How the Avon Lady Improves Incomes in Bangladesh by 31%
The Avon Lady in rural Bangladesh: it’s actually a more apt metaphor than you think. Avon uses a direct sales model that aims to get products to people who would not normally be able to access them, and that’s exactly what Krishi Utsho is—a way to get products closer to people. Instead of selling makeup, they’re selling fertilizer, feed, and veterinary services. Instead of door-to-door sales, they have shops that are located directly in the communities where farmers live. But the idea is the same—people in the community can sell high quality products to their peers and get a sense for what works best in their area. They then communicate those needs back to the big vendors who can target products to what customers need.
They may be getting more beautiful cows (IFPRI refers to some of these approaches as the “pampered cow project”), but the real impact is on the farmers. With the support of the Finn Brooks Family Foundation, they’ve been working since 2012 to improve access to goods for the poorest families in Bangladesh.
Farmers and shop owners benefit, but they are not alone. The system is sustainable because it solves a market need. By talking to shop owners, farmers have a way to communicate their needs to the people who produce and package agricultural supplies. Shops are based in communities, which reduces the huge barrier of travel and transport that most smallholder farmers face. Shop owners are based in communities and are often farmers themselves, so they see what makes the most sense in their context. And big companies now have a way to figure out how to reach the last mile farmers—with products that come in the right amounts, with the right information, and at the right price that meet their customers' needs.
What did we accomplish?
- Higher incomes: Farmers in areas covered by Krishi Utsho had a 31% increase in their incomes, and vendors were able to earn $1,394 per month. That’s more than eight times what the average farmer makes in a month, so being a vendor is an attractive option.
- Cheaper, easier access to products: Because the shops are closer to home, farmers cut the time they spent going to get inputs in half (a 58% reduction), and dropped their cost on items like feed by 92%. So people have more money to spend from income but also on savings from the goods.
- Stronger businesses: Besides the income, shop owners saw a 25% increase in their sales, and now they’re serving nearly 17,000 people a month.
- Healthier families: Farmers in Krishi Utsho areas increased their spending on protein and vegetables by 15%, so they have better diets. 56% of families increased their spending on health care and education with the new money they had available.
- More empowered women: In Krishi Utsho areas, women were 84% more likely to be able to influence household decisions in 2015 than they were in 2012. They were 250% more likely to be able to make decisions about income generating activities at home.
How did we get there?
- Set up shops with a quality brand standard: Krishi Utsho helped set up 64 branded shops that have a common brand, but are individually owned businesses—the franchise approach. To be a Krishi Utsho shop, they have to stock quality products and provide high quality services.
- Build better businesses: Krishi Utsho trained shop owners in business skills and helped them make connections to providers of quality agricultural products. Once they have the necessary training, CARE can provide certificates and quality of service standards that people trust. CARE also serves as a trusted broker between the big brands and the KU owners. As the project continues, CARE scales down its involvement and shops and companies build their own relationships and brand standards
- Go the extra (last) mile: Because the KU shops reach thousands of people that normally would never access products in bigger cities or farther away, they are attractive options for makers of inputs like fertilizer, vet services, and seeds to change their marketing and pricing to reach new customers. It also makes products more accessible for women, who have less mobility, and for people who cannot spare the time or money to travel.
- Build demand: By training poor, rural farmers in improved agricultural techniques and the need for services and then connecting them to solutions that work, CARE helps the local market strengthen for everyone. CARE’s M&E and technology platforms also help track demand and see what needs to change in the future. As the project continues its piloting, shops will take over the technology platform to make changes to their inventory.
What did we learn?
- Training is not enough: As with many projects, the precursor to Krishi Utsho started with a classic “If you teach a woman to fish...” training model. But teaching people how to fish only works if they actually can buy fishing gear, if there are fish in the sea, and if there is somewhere to sell the fish. So the first try had some success in getting women to change their behavior, but we weren’t confident it would last long term. We had to look at the whole market and the key constraints women told us they were facing, one of which was the ability to buy supplies. Only by focusing on those constraints did we come up with the local input supply shop model.
- Markets need to function: A series of CARE-run supply shops were no more likely to be sustainable than training. We had to find local entrepreneurs who were willing to take on the challenge and make it worth their time to participate. The solution is sustainable because the shops can stand on their own without CARE support once we’ve helped with the initial setup and connections to the right market suppliers.
- Put farmers at the center: In early 2016, the KU Team was selected to participate in CARE’s Scale X Design Impact Accelerator, which aims to reduce the time it takes for an innovation to scale from an idea to widespread impact. One core process is Human Centered Design (HCD), where the project team is focusing on the day-to-day experience of farmers. By rigorously and quickly field testing new ideas, the team can see what’s working and what isn’t.