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Agri-business for inclusive growth:

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Presentation on theme: "Agri-business for inclusive growth:"— Presentation transcript:

1 Agri-business for inclusive growth:
prospects and challenges of Bangladesh Nazneen Ahmed, PhD Senior Research Fellow Bangladesh Institute of Development Studies 14 February 2018

2 Salient features of Bangladesh Agriculture:
Main production: Rice, Wheat, Jute, Oilseed, pulses, Vegetables, fisheries, livestock and so on. Employment: 42.7% Agricultural Output: Rice production: increased to 34 million metric ton in 2016 from 14 million metric ton in FY 1981 Fishing sector : In FY , contributed 3.61% to the GDP and 24.43% of total agricultural products Animal farming: contributed 1.60% to GDP FY which 11% of total agricultural GDP Agriculture sector is the major contributor to self-sufficiency in food production, reduce rural poverty and foster sustainable economic development

3 Contribution of Agriculture in GDP- currently 15%
sub-sectors in GDP

4 Trend in sectorial distribution of employment
Growth rate of different broad sectors Trend in sectorial distribution of employment

5 Export of Agricultural Products (mill USD)
The main agricultural export items of the country are Shrimp, other fishes, tea, tobacco, vegetables etc. In FY , Bangladesh earned USD million by exporting agricultural products which was 3.1 percent of total export earnings

6 Inclusive business maximizes social and economic value
Characteristics: Positive human development impacts Commercial viability Environmentally sustainable Inclusive business leads to Poverty reduction Women participation in economy and empowerment Value addition Safe food/ food safety Source: WBCSD

7 Inclusive growth by Inclusive Business
Commonly poverty alleviation : Social safety net programs of the government Conventional approach: Micro-entrepreneurship through (NGOs) Not integrating poor with the market the poor could not become 'market agent‘ In a market economy, development models, those can ensure better integration of the poor in the production network and supply chain can go a long way to alleviate poverty. Private sector's involvement: making market work for poor Private sector’s involvement in poverty reduction: supply of labour collecting raw materials from poor, operating labour-intensive distribution corporate social responsibility and social business Limitations in terms of making poor self-reliant Inclusive Business goes beyond above mentioned traditional 'business as usual' models to make poor people more integrated in the market so that they can attain sustainable economic development. --- Making markets work for the poor

8 Making Markets work for the poor
Information Related services Skills & capacity R&D Coordination Infrastructure Supporting functions Rules Standards Informal rules & norms Laws Regulations Private sector Representative bodies Membership organizations Government Informal networks Not-for-profit sector Supply Demand Core market

9 Agribusiness and inclusive growth
Inclusive business in agriculture sector Business in agriculture supply chain is observed in different forms- contract farming, management contracts, tenant farming and sharecropping, joint ventures, farmer-owned business upstream/down stream business links All of these may not fit in the inclusive business model mentioned above. Agribusiness includes various business involved in food and fiber production, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales Huge scope for investment in backward and forward linkages in the agriculture sector. Subsistence to Commercial agriculture The market needs to work for inclusive growth in agriculture

10 Inclusive business in agriculture for inclusive growth
The ‘contract farming’ will remain a mainstream business model unless some additional elements of inclusivity are put in place to make it a ‘inclusive business’. This model does not involve companies to do anything beyond their business motives. Rather inclusive business is asking them to apply those skills to areas that happen to be pro-poor.

