Are inclusive agribusinesses beginning to break through?
Agriculture is a huge component of the inclusive business space. And indeed if business is going to be relevant to the bottom billions, it has to be relevant to smallholder farmers, given their predominance in the lowest income groups. But in recent years, it's not been the sector demonstrating huge success or scale. Are agribusinesses now breaking through?
This month we share many practical examples of agribusiness in action, from dairy farmers in East Africa, to a fast food company sourcing from smallholders in the Philippines. And we hear the reflections of those trying to boost the flow of finance or build new partnerships in the sector.
Our series of diverse blogs on agribusiness highlight three main themes:
- Unlocking finance: a large and welcome amount of effort is going into this, with more understanding of the market, the finance gap, and efforts to increase the flow of capital to financial providers. The Guest Editor's Choice summarises the latest we know about this gap, while blogs from The Initiative for Smallholder Finance, the Rural and Agricultural Finance Learning Lab, and an impact investor explain what they are doing to get finance to farmers and to intermediaries.
- Mistrust remains an issue: Stuart Morris from a seed company describes the benefits that improved seeds deliver to farmers in Myanmar, but the deep-seated mistrust of companies profiting from farmers is undermining the gains. Jim Woodhill explains that the challenges to the term inclusive agribusiness are not just because it is vague and overlaps with other terms, but that there are different views on how inclusive agribusiness supports agricultural transformation, what that transformation looks like, and whether large companies will capture the main share of gains. Several blogs explore the tension between commercial and social value. Mark Ingram argues that initiatives fail if profit is not generated, but businesses need to focus on long-term gains which deliver mutual value, not just short-term margins.
- Partnership is key: we heard this last month in our series on partnerships in IB, and its not surprising we hear it again this month looking at agriculture. Successful models generally require partners across the value chain, and involve commercial, public and non-profit partners. Blogs about the Jollibee initiative in the Philippines and about the Africa Milk Project both demonstrate this.
This is an exciting series for us, not just because of the great variety of perspectives and insights it contains but also because it is the first product of a new and exciting collaboration between the Practitioner Hub for Inclusive Business and Seas of Change, an organisation immersed in the larger space around the transformation of agriculture. We have jointly created an Agribusiness Know-How page which gives you a concise summary of the issues involved and keeps you up to date with the latest research and developments in inclusive agribusiness. It is worth bookmarking!
Finally this is also the first series that we are sending from our new-look Hub – we hope you find the new site easy to navigate and use and if you have any feedback at all, please do let us know.
This blog is part of the July 2016 series from the Practitioner Hub and Seas of Change on Inclusive Agribusiness. For more insight, updates and opinion view the pdf of the whole series.