Inclusive Business Models: Solving the Challenges of Sustainable Agricultural Development

The inclusive business model (IB) is no longer a new concept in Vietnam. Especially in the agricultural sector, IB is not only a systematic solution to solve problems for the poor and low-income people by increasing their income through employment, accessing essential goods and services at affordable prices, but also helps businesses turn compliance challenges into advantages, open up new business markets, and accompany the government in poverty reduction and socio-economic development.

Quang Vinh Ceramics Company Limited was established in Bat Trang ceramic village. As the 15th - 16th generation descendants of Bat Trang artisans and inheriting the traditional craft, the Board of Directors of the Company has a mission not only to preserve and promote traditional values, but also to create social impact and shared values ​​with low-income people. From this perspective, Quang Vinh recruits farmers, applies science and technology along with ISO and 5S production processes in the production of low-cost ceramic products suitable for low-income people and sustainable production. Currently, Quang Vinh is building a factory using solar power, renewable rooftop electricity to save energy, moving towards green production. Quang Vinh also builds policies to improve workers' lives such as: Mutual aid fund, loans, education promotion fund...; raising workers' children in especially difficult cases; Priority is given to female suppliers/partners.... Currently, over 90% of the Company's products have been and are being sold in the markets of more than 20 countries around the world such as Japan, USA, Australia, France, Germany, Denmark, UK, Canada, Israel...

In another case, Mr. Phan Thanh Loc, Chairman of Vietnam Food Joint Stock Company (VNF), said that with the vision that today's waste is tomorrow's resource, VNF applies "green" treatment orientation and biotechnology to turn shrimp oil and shells into companion products, thereby creating added values ​​to serve many different manufacturing industries, while contributing to reducing the environmental burden. VNF is creating many natural shrimp flavor product lines including: shrimp powder, shrimp oil and shrimp extract... that can replace synthetic flavors on the market, aiming to protect health and provide nutrition for consumers. Experts also pointed out that the inclusive business model in agriculture (IAB) plays an important role in achieving sustainable development goals and creating social impact in Vietnam.

Policy and legal foundations are also supporting IB development, especially Decision 167/QD-TTg on the Program to support private enterprises in sustainable business for the period 2022-2025 with institutionalization of support activities for enterprises applying IB through raising public awareness of this model....

However, there are still many challenges when implementing the IAB model in Vietnam. There is still a lack of consistency in understanding and implementation. There are currently many different definitions of this type of enterprise. Investment in IAB has high costs with unattractive returns compared to other popular forms of investment. Many IAB enterprises are not ready to "receive investment", leading to limited access to international support sources. In addition, there are financial and resource challenges such as uncontrollable risks in the agricultural sector, preventing investors from pursuing large-value investment packages or committing to continue investing. Impact investment in the agricultural sector is still very limited. Funding sources are currently only focused on a few typical IAB enterprises...

To address these challenges, Mr. Jason Lusk, representative from Clickable Impact, said that raising awareness of inclusive business is urgent, and support from the Government and relevant agencies is needed to create leverage for businesses to apply this model. Sharing the preliminary results of the Assessment Report on the Current Status of IAB Model Application in Vietnam, Ms. Vu Thanh Mai (Clickable Impact) recommended that, in order to promote the implementation of IAB policies and programs, central and local government agencies need to develop and issue regulatory guidelines at the local level to uniformly implement the IB model. Development organizations and multilateral financial institutions need to organize high-level discussions with groups of development organizations to continue to engage them in developing IB support programs. At the same time, raising awareness of diverse financial sources and risk-sharing mechanisms to help businesses identify appropriate channels and types of finance to access. Raise awareness among farming households about the opportunities and benefits of participating in IAB models, especially among female farmers, people with disabilities and youth.

Source: https://thoibaonganhang.vn/mo-hinh-kinh-doanh-bao-trum-hoa-giai-thach-thuc-phat-trien-nong-nghiep-ben-vung-157114.html