity. The first column tends to assume a

50

world of pre-existing and universal scientific laws of social

phenomena that represent an independent external reality. The

second column reflects an ontological assumption of reality as

subjectively constructed by individuals engaged in a common

project of interpretation and sensemaking. Although these

generalized ideal types of theory-building can be distinguished,

they are often usefully combined in the theory development

process (DiMaggio, 1995; Miles & Huberman, 1994).

Any theory, however, has to necessarily balance trade-offs

between generalizability, accuracy and simplicity (Weick, 1999).

A theory that satisfies any two of these characteristics is least

able to satisfy the third. And, it may be helpful to note that

theory construction is not the only way to develop new knowledge.

“Thick and rich description, case analysis, bringing about change

in a difficult situation, and telling a story are all valid

reasons for doing research” (Corbin and Strauss, 2008: ix).

Theory can serve multiple purposes including serving as an

intermediate step to another theory (Mintzberg, 2005) or serving

as a generator of debate and discussion (Barney, 2005). Karl

Weick reminds us that theory is a dimension rather than a

51

category – that the more an explanation satisfies the criteria of

a theory, the more it deserves the label (Weick, 1989; 2005).

My motivation for theorizing is to generate concepts and an

explanatory model that can further the conversation about market-

based approaches to poverty alleviation and explain the key

concepts and their interrelationships to advance knowledge in

both organization studies and the practice of management (Simon,

1967; Van de Ven, 1989).

Qualitative Research Design

To answer my research question about how an organization is

able to enhance market practices to make markets work for poor

primary producers in least developed countries, I chose an in-

depth qualitative research design, suitable for understanding

patterns and relationships in complex market settings. Although

the research question focused on the organizational level of

analysis, a qualitative approach allowed a close examination of

interrelationships among actors in the dairy value chain and how

they were embedded within multiple levels of their social,

economic and institutional context, a consideration important for

52

capturing and drawing out explanations from inter-related social

and market dynamics (Weick, 2005). The research was phenomena-

and problem-driven (Mintzberg, 2005), focused on explaining

events in the world, which was appropriate for research in a

complex, changing environment (Pfeffer, 2005; Locke, 2001). My

research approach was mostly inductive, especially during the

earlier stages of data gathering and analysis, but also included

deduction, as I consulted literatures associated with emergent

patterns and analysed quantitative data. Data were gathered

between October 2009 and June 2012.

Grounded Theory Method

I drew substantially from the grounded theory building

approach for my research design due to its suitability for

studying emergent phenomena not fully explained in the existing

literature (Corbin and Strauss, 2008). The grounded theory method

is a systematic inductive approach to constructing theory

(Charmaz, 2006) and is currently the most widely used qualitative

research method across a range of disciplines (Bryant & Charmaz,

53

2007). Induction is a type of reasoning that extrapolates from

specific instances to more general constructs or patterns

(Charmaz, 2006). The method includes procedures such as continual

iteration between data collection and data analysis and

considering alternative explanations to ensure that findings are

firmly rooted in data and that they generate useful analytic

explanations (Glaser & Strauss, 1967). Although there are

variations in the application of the method and cautions about

adopting an overly prescriptive approach to essential elements

that make up grounded theory building, Wiener (2007) has

identified the following representative elements to the grounded

theory method:

Data gathering, analysis and theory construction proceed concurrently

Coding and memo writing start with first interview and/orfield notes

Theoretical sampling Memoing Reaching theoretical saturation Identifying a basic process that accounts for most of the

observed behavior

One of the advantages of the grounded theory method of

qualitative research is that its procedures are visible,

comprehensive and replicable (Bryant & Charmaz, 2007). The

54

section on data analysis, below, details how these elements of

grounded theory-building were undertaken.

Case Study

Case studies can be used with a grounded theory building

method to investigate complex social phenomena. A case study can

allow examination of phenomena “in depth and within its real-life

context, especially when the boundaries between phenomenon and

context are not clearly evident” (Yin, 2008: 18). A case study

can be used when “how” or “why” questions are being asked about

contemporary events over which the investigator has little or no

control (Yin, 2008). A comparison of the relevant situations

appropriate for different research methods is given in Table 2

which considers the form of research question, the requirement

for behavioral control and whether the focus is on contemporary

events.

55

Table 2: Relevant Situations for Various Research Methods (after Yin,

2008)

MethodForm of ResearchQuestion

Control ofEvents Required?

Focus onContemporary

Events?Experiment How, why? Yes YesSurvey Who, what,

where, how many,how much?

No Yes

Archival Analysis

Who, what, where, how many,how much?

No Yes/No

History How, why? No NoCase Study How, why? No Yes

Because my research question focused on contemporary events, did

not require strict control of events, and was interested in the

question of “how”, a case study methodology was appropriate.

Case Selection

To examine poverty alleviation from a managerial

perspective, I needed an organization that had adopted a market-

oriented approach to a challenging poverty situation for poor

primary producers within a least developed country. From an

initial database of 900 market-based approaches to poverty

alleviation, I identified a short list of 20 that were of larger

56

scale and globally significant. After considering a number of

possible options of both for-profit and not-for-profit

organizations, I selected an initiative in the Bangladeshi dairy

industry by the NGO CARE Bangladesh. The initiative to strengthen

the dairy value chain was funded with US $5.25 million from the

Bill and Melinda Gates Foundation over the period 2008 to 2012

and sought to double the dairy-related incomes of 35,000

smallholder farmers in the northwest of the country who earned,

on average, $1 per day. CARE worked as a facilitator,

intermediary and catalyst with farmers, dairy companies, and

other enterprises throughout the value chain to identify

commercially viable and financially sustainable enhancements to

market practices for the benefit of farmers as well as other

actors in the value chain.

I chose this particular initiative for four reasons. First,

CARE was explicitly taking a market-based approach to poverty

alleviation focused on economic viability and commercial

sustainability. CARE worked closely with private sector companies

and employed business principles and strategies that would be

familiar to, and were being productively utilized by, private

57

sector companies. In their study of innovations to make markets

more inclusive for the poor, Mendoza and Thelen (2008) equally

considered initiatives by NGOs and companies as relevant

organizations of study. Another advantage that the CARE case had

over other potential research sites was that their work was also

informed by the long tradition of rural development approaches

which focus on poor primary producers. In this way, the CARE case

provided a potentially robust channel for the translation of

useful insights from rural development practices into the

management literature.

Second, researchers and practitioners using base-of-the-

pyramid, microfinance, and SME employment approaches to

development have attained insights from studying NGOs that were

later adapted by other organizations, including private sector

companies (Chesbrough, Ahern, Finn & Guerraz, 2006). Examples of

innovative NGOs include those that have helped lay the foundation

for the current commercial microfinance industry (Chu, 2007),

enterprises such as Aravind Eye Care, which has shown the

potential for future health care applications (Mehta & Shenoy,

2011), and Grameen's family of NGO enterprises which has

58

pioneered profitable business models, including solar home

systems and rural telecommunications (Yunus, Moingeon & Lehmann-

Ortega, 2010).

Third, the CARE dairy initiative represented a significant

global example of the phenomenon under study funded by one of the

most prominent investors in market-based approaches to

development. The initiative was being implemented by one of the

largest NGOs in Bangladesh, a country known for its innovative

market-based approaches to development including the enterprises

of BRAC and Grameen’s business ventures with Danone, Adidas,

Telenor, BASF, Uniqlo, GE Healthcare, Veolia and Pfizer (Yunus,

Moingeon & Lehmann-Ortega, 2010).

Fourth, although CARE is an NGO and is not itself buying and

selling products in the marketplace, this potentially non-

traditional research site offered a distinct advantage over more

traditional choices of for-profit companies because, as Weick

(1974: 487) argues, it is in these uncommon cases that phenomena

relevant to companies are made more visible and available for

theory development, thus helping researchers “improve theories

and discover something besides the obvious.” As Scott (1995: 151)

59

similarly argues, research is more likely to offer novel

management insights when researchers seek out “the frame-breaking

experiences that only come from examining and comprehending

organizations operating in other places and times.”

60

Single Case Design

The CARE case was a specific, unique, bounded, purposive and

integrated system that would be suitable for a case study (Yin,

2008). The trade-off between studying a single case or multiple

cases revolves around the depth of understanding of an

organization within its context achievable with a single case

versus the comparative insights of multiple cases. Because the

organizational context – the Bangladeshi dairy sector – was an

essential element of the research question, a single case study

design was chosen. This design therefore aimed to maximize

insights of the organization working in its market and

institutional context, a strategy that allows for the capturing

of deeper social dynamics (Van Maanen, 1979), and the surfacing

of more tacit and less obvious dynamics of a phenomenon which can

therefore generate more accurate theoretical insights (Dyer &

Wilkins, 1991). Weick (2005) has argued that attention to social

context is essential to both sensemaking and theory-development

because of the complexity of social phenomena. A single case was

therefore selected to maximize understandings of deeper

structures and contextual relationships.

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Empirical Setting

Bangladesh as a Least Developed Country

The major market development initiative being implemented by

CARE in the Bangladeshi dairy sector was appropriate because it

was located in a least developed country exhibiting high rates of

poverty and weak state and market governance. Bangladesh is among

the poorest countries in the world with an estimated 40 percent

of the country’s 150 million people living below the national

poverty line of $1.25 per day (Narayan & Zaman, 2009). Forty-

eight per cent of children under five in Bangladesh are

chronically malnourished and 30 percent of the total population

is below the minimum level of dietary energy consumption (WHO,

2005, 2009). These poverty-related challenges for families are

particularly acute in rural areas, which offer few opportunities

for employment or increased income generation to meet nutritional

needs. Weak state governance and market failure are significant

issues in the country, with the state having little positive

influence on dairy sector development as a result of over-

bureaucratization and a high incidence of public service

62

inefficiency, waste, and underfunding (Parnini, 2009). While the

Bangladeshi livestock sector accounts for 3 percent of

Bangladesh’s GDP, it receives only 0.27 percent of government

expenditures (Jabbar, 2010). Resources that are allocated to the

dairy sector have been ineffective at reducing poverty for poor

producers (Jabbar, 2010). Overall, governance has been rated low,

not only in terms of regulatory quality, rule of law, and control

of corruption (Azmat & Coghill, 2005), but also because of “a

lack of political consensus, weak legislative authority,

unhealthy model of political competition, undemocratic political

party structures, political and administrative patronage, and

weak local governance” (Zafarullah & Rahman, 2002: 1013). A

recent assessment of the investment climate in Bangladesh

identified poor infrastructure, unreliable electricity,

corruption, and limited regulatory governance as major

impediments to investment and development (Mahmood, 2009). In

these ways, the case was situated in a least developed country

exhibiting significant poverty challenges and weak state and

market governance.

63

Bangladeshi Dairy Sector

Smallholder dairy farming accounts for 90 percent of the

country’s annual milk production of 2.8 million metric tons, but

despite strong domestic demand only nine percent reaches the

formal market comprised primarily of three large dairy processing

companies (Jabbar, 2010). Bangladesh is thus forced to import 30

percent of the country’s milk requirements in the form of

powdered milk (Jabbar, 2010). Bangladesh’s formal dairy sector

has been described by policy analysts as “nascent,” fragmented in

terms of its development and “characterized by extremely weak

value chains” (Ahmed et al., 2009: 18). The fragmented nature of

the dairy sector means that milk production remains a mostly

subsistence practice with transactions highly localized,

uncoordinated, and lacking in predictability and transparency.

Knowledge of productivity and income-enhancing dairy

practices is typically limited to traditional subsistence farming

techniques. Fifty-seven percent of CARE’s target farmers are

functionally landless, which means that they own less than half

an acre of land, including the land on which their bamboo and

straw houses are built and around which they keep any livestock

64

(usually between one to three cows). Typically, dairy farmers

maintain their animals with as little cash outlay as possible,

often sustaining them on agricultural waste materials such as

rice straw (Haque, 2007). Preventative or acute veterinary care

is normally viewed as an expensive luxury, if such services are

available at all (Jabbar, 2010). Opportunities for smallholder

farmers are further constrained by a lack of access to quality

inputs (such as concentrated feeds and artificial insemination).

The local “deshi” breed of cattle has evolved to survive the

challenges of Bangladeshi diseases, the hot and humid climate,

and the semi-starvation rations; however, these cows are small in

stature and limited to producing only about a litre of milk per

day (cows in developed countries produce 30 liters per day).

Approximately a quarter of the limited milk production is

immediately consumed by the family, and the rest is sold to a

collector or local market in the few hours before the milk

spoils. The diagram in Appendix A visually illustrates the key

actors in the dairy value chain from input providers to dairy

producers and collectors selling into the informal and formal

markets. Traditional milk collectors make their incomes by buying

65

from farmers at the lowest possible price and selling at the

highest price. In this traditional context of market risks,

uncertain buyers, disaggregated production, limited knowledge of

dairy productivity, and limited access to improved feed,

veterinarian advice, and breeding services, Bangladeshi

smallholder farmers face significant obstacles to increasing

their incomes through milk production.

Enhancing Market Practices Through a Market-Based Approach

These challenges were targeted by the initiative developed

by CARE Bangladesh, which explicitly sought to enhance market

practices in the dairy sector for the benefit of poor producers.

By market practices, I mean the strategic initiatives executed by

an organization that alter market structure and shape market

relationships and actions (Ullah and Routray, 2007). Market

practices tend to bring order and consistency to production and

exchange through the provision of more predictable incentives and

sanctions. Markets and value chains in which poor producers are

often embedded are typically characterized by institutional voids

and informal practices that impede market coordination and

66

contribute to low-level equilibria and poverty traps (Azariadis &

Stachurski, 2005; Bowles, Durlauf & Hoff, 2006). Sub-optimal

equilibria can be established and persist because poor

individuals adopt practices for survival and minimization of

risks which may not be particularly optimized for the efficiency

and effectiveness of the overall market system. Low-income

contexts can also “configure exclusionary markets” when the

autonomy and property rights of individuals are constrained

(Mair, Marti and Ventresca, 2012). CARE recognized that in order

to improve the overall functioning of the dairy value chain for

the benefit of smallholder farmers, other stakeholders such as

processors, collectors, and animal health workers would need to

be incentivized and benefit as well. CARE sought to enhance or

introduce new market practices at various points throughout the

value chain, providing additional significant strategic insights

into the use of a market-based approach to poverty reduction by a

variety of different types of organizations.

67

Data Collection

Because I was interested in grounded theory building, I

collected multiple forms of qualitative data which included three

two-week field visits to remote rural communities and 299 face-

to-face interviews with farmers and CARE staff as well as

representatives from organizations from all points in the value

chain. All aspects of dairy production, marketing and sales were

observed in the field and explored through meetings with CARE

staff and dairy processors, farmers, collectors, informal market

buyers and input sellers in the dairy sector (see Appendix D). In

addition, I had access to extensive quantitative monitoring and

evaluation data on the project, farmers, and the dairy sector in

the northwest of the country (see Appendix E).

My data sources included interviews, written and electronic

archival documents, participant observation, and quantitative

household baseline and project evaluation data. I took an

iterative approach to the collection and analysis of data and

used triangulation among the various informants and various types

of data sources to enhance the reliability and trustworthiness of

my findings (Corbin & Strauss, 2008; Eisenhardt, 1989; Miles &

68

Huberman, 1994). This systematic approach was aimed at

discovering behavioral and outcome patterns in the data and how

emergent constructs and categories interrelated to form a

coherent explanatory model. I relied on interviews, observations,

and archival documents as the primary sources of data for theory

building and relied on other data for the triangulation of

findings, the generation of interview questions, and as evidence

that CARE’s activities were reducing poverty. The data were

collected between October 2009 and June 2012 which allowed for

sufficient time to become familiar with key organizations,

individuals and events.

Interviews

I interviewed 299 individuals including CARE staff, dairy

economists, industry experts, agriculture and dairy scientists,

International Finance Corporation employees, and multiple

representatives of the dairy value chain, including input

providers (e.g., cattle feed suppliers, animal health service

69

workers), producers, milk collectors, chilling plant managers,

small and medium-sized formal and informal sector processors and

retailers, and senior representatives from the three largest milk

processors in Bangladesh.

I also gathered data on the country’s three largest dairy

processors, BRAC Dairy, Milk Vita and PRAN Dairy (see Appendix

C). Of the 299 interviews, 59 were semi-structured, face-to-face,

in-depth and focused individual interviews and 240 were part of

eight focus groups of milk producers and collectors. Of the

total, one focus group of 30 farmers and face to face interviews

with 28 value chain actors independent of CARE’s intervention

were also conducted for control and contrast purposes. To elicit

the highest quality interview data, interviews tended to be

balanced between gathering information on predetermined questions

and embracing deviations signalled or initiated by the

interviewee. Every effort was taken to be fully present with

interviewees, to be attentive to verbal and non-verbal cues, and

to be aware of cultural norms in conversation. I made special

efforts to establish a relaxed and comfortable setting for the

interviews, to encourage openness, spontaneity, reflection and

70

free flow of conversation (Gubrium & Holstein, 2003; McCracken,

1988; Weiss, 1994). I purposefully selected interviewees guided

by gaps in the data and questions arising from on-going analysis.

I asked questions of informants from every role in the dairy

sector to understand the existing state of practices in the

sector, power dynamics and interests, obstacles to changing

existing practices, and CARE’s influence and effectiveness in the

sector. Reaching saturation in my understanding of sector

structure and dynamics, I focused on the specific activities of

CARE’s project. During this process, interviews became

increasingly more structured as themes began to emerge from the

data. Interviews were generally between 30 minutes to one hour,

with some lasting as long as three hours. Interviews were

recorded and transcribed. When interviews were conducted in

Bengali through an interpreter, two bilingual translators (one a

business faculty member at the University of Dhaka and one an

undergraduate student in Canada) translated and transcribed the

recordings. The two translations were compared and consensus was

achieved to ensure accuracy of the data.

71

Documents

I collected an extensive set of documents and archival data,

consisting of CARE project data and dairy sector data (see

Appendix D). A comprehensive set of project documents was

obtained from CARE, including proposals, memoranda of

understanding, internal communications, commissioned reports,

training materials, and semi-annual progress reports. I also

collected documents and industry assessments undertaken by the

larger dairy processor organizations (Milk Vita, BRAC, and PRAN),

newspaper articles related to the Bangladeshi dairy sector, and

key sector reference materials recommended by my informants, such

as Livestock Resources in Bangladesh (Alam, 1995) and Studies on Agricultural

and Rural Development (Alam, 2008). These materials were helpful in

triangulating with other sources of data, as they provided

information about the history and evolution of market practices

in the dairy sector as well as in-depth information on CARE’s

strategies to enhance market functioning.

Observation

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Direct observation was a valuable source of data in this

study. Because it is not uncommon for people to behave in

unconscious ways or for there to be discrepancies between their

words and actions, observation is an important means of data

gathering and triangulation with other data sources (Corbin &

Strauss, 2008; Lofland, et al., 2006; Patton, 2002). Observation

can help distinguish between individual and organizational

espoused or formal statements and their actual activities and

practices, if the two differ. I observed activities associated

with all aspects of value chain operations and communications.

Extensive field visits to remote northwest Bangladesh villages

were undertaken to observe farmer milk aggregation, animal

husbandry practices, feed distribution, milk collection, milk

testing, and meetings between CARE staff and villagers. I

observed the daily activities of CARE staff and witnessed

informal discussions that arose between staff members; I was also

invited to attend three confidential meetings between senior CARE

staff members, the International Finance Corporation, and senior

executives of one of the large private sector dairy companies.

Because a cross-cultural context can increase the complexity of

73

interpreting field observations, I made a continuous effort to

cross-check assumptions and impressions with multiple informants,

including with the individuals themselves as well as with

Bangladeshis very familiar with the day to day lives of farmers

and equally familiar with life in Western countries (Green, et

al., 2007). Field notes and photographs were taken during

observation periods to capture information about market practices

in the field and CARE’s organizational culture, structure, and

priorities. Observation was an important source of spontaneous

and everyday “operational data” with which to triangulate the

sometimes “presentational data” offered by informants in

interviews (Van Maanen, 1979). Attendance at an important

national two-day dairy conference at Bangladesh Agricultural

University in Mymensingh resulted in significant additional

information on the dairy sector and its practices. For further

details on the qualitative data gathered through interviews,

documents and observation see Appendix D.

Quantitative Data

74

As part of its activities, CARE conducted a comprehensive

baseline assessment of smallholder dairy producers in its project

region (for more details, see Appendix F). CARE also collected

data on 350 variables relating to 35,000 farmers, 1,163 producer

groups, 308 milk collectors, 201 livestock health workers and

milk buyers as well as market prices for milk and cattle feed

(see Appendix E). Different types of quantitative data were

gathered on a monthly, quarterly, semi-annual and annual basis.

As my research and analysis progressed, I was able to add

specific additional questions to the quantitative surveys in

order to further understand or provide evidence for emerging

constructs and relationships in my theoretical model. All of the

raw quantitative data were made available to me on an on-going

basis throughout the study and were comprehensively analysed for

a total of 475 hours by a statistician associated with the York

Center for Social Research for further insight into the

production and exchange relationships in the dairy sector and for

indicators of progress in CARE’s efforts to increase the incomes

of smallholder farmers. For further details on the quantitative

75

data gathered and analysed throughout the project, see Appendix

E.

Qualitative Data Analysis

Consistent with a grounded theory building approach, the

analysis of qualitative data was iterative and relied on

triangulation, coding and memoing to develop categories and their

interrelationships that would serve as an explanatory model.

Iteration

Data collection and theory building were an iterative and

incremental rather than a pre-planned linear process. I applied a

recursive process of constant comparison between data collected

and the themes and theoretical points that emerged from the

analysis (Corbin & Strauss, 2008). Analysis and collection

proceeded iteratively from the first round of data collection and

became progressively more focused until the theoretical model was

finalized at the conclusion of the study. During the first half

of the study period, emphasis was placed on understanding the

market context of the dairy sector and CARE’s activities within

76

it. Data collection and analysis during this phase were open-

ended and exploratory. Analyses revealed gaps and missing data

and helped to continually focus subsequent rounds of data

collection and refine the theoretical model. Previous interviews,

field notes, documents and memos were analysed before the next

trip to the field.

Triangulation

During the data gathering and analysis process, I cross-

checked emerging categories and relationships with comparisons

between different pieces of data from various sources to enhance

the reliability and validity of the findings. The multiple

sources of data allowed for triangulation and corroboration in

data collection and analysis processes which served a similar

function to providing multiple measures of the same phenomena

thus enhancing validity of data and findings (Yin, 2008). I

developed a 38,000 word (77-page) case description of CARE’s

efforts to enhance market practices in the dairy sector and

shared it with key managers at CARE to confirm the accuracy of my

understanding of the facts. In addition, I presented an overview

77

of my understanding of the dairy sector at the Bangladesh

Agricultural University national two-day dairy conference in

Mymensingh in April 2010, and gathered feedback from a diverse

academic and practitioner audience of the most knowledgeable

individuals in the country. These efforts allowed me to become

intimately familiar with the details of the case, helped ensure

the accuracy of the data I had collected, and assisted in

guarding against premature or false conclusions as a result of

human information-processing biases (Eisenhardt, 1989).

Coding

As part of the systematic analysis of data, all interview

transcripts, key project documents, and memos were consolidated

in a single database and ATLAS.ti software was used to assist in

structuring and coding the data. The creation of a comprehensive

database of all case study data was organized so it could be

accessible and auditable by a third party (Yin, 2008). The

initial coding was guided by concepts that appeared in the data.

Data were coded at various levels of theoretical abstraction. An

on-going tension had to be managed between developing a

78

theoretical model at an appropriate level of abstraction and

remaining grounded in the data (Bryant & Charmaz, 2007). Through

constant comparison and ongoing inductive analysis, codes were

split or consolidated and patterns and relationships pertaining

to market practices and reduced poverty emerged. Codes were

grouped into second-order constructs and these were grouped into

higher-order theoretical concepts while remaining open to avoid

early closure or premature conclusions (Corbin & Struass, 2008).

Figure 2 includes a visual map of how data was coded to induce

higher order theoretical concepts.

79

Figure 2: A Visual Map of the Analytical Coding Process Used To Induce Higher-Order

Theoretical Concepts

80

81

With the aid of the coding software, all sections of text marked

with particular codes were reviewed to ensure that the essence of

the construct was adequately captured. Frequencies of various

codes were also noted. This process resulted in the ongoing

reinterpretation and refinement of categories and concepts and

their structuring into a model that captured interrelationships

as well as a hierarchy of more abstract theoretical concepts and

their supporting second order constructs. To maximize the

reliability of coding, minimize the possibility of idiosyncratic

interpretations, and ensure that rare themes were adequately

captured, I repeatedly tested my coding interpretations with

various diagrams, flowcharts, visual maps and other forms of

graphical representations to help eliminate alternative

conceptualizations of the relationships and categories in the

data (Langley, 1999; Miles & Huberman, 1994).

Memoing

During and after field visits, as well as during coding and

analysis, brief (1-2 page) memos were written to identify,

conceptualize and connect emerging concepts with each other

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(Goulding, 2002). Memos in the earlier research stages were

written freely and openly to capture a wide diversity of ideas

and guide theoretical sampling of subsequent data. Later, memos

also began reflecting on and enfolding related literatures as

they were reviewed (Corbin & Strauss, 2008). Memoing was an

integral part of data analysis that helped capture insights and

epiphanies, refine concepts and relationships, lift data to

theory and build an overarching answer to the research question

(Miles & Huberman, 1994). In a related exercise, reflective

remarks were noted on the margins of transcripts and documents to

capture emerging thoughts and ideas.

83

Emergence of Constructs, Relationships and Theory

During the iterative process of coming to the final version

of the explanatory framework, alternative logical pathways and

rival constructs and relationships were considered and

progressively eliminated. Ultimately, I searched for what I

believed was, on balance, the model and explanation that best fit

the data (Miles & Huberman, 1994; Lincoln & Guba, 1985). The

grounded theory method, like other qualitative research methods,

recognizes that the researcher is an important part of the data

analysis process and that the patterns and relationships

identified in the data arise from an inherently human process of

meaning-making and interpretation.

Closure

Data collection, analysis, and theoretical refinement

continued until the categorization and overall model became

stabilized and new data and analysis no longer resulted in

refinements or changes. At this point, theoretical saturation was

reached.

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Ethical Procedures

My research was carried out in adherence with the York

University Ethical Review Process for Student Research Using

Human Participants as administered by the office of the Faculty

of Graduate Studies.

Validity and Trustworthiness

Based on the description of qualitative data analysis above,

a summary of the methods used to ensure validity, reliability and

trustworthiness of the data and findings is given in Table 3.

Various authors assign different names to similar trustworthiness

dimensions. Note that many methods can contribute to more than

one type of validity or trustworthiness criteria. The current

list has been condensed to minimize mentions of similar methods

in multiple categories.