11 Benefits of Inclusive Business and Requirements for Companies
Benefits for companies Benefits for communities (Mainly poor people) Benefits for government Requirements for companies Higher profitability Jobs and income Increased tax revenues (SMEs) Changed mindset: Open to collaborate with new markets Wider market share Increased market access Improved social services High understanding and knowledge of local / informal markets Lower operating costs Enhanced human dignity Increased GDP Market research, resources /investment New consumers Access, innovation and technology Greater infrastructural support Innovation and ‘thinking out of the box’ Better branding of products Easier access to credit Improved business climate Proper calculation of return on investment (ROI ) Ease of doing business Better living conditions as a result of the above points  Better relations with business Patience

12 Challenges of Inclusive Business Opportunities of Inclusive Business
Organizing and upgrading supply from a detached producer base and traceability and quality assurance of these products Export competition Maintaining a sustainable Supply chain Opportunities of Inclusive Business Surplus production Export expansion Import substitution Local consumption

13 Making inclusive business successful in Agriculture
The success of an inclusive business model in agriculture depends on Identifying Opportunities, Analyzing the Market, Finding Solutions, Developing the product,, Engaging partners, Leveraging Local Capabilities, Testing the Model, Understanding the Impacts, Adapting the Model, Expanding locally. The success of Inclusive Business requires that all parties to play a part. Many examples of promoting inclusive business in Agriculture- Quality Seed in Mini-Packs, Maize contract farming, Integrated pest management (IPM), Women with easy access to information, services and finance enjoy greater economic opportunities and decision-making authority etc.

14 Concluding remarks! SDG poverty reduction goal: No one to be left behind We need inclusive growth Inclusive business model is a sustainable way to achieve inclusive growth So market will work for poor in the supply chain (Both as entrepreneurs or as consumers poor will benefit) Like other sectors inclusive business models in agriculture may bring positive change in the life of poor We need to continue with inclusive business models in agriculture to a greater extent

15 Thank you

16 Facilitating Inclusive Business
Poor Men and Women Impacts Private Sector Orgs. Knowledge Info Skill Implements Simultaneously provide rationale for this particular assignment 1. Explain systemic change of capitalisation here i.e. what we envision pvt sector will do and what public and NGO’s will do. We want to see more business that includes (and impacts upon) the poor. 2.) This is widely known as inclusive business. 3.) Who currently implements this? 4.) The three actors, who are interconnected. 5.) They all need K, I, and S in creating these models. 6.) While they develop K,I,S themselves, they also rely on others, who influence the development of their K,I,S Example: Public sector - DAE Reaches every corners of the country Have mandate to serve marginal farmers However they have lack of understanding (knowledge) of how private sector can assist marginal farmers. Example: Influencing group - Think tank Conducts of policy research Undertake policy related lobbying activities Public Sector Orgs. NGOs Universities Media House Think Tank BMOs Training Institutes Civil Society CSR Groups Consultancy Influence

17 17

18 Export of Agricultural Products (million US$)
Export Performance % Change of export performance Over All products 1.72 A. Primary Commodities (Chapter 1-24) -4.61 (1) Frozen & Live Fish 535.77 526.45 -1.74 a) Live Fish 9.14 8.05 -11.93 b) Frozen Fish 47.07 44.04 -6.44 c) Shrimps 448.56 446.04 -0.56 d) Crabs 23.18 18.28 -21.14 e) Others 7.19 10.04 39.64 (2) Agricultural Products (04-24) 596.06 553.17 -7.20 a) Tea 1.83 4.47 144.26 b) Vegetables 104.34 81.03 -22.34 c) Tobacco 54.98 46.62 -15.21 d) Cut Flower & Foliage 4.73 0.08 -98.31 e) Fruits 20.23 2.69 -86.70 f) Spices 29.06 34.95 20.27 g) Dry Food 96.04 109.61 14.13 h) Others 284.85 273.72 -3.91

19 Concept of Inclusive Market Development or Inclusive Business
According to the inclusive market development hand book of UNDP (2010)- “The Inclusive Markets Development (IMD) approach is based on the notion that different interventions at different places and times is necessary in order to ensure effective role of markets for the poor. This approach seeks to strengthen the whole market system according to the need, which may include enterprises, business relationships, market structures or the business environment. “ World Business Council for Sustainable Development, “An inclusive business is one which seeks to contribute towards poverty alleviation by including lower-income communities within its value chain while not losing sight of ultimate goal of business, which is to generate profits. “


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