Leveraging inclusive business for poverty alleviation and women’s economic empowerment
CSR Asia’s ongoing work on inclusive business is demonstrating again and again that simply doing business in a way that includes poor people in the value chain of large businesses can increase incomes, reduce poverty and contribute to the Sustainable Development Goals (SDGs).
Our work shows that the growth of the agricultural industry – spurred by foreign investment and significant improvements in productivity and processing – has elevated the Association of Southeast Asian Nations (ASEAN) member states of Myanmar, Thailand, Laos, Cambodia, Vietnam, Malaysia, Indonesia and the Philippines as global leaders in soft commodities (such as coffee, timber, vegetable and fish) production and trade.
Pathways out of poverty – whether through farming, employment, non-farm processing and trade or migration – are all heavily reliant on agriculture. As commercial investment continues to grow in the region its impact has the potential to transform the agricultural landscape. The private sector is in a position to optimize production and processing as well as contribute to the socio-economic development of the region.
Smallholder farmers – farm households that own or cultivate less than two hectares of land – represent a significant proportion of the upstream agricultural value chain. They provide over 80 percent of the food consumed in a large part of the developing world. Smallholder productivity and sustainable rural development are inherently linked with economic growth, food security and poverty reduction. Yet, small-scale farmers are often neglected, living in poverty in remote and environmentally fragile locations, and part of marginalized and disenfranchised populations.
Nevertheless, in a recent publication by CSR Asia we demonstrate how smallholders can be at the forefront of business profitability as well as in creating a more sustainable industry. Leading companies have created comprehensive inclusive business programmes that can tackle poverty and reap other benefits associated with environmental conservation, social progress and the crucial role that women play within the smallholder system.
To really capitalize on these opportunities, the agricultural sector needs to move beyond the idea of “doing good” and recognize the value that responsible and inclusive business practices bring. The inclusive business approach requires companies to reimagine how they see and interact with farmers, particularly smallholder farmers. Greater inclusivity and tapping into an underrepresented smallholder population has the potential to secure raw materials, develop products and services that improve efficiency and stimulate innovation.
There are many ways that companies can support smallholders, through training and capacity building, logistical services and agricultural equipment and inputs. Companies then benefit by ensuring reliability of supply and marketing their responsible activities and products in emerging, and increasingly valuable, socially and environmentally conscious markets.
Through ten case studies of best practice our research we demonstrate that the private sector has the ability to create change. And it is not only big businesses that can reap the benefits of more inclusive value chains. Regardless of the size of a company’s operations, responsible and inclusive businesses approaches can drive progress towards sustainable development.
Our report points out that women play a crucial role within the smallholder system. However, they often represent an ‘invisible’ labour force burdened by inflexible working hours, gender bias and a disproportionate amount of additional obligations including childcare and household work. Women in Asia represent 50 percent of the agricultural labour force, yet research has shown that for agribusiness, women are both disengaged and undervalued.
Companies have the potential through their engagement with women to help spur rural economic development, to close the region’s gender gap and increase yields on average by 20 to 30 percent. By increasing the involvement of women along major agricultural value chains, companies can take advantage of this opportunity to overcome constraints that hinder women’s economic empowerment. For many companies in Asia, operations are ‘gender blind’ and although there are instances where companies are able to create a positive impact for women, it is often achieved unintentionally.
The report argues that a successful inclusive business strategy can unleash the advancement of the social, economic and environmental conditions of the communities in which it operates and make significant contributions to the achievement of the SDGs. The report is to be used by agribusinesses throughout the agricultural supply chain as a reference tool to show how the private sector is able to directly or indirectly establish their own programmes and to outline the range of approaches that contribute to market expansion and supply security.
All stakeholders involved in the agribusiness sector can use this analysis as a resource and advocacy driver in promoting better agricultural practices and collective impacts.