Table 3: Methods for Building Trustworthiness from Qualitative Data and Analysis

Trustworthiness ConceptTrustworthiness Methods Employed in This Study

Yin, 2008

Lincoln &Guba,1985

Miles &Huberman,

1994

Maxwell,1992

Construct Validity

Confirmability

Objectivity

TheoreticalValidity

Use of multiple sources of evidence

Maintenance of chain of evidence

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Key informant review of draft case study

Systematic data collection andanalysis procedures

Consideration and elimination of rival explanations

Subjectivity of researcher acknowledged and self-monitored through reflective memoing

Internal Validity

Credibility

Authenticity Internal Validity

Credibility

Interpretive Validity

Substantive quantity and diversity of rich multi-layered data

Triangulation among data sources and types of informants

Frequent iteration between data collection and analysis

Data gathered for control and contrast purposes

Prolonged duration of researchincluding multiple field visits

Extensive number of informants Conference presentations to expert audience

Internal and external peer review

Followed well-established qualitative research procedures

Establishment of trust with key informants

Atmosphere of openness and rapport established with interview respondents

Examination of previous research findings in the literature

External Validity

Transferability

Fittingness External Validity

Transferability

Generalizability

Not inconsistent with existingtheories

Extensive data collection Thorough description of research setting and context to allow reader to relate findings to their own contexts

86

Reliability

Dependability

Auditability ReliabilityDependability

DescriptiveValidity

Data comprehensively collectedand organized in case study database creating an auditablepaper trail

Attention paid to factual accuracy and precision of datagathered

Analysis conducted with diligence

Data collection and analysis methods documented in detail

Overlapping data collection methods

From a subjectivist (Morgan & Smirchich, 1980) or pragmatist

(Dewey, 1938) perspective, it is impossible to separate ourselves

and our identities from the research and analysis that we do.

Therefore, the trustworthiness in the findings can be increased

with explicit descriptions of what I did to be as self-reflective

and aware as possible of my personal assumptions, biases and

values and the role that they may have played during data

collection and analysis (Miles & Huberman, 1994; Corbin &

Strauss, 2008). These reflections, as noted earlier, were

captured in memos written during data collection and analysis and

included my experiences, for example, in interviewing smallholder

farmers – people with some of the fewest material possessions in

the world, exposed to natural and political risks with few social

or economic safety nets. These same individuals, many of whom

87

were women, did not lack for willingness to learn, work hard, and

take advantage of opportunities to improve their lives and those

of their families. In these memos I reflected on how

understanding their stories, their constraints and their

resourcefulness, like previous research studies in Africa and

India with low-income individuals, provided on-going motivation

to pursue research that could have the possibility of

contributing to knowledge that could allow for more effective or

more sustainable opportunities. In my notes I was conscious of

the importance of not exaggerating their situations as a form of

rhetorical dramatization. Instead I wrote of my interest to

respect their stories and challenges in order to maximize any

contribution that my analysis might have to theory and practice.

This self-reflective knowledge was cultivated as part of the

overall practice of being sensitive to signals, signs and

patterns in other types of data, and was fed into the iterative

process of data collection and analysis. The practice of self-

reflexivity helps avoid forcing data into interpretations that

are overly predetermined by the researcher (Glaser, 1992).

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Quantitative Data Analysis

Although the primary data used in this study was drawn from

qualitative sources, I also gathered and analyzed quantitative

data to inform my understanding and theorizing. Quantitative data

was analyzed from the raw survey data gathered by CARE or third

party organizations on farmers, farmer groups, collectors,

livestock health workers, processors, feed and medicine sellers,

and agricultural input supply shops (see Appendix E). In many

cases I was able to add questions to the surveys as my research

progressed. The quantitative survey data was analyzed for

evidence on how CARE interventions were working and the impacts

of CARE’s market practice enhancements on farmers and other value

chain actors. Since the data had been collected at the household

level, the static group level, and the dynamic group level (which

changes over time) over eight waves from 2009-2012, advanced

statistical methods were required to produce accurate results. In

order to analyze the data in detail to look for trends and

effects, I had a statistician build statistical models that

controlled for the farmers’ context and many mediating variables

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including geographic variables, group effects (i.e. group number

and group contextual variables), and household differences (i.e.

family size, number and breed of cows). R software was used to

build mixed-effects regression models with both fixed and random

effects. This was important for accuracy as this data had both

nested effects (such as households within groups within regions)

and crossed effects (such as groups that had been involved with

CARE for different lengths of time). Due to the complex nature of

the raw quantitative data, all of the models were created using

generalized linear mixed-effect models (Faraway, 2006).

Generalized linear mixed-effect models are a class of models

designed for the analysis of clustered and longitudinal data with

non-normal dependent variables. The models were constructed using

a binomial link function and a penalized quasi-likelihood method

(Faraway, 2006). All the models included both a random intercept

and a random slope. Each model included fixed effects such as

size of cow herd, time of data collection and length of time that

the farmer group had been involved with the CARE project. Each

model also included a series of random effects including which

group individual farmers are associated with and time. This

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method properly controlled for the fact that each farmer group

was measured repeatedly in the data collection process. This

method also properly controlled for the fact that the data was

clustered in several dimensions (ie. time periods and geography).

The acceptable significance level for all of the models was alpha

= 0.05.

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FINDINGS

Over the course of my study, I found that CARE was

successful in having an impact on milk production and incomes of

the farmers targeted by the project. My analysis confirmed that

CARE significantly reduced poverty for the 35,000 farmers

targeted by the project (see Appendix G for a variety of high-

level impact indicators). Between August 2008 and April 2012,

average monthly farmer income from milk sales increased 69

percent while overall milk production increased 48 percent.

Project impacts were measured based on an independent in-depth

baseline study carried out by the Washington-based International

Food Policy Research Institute (IFPRI) (see Appendix F) and

monitoring and evaluation data collected by CARE with a

methodology audited by IFPRI and the Bill and Melinda Gates

Foundation (see Appendix E). I also found that the emerging

explanation of how these results were achieved did not fit

comfortably with the logic of the three prominent theories of

poverty reduction in the management literature. There were no

large multinational companies involved in innovatively selling

products and services to the farmers; microfinance was actually

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readily available but did not have any influence in reducing

poverty; and in the subsistence rural economy there was no

prospect for the growth of small and medium-sized enterprise

employment in the near future. Certainly, some elements of each

of the three approaches could be recognized in CARE's activities

and in the marketplace, but the overall logic of existing

approaches in the management literature could not explain CARE’s

apparent success in reducing poverty.

How Might Success in Reducing Poverty for Poor Producers Be

Explained?

I found instead that CARE’s success in reducing poverty was

the result of its ability to enhance market practices and change

market structures in ways that redistributed social control for the benefit of

poor producers within their embedded market constraints. I define

social control in an economic context as a condition in which an

individual in society is able to assume the attitudes and actions

necessary to increase his or her self-sufficiency or decision-

making power over his or her economic assets, inputs, production,

outputs or transactions. Social control includes both economic

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dimensions (such as increased productivity and market access) as

well as social dimensions (such as greater capabilities and

power) which are both ends in themselves as well as the means to

the ends of greater economic incomes and reduced poverty. The

redistribution of social control combines both practical market

practice enhancements and market structural changes. My view of

enhanced social control for the benefit of poor producers

resonates with Amartya Sen’s notion of the means by which an

individual acquires capabilities and resources “in pursuit of

whatever goals or values he or she regards as important” (Sen,

1985: 203). My concept of social control also recognizes the

relational aspect of control – that it is a condition, similar to

that of power and agency, which is necessarily relative to others

in society. This definition of social control incorporates the

concepts of empowerment and agency, but situates them within the

context of market and economic control (Pardo del Vol & Lloyd,

2003). Within the broader discourses on power in the social

sciences, the present concept of social control is consistent

with structuration theory which defines power as the capacity to

achieve outcomes within institutional constraints due to the

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interdependence of structure (e.g. value chain development) and

agency (e.g. empowerment of individual farmers) (Giddens, 1984).

Within the long history of literature on power and poverty, the

concept of social control builds on the logic that markets can

enable people to lift themselves out of poverty, but in many

instances the distribution of power within market institutions

and practices constrains the benefits of growth from reaching

poor producers (Green, 2008).

CARE recognized the relative lack of individual market,

economic and social power that poor producers possessed relative

to other value chain actors and was astute in its understanding

of the structures and relationships within markets that

perpetuated unequal relations. I found that CARE’s facilitative

role in the reallocation of social control toward poor producers

worked to reduce their poverty through two mutually reinforcing

mechanisms: reducing the market failures that particularly

affected poor producers and reducing the failure of government to

provide basic services and uphold basic rights. Figure 3

summarizes the explanatory model that emerged from the data.

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Figure 3: Poverty Alleviation as the Redistribution of Social Control

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Elements of Social Control

As I studied CARE’s work and analyzed the data, six market

practice enhancements emerged as elements of social control that

led to four important higher-order market structure changes.

These elements of social control and resultant market structure

effects are summarized in Table 4 and explained below. Table 4

also gives illustrative examples of how redistributed social

control addressed market failures and the failure of government

to provide basic services, thereby making markets more inclusive,

coordinated and efficient across the value chain. The

interrelatedness among these elements created mutually

reinforcing cycles of interaction that contributed to their

perpetuation. I found that greater social control among poor

producers reduced market failures and the failure of government

to provide basic services, thereby increasing producers’

prosperity. In the paragraphs below, I further describe and

explain these elements of social control that contributed to the

initiative’s effectiveness: collective action, participation, access to inputs,

capability enhancement, access to markets and transaction transparency.

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Table 4: Redistribution of Social Control as a Means of Reducing Market and Government Failures

Redistribution of SocialControl Addressing Market Failures:

ExamplesAddressing Government Failures:

ExamplesMarketPracticeEnhancemen

ts

Market Structure Changes

Lack of Information Monopolies

Lack of Economies of

ScalePublic Goods Basic Rights

CollectiveAction (e.g. producer group formation)

Increased productivity

Restructured power

Reduced information asymmetries

Farmer bonding leading to mutual accountability and communication

Collectors as agents of groups and increased bargaining power

Bulk buying of inputs and aggregation of milk that allow for efficiencies and reduced costs

Group solidarity, self-reliance, enhanced trust in transactions, savings groups

Voice for womenand poorest producers

Participation (e.g. group leadershipand governancestructures)

Restructured power

Reduced risk

Efficient channel of information dissemination and communication with other market actors

Leadership based on service and merit rather than strictly power elites

Facilitation of relationships with larger formal organizations

Equity and inclusion of women and the poor

Participation and voice for women and marginalized ingroup leadership

CapabilityEnhancement (e.g. training and education)

Increased productivity

Restructured power

Reduced information asymmetries

Reduced risk

Animal husbandry knowledge to enhance productivity and quality

Negotiation skills that enhance marketpower

Individual performance tracking data that allow for system level improvements

Curricula for poor farmers and vet assistants

Inclusion of women and the poor in training and education

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Access to Inputs (e.g. input market linkages and technologies)

Increased productivity

Reduced information asymmetries

Quality testing, optimal feed mixes, and relationships between farmersand suppliers

New and multiple choices and points of access for inputs

Enhancement of village demand and microfranchising systems for inputsellers that create sustainable access

Quality monitoring of commercial feedand microfranchising standards

Women as vet assistants and feed sellers; customized bicycles for women

Access to Markets (e.g. output market linkages)

Increased productivity

Reduced information asymmetries

Reduced risk

Relationship building between farmersand milk buyers

Milk supply contracts thatenhance control and power over monopoly buyers

Reduction of transaction costsfor buyers, collectors, and farmers through milk aggregation

Enhanced milk quality and trust in the dairy value chain

Women as collectors

Transaction Transparency (e.g. rules of exchange)

Restructured power

Reduced information asymmetries

Reduced risk

Lactometers anddigital fat testing meters

Transparent digital fat testing that overcomes processor monopoly

Increases in returns to investment and scale by rewarding farmersfor improved milkquality

Establishment of fat testing practices in the absence of government standards

Fairness in transactions regardless of social status and market power

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Market Practice Enhancements

Collective Action

An important element in redistributing social control toward

poor producers was organizing farmers into producer groups

(Sarker, 2005). Group formation as a form of collective structure

gave farmers greater individual and market power through

achieving economies of scale and reducing transaction costs.

Group purchases reduced costs of inputs through bulk buying of

feed and veterinary medicines, thus improving productivity. The

formation of groups also strengthened the voice of the farmers’

interests in local decision-making processes. Concurrently,

groups allowed for the aggregation or “bulking” of milk into

larger volumes, reducing the transaction costs of milk collection

and transportation and improving farmers’ bargaining power with

formal or informal sector buyers. Aggregating milk into larger

volumes also made it easier and more profitable for collectors to

provide service to producers rather than relying on independent

collectors who were otherwise incentivized to maximize their own

incomes at the expense of the farmers. Groups gave producers the

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power to elect milk collectors to act as agents of the group in

transporting and selling the group’s milk, which in turn

increased accountability in transactions within the group and

provided greater access to information from the marketplace.

CARE’s organization of poor dairy producers into 1,163

groups also created efficient channels for information

dissemination and training. As a group began to build shared

experiences through joint problem-solving and information

exchange, members developed an increasing sense of mutual

accountability, solidarity and self-reliance (what one

interviewee called “farmer bonding”). Farmer groups also provided

the basis for more formal relationships with other value chain

actors, improving communication and trust in exchange

relationships. A male farmer who had previously lost his land to

river erosion concurred: “I used to spend a lot of time and money

selling milk personally. Milk selling in a group is saving me

time and money. I can now spend more time with my cows and

crops.” Therefore, by means of collective action, the farmers

were able to augment their autonomy, decision-making power,

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productivity and access to information in responding to

potentially acute market constraints.

Participation

CARE not only helped producer groups form but paid

particular attention to the potential for reducing individual

powerlessness through participation and improvements in the

quality of group leadership and governance. A CARE employee

described the process of group formation:

So what we would do in an initial meeting is lay out what we’re planning to do in the project. Advise them on why we think a group of 25 to 35 is optimal. And help them to beginunderstanding the key characteristics of what we think the group leader should have in terms of the skills, the competence, the reading and writing skills, management skills, etc. But the selection of those leaders is done by them.

Rather than allowing producer groups to be captured by local

elites or men at the expense of women or more marginalized

members, CARE ensured that rules and norms of group meetings

operated to include women and the poorest or least vocal members.

This was achieved based on CARE’s reputation as being a neutral

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third party and the competencies of CARE field facilitators who

were skilled in group work and familiar with the dynamics of

village politics. Ensuring the participation of women in farmer

groups created spaces of empowerment for unobtrusive expansion of

otherwise institutionalized gender roles (Natajaran, 2005).

CARE’s market initiatives also redistributed social control

by supporting the training and self-employment of 28 women milk

collectors and 42 women veterinary assistants (local animal

health care workers), both jobs traditionally carried out by men.

Although this process of enabling greater gender equity and

opportunities for women was not always lacking in pushback from

community members, CARE’s localized knowledge of the contours of

institutionalized beliefs about gender norms and roles enabled

them to pursue promising opportunities with minimal community

backlash. As a female milk collector who had lived in extreme

poverty stated:

Previously I had no idea about hygienic milk collection, hadno linkage with a market, had very limited social contact and degraded status, had limited knowledge about cow management and balanced feeding; but now I have started

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believing in my aptitude… that I have the power and capacityto change my way of life.

The International Food Policy Research Institute evaluated CARE’s

dairy-related work in Bangladesh and indicated that “the project

is having positive impacts on women’s asset ownership (physical

and natural capital); decision making power; and human, social

and political capital” (CARE, 2011: 19). A female paravet

(veterinarian practitioner) who had been trained by CARE

concurred that the initiative had been successful, stating: “my

acceptance level in the community and in my family is growing up.

I don’t feel helpless any more. Now I am self-dependent and

confident.” My access to CARE’s raw quantitative data on group

composition and governance allowed independent statistical

analysis which showed that milk income increased as the

percentage of women in the farmer group increased. In addition,

groups with women leaders earned more income from milk sales than

groups with male leaders (see Appendix H).

These shifts in social control through increased

participation of women also triggered accompanying empowerment

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beyond dairy-related activities. One example was group income

savings activities as illustrated by a CARE manager (and further

documented in Appendix I):

…the fact that they have a common pool of savings they can rely on, especially given the households we are working with,some of whom are landless, that does give them an opportunity, gives them a bit of a safety net in some ways. And I think it’s not just the money, it’s also the fact that they have these relationships, which we think is tremendouslyimportant for them.

CARE’s initiative to effect incremental changes in

hierarchical power and create inclusiveness through participatory

improvement gave farmers greater self-sufficiency in managing

their assets and production processes. It enabled them to

mobilize savings and overcome liquidity constraints that often

act as barriers for small farmers to invest in the health and

nutrition of their livestock.

Capability Enhancement

Chronically poor producers engage in social and economic

life on highly adverse terms (Cleaver, 2005). Capability

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enhancement is a means of social control that emerges from

increases in the capacity of people to satisfy their own needs

(Nussbaum, 2011; Sen, 1999). Specifically, CARE drew on a

repertoire of actions to enhance training and education for

smallholder farmers in ways that increased relevant competencies.

The need for capability enhancement was highlighted by a CARE

manager who stated that poor farmers have “no access to anybody

else who is providing training to them, either from government or

from the private sector; somebody needs to make the investment in

the training.” Education and training provided dairy farmers with

the knowledge and skills to improve their market power and the

returns on investment in their cows.

The poor producers that CARE worked with had an average of

only one and a half years of formal schooling and often possessed

limited knowledge of productivity-enhancing animal husbandry

concepts such as immunization, parasite treatment, animal

nutrition and feed storage methods (Ahmed, et al., 2009).

Typically, however, farmers were eager to acquire knowledge. As

one woman farmer with no formal education stated, “I know the

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value of education. I could not get it, but I am sending my

daughters to school.” CARE’s training practices included a

standardized curriculum tailored to the producers’ limited

material resources and literacy levels. The curriculum relied on

pictures, prioritized the most essential elements to improve

animal productivity (e.g. feeding green grass to lactating cows)

and included training on their rights as well as market

negotiation skills. CARE’s complement of 55 field staff were

intentionally drawn from the regions where they worked, ensuring

as close a match as possible to regional dialects and customs and

understanding of local market constraints and opportunities.

After initial training sessions, farmers were enabled to

sustain improvements in their dairy production. To achieve this,

group members tracked their performance in adopting ten primary

dairying practices that could be attained within the resource

constraints of their institutional setting (e.g., keeping records

on cattle health). This self-evaluation process, termed

“participatory performance tracking,” consisted of meetings every

few months where farmers would place pictures representing each

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practice they had successfully implemented in a column by their

name on a large 10 (practices) x 30 (group members) matrix. This

created an opportunity for members themselves to take the

initiative in identifying obstacles to further adoption of

practices and enhanced their abilities to improve their own

performance. Independent statistical analysis of quantitative

data showed that the greater farmers’ knowledge of animal feeding

and health practices, the greater their milk-related incomes (see

Appendix J).

CARE’s implementation of capability training and education

on essential animal husbandry practices and market opportunities

therefore imparted greater control over farmers’ assets (i.e.

reliably increased milk productivity and quality), inputs

(immunizations and feed) and transactions (market information and

negotiation skills). In offering training in hygiene and other

practices, this also reduced the risk of farmers’ milk becoming

contaminated or spoiled. By building capacity, CARE thus improved

the level of self-sufficiency and decision-making power of

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producers and increased their social control relative to both

upstream and downstream value chain actors.

Access to Inputs

Increasing access to markets for productivity-enhancing

inputs (like improved feed, vet services and medicines) and

technologies (like artificial insemination with improved animal

genetics) was revealed by this study as a central element in

redistributing social control toward poor producers. To increase

opportunities for farmers to use productivity-enhancing inputs

and technologies, CARE worked with various value chain actors to

enhance their accessibility and affordability.

For example, CARE worked with feed companies to encourage

them to package rations in 10kg bags (rather than 40kg). These

quantities were more useful and affordable to farmers and

increased feed companies’ overall sales. Another example is the

customized three-wheeled bicycle developed by CARE for use by

women milk collectors that could also be used to transport feed

for sale in the villages. Simple village-level technologies for

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feed preparation and storage also ensured that animals received

the maximum nutritional value from their diet. In these ways, the

inputs and technologies introduced through CARE’s facilitation of

market interactions gave smallholder farmers, especially women,

more social control over resource use and increased ownership of

input processes in ways that increased their incomes and ease of

transaction with upstream suppliers.

CARE also facilitated distribution channels for inputs such

as green grass, concentrate feeds, medicines, and artificial

insemination services that gave farmers much greater self-

sufficiency and control than they had previously possessed with

existing channels. In many cases, the smaller and remote villages

where CARE’s target farmers lived lacked markets or shops that

carried the products and services they needed. Most of these

villages, along with approximately 30 percent of the rural

population, were often beyond the “last mile” of formal

commercial distribution channels (McKague and Tinsley, 2012;

Vachani and Smith, 2008). CARE facilitated the piloting of

multiple alternative market practices simultaneously to see which

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approach might be most viable in the creation of sustained input

market linkages. Examples included assisting individuals to

establish small dairy input shops in their villages and

supporting milk collectors, veterinary assistants, and rural

sales women in the sale of feed and medicines along with their

regular goods and services. CARE partnered with large private-

sector processors to extend input provisions to smallholder

farmers. CARE also initiated efforts to improve the quality of

inputs through enhanced quality testing and microfranchising

(Kistruck, Webb, Sutter & Ireland, 2011) of emerging village

input shops. Over time, the distribution channels with the

greatest potential for farmer benefit and commercial

sustainability in a particular region emerged. Statistical

analysis showed that farmer access to improved feeds, medicines

and artificial insemination were associated with increased

incomes (see Appendix K). All of these activities generated

greater input and output selection and greater power and

productivity for the farmers.

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Access to Markets

The fifth important market practice enhancement that

redistributed social control to poor producers was increased

accessibility to product markets. CARE facilitated farmers’

ability to create new output market linkages and relationships.

Dairy farmers have a unique need in that they not only must

connect their supply to the strong and growing sources of demand

for milk products in larger population centers, but they must

have the opportunity to sell what they produce quickly. Thus,

small farmers face the perishability of milk produced in a hot

climate with no village-level refridgeration infrastructure. They

also confront market challenges, including varying seasonal

demand, lack of transportation infrastructure, lack of basic

information about market opportunities, and inadequate milk

collection practices. To address these market access challenges,

CARE created disincentives for less than transparent output

market actors to remain in the market and improved opportunities

for honest market actors who could share in the benefits as

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farmers increased their incomes. As a female farmer living in

extreme poverty recounted:

Two years ago the price of milk was very low. There were very few collectors available and we had no other way but tosell to the collectors. They took advantage of this and paida low price for the milk we used to sell.

Traditionally, independent milk collectors travelling door-to-

door to buy milk were tempted to add water to the milk to

increase milk volume and maximize their own incomes. Farmers were

also tempted to do this. From CARE’s perspective, this not only

created product quality issues and consumer health concerns but

also reduced trust in the value chain. To address this, CARE

helped educate farmers in the importance of keeping milk free of

water and contamination and encouraged farmer groups to nominate

a milk collector from their own village and pay them a

competitive daily flat rate (made possible by milk aggregation).

With these new arrangements, losses due to spoilage by collectors

were reduced to zero. Local collectors, effectively acting as

agents of the group, increased opportunities for accountability

and trust in the value chain and allowed the collector to be a

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reliable conduit for reporting information about market

opportunities and prices back to the group.

Statistical analysis of quantitative data showed that

producer households that selected their own collector had

significantly higher total household income from dairy sales than

households that did not choose their own collector (see Appendix

L). As noted earlier, CARE also supported opportunities for women

to become milk collectors. As one CARE interviewee described:

We had a situation where a widow in a community or someone from a minority religious community has been appointed to bea collector. I think what we’ve done there is provide them with a little bit more training, a little bit more support. And in some cases, we may decide to help them with access toa bicycle which we might fund or partly finance in order forthem to have the traditional support to be able to do this, to interact with the market. But a lot of it relies really on the groups. This is not something that CARE would come inand intervene in and expect to work if the group didn’t havebuy-in to assist them. So I think we’ve never gone out and identified a woman collector and said, oh, you should make her a collector. It’s been a process in which the community would say to us, we’ve identified someone here we think could be a good collector. She’s a woman. These are the constraints that she’s facing. How could you help us to resolve this?

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This continued strengthening of market linkages, in turn, led to

the implementation of more value-added strategies as well. Market

practices such as packaging liquid milk, making cheese curd, or

separating the cream from the milk allowed farmers to diversify

their portfolio of products for sale and broaden their market

opportunities. Value addition strategies helped farmers turn

their labor into increased income and reduced risk by creating

less perishable and more easily transported products.

CARE also served as a temporary broker to expand farmers’

market opportunities by helping establish longer-term relations

between the farmers and both formal sector buyers (chilling

plants of large dairy processors) and informal sector buyers

(local restaurants, tea shops, hotels, yogurt makers and sweet

shops). These relationships served to inform farmers of quality

and volume demands and buyer expectations. By developing trust

through direct relationships along the value chain between

sellers and buyers, poor producers also gained market power

through enhanced knowledge of prevailing market prices and access

to a wider choice of trading partners. Regardless of whether milk

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was sold to the formal or informal sector, CARE helped to

construct paths towards greater market opportunities for the poor

that gave them more information, power and control over the terms

of trade for the milk they produced.

Transaction Transparency

Results revealed that increasing transaction transparency

was a critical mechanism in the reallocation of social control to

the smallholder dairy producers. Increasing transparency helps

markets work as coordination devices (Aspers, 2011). Transparency

in exchange relationships increases self-sufficiency and

decision-making power for poor producers by improving

accountability, trust, methods of product or service assessment,

and equitable market development. A key issue for dairy farmers

is how milk fat is tested, which in turn determines the price

that farmers are paid per liter of milk. CARE reported that fat

testing evaluations had shown a marked discrepancy between fat

content as measured when collected from farmers and when measured

at the chilling plant. Under prevailing practices, milk was often

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not tested, or was tested away from the observation of farmers or

their collectors, a strategy that exacerbated information

asymmetries between producers and buyers and compromised the

quality of information necessary to establish fair prices. In

some instances, milk was tested by buyers simply plunging their

hands into the milk to subjectively estimate its fat content. As

a CARE employee described the situation:

If you are an honest farmer, who has a high fat percentage, you are going to end up getting a lower price than you should. And one of your neighbours, who may be adding water to their milk, actually has a benefit. So we just think it’sthe complete misalignment of incentives.

To enhance transparency, CARE facilitated the introduction of

lactometers (simple milk quality testing devices) and digital fat

testing meters (more advanced devices) into the dairy value chain

and trained both producers and collectors in their use.

Evaluations of the introduction of digital fat testing meters at

chilling plants showed that the increased transparency they

provided was responsible for a 20 percent increase in the price

of milk paid to farmers. These significant improvements in

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transparency led to much greater market price accuracy, more

equitable milk prices and tangible incentives for farmers to

produce higher quality milk.

Another dimension of the milk production market is the

occasional buying and selling of a cow at regional “haats” or

markets. In order to increase the transparency of this

transaction, CARE introduced a cattle health card (a new practice

in Bangladesh) in which the animal’s immunizations and deworming

and other health treatments were explicitly and clearly

documented by a vet or veterinary assistant along with known

breed information. This cattle health card transparently

communicated information which could reduce buyer uncertainty

about the health risks and the genetic status of the animal and

allowed for an exchange price that reflected the investments a

farming household had made in their cattle. These improvements

were particularly valuable in this context, given the absence of

government standards and enforcement of basic transparency in

commercial transactions.

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Market Structure Changes

Apparent in the foregoing explanation of the six enhanced

market practices are the resulting broader market structure

exchanges that led to positive social and market outcomes and

reduced poverty (see Figure 3). These higher-order elements of

the redistribution of social control are increased productivity,

redistributed power, reduced information asymmetries and reduced

risk.

