Agroecology

Work Package 3: Inclusive business models and financing strategies

Contacts: Carolina Gonzalez and Manuel Narjes (Alliance Bioversity-CIAT) 

The Latest 

Accomplishments at a glance

• Twelve business models, one feasibility assessment of carbon markets as a financial mechanism for cocoa agroforestry and one Incubator/accelerator were co-developed to provide finance and technical assistance to 10 enterprises and producer organizations in the ALLs, thus helping upscale agroecological innovations.
• Eleven value chain analyses were carried out, including the identification of system-level binding constraints and leverage points for the adoption of practices and business models with potential for the proposed agroecological transitions.
• Nine investment cases were developed to feed dialogues with interested private and public investors.
• Twelve cost-benefit analyses were carried out that capture the profitability of innovative business models, compared with that of current (conventional) business models.

Overcoming barriers to market access
When low-income rural communities engage in agroecological transitions to transform their food systems, actors usually lack fair and effective access to markets and the necessary capital for investments in farming, processing handling and marketing. Overcoming these barriers usually requires support in the form of capital, technical capacity, access to networks and information that can unleash the potential of inclusive business models that incorporate agroecological innovations.

WP3 researchers are addressing various key questions with actors such as small and large enterprises, governmental agencies, NGOs and small-scale farmers centering on the potential of improved and inclusive business models and financial mechanisms to advance the agroecology transition and the application of its principals. Methods used include value chain analyses, holistic business model assessment and upgrading, and the development of a business incubation and acceleration program.

Since the inception of the Agroecology Initiative, researchers have explored opportunities identified jointly with stakeholders and partners (summarized in Figure 3). One early result consisted of a guideline for rapid agroecological value chain analysis (RAVCA), which was applied in Burkina Faso, Kenya, Peru, India, Tunisia and Zimbabwe to identify farmer organizations and local enterprises, and determine the potential for designing business models that can strengthen their agroecological transition.

In addition, a holistic business model assessment tool – which included the application of Biovisions’ Business Agroecology Criteria Tool (B-ACT | Agroecology Info Pool) – was applied with businesses and producer organizations in Peru, Kenya, Zimbabwe, Burkina Faso and Tunisia to determine the current agroecological performance of the organizations, better conceptualize their business model and define priority action points for improving their economic and agroecological performance.

Opportunities for strengthening value chains and business models
Results from rapid value chain analyses helped identify opportunities for integrating agroecology principles into eight value chains in six countries (Burkina Faso, India, Kenya, Peru, Tunisia and Zimbabwe). The WP3 teams produced specific reports for each value chain and country as well as a global report with the aggregated findings from these analyses. Among other insights, the report identifies various opportunities for improvement along the value chain (such as service and input provision as well as market development for agroecological products); pairs these opportunities with challenges or trade-offs; and discusses options to mitigate them.

By 2024, the WP3 team had engaged with 202 private sector companies and multiple organizations to improve or codevelop 12 business models across 7 countries and 9 ALLs. Examples of successful partnerships include Peru, with the NGO Terra Nuova on Biotrade, in Tunisia with the seed society COTUGRAIN and National Agricultural Research Institute of Tunisia (INRAT) on forage seeds, and in Zimbabwe with a focus on sorghum contract farming and brooding SASSO chickens.

Finally, through the AE incubator/accelerator program, the Initiative is currently supporting the implementation of actions aimed at implementing the upgraded business models of 10 local enterprises and farmer organizations, with over USD 200,000 in capital and capacity building on actions prioritized through the value chain and business model assessments.

Focus on: Market system interventions by country and the agroecological principles addressed

The way forward
WP3 research underlines various challenges for the adoption of agroecology principles:

• The main drivers are the reduction of external input use and environmental impacts along with increased diversification.
• Major barriers stem from lack of access to inputs and information, high dispersion, limited economic and technical capacities, absence of standardized agroecology products and processes, labor and land constraints, inadequate infrastructure, and limited incentives and support services.
• Though prevalent in conventional food systems, those challenges pose even greater barriers for stakeholders interested in agroecology

Going forward, inclusive business models and markets are expected to play a key role in the next phase of this work. Researchers will seek to understand market linkages beyond the ALLs in various types of landscapes, such as urban and peri-urban areas or wetlands, while strengthening the financial and economic viability of landscape approaches. They will further co-create knowledge on consumer preferences and promote “territorial markets” as key retail hubs in support of fresh and healthy diets. In addition, they will address various aspects of conservation and restoration linked to business models and markets. Further work is needed in strengthening organizations and achieving “investment readiness” to successfully connect with financial mechanisms. Finally, more emphasis will be given to research with stakeholders on best green business opportunities and income-generating activities by monetizing ecosystem services.

“Following up on the value chain and business model assessments, the Initiative is currently supporting the implementation of actions aimed at materializing the upgraded business models of 10 local enterprises and farmer organizations, with over USD 200,000 in capital and capacity building.” Carolina González, Thematic Leader Performance, Innovation and Strategic Analysis for Impact, Alliance Bioversity-CIAT, and WP 3 Lead

Progress towards the Initiative goal
Investors, the private sector, NGOs and farmers within ALLs now participate equitably in partnerships that are codeveloping business models to link agroecological innovations with markets and investment. Further support will leverage adoption beyond current territories and partnerships.