The road to inclusive business needs continuous feedback

You can’t escape these days from the ‘Inclusive Business’ concept. Since CSR has been moving from communication and public relations strategies to the core of business practice, there are few agrifood companies that do not have coined the ‘inclusive business’ terminology. Inclusion of smallholder farmers as providers is one of the strategies used to make supply chains more sustainable.  

But too often we assume that sourcing from smallholders will lift them out of poverty or that inclusive business practices automatically lead to sustainability at farm level. It is however not that straightforward. For farmers, it often is a challenge to comply with the quality, food safety and sustainability demands of a continuous supply. And generally, food companies need to reinvent their business model to be able to source from smallholders.

Food supply chains are complex realities in which different actors with different perspectives interact. Short feedback loops can play a role in making these interactions between smallholders and food companies more dynamic and can offer the elements to quickly adapt supply chains to become successful and more sustainable. 

Inclusive Business is a beacon

VECO has been facilitating the relations between farmers and food companies/retailers since more than 15 years. We consider inclusive business as a beacon on the horizon that gives direction to companies and farmers to make their relations more sustainable.  The principles that guide an inclusive relation are: chain-wide collaboration, effective market linkages, fair and transparent governance, equitable access to services, joint innovation and measurement of outcomes. Relations between buyers and suppliers improve as the relations deliver better on these principles.

Making sense of practice to grow towards inclusive business

The Inclusive Business Scan, that builds on the Sensemaker® methodology and that was developed by VECO, is a narrative-based research tool. It comes with software for collection and analysis of data. It offers an innovative way of collecting large numbers of stories from farmers, who interpret and classify their stories themselves. The analyses of these story collections offer insight in how these inclusive business principles can be put into practice.

Interviews with producers are done individually during their meetings. Each farmer is asked to share a story about a specific event that has happened in the past 6 months and that has motivated or demotivated him/her to produce and sell to the buyer. Once the story is told and written down, the producers are asked to answer a set of questions related to their story. These questions are crucial to the study as they are meant to reveal the perception of farmers on the importance of being a member of their organisation and the relationship to the buyer.

Learning through real-time feedback and dialogue

In Polman district on Sulawesi island, Indonesia, 517 farmers, farmer leaders, service providers, staff of the farmer organisation and other chain actors have shared their experiences regarding the commercial relations between Amanah (the farmer organisation) and Mars (the buyer). During that gathering, they also interpreted the implementation of the Inclusive Business Scan considering several key aspects of business inclusivity and sustainability.

The main goal of these feedback sessions was for the chain actors to ‘make sense’ of the patterns that had emerged from this data collection and come up with propositions to improve the commercial relations in the cocoa value chain in Polman district. At the first workshop, over 40 farmers and members of Amanah and Wasiat (the main service provider) eagerly read the stories that had been shared and interpreted them in the light of their day-to-day realities. Farmers showed themselves very understanding of the challenges that Amanah faces as a young organization and came up with several propositions for all chain actors to strengthen the organization and its position in the value chain.

The next day, Amanah analysed the patterns following a set of variables such as age, gender, sub-district and perceived nature of the business commitments (long-term, short-term or unpredictable). This helped Amanah to better grasp the different aspects of their members’ realities: are prices paid enough to permit new investments? Do farmers have a sales’ commitment to Amanah? Are the benefits of the collaboration with Amanah and Mars worth the effort? What are their main service needs? Amanah proceeded to incorporate the input from this analysis and the suggestions from the workshop with farmers into its organizational plan.

Finally, representatives of Amanah met with Mars to discuss the outcome of the Inclusive Business Scan survey and looked for solutions to improve their relations with Amanah and its farmers. Mars said it was very happy with the results, saying they were ‘remarkable’ and that it is the first time that they get such constructive and measurable fast feedback from the field. The Inclusive Business Scan offers a wealth of material to start a real dialogue between buyer and suppliers and leads to adaptation of practices and improved collaboration.

For more information on the Inclusive Business Scan developed by VECO.

• This blog is part of a series on what’s new in inclusive agribusiness from April 2017. Hear from more contributors in part one of the series- digging into the details of inclusive business programmes around the world.  In part two contributors share how long-standing perspectives on cooperative, corporate strategies, value chain partnerships, market system change, rural livelihoods support, financing, and innovation adoption are beginning to blend, and why. 
• Read more on key topics in inclusive agribusiness in the series of six theme papers.
• Access over 450 resources on inclusive agribusiness on SearchInclusiveBusiness.org