Increased Productivity

Enhanced farmer productivity permits greater efficiency in

converting inputs (labor, assets, resources) into outputs (milk,

profit), thus enabling greater incomes that allow poor producers

to live lives that they value. Enhanced market practices

contributed to increased productivity through greater farmer

knowledge of animal feeding, health care, record keeping, and

hygienic practices. Value addition strategies and access to

technologies such as improved animal genetics and artificial

insemination also increased farmer productivity. Farmer groups

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reduced costs of inputs through bulk purchases and aggregated

their milk output, thus reducing their own costs as well as those

of milk buyers and input sellers. Therefore, collective action,

capability enhancement, access to inputs and transaction

transparency all contributed to increased farmer productivity.

Restructured Power

CARE’s enhanced market practices worked to rebalance power

relations in the value chain toward poor producers. Mosedale

(2005: 250) writes that “the greater and more asymmetrical are

the social limits that define what is possible with a given power

relation, then the closer that relation approximates a state of

domination.” In groups of 30, farmers had greater negotiating

power and choice among buyers and could enter into contracts with

larger milk buyers and input sellers. Group formation also

empowered producers by providing a workable platform for mutual

problem solving and solidarity. Group governance structures based

on principles of equity rather than social stratification helped

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women and poorer village members participate equally in decisions

that affected their incomes. Capability enhancement, increased

personal empowerment and access to inputs and markets increased

market power leading to structural changes in the market that

benefited poor producers.

Reduced Information Asymmetries

When poor individuals have little formal education and

limited literacy and numeracy skills, information asymmetries

that benefit more powerful market actors are a significant

obstacle to reducing market failure and allowing poor producers

to improve their incomes. CARE’s market practice enhancements

helped to create structural changes in the marketplace to reduce

information asymmetries for poor producers. Introducing digital

fat testing systems and cattle health cards reduced product

quality information asymmetries. Group-nominated milk collectors

also helped bring back information to the group from the

marketplace, reducing market information asymmetries. In

addition, when village-level agricultural input shops began to

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open, CARE ameliorated transaction information asymmetries by

working with the shop owners to establish standards for the

provision of greater information to producers. In these ways,

collective action, capability enhancement, access to inputs and

markets and transaction transparency all contributed to a

structural change in the market that increased access to

information for poor producers.

Reduced Risk

Due to the nature of poverty and the fragmented and

underdeveloped nature of the dairy sector, farmers were exposed

to diverse risks and possessed few instruments on their own to

deal with these risks (Banerjee and Duflo, 2007; Duflo, 2006; Jha

& Dang, 2009). Farmers were understandably risk averse “because

they have to secure their household needs from their current

production or face starvation. There is no room for aiming at

higher income levels by taking risky decisions” (Mendola, 2007:

55). Because farmers were vulnerable to risks due to weather,

diseases, natural disasters, price fluctuations, illness and

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unreliable roads and other infrastructure, they often

intentionally chose “low-risk, low return activities” binding

them to the reproduction of traditional economic practices which

were often sub-optimal (World Bank, 2001: 142). CARE helped

farmers reduce risk by pooling risks across time and

contingencies (e.g. grouping farmers’ savings), temporarily

transferring start-up risk to wealthier actors (like CARE) and

providing more predictable sources of inputs, outputs and

exchange. Virtually all of the initiatives undertaken by CARE had

the effect of lowering marginalized actors’ risk burdens and

therefore this element of the redistribution of social control

was an especially important inducement for the poor to embrace

enhanced market practices that led to market structure changes.

To summarize, the data in this study revealed that the

redistribution of social control was a key explanatory factor in

CARE’s ability to reduce poverty for poor producers. The

redistribution of social control, in turn, is comprised of lower-

order market practice enhancements and higher-order market

structural changes. Further, I found that the redistribution of

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social control reduced poverty by addressing market and

government failures, which are discussed in the next section.

Reduction of Market and Government Failures

Having analyzed the core elements of social control that led

to CARE’s success, I continue the analysis of my model by

explaining how the redistribution of social control led to

poverty alleviation through the mutually reinforcing mechanisms

of reducing market and government failure in the producers’ local

context. Table 4 summarizes how these reductions in failure were

the result of redistributed social control.

Market Failures

Poor producers often face institutionalized patterns of

marginalization that manifest in an inequitable distribution of

information, tendencies toward monopoly power and economic

exclusion, and the inability to reach economies of scale (Mendoza

& Thelen, 2008; Banerjee & Dufflo, 2011; Karnani, 2011). Poor

people living on less than $2 per day are often less educated,

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less literate and less informed than other members of society

making them vulnerable to exploitation. Because poor people often

live in rural areas with limited infrastructure, competition for

the provision of goods and services, when they are available at

all, is often extremely limited and the poor are often forced to

turn to providers with monopoly power. Further, the productive

activities of poor households are often restricted to initiatives

and technologies that do not allow for increasing returns to

scale, leaving little opportunity for growth or improvement.

CARE’s redistribution of social control toward poor producers

through the enhancement of market practices addressed each of the

three types of market failures that disproportionately affect the

poor: information asymmetries, monopolies and lack of economies

of scale (Banerjee & Dufflo, 2011; Karnani, 2011).

First, the redistribution of social control gave farmers

greater control over and access to information and knowledge.

Farmer training in safe milk handling practices and animal

nutrition allowed farmers to increase the quality and volumes of

milk produced per unit of input. Demonstrations of appropriate

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technologies for farmers to package or process their milk before

sale gave them valuable knowledge about how they could leverage

their time and technology to increase their revenues. The

introduction of cattle health cards documenting vaccinations and

deworming treatments reduced uncertainty for potential buyers

when farmers sold their animals. Greater access to and control

over information allowed farmers to increase their incomes

through enhancing the productivity of their cows, reducing the

costs of inputs, avoiding losses due to milk spoilage, earning

greater returns from adding value to their milk, selling their

animals at a premium, and avoiding exploitation.

Second, CARE’s tactical market interventions gave poor

farmers greater control over existing monopolies by introducing

greater choice and competition and by facilitating pre-agreed

terms of exchange. When farmer groups chose to have one of their

own members trained and employed as a milk collector, when they

aggregated their milk to provide volumes that made for a viable

livelihood, and when the collectors were paid a flat rate to act

as the group’s agent, they freed themselves from reliance on

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collectors with monopoly power who lacked incentives to act in

the best interests of the group. CARE encouraged the provision of

inputs through multiple sources, including large processors,

local shops, collectors, and vets, thus reducing reliance on any

single input provider. CARE also helped farmers identify options

for multiple buyers of their milk. Where there remained only a

single milk buyer or provider of input services available to a

farmer group, CARE helped the groups agree on a Memorandum of

Understanding for terms of trade that acted to limit opportunism

by more powerful market actors. These tactical market practices

introduced by CARE addressed market failures that attenuated

local monopolies, enhanced predictability, and gave farmers

greater choice and control over production and exchange.

Third, CARE redistributed social control in a way that

allowed poor farmers, collectors and veterinary assistants to

achieve greater economies of scale and thus overcome a key market

failure for smallholder farmers. Farmers organized into groups

could achieve scale economies by aggregating the purchase of

feeds and medicines. Larger demand made the provision of inputs

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more attractive to shop owners and service providers and

occasionally bulk purchasing discounts could be negotiated. The

aggregation of outputs also incentivized milk collectors to

provide greater service to farmers (i.e. twice a day milk

collection), allowed animal health workers and shop owners to

make a viable living, and reduced transaction costs for buyers

who preferred fewer numbers of higher-volume milk deliveries.

Government Failures

Analysis of my data revealed that the redistribution of

social control achieved by CARE’s set of enhanced market

practices moved beyond the realm of market failures to address

government failures. As noted in the literature on pro-poor and

inclusive value chains, “it is not unusual for the main

impediment to poor people engaging with value chains to be the

state which purports to represent them” (Mitchell, Keane & Coles,

2009). Government failures refer to the “cases where, not as a

result of individual errors of judgment or lack of expertise but

for fundamental, structural or other reasons, government

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intervention cannot produce the results at which it is aimed”

(O’Dowd, 1978: 360; see also Wallace & Dollery, 1999). Poverty is

multifaceted and its reduction requires not only increased

incomes, but also equitable access to basic public services and

support for universal human rights and freedoms (Sen, 1999).

Equitable access to basic public services or public goods, such

as education and standards for weights and measures, are

necessary to allow poor households to work their way out of

poverty. The continued marginalization of individuals based on

their gender or other social or cultural characteristics

entrenches discrimination that undermines equal rights and

opportunities for the poor to fully participate in society. The

portfolio of practices that CARE enhanced addressed issues of

income, but also supported the rights of the poor as agentic

individuals with equal access to public services. Indeed, my data

suggest that the provision of public services and support for

basic rights were closely linked to success in reducing market

failures or government failures.

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First, the lack of access to basic public services such as

education and regulated standards of commercial practice was

addressed by CARE in a number of ways. Most directly, CARE’s

introduction of standardized training curricula customized for

rural animal health care workers and farmers with low literacy

levels led to improved knowledge and capabilities in the absence

of adequate public education. CARE also supported a

microfranchising approach (Jones-Christensen, Parsons, &

Fairbourne, 2010; Kistruck, Webb, Sutter & Ireland, 2011) to

organizing veterinary assistants and dairy input shops that could

set fair expectations for their pricing, levels of service,

quality of products, and weights and measures in the absence of

government regulation and enforcement mechanisms to protect the

interests of farmers. Also, in the absence of public goods such

as adequate transportation and electricity infrastructure to

support milk refridgeration, CARE trained farmers in hygienic

milk handling practices to reduce losses due to spoilage. These

market practices addressed the failure of governments to provide

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basic public services such as education, infrastructure and

standards of commercial practice.

Second, weak or absent governments may fail to uphold basic

human rights or address discrimination. CARE’s practice of

supporting women as group leaders and milk collectors directly

increased women’s capabilities and empowerment. Thus CARE’s

market practices addressed governance failures by increasing the

capabilities, freedoms and power of the country’s most

marginalized market participants. This not only acted to reduce

poverty, but also simultaneously worked to expand human rights

and economic opportunities.

To summarize, the analysis of my data demonstrated that

increases in social control of poor producers by means of

practical, incremental and non-confrontational market practice

enhancements reduced poverty through two mechanisms: reducing the

market failures that disproportionately affect the poor through

enhanced knowledge, increased scale economies, and the provision

of alternatives to monopolies, as well as compensating for

government failures by upholding the rights of the poor and

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offering basic services that improved their welfare and

capabilities.

Institutional Leveraging

The data also revealed that the relationship between

redistribution of social control and effective poverty

alleviation was moderated by the extent of CARE’s institutional

leveraging (see Figure 3). Institutional leveraging is the process

of stimulating market change by meticulously framing and

implementing new market practices within the existing

institutional logics and incentives of value chain actors.

Institutional leveraging gave local actors a way to make sense of

new market practices within the cognitive structure of their own

logics about markets and to reduce their experienced uncertainty

in implementing new market initiatives. The various market-making

strategies that I identified during my research were implicit to

CARE’s behaviors rather than explicitly recognized or articulated

by the organization. Institutionalization of market practices is

the perception by market participants that they are likely to

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endure as a legitimate aspect of production and exchange. I argue

that markets cannot be created independently of their social

enactment. Creating and enhancing market practices in ways that

are aligned with local institutionalized understandings of what

constitutes a socially appropriate and economically viable market

is crucial to successful market creation. This study found that

creating market practices that are carefully aligned with local

institutionalized understandings of what constitutes a socially

appropriate and economically viable market is a crucial

moderating variable to successful market enhancement for poverty

alleviation. I propose that CARE customized incentives around the

institutionalized logics of market participants by applying four

institutional leveraging mechanisms: provision of evidence,

contextualization of knowledge, legitimation of transactions, and expansion of

relationships. These mechanisms are summarized in Table 5.

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Table 5: Institutional Leveraging Mechanisms of Market Creation

Dimension ofMechanisms

Institutionalizing Mechanisms of Market Creation

Provision ofEvidence

Contextualization of

Knowledge

Legitimationof

Transactions

Expansion ofRelationships

Definition Perceived incontrovertible proof that a product, technique or market has enduring value for themarket participant

Training and technical assistance embedded and contextualizedwithin the institutional values of the community

Cultural support for markets and market participation within local institutionalized norms and values

Relationship-building directed toward community and political actors to affect the allocation of material resourcesand collective cultural support for the market

Example Pilot projectthat demonstrates better outcome quality and volume from improved inputs

Training locally selected community leaders to translate and diffuse knowledge

Legitimating quality testing through accessto socially accepted measurement methods

Matchmaking meetings; multi-stakeholder working groups; international dairy conference

Basis for need

Risk minimization

Knowledge internalization

Social endorsement

Political and social approval and trust

Source of momentum forinstitutionalizing the market

Proof of utility

Local leadership andknowledge buy-in

Alignment of expectations about market transactions

Regulatory, social, and community support

Perceived value

Assurances ofreturn on investment

More effectiveknowledge transfer and diffusion

Faster, easierimplementationthat is sustainable

Sustainability of market developmentinitiatives

Role of Demonstrator Knowledge Legitimacy Advocate for poor

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intermediaryorganization

and trust broker

translator provider producers

Implicationsfor value chain coordination

Induce changethrough tangible proof rather than verbal assurances

Induce rather than impose change throughthe use of locally framedknowledge

Encourage change throughlegitimacy of local norms and values

Ensure change efforts are underpinned by consistent rules and shared norms

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Institutional leveraging is a strategic intervention that

secures a maximum cognitive fit between existing localized

institutionalized logics or beliefs and proposed change

initiatives and then builds off this congruence to incentivize

and propagate change. Institutional leveraging achieves this fit,

first, by reconstructing institutional understandings of new

knowledge and initiatives within the frame of current local

beliefs, rather than by imposing different belief systems on a

given collectivity. As Lee and Paruchuri (2008: 1173) noted,

“integration of new logics under the umbrella of preexisting

institutional logics creates ‘facticity’ (the state of being a

fact) for the new logic.” Institutional leveraging then propels

change forward by working off this integration to incentivize

participants to embrace new initiatives as core components of

their beliefs. I elaborate the logic and evidence for the four

institutional leveraging mechanisms below.

Provision of Evidence

Institutionalized understandings are “shared templates for

interpreting situations and planning courses of action in

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mutually comprehensible ways that involve social accountability”

(Biggart & Beamish, 2003: 444). My interviews and observations

uncovered consistent findings that local producer logics and

expectations were highly institutionalized around the value of

what I call proof of utility. Proof of utility refers here to

perceived incontrovertible evidence that a given object or

technique possesses high economic value for the recipient. In the

context of market exchange, the key institutionalizing mechanism

that generated momentum in developing a dairy market among

producers was the provision of evidence by CARE that adoption of

enhanced market practices possessed utility, that it was

economically and socially beneficial for the potential market

participant. One CARE technical advisor noted that “farmers don’t

do something till they see it, they are very risk averse.” The

reasons for the importance of proof of utility are obvious: the

risks associated with failure for actors in less developed

countries are extremely high (e.g. insufficient sustenance or

loss of the few assets that are owned); access to valid evidence

is often difficult to acquire in these contexts, making its

acquisition valuable; and a low level of rule of law and

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relatively high level of state and private sector corruption

(e.g. Bangladesh ranked 134th out of 178 countries on

Transparency International’s Perceived Corruption Index in 2010)

seriously compromises the usefulness of unconfirmed evidence for

economic decision making. As a consequence, proof of utility as a

core logic of exchange was highly institutionalized among dairy

producers.

As an example of providing evidence to create momentum in

institutionalizing market exchange, CARE initiated a pilot

project to give farmers and their exchange partners (in this case

a dairy processor) proof that changes in the use of feed would

provide tangible concrete improvements to profits for both

parties. In a controlled experiment, farmers were given

measurable amounts of improved feed over a number of months and

were able to observe the increase in milk volume and

profitability of their cows as a result of higher quality inputs.

Therefore, by adopting a strategy of structured experimentation,

CARE was able to design a market initiative that leveraged core

institutional beliefs (proof of utility) to incentivize change

and grow the market.

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A second example was the introduction of lactometers (milk

quality testing devices) into the value chain. CARE initiated the

distribution of milk-quality testing devices in villages as a

means of providing a tangible evidence-based means of measuring

milk quality, thereby improving market price accuracy. Leveraging

producers’ strong belief in the provision of evidence, the feed

experiment and introduction of testing devices rapidly

accelerated improvements in market transparency and efficiency,

generating strong incentives and momentum for market development.

Contextualization of Production Knowledge

CARE is among many NGOs worldwide that seek to provide

training and technical assistance to the disadvantaged to

generate sustainable improvements to their income. In CARE’s

case, however, I propose that the success of the organization’s

approach was attributable to its unvarying contextualization of

novel production knowledge and information within the meaning

systems of those whom it was attempting to assist, and its use of

this contextualization to leverage social modeling processes,

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knowledge codification, and role modification to incentivize

market development.

Institutional theory suggests that individuals are more

likely to act in conformity with those whom they consider similar

in values and beliefs, particularly if those referents are also

of higher status. Research on social modeling and institutional

imitation also shows that individuals’ behavior is affected more

by those whom they consider relevant comparisons for their own

choices about whether to undertake new economic activities

(D’Aunno et al., 2000: 679). Smallholder farmers accustomed to

subsistence mixed farming methods often possessed little

knowledge of many productivity-enhancing concepts of dairy cattle

rearing, including limited understanding of immunization and

parasite treatment, animal nutrition, high yielding fodder, and

feed storage methods (Ahmed et al., 2009: 15). CARE applied

institutional leverage by embedding production knowledge and

training within the respected local leadership of the community.

CARE worked within the existing social structure to leverage the

value of local leaders as plausible referents of socially

acceptable economic behavior, thereby accelerating the

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translation, implementation and diffusion of novel production

knowledge. CARE’s success in contextualizing production knowledge

within an institutionalized frame of reference was also leveraged

by ensuring that all 88 project staff were Bangladeshi nationals

rather than foreigners and by drawing the 55 field-level group

facilitators from the regions of the villages in which CARE was

developing the dairy market. By using familiar social referents

exclusively to institute market change, CARE was able to

formalize and institutionalize market development more quickly

and efficiently.

CARE also used institutional leverage to develop the dairy

market by seeking means to codify new knowledge within the local

context. A senior CARE worker observed that “farmers don’t see it

[milk production] from a commercial perspective.” Working to help

farmers instantiate a commercialization logic of milk production,

CARE assisted farmers to envision their cattle as productive

economic assets and to evaluate those assets more in terms of

increasing returns on investment rather than exclusively on

minimizing costs. CARE introduced a Cattle Health Card for

recording and codifying production knowledge, creating an

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incentive feedback loop where farmers learned more about the

financial rewards of improved animal husbandry practices and

increased milk production, thus reinforcing and incentivizing a

commercialization logic of asset production and market

participation.

CARE also used its process strategy of participation to

leverage the institutional framework of existing gender roles for

purposes of promoting training, equity, and education for women.

Gendered division of labor tends to be highly institutionalized

in rural communities in Bangladesh with women involved in the

care of cattle and other livestock around the house and men

responsible for working in the fields and any off-farm activities

such as buying inputs or selling milk in local markets. In

addition to facilitating group meetings which both men and women

attended, CARE field facilitators conducted small group

discussions with women and

identified any women who may be having difficulty in participating in such a group and through home visits, staffbuilt rapport with the male householders to help them understand the important role that women can play in dairy production and marketing (Annual Report, 2009).

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CARE’s engagement with the local community in discussing gender

roles helped to build women’s confidence in business activities

and to persuade men of the value of gender role modification

through the cognitive rationale of economic benefit.

Thus, embedding knowledge within the local institutionalized

framework augmented and accelerated market creation by building

off social modeling processes, local engagement, knowledge

codification, and role modification to give institutional meaning

to the value of new production knowledge and market growth.

Legitimation of Transactions

The third institutional leveraging mechanism of market

creation was legitimation of market transactions. Markets are

created on the basis of material interests and shared values that

legitimate economic arrangements (Biggart & Beamish, 2004). “The

first condition of any form of coordination is that it is

legitimate among those taking part, as well as in its

environment” (Aspers, 2011: 35). Legitimacy refers here to “a

generalized perception or assumption that the actions of an

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entity are desirable, proper or appropriate within some socially

constructed system of norms, values, beliefs and definitions”

(Suchman, 1995: 574). Nascent markets, by definition, lack

established legitimacy, which is an obstacle to effective market

functioning. Legitimizing market transactions helps overcome the

resistance of market actors who prefer traditional arrangements

(Aldrich & Fiol, 1994). CARE leveraged market legitimacy in a

number of ways to incentivize and promote market development.

Core to initial institutionalization of the dairy market was

the process of bricolage, which refers to “applying combinations

of the resources at hand to new problems and opportunities”

(Baker & Nelson, 2005: 333). Simply stated, CARE leveraged an

already-existing asset among rural households – milk-producing

cows – to develop the dairy market. Cows were traditionally

raised for multiple purposes, including draught power and the

production of calves, dung and meat, rather than solely for

income generation through milk production. Bricolage is the

process of using “whatever is at hand” (Levi-Strauss, 1967: 17)

for a new purpose, a process that is particularly applicable in

resource-constrained environments (Baker & Nelson, 2005; Garud &

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Karnoe, 2003; Mair & Marti, 2009; Rao et al., 2005). By

demonstrating the economic value of cattle for milk production to

farmers, CARE leveraged an existing asset to legitimate the value

of transacting in a dairy market.

Second, CARE served as an institutional trust broker between

exchange partners to legitimate the market. This was achieved

through various strategies including communication with producers

and downstream processors to persuade them of the feasibility of

regularizing exchanges with one another, and facilitating

interactions between farmers and milk collectors, through

meetings, to build mutual trust.

CARE also helped to legitimate the role of poor farmers as

market participants in the formal value chain. Downstream formal

value chain actors were cautious in their assessment of poor

farmers as viable value chain participants due to issues of low

productivity and milk quality. As a manager from a large

processor stated, “The farmers need constant support and pushing

and motivation because they… do not understand the potential

benefits available to them.” In response to these beliefs, CARE

appealed to processors’ existing business logic by creating

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incentives for processors to work with small-scale producers to

reduce transaction costs, improve milk quality and improve the

reliability of milk delivery.

Fourth, CARE leveraged cultural and material support for the

market by working with input service providers to make production

viable, high quality and scalable. CARE focused some of its

energies toward input service access as a means of improving milk

production quality and efficiency. This generated higher income

for farmers and better met the capacity and quality- control

requirements of downstream processors, thereby increasing the

legitimacy of the value chain as a means of economic production.

For example, CARE experimented with a model where they partnered

with a veterinary association to become an informational and

transactional intermediary between farmers and chilling plants.

In this way, CARE leveraged the experience of the association to

legitimate market transactions among the farmers, collectors,

input providers, and chilling plant managers, and, in turn,

improved actors’ motivation to participate in market growth.

Finally, institutional research has suggested that current

institutionalized practices constrain actors’ capacity to imagine

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an alternative to existing economic arrangements. A critical

obstacle to developing legitimacy and momentum on behalf of a

nascent market in many less developed economies is actor

habituation to charitable and aid-based development approaches.

NGO interventions that rely excessively and continuously on

subsidies create market distortions and dependency conditions

that can accustom project recipients to free benefits. An

attractive and humane solution in the short term, aid-based

development approaches often create the unintended consequence of

constraining opportunities for self-sustaining markets in the

long term. CARE’s success in legitimating the dairy market was

partially attributable to its self-perceived role as a transient

mode of intermediation to be ultimately supplanted by self-

organized, incentivized markets and economic arrangements. As a

CARE report indicated,

[CARE] has been conducting extensive awareness [sic] and discussions during its capacity building sessions with farmer groups such that they understand, accept and internalize the market development approach and its benefits, as opposed to the subsidy driven approach.

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By adopting this approach, CARE sought to ensure that the

developing market was self-sustaining and durable in the long

run.

Expansion of Relationships

Scott (1991) argues that local relationships tend to be more

horizontal and informally structured whereas extralocal

relationships tend to be more formally structured, hierarchical,

and subject to authority relations. Social relationships shape

economic activity (Granovetter, 1985) where different kinds of

market relationships exist: “market relationships are embedded in

both economic (contract) and non-economic (friendship, familial)

institutions” (Owen-Smith & Powell, 2008: 603). Under conditions

of weak state and market governance, markets are unable to depend

on favorable state policies or effective political centralization

to stimulate market growth or solve coordination failures. An

independent study commissioned by CARE on the effects of state

policy on the dairy sector in Bangladesh showed that the dairy

sector “receives very little out of the government’s huge subsidy

bill” and “nearly all the policy related variables – both dairy

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policy and macro-economic policy – had no significant association

with growth in the dairy sector” (Jabbar, 2010: 52, 57).

Understanding the need for institutional support within the

market context of dairy production, CARE drew on its

relationship-building strategy to incentivize other actors in the

producers’ market context to promote market growth.

CARE used a number of techniques to expand relationships

that supported the development of a milk market to benefit small-

scale farmers. For example, CARE leveraged its position as the

co-organizer of a national dairy conference to present research

data on policy-related obstacles to dairy sector growth to five

government ministers. CARE also worked to convene multi-

stakeholder working groups (including government, processors,

NGOs, and multilateral institutions) around key policy priorities

for the sector such as tariffs, genetics, extension services and

certification of local animal health workers. CARE’s

participation in the working groups also helped to frame the

relevant issues from the perspective of smallholder farmers, who

were otherwise absent from policy discussions, even though they

accounted for 90 percent of the country’s milk production. By

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cultivating and expanding these relationships to help frame

market development in terms of each of the participants’ own

interests, CARE was able to motivate these and other

institutional constituents to participate more actively in policy

reform and market development. In addition to the data presented

above, Appendix M provides additional illustrative evidence for

institutional leveraging from the data.

To summarize, institutional leveraging was found to be an

important variable that moderated the effect of redistributing

social control on poverty alleviation. Institutional leveraging

can be understood as consisting of four mechanisms, provision of

evidence, contextualization of knowledge, legitimation of

transactions and expansion of relationships. When new or enhanced

market practices are aligned with local institutionalized

understandings of what constitutes a viable market, then poverty

alleviation is more likely to be successful.

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Learning Strategies of Market Development and

Institutionalization

The final element of the explanatory model illustrated in

Figure 3 is the role that learning strategies played in

moderating the relationship between the redistribution of social

control and measurable poverty alleviation. To gather and

effectively integrate the knowledge generated from the

redistribution of social control and institutional leveraging,

CARE utilized three critical learning strategies to facilitate

effective information feedback loops: needs assessment, performance

measurement, and continuous impact evaluation. These three learning

strategies provided a continuous systems-level stream of

information for dealing with complexity and guarded CARE from

adhering to initiatives that might become quickly outmoded in the

rapidly changing and fragile market environment that it

confronted. The intent of these learning strategies was to obtain

detailed feedback on the outcomes of their activities. These

learning strategies were measurement-based assessments that

brought timely and continuous insights to CARE’s strategic

decisions.

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Needs Assessment

The first learning strategy was needs assessment. CARE’s first

step in working with the milk-producing households in a

particular village was to organize a general community meeting to

share the objectives of the project, learn if the community would

be interested in participating, and engage in a tailored needs

assessment research methodology to facilitate the participation

and input of all community stakeholders. Conversations were

focused on the needs of smallholder dairy producers in the

community and opinions on the obstacles to increased incomes and

participation in the dairy value chain. Having identified the

needs of each individual village and the patterns of needs that

emerged from working with hundreds of villages, CARE was able to

establish a baseline against which to determine and gauge its

individual and community-level solutions to problems of market

development.

