Final Documentation

Development and Commercialisation of the Treadle Pump in Bangladesh, 2000

    Description
    Targeting small farmers with an average plot size of 1.25 acres (divided into 5 quarter plots), the program set out to create a new, mass market for affordable small plot irrigation devices. To stimulate demand, IDE used customer-focused marketing techniques, common among the business community but - at the time - uncommon in the development community. IDE refers to its project approach as "market-led product development." A performance measurement framework (PMF) is applied which examines data relating to relating to the programme and the wider market. For the purposes of the PMF, the BDS service associated with the IDE/Bangladesh MAT program is defined as product development and commercialization. In the role of market facilitator, IDE invested donor funds in R&D to further adapting - to the demands of the market - a foot-operated pump, called the treadle pump (TP); in building the capacity of private sector distributors; and in stimulating demand. To stimulate demand, IDE undertook extensive promotional and marketing efforts and leveraged these interventions to create impacts far and beyond directly assisted BDS providers, referred to as market leaders. At the peak of the market, these market leaders made up only 25% of the market, while the remaining 75% consisted of BDS providers only indirectly assisted by the MAT program. Total sales of directly and indirectly assisted providers totaled 1.3 million in 1999.

    Summary of results
    The PMF market development indicators reveal IDE's success at creating a vibrant and competitive market. Over time, the number of BDS suppliers has increased, the number of products has increased, the price range for irrigation equipment has broadened, and the price of the TP has declined with greater competition. As a result of increased product and price differentiation, the TP has moved down-market to a larger percentage of the most marginal farmers, living on the smallest segments of land or working as tenant or sharecrop farmers.

    The PMF cost-effectiveness indicators indicate the very high level of cost-effectiveness of the IDE/Bangladesh MAT program. A 1999 impact study did an exhaustive assessment of the net income earned by TP owners and found
    that farmers conservatively earn US $100 annually on their US $24 investment in an installed pump. More enterprising farmers earn far more. In a country where per capita income is estimated at US $220, even the most conservative figure is indeed substantial. The cost benefit ratio of the program was .01 in 1999, due to the enormous aggregate net income benefits as compared against aggregate program costs. The PMF sustainability indicators show that BDS providers are profitable and thus sustainable. However, as IDE begins to exit from the market and withdraw its subsidization of promotional activities, there is some question as to what will happen. Will providers be willing to invest their own funds into marketing? Will they need to, or have past efforts been sufficient to bolster sales? Impacts on BDS customers have been substantial. As already noted, farmers using the TP easily make US $100 per year; this is in a country where average per capita income is US $220. BDS providers improvements in their business practices and TP farmers increase in land-use intensity and productivity in a country that is land poor are further indications of impact.

     
    Associated Activities and Documents
    Synthesis Documents
    »Hanoi DC Conference, 2000