Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

15 January 2011

Agricultural Growth Corridors: Going Beyond Corporate Social Responsibility

An article in this month's Harvard Business Review by Michael Porter and Mark Kramer identifies agricultural growth corridors in Mozambique and Tanzania as examples of the next major transformation in business strategy: "shared value".

"Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking."

According to the authors, shared value is about much more than corporate social responsibility. It is a new conception of capitalism which recognises that societal needs, not just conventional economic needs, define markets and long-term business success.

The agricultural growth corridors in Tanzania and Mozambique, developed by social investor AgDevCo, are cited as an example of a shared value approach with the potential to kick-start a virtuous cycle of social and economic improvement.

Porter and Kramer write: "A shared value perspective [in the agriculture sector] focuses on improving growing techniques and strengthening the local cluster of supporting suppliers and other institutions in order to increase farmers’ efficiency, yields, product quality, and sustainability."

They continue: "Early studies of cocoa farmers in the Côte d’Ivoire, for instance, suggest that while fair trade can increase farmers’ incomes by 10% to 20%, shared value investments can raise their incomes by more than 300%."

The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) and the Beira Agricultural Growth Corridor (BAGC) in Mozambique are innovative partnerships between businesses, governments and development agencies. For more information see http://www.africacorridors.com/