Performance Measurement

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The second learning strategy was performance measurement. This

refers to the measurement and tracking of practices at the level

of each value chain actor as strategic market interventions were

implemented. An example of a specific change in practice at the

farmer level was the development of what CARE termed a

participatory performance tracking matrix, as noted earlier. This

process measured the performance of individual producers on ten

indicators related to the adoption of improved animal husbandry

and dairy productivity practices. Progress targets were set

collectively by each farmer group, and individual and group

progress was measured in sessions facilitated by farmer leaders

with support from CARE field staff as needed.

Continuous Impact Evaluation

The third learning strategy was continuous impact evaluation.

Following an exhaustive baseline assessment of the dairy industry

(see Appendix E), CARE implemented a project-wide monitoring and

evaluation system supported by the Gates Foundation’s funding

model (see Appendix F). CARE assessed performance improvements

against 120 tangible and measurable milestones on a continuing

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basis (See Appendix N) and reported progress on these milestones

in semi-annual and annual reports to the donor agency.

Performance measurement of value chain actors’ practices also

served as input to CARE’s continuous impact evaluation.

Continuous impact evaluation against tangible milestones created

an overarching framework within which to experiment with multiple

iterations of both planned and speculative initiatives, which in

turn increased continuous learning and adaptation.

To summarize, needs assessment, performance measurement, and

continuous impact evaluation, while not core to the explanation

of successful market enhancement, were nonetheless important

moderating influences on the successful redistribution of social

control to reduce poverty for poor producers in a least developed

country context.

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DISCUSSION

Management Implications

Whether they like it or not, for-profit companies are often

asked to make investments in social and public goods. The debate

around business’ role in society is an old one to which new

energy has been added in the last decade as the separation

between business and poverty alleviation has broken down. Some

firms are finding new ways to create business benefits by

incorporating poor producers into their value chain. This study’s

implications for for-profit companies currently working with, or

considering greater engagement with, poor producers pertain to

augmenting the productivity and reach of low-income producers as

viable business partners.

First, for-profit firms are more likely to be successful to

the extent that they select markets in poor countries where

demand for a given product is irrefutably high and where the poor

are both producers and consumers of the product (like the dairy

industry in Bangladesh). Both conditions tend to accelerate

market growth and generate a stable market for for-profit input

providers.

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Second, for-profit businesses should tie their supply chain

to producers with the capacity to aggregate their products,

thereby leveraging scale economies and knowledge-sharing as a

basis for sustaining and growing production. Among low-income

producers in rural areas, the optimum for-profit supplier model

is not necessarily to build ties to centralized production, but

to producers who can centralize the outputs of their production

through farmer groups or cooperatives that forward integrate into

product distribution (to large wholesalers or local businesses

and consumers), excluding the necessity for independent

intermediaries.

Third, my results suggest that businesses which can develop

input linkages to low-income producers should use field

demonstrations of the productive value of their product to

establish and sustain such linkages. This study suggests that

demonstrations that provide tangible evidence of production and

income improvement are the most compelling means of building

economic relations with producers in low-income contexts.

Fourth, business might be advised to focus on increasing the

productivity of the client producers whom they can serve through

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low-cost technological and scientific applications. These

applications (e.g. higher yielding feed or medicines for

livestock), which are often common in advanced economies, may be

missing from rural areas in less developed countries, and their

introduction into these markets can serve the needs of both the

supplier and the producer simultaneously to stimulate increased

profitability.

Fifth, modest upfront investments in training or educating

producer clients on the means of improving efficiency are likely

to generate sustainable increases in the volume of suppliers’

sales. Producers can then disseminate knowledge themselves to

other local producers through farmer groups or cooperatives.

Sixth, as this study shows, businesses operating in these

contexts tend to benefit greatly from retaining staff that are

indigenous to the local area because they facilitate economic

exchange and significantly increase receptivity to new inputs and

information.

Finally, my findings suggest that companies seeking to

profitably reduce poverty for poor producers would be well

advised to understand the workings of the entire value chain and

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to attend to issues of power and risk for disadvantaged and risk-

adverse producers throughout the chain. Companies should also

assess their own capabilities as well as the capabilities of

potential NGO partners to implement market enhancing practices

that can be mutually beneficial to both the firm and low-income

producers and input suppliers.

Business Motivations for Inclusion of the Poor in Value Chains

If for-profit firms choose to play the role of market

coordinator and facilitator or if they collaborate with a market-

based NGO to make markets more inclusive for poor producers,

several business benefits are attainable. Specific benefits

presented here from the Bangladeshi context are illustrative of

the potential for business growth, innovation, reliability and

quality of inputs, reduced corruption, access to financial

resources and enhanced reputation and social legitimacy.

First, by working with poor producers, business can benefit

from market growth opportunities. The three large Bangladeshi

dairy processors have access to less than 10 percent of milk

produced in Bangladesh, reducing their opportunity to capitalize

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on rapidly growing demand for milk and other high value-added

dairy products in urban areas. Through new linkages between

smallholder farmer groups and dairy processing companies, farmers

can increase milk delivered to private sector processors thus

allowing them to expand their operations considerably to meet

consumer demand.

Second, by seeking solutions to new challenges presented by

working with poor producers, companies can develop their

capabilities for innovation (Hart and Sharma, 2004). Bangladeshi

dairy companies are beginning to benefit from innovative models

for working with farmers to generate mutual benefits for the

companies and dairy producers. These models included a one-stop-

shop dairy hub and an intermediary organization model that

improved economic transactions between dairy processing companies

and smallholder farmers.

Third, companies can benefit from greater reliability and

quality of product inputs. This stability is especially important

during any seasonal fluctuations when expensive plants and

capital assets can operate well below capacity.

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Fourth, when markets are enhanced for the benefit of poor

producers, companies also can benefit from fewer, higher-volume

transactions and reduced costs and complexities of procurement.

In addition, the potential for corruption associated with lack of

transparency can be reduced through greater transaction

transparency. At the same time, companies can benefit from

enhanced reputation and social legitimacy in the eyes of a number

of firm stakeholder groups.

Fifth, working with poor producers can unlock access to

financial resources. The International Finance Corporation and

the regional development banks have public interest mandates to

reduce poverty and achieve sustainable development and have

collectively provided more than $100 billion in loans to

companies that can demonstrate that their activities are

contributing to poverty alleviation.

Although this study focused on a non-governmental

organization, I suspect that other types of organizations,

including small and medium-sized enterprises, MNCs, and social-

purpose businesses can also serve as market-facilitating

intermediaries for the benefit of all market actors. The benefits

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for companies reveal a variety of incentives relevant for other

types of enterprises to facilitate market practice enhancement in

ways that also benefit their own market interests.

Potential Drawbacks to Market Enhancement

Although CARE was successful in working with large dairy

processors and other value chain actors to achieve its intended

outcome of poverty alleviation for poor producers, any

substantial changes in the way a market system operates will

inevitably result in potential downsides for certain value chain

actors. In the present case, CARE’s activities had potential

downsides for some value chain actors including traditional milk

collectors, chilling plant managers who took advantage of

information asymmetries, importers of powdered milk, and

individuals or groups opposed to greater capabilities and agency

for women. The power and influence of these individuals or groups

could be compromised by market enhancement practices. CARE staff

understood the potential downsides to its activities and, where

possible, gave support to ease transitions to new practices, such

as giving traditional milk collectors the same training provided

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to group-nominated collectors and helping communities to address

any resistance to women taking on more non-traditional roles.

Overall, there were significant Pareto improvements (changes that

generate benefits to some without disadvantaging others) to be

gained in the dairy value chain and CARE’s market enhancement

interventions generated net benefits to the vast majority of

value chain actors. The value chain actors who saw potential

drawbacks to market enhancing activities typically had a less

legitimate claim to the maintenance of their advantages which

generally accrued at the expense of others, and especially at the

expense of those who were the least advantaged.

Theoretical Implications for Market-Based Approaches to Poverty

Alleviation

Strategic organization-level approaches to poverty

alleviation in least developed economies confront formidable

challenges to market creation. This study sought new insights

into the causes of poverty reduction among poor producers in the

primary sector of a least developed economy by investigating the

hands-on market practices of a successful initiative that

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delivered tangible economic and social benefits throughout a

fledgling value chain. I found that making markets more inclusive

for poor producers requires a comprehensive and interrelated

approach at the level of execution that recognizes the importance

of social control and institutional leveraging. I argued that

CARE’s ability to enhance market practices in ways that

reallocated social control and leveraged existing institutional

norms was successful because it overcame the most relevant

factors in market and government failure.

While no single intervention can solve the structural,

political and economic problems of poverty, the findings of this

imply that the means by which actors, including NGOs, MNCs,

donors, policy makers and financial investors intercede in

stimulating market and income growth may be more important than

researchers have acknowledged to date. In the present case,

neither global (e.g. MNC) capabilities, state policies nor

multilateral institution programs explained market development

and poverty alleviation. Far more critical to success was the

redistribution of social control and institutional leveraging

processes used by a facilitating organization to mobilize and

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motivate local buy-in to an identified economic opportunity. This

study makes several contributions to the existing theoretical and

practitioner conversations about the role of market-based

approaches to reducing poverty in least developed countries.

First, although calls for greater attention to viewing the

poor as producers have been voiced since the emergence of the

base-of-the-pyramid approach (Karnani, 2005) as well as more

recently (Ramachandran, Pant and Pani, 2012) this current study

is among the first in the management literature to examine the

implications of this poor-as-producers approach with an in-depth

empirical study of practical strategic initiatives. A focus on

the poor as producers in the present study uncovered a detailed

model and comprehensive set of mechanisms that were able to

explain poverty reduction as the outcome of strategic

interventions to alter entrenched patterns of limited social

control among producers in ways that overcame the constraints of

market and government failure. Rather than focus on the poor

primarily as individual consumers, microentrepreneurs, or

employees in the immediate market environment, the current study

considered the relation of poor producers to the entire value

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chain to reveal important dimensions of social control that are

relevant considerations for the ultimate enhancement of an entire

industry. My results imply that future management studies of

poverty could benefit from additional study of NGOs facilitating

inclusive value chains for the poor.

Second, this study brings a more detailed analysis of power

into the management literature on poverty alleviation. This study

extends the concept of empowerment by illustrating that

empowerment is only one, albeit important, mechanism in the

process of alleviating poverty. Greater empowerment or

participation in decision-making is of little strategic relevance

if the exercise of empowerment is rendered moot by market and

governance factors, such as limited transparency, higher risks,

and constraints on resource acquisition – factors which make the

application of greater empowerment highly challenging.

Empowerment thus needs to be considered more broadly within the

economic context in which it is applied just as economic factors

need to be considered concurrently with social factors. CARE’s

approach to inclusive market development was not just about

getting prices right and maximizing economic efficiencies, but

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was also grounded in attending to social relations, risks and

power relations that disproportionately affect the poor.

Third, the effectiveness of a process-based strategic

orientation also calls into question the feasibility of

interventions in less developed economies based on traditional

top-down planning models because these contexts tend to be highly

idiosyncratic and unpredictable. Future research in low-income

economies might be advised to place considerably more emphasis on

strategy process and the chains of causality that constitute a more

dynamic theory of strategy in development contexts (London &

Hart, 2010; Pettigrew, 1992), in particular, how strategies are

interpreted and locally enacted (Wheeler et al., 2005), as was

evidenced in this study.

Fourth, my focus on enhanced market practices among poor

producers provides a complement to the three predominant

approaches to poverty alleviation in the management literature.

Table 6 summarizes the differences in focus and mechanisms of

poverty reduction among these approaches and the approach

uncovered in the present study.

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Table 6: Comparison of Market-Based Approaches to Poverty Alleviation

Differentiating Factors

Base-of-the-pyramid

Microfinancing SME Employment EnhancedMarket

PracticesPrimary Role of the Poor

Consumers Entrepreneurs Employees Producers

Key Driver of Poverty Reduction

Low-costconsumption

andaffordability

Micro-lendingand financialopportunity

Employmentcreation

Marketenhancementand growth

Underlying Mechanism of Poverty Reduction

Mutual valuecreation

through win-win marketingopportunities

Stimulation ofeconomicactivities

that generatefinancial

self-reliance

Creation ofopportunitiesfor steadyemployment

Redistributionof socialcontrol toovercomemarket andgovernmentfailures

Unit of Analysis

Corporate Microenterprise

SMEs Producercontext

Relevant Economic Context

MNE consumermarket

Domestic andforeignconsumermarket

Domesticemploymentmarket

Domestic valuechain

Key Outcome ofPoverty Alleviation

Provision ofaccess toinnovativelow-costconsumerproducts

Provision offinancialservices toestablish

entrepreneurial

opportunitiesand

microenterprises

Creation ofsteady

employmentwithin firmswith potential

scaleeconomies

Marketstructuralenhancementsthat establisheconomicallyviable value

chains

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The model may help to extend and complement base-of-the-

pyramid, microfinance and SME employment approaches in a number

of ways.

All market-based approaches to poverty alleviation can be

understood as part of the broader global shift in views on the

role of markets in international development. From the end of the

Second World War to 1980, governments and multilateral

organizations such as the World Bank, IMF and the United Nations

Development Program were assigned the lead roles in global

poverty reduction. But with the continuation of poverty on a

large scale despite massive investments in these state-lead

approaches, an ideological shift took place in the 1980s which

emphasized free markets as a solution to poverty. Known as the

Washington Consensus and structural adjustment, the prescription

for developing country governments was to open their markets and

reduce government expenditures. This approach, especially in its

more libertarian ideological form, was also limited in its

impact, and called for a middle path and a balanced approach to

the complex challenges of poverty alleviation for people living

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in countries where existing approaches had failed. These debates

on development and poverty alleviation took place at the macro

level of analysis. In the last 10 years, however, with the rise

of microfinance and the publication of Prahalad and Hart’s base

(or bottom) of the pyramid approach (Prahalad, 2005; Prahalad and

Hart, 2002), the conversation on approaches to poverty

alleviation has also entered the management literature at the

organizational level of analysis.

Critics of the base-of-the-pyramid approach argue that it is

underlying beliefs that are rooted in the libertarian free-market

ideology of recent decades (Karnani, 2011; Munir, Ansari, &

Gregg, 2010) which assume that corporations are best suited to

play the leading role in global poverty alleviation. Uncritical

acceptance of the premise that poverty can be reduced by the

presence of multinational companies profitably selling to the

poor is, they argue, at significant risk of doing more harm than

good (Karnani, 2007). Without recognition of the complexity of

poverty issues, an understanding of the power differences and

inequalities embedded in market practices (Mair, Martí, &

Ventresca, 2012) or a sensitivity to the actual poverty-related

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impacts of business activities, the base-of-the-pyramid approach

remains limited in its ability to achieve its espoused poverty

reduction impacts.

Providing greater access to productivity-enhancing goods,

services and inputs to the poor in ways that may be more

affordable and appropriate to their needs is an important element

of the redistribution of social control and poverty alleviation

as the current study has shown. However, without considering how

the introduction of new products and services into low-income

marketplaces may potentially affect power relations or risks for

the poor (e.g. where consumer protection and advertising

regulations and enforcement may be lacking), the access to

certain products may actually work against reducing poverty.

Without these more nuanced understandings, the base-of-the-

pyramid approach has been susceptible to criticism for creating

nonessential consumer needs (Davidson, 2009), undermining the

important roles and responsibilities of the state and

overemphasizing the potential business opportunities for selling

to low-income consumers (Karnani, 2011), romanticizing the poor

(Banerjee & Duflo, 2007), and leading to even greater strains on

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the ecological carrying capacity of the earth through unmindfully

increased consumption (Hahn, 2009).

With this in mind, recent calls in the base-of-the-pyramid

literature have been made to go beyond the product “market entry”

approach to understand “market creation,” including the broader

social and institutional context within which low-income

individuals are embedded (Simanis, 2010; Simanis and Hart, 2009).

The current study therefore provides a potential contribution in

this direction, offering a model which relates enhanced market

practices to poverty alleviation through elements of social

control as a means of reducing the constraints of under-

functioning markets and governments. Further base-of-the-pyramid

studies of market creation may benefit from greater attention to

power relationships across the entire value chain to identify the

obstacles to both consumption and production in low-income

economies.

From the perspective of the microfinance approach, great

emphasis is placed on the participation of individuals in

microfinance groups. Organizing borrowers into groups and

building solidarity among group members in order to secure loans

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through social capital is an innovation that allows poor

individuals to be more personally empowered, obtain greater

access to financial services and build financial institutions

which reduce risk. However, in order for the provision of

microfinance to effectively reduce poverty, a number of other

important factors identified in the present study may need to be

in place. For example, to move beyond a subsistence-based

entrepreneurship of necessity with small undifferentiated

businesses, microentrepreneurs may need additional capacity-

building and access to market information to increase their

productivity and overcome the barriers of limited economies of

scale and scope. For microfinance to contribute to poverty

alleviation, additional attention may also need to be paid to the

broader market structure within which microentrepreneurs are

operating and the accessibility of inputs and markets for outputs

as well as transaction transparency.

Considering the strength of the SME employment-based

approach to poverty alleviation, its considerable appeal is the

reduced risk and uncertainty that comes with a formal-sector

salaried job which is partly a function of the greater

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productivity of SMEs relative to microenterprises. This is an

important approach to poverty alleviation where a functional

government is able to create the necessary enabling environment

for SME growth and development. I extend this approach by

exploring practical initiatives where governments are ineffective

and by considering how poverty can be reduced in rural areas

where the creation of a significant number of jobs by SMEs may

not be possible in the short term. If, as in Bangladesh, the

state lacks the capacity to address market failures, provide

basic public services for the poor and uphold their basic rights,

other organizations can play an intermediary role in filling this

institutional void. A focus on the redistribution of social

control highlights access to power as an important element of

poverty alleviation along with enhanced productivity and risk

mitigation. Therefore, SME employment approaches may be able to

further enhance their impact on poverty alleviation if they

ensure that jobs created for the poor do not come at the expense

of modes of disempowerment such as reduced opportunities for

capability enhancement, participation or workplace safety.

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A fifth contribution of this study is increasing awareness

of the importance of organization-led changes in market

structure. Given that CARE played the role of a market-

facilitating intermediary organization and did not buy or sell

products in the marketplace itself, raises the important question

of how an NGO-led initiative may compare with other types of

market-based approaches led by profit-making enterprises.

Certainly, an NGO operating with a market-based approach is

attuned to the incentives of markets and business, and CARE was

subject to its own form of market pressures, in that access to

further funding depended on improved profitability and market

growth in the value chain it targeted. Moreover, in Bangladesh in

particular, and in market-based approaches to poverty alleviation

in general, hybrid organizational forms that mix elements of for-

profit businesses and non-profit ventures (Battilana and Dorado,

2010) appear to be the norm, rather than the exception. A wide

variety of organization forms – large commercial firms, social

enterprise businesses, state owned firms, and NGO business

ventures – commonly operate commercially and sustainably on their

own or in partnership with other actors (Wheeler, et al., 2005).

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Therefore, hybrid forms of governance may be especially

serviceable in low-income markets.

However, if one wanted to begin from the perspective of a

large for-profit firm and consider how the firm might go about

integrating or replicating the market-enhancing activities of an

NGO-led initiative, a number of general approaches may be

possible. First, a company could aim to copy the work of an NGO

through its own corporate foundation, similar to Danone’s

approach in Senegal and Bangladesh (Rangan & Lee, 2010). Many

corporate foundations have financial resources that are orders of

magnitude larger than most NGO budgets. Second, a company could

partner with an NGO taking a market-based approach to gain access

to its capabilities, knowledge and resources, such as Telenor has

done to create Grameen Phone (Seelos & Mair, 2005). Third, a

commercial firm could decide to replicate the market-enhancing

initiatives described in this study by drawing on its own in-

house resources and expanding its capabilities to focus on the

broader issue of market creation, as Unilever has done in India

(Rangan, Sehgal & Rajan, 2007) and CEMEX has done in Latin

America (Segel, Meghji & García-Cuéllar, 2007). In these ways, a

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for-profit commercial firm would have numerous options to

undertake activities related to changing market structure and

institutions for the benefit of both the company and the poor.

The market-facilitation activities of CARE reported in this study

are therefore not limited to NGOs exclusively. Recent findings

from the literature on commercial value chains suggest that

dominant for-profit companies or “lead firms” in the value chain

have an even greater ability than NGOs to coordinate and change

practices within their more considerable spheres of influence

because of their greater power to offer financial incentives and

impose economic sanctions on suppliers and other market actors

(Gereffi, Humphrey & Sturgeon, 2005).

The ultimate sustainability and durability of CARE’s market

enhancements will only be conclusively determined following the

conclusion of CARE’s activities. However, CARE’s management,

having come from business backgrounds, has been well aware of the

traditional limitations and lack of financial sustainability of

aid-based development projects. As a result, CARE’s market

enhancements were designed up-front with financial sustainability

in mind, avoiding dependency, building capacity and working

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through private sector companies and other value chain actors to

introduce mutually beneficial enhancements and efficiencies that

would have the best chance of being profitably maintained by

farmers and other market actors after CARE’s involvement

concluded. With CARE’s activities in the dairy sector in its

fifth year at time of writing, there were already farmer groups

trained early in the project period that were operating

independently on a sustainable basis. Thus, preliminary evidence

for the independent long-term sustainability of market and income

improvements is promising.

Theoretical Implications for Institutional and Market

Perspectives

The findings of this study provide new insights into the

processes of how organizations change institutionalized market

practices. First, the current study helps to provide fresh

insight into how agency is enabled in institutionalized settings.

Embedded agency, a central issue in the current institutional

literature (Barley & Tolbert, 1997; Battilana, 2006; Battilana et

al., 2009) refers to the means by which actors are able to change

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within the embedded constraints of their environment (Zietsma &

Lawrence, 2010). As institutionalized patterns of production and

exchange, market practices in low income contexts tend to be

deeply embedded, as they have often been reproduced by tradition

and are closely linked to highly constraining rules and beliefs

that are central to the social order (Jepperson, 1991). These

deeply embedded market practices can persist even if they are

collectively suboptimal and serve no one’s best interests

(Akerlof, 1976; Bowles, Durlauf & Hoff, 2006; Dorward et al.,

2005). If institutional contexts are by definition constraining

environments resistant to change, then a central question is “how

embedded agency is possible” (Zietsma & Lawrence, 2010: 189). Few

environments are more constraining than those of impoverished

individuals in least developed countries. Although some

institutional scholars have expressed concern that accounts of

institutional change based on the agency, purposive actions,

skills and strategies of actors diverges from the core social-

influence emphasis of institutional theory (i.e. Thornton &

Ocasio, 2008), others welcome the new and practical contributions

that can be made from recognizing the importance of individual

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and organizational action in understanding institutional change

and the emergence of new market practices (DiMaggio, 1988;

Lawrence & Suddaby, 2006; Lawrence, Suddaby & Leca, 2009; Oliver,

1991, 1992).

My study revealed agency within embeddedness to be the

result of neither an exogenous shock, nor a social movement, nor

a political or ideological clash of contradictory logics

(Battilana, Leca & Boxenbaum, 2009). Instead, it was the result

of targeted reallocations of social control and institutional

leveraging based on non-confrontational market interventions and

a shift in risk-bearing burdens. The findings of this study

provide a partial answer to the question of embedded agency by

privileging action or praxis over ideology and logics in

institutional environments as the most legitimate mechanism for

increasing social control for the poor in least developed

countries. This positions my theoretical perspective in strategic

choice perspectives of agency (Oliver, 1991; Greenwood & Suddaby,

2006) that explain institutional change through intentional

action or praxis (Barley & Tolbert, 1997; Giddens, 1984; Seo &

Creed, 2002). Benson (1977: 5) defines praxis as “the free and

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creative reconstruction of social arrangements on the basis of a

reasoned analysis of both the limits and the potentials of

present social forms.” In emphasizing agency, however, I have

sought an explanatory balance between structure and agency,

seeking to avoid over-stylized accounts of too much determinism

or agency (Barley & Tolbert, 1997; Barley, 2008).

From this I draw the conclusion that the explanation for the

success of poverty alleviation through redistribution of social

control in least developed economies is attributable to two

factors that created spaces of empowerment and opportunity for

exercising greater agency: the unobtrusive use of power and a

shift in the risk-bearing burdens of the market’s most vulnerable

actors. “Unobtrusive forms of power” (Garud, Hardy & Maguire,

2007: 962) are uses of power that minimize opposition from state

political interests. Hardy (1985: 389) observes, “unobtrusive

power refers to the ability to secure preferred outcomes by

preventing conflict from arising.” Further, Hardy (1985: 388)

states that, “this unobtrusive use of power…is a viable strategy

for specific groups and individuals who wish to avoid conflict

over political issues.” As the present study demonstrated, power

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is more likely to be unobtrusive if it is incremental, small-

scale, and incentivized to satisfy all participants affected by

changes in social control. It is also less obtrusive to the

extent that it is not explicitly subversive or political. NGOs in

Bangladesh tend to be oriented toward economic action rather than

direct advocacy due to the entrenched political interests of

local and national governments (Blair, 2005). In the context of

its work in the Bangladeshi dairy sector, CARE did not take an

overtly political approach to change to achieve greater power for

the poor. Researchers have noted that “Bangladesh has a domestic

environment inimical to political activism” (Rahman, 2006: 451).

CARE assessed the potential effectiveness of a confrontational

strategy that called for radical change in government policy and

determined that it would not likely be feasible. Thus, CARE’s

reliance on unobtrusive power changes was effective because it

minimized resistance to expansions in producers’ agency by

creating “win/win” outcomes for all participants affected by

changes in market practices and by “embedding calls for change

within accepted models of social conduct” (Englund & Gerdin,

2011: 587). The deeply embedded nature of market and social

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practices in low-income contexts also explains why CARE avoided a

strategy of confrontational political advocacy in order to

redistribute social control. In these contexts, CARE needed to

play the role of intermediary and neutral third-party broker.

Opportunity spaces for the very poor are more easily created if

market actors perceive that CARE is acting economically rather

than politically for the common good and promoting freedom

through unobtrusive redistributions of power and control rather

than explicitly subversive partisan politics. My study shows how

incremental, iterative modifications over time to

institutionalized patterns of social control expand the agency

exercised by the poor for the mutual benefit of market

participants. In this way, the current study helps provide fresh

insight into how agency is enabled and channeled in deeply

institutionalized settings.

Highly embedded actors such as poor dairy producers were

also able to increase their agency through a shift in risk

bearing burdens from the farmers to other actors. The high levels

of vulnerability and risk associated with poverty constrains

individual options and agency (Duflo, 2006). The risks borne by

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the poor tend to reinforce low level equilibria and poverty

traps, therefore keeping people poor (Azariadis & Stachurski,

2005; Bowles, Durlauf & Hoff, 2006). Reducing the risk burdens of

the poor therefore increased their agency and gave them greater

ability to influence and change market practices, institutions

and norms.

Secondly, the results of this study also imply that it is

not necessary to graft on Western institutional conventions in

contexts of market and governance failures. As challenging as it

may be for some outside observers who find domestic policies and

local customs anathema to traditional models of social justice or

business success, the means by which institutional change is

achieved, I believe, is through even deeper grounding in local

institutionalized beliefs to uncover what motivates local actors

and communities to seek market engagement and what conditions are

necessary to incentivize change. My proposed theoretical model

suggests that incipient markets are personal and value-laden,

possessing an underlying cognitive fabric from which economic

actors take their cue. Therefore, approaches to economic

development and poverty alleviation need to be supplemented by

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operational approaches of the type studied here that frame market

development in terms of building upon locally perceived needs.

