The future trajectory of impact-oriented agriculture: a response to Acumen and Bain’s Growing Prosperity report

 

Paul Breloff

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Growing Prosperity: Developing Repeatable Models® to Scale the Adoption of Agricultural Innovations, the new report by Acumen and Bain & Company, produced with the support of the Bill & Melinda Gates Foundation, is intended to help entrepreneurial companies, and others, get smart about scale and unlock the full potential of smallholder farmers.

In a series of blogs, to be published over the next few days, the views of investors, capacity builders and others on the opportunities outlined in the report will be presented. You can read the previous posts here>

Set aside the explicit reference to agriculture in the title of this report – Growing Prosperity: Developing Repeatable Models® to Scale the Adoption of Agricultural Innovationsand you could be forgiven for reading this as a generally applicable how-to manual for building and scaling emerging market businesses, particularly ones characterized by heavy ops serving poor customers in low infrastructure, hard-to-reach geographies. With work like this from Acumen and Bain, the magic is never the framework – the Four A’s and the focus on repeatable models are not entirely new. But these stories of how pioneer entrepreneurs have solved the Four A’s and executed Repeatable Models® have the potential to inspire and unlock additional value for enterprises and investors earlier in the process looking for their own answers.

I invest in financial inclusion innovations, and it may seem like financial services and agriculture are quite different domains, but I see many similarities. I also see some clues from our experience in microfinance and financial inclusion that may hint at the future trajectory of impact-oriented agriculture.

First, in both areas, it’s clear that we need brave pioneers to dive into the great unknown and try what hasn’t always been done before. These pioneers are hacking through the jungle, trying to figure out what works, and there’s no question that this work benefits those who follow. In microfinance, we see it in the way later microfinance institutions benefited from the experience and insights of those MFIs who went first: it took Grameen Bank 17 years to break even, but it took SKS (founded 1998) only six years to break even and Equitas (founded 2007) only one year. We should see, and indeed cultivate, similar effects in agriculture, where the work of these early pioneers can be learned from and built upon in subsequent efforts. This also points to a justification for smart subsidy in the early days of these pioneering firms, since the benefits of these experiments spill over to the broader sector.

Second, it’s clear that both agriculture and financial inclusion depend on a robust ecosystem and industry to optimize conditions for a pioneer enterprise to thrive. Yes, an enterprise can exert a degree of control in terms of how it finds creative solutions for the Four A’s and a repeatable model, but it also needs supportive policy and regulation and an ecosystem of funders/investors, talent and knowledge centres to draw on for the financial, human and intellectual capital needed to scale. In our sector, I’m particularly excited by the way national governments and global bodies like the G-20 have embraced financial inclusion as critical for long-term prosperity and growth.

Third, in financial inclusion, we’ve only started to see real momentum once the mainstream players start to see the opportunity to engage, whether as funders, partners or competitors. We are excited by this convergence between the traditionally separate realms of profit-making and do-gooding. As the mainstream banking world starts seeing base-of-pyramid and mass market customers as a massive business opportunity, as opposed to a CSR side project, we are bringing to bear a new level of expertise, capital and reach to the challenge of financial inclusion. Agriculture seems earlier in its trajectory in this regard, but we’re starting to see more large companies like Mars and Starbucks developing creative and proactive strategies to develop hyperlocal sourcing strategies with smallholder famers and co-ops, seeing it as a core strategic interest to develop these markets as customers and perhaps more importantly as suppliers. Surely this is only the beginning.

Paul Breloff is managing director at Accion Venture Lab.

Tagged in: Growing Prosperity: Developing Repeatable Models® to Scale the Adoption of Agricultural Innovations


Comments (1)

CYRUS M. MUNENE

The concept of Growing Prosperity through Developing Repeatable Models to scale the Adoption of Agricultural Innovation is a great idea. I believe quite a great numbers of farmers have gotten a big boosting shake - up for their Agri - Businessies. However, I wish to enquire whether you have considered something in the area of Growing Prosperity throw Developing Start- up Capitals to Loan to those who are endowed with Impacting and Innovative Agricultural Ideas. If you have, please link me to them so that I can be able to share my creative and innovative idea with them for possible financing Thanks and GOD bless. Cyrus M. Munene NAIROBI - KENYA


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