Why is an entire value chain focus is important as the way out of poverty for rural poor?
A predictable or guaranteed net return on investment is the key to wealth creation in any enterprise. In small-scale rural production however, agricultural producers can almost never know what price they will get. In most cases their expenditure exceeds the gate price for their produce. Working at a loss ensures they remain poor perpetually.
Without realization of a consistent profit, families keep sub-dividing their land, and they degrading it from season to season due to lack of resources to invest in its improvement. Both developments lead only to more poverty, or cause / accelerate migration to the urban area.
However, as this goes on, everyone else up the value chain gets wealthier: the brokers, the transporters; the value adding entities; the retail shop owners; the input suppliers.
Akili’s entire value chain approach is a comprehensively structured framework for capturing value and profits from the end of the value chain (retail outlet) and sharing them backwards with the primary producer.
Akili captures this value through several distinct pillars that make up the organization’s operational framework:
to create production accountability groups, social/economic support groups and to ensure quality production and achievement of economies of scale.
Producing only on contract, and at a (per unit) purchase price that covers all costs and leaves a quantified profit to the primary producer.
Ensuring Achievement of Economies of Scale:
Establishing bulking centers through which Akili-organized communities create both scarcity (to buyers), therefore a stinger negotiating capacity and also cost-cutting through economies of scale.
Ensuring quantity and Quality:
Structures to ensure quality adherence and achievement of contracted production volumes
transport or value-adding raw produce to improve the price of the produce. At the market level, channeling both raw and/or value-added produce through franchised retail outlets, thereby sharing with the primary producer the retail price earned by the retail channel owner.
Capturing all transactions, value gained and payments due across the entire value chain using the Akili eT system and facilitating access to this information in real time.
Facilitating credit and value trading between producers, shop owners, schools, service providers involved in the Akili framework.
Maintaining a common Akili brand for all final products.
Ensuring an entire value chain management framework.
Akili, therefore, truly partners with rural primary producers; it does not simply buy from them.