Dhaka/New York, 17 August 2016 – Bangladesh-based Direct Fresh Ltd. has joined the Business Call to Action (BCtA) with a pledge to integrate 2,000 small-scale vegetable farmers into its vegetable supply chain by 2018. The company’s inclusive business model involves training farmers in sustainable agricultural practices and sourcing fresh produce from them for direct sale.
The BCtA is a global initiative that aims to support private sector efforts to fight poverty through its core business. It is supported by several international organizations and hosted by the United Nations Development Programme (UNDP).
Like in most developing countries, small farmers in Bangladesh have a very challenging existence. The income they generate from even bountiful harvests is barely enough to sustain them and their families. If harvests are poor or market prices drop, their lives are severely impacted. However, the opposite is also true: even the slightest improvement in farmers’ yields or the prices they receive for their crops greatly improve their families’ lives.
Most food retailers in Bangladesh source fresh produce via third party traders, who in turn buy from major wholesale markets. This system exerts pressure on farmers to keep their prices low, which means they often do not receive the fair market value of their harvest. In order to maximize their yields in this challenging market, farmers use fertilizers and pesticides, but many lack technical knowledge about what kind and how much to use. The overuse of chemicals often leads to sharp declines in yields after a few years, contaminates the soil and can make produce unsafe for human consumption.
Launched in 2013, Direct Fresh supplies fresh produce directly to households and other businesses through Internet sales. This unique initiative is disrupting the traditional vegetable business in Bangladesh by bringing sustainably farmed products to market without the need for middlemen. As part of its BCtA commitment, the company aims to provide adulteration-free vegetables and fish to 25,000 consumers in Bangladesh’s capital, Dhaka, by 2019.
Support to farmers is incorporated into the Direct Fresh core business model. This includes training in sustainable farming techniques, such as safe pest-control measures, helping farmers to decrease input costs and maximize profits. The company also supplies high-quality seeds and other inputs through trusted partners in order to ensure that harvests remain strong over the long term – without the overuse of chemicals.
“We build trust among farming community because they can see from our model farms that our way does in fact work better,” said Mishal Karim, Chief Executive Officer of Direct Fresh. “While NGOs’ agriculture initiatives help farmers for a limited period, they are gone as soon as their budgets run out. Farmers can see that our business model is well established so they appreciate our support – and our customers appreciate the freshness and quality of their produce.”
In order to ensure that farmers’ produce meets quality standards, Direct Fresh provides free soil testing and continuous monitoring. The company then purchases crops directly from farmers at above-market prices. Eliminating middlemen allows Direct Fresh to share its margins with its partner farmers – ensuring that the business is profitable while improving farmers’ livelihoods.
“The real innovation of Direct Fresh is its deep connection with farming communities,” said Paula Pelaez, BCtA’s Programme Manager. “By teaching farmers about sustainable practices and providing fair prices for their produce, the company is able to provide its customers with healthy and nutritious produce while improving farmers’ livelihoods and protecting the environment.”
One of Direct Fresh’s most successful partnerships during the formative stage of the company’s inclusive business model was with Swisscontact’s Katalyst, a market development project to increase the competitiveness of farmers and small enterprises in Bangladesh. Katalyst supported the company’s pilot model to establish and promote a sustainable supply chain for safe produce in Dhaka. The successful cooperation allowed Direct Fresh to grow and scale its initiative to be able to custom-farm for large businesses including hotels, retails, restaurants.
Direct Fresh sources close to 80 different types of vegetables from 900 farms. With its inclusive value chain firmly established, the company plans to expand both the volume and variety of produce it sources from smallholders, with a goal of taking its model nationwide. It is also facilitating loans for farming families to diversity their incomes through the purchase of dairy cows through a partnership with microfinance institutions.
For further information:
Business Call to Action: Tatiana Bessarabova at email@example.com
Direct Fresh: Tanvir Sifat, Head of Strategy at firstname.lastname@example.org
Membership in the Business Call to Action does not constitute a partnership with its funding and programme partners, UNDP or any UN agency.
About the Business Call to Action (BCtA): Launched at the United Nations in 2008, the Business Call to Action (BCtA) aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that offer the potential for both commercial success and development impact. BCtA is a unique multilateral alliance between key donor governments including the Dutch Ministry of Foreign Affairs, Swedish International Development Cooperation Agency (Sida), UK Department for International Development, US Agency for International Development, and the Ministry of Foreign Affairs of the Government of Finland, and the United Nations Development Programme — which hosts the secretariat. For more information, please visit www.businesscalltoaction.org or on Twitter at @BCtAInitiative.
Direct Fresh Ltd: DirectFresh was born from its founders’ collective frustrations with grocery shopping in Dhaka’s local markets and supermarket chains. Crowded aisles, limited selection, rapidly approaching expiry dates and questionable origin made it hard to find high-quality fresh food. Direct Fresh’s mission is to provide families in Dhaka with access to the finest, freshest ingredients, delivered to their homes within 24 hours. Its produce is sourced directly from farmers, who receive training and support in order to grow their crops sustainably, safely and to the highest standards of quality. With a focus on premium ingredients, excellent prices, customer service and the integration of farmers into its value chain, Direct Fresh is seeking to change the culinary – and agricultural – landscape in Bangladesh. For more information, visit http://www.directfreshbd.com.