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Photo by East–West Seed, Myanmar, a company that develops, produces and markets hybrid tropical vegetable seeds.

Photo by East–West Seed, Myanmar, a company that develops, produces and markets hybrid tropical vegetable seeds.

Over the past five years the term “inclusive business” has shifted from being an uncomfortable phrase for many to being commonly used in the world of food and agriculture. Companies that struggled with what was considered wishy-washiness of the phrase now have CEO’s who refer to the inclusiveness of their business. Even that slightly awkward phrase ‘inclusive agribusiness’ is regularly used.

Just a few examples that this language is becoming mainstream:

What this tells me is that there is widespread acknowledgement of the need to make agribusiness more deliberately inclusive. This means simply being much more deliberate about how the risks, resources and rewards of a business model and relationship are shared. Why is it needed? Because while growing agribusiness has many benefits, at best it simply does not trickle down to those who struggle most to life off agriculture. And at worst it can make those who struggle most worse off, by focusing limited resources on the more asset rich.

That’s a major step forward. Increasing reference to “inclusive (agri)business” seems to be an abstract recognition by many businesses that they are co-dependent for success on others in their value chain. What’s still missing for me is the many examples of core business models being built around the intention of inclusiveness. There are always great examples led by inspiring people, who play a critical role of demonstrating that yes, it can be done. But they tend to be exceptions, rather than the rule.

What’s also missing is structural evidence and effective sharing on what inclusive agribusiness models and investment strategies do and don’t work. Work in terms of structurally improving farming community income, reducing everyone’s business risk, stimulating productivity leaps, ensuring the right products are available and affordable for those who can least afford poor quality. Without clear evidence, it is perfectly understandable that companies will not gamble on structural shifts in business models and investment strategies.

A third piece of the puzzle I’m increasingly missing is a linked discussion with transitions out of primary production. Many producers need to move out of primary production, to make it viable and attractive for those who do stay there. But of course they can only do that if they have opportunities to move to. Anywhere: in processing, logistics, retail, supporting services. And also outside agriculture, yet ideally also in rural areas to maintain necessary flexible labour pools. Of course this Stepping Out happens all the time, see massive rural-urban, often male migration. I just wonder whether it can be tackled more deliberately and as a whole.

So I’m hopeful for the future. Because changing intention reflects changing awareness, and is the foundation for changing practice. And there is a growing active demand for evidence, exchange and investment opportunities, all wanting to do good business in a more inclusive manner. This demand will be met, and standard agribusiness practice will look quite different in 10 year’s time.

This blog post is part of the December 2017 edition of the ‘Monthly Theme’ that reflects recent and future developments in inclusive business.

What progress have we made? Where are the missing links? And what needs to change in 2018 in order to increase momentum on inclusive business? Read the full series to see what thought leaders and practitioners think about these questions.

2 Comments

  1. Profile photo of Caroline Ashley, Editor Caroline Ashley, Editor says:

    Nice reflections Joost. I agree we need to understand more clearly how the risks and rewards are shared in an inclusive business model. Just ‘sourcing from smallholders’ is not enough. Asian Development Bank’s definition is nice, where they look at how much better smallholder terms/benefits are than normal practice.
    And you are right ‘stepping out’ of agriculture is as important for smallholders as stepping up. I wonder if there are any business models out there that are doing both, or if it’s a matter of having complementary options side by side.

  2. Profile photo of Bui Tran Nhu Phuong Bui Tran Nhu Phuong says:

    I think, like many other concepts emerging around the globe every day, the concept of “inclusive business” also needs time to mature. My impression is that a wide range of stakeholders (businesses, NGOs, social enterprises, etc.) are still trying to figure out what “inclusive business” means to their operation.
    As I sometimes reflect on how the field of development has actually developed, I realize that our intention has always been the same: eradicate poverty; however, for some reason, we have always struggled with the execution, the realization of our intention. Of course, as you rightly pointed out: there have been cases where thing were done right but it was more the exception than the rule. This, I believe, is inevitable since the speed at which circumstances continue to change is just too fast. This is the reason why we keep coming up with new concepts and methodologies; the later is a new version of the former.
    I often say “inclusive business” is a rather new concept in Southeast Asia because in some regards, it is. But if I really look at how agriculture cooperatives have been operating in Vietnam, inclusive agribusiness has been there for … maybe 20 years or more, or at least the primitive form of it. They have a board of management with legal entity to sign commercial contracts like a commercial company. They buy produce from their members regardless of quality and quantity. They receive regular training and support from the local department of agriculture and rural development – a government agency, in term of finance and farming technique. The board of management is also in charge of processing and packaging of the produce, marketing and looking for output for their products. The profits come back to the operation cost and support for their own members: fertilizers, seedlings, etc. With the support from the central government, the high level of sustainability is inarguable.

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