These operational approaches improve the chances of success when

they freely accept guidance for their actions from localized

logics to gain traction in solving problems of market growth.

Third, another theoretical implication of my study is that

conceptualizations of markets as utility-based modes of human

interaction (Callon & Muniesa, 2005) are not necessarily

contradictory to notions of markets as institutionalized and

highly normative belief systems (Fligstein & Dauter, 2007).

Knowledge and expectations of market behavior were highly

calculative and sophisticated among local producers in the

present study – not surprisingly in light of the risks (such as

severe personal privation) associated with market failure. A

rational, calculative mental model of market exchange was also

buttressed by a pragmatically justified vigilance and sense of

caution in conducting economic transactions due to the tangible

limitations of the formal market mechanism as a vehicle for

income generation given persisting challenges of information and

power asymmetries. My findings provide evidence that a rational

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calculative model of exchange may be constitutive of

institutional belief systems themselves: that is, calculative,

rational mental models of market behavior can be the belief

systems within which other beliefs about economic exchange are

necessarily nested. More research is needed on rational

calculative models of markets as the basis for institutional

beliefs and as inducements for reliance on kinship or local

leadership for conducting exchange (Callon & Muniesa, 2005;

Miller et al., 2009).

Fourth, my findings also extend work on institutional voids

(Khanna & Palepu, 2005) by suggesting that these voids, lacking

as they are for state and private sector support, are nonetheless

opportunities for potential development (Mair, Marti & Ganly,

2007; Mair, Marti & Ventresca, 2012), particularly if potential

markets can be identified within the void by institutionally

astute firms or NGOs. Thus I find support for framing

institutional voids as “opportunity spaces” (Mair & Marti, 2009:

430) and “analytical spaces” (Mahoney & Thelen, 2010) that need

to be better understood in low-income market contexts. A

promising direction for future inquiry to achieve this

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understanding is the concept of bricolage – the creative use of a

resource for purposes other than those originally intended (Baker

& Nelson, 2005; Rao et al., 2005) also known as “jugaad” in

India, “zizhu chuangxin” in China, “gambiarra” in Brazil and “jua

kali” in Kenya (Radjou, Prabhu & Ahuja, 2012). Bricolage was a

conspicuous element of opportunity recognition and implementation

in this study. Though cattle are typically raised for mixed uses

and for sale in rural Bangladesh, increasing their production of

milk promoted an enhanced income stream for farmers and opened

market opportunities. My study therefore finds preliminary

support for claims about the effectiveness of bricolage as a

means of improving conditions in highly resource-constrained

environments (Baker & Nelson, 2005; Mair & Marti, 2009).

Fifth, this study is also among the first to explain how

market development requires normative justification. These

findings support Greenwood, Suddaby, and Hinings’ (2002) emphasis

on the justification of solutions as an important antecedent of

institutional diffusion. The crucial role of evidence in

determining successful implementation of market change

initiatives is strongly indicative of the need to focus future

186

research in less developed countries on individuals’ processes of

validation in seeking assurances of economic benefit. The poor in

these economies are by definition “frustrated…at almost every

turn by the poor quality – above all low reliability – of the

instruments that they use to manage their meager incomes”

(Collins et al., 2009: 3). The earnings of the poor face “a

‘triple whammy’: low incomes; irregularity and unpredictability;

and lack of tools” (p. 16), conditions made even more uncertain

by typically unreliable health, judicial and education services.

Yet despite, or perhaps because of, these conditions, recent

research in less developed countries, including Bangladesh,

indicates that “money management is, for the poor, a fundamental

and well-understood part of everyday life” (Collins et al., 2009:

3). Poor households’ necessary caution combined with the

centrality of money management to their lives account for the

fundamentally critical role of evidence and validation for the

poor when they are considering market participation. Therefore,

future research needs to examine the role of validation and risk

perceptions in engagement with local economies and the tools

187

available to the poor to help them minimize the very palpable and

consequential risks of market failure.

Limitations

A limitation of this study is its examination of poor

primary producers in a single sector in a single country.

Although this single case study allowed for deeper, on-the-

ground, multi-year insights into the economic initiatives, value

chain relationships, and power dynamics of business activities in

situ, further studies in multiple market contexts and countries

with varying levels of market and governance failure would allow

for confirmation, refinement or extension of the findings

presented here. In particular, the limited impact of access to

financing as a distinct element of enhanced social control in the

present study (due partially to inappropriate repayment schedules

for investing in dairy cows) could be explored in more detail in

contexts where access to finance plays a more significant role in

poverty alleviation. Another limitation of this study is that,

since the research question was focused at the organizational

level of analysis, much data gathering was focused on CARE staff

188

and management. This limitation was addressed as much as possible

through triangulation and supplemental data gathering from other

value chain actors and farmers and collectors not involved with

CARE.

Future Research

The question can be asked as to how the model uncovered by

this study can contribute to poverty alleviation. Is this

something that can save the bottom billion? Although a number of

arguments have been made that the only sustainable way to reduce

poverty is to raise incomes and capabilities (Anderson, Markides

and Kupp, 2010; Nussbaum, 2011; Karnani, 2011) this obvious

approach to poverty alleviation has been surprisingly absent from

the management literature, perhaps due to some of the educational

and cultural constraints of existing research that has focused on

instrumental value creation for a focal firm (Prahalad, 2005)

which has taken a liberal market ideology as given. A

contribution of my study is that it explicitly focuses on

building inclusive markets (McKague, et al., 2011) and takes a

value chain approach that goes beyond the boundaries of a focal

189

firm. This study also philosophically situates poor producers

neither as passive recipients of assistance nor as heroic free-

market entrepreneurs. Instead, this study has taken an in-depth

grounded approach which has revealed a more nuanced and less

abstract view of low-income market actors and market creation.

Given the findings of my research that explained poverty

alleviation for poor producers as enhanced market practices that

redistributed social control in ways that overcame market and

governance failures, there are several important additional

implications for future research.

First, more research is needed on the unique contexts of

market and governance failures in bottom billion markets. Most

base-of-the-pyramid and other market-based approaches to

development have focused on the middle of the economic pyramid

and the growing middle class consumers in emerging market

countries (Jaiswal, 2008). Taken-for-granted assumptions about

institutions to support markets can be more effectively surfaced

when studying enterprise activity in low-income contexts which

can lead to greater theoretical and practical insights (Scott,

1995; Weick, 1974).

190

Second, further research is needed to understand

institutional concepts of fairness, trust and justice in value

chain relationships in low-income contexts. This is especially

true for independent entrepreneurs such as milk collectors which

are an essential link in the value chain. These brokers and

middlemen offer an essential service but are often ignored or

maligned by other value chain actors. Studies of these

independent entrepreneurs have looked at economic aspects of

marketplace transactions but have not to date sufficiently

explored issues of trust, relationships, justice and fairness in

the value chain. More research on these intangible dimensions of

market transactions is essential to understand how markets and

value chains work and how they can be restructured to be more

inclusive. This focus on relationships is especially important in

emerging markets and with poor entrepreneurs because they face

higher risks and power differences (Duflo, 2006).

Third, further research is needed on the social skills

(Fligstein, 1997) and dynamic capabilities (Teece, 2007; Teece,

Pisano & Shuen, 1997) of an intermediary organization like CARE

which is balancing financial sustainability with social impact.

191

This research could compare the differences in capabilities and

skills for pursuing a BoP approach, a microfinance approach, a

SME employment approach and an approach focused on redistribution

of social control in a value chain. This research could also

explore under what conditions an intermediary organization like

CARE should become directly involved in buying and selling

products in the value chain to maximize its social impact. It

could also articulate a model of cross-subsidization or blending

of various resources to achieve financial self-sufficiency and

growth while benefiting harder to reach poor producers.

Fourth, further research could focus on the importance of

collective action, pooling resources, bricolage and ecosystems of

development and enterprise to discern the dynamics of the way

various types of resources (economic, social, cultural,

ecological) are mobilized and transformed to benefit smallholder

farmers and other low-income individuals.

Fifth, further research could focus on understanding the

motivations, advantages and disadvantages of for-profit firms who

include poor producers in their value chains in different

industry and country contexts (McKague and Oliver, 2012).

192

193

CONCLUSION

In developed markets, we take so many aspects of market

institutions for granted that they become invisible (de Soto,

2000). But in the Bangladeshi context, characterized by market

and government failures, markets have to be explicitly enhanced

and structurally changed in order to function more effectively,

especially for the most marginalized market actors. This study

has revealed that making markets work for the poor requires

simultaneous attention to practical elements of social control

that create increased productivity, access to power, reduced

information asymmetries and reduced risk. I found that

reallocating social control toward marginalized market

participants is the overarching mechanism through which market

and governance failures that affect the poor can be sufficiently

alleviated to cause significant poverty reduction. This

relationship is moderated by the extent of institutional

leveraging – the ability to ground changes in local norms and

worldviews – and the effectiveness of systematic learning

strategies.

194

Markets have been able to create wealth in developing and

emerging economies, although it is often disproportionately

captured by those with power and access to capital and

technology, exacerbating inequality (Firebaugh, 2003). It would

take only a 1.3 percent shift in global income distribution to

lift every person in the world above the $2 per day poverty line

(Karnani, 2011). Addressing the global disparity between opulence

and deprivation has attracted many competing and contrasting

management approaches and propositions including approaches that

have focused on the poor as consumers, entrepreneurs and

employees. This study, however, is the first to substantially

examine the mechanisms by which poverty can be reduced for poor

primary producers in least developed countries despite the fact

that smallholder farming is the single largest occupation amongst

people living on less than $2 per day. The findings of this study

suggest that the redistribution of social control that overcomes

market and government failures may be a key explanation that will

engage a range of market-oriented organizations to strive to

further enhance their enterprise ventures and improve the

prosperity of the poor.

195

196

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227

APPENDICES

228

APPENDIX A: Bangladesh Dairy Value Chain

Source: Author

229

APPENDIX B: Geographic Study Area

CARE Bangladesh’s Strengthening the Dairy Value Chain Initiative

Source: CARE Bangladesh.

230

APPENDIX B: Geographic Study Area (Continued)

CARE Bangladesh’s Strengthening the Dairy Value Chain Initiative

Regions Districts Upazilas Unions Villages

Bogra

Sirajganj

Kazipur,Royganj,

Ulla Para,Tarash,

Shahjadpur

19 87

Bogra Sariakandi,Gabtali 8 37

Naogaon Manda,Badalgahi 6 40

JoypurhatPanchbibi,

Kalai,Khetlal

10 47

Rangpur

Gaibandha Sadullapur,Palashbari 11 45

Rangpur

MithaPukur,RangpurSadar,Kaunia,

Badarganj,Taraganj

28 101

Kurigram Ulipur,Rajarhat 14 77

NilphamariSaidpur,

Kishorenganj

7 17

Dinajpur Parbatipur 5 20

Total2

Regions9

Districts 24 Upazilas 108 Unions 471Villages

231

Source: CARE Bangladesh.

232

APPENDIX C: Formal Sector Milk Processors

This appendix provides an overview of the formal sector dairy processors in Bangladesh.

Name of dairy processor (year of establishment)

Processing/chilling capacity (liters per day)

Approximate number ofproducers

supplying milkc

Milk Vita (1973) 200,000 150,000BRAC Dairy (1998) 170,000a 40,000Pran Dairy (2001) 100,000a 30,000Akij Dairy (2007) 20,000 500Amomilk (1996)* 10,000 5,000Aftab Dairy (1998)* 8,000 4,000Rangpur Dairy (2007)

8,000 7,000

Grameen-Danone (2007)

8,000 277b

Savar Dairy (1974)* 3,000 (from own farm)Total 527,000 236,777

*Dairy processor operating outside CARE’s project area.

This table was adapted from Jabbar, 2010. Policy Barriers for Dairy Value Chain Development in North West Bangladesh. CARE Bangladesh, page 23, with additional information as noted from:a Interview with Nurul Amin Siddiquee, CARE Project Manager, September 5, 2010.

b Interview with, Corrine Bazina, Managing Director, Grameen Danone, August 31, 2010. Grameen Danone sources from 275 individual farmers and two large dairy farms.

c There may be some double counting of farmers by dairies as some farmers may sell to more than one processor.

Note: Only 10% of milk produced in Bangladesh was sold to formal sector milk processors.

233

234

APPENDIX C: Formal Sector Milk Processors in Bangladesh(continued)

MilkVita, BRAC, PRAN and Danone

This appendix provides an overview of the four major formal sector dairy processors in Bangladesh.

MilkVita

BRAC PRAN Danone 5 Othersa

Year Founded

1973 1998 2001 2007 -

Farmers 150,000b 40,000 30,000 277 16,500b

Farmer Groups

565c-1,200d

821 n/a n/a n/a

Milk Purchased (liters/day)

200,000 120,000 80,000 3,000 23,000e

Chilling Centers

19 100 13 2 -

Chilling Capacity

200,000b 80,000b 100,000 8,000 46,000f

Processing Plant Locations

DhakaSirajgan

j

Gazapur Rangpur Bogra -

Powdered Milk Plants

1 1 1 0 0

Urban Consumer Market Shareg

40% 35% 15% <1% -

Employees 1,000 500 300h 47 -

a Consolidated figures for the five other smaller dairy processors (with whomCARE is not actively engaged) is included in this column.

235

b Jabbar, M. A. 2010. Policy Barriers for Dairy Value Chain Development in North West Bangladesh. Dhaka, Bangladesh: Unnayan Shamunnay, page 23.

c Halder, S. R. & Baruda, P. 2003. Dairy Production, Consumption and Marketing in Bangladesh. Dhaka, Bangladesh: BRAC Research and Evaluation Division, page 15.

d Ahmed, A.U., Minten, B., Quisumbing, A.R. & Roy, D. 2009. Evaluating the Dairy Value Chain Project in Bangladesh: Baseline Report. Washington, DC: International Food Policy Research Institute.

e Estimate assuming these dairies are buying milk at 50% of their chilling capacities.

f See previous page.g BRAC’s 35% market share in 2007 cited in Jonker, K. 2009. In the Black withBRAC. Stanford Social Innovation Review, 7(1): 74-79. Market share figures for MilkVita, PRAN and Danone are estimates based on personal interviews with various industry analysts.

h The number of PRAN employees dedicated to dairy was estimated at 10% of PRAN’s 3,000 full-time employees.

236

APPENDIX D: Qualitative Data Sources

Data Source Focus Length/frequency

Interviews210 Farmers (7 groups x 30 farmers per group)

Opinions of dairy production and market participants

10 hours

30 Independent farmers (control group)

Opinions of dairy production and market participants

3 hours

5 Chilling plant managers Opinions of dairy value chain and its participants

4 hours

3 General Managers of large processing companies (1 from Milk Vita and 2 from BRAC Dairy)

Opinions of dairy value chain and its participants

4 hours

2 Plant Managers of medium sized processing company (Grameen-Danone)

Opinions of dairy value chain and industry 3 hours

2 General Managers of small dairy processing companies

Opinions on opportunities for dairy sector growth

1.5 hours

Milk collectors: 3 Individual interviews 1 Focus group of 26 collectors

Opinions of dairy value chain and its participants 2 hours

2 hours2 Rural Sales Program distributors Opinions of distribution of consumer dairy

products1 hour

5 Agricultural input shop owners Opinions of input services to farmers 2 hours

237

Data Source Focus Length/frequency

1 Artificial insemination service provider

Opinions of input services to farmers 0.5 hours

2 Livestock health workers Opinions of animal health services to farmers

0.5 hours

1 Head of the Community Dairy Veterinary Foundation

Opinions of input services to farmers 1.5 hours

1 Senior Agriculture Economist, International Livestock Research Institute

Opinion on dairy industry and policy 0.5 hours

1 Dairy industry financial services expert

Opinion on current and potential financial services for smallholder dairy farmers

1 hour

3 Dairy packaging company executives Opinion of dairy industry growth potential 1 hour2 Senior executives of feed and medicine companies

Rural markets, distribution, products and business models

1.5 hours

1 CEO of a company partnering with CARE

Benefits and evolution of NGO partnership 3 hours

2 Company mangers partnering with CARE

Working with CARE and other NGOs 1 hour

3 Executives of non-governmental organizations working to support smallholder dairy farmers

Opinion of constraints and opportunities for farmer participation in dairy

1 hour

2 Milk bar owners Customer preferences and demand 0.5 hours3 Agriculture and dairy scientists Technical aspects of dairy production 1 hour

238

Data Source Focus Length/frequency

1 Dairy economist Macro-economic trends in the dairy industry 1 hour2 CARE Senior Project Managers All aspects of the dairy value chain 30 hours1 CARE Senior Technical Advisor All aspects of the dairy value chain 30 hours1 CARE Technical Coordinator Project stakeholders and private sector

partnerships1 hour

1 CARE Communications Manager All aspects of the dairy value chain 10 hours1 CARE Monitoring and Evaluation Manager

Impact evaluation of the dairy value chain interventions

30 hours

10 CARE field, technical and programstaff

All aspects of dairy value chain 5 hours

1 CARE Country Director Context of CARE’s work globally 1 hour2 CARE Rural Distribution Channel Managers

Rural sales of feed and medicines to input shops

3 hours

Participant ObservationOn site farm visits and observations Multiple rural areas of northwest

Bangladesh10 hours

On site milk testing Multiple rural areas of northwest Bangladesh

10 hours

On site milk collection Multiple rural areas of northwest Bangladesh

10 hours

Meetings with villagers and producers

Knowledge and information exchange 10 hours

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Data Source Focus Length/frequency

Informal milk markets Milk handling, trading and prices 1 hourMeeting between senior CARE and IFC staff

Government policy and competitiveness in the dairy industry

2 hours

Meeting between senior CARE staff and 11 senior executives at BRAC dairy

Potential of dairy industry collaboration 2 hours

Meeting between senior CARE staff and three TetraPak (dairy packaging company) executives

Dairy industry collaboration 6 hours

Attendance at Major Dairy ConferenceAt Bangladesh Agricultural University (24 paper and plenary presentations)

Wide range of issues in dairy sector development and animal husbandry

16 hours

Archival DataMonitoring and evaluation reports Documentation of project impact evaluation

of: Farmer incomes, productivity improvements, animal health, animal health worker performance, market prices of milk and feed; collector performance

Monthly andbimonthlyreports

8 Progress reports (2008-2012) to donor

Progress toward project objectives Semi-annually (90pgs eachavg.)

240

Data Source Focus Length/frequency

5 CARE commissioned external reports: Value chain analysis report Policy barriers for dairy development Investment scenarios and demand in the dairy sector Dairy nutrition input analysis Laboratory analysis of existing feed mixes

Socio-economic analysis of dairy value chainPolicy analysis of dairy value chain Financial services needs for dairy producers in BangladeshImpact of nutrition and feeding on dairy productivityNutritional context of feed mixes on market

67 pages71 pages57 pages26 pages10 pages

4 Memoranda of Understanding betweenCARE and PRAN, TetraPak, Milk Vita and BRAC

Partnership agreements for collaborative projects

4-14 pageseach

22 Other archival documents (including CARE training materials; promotional material from value chain actors)

Technical training and promotional materials

Avg. 40pages ea.

241

APPENDIX E: Quantitative Data Sources

Information on 350 variables related to animal husbandry, farmer productivity, group performance, milk collectors, animal health workers, milk buyers (formal sector processors and informal sector processors), milk and feed prices, and feed and medicine sellers were collected through regular surveys throughout the project. As my research progressed and my theoretical model began to take shape, I was able to add questions to some of the regular stakeholder surveys in order to gather additional targeted information on some of my constructs and relationships of interest. The data collection items for each target group or phenomena are summarized in the table below. In the pages following this table further detail is given on the information collected by each of the surveys.

Target Survey Name Date/Frequency

Conducted By Sample Size(most recent

sample)

DataGathered

(seeAppendices)

DairyProducers

andProducerGroups

Household Baseline Beginning(Sept 2008)

and end(Dec 2012)of project

InternationalFood PolicyResearchInstitute(IFPRI)

1,509 Households(658 CARE

Beneficiaries and851 ControlHouseholds)

Appendix F

Farmer Surveys /Group MemberProgress

Semi-annually

Surveyors hiredby CARE

848 Individualsin 271 Groups

Appendix E1

ParticipatoryPerformanceTracking

Semi-annually

Farmers withCARE FieldFacilitators

519 CARE Farmers Appendix E2

Milk Collector Progress Quarterly CARE 308 Milk Appendix E3

242

Target Survey Name Date/Frequency

Conducted By Sample Size(most recent

sample)

DataGathered

(seeAppendices)

Collectors CollectorsLivestock

HealthWorkers

Livestock HealthWorker Progress

Monthly CAREVeterinarian

201 LivestockHealth Workers

Appendix E4

DairyProcessors

FormalSectorProcessors

HeadOffice

Management

December2009

CARE SeniorManagers

5 Managers ofLarge Processors

Appendix E5

ChillingPlants

December2009

IFPRI 50 Plant Managers Appendix E6

Informal SectorProcessors

December2009

IFPRI 50 InformalProcessors

Appendix E7

Feed andMedicineSellers

Feed and MedicineSellers and

Agricultural InputShops

June 2009 CARE 178 Feed ShopOwners

Appendix E8

CattleBreed

Breed andArtificialInseminationAssessment

March 2010 MymensinghUniversity

15,148 Cattle Appendix E9

CARE Staff Team Progress Format

Monthly CARE Field Staff

55 CARE Field Staff

Appendix E10

Overall Gates Foundation Semi- Data drawn from 120 Indicators Appendix N

243

Target Survey Name Date/Frequency

Conducted By Sample Size(most recent

sample)

DataGathered

(seeAppendices)

Initiative Performance

Semi-Annual Reports Annually above surveys drawn from above surveys

244

APPENDIX E1: Quantitative Data Gathered - Farmer Surveys

Twice a year, CARE conducted quantitative surveys of the smallholder farmers they worked with. In 2012, 2,125 farmers were randomly sampledto complete the survey. These surveys measured milk production, consumption and sales, farmers’ knowledge of animal husbandry practices, farmers’ perceptions of women’s roles in the value chain and farmers’ perceptions of collectors, animal health workers and other service providers. The methodology for these surveys was co-developed and audited by the International Food Policy Research Institute and the Bill and Melinda Gates Foundation to ensure validityand reliability of the data. I had access to all of the raw data and used it to triangulate findings from qualitative data. I also used this data to understand the impact of CARE’s work in the dairy value chain, to test explicit and implicit assumptions that guided CARE’s activities, and to inform my theorizing about the mechanisms at work to reduce poverty for poor producers. Questions from the farmer surveys are reproduced below in an edited form to indicate the types of data gathered.

Farmer Survey Data Gathered

1. Respondent Identification 1.1. Name1.2. Sex 1.3. Position in group (Member, Leader) 1.4. Occupation 1.5. Age 1.6. Number of family members 1.7. Group code number 1.8. SDVC group name

2. Cattle Inventory and Milk Production (yesterday’s status)2.1. Cattle type (local breed /cross breed)2.2. Total milk production2.3. Total cow value (Tk)2.4. Cow identification numbers

245

3. Milk Consumption and Distribution (yesterday’s status)3.1. Total milk consumption (Liters)3.2. Total free distribution (Liters)3.3. Yesterday’s total milk sale (Liters)3.4. Yesterday’s total spoilage (Liters)3.5. Yesterday’s total receipts from milk sales (Tk) to:

- Neighbors- Group selling point- Gowala/Collector- Open market- Sweetmeat maker/ Tea stall- Direct to major private sector processor

3.6. Generally, who gets priority for milk consumption in your family? - Male child- Female child- Son- Daughter- Husband- Wife- Old man- Old woman- All members - Not applicable

3.7. Why?3.8. Who consumed milk yesterday?

- Male child- Female child- Son- Daughter- Husband- Wife- Old man- Old woman- All members - Not applicable

3.9. Do you know where the milk of your group is sold? 246

3.10. If known, where is it sold? - Milk Vita - Rangpur Dairy - PRAN - BRAC - Akij Dairy- Danone- Sweetmeat Shop - Other (Specify)

3.11. Do you know the price of milk? 3.12. If yes what is the price (Tk/Liter)

4. Knowledge and Practice Information about Cow Rearing (In the Last 3 Months)4.1. Are you cultivating fodder?

- Yes - No - Do not know how to cultivate - Have no land/scope to cultivate

4.2. If yes, how many decimals of land are you cultivating for fodder?

4.3. Which type of fodder are you cultivating?- Napier grass- Sorghum - Maize - Para - German - Jamboo - Kheshari/Mati Kalai - Triticale - Other

4.4. Do you feed green grass to your cow? 4.5. Source of green grass?

- Own production - Purchased - Collected from the road side

247

- Grazing - Other

4.6. Who provides health treatment services to your animals? - Livestock Health Worker (CARE)- Livestock Health Worker (other) - VS- VFA/VC - Milk processor veterinarian (Milk vita/BRAC/PRAN/Rangpur

Dairy/Other)- Medicine company Vet- Traditional healer (Kabiraj)- Self/family member - Other (Specify)

4.7. How many vaccines should be given for cattle? 4.8. What are they? 4.9. Which vaccines have you given your cattle during the last 3

months?4.10. Did you de-worm your cattle during the last 3 months?4.11. What are the drinking water sources for your cattle?

- Well- Tube well with pump- Pond- Ditch/water bodies- Pipeline- River/canal- Other (Specify)

4.12. Do you wash your cattle?

248

4.13. If yes, in which interval? - Daily- Each second day- Twice a week- Once a week- Once per two weeks- Other (Specify)

4.14. What measures have you taken against flying insects?- Mosquito net- Mosquito coil- Smoke- Nothing- Finish insect killer powder/liquid- Others

4.15. Who milks the cows? - Self- Husband/wife- Other family member- Gowala/Collector- Other (Specify)

4.16. If you don't milk the cows yourself, why not? 4.17. Sex of family member who milks? 4.18. Do you wash your hands before and after milking?4.19. If yes, how?

- Water- Warm water- Water and soap/detergent- Other (Specify)- Not applicable

4.20. Do you wash your milking pot? 4.21. If yes, how?

- Water- Warm water- Water and soap/detergent- Warm water and soap/detergent- Water and sand/ash- Other(Specify)

249

- Not applicable4.22. Do you wash the udder and teats before milking? 4.23. If yes, how?

- Water- Warm water- Water and disinfectant- Warm water and disinfectant - Other (Specify)

4.24. Do you use anything on the udder and teats during milking? 4.25. If yes, what?

- Oil- Ghee- Disinfectant- Milk- Other (Specify)

4.26. Where do you dispose of cow dung? - In open hole - In closed hole - Kept in specific place- Dump in open place- Sold as raw dung- Other (Specify)

4.27. What do you do with your cow dung? - Use as fertilizer- Use for yard cleaning- Use as fuel- Sold as fuel (Ghuta)- Uses in own bio-gas plant- Supply to other bio-gas plants- Other (Specify)

4.28. How do you sell your cow dung? - Raw dung- Sold as fuel (Ghuta)- Sold as fertilizer- Other (Specify)

4.29. Income from cow dung sold during last 3 months (Tk)

250

5. Farmer Knowledge (Questions to evaluate farmer knowledge. Correct answers in parentheses.) 5.1. What types of cattle feeds are there? (Two types. Roughage

and concentrate)5.2. What are some types of hybrid fodder? (Napier grass, Para,

German, Jamboo, Maize, Cowpea, Kheshari, Triticale, Sorghum)5.3. What are some types of concentrate feed? (Rice polish, Wheat

bran, Oil cake, Pulse husk, Broken maize) 5.4. What should be the condition of a cow shed? (Comparatively

high, well ventilated, floor should be mud free, proper drainagefacilities, adequate free space)

5.5. Which type of cattle should be vaccinated? (Healthy and disease free)

5.6. What are the symptoms of worm-affected cattle? (Cow becomes lean and thin, rough hair, decreased appetite, frequent dysentery, decreased milk production)

5.7. In which interval should de-worming be done? (Every 3-4 months)

5.8. After heat detection, what is the best time for artificial insemination? (12-18 hours)

5.9. In which interval does the cow come in heat? (21 day intervals)

5.10. What are the advantages of artificial insemination? (Breed development, possible to inseminate many cows with the semen of one bull, semen can be stored for a long time, possibility to evaluate the quality of semen)

6. Cow Shed6.1. Is proper ventilation available in the cow shed?6.2. Is the floor of the cow shed clean?6.3. Is there proper sloping of the floor to the drain?

