Ashoka: The Inclusive Agribusiness Agenda in Mexico
Due to the fast and continuous demographic growth – the current population is expected to expand by an additional 2 billion people by 2050 – and the fact that there are no longer many opportunities available to increase the existing agricultural area or productivity, it is necessary to look for innovative solutions to respond to the world’s rising food demand. One potential answer is creating inclusive and flexible value chains which integrate people in vulnerable economic conditions as employees, producers and business owners in several parts of the chain and thereby generating mutual benefit for them and the companies – this is the general idea and the challenge behind inclusive business models.
Instead of ignoring people on low incomes or considering the Base of the Pyramid (BoP) merely as consumers, the concept seeks to involve them in different ways in order to create new growth potentials and improve the lives of the poor. By this means, this business model generates shared value for all participants (e.g. market development and stronger value chains for the companies as well as sustainable income and access to products and services related to basic needs for the BoP).
Definition: Inclusive Agribusiness
Inclusive agribusiness is…
…the efficient production of safe agricultural products of high quality through practices which protect and improve the natural environment, the social and economic conditions of the farmers, their employees and communities.
(Translated from: Ashoka en colaboración con Accenture – Creación de canales de agricultura inclusiva: aprendizajes, recomendaciones y estrategias de actores pioneros en México. June 2015. p.6).
Developing and emerging countries represent the majority of the world’s future markets and great potentials for agrifood companies. A predominant share of agricultural land is located in these countries and they account for a large part of the current demographic growth turning emerging markets into key actors with a view to the development of sustainable economic sectors.
Nevertheless, smallholder farmers in these regions often cannot transparently access the relevant agrifood systems but are rather disconnected from the formal market and depend on intermediaries. Frequently, these do not act in a socially responsible way and exploit the fact that small-scale farmers do not have the necessary information available to them (e.g. knowledge about the value chains of large companies or crop diversification practices).
Therefore, the EMM Network, in cooperation with Ashoka and other strategic actors (Figure: Map of actors) boosts the inclusive agribusiness agenda. Through various activities and innovative schemes, the goal is to develop tools and share both experiences and good practices regarding the development of inclusive value chains that integrate small farmers (e.g. with respect to supply, processing and manufacturing, distribution and export, or relating to the role of intermediaries).
Being a sector with a specific complexity – on one hand due to the necessity to increase food production, on the other hand because it is the primary means of subsistence for many people – agriculture is of great importance for sustainable development. In the particular case of Mexico its potential impact is based on the 68% of smallholder farmers who work with equal to or less than 5 hectares and have few knowledge concerning the market, new technologies and access to credit.
In cooperation with other regional key actors the EMM Network has therefore committed itself to include small-scale farmers in the market and – by means of a diverse and complex network of dedicated allies in multiple sectors – seeks inclusive agribusiness solutions. Among others, two thematic forums and a workshop were conducted in order to support the agenda of cocreation in inclusive agribusiness in Mexico.
Workshop: Designing sustainable supply chains: Agribusinesses | June 26 and 27, 2014 | Headquarters of Conservas Santa Rosa (organized by the EMM Network, Global Compact Mexico and Ashoka)
In June 2014, the EMM Network organized a thematic workshop in collaboration with other allies and the presence of leaders in corporate social responsibility and sustainability, corporate foundations and social innovators in the agrifood sector. The participants discussed the design of sustainable supply chains and got to know best practices, tools and methodologies that were development by pioneers in this field. Furthermore, general principles for the creation and management of sustainable supply chains in the agriculture sector as well as key processes for their successful development and management were identified. An important result of the workshop was the design of a working guide for each participant which systematizes existing methodologies and can help the companies to conduct similar activities.