Six reasons for scaling inclusive agri-food markets
Why scale is so important
The magnitude of the issues prevalent in the agricultural sector is simply vast. Inclusive agri-markets must therefore develop meaningful responses at commensurate scale. Unless they are scaled up, good initiatives are likely to remain ‘islands of success’, instead of becoming accepted common practice and functioning as seas of change. Scaling up, however, requires specific and explicit effort.
The World Bank (2005) defines scaling as “expanding, adapting and sustaining successful policies, programs and projects in different places and over time to reach a greater number of people”. There is a growing interest in and literature around the idea of scaling, with connections to complexity science and systems thinking..
Common interests
1Feeding the world
Producing and distributing enough food for 9 billion people by 2050, including 70% living in urban areas.
2Tackling hunger and poverty Developing agricultural production and markets in ways that help to create wealth, jobs and economic opportunity for those at the bottom of the economic pyramid.
3Peace and security
Organising and controlling agricultural markets to reduce inequalities that could generate political instability and social unrest, which translates into greater risks for business investment.
Business interests
4Securing a stable supply base
With growing demand for agri-food products and pressure on natural resources, businesses will increasingly need small-scale producers and processors for their supply base.
5New market opportunities
Generating a positive spiral of wealth with large numbers of people at the base of the economic pyramid.
6Responsible Reputation
Businesses are able to enhance and protect their reputation for social responsibility and ensure a ‘licence to operate’ in the face of growing public scrutiny of business practices and rapid communication technologies.
Practically this means business needs to figure out very different ways of connecting to both suppliers and markets. Currently most modern agri-food markets are built around a ‘comfort zone’ of 10% large-scale commercial farmers, and 10% of small farmers who have the assets and capacities to connect to modern markets.
The challenge for ‘scaling’ is that, what works successfully at small scale will not necessarily work at larger scale. What works in one situation, will not automatically work in another. We need a much better understanding of what is needed to help good initiatives grow rapidly; following which we need to deliberately put in place appropriate incentives and mechanisms to facilitate the anticipated scaling process.
How do businesses scale up?
Successful inclusive business models can take a long time to scale. Pathways to scale are often iterative, rather than linear. Some companies think of it as one long series of pilots. Seeing it through takes time, money, senior buy-in, and significant dedication from staff involved. The questions to answer must include: How do the short-term costs of adapting core business stack up against the longer-term benefits? Where are the key influence points that need to be leveraged to create internal buy-in? What are the indicators that an inclusive business model is ready to scale? What are the most common mistakes to avoid?