6.4. Is there a disposal place for cow dung?6.5. Is the milking place clean?

7. Women’s Empowerment and Property Ownership Information (Questions for female group members)7.1. Do you own any cattle?

251

7.2. Did you inherit any cattle/cow (from father/husband/others)7.3. Did you get ownership of cattle after joining SDVC? 7.4. Have you had any income from those cattle during the last 3

months? 7.5. Did you have any other income during the last 3 months? 7.6. Who makes decisions for the use of your income?

- Self- Husband- Jointly- Other male member- Other female member- No income

7.7. Who makes decisions for the use of the milk sales income? - Self- Husband- Jointly- Other male member- Other female member- No income

7.8. Sex of the person who is engaged with cow rearing? (Women/Men/Both)

7.9. Sex of the person who is engaged with cattle feed purchase? (Women/Men/Both)

7.10. Sex of the person who is engaged with milk selling? (Women/Men/Both)

7.11. Who makes the cattle purchase decision? - Self- Husband- Jointly- Other male member- Other female member

7.12. Who makes the cattle sales decision?- Self- Husband- Jointly- Other male member- Other female member

7.13. Do you have to get permission to attend group meetings?252

7.14. If yes, from whom? - Husband- Father-in-law- Mother-in-law- Other family member

7.15. Do you have to get permission to attend meetings at distant places?

7.16. If yes, from whom? - Husband- Father-in-law- Mother-in-law- Other family member

7.17. Does your husband help you in your day-to-day household activities?

7.18. If yes, in which activities? - Cattle rearing- Child care- Other household activity- Cattle feeding- Cattle washing- Grass collection- Cooking- House cleaning

7.19. How happy are you with the service of women livestock healthworkers / collectors and feed sellers in comparison to men?

- Very good- Good- Moderate- Poor

7.20. Are you permitted to purchase cattle feed yourself? 7.21. Are you permitted to sell milk at a marketplace yourself? 7.22. Do you face any obstructions from your family to spend your

own money or make decisions affecting you?7.23. If yes, where do the obstacles come from?

- Husband- Father-in-law- Mother-in-law - Son

253

- Other male group member- Other female group member

8. Expenditure on Fodder and Concentrate Feed for Cattle (In the last 7Days) 8.1. Rice bran8.2. Wheat bran8.3. Pulse husk8.4. Brocken rice8.5. Molasses8.6. Brocken maize8.7. Oil cake8.8. Mustard oil cake8.9. Mineral mix8.10. DCP8.11. Straw8.12. Green grass8.13. Ready feed

9. Disease Instance and Treatments (In the last 3 Months) 9.1. Did your cows have disease or health issues? 9.2. If yes, what did you do?

- Provided Treatment- Did Nothing

10. Other Progress Information10.1. Did you purchase any cattle during the last 3 months? 10.2. If yes, how many? 10.3. What type of cattle did you purchase?

- In-milk cow- In-milk cow with calf- Heifer- Male calf- Bull/bullock

10.4. Breed type254

- Local breed- Cross breed

10.5. Did you sell any cattle during the last 3 months? 10.6. How many?10.7. What type of cattle?

- In-milk cow- In-milk cow with calf- Heifer- Male calf - Bull/bullock

10.8. If yes, why?- Improve breed - Need money - Less production- Disease instance- Other (Specify)

10.9. Did you sell any calves during last 3 months? 10.10. If yes, how many? 10.11. Did you have any cattle die during the last 3 months? 10.12. If yes, how many? 10.13. Type of dead cattle?

- In-milk cow- Heifer- Male calf- Bull/bullock

10.14. Reason for death?10.15. What did you do with the dead Cattle?

- Buried - Dumped in river/cannel- Dumped in open place- Gave to cobbler- Other (Specify)

10.16. Did you receive any loan during last 3 months for cow rearing?

10.17. If yes, how much (Tk)? 10.18. Loan Source?

- Friend/Relatives- NGO

255

- Commercial bank- Money lender/Dadan- Government Institution (Youth Development, DLS, Social Service,

Women’s Affairs)- Milk Processor (Milk Vita/BRAC/PRAN/Rangpur Dairy)- Milk Production and Marketing Society- Other society (Specify)

10.19. Explain the terms and conditions of the loan

11. Livestock Health Worker (LHW) Performance Evaluation11.1. What is the name of the LHW that serves your group? 11.2. How many times has the LHW visited your farm during the last

3 months? 11.3. What is the knowledge level of your LHW?

- Very good- Good- Moderate- Poor

11.4. What is the skill level of your LHW?- Very Good- Good- Moderate- Poor

11.5. How responsive is your LHW when you call?- Instant response- Response with occasional delay- Response required frequent follow up- Rarely responded- Never responded

11.6. What is your view of the fees charged?- Very high- High- Reasonable- Comparatively low- Very low

11.7. Does the LHW provide prescriptions?- Always

256

- Mostly- Often- Rarely- Never

11.8. Overall, how satisfied are you with the service of your LHW?- Highly satisfied- Satisfied- Moderately satisfied- Not satisfied- Dissatisfied

12. Milk Collector Performance Evaluation12.1. What is the name of your group’s milk collector?12.2. Was your milk collector selected by the group?12.3. What is your level of satisfaction with your collector?

- Highly satisfied- Satisfied- Dissatisfied- Highly dissatisfied

12.4. How timely is your collector?- Rarely late- Often late- Always late

12.5. How timely are your collector’s payments for your milk?- Always pays on time- Some delayed payments- Often delayed payments- Always delayed payments

12.6. Payment system in the morning- Fat percentage based price- Flat rate- Don’t sell in the morning

12.7. Payment system in the evening - Fat percentage based price

257

- Flat rate- Don’t sell in the evening

12.8. Does your collector measure milk fat percentage accurately? 12.9. Does he/she keep records accurately?

13. Cattle Health Card (CHC) Progress and Use Information13.1. Has the CHC been introduced in your group?13.2. How have you been using the CHC?

- Preserved and filled-up- Un-preserved and filled-up- Preserved but not filled-up- Un-preserved and not filled-up

13.3. What sections are up to date? - De-worming section- Vaccination section- Insemination section- Treatment section- Only identification section- All sections

13.4. Is the CHC filled up correctly? 13.5. Did you get any benefit from CHC? 13.6. If you received benefits, what are they?

- Timely de-worming- Timely vaccination- Know treatment information - Know cow delivery date- Cattle disease, treatment record- Veterinarian, LHW, AI worker contact numbers- Received a higher price when cow sold

14. Community Changes14.1. Did you observe any change in dairy related

activities/practices among Non-SDVC households in your community?

14.2. If yes, which changes did you observe among other non-SDVC producer?

- Bulking through collector - Developed feed seller

258

- Developed feed buyer - Fodder growing- Developed fodder seller - Receive treatment from CARE-LHW - Attended vaccination camp- Use CHC for cattle - Sold milk to digital fat testing point - Member of savings group- Improved cattle feeding- Used artificial insemination - Increased milk price- Service providers became more committed- Artificial insemination popularity increased- Milk consumption increased

15. Savings Information15.1. Does your group engage in group savings? 15.2. If yes, do you personally engage in group savings? 15.3. If yes, what is your savings amount? (Tk)15.4. If no, Why? 15.5. Is there any savings executive committee? 15.6. Does the group have a bank account for savings? 15.7. Is the savings executive committee performing well? 15.8. What are you doing with the savings amount?

259

APPENDIX E2: Quantitative Data Gathered - ParticipatoryPerformance Tracking Data

Twice yearly, CARE field facilitators (staff who worked directly with farmer groups) helped farmer groups to facilitate a ‘participatory performance tracking’ process. In this process each farmer in a producer group would self-evaluate their progress towards fully implementing twelve important animal husbandry practices. These activities included nutritional feeding, vaccinations, deworming, using artificial insemination, aggregating milk, and hygienic milk handling practices. The process also evaluated a group’s savings activities, record keeping, cohesion and leadership. The scores and progress of each farmer were recorded by CARE and I used this raw datato triangulate with qualitative interviews and observation. Independent statistical analysis of this data by a statistical consultant associated with the York Centre for Social Research was also helpful in providing further evidence for relationships between concepts and constructs as my theoretical model emerged. The questionnaire adapted below illustrates the data gathered by this process.

Participatory Performance Tracking Data Gathered

1. Milk Marketing1.1. Do group members bulk/aggregate their milk before selling?1.2. Do group members sell milk individually, but at good prices?1.3. Do group members sell milk to buyers through written

contracts?1.4. Is milk sales information recorded either individually or at

group level?

2. Group Savings2.1. Has savings continued for at least last 4 months?2.2. Are savings records kept correctly?2.3. Is group savings money used for dairy related purposes by

group members?2.4. Is group savings money deposited either at a bank or

maintained through proper regulation and bylaws?260

3. Feed Access and Adoption Status3.1. Has a feed seller been developed at the group level?3.2. Do at least 30 percent of members have access to feed? 3.3. Do at least 50 percent of members have access to feed?

4. Artificial Insemination Access and Adoption

4.1. Have at least 30 percent of members’ cows received artificial insemination service?

4.2. Do at least 10 percent of members have crossbred calves (so far)?

4.3. Do at least 20 percent of members have crossbred calves (so far)?

4.4. Is artificial insemination related information recorded in the CHC by at least 50% of producers?

5. Group Fodder Cultivation & Adoption5.1. Is grass feeding being done by at least 50 percent of group

members?5.2. Do group members have access to fodder cutting or seeds?5.3. Has a fodder selling/fodder cutting/fodder seed selling

entrepreneur been developed?

6. Vaccination Status & Record Deeping6.1. Have at least 1 dose of 2 types of vaccines been given by

group members so far? 6.2. Have at least 2 doses of 2 types of vaccines been given by

group members so far? 6.3. Are vaccination records kept in the member’s cattle health

card?

7. Deworming status & record keeping7.1. Have at least 50 percent of members’ cows been dewormed so

far?7.2. Have at least 70 percent of members’ cows been dewormed so

far?

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7.3. De-worming camp was arranged at least 2 times or 70% of members’ cows came under de-worming (as per schedule so far)

7.4. Are deworming records kept in the members’ cattle health card?

8. Cattle Treatment Service Access & Record Keeping8.1. Do group members take regular services from CARE trained

LHWs?8.2. Are treatment services given to members properly ? (fee,

service quality etc.)8.3. Are LHWs engaged in conducting learning sessions with

groups?8.4. Is treatment information recorded in the CHCs?

9. Group Cohesion and Leadership9.1. Are group records maintained properly, transparently and

systematically?9.2. Does the group have evidence of benefits or competitive

services by negotiating with other value chain actors?9.3. Does the group leader have organizing capacities that

members have confidence in?

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APPENDIX E3: Quantitative Data Gathered - Collectors

In January, 2009 CARE began gathering data on milk collectors in theirproject area in the northwest of the country. Like all of CARE’s quantitative data gathering efforts, the methodology was audited by the International Food Policy Research Institute and the Bill and Melinda Gates Foundation. As my research progressed, I was able to addquestions to this survey to triangulate with other qualitative data sources, test assumptions, and help inform my theoretical model of poverty alleviation for poor producers through a market-based approach. Reproduced below are survey questions asked of milk collectors to illustrate the kinds of data gathered.

Milk Collector Data Gathered

1. Collector Profile1.1. Sex of the milk collector?1.2. Age of the milk collector? 1.3. Literacy of the milk collector?1.4. Marital status of the milk collector?1.5. Education of the milk collector (highest class passed)? 1.6. Current main occupation of the milk collector? 1.7. Total income from main occupation in last month?1.8. Other occupation besides milk collecting?1.9. Is the milk collector the main income earner in the family?1.10. If not the main earner, then what is the relationship to the

main earner?1.11. If not the main earner, then what is the occupation of the

main earner?1.12. Total land owned by the milk collector’s household? 1.13. Total cultivable land owned by the milk collector’s

household?1.14. Number of family members (including the milk collector)?1.15. Does the milk collector have any children?1.16. How many children aged 6-11 years?1.17. How many of these children go to primary school?1.18. How many children aged 12-18 years?1.19. How many of these children go to secondary school?

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2. Milk Collection Business and Assets 2.1. How was the milk collection business started/acquired?2.2. What was the source of any initial financing?2.3. Amount of initial capital to set up the business/activity? 2.4. Did you take a loan to enhance your collector business?2.5. If yes, what was the loan amount?2.6. What was the source of the loan?2.7. What was the interest rate?2.8. Number of family members involved full-time in this business

excluding yourself?2.9. Number of family members involved part-time in this business

excluding yourself?2.10. Number of hired laborers involved in this business?2.11. Did you receive any training in milk handling and marketing?2.12. If training received, who provided it?2.13. Do you have a lactometer?2.14. Do you have a vehicle for transporting milk?2.15. Do you have milk handling cans?

3. Information on Milk Collection3.1. How many producers sell milk to you? (currently)3.2. How many producers sell milk to you? (Before CARE)3.3. How large is your milk collecting area? 3.4. How many groups do you collect from?3.5. Do you have any formal/written agreement with the groups? 3.6. If yes, how many groups do you have agreements with?3.7. Do you collect milk in the morning?3.8. Total quantity of morning milk collection?3.9. Average fat percentage in the morning?3.10. Price paid per liter (Tk)?3.11. Total price paid by buyer (Tk)?3.12. Do you collect milk in the afternoon?3.13. Total quantity of afternoon collection?3.14. Average fat percentage in the afternoon?3.15. Price paid per liter (Tk)?3.16. How are milk prices established? 3.17. What is your mode of usual payment to farmers?

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3.18. What hygenic milk handling measures do you practice?3.19. What type of milk handling pots do you use? 3.20. How many pots do you have?3.21. Distance traveled daily?3.22. What is your mode of transport?3.23. What is your daily cost of transport (self + milk)?3.24. Type of road ? 3.25. Do you also provide input supplies to farmers at least once

a month?3.26. How do you guarantee that farmers will not shift to other

collectors to buy their milk? 3.27. Do you give cash advances (deposit/security) to farmers? 3.28. How many producers have received cash advances from you?3.29. What characteristics do you look for in good quality milk?3.30. Have you had any spoilage of milk in the past 3 months?3.31. If yes, how many times?3.32. What was the total quantity of milk spoiled? 3.33. Did any of the milk collected from CARE groups spoil? 3.34. What did you do with the spoiled milk?3.35. If sold, then to whom?3.36. If sold, then at what price on average?3.37. What measures have you taken to prevent spoilage?

4. Milk Handling4.1. How do you bulk milk after purchase? 4.2. What is your method of transferring milk from supplier

containers to bulking containers? 4.3. What type of containers and utensils do you use for bulking

purchased milk? 4.4. When did you wash the containers before receiving milk?4.5. What is your water source for washing containers and utensils? 4.6. What is your mode of cleaning milk containers and utensils?

5. Information on Milk Sales5.1. Type of milk test performed by the buyer ? (At chilling

plant there are numerous tests done simultaneously: Alcohol

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test, Lactometer test, Fat test, Adulteration test, Formalin test)

5.2. Price paid by the buyer for the milk sold?5.3. Commission paid by the buyer for the milk sold?5.4. Transport allowance paid by the buyer for the milk sold?5.5. When did you receive the payment for the milk sold?5.6. How was milk price determined?5.7. If pricing was based on fat percentage, then average fat

percentage of the milk sold?5.8. Equipment used by the buyer for measuring fat percentage?5.9. Did you observe the process of measuring fat percentage?5.10. If you did not observe the process, why not?5.11. Type of container used to transport milk to selling point?5.12. Did the buyer provide the container to you?5.13. Distance traveled from the first collection point to selling

point (km)?5.14. Travel time from the first collection point to the selling

point (minutes)?5.15. Cost of transport to the selling point (self + milk)? 5.16. Type of road?5.17. Do you have a contract with any buyer?5.18. If you have a contract, then with which buyer? 5.19. Is the contract written?5.20. How long is the contract period ?5.21. In the past 3 months, did any buyer refuse to buy milk (part

or full quantity) from you after you brought the milk to the buyer?

5.22. If refused to buy, then how many times has it happened in the past 3 months?

5.23. Which buyer refused to buy? 5.24. Why did the buyer(s) refuse to buy milk from you?

6. Female Milk Collectors6.1. Did you receive any loan as a female milk collector? 6.2. If yes, from which organization or individual? 6.3. Did you get training as a woman collector?6.4. If yes, from which organization?

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6.5. As a woman, did you get any assistance for transporting milk?

6.6. If yes, describe.6.7. What is your expereance as a awomen seller to get a good

price for your milk?6.8. Do they insult you as a awomen when you are selling milk?6.9. As a woman did you receive any advice to develop your

business?6.10. As a women when you collect milk do you face any obstacles?6.11. If yes, what are they?6.12. Do you get adequate support from your family?

7. Income from Milk Sales in the Past Month7.1. Total quantity of milk purchased?7.2. Total amount paid to farmers for the quantity purchased?7.3. Total transport cost incurred to procure milk?7.4. Total hired labor cost incurred to procure milk?7.5. Any other cost to procure milk (specify)?7.6. Loss due to milk spoilage (if any)?7.7. Any other cost to sell milk (bribe, tips, etc)?7.8. Total cost?7.9. Cost per liter?7.10. Total quantity of milk sold?7.11. Total amount received from buyers for the milk sold?7.12. Total amount received from buyers as commission?7.13. Total amount received from buyers as transport allowance?7.14. Total amount received from selling spoiled milk?7.15. Total revenue?7.16. Revenue per liter ?7.17. Total profit (loss) per liter?

8. Perceptions8.1. Do you think that the price you are paid for collecting milk

is fair?8.2. Do you think that the processes used to determine the price

you are paid for collecting milk are fair?8.3. On a daily basis, do you know whether what you are paid for

collecting milk differs from what you could get from another 267

buyer (for instance selling to the local sweet maker or tea shopor to another large milk company)?

8.4. What type of behavior/ practices do you expect from farmers?8.5. How important are the following farmer behaviors to you:

- Selling/supplying to you predictably and reliably?- Selling at a price that allows you to make a profit? - Selling/supplying greater volumes of milk?- Selling/supplying milk with high fat content?- Selling/supplying milk without any added water or chemicals?- Other

8.6. Do you think the farmers are fair and honest when it comes to selling/supplying milk to you?

8.7. Do you think the farmers care about your welfare and livelihood?

8.8. Do you trust the farmers?8.9. What are your expectations from farmers?8.10. From your perspective, how important do you think the

following are to farmers:- Timely payment?- Timely collection?- Transaction transparency?- Other

8.11. Do you think the local milk buyers (sweet makers, tea shops,etc.) are fair and honest when it comes to buying milk from collectors?

8.12. Do you think the local milk buyers (sweet makers, tea shops,etc.) care about the welfare and livelihood of milk collectors?

8.13. Do you trust the local milk buyers (sweet makers, tea shops,etc.)?

8.14. What type of behavior/practices do you expect from chilling plant operators?

8.15. How important are the following chilling plant operator behaviors to you:

- Transparency of milk testing?- Offering a good price?- Prompt payment?- Other

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8.16. Do you think the local chilling plant manager is fair and honest when it comes to buying milk from collectors?

8.17. Do you think the local chilling plant manager cares about the welfare and livelihood of milk collectors?

8.18. Do you trust the local chilling plant manager?8.19. What are your expectations of chilling plant managers?8.20. From your perspective, how important do you think the

following are to chilling plant managers:- Receiving increased volumes of milk?- Receiving quality milk (unadulterated, high fat content)?- Transparency of the transaction (milk testing, record keeping)?- Other

8.21. Do you think the large milk companies (Milk Vita, BRAC, PRAN, Danone) are fair and honest when it comes to buying milk from milk collectors?

8.22. Do you think the large milk companies (Milk Vita, BRAC, PRAN, Danone) care about the welfare and livelihood of milk collectors?

8.23. Do you trust the large milk companies (Milk Vita, BRAC, PRAN, Danone)?

8.24. What do you think determines a milk collector’s success? - Random luck, chance - Powerful others in the dairy industry (including milk

collectors, processors, chilling plant operators) - The farmer’s own hard work - Forces or events that are beyond anyone’s control - God’s will; fate

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APPENDIX E4: Quantitative Data Gathered - Livestock HealthWorkers

CARE regularly surveyed all of the livestock health workers (also known as paravets) that it had trained. By 2012, CARE had trained 201 livestock health workers. These individuals provided basic animal health care services such as immunization, deworming, basic disease diagnosis, artificial insemination advice and other animal health careadvice to farmers with limited access to a veterinarian. Data gatheredon livestock health workers included their training, business capital and equipment, services, knowledge, costs, revenues and profit, and their perceptions of other actors in the dairy value chain. My access to all of the raw data collected by these surveys was helpful in triangulating with qualitative data and in helping inform my theoretical model. As my research progressed, I was able to add questions to the questionnaire to gather additional focused data. An edited version of the survey administered to livestock health workers is given below to illustrate the kinds of data gathered.

Livestock Health Worker Data Gathered

1. Profile Information1.1. Age 1.2. Sex 1.3. Literacy level 1.4. Marital status 1.5. Education (highest class passed)1.6. Current main occupation1.7. Other occupation besides livestock health work?1.8. Are you the main earner in the household?1.9. If not the main earner, then what is the occupation of the

main earner?1.10. Total land owned by your household?1.11. Total cultivable land owned by your household?1.12. Number of family members?1.13. Do have any children?1.14. How many children aged 6-11 years old?1.15. How many of these children go to primary school?

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1.16. How many children aged 12-18 years old?1.17. How many of these children go to secondary school?

2. Training2.1. Did you receive any veterinary training?2.2. If yes, who provided the training?2.3. Duration of training (days)? 2.4. Training subjects covered?2.5. Total training fee paid by trainee?

3. Business Capital and Equipment3.1. Source of initial financing?3.2. Amount of initial capital to set up your livestock health

worker business?3.3. Number of family members involved full-time in this

business?3.4. Number of family members involved part-time in this

business?3.5. Number of hired laborers involved in this business?3.6. Do you have the following equipment:

- Kit box for vet services? If yes, how much did it cost? - Vehicle for home visits?- Refridgerator for storing vaccines/medicines?

4. Livestock Health Worker Activities4.1. Service area covered? 4.2. Number of unions covered?4.3. Number of villages covered? 4.4. Usually, how do farmers contact you to request services?4.5. How many houses visited in the last month?4.6. How many CARE groups did you serve in the last month?4.7. How many other livestock health workers worked in the area

you covered last month?4.8. Have you established any service point/clinic where farmers

bring their cattle for treatment?4.9. Have you established linkages with relevant institutions? 4.10. If yes, then with which institutions?

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4.11. Did you maintain a cold chain for vaccines and/or semen straws?

5. Livestock Health Worker Knowledge and Practices5.1. Do you how to prepare a cow shed?5.2. Do you know which diseases need vaccines?

- Foot and Mouth Disease- Hemorrhagic Septicemia - Anthrax- Black Quarters

5.3. How do you identify those cattle attacked by worms?5.4. Do you differentiate between tumor and pustules?5.5. Do you know what is the primary treatment of FMD?5.6. How do you control cattle lice, mite and attali?5.7. What type of precautions should be taken before cattle

vaccinations?5.8. What is the reason for belly distended diseases?5.9. What is the medication for belly distended diseases?5.10. How many households of SDVC farmers obtain treatment/service

from you?5.11. Do you refer someone else when you face complex diseases?5.12. Where do you refer?5.13. What type of training would you like in the future? 5.14. At present do you face any barriers? 5.15. If so, what are they?

6. Costs6.1. Total cost of medicines used to treat dairy cows?6.2. Total cost of vaccines used for dairy cows?6.3. Total cost of Anthelmentics (Deworming tab/Injections) for

dairy cows?6.4. Total cost of semen used for AI?6.5. Total cost of medicines used to treat other animals?6.6. Total cost of vaccines used for other animals?6.7. Total cost of Anthelmentics (Deworming tab/Injections) for

other cattle?6.8. Total transport cost incurred for farmers’ home visits?

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6.9. Cost of running the clinic, if any (rent, electricity & water bill, etc.)?

6.10. Any other costs incurred for providing livestock health worker services?

6.11. Total costs

7. Revenues 7.1. Total payments received for treating dairy cows (including

medicines)?7.2. Total payments received for vaccinating dairy cows

(including vaccine)?7.3. Total payments received for providing AI services (including

semen)?7.4. Total payments received for treating other animals

(including medicines)?7.5. Total payments received for vaccinating other animals

(including vaccine)?7.6. This business related any other income? 7.7. Total revenue

8. Total profit

9. Networks9.1. Do you have any connection with any organizations?

- Government- NGO - Private sector- Others

9.2. What type of /communication or linkage do you have?

10. Perceptions10.1. Do you think your remuneration for your services is correct?10.2. What is most important to you when you provide services to

farmers?10.3. How friendly are farmers when you provide services for their

animals? 10.4. Has the government’s livestock division provided any

assistance to you? 273

APPENDIX E5: Quantitative Data Gathered - Formal SectorProcessors

A survey of formal sector dairy processors, which gathered both quantitative and qualitative data, was undertaken by CARE in December,2009. I worked with CARE to add questions to the survey relevant to myresearch. With access to the raw data gathered and with analysis provided by a professional statistician associated with the York Centre for Social Research, I was able to use this information to triangulate with other data points and inform my theorizing efforts about the process by which CARE enhanced market practices for the benefit of poor producers. The edited questionnaire reproduced below illustrates the data gathered by this survey.

Formal Sector Dairy Processor Data Gathered

1. Dairy Processor Profile1.1. Year firm established? 1.2. Type of ownership of business? 1.3. Source of initial financing?1.4. Amount of initial capital to set up the business? 1.5. Number of milk processing plants?1.6. Total daily milk processing capacity? 1.7. Total milk chilling capacity in the processing plants? 1.8. How many chilling plants outside the main processing plants?1.9. What is the total milk chilling capacity of the chilling

plants? 1.10. How many milk tankers are owned for transporting milk? 1.11. Total carrying capacity of the tankers?1.12. What dairy-related products do you make?1.13. Number of total employees in the firm (including management-

level staff)?1.14. Number of female employees in the firm? 1.15. What percentage of your milk supply is sourced from

collectors? 1.16. What price do you pay for milk?1.17. What services do you offer farmers?

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2. Firm Employees (numbers)2.1. Management level staff?2.2. Graduate engineers?2.3. Other technical staff?2.4. Administrative staff?2.5. Milk packaging/sorting staff?2.6. Other staff (cleaners, guards, etc.)?

