Photo caption: Members of a women’s farmer group tend to their communal crops in Durgapur Village
500 million smallholder farmers provide around 80 percent of food consumed in the developing world, and innovation can be the only way to get them set on the highway of Sustainable Development Goals (SDGs).
Casting a business mould on farmers of developing countries is not easy. The family that normally struggle for basic amenities like safe drinking water, sanitation and education of their children cannot be expected to emerge as an entrepreneur overnight!
These challenges require new cross-sectoral collaborations; according to the Voluntary Service Overseas (VSO), an international development organization and Syngenta, an agriculture expert company. They showcased the project titled ‘Growing together: Transforming Agriculture Value Chain in Bangladesh’, at aside event of CFS44, FAO, Rome. The aim of this partnership through the project is to merge company and development sector expertise, including civil societies, and banks for enabling business in the target community of farmers.
Inducing the strength of entrepreneurship in farmers was the aim of this combining effort: “If you don’t have an entrepreneur’s mind you will always wait for subsidies”, advised Juan Gonzalez Valero, Head of Public Policy and Sustainability from Syngenta. He further added that this innovative strategy is about the efficacy of cropping techniques, and at the same time building farmer’s connection with the market. This practice has never existed in mainstream Bangladesh agriculture, but experts in the session feel such ground-level partnerships are important as a way for farmers to enhance their capacities.
What was the challenge? In the opinion of Simon Brown, Country Director, VSO Bangladesh, this country has 60% landless marginalized farmers. Floods in the northern part of the country are pretty devastating. Also, Bangladesh is a country of 15 million farmers, dependent on formal and informal micro-finance, which has existed for years now. Shifting mindsets towards a new financing development model is indeed a challenge. Finally, they are disinterested in insurance for risk spreading and coverage, as they prioritize income and expenditures meant to fulfill their basic needs. Despite growing into a lower middle income country, a staggering 40% of Bangaldesh population live on less that 1.25$ a day and of this 75% live in areas where agriculture is predominant source of income (World Bank report 2016).
What is the innovation? The company representatives explained that the key to this success was a ‘Farmer Center model’ that provides remote farmers with a wide range of farming services. These include access to training, low cost credit and machinery for agriculture on rent. The program is now reaching 10,000 farmers and is looking to widen its approach to 100,000 more farmers. In 2017, the program opened the first of its initial retail banking facilities in farmer centers with the help of Bank Asia, a leading bank in Bangaldesh. It was a tactful integration of cultivation techniques, Finance management, business strategies and confidence- building in farmers.
The net impact, as per the deliberation of the experts in the session, is that the intervention has successfully demonstrated an agroeconomic and market systems approach which has tripled farmer’s net income and has improved farmer’s resilience to climate shocks. “Developing rural communities sustainably means bringing them closer to market”, said Valero. In 2017, this collaborative program also intends to become a pilot partner with Blue number, a United Nations led data initiative that will support farmers to self-report on their own impact data against the SDGs.
This is a new, social franchise concept that creates a win-win situation for both investor and the farmer and gives a first-hand feel of organized business advancement among the farmers.
I personally feel this model is replicable anywhere in the world, but we also need be careful, considering the fact that many unregulated finance companies in the developing world may use farmers’ vulnerability as a means of exploitation as we cannot ignore the profit component or motive of financers. In India, in many villages, farmers have ended up paying 20-33% interest on loans to finance companies and have fallen into a bigger poverty trap, rather being lifted from it.
However, it is also true that need of the hour is farmers’ need to shift from subsidy based mindsets to financing based development.
First, we must build the capacities for this change!