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Poor should be included in value chain: experts

Businesses should include the poorest part of the population in the value chain as consumers, producers, retailers, distributors or partners to make their ventures sustainable, experts said yesterday.

"The real solution lies in making this group of population a part of your business," said Ivdad Ahmed Khan Mojlish, managing director of LightCastle Partners, at the launch of a report -- Business for Sustainability: Imperatives for Inclusive Ventures -- at The Daily Star Centre in Dhaka.

Bangladesh has an estimated 77 million people who are languishing in the bottom of the pyramid and whose monthly income is lower than $150, according to the report.

Elizabeth Dunn, president of US-based Impact LLC, said all parties of a value chain must have a shared vision to make the chain successful.

FH Ansarey, managing director of ACI Agribusiness, said agriculture could be the best area to make a larger impact on the lives of the people.

Bangladesh's agriculture sector employs about 47 percent of the total labour force.

Ansarey said his company was supplying high-yield seeds, other inputs and modern technologies to farmers. "We are closely working with farmers. As a result, our company is growing and farmers are also growing."

Firoze Shah Sikder, executive coordinator of Lal Teer Seeds Ltd, said his has developed high quality seeds and was encouraging farmers to grow more.

Farhad Zamil, country director of Syngenta Foundation for Sustainable Agriculture, said Syngenta was making science-based interventions in Bangladesh and providing high-yield seeds to farmers.

While presenting the report, Zahedul Amin, head of consulting engagements and finance director of LightCastle Partners, said people who are a part of the bottom of the pyramid have to be turned into an integral part of the market economy.

"We have to create jobs for them and convert them into consumers," he said.

The report said the better a business was integrated with the entire value chain, the better was its chances for success. Value chain integration in businesses lowers cost and betters control.

It said when the bottom of the pyramid (BoP) was the customer, the backward linkage should ensure cost-competitiveness and adequate quality, whereas forward linkage should ensure reduced distribution costs and increased accessibility.

When BoP is the producer, ensuring supply of inputs and working capital is essential for quality production, the report said.

The report pointed out that one of the key challenges of operating an inclusive business was the lack of information about the BoP size.

But with modern technological advances such as real-time consumer data, the whole value chain can be monitored to provide competitive advantage for the business, it said.

According to the report, the BoP customers are undoubtedly cost-sensitive. However, time and time again they have demonstrated that the value created by the product comes first instead of price in their purchase decisions.

"Communication of the value is equally important to educate the consumer segment about the long-term benefits of the products." Bijon Islam, chief executive officer of LightCastle Partners, and Imran Chowdhury, a senior business consultant of the firm, also spoke.