3. Firm Practices3.1. What kind of behaviors, practices or actions do you expect

from chilling plant operators?3.2. How important are the following chilling plant operator

behaviors to you?:- Meeting volume targets?- Treating collectors and farmers fairly?- Supplying unadulterated milk?- Others?

3.3. Do you think the chilling plant operator cares about your business?

3.4. From your perspective, how important do you think the following are to chilling plant operators?

- Maximizing their incomes?- Treating collectors and farmers fairly?- Meeting their targets?- Transaction transparency (milk testing, record keeping)?

3.5. Do you think the chilling plant managers perform their jobs in a fair and honest manner?

3.6. Do you think the chilling plant managers care about the welfare of your company?

3.7. Do you trust the chilling plant managers?3.8. What kind of behaviors, practices or actions do you expect

from small-scale farmers that supply your organization with milk?

3.9. How important are the following small-scale farmer behaviorsto you?

- Supplying unadulterated milk?- Supplying increased volumes of milk?- Supplying milk with high fat content?

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- Other?3.10. If the behavior of the small-scale farmers doesn’t meet your

expectations, how likely is it that you can address and resolve the issues?

3.11. What do you feel are your obligations to the small-scale farmers that supply your organization with milk?

3.12. From your perspective, how important do you think the following are to small-scale farmers?:

- Improved productivity of their cows?- Price for their milk?- Maximizing their incomes?- Being treated fairly by collectors and chilling plant

operators?- Transparency of transactions (milk testing, record keeping)?- Animal health related services?- Other

3.13. Do you think the farmers are fair and honest when it comes to selling/supplying milk to you?

3.14. Do you think the farmers care about your welfare and livelihood?

3.15. Do you trust the farmers?3.16. Do you think the milk collectors are fair and honest when it

comes to selling milk to you?3.17. Do you think the milk collectors care about the welfare of

your company?3.18. Do you trust the milk collectors?

4. Plant Capacity4.1. Pasteurized, UHT milk in packets (liters)?4.2. Pasteurized, non-UHT milk in packets (liters)?4.3. Non pasteurized, UHT milk in packets (liters)?4.4. Powdered milk (kg)?4.5. Butter (kg)?4.6. Ghee (kg)?4.7. Yogurt (kg)?4.8. Sweet (kg)?4.9. Candy (kg)?

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5. Market Information

6. Sales Promotion Activites

7. Expansion Plans

8. Business Challenges

9. Stakeholder Relationships

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APPENDIX E6: Quantitative Data Gathered - Chilling Plant Managers

A survey of fifty chilling plant managers was undertaken by CARE in December, 2009. Chilling plants are small collection centers with refrigerated milk storage capacity owned by the large dairy processors. Chilling plant managers are responsible for buying milk from collectors and farmers which is then transported by tanker truck to urban centers for pasteurization and processing. With access to theraw data gathered and with analysis provided by a professional statistician associated with the York Centre for Social Research, I was able to use this information to triangulate with other data pointsand inform my theorizing efforts about the process by which CARE enhanced market practices for the benefit of poor producers. The edited questionnaire reproduced below illustrates the data gathered by this survey.

Chilling Plant Manager Data Gathered

1. Profile Information on Chilling Plant Manager1.1. Sex?1.2. Age?1.3. Education?1.4. Monthly salary?1.5. Other monetary benefits received (specify the benefits)?1.6. Date of joining the chilling plant as manager?1.7. Did you receive any training in milk handling?

2. Profile of Chilling Plant2.1. Year chilling plant was established?2.2. Is the plant building owned by the processing company or

rented?2.3. Number of employees in the plant (including the manager)?2.4. Total milk chilling capacity (liters)?2.5. Type of fat testing equipment used? 2.6. Does the chilling plant have any cream separators?2.7. If yes, how many cream separators?2.8. Does the chilling plant provide milk collection containers

to milk suppliers?278

2.9. If yes, how many milk collection containers does the plant have?

2.10. How many times has the price chart been changed in the last 6 months?

2.11. How and when do you notify collectors and farmers of price changes?

3. Chilling Plant Employees (numbers)3.1. Managers3.2. Plant operators3.3. Mechanics3.4. Accountants3.5. Other administrative staff3.6. Cleaner/janitor3.7. Guard 3.8. Veterinary Doctor3.9. Artificial insemination provider

4. Milk Collection Information4.1. Does the chilling plant work with organized producer groups?4.2. If yes, how many?4.3. Does the chilling plant have any support programs for their

producers groups?4.4. If yes, what type of services does the chilling plant offer?4.5. Total quantity of daily morning milk purchased (liters)?4.6. Average fat percentage of the morning milk purchased? 4.7. Average price paid per liter for the morning milk (Tk)?4.8. Total quantity of daily afternoon purchase (liters)?4.9. Average fat percentage of the afternoon milk purchased? 4.10. Average price paid per liter for the afternoon milk (Tk)? 4.11. How are your milk prices determined? 4.12. Does the chilling plant provide a transport bonus to milk

suppliers?4.13. If yes, how is the transport bonus determined?4.14. What is the average transport bonus?4.15. What types of quality tests are done before receiving the

milk?4.16. Do you measure the fat percentage in front of the collectors

or milk suppliers? 279

4.17. Does the chilling plant have contracts with any milk suppliers?

4.18. If it has contracts, with how many suppliers?4.19. In the past 3 months, did the chilling plant refuse to buy

milk (part or full quantity) from any suppliers after they brought the milk to the plant?

4.20. If you refused to buy, how many suppliers did this affect inthe past 3 months?

4.21. What was the reason for refusing to buy milk from a supplier?

4.22. Do you give cash advances to your milk suppliers?4.23. If not, how do you guarantee that the supplier will not

shift to other chilling plants? 4.24. Has there been any milk spoilage in the past 3 months?4.25. If yes, then how many times?4.26. Total quantity of spoiled milk in 3 months?4.27. Did any of the milk collected from SDVC group spoil? 4.28. What did you do with the spoiled milk?4.29. What measures have you taken to prevent spoilage?

5. Patterns of Milk Collection and Plant Capacity (Past 12 Months)5.1. What has been your highest quantity of milk purchased in a

day?5.2. What date was it?5.3. What was the average price paid for milk on the day of the

highest purchase? 5.4. What was your lowest quantity of milk purchased in a day?5.5. What date was it?5.6. What was the average price paid for milk on the day of the

lowest purchase?

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APPENDIX E7: Quantitative Data Gathered - Informal Sector MilkProcessors

A survey of fifty informal sector milk processors and milk buyers was undertaken by CARE in June, 2009. Examples of informal sector milk processors include sweet shops, yogurt makers, milk bars, tea shops, restaurants and hotels. Processing in the informal sector traditionally occurs without pasteurization and often without refridgeration. CARE initially identified 198 significant informal sector milk buyers and processors in their area of operations and surveyed fifty of them to understand their capacity, size, demand for milk, future growth plans and perceptions of other value chain actors.I was able to include questions in the questionnaire below and analyzethe findings to triangulate with other data points and inform my theorizing. The edited questionnaire below illustrates the data gathered by this survey.

Informal Sector Milk Processors Quantitative Data Gathered

1. Organizational Profile1.1. What year was your business founded? 1.2. How was the business established?1.3. Source of initial financing?1.4. Amount of initial capital to set up the business? 1.5. Number of milk processing plants?1.6. Total daily milk processing capacity (liters)? 1.7. List the dairy-related items that you produce.1.8. Number of total employees in the firm? 1.9. Number of female employees in the firm?

2. Employees (number)2.1. Management level staff2.2. Administrative staff2.3. Milk packaging/sorting staff

3. Production Capacity3.1. Pasteurized, UHT milk in packets (liters)?

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3.2. Pasteurized, non-UHT milk in packets (liters)?3.3. Non pasteurized, UHT milk in packets (liters)?3.4. Powdered milk (kg)?3.5. Butter (kg)?3.6. Ghee (kg)?3.7. Yogurt (kg)?3.8. Sweet (kg)?3.9. Candy (kg)?

4. Market Information

5. Sales Promotion

6. Expansion Plans

7. Business Challenges

8. Stakeholder Relationships

9. Perceptions9.1. What kind of behaviors, practices or actions do you expect

from small-scale farmers that supply your organization with milk?

9.2. How important are the following small-scale farmer behaviorsto you?- Supplying unadulterated milk?- Supplying increased volumes of milk?- Supplying milk with high fat content?

9.3. If the behavior of the small-scale farmers doesn’t meet yourexpectations, how likely is it that you can address and resolve the issues?

9.4. What do you feel are your obligations to the small-scale farmers that supply your organization with milk?

9.5. From your perspective, how important do you think the following are to small-scale farmers:- Improved productivity of their cows?- Price for their milk?- Maximizing their incomes?

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- Being treated fairly by collectors and chilling plant operators?

- Transparency of transactions? - Animal health related services?- Other

9.6. Do you think the farmers are fair and honest when it comes to selling/supplying milk to you?

9.7. Do you think the farmers care about your welfare and livelihood?

9.8. Do you trust the farmers?9.9. Do you think the milk collectors are fair and honest when it

comes to selling milk to you?9.10. Do you think the milk collectors care about the welfare of

your company?9.11. Do you trust the milk collectors?

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APPENDIX E8: Quantitative Data Gathered - Feed and MedicineSellers and Agricultural Input Shops

A survey of 178 feed and medicine sellers and informal agricultural input shops in CARE’s geographic area of operations was undertaken in June 2009. These small-scale sellers and shops provide access to important productivity enhancing feeds, medicines and other agricultural inputs for poor dairy producers. Information collected from these entrepreneurs included their feed and medicine procurement and sales and other aspects of the size and scope of their business. An edited version of the questionnaire is reproduced below to illustrate the type of data gathered. With access to this raw data, I was able to analyze it with a statistician and use the data and analysis to triangluate with qualitative data and inform the development of my grounded theory model.

Feed and Medicine Sellers and Agricultural Input Shop Data Gathered

1. Profile1.1. Sex 1.2. Age 1.3. Number of family members 1.4. Literacy level1.5. Marital status 1.6. Education 1.7. Current main occupation of Feed/Medicine Seller

2. Business Operations2.1. Type of ownership of business?2.2. Date of start of this business?2.3. How was the business acquired?2.4. Source of initial financing?2.5. Amount of initial capital to set up the business? 2.6. Number of family members involved full-time in this business

(including the owner)?2.7. Number of hired employees involved full-time in this

business?

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2.8. Number of hired employees involved part-time in this business?

2.9. From what location do you mainly operate your trading business?

2.10. Is the shop space owned by the owner or rented?2.11. Total area of the shop?2.12. Total cost of all furniture/cabinets for the shop?2.13. Does the shop have electricity?2.14. If yes, then total electricity bill in the past 3 months?2.15. Telephone/cellphone bill paid in the past 3 months for

business use? 2.16. Municipality/other tax paid for the business last year?2.17. Does the shop owner sell feed/medicine himself/herself?2.18. Are you a SDVC group member? 2.19. Are you a SDVC livestock health worker?2.20. Do you have training in animal nutrition and health?2.21. Do you prepare feed by yourself? 2.22. Do you have a license to sell medicine?2.23. Do you have any refridgerator for your business?

3. Feed Procurement and Sales (monthly in kgs)3.1. Wheat bran (Gomer vushi) - Fine3.2. Wheat bran (Gomer vushi) - Coarse3.3. Rice husk (Chaler tush)3.4. Rice polish (Chaler kura)3.5. Broken rice (Chaler khud)3.6. Crushed maize (Vutta vanga)3.7. Pulse husk (Daler vushi)3.8. Oil Cake (Khoil): Mustard3.9. Oil Cake: Till3.10. Oil Cake: Coconut3.11. Oil Cake: Linseed3.12. Oil Cake: Soyabean3.13. Oil Cake: Ground nut (Badam)3.14. Crushed Kheshari3.15. Crushed Mati-kalai3.16. Crushed boot/dal (Vej)3.17. Soyabean meal

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3.18. Fish meal3.19. Urea 3.20. Molasses (Cheeta gur)3.21. Salt3.22. DCP+DB3.23. Vitamin-mineral mix3.24. Ready feed

4. Medicine And Vaccine Procurement And Sales (units per month)4.1. Renamycin/Oxytet/Gentamycin/SP vet/

Acipilline/penbacllin/Neomastipra4.2. Procain penicillin/combipen-vet/acigent/strepto-p/

Mastilex/Masticare/ Salidone/Temptin-S/Diadin/Sulpha-plus4.3. Endex/LT

vet/Facinex/Helmex/Nitronex/Antiworm/Acimac/Acinex/Endokil4.4. Astavet/Histavet4.5. Difen/Fevasole/Longosona/A-fenac-vet/pyro vet4.6. Digimix/Digitop/Zymovet4.7. Calfostonic/ayumin/calcivit/DCP/megavitDB4.8. Aminovit/barenil/Atrovet/Vermic

5. Feed5.1. From where do you procure feed? 5.2. Total transportation cost incurred to procure feed in the

last month?5.3. Do you have contracts with any feed suppliers?5.4. If you have contracts, then with how many feed suppliers?5.5. Type of contract?5.6. Do you give cash advances (deposit/security) to your

suppliers?

6. Veterinary Medicine6.1. From where do you procure veterinary medicines?6.2. If you buy medicines from company agents, then list the

names of medicine companies.6.3. Total transportation cost incurred to procure medicines in

the last month?6.4. Do you have contracts with any medicine suppliers?

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6.5. If you have contracts, then with how many medicine suppliers?

6.6. Type of contract?6.7. Do you give cash advances (deposit/security) to your

medicine suppliers?

7. Feed Sales and Promotion7.1. How many buyers bought feed from you last month? 7.2. Buyers from approximately how many villages bought feed from

you? 7.3. Do SDVC group members buy feed from you?7.4. If yes, then members from how many SDVC groups buy feed from

you? 7.5. Do you deliver feed to buyers’ premises? 7.6. Do you sell feed to buyers on credit?7.7. Do you give a discount to feed buyers?7.8. Do you advertise to promote feed sales?7.9. If you advertise, then what methods do you use?

8. Veterinary Medicine Sales and Promotion8.1. How many buyers bought medicines from you last month? 8.2. Buyers from approximately how many villages bought medicine

from you? 8.3. Do SDVC group members buy medicine from you?8.4. If yes, then members from how many SDVC groups buy medicine

from you? 8.5. Do you deliver medicine to buyers’ premises? 8.6. Do you sell medicine to buyers on credit?8.7. Do you give a discount to medicine buyers?8.8. Do you advertise to promote medicine sales?8.9. If you advertise, then what methods do you use?

9. Market Information9.1. Where do you get information on price, supply and demand

conditions in the market? 9.2. What improvements would you like to see in the way you get

information about prices, supply and demand conditions in your purchase markets?

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10. Business Plans10.1. What are your future plans for business improvement?

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Appendix E9: Quantitative Data Gathered - Breed and PhenotypeAssessment

To identify and determine the breed (genotype) and body characteristics (phenotype) of existing dairy cows in CARE’s project area, a survey was conducted in 2010 with a sample size of 15,148 CAREfarmers. The breed or genotype of a cow combined with its environment (feed, housing, animal husbandry practices) determines its phenotype (observable characteristics). The survey sought to gain a deeper understanding into the animal genetics and artificial insemination options and practices that could make the greatest impact on milk productivity for smallholder dairy farmers in the country. The survey included questions on milk production, feeding and nutrition, milk handling, calving, heath care and breeding practices which are shown in greater detail below. I used this raw data to triangulate with other data sources and inform my understanding of the project context and my own theory-building process.

Cattle Breed Data Gathered

1. Farmer Information1.1. Name1.2. Father’s/Husband’s Name1.3. Group Number1.4. Village1.5. Union1.6. Thana/Upazilla1.7. District

2. Level of Education of the Farmer 2.1. Illiterate2.2. Up to Primary2.3. Up to High school2.4. Up to HSC2.5. Up to Graduate2.6. Above graduate

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3. Main Source of Farmer Income 3.1. Crop production3.2. Livestock production3.3. Business3.4. Service3.5. Other

4. Second Main Source of Income 4.1. Crop production4.2. Livestock production4.3. Business4.4. Service4.5. Other

5. Total Amount of Owned Land5.1. Homestead (acres)5.2. Crop (acres)5.3. Pond (acres)5.4. Other (acres)

6. Total Number of Livestock 6.1. Dairy cattle

- Cow- Heifer- Bull

6.2. Draft cattle - Male - Female - Castrated bull

6.3. If cows are used for draft, do they give milk?- No- Yes- If yes, how much? (liters/day)

6.4. Goats - Males- Females

6.5. Sheep- Males- Females

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6.6. Buffalos- Males- Females

7. House Management7.1. Husbandry system

- Free range- Intensive- Semi-intensive

7.2. Floor of the house- Brick built- Soil made/Kacha

7.3. Hygiene of the house- Hygienic - Unhygienic

7.4. Disposal of manure from house- Traditional- Scientific (cow dung pit/bio-gas plant)

7.5. Do you know the characteristics and rearing methods of different cross breed cattle?- Very well- Medium- Little- Not at all

8. Feed Management8.1. Feed Resources

- Crude protein source and average percentage in daily feeds- Carbohydrates sources and percentage in daily feeds- Others (vitamins, minerals)

8.2. Types of roughage supply/feeding- Treated- Untreated

8.3. Frequency of green grass feeding- Regular- Irregular

8.4. Amount of green grass feeding per day per cow (kg)8.5. Is green grass available?

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- Yes- Some times of the year- No

8.6. Frequency of concentrate feeding - Once at a time per day- Dividing into two or more

8.7. Amount of concentrate feeding per day per cattle (kg)- Cow- Heifer- Calf (after weaning to 1 year)- Bull

8.8. Are the concentrate feeds balanced or not?- Yes- No

8.9. Feeding of concentrate prior to milking - Yes- No

8.10. Is concentrate feed available?- Yes- Sometimes- No

8.11. What is the source of drinking water supply?- Tubewell- River- Pond

8.12. Supply/feeding status of vitamins and minerals- During Pregnancy period? - During Milking/lactation period?

9. Milk Management9.1. Udder condition

- Very good- Good- Medium- Low

9.2. Udder Sanitation- Hygienic- Unhygienic

9.3. Washing of the udder before milking? 292

9.4. Washing of the udder after milking?9.5. Use of cold water?9.6. Milking method

- Knot method- Two finger method- Full hand method

9.7. Milking by- Family- Milking man/Gowala- Milking machine

9.8. Milking frequency - Once/day- Twice/day- More than twice/day

9.9. Milking intervals - Regular- Irregular

9.10. Present milking cow/heifer information- Breed Name- Pedigree of cattle- Age of the cow (year)- Body weight of the cow (kg)- Color of the cow- Age of puberty (month)- Age of 1st calving (month)- Calving interval (month)- Number of Calves- Average milk yield/ day (liter)- Lactation period (in days)- Dry period (in days)

10. Calf Management10.1. Feeding of colostrum after calf birth

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- Yes- No

10.2. Average amount of colostrum feed to the calf daily- 0 to 0.5 liter- 0.5 to 1 liter- 1 to 2 liters

10.3. Calf weaning system- Ideal method- Traditional method

10.4. Calf survival status (from birth to 6 month of age)- Alive- Died

10.5. Calf pedigree status- Calf number- Breed name- Pedigree of the calf- Age of the calf (months)- Sex of the calf- Color of the calf- Father- Mother- Male- Female

11. Health Management11.1. What is the vaccination program of the household cattle?

- Routine program- Irregular

11.2. What is the deworming program?- Routine program- Irregular

11.3. Any previous/present history of mastits that affect the cow?11.4. Any previous/present history of milk fever that affect the

cow?11.5. Any cows affected by disease within the last six months? If

yes then disease name:11.6. Health treatments of cows done by:

- Veterinarian294

- Livestock health worker (LHW)- By both of them

11.7. How many times the cow may be sick/ill in a year? - 0-1 time/year- 1-3 times/year- 4-6 times/year

11.8. Have you had calving difficulty?12. Breeding Management/Status

12.1. What is your system of cow breeding?- Natural- AI- Both (Natural & AI)

12.2. Do you know/understand the heat detection sign of a cow?- Yes- No

13. In Case of Natural Breeding13.1. What is the source of natural breeding?

- Local/indigenous bull- Cross breed bull

13.2. How many services needed for conception of the cow by natural breeding?- One time service- Two time service- Three times service- Four times service

13.3. What is the success rate/conception rate of natural breeding?- 25%- 50%- 75%- 100%

13.4. What is the cost per service for natural breeding?- 30-50 Tk- 50-80 Tk- 80-100 Tk- 100-150 Tk

13.5. Any previous or present history of abortion by the cow?295

13.6. If the answer is Yes, then when- Within 1-3 months of pregnancy- Within 4-6 months of pregnancy- Within 7-9 months of pregnancy

13.7. What do you think was the cause of abortion?- Accidental/injury cause- Poisonous cause- Drug reaction- Other

14. In Case of Artificial Insemination (AI):14.1. Have you ever used AI in your cow breeding ?14.2. Which year did you use AI in your cows? 14.3. Have you used AI regularly in your cow since the first use ?

14.4. If you didn’t use AI regularly what is the main reason? - It is costly/expensive- Need 2 or more services- Not available- Suspect problems arise for cows in future- Calves did not survive

14.5. Which breed of cows have you used for AI before?- Local- Cross breed- Both local & cross breed

14.6. Why did you choose AI? - Get a good calf/cow- Get more milk in future- Unavailable breeding bull- Easy to breed the cow

14.7. How far is the AI service center/point from your home? (km)14.8. Do you ask the AI worker for a specific breed of semen to

breed your cow?14.9. If the answer is yes, then which breed of semen did you

choose? (The semen of Hariana, Tharparker, Pabna breed are not used in the field by AI)- Holstein Friesian

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- Jersey- Sahiwal- Red Sindhi

14.10. Do you get the semen that you prefer from the AI worker/center?

14.11. If you have no choice or do not ask the AI worker for preferable semen, why not?

- Have no idea- Have no interest- It is not necessary

14.12. What is your source for Artificial Insemination?- DLS- BRAC- Milk Vita- Ejab Aliences

14.13. How many services are needed for the cow to conceive by Artificial Insemination?

- One time service- Two times service- Three times service- Four times service

14.14. What is the success rate for your Artificial Insemination?- 25%- 50%- 75%- 100%

14.15. What is the cost per service of Artificial Insemination?- 50-100 Tk- 100-150 Tk- 150-200 Tk- 200-300 Tk

14.16. Are you interested in producing a milk cow or beef cattle?- Milk Cow- Beef Cattle- Both

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15. Economics and Profitability15.1. Price of milk/liter

- Highest rate (Tk)- Lowest rate (Tk)

15.2. Rearing cost of per cattle/month (feed,medicine,treatment) (Tk)

15.3. Production cost of per liter milk yield (calculating all expenses) (Tk)

15.4. Labor cost per cattle/month (Tk)15.5. Treatment cost per cattle/year (Tk)15.6. Are you interested in taking training to know better health,

breeding cattle management practices?15.7. Are you interested in taking a loan for cattle rearing or to

improve your cattle?15.8. Do you think cow rearing is a profitable business?

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APPENDIX E10: Quantitative Data Gathered – CARE Staff Performance

On a monthly basis, CARE field facilitators (staff who worked in the field with farmer groups) gathered data on farmer group participation,the performance of livestock health workers, artificial insemination service providers, collectors and chilling plant managers. An edited summary of the survey is given below to indicate the types of data gathered.

CARE Staff Performance Data Gathered

1. Data Related to Group Organizing1.1. Number of learning sessions conducted in the past month?

1.2. Number of learning sessions planned?

1.3. Average farmer attendance in learning sessions? (percentage attended)

1.4. Number of farmer groups engaged in aggregating milk for collection and sale?

1.5. Number of collection points active in aggregated milk collection?

1.6. Number of written agreements between groups and collectors?

1.7. Number of verbal agreements between groups and collectors?

1.8. Number of farmer groups engaged in group savings?

1.9. Total savings per group? (Tk)

1.10. Number of farmer groups with access to improved feed supply?1.11. Number of farmer groups with access to balanced feed

rations?1.12. Number of local feed suppliers developed?1.13. Number of Female:

- Collectors- Livestock Health Workers- Farmer Leaders

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- Other

1.14. Number of farmer groups that are using the Cattle Health Cards?

1.15. Number of producers dropped out of groups? 1.16. Number of new farmers enrolled in existing groups?

2. Data Related to Livestock Health Workers and Artificial Insemination2.1. Number of livestock health workers servicing farmer groups

this month?2.2. Number of milking cows, calves, heifers, bulls, etc. of CARE

farmers died this month?2.3. Number of livestock health workers dropped-out this month?

Reasons?2.4. Number of farmer groups receiving artificial insemination

service?2.5. Artificial insemination service providers operating with

farmer groups (BRAC, Milk Vita, DLS)?

3. Data Related to Collectors

3.1. Number of collectors engaged in milk bulking?

3.2. Number of collectors engaged in milk collection from CARE farmers?

3.3. Number of collectors conducting joint planning meetings with farmer groups?

3.4. Number of collectors training farmer groups on lactometer usage, fat percentage pricing, and milk hygiene?

3.5. Number of collectors dropped-out so far?

4. Data Related to Chilling Plants

4.1. Chilling plant name and location4.2. Chilling capacity (liters/day)4.3. Total CARE farmer group collection (liters/day)

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4.4. What is the ration of local chilling plant collection to CARE farmer group supply?

4.5. Are the milk prices publicly posted at the chilling plant?

5. Other Data

5.1. Number of feed, medicine and agricultral input shops established so far?

5.2. Number of stakeholder coordination meetings held this month?

5.3. Number of times women reported barriers this month?

5.4. Number of times actions were taken to overcome barriers reported by women?

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APPENDIX F: Baseline Survey

To determine the impact of their work with a high degree of statistical accuracy, CARE commissioned the Washington-based International Policy Research Institute to conduct a detailed baselinesurvey (completed in September 2009) and follow-up survey (to be completed in December 2012).

MethodologyThe methodology sought to compare outcomes for CARE farmers to what those outcomes would have been if CARE’s interventions had not taken place. A purely randomized approach to sampling for the baseline studywas not feasable because CARE farmers would be partially purposively selected based on their proximity to milk chilling infrastructure. Instead, a longitudinal difference-in-differences (or double-differences) method was used to develop a before and after comparison (Donald & Lang, 2007). This was combined with data gathered on CARE farmer households along with the control housholds that were not associated with the CARE initiative. Difference-in-differences impact estimates typically have lower bias than estimates based on cross-sectional data (Donald & Lang, 2007). Central to the application of the difference-in-differences method is the allocation of households to be either in treatment (CARE project farmers) or comparison (non-participant) groups. The approach used for constructing comparison groups was propensity score matching (Caliendo & Kopeinig, 2008). During the follow-up survey, participant and non-participant households (consisting of two control groups) will be matched using the propensity score matching method (Dehejia & Wahba, 2002; Rosenbaum& Rubin, 1983) to assess the impact of CARE’s intervention. Two control groups were used to capture potential spillover effects from CARE’s initiative.

Sample SizeSince CARE’s primary objective was to increase income from dairy activities for its target farmers, per capital total monthy household expenditure was used as a proxy for income to estimate the sample sizeof the treatment and two control groups for the baseline survey. Threeparameters necessary for sample size estimates – mean, standard deviation and interclass correlation coefficient – were estimated for this outcome indicator (Ahmed et al., 2009). The minimum sample size necessary to detect a statistically significant change of 12 percent is given in the table below.

