It has been a long hiatus for my blog here on the hub. After writing 3 articles in quick succession, it was time for me to return to college, and since then my collegiate activities have kept me well occupied. I hope the BIF hub and all its practitioners are doing well around the globe. A special shout -out to the BIF Bangladesh Team who I did an internship with this summer. They were the ones spurring me on to contribute material to the hub, and it worked out well. So cheers! Before leaving, I visited my ancestral land in the district of Chuadanga. I was hoping to write a piece about the visit, but with my internship ending, my inclusive business creative juices had stopped flowing. For the first time in two months, I didn’t have to step into an office, I didn’t have to think about inclusive businesses, and thus the idea vanished very quickly into the backburners. So let me try to organize my thoughts once again, and get this chapter over with.
So I paid a visit to my dad’s birthplace, Chuadanga. I had toured the border district on many occasions in the past and this time there was a little personal agenda I had committed to. You see, we donated our ancestral land in Kedarganj, Chuadanga to a NGO called Impact Foundation Bangladesh (IFB) and their amazing progress so far is truly a story to be told. But their success merits its own article, and I shall not delve into the details for the sake of this article’s freshness. Rather, I want to discuss about the minor side project I undertook. I wanted to question them about the idea of inclusive business, whether it would be applicable or not. This is what I felt was the problem was after talking to the farm land resource coordinator.
One of the main obstacles to inclusiveness seems to be the free market itself. Competition is a giant killer, and when inquired as to why they couldn’t start an inclusive business with their chicken farm, the reason stated was competition. In fact, let’s forget about inclusive business for a brief moment, let’s just focus on sustainability. I say this because, I have been in that farm many times and on the provision that the definition of inclusive business includes engaging the poor as employees, then IFB was already operating an inclusive business. But I don’t see the point of being inclusive when your business is being run into the ground by unmatchable competition. This was the case in the Chuadanga scene with Rafid Poultry apparently running the game. The IFB farm just didn’t have the finances to compete. I know it is has become a popular idea for people in Dhaka to set up farms back at their home districts, but it is harder than you would think. Chicken feed for example is not cheap; talk to any poultry farmers and they will affirm to this fact. The big farms such as Rafid poultry have the economies of scale advantage being in the business for a long time, and can offer the best prices to potential buyers. IFB doesn’t have a chance, unless they are willing to unload a mountain of cash into their farm business. So this got me thinking, the employee clause would mean that many other NGOs spread across Bangladesh would qualify as inclusive businesses, training the poor people and employing them in various projects. With IFB, the day to day operations of the farm was handed over to this family who were previously subsistence farmers. Now with this project, the family could supplement its income. But overall the farm wasn’t doing well enough to grow in size or ensure stability for the future. IFB was questioning whether it was worth all the trouble to even maintain such a farm.
Left: Crates of eggs located at at the storage. Above: South side of the poultry farm
Thus it does make you wonder, maybe employing the poor isn’t enough when you don’t have an effective business structure or plan in hand. As long as you depend on continuous funds, I don’t believe that you should be classified as an up and running inclusive business since you are not essentially a profit making self sufficient business. But the definition of the subject provided by BIF provides a loophole, where engaging the poor in the value chain as employees should be enough for an inclusive business certification. So I guess I would strongly advocate inclusive business in its purest form for all the NGOs, meaning self-sufficiency should be paramount. At the risk of sounding like Milton Friedman; maybe with less govt. interference, this will be possible when all these organizations are brought under the market structure. But then again, that would result in even fiercer competition which would double IFB’s misery as far as the farming project is considered. So in the end, I think the route to poverty eradication is two folds. The first one is engaging the poor as consumers, producers, suppliers or employees, which is undoubtedly important. But the second step is overcoming competition; and to actually be successful and help the poor, there is no compromise on efficiency. The proper distinction of inclusive businesses can come down to very trivial points; put competition shall always remain.
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