Across Asia, along with addressing food security concerns, agriculture is an important source of livelihoods for more than 2.2 billion people; making it a sector of high importance for development agencies. For most economies in the developing Asia, small and medium enterprises (SMEs), including social enterprise (SEs) as a subset, have become crucial to creating impact and fostering growth, especially in sectors like agriculture.
Given that SMEs in agricultural value chains are imperative for sustainable development, many donor/developmental agencies, including development finance institutions (DFI), have initiated programs that are aimed at improving the effectiveness and growing the environment in which SMEs work. However, lack of access to capital and high value markets are still some of the main challenges that hamper the growth and effectiveness of SMEs. Along with SMEs, SEs as a subset have also proven to be drivers of growth in the agriculture sector. SEs not only increase the incomes of farmers, but they also create immense social impact in the communities they work in. However, they tend to face a unique set of challenges that could be addressed by the development community.
Shujog in collaboration with Oxfam undertook a study to understand and analyze how effective development programs have been in addressing the challenges that SMEs in agriculture face in Asia. Released in November 2014, the report ‘Small and Medium Enterprises in the Agricultural Value Chain’ finds that development programs have taken various innovative approaches to solve some of the most daunting challenges faced by SMEs. Most development programs run with the broader goals of poverty alleviation, employment generation, and economic development. However, some of the most relevant and effective programs were those that targeted specific geographies and tailored interventions to target market conditions.
Furthermore, the report is aimed at informing the decision making processes of development programs and encouraging the inclusion of and support for SEs in agriculture as a part of their interventions. With the belief that SEs can further catalyze growth in the agricultural sector in Asia, Shujog has made recommendations through which development programs can tailor their approaches, leverage on past experiences and work with impact investment capital to solve the specific challenges faced by SEs in agriculture. Our findings and specific recommendations can be found here.
By Noopur Desai
Research and Programs, Shujog