From farm to fork – making value chains more inclusive and learning from best practices

When working with smallholder farmers in remote and rural regions, companies often face severe challenges. These are related amongst others to infrastructure, regulatory and policy environments, and insufficient knowledge and skills. Some of them might be predictable, such as bad road conditions due to heavy rainfall, but some might not be foreseen or identified easily as the following example shows.

In the rural area of Malawi, 30-40% post-harvest losses of maize occur due to availability, edibility, wholesomeness or quality. Small-scale farmers normally store maize unpeeled in cobs according to traditional methods. These losses occur due to several reasons as there is a lack of knowledge on correct post-harvest handling or there are not sufficient storage facilities for extensive harvests. Rab Processors Ltd, a Malawian company founded in 1983, provides farm inputs such as fertilizer, seed and a range of basic goods at reasonable prices to smallholder farmers.

The company provides a convenient outlet for the smallholder farmer to sell unprocessed agricultural produce at accurate weights and a fair price. The produce is processed at the company’s factories, into fortified and nutritious food products for distribution within Malawi and internationally. Working with the smallholder farmers Rab Processors also faces problems of post-harvest maize losses. Whilst considering how to address these losses through modern storage and processing systems they had to learn another important fact. When peeling the maize directly after the harvest and storing it accordingly, robbery is likely to happen. There remains one question: why would the traditional method prevent it? As the communities where the smallholders live are very small and peeling the corn would cause left-overs and removed shells, it is much easier to detect who has been stealing the corn. They learnt that it’s the fine details and knowledge about traditional processes that really make a difference.

These findings were presented by Ahmed Sunka, Deputy Managing Director RAB Group, in a workshop organized by the Inclusive Business Action Network at the SEED Africa Symposium 2015, in Nairobi. The workshop presented successful inclusive business models to other companies and gave them the opportunity to learn from experiences, opportunities and challenges. Using a value chain analysis tool, the companies were able to explore each inclusive value chain and identify opportunities as well as collaboration potential.

Another business model was presented by Bosch India. In India, milk contamination is a huge problem as up to 70% of milk samples are adulterated or diluted. What is even more concerning is the rise in different types of contamination such as chalk powder, water, urea, salts, detergents and other residues. Bosch India developed a portable device for detection and measurement of milk contamination operating faster than other devices and on a lower cost basis. Chandana Kiran, Head of New Business Initiatives within Food Safety, Bosch India, introduced this new method that allows addressing a critical mass of farmers. A great percentage of farmers is organized within cooperatives of 20.000-30.000 farmers which makes it relatively easy to reach them. At the workshop, together with the participating companies, it was discussed how this business model could be transferred to Kenya. The main difference to India was in getting access to the smallholder farmers as they are not organized in cooperatives. This showed that for the development of a market-entry-strategy local support and knowledge is absolutely necessary. Find out more in this video interview.

Building Bridges has been the overall theme of the Symposium to amplify the impact of social and eco-enterprises. Within the workshop on designing inclusive value chains, bridges could be built for sectors as well as regions. The main learnings were:

• In order to better understand how value chains can be made more inclusive and how to address specific challenges, it is helpful for companies to get the opportunity to exchange their experiences and reflect with other companies on their business model
• especially, when entering new markets that differ in many aspects from the market where the business idea was created (e.g. India – Kenya) it is necessary to explore it in depth and
• a supportive ecosystem that offers trainings, knowledge and other cooperation possibilities is important to connect relevant actors.

The Inclusive Business Action Network - promoting inclusive businesses around the world. As a Network, IBAN connects the dots between the vast number of businesses, existing initiatives, support mechanisms and stakeholders around the world. Compiling and sharing publications, guidelines, checklists and market research from a broad range of sources, IBAN facilitates access to relevant information and knowledge. Online and offline peer-learning and exchange formats provide numerous opportunities for interaction between the different members of the inclusive business community. A network of local hubs and partner structures provides direct access to local partners and BoP markets.

This blog was a part of the September 2015 series on collaboration for innovation.