The problem with food aid: one charity tells it as it is

Our latest news round up profiles one on the most inconsistent development policies currently out there - the long-running practice by the US government of providing aid relief in the form of subsidized grain bought from its own farmers. As reported in the New York Times, CARE, one of the world's largest charities, has just announced its decision to phase out its involvement, arguing that:

American food aid is not only plagued with inefficiencies, but also may hurt some of the very poor people it aims to help...[by competing] with the crops of struggling local farmers.

In taking this stand, CARE is breaking not only from its own past, but also from the general practice among similar agencies.

As we argued in a recently-issued statement, the real solution is far more complex: better access for farmers to markets and capital, appropriate technologies, farm inputs, diversified crop and animal portfolios, secure land tenure, adequate irrigation, the infrastructure and capacity building they need to connect to local, regional and international markets and supply chains, and better information on the current and future levels of demand for their crops.

We have also argued for a fairer world trading system. This includes ending market-distorting subsidies by the US (and EU) on the products that matter most to African farmers. Supporting farmers in a way that fundamentally damages their long term prospects, and is rooted in a problematic trade arrangement, is flawed. By standing up to its peers, CARE has brought this practice out into the open. And for that it should be congratulated.

Mobilising for Emergencies: Progress in Partnership

Real progress is being made in mobilizing African expertise to prepare for, and respond to, African crises. That was the focus of a recent conference (“Mobilising Human Resources and Skills in Emergencies: the Role of Non-Governmental, Private and Public sector in Africa”) held in Nairobi by the Commonwealth Secretariat, People In Aid and AfricaRecruit. The event brought together representatives from the public, private and non-governmental organisation sectors to identify what is needed and what can be offered in emergency situations.

John V. Rogers, Disaster Management Department, Office of National Security, Sierra Leone, shared the challenge of rebuilding after disasters, and harnessing limited resources of government and other stakeholders. He stressed that “disasters are unforeseen but their impact can, in a second, completely destroy the whole country - hence, governments, donors and other partners should ensure that disaster management is integrated into development programmes”.

In his speech, Hon. Musa Echweru (MP) Minister of State for Relief, Disaster Preparedness and Refugees, Uganda, highlighted the need for strong collaboration and networking between NGOs, public and the private sectors in Disaster Risk Reduction. According to him, “each of these actors has a critical role to play, which can only be improved on through policies, adequate flow of information and proper coordination mechanisms”.

What will be the role of each sector to ensure that the two recommendations are achieved? Would outsourcing to a third party be an option as a model to strategic disaster preparedness and response, as James Du Plooy, Business Development Manager of Capital Outsourcing Group suggests? What is clear is that the progress made to date, and the only way further progress can be made in future, is through a new spirit of partnership.

Spoil Association? Time to fight back on food miles

As was reported in an excellent article in The Times last week, the Soil Association – the UK’s leading organic organization – is seriously considering removing its organic certification from African farms because their produce is imported into the UK by air.

On the back of flimsy data and spurious logic (see my last blog on this subject), the Soil Association could single handedly ruin the livelihoods of tens of thousands of poor people in Kenya alone. And for millions of farmers across Africa, exporting their produce to markets like the UK offers one of the best prospects for escaping poverty.

If the Soil Association goes ahead, it would be appalling. And it’s about time we said so.

Bottom-up approaches to the business enabling environment

Many traditional development actors, including the World Bank, IFC, and a range of bilateral donors (such as, USAID) in developed countries, are actively involved in improving enabling environments for business. But this doesn’t mean we should equate “enabling environment” with “single Western blueprint imposed in an imperialistic manner on developing countries.” The connotation is logically incorrect and practically unhelpful.

Institutional, structural, and systemic changes are required to expand the scope of economic opportunity available to the poor – economic opportunity that enables individuals to create their own paths forward in life. Westerners, business people, rich elites, and other people in positions of power will need to be involved and invested in these changes if they are to occur. Rather than scare them away, or drive them into secretive discussions in smoke-filled rooms, we need to encourage them to engage openly and explicitly in inclusive, experience-based dialogue.

“Enabling environment” efforts can certainly fall into the reviled “top-down” category of development approaches. When conducted by corporations, they can fall into the equally reviled “lobbying” category. But bottom-up enabling environment efforts are critical, possible, and more common than one might think.

