Twenty years ago, the first RIO conference put sustainable development clearly on the global agenda. Today the critical need to conserve our natural resources, tackle poverty and respond to climate change is widely accepted by governments and business alike. Sadly, as this RIO+20 conference illustrated, agreeing that there is a problem and making meaningful commitments to do something about it are apparently two very different things.
So how do we get the scale of change needed to have a real impact on poverty and environmental destruction?
I find it easy to be inspired by the great work many individuals, businesses, NGOs, and governments are in fact doing. Indeed this is what keeps me motivated. Yet taking some distance we need to keep asking – ‘what does this all add up to?’. Are we simply creating wonderful ‘islands of success’ that make use ‘feel good’ or is there really a ‘sea of change’ underway big enough to impact on the sustainability and poverty issues we face?
Should we worry about what governments do, or don’t do, at a global level? Are there other pathways of change? Is it a bottom-up ground swell that will bring the change? Must we wait for impending disaster before we get motivated? And what about the private sector and markets?
Interestingly many business leaders and platforms have begun setting ambitious sustainability goals and are unambiguous about the urgency of finding ways to live within the limits of our planet’s resources and to tackling poverty. At one recent event, I witnessed a call to action from a business leader infinitely more strident that what any of the politicians had to say. Is this simply business posturing or is something deeper going on?
International learning workshop on scaling inclusive agri-food markets
In April the Wagenignen Centre for Development Innovation (CDI), Wageningen UR hosted an international learning workshop on ‘scaling inclusive agri-food markets’. It was developed in partnership with business and development organisations. Those supporting the initiative included Rabobank, the International Fund for Agricultural Development (IFAD), the International Finance Corporation (IFC), the Sustainable Food Lab; the Bottom of the Pyramid Innovation Centre, Agri-ProFocus, the Dutch Sustainable Trade Initiative (IDH), the Royal Tropical Institute (KIT), the Netherlands Development Organisation (SNV), the Technical Centre for Agricultural and Rural Cooperation (CTA), the Netherlands Ministry of Foreign Affairs, and the Netherlands Ministry of Economic Affairs, Agriculture and Innovation.
The workshop brought together leading practitioners from business and development organisations to explore what works when scaling inclusive agri-food markets. Inclusive business means creating profitable enterprises and investments that benefit the poor and help to tackle the underlying causes of poverty and economic inequality. An inclusive agri-food markets is one that creates economic opportunity for small-scale farmers and local entrepreneurs and employment opportunities along the value chain. Importantly this doesn’t mean just buying from small farmers or employing people; it means doing so in a way that helps to create a spiral out of poverty. With food demand doubling over the coming decades and with the reality that there will be another two billion people at the bottom of the economic pyramid – heavily dependent on agriculture for their livelihoods – inclusive agri-food market development must be a key plank in the wider sustainable development agenda.
Many leading agri-business firms, such as Unilever with its ‘sustainable living plan’ or Nestlé with its ‘shared value’ strategy have made explicit commitments to inclusive business in the agri-food sector. However, the leading business players will also freely admit that they have a long way to go. It is one thing to create glossy brochures outlining admirable principles and goals, it is quite another to put this into practice and embed it in business operations along an entire value chain. Interest in living up to their stated goals is what brought many business players to the table with a diversity of development organisations and researchers.
But let’s not get off on the wrong foot here. Remember that the job of business is to make profits. Business is interested in ‘inclusive business’ because it can be profitable for them in three main ways. One, as pressure on natural resources increase it is a strategy for securing long term supply. Two, large, poor rural populations represent a significant future market opportunity if they can be lifted out of poverty. Three, the conditions for small scale farmers and employees in agricultural value chains is a key issue for managing reputational risks and positive brand identity.
Coming back to the islands of success theme, one of the failings of aid and traditional development projects is not being able to have an impact at scale. Working with the power of market forces and leveraging the very large investments made by private sector players offers a route for scaling change. Increasingly business and development organisations and donors are finding a common agenda around inclusive agri-food markets. But it is early days with challenges to be overcome and evidence of scaling impact still ahead of us.
The ‘Seas of Change’ workshop highlighted a number of directions for moving forward to tackle these challenges. First, it might seem obvious, but the different players do need to understand each other better. This was much emphasised by participants on all sides during the workshop. Another key factor is linking public and private finance in ways that works. Understandably there is concern about subsidising business operations. On the other hand, inclusive business opportunities often need a kick start before they can become commercially viable. The old development model is essentially that public sector funds government and NGOs, but in the value chains and markets area this often leads to unsustainable models that collapse once funding stops. There is still much to learn about how to link public and private investments in ways that are effective, accountable, transparent and not full of ‘red tape’. However smart use of market forces is certainly one frontier for scaling impact. Certification was also a hot topic. Increasing demand for certification products, such as UTZ, Rainforest Alliance or Fair Trade can be a mechanism for scaling change. But do these systems really have a significant benefit for smaller scale producers? How can they go from being 10-20% of the supply chains to much higher levels? And, how can standards be developed and implemented in ways that they don’t become an unintentional break on innovation?
Across all the discussion and debate around scaling, sustainability and inclusiveness one factor is clear. Various forms of multi-stakeholder engagement are critical to any change process. Business, government and NGO players are all talking about the importance of partnerships with each other. However, they are also clear that these partnerships and multi-actor collaborations need to work well – and often they don’t for many different reasons. This year CDI will hold its 10th annual international course on facilitating multi-stakeholder processes and social learning. In fact, the demand is so high this year with 75 participants that the course will be held with three parallel groups. Alongside our multi-stakeholder course we are also collaborating in the Change Alliance. This is an emerging network of practitioners and organisations interested in multi-stakeholder processes and systemic change.
Director Wageningen Centre for Development Innovation