The Bottom of the Pyramid, Part II: Partnering for Success

[PHOTO CREDIT: A bride's feet dipped in milk and lac dye, by Shounak Ray (CC).]

Introduction & Background:

Part I of this two-part series discussed the need to integrate the poor in the growth story. This is important because even the best designed and packaged products need buyers. The poor therefore need livelihood solutions that generate real income so that they can become potential consumers. It is imperative to integrate the poor into the value chain as producers, suppliers, business partners, stakeholders and not merely as consumers so as to ensure that the cycle of prosperity continues and the fortune at the BOP grows. In the absence of real income even the best marketed products will find limited takers.

The relationship therefore needs to be symbiotic rather than an adversarial one—where only one party (the seller) benefits.

This orientation implies the crafting of entirely new business solutions related to buying, manufacturing, packaging, marketing, and advertising products, thereby contributing towards the goal of inclusive development.

This approach is very different from the common understanding and practice of corporate social responsibility (CSR) activity which involves a few people deciding external communication policies and undertaking some corporate image-building activities, where the purpose is to create some short-term publicity and use the poor as "props."  The BOP in its holistic sense involves comprehensive management and organization revamping, with a commitment to make a real measurable difference.

The Vital Mix:

The ideal combination therefore would involve:

  • The Expertise (R&D, Training, Mentoring, etc.): This can be brought in by a grassroots level development agency, NGO, or equivalent organization.
  • The Market Linkages: This can be facilitated by corporations that have the mechanism to link with and use the output produced by the BOP. Last-mile distribution activities can be facilitated by involving the BOP, especially in areas where access and connectivity are an issue.
  • The land/labor/commitment: Since this is the most precious resource for the BOP it needs to be channeled in a way that can generate sustainable livelihood solutions for the poor.

It is important to realize that a singular solution won’t work. For example, just providing micro credit alone is not an answer to ensure that the poor are able to overcome the barriers of poverty. The Indian microfinance fiasco [1] is a classic example of a good idea gone wrong due to poor execution and lack of governance. Industry can hence partner with legitimate grassroots level initiatives so that the vital linkages required to set this cycle of interdependence are set in order.

Lac Production in Gawrai village: Maharashtra[2]