Companies such as Vodafone and Nokia, Reliance and Bharti, SABMiller, and others are innovating and experimenting with inclusive business models that work to expand the scope of economic opportunity available to the poor. These companies inevitably identify policy, regulatory, infrastructural, and other “enabling environment” bottlenecks along the way. This is invaluable learning about actual – as opposed to theoretical – constraints on the sustainable creation of what Michael Porter and Mark Kramer have called “shared value.” It suggests specific changes to unlock specific benefits for business and society simultaneously. It allows companies to approach governments as public leaders, not just lobbyists.

This is a big departure from “enabling environment” strategies based on lobbying – or simply waiting – for the right enabling environment to be established before letting the innovation and experimentation begin. Back in 1961, at the International Industrial Conference in San Francisco, A. Romeo Horton, then President of the Bank of Liberia, delivered a speech I liked a lot – “Plain Talk from an African.” In the context of the Cold War and newfound independence in many countries, he says (and I’m paraphrasing a bit here) that he couldn't care less about ideology. He isn’t worried about communism or anything associated with communism. “What frightens me most,” he declares, “is the timidity and fear that is displayed by 20th century capitalism. It seems, from my point of view, that free enterprisers have a kind of fear that was not present during the days of ‘Go West, young man,’ of the westward movement from Europe to this continent and from the eastern part of this continent to the western part.” If the likes of Vodafone, Nokia, Reliance, Bharti, Microsoft, and SABMiller are any indication, perhaps 21st century capitalists will prove a bit more spirited.

Harnessing the potential of social entrepreneurs

Many leading companies are starting to understand that profitable business lines can be developed out of the need to tackle pressing social issues, and that when done successfully, this is far more effective than philanthropy. But individuals have been doing this for years. As the International Business Leaders Forum reports in its recent eBulletin newsletter, social entrepreneurs have been behind many of the most innovative and scalable solutions to challenges in international development – from the provision of school meals or waste management in urban areas, to the development and installation of low-cost solar energy systems. Social entrepreneurs come in all shapes and sizes, but what makes them stand out is that they use entrepreneurial principles to tackle a particular social problem. Like Martin Kalungu-Banda, founder of Zambia's The Forum for Business Leaders and Social Partners, who forged a partnership between the country’s largest supermarket, local communities and government, which became a profitable model that business could replicate nationwide. The solution was good for business, and good for the local communities.

Many organisations have worked with social entrepreneurs for years, such as Ashoka or the Schwab Foundation for Social Entrepreneurship. But there is a gap in the understanding of how large multinationals can work with social entrepreneurs.

Picking up on work conducted by the CSR Initiative at Harvard University, IBLF recently produced a short report entitled, Harnessing Potential: why it makes sense for your business to work with social entrepreneurs. Companies can work with social entrepreneurs to help develop into underserved markets, while social entrepreneurs can help companies both design products and services that create value for low-income people and distribute those products and services more efficiently.

So far, so good – in theory. But as usual the challenge is in the implementation. To help, IBLF has compiled a list of social entrepreneurs that we think could make suitable partners for businesses. We’d also be interested to know of case studies where multinational companies have forged effective partnerships with social entrepreneurs.

Where does development come from?

In a speech at the United Nations, which Zahid (from Business Action for Africa) blogged about yesterday, new British Prime Minister Gordon Brown called for a renewed, collective drive to achieve the Millennium Development Goals laid out in 2000. He declared, “For too long we have talked in the language of development without defining its starting point in wealth creation – the dignity of individuals empowered to trade and be economically self-sufficient.” Alone here in my office, I said “YESSS!!!” and pumped my fist and highlighted the sentence in agreement. It sounded like Gordon Brown might dig our Economic Opportunity Program.

But what is the role of private sector firms in creating and expanding economic opportunity? The Prime Minister is right that it goes way beyond generosity. Instead, it is the private sector’s aptitude for “wealth and job creation that, if fully mobilized for global purpose, will help meet our goals.” Stated another way, the comparative advantage of business in development is rooted in core, profit-making business activity and the natural multiplier effects it engenders.

It’s time to break down the association between altruism and social value creation. Companies can create social value without altruistic motives, and altruistic motives don’t guarantee that social value will be created. For a long time companies seemed to fear mixing motives, and used one set of tools for shareholder value creation and another, distinct set for social value creation. Today we find leading companies combining these tools to leverage core business interests, assets, and activities for enhanced development impact. And if these companies manage to enhance their own long-term business prospects in the process? All the better.