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Minimum Sample Size Required for Detecting a Change of 12% in theOutcome Indicator

Indicator Minimumimpact

Totalnumberof

villages

Ratio ofsample

(treatment:

control)

Minimum sample size

Treatment Control

Total

Per capita household expenditure / month

Anincreaseof 12%

60 1.5:1 466 312 x 2 =624

1,090

Source: Ahmed, A.U., Minten, B., Quisumbing, A.R. & Roy, D. 2009. Evaluating the Dairy Value Chain Project in Bangladesh: Baseline Report. Washington, DC:International Food Policy Research Institute.

To detect a 12 percent difference between treatment and control groups, a minimum sample size of 1,090 households was needed. Budget resources allowed 1,500 housholds to be surveyed; therefore changes of12 percent between treatment and control households could be detected.The total sample of 1,500 households included 60 villages. Within villages, 25 households were randomly sampled of both beneficiary farmers and control households as described below.

Beneficiary Household Selection MethodFrom CARE’s list of project beneficiary households and their village, 26 villages were randomly selected based on the probability proportional to size sampling method (Rao & Vijayan, 1977). From each of the 26 villages, 25 project beneficiary households were randomly selected.

Control Household Selection MethodTo capture potential spillover effects from CARE’s work, two control groups of households were created: control group one and control grouptwo.

Control group one was selected from villages where CARE was not operating that were within the same union (a geographic district with

303

approximatly 10 villages) as a CARE beneficiary village. Control groupone households were selected randomly from within their village based on a previous list of all households in the village.

Control group two households were selected randomly from upazilas (a geographic district similar to a county in many Western countries) where CARE was not operating. Seventeen unions were randomly selected from nine upazilas without CARE beneficiaries and one village was randomly selected from each union. Within each selected village, 25 households were randomly selected from a list of households.

Baseline Survey QuestionnaireThe baseline survey questionnaire was designed to collect information on multiple topics including household demographics, level of education, assets and expenditures, economic shocks, cattle ownership and dairy farming practices. An overview of survey items is included below. The baseline survey was conducted between July and August 2008 with trained surveyors under the supervision of the International FoodPolicy Research Institute to ensure quality control.

Overview of Survey Items for Baseline SurveyThe CARE baseline survey covered the categories of information listed below:

1. Household Characteristics1.1. Characteristics of survey households1.2. Demography and dependency ratio

2. Budget Shares and Food Consumption2.1. Budget share2.2. Food budget share2.3. Quantity of daily per capita consumption of food items2.4. Calorie consumption and composition2.5. Cost of calories by food groups

3. Nutritional Status of Children and Women3.1. Prevalence of malnutrition among preschool children aged 6

to 60 months3.2. Prevalence of malnutrition among preschool children aged 6

to 60 months: By income3.3. BMI of childbearing-age women aged 15–50 years (non-pregnant

and non-lactating women)

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4. Incidence of Illness and Disability4.1. Incidence of illness of household members, during 30 days

preceding the survey4.2. Physical disabilities of household members

5. Schooling of Children5.1. Primary and secondary school enrolment5.2. Types of primary school attended

6. Ownership of Household Assets6.1. Selected household asset ownership6.2. Value of selected assets owned, by gender

7. Ownership and Tenancy of Land7.1. Ownership and Tenancy of Land

8. Dwelling Characteristics8.1. Electricity and structure of dwelling8.2. Types of latrine

9. Employment and Labor Force Participation9.1. Labor force participation of household members aged 15 and

over

10. Participation in Public Intervention Programs10.1. Households receiving public assistance

11. Private Transfers and Remittances11.1. Private transfers and remittances received

12. Access to Credit12.1. Importance of credit sources, as a proportion of total loan

amount12.2. Use of loans12.3. Interest rates by loan source

13. Patterns of Savings13.1. Incidence of savings, as a proportion of total amount saved

13.2. Planned use of savings13.3. Planned use of savings

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14. Shocks and Coping Mechanisms14.1. Incidence of shocks in the past five years14.2. Coping mechanisms (multiple response)

15. Gender-Related Issues15.1. Decisions to work and to spend income from work15.2. Factors negatively affecting women's decisions to work

outside the home

16. Indicators of Women’s Decision-making and Control of Resources16.1. Decisions to take loans from NGOs and to spend loan proceeds16.2. Spending decisions16.3. Women's control of money to make purchases16.4. Primary decision-maker on livestock and dairy-related items

17. Correlates of Women’s Status within the Household17.1. Indicators of women’s mobility17.2. Assets at marriage of husband and wife, matched couples17.3. Cattle ownership per dairy farmer17.4. Cattle ownership distribution (for participant group)

18. Profile of the CARE Dairy Farmers18.1. Characteristics of dairy farmers18.2. Dairy-related assets

19. Characteristics of Cows, Milk Productivity, and Feeding Practices19.1. Characteristics of cows19.2. Use of fodder and concentrate markets19.3. Feeding and labor inputs in dairy production19.4. Average household milk production and milk use of all dairy

farmers19.5. Distribution of milk production and milk sales among dairy

farmers

20. Milk Use and Marketing20.1. Milk sales practices by dairy farmers20.2. Milk marketing practices during the week prior to the survey20.3. Milk transactions20.4. Cattle transactions20.5. Determinants of milk and cattle prices

21. Cattle Diseases and Treatment Providers21.1. Animal health problems

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21.2. Animal treatment practices21.3. Incidence of cattle death

22. Milk Quality and Safety22.1. Food safety measures22.2. Milk storage and preservation practices22.3. General hygiene22.4. Information requirements on milk quality and safety

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APPENDIX G: Impact Indicators

Comparing the initial baseline quantitative study of CARE farmers fromAugust 2008 (N=658) with the farmer survey from April 2012 (N=2,125) shows significant increases in milk productivity for the cattle of CARE farmers. In addition, farmer incomes from milk sales increased 37% even though the average milk prices decreased slightly during thattime. As described previously, the methodologies for these surveys have been audited by the Bill and Melinda Gates Foundation and the Washington-Based International Food Policy Research Institute.

CARE Impact Indicators

Baseline (Aug2008)

Farmer GroupSurvey (April

2012)

N=658 N=2,125 Change(%)

Average local breed milking cow productivity (liters/day) 1.13 1.39 23%Average cross breed milking cow productivity (liters/day) 3.99 5.45 37%Average daily household milk production(liters/day) 1.20 1.77 48%Daily household milk sales (liters/day) 0.91 1.35 48%Average monthly income from milk sales ($/month) 9.64 16.27 69%Average household milk consumption (liters/day) 0.28 0.42 50%Average milk price (Tk/liter) 24.88 15.34 (38%)

Source: Independent statistical analysis of raw farmer group surveydata collected April 2012.

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APPENDIX H: Milk Income and Gender

My access to CARE’s raw quantitative data on group composition and governance allowed statistical analysis which showed that milk income increased as the percentage of women in the group increased. In addition, groups with female leaders earned more income from milk sales that groups with male leaders. Further details on statistical methods and modeling are given in the quantitative data analysis section.

Milk Income by Percent of Women in Learning Group

This relationship hasbeen modeled using a linear mixed-effects model which controls for phase, year, size of herd, and includes random effects for learning group. F(4)=19.86

p<.0001.

In addition, groups with women group leaders earned greater income from dairy production than groups with male leaders.

Milk Income by Sex of Main Farmer Leader

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This relationship has been modeled using a linear mixed-effects model which controls for phase, year, size of herd, and includes random effects for learning group. F(2)=5.78 p=.003.

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APPENDIX I: Group Savings

Group savings have been established as a strong financial back up source for project participants to access dairy related inputs, vet medicines, vaccinations and other livestock services. Therefore, increasing numbers of groups are becoming interested in savings groupsas a way to attain better opportunities and minimize the risk of paying interest that they are used to paying to traditional microfinance services. As of September, 2011, 66 percent of year 1, 2 and 3 groups are actively involved in savings groups and the average savings per group has reached $116.

Savings Activities Among CARE Farmer Groups

Year

Numberof

GroupsEngaged

inSavings

TotalSavings

Amount

($)

Spenton

InputPurchase ($)

Spent onInputSeller

Development

($)

Spenton

CattlePurcha

se($)

Spenton

DairyRelate

dPurposes ($)

Spenton Non-DairyRelatedPurpose

s($)

Cashin

Hand/

Bank($)

Year1 120

23,812 3,081 469 3,720 5,832 3,552

7,158

Year2 180

26,217 3,960 312 1,161 5,101 3,158

12,526

Year3 268

20,415 1,952 89 122 3,118 3,002

12,132

Total 568

70,444 8,993 870 5,003 14,051 9,712

31,816

Source: October 2011 CARE Bangladesh Annual Report to the Bill and Melinda Gates Foundation.

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APPENDIX J: Milk Income and Knowledge

Statistical analysis of quantitative data showed that the greater farmers’ knowledge score on animal feeding and health practices, the greater their milk-related incomes. Further details on statistical methods and modeling are given in the quantitative data analysis section of the dissertation.

Milk Income by Knowledge Score

This

relationship has been modeled using a linear mixed-effects model whichcontrols for phase, year, size of herd, and includes random effects for learning group. F(1)=6.67 p=.009.

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APPENDIX K: Milk Income and Access To Inputs

Statistical analysis showed that farmer access to improved feeds and artificial insemination were associated with increased incomes from dairy-related activities. Further details on statistical methods and modeling are given in the quantitative data analysis section of the dissertation.

Milk Income by Level of Access to Feed

This

relationship has been modeled using a linear mixed-effects model whichcontrols for phase, year, size of herd, and includes random effects for learning group. F(1)=10.47 p=.001.

Milk Income by Level of Access to Artificial Insemination

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This

relationship has been modeled using a linear mixed-effects model whichcontrols for phase, year, size of herd, and includes random effects for learning group. F(1)=76.63 p<.0001.

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APPENDIX L: Milk Income and Access To Markets

Statistical analysis of quantitative data showed that producer households that selected their own collector had significantly higher total household income from dairy sales than households that did not choose their own collector. Further details on statistical methods andmodeling are given in the quantitative data analysis section of the dissertation.

Milk Income by Whether or Not a Learning Group has Chosen their Own Milk Collector

This relationship has been modeled using a linear mixed-effects model which controls for phase, year, size of herd, and includes random effects for learninggroup. F(4)=2.62 p=.03.

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APPENDIX M: Evidence of Institutional Leveraging

Provisionof Evidence

“[F]armers don't do something until they see it; I mean they need to see it very clearly.”(CARE Technical Advisor)

“The main objective of our pilot program is to prove to the dairy farmers that by changingtheir feed composition, and provide proper vaccines and parasite control for their cows this will increase their daily cow milk production. Each dairy farmer will be introduced to the estimated increase in their economic return from each cow if their current practices are changed. (MOU with PRAN)

[I]f I can show what a digital lacto scanner can bring farmers in terms of fair prices, this can be evidence for how this whole industry operates.” (CARE Manager)

“Each dairy farmer will be introduced to the estimated increase in their economic return from each cow if their current practices are changed.” (Annual Report)

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Contextualization

of ProductionKnowledge

“[T]o understand what the underlining causes of poverty are, and to develop interventions around that, is only possible when you really know from the people what their thoughts arearound that… [W]e learn from them.” (CARE Manager)

“2,860 learning sessions have been conducted at the producer level by the trained FL [farmer leader] to educate them on animal husbandry and management. The producers are getting information and increased knowledge on fodder preservation (silage and hay making)mentored by FL.” (Annual Report)

“[Training modules included] specific sessions in marketing, collective bargaining, leadership, facilitation skills, decision making and problem solving etc. 1269 women farmer leaders has [sic] been trained on these topics so that they can negotiate with relevant institutions for getting services and fair price of milk.” (Annual Report)

“The combined effort of basic and advanced capacity building (e.g. basic and refresher training on farm management, learning sessions conducted by farmer leader and livestock health worker, information and services provided by information service centers, etc.) hashad a greater impact on the farm management capacities of organized producer groups.” (Progress Report)

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APPENDIX M: Evidence of Institutional Leveraging (continued)

Legitimationof Market

Transactions

“Price differences for milk based on its fat content are very significant and the difference this would have on poor dairy farmers’ income is equally significant. This warrants the investment of time, effort and resources to bring more transparency to the process and ensure the transaction is fair.” (Annual Report) “How do you reconfigure the market so that the service providers understand that if you are in dairy, your client is a woman, and she lives at home?... How do you think about themarket in a different way?... The transaction needs to move down to household level. That's where the documentation is done, that's where the fat testing is done, that's wherethe cash transaction takes place.” (CARE Technical Advisor)

“SDVC [CARE] is very much concerned about women’s issues. For giving more attention to this we have developed a women’s barrier checklist. Every team office has discussed the issue with groups or individuals and maintained a record of the women’s barrier checklist and also recorded the steps to overcome the barrier” (Gender and Empowerment Report)

“One of the biggest risks for the project is that if private sector processors do not remain in close contact with milk producers a big void in understanding may develop…Since inception SDVC [CARE] has been trying to address this issue through increased engagement with the private processors [and] a relationship of mutual respect and understanding has been slowly but surely developing.” (Progress Report)

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Expansion ofRelationships

“15 workshops (5 pre-matchmaking and 10 matchmaking) have been organized during this grantperiod to facilitate the relationship and improve communication across the regional value chain actors and supporters in the project area.” (Annual Report)

“From the very beginning we are trying to establish different stakeholder working groups, processors, input sellers, artificial insemination service providers, NGOs, and then identifying areas that each group can work on… If I can bring out five key policy related issues, I can then easily bring these people together and say let’s work on that.” (CARE Manager)

“The project has successfully entered into formal agreements with some leading processors (PRAN, BRAC Dairy, MilkVita, etc.) and each of the agreements addresses this core issue ofbuilding win-win relationships between the processors and the smallholding dairy farmers… To ensure this, the project is conducting training sessions in which these operators are required to participate, and meetings are being held between processors and producers, to allow for greater interaction and improved relationships between the two parties.” (Progress Report)

“CARE is the only [NGO] that is a member of the Dairy Development Board (DDB) and its executive committee… CARE is now well positioned within the national and local level policy making arena (Annual Report).

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APPENDIX N: Performance Measurement

Based on the data collected by the surveys described in Appendix F, CARE Bangladesh reported on 120 overall performance indicators to the Bill and Melinda Gates Foundation twice per year. The performance indicators are organized into five higher-level objectives and 37-mid-level activities. This Appendix shows the performance measurement indicators and illustrates the kinds of data that I used for further triangulation with other quantitative and qualitative sources of information.

Objective 1: Improve Milk Collection Systems

Activity Milestone1. Conduct formal

and informal value chain assessment at national and local level.

1. Detailed information on milk value chain bottlenecks, opportunities and gender-specific challenges both nationally and in target area collected into a report and made available to stakeholders.

2. Identify and select dairy sector infrastructure in the region and project area.

2. Identify collection points, chilling centers and processing infrastructure of public and/or private sector owned processors.

3. 53 suitable and appropriate chilling plants or processing facilities are identified; 17 selected in specific areas for the project duration.

3. Establish effective relationships with key dairy sector processors and partners.

4. National level MOU established and signed between the project and the key dairy partners.

5. Establish guideline/code of conduct in collaboration with formal sector milk processors/buyers to engage with milk producers/sellers.

4. Develop collection pointbased milk

6. Milk collectors identified, selected for training; 100 by end of year 2; 200 by end ofyear 3; 350 by end of year 4; 25% are female.

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collection system.

7. Based on suitability, community-based collection points identified and developed toaggregate milk as appropriate

8. Bilateral agreements established between collectors and producer groups on milk procurement and sales; 100 by the end of year2; 200 at the end of year 3; 350 at the end of year 4.

9. Identified milk collectors trained on lactometer usage, fat testing mechanism, sanitary/safe handling and business operations to reduce spoilage; 100 by the endof year 2, 200 by end of year 3, 350 by end of year 4.

10.Introduce community-based milk testing facilities. 1 chilling plant by end of year 4. If successful 2 additional chilling plantsby end of year 5.

5. Establish working relationship between producergroups and processors through collectors.

11.Collectors and processors inform producer groups on quality milk supply and sales

12.Producer groups selling quality milk through collectors

13.By end of year 2, at least 50% collectors associated with target groups should increasetheir milk collection and Income by 25-35%.

14.By end of year 4, at least 75% collectors associated with target groups should increasetheir milk collection and Income by 40-50%.

6. Build relationship andimprove communication across the valuechain actors andsupporters associated with

15.Facilitate workshops to improve communication, coordination and collaborationbetween various dairy value chain actors and supporters.

16.Regular communication and feedback channels established between value chain stakeholders through collection and sales level working groups

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milk collection system development.

17.Business roles, relationships, and expectations clarified between producer groups, collectors/transporters and chilling facilities or processors.

7. Facilitate sustainability and scale-up of milk procurementand collection system.

18.50% of Organized producer groups aggregate and sell milk

19.Establish formal milk supply arrangements between producer groups and collector/processors.

20.Chilling facility operators/processors, farmers' groups, collectors/transporters receive regular monthly visits from CARE to facilitate proper collection system establishment.

21.Collectors provide information to groups about market and hygienic practices; 100 at end of year 2; 200 at the end of year 3; 350 at the end of year 4.

22.Processor/milk buyers and producer groups maintain regular transaction on milk procurement and sales through register book and goods receiving notes

23.Encourage greater interaction between processors and producers and develop scalablemechanisms for greater upstream investment byprocessors; at least 5000 farmers to be involved.

24.Processors/milk buyers and farmers' groups take over all aspects of management of the transactional relationships and ensure a smooth and orderly exit for SDVC.

Objective 2: Increase Production by Improving Access to Inputs, Markets, and Services by Mobilizing Groups of Poor Producers and InputServices Providers

Activity Milestone8. Develop 25.Producer communities to be targeted are

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community-based milk producer / marketing groups.

identified.26.Groups of small-scale and landless producers

in targeted communities are mobilized, with strong female participation.

27.Factors impeding women’s participation discussed with producer groups and communities and specific actions needed to include women in planning and service delivery are undertaken.

28.By the end of year 1, at least 8000 farmers have been organized into groups; 15000 at theend of year 2; 30000 at the end of year 3; and 35000 at the end of year 4; on average 30producer per group.

9. Enhance farm management capacity of organized producer groups.

29.Farmer training curriculum developed to include management; book keeping; animal registration; feed and fodder; improving milkquality; fat testing; animal housing and husbandry.

30.3,000 farmers' group leaders trained: 500 by midpoint of year 2; 1,500 by end of year 2; 3,000 by end of year 3.

31.Farmers mentored in adopting improved animal husbandry and business practices through trained group leaders and under direct guidance of CARE staff; 15000 by end of year 2; 30000 by end of year 3; 35000 by end of year 4.

10.Adoption of feed& fodder practices.

32.Analysis of existing animal feeding practicesof dairy producers in the project area undertaken to understand the nutrient requirement/areas of improvement needed.

33.Proper fodder, silage, hays and concentrate practices are identified & promoted to all organized producer groups.

11.Establish animalregistry system / health

34.Set up of animal health registry system / health card.

35.Paravets conduct training sessions with all

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card. farmers' groups in their catchment areas on how to use an animal health registry system to track vaccinations and other health measures.

36.Farmers report adoption and use of the animalhealth card to improve their animal husbandrypractices.

37.Health registry cards capture information on regularly scheduled vaccination and de-worming services received by producers.

12.Facilitate better access toinputs and microfinance.

38.Specific inputs required by farmers to improve milk production and animal husbandry identified through various assessments.

39.Sources, accessibility, and costs of inputs identified and shared with producer groups, paravets, collectors and processors.

40.Negotiations reported between farmers’ groupsand input suppliers, allowing farmers to obtain required inputs at lower, bulk cost.

41.CARE staff identifies farmers' finance needs through group discussions, including needs specific to women farmers.

42.CARE links farmers' groups with finance sources and facilitates group savings for interested groups

43.Assess financial service market and disseminate information to financial institutions interested in dairy value chain financing.

13.Promote environment and health-friendly practices.

44.Establish baseline indicators on existing practices that are environment and health friendly.

45.Environment and nutritional impact assessmentof project intervention on the targeted community and stakeholders including milk quality standards and measurement conducted.

46.From assessment, develop materials and tools supporting environment, nutrition and health

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friendly practices.47.Dissemination of published materials to

private sector partners and government agencies and also incorporated into farmer training.

48.Develop billboards, leaflets, dramas, calendars and posters to promote the use of milk to improve women's and children's nutrition.

49.Promote increased milk consumption among women and children.

14.Develop marketing, collective bargaining, and leadership skills.

50.Existing training material identified and adapted to train farmers in marketing, collective bargaining, and leadership.

51.3,000 farmers' group leaders are trained: 500 by midpoint of year 2; 1,500 by the end of year 2; 3,000 by the end of year 3.

52.At least 900 women farmers and milk collectors receive training aimed at buildingtheir self-confidence and increasing their bargaining, marketing and leadership skills.

15.Organized producers increased milk production.

53.By the end of year 2, at least 10,000 farmershave increased their average milk production by 50%.

54.By the end of year 3, at least 20,000 farmershave increased their average milk production by 50%.

55.Organized farmers increased their average milk production by 75% at the end of project period.

16.Build relationships and improve communication across the valuechain actors andsupporters at

56.Workshops held to connect various dairy valuechain actors and supporters - especially producers and different input service providers.

57.Regular communication and feedback channels established between producers, collector, paravet and input service providers.

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various levels and promote integration.

58.Business roles, relationships, and expectations clarified between producer groups, collectors, and paravets and input sellers.

17.Facilitate sustainability and scale-up on the access of different service provision mechanism.

59.Facilitate the development of at least 50 community level dairy input outlets. 25 by end of year 4, 50 by end of year 5.

60.Facilitate group savings and loans schemes with interested producer groups to enable regular purchase of dairy inputs

61.Facilitate the development of linkages between producer groups and input supply outlets.

62.Share milk producer group development and capacity building skills/materials to partnerNGOs.

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Objective 3: Improve the Breeding/Artificial Insemination Network

Activity Milestone18.Analyze existing

breeding / AI service provision.

63.Analyze the constraints/opportunities of AI service provision (both liquid and frozen) inthe project area.

64.Collate data from field assessment of breed population and shared results with BAU, ILRI,University of New England, BMGF and others tocatalyze discussion on breeding policy reviewin Bangladesh.

19.Train AI technicians withprivate sector AI service provider in the project area.

65.Select existing and new AI technicians (40) in the project area and provide need based training so as to increase conception rates from 25 to 40 percent. By end of year 4

66.Introduce trained AI technicians to quality semen sources and the producer community.

67.Monitoring and follow up mechanisms established with external AI service providers to measure the performances of AI technicians.

20.Strengthen relationship between current AI supply chain and producers.

68.AI service providers will maintain records ofAI service delivered to producer households after training.

69.Collaborate with AI suppliers and techniciansto reduce semen quality deterioration in transit.

70.Increase quality consciousness at producer level of AI services through awareness & education campaign.

71.Work with DLS, MoFL & AI suppliers to improvesupervision of AI service provision in the project area.

21.Facilitate sustainability and scale-up of successful AI

72. AI technicians provide quality AI service to organized producer groups.

73.At least 50% of AI Technicians report profitable operations.

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service provision in theproject area.

74.Producer groups report good conception rate (40%) and quality AI service. 3000 producer at the end of year 2; 6000 at the end of year3; 12000 at the end of year 4.

Objective 4: Ensure Access to Quality Services at the Producer Level

Activity Milestone22. Review/update

paravet curriculum and select trainees.

75.Updated curriculum that reflects need/demand in project target area developed and undergoes university veterinary review.

76.185 trainees selected using CARE criteria; 85at the end of year 1; 145 at the end of year 2; and 185 at the end of year 3.

23. Train paravets.

77.165 paravets trained (50% female), including advanced and refresher courses (60 year 1; 120 by end of year 2; 165 by end of year 3)

78.Paravet technical, business development, outreach, facilitation, and influencing skills assessed at end of trainings.

79.Paravets obtain certificate of completion andstarter kit.

24. Facilitate access to finance.

80.Based on demand paravets connected with available finance services.

81.Based on demand paravets use finance to expand their services.

25. Connect trained Paravetswith AI firms, DLS, and farmers’ groups.

82.Paravets introduced to farmers’ groups in thetarget area.

83.Paravets introduced to DLS in the target area.

84.Selected paravets introduced to AI. 85.120 Paravets will be delivering fee-based

services and averaging $120 income per month;60 by the end of year 2; 120 by the end of year 3.

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26. Supervise thedevelopment and use of the animal health register.

86.Paravets introduced to the use of CHC and trained to train farmers' groups as well.

87.Paravets train and monitor all farmers' groups in their catchment areas to use the registry system and record farmer compliance.

27. Facilitate use and improvement of dairy inputs.

88.Selected paravets establish links with dairy input outlets; 65 in year 1; 120 in year 2; 165 in year 3.

89.Paravets recommend to farmers' groups improvements on dairy input use.

90.75% of farmers' groups report at least two improvements / new practice adoptions relatedto dairy input use.

28. Promotion of quality & cost effective feeding practices to increase milk productivity

91.Encourage private investors to promote development of improved concentrate feed.

92.Identify and develop feed mixes and ratios inpartnership with private sector.

93.Promote developed concentrate feed in partnership with private sector.

29. Facilitate development of demand-driven Paravet serviceson a commercial basis.

94.3 knowledge sharing workshops held with vet medicine producers.

95.40 knowledge sharing workshops held with the private sector.

96.Paravets providing regular services to farmers.

30. Monitor (Paravet) service effectiveness and satisfaction.

97.Monitoring system in place.98.Usage and service satisfaction rates measured

regularly.99.Usage and service satisfaction rates used by

CARE to mentor paravets and drive service improvements.

31. Facilitate sustainability and scale-up.

100. Work with DLS to develop and promote improved paravet training.

101. Promote paravet training through media.

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102. Establish community-based dairy veterinaryservice on a pilot basis and scale up reaching 2000 farmers during the pilot phase.

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Objective 5: Improve the Policy Environment

Activity Milestone32.Conduct national

assessment of policy barriers to the development of the milk value chain.

103.Review existing government tax, tariff, andsubsidy policies as they affect the value chain.

104.Prepare a report and recommendations and share with government, farmers' associations, and chambers.

105.Conduct 6 workshops to promote policy framework among civil society, private investors, government officials, and other stakeholders.

33.Encourage more effective and gender-sensitiveagricultural extension systems.

106.Regularly hold meetings with government ministries to encourage broader adoption ofpromising practices and gender-sensitive paravet and extension services.

34.Advocate for government promotion of best practices.

107.Meet with government and media to develop amedia plan that ensures best practices relevant to farmers and entrepreneurs are regularly promoted through news media and advertising.

35.Advocate for practical research.

108.Specific research needs with practical applications are identified by project staff and participants and communicated to research agencies.

109.Work with FAO, ILRI, government, BARC and AU to facilitate research with practical applications.

36.Share lessons learned from theproject.

110.Steps needed and level of investment required to support scale-up defined.

111.Best practices to incorporate smallholding farmers and women into the milk value chainidentified, as well as challenges and lessons learned are documented.

112.Lessons learned report and recommendations

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written, presented, and disseminated. 113.Cross sharing with other similar dairy

sector development project actively pursuedand promoted.

37.M&E Activities 114.Baseline assessment completed115.M&E system developed and agreed upon by

stakeholders116.M&E system in place in the field117.M&E quarterly reports produced118.Mid-term evaluation conducted119.Final Impact Assessment conducted120.Program evaluation conducted and report

produced

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