The top three reasons you should be focusing on agribusiness professionalism
Even if your donor is not
So, you’ve been awarded a $50M five-year grant from an institutional donor to work on an agricultural value chain project: FANTASTIC. However, the donor’s expectations are high, the approach seems codified in the proposal that was awarded, and there is no room in the budget for another item. What if someone were to tell you that you can achieve your donor’s objectives in a quicker and more cost-effective way? Would you then revisit the work plan to build this into your overall approach?
The value of agribusiness professionalism
Agribusiness professionalism leads to more successful and sustainable agribusinesses. The definition of a professional agribusiness, as defined in the IWA29 (to be updated soon into an ISO standard), is an agribusiness that can “manage its resources and processes efficiently, effectively, sustainably, and transparently.” There are many benefits linked to this professionalism, both for the agribusiness and for the stakeholders and sector around it.
Here are the top three reasons you should be incorporating agribusiness professionalism as an approach into your programs right now:
1. Professional agribusinesses are more profitable
A focus for many agricultural value chain projects is better livelihoods for the farmers. How can you help these farmers improve their livelihoods through working with agribusinesses? One way is through increasing the agribusiness’s profit.
In the graph to the right, the level of professionalism is plotted against the annual gross profit. You can see that more professional agribusinesses make a higher profit than very immature ones. This often translates to higher earnings and benefits for the members themselves.
2. Professional agribusinesses are more environmentally sustainable
As climate change effects are worsening worldwide, environmental sustainability is a crucial part of strengthening agricultural value chains. One way to support a transition to greater sustainability is through professionalism.
In the graph to the right, the level of professionalism is plotted against environmental performances. You can see that more professional agribusinesses are more likely to implement environmentally sound agricultural practices. This means these agribusinesses are more environmentally sustainable.
3. Professional agribusinesses have better access to finance
One of the biggest barriers to agricultural enterprise growth is a lack of finance. Many agribusinesses struggle to access sufficient levels of finance for their needs, often falling into the so-called “missing middle.”
In the graph to the right, the level of professionalism is plotted against average loan size. More professional agribusinesses are not only more likely to receive a loan, but when they do, it is larger. This means that these agribusinesses are more able to invest in their business, for example in accessing inputs at the start of a growing season.
While these are only three reasons, there are many more benefits to agribusiness professionalism. Professional agribusinesses provide a host of services to their members and are a source of job security for many in their communities. SCOPEinsight has been collecting data about agribusinesses since 2010, and we see dozens of correlations between the level of professionalism and a host of development outcomes. The most important outcome, however, is that when practitioners focus on professionalism, they inherently develop an exit plan for the agribusinesses they support. In other words, once organizations are professionalized, they can to link to the market and private sector partners, which reduces their need to rely on donor/development led programs.
Are you ready to move the agribusinesses you work with from reliance to self-sufficiency? Contact us today and we will show you how focusing on agribusiness professionalism can help you get the results you want in your programs.Back to news