An honest gaze at Inclusive Business models

Inclusive Business is Rikolto’s core business. In a world where the urban population is growing and land is degrading, how do we make sure that we feed everybody and maintain the quality of the soil for future generations, while also guaranteeing a fair price for those who produce our food?

To help us answer that question and guide our action, Josephine Ecklu joined our Global Support Team as Inclusive Business Coordinator. Enthusiastic and constructive, she has a head full of knowledge that she is willing to share, whether it’s about inclusive business models or about her findings during partner visits.

For this reason, we sat down for an honest, virtual interview about her take on inclusive business models.

Josephine, where does your passion for Inclusive Business come from and what does it mean to you?

I’m from Ghana, and I have worked in the agribusiness space for quite a while. Over the years, I have observed that one of the areas where aid grants really come to is agriculture . Nevertheless, despite the many donors working in the sector, African agriculture has remained the same or has even become worse. Of course, there are many factors involved, with climate change being the most important one lately.

With a population growing globally, and about 60% of the world´s arable land being in Africa, many investors are looking to Africa for investment opportunities. are trying to conquer new grounds again. If we do not deal with agriculture as a business and in a scientific way, Africa might lose out on its fair share of the cake. Free money (aid) over the years have not necessarily worked. Free money in the form of grants in my opinion should be channelled in a way that enables a solid foundation for business activities in the agriculture space, while also respecting social and environmental sustainability.

Given that agriculture is the main economic driver in most countries , we must position ourselves in a way that we can create the necessary jobs and opportunities that would foster the economy. To meet the food demand, we need a professional farmer who sees farming as a business and not only as a form of subsistence for the family. A farmer who delivers the right product at the right time and with the right price to the market.

If we do not deal with agriculture as a business and in a scientific way, we might lose out on the sense of our mission.

Most organisations tend to focus on climate and the social aspect, which is fine… But how do these interventions survive after we leave with our development project? If you work with farmer organisations that are not professional, how can we make them competitive?

We need a development aid focused on creating business opportunities, not one that just gives money for subsistence. We must engage both the public and private sector to foster a public-private partnership that enables a positive environment. That is where Inclusive Business comes in.

Which elements are most relevant in the development of an Inclusive Business relationship?

The goal of Inclusive Business is to make smallholder agribusinesses including farmer organisations competitive and allow them to access markets and finance for the purpose of creating a stronger level of professionalism. At the same time, it is necessary to work with agribusinesses who are willing to make their business more sustainable and enhance competitiveness.

Generally, there is an imbalance between the producers and buyers who want to source from them. Inclusive Business aims at filling the gap and creating a positive outcome for both parties. It is a win-win relationship, and a different way of doing business.

First, there must be an understanding between the two parties. For example, if the buyer is willing to set the quantity, quality, and price for the product together with the farmer organisation, and eventually facilitate the access to credit and technology, farmers will be able to plan their production and satisfy the market needs. At the same time, they get a fair price and will respect the conditions.

Second, to broker an Inclusive Business relationship, it is necessary to enable a good environment for the relationship. This can be done by working together with trade organisations and government officers to remove obstacles along the value chain such as policy bottlenecks and regulatory frameworks that don’t support the competitiveness of the sector.

Inclusive Business aims at filling the gap and creating a positive outcome for both parties. It is a win-win relationship, and a different way of doing business.

Do you think that it is feasible to convert this kind of relations into the most normal way of doing business? Are there any gaps in the Inclusive Business methodology?

When I look at Inclusive Business models such as the LINK methodology and SCOPE insight, I don’t think there a gap. Nevertheless, to convert them into a standard way of working is very hard because when it comes to field application there are various aspects, depending on the context. A farmer in Vietnam is not the same as a farmer in Ghana, because they have a different socio-economic environment. I do not believe it is possible to scale up the process without considering the contextual diversity when applying the Inclusive Business guidelines.

If you take rice, for instance, you will notice that African value chains still rely a lot on informality and African leaders import large volumes of Asian rice to supply their countries. You will have to work with them to define policies that can create a market link for local producers at the same that time you are working with producers to reduce their costs and supply the quantity and quality demanded by the market.

I do not believe it is possible to scale up the process without considering the contextual diversity when applying the Inclusive Business guidelines.

What about Rikolto’s actions toward the establishment of Inclusive Business relationships?

Inclusive Business lies right at the core of Rikolto's work. At this stage, we are trying to marry the development goals with business objectives. How do you match those two?

We are good at establishing development indicators. However, since we are dealing with business actors, deveopment agents and business actors need to speak a common language. We need to show that building an inclusive and sustainable relation with a producer is profitable. We cannot just say that it is fair to pay a higher price. We must be able to show economic returns and financial benefits. At the end of the day, most buyers are interested in profit.

As Inclusive Business coordinator, I have to explain these features to my colleagues around the world and help them contextualise their interventions, while evaluating the issues of market and financial access as well as how to work together to achieve our objectives.

We cannot just say that it is fair to pay a higher price. We must be able to show economic returns and financial benefits.

Which case particularly inspires you?

I joined Rikolto about a year ago and, as a coordinator, I do not just work on one project … I don’t really have a favourite one, but right now, the ones that look exciting to me are the EU programme in East Africa which focuses on the horticultural sector in Tanzania and the project in Nicaragua with Subway. These cases demonstrate the power of Inclusive Business relationships.

I was supposed to travel and visit Rikolto’s offices in different continents, but then Covid happened… So, my job had to evolve a bit. Now I am focusing on capacity building and a mindset change within Rikolto, evaluating how I can use my lens to scan new programme proposals and integrate Inclusive Business elements into them.

What lessons have you learnt during your work with Rikolto on this topic?

The learning is still going on. We are using the SCOPE assessment to identify the gaps in business capacities and identify which aspects a farmer organisation may need to strengthen. The question is, what comes next? How we can use that assessment to foster the Inclusive Business relationship?

A SCOPE assessment is like going to a doctor. You tell him you feel sick and describe your symptoms. He will diagnose you and give you medicine for your disease. But as Rikolto we are not yet at the point that we can prescribe a remedy. We are doing testing and looking out for the best way to do things, while harmonising our methodology for approaching the feedback that we collect from the ground.

It is essential that we work with people who share our vision and really look at the business side of the development. We really need to focus on enabling an environment where experiences can live independently after the end of our programmes.

As Rikolto we are not yet at the point that we can prescribe a remedy. We really need to focus on enabling an environment where experiences can live independently after the end of our programmes.

What recommendation would you give to a new colleague who starts working in Inclusive Business?

It depends. If the colleague is working on a global team, I recommend looking at the different projects proposals that are running worldwide and determining which elements can help develop Inclusive Business relations. If she is working in the field, I would recommend examining the context and specifics of the farmer organisations and businesses who we want to work with, while indicating to both partners what obstacles along the road need to be removed to develop a fair and healthy business relationship and meet the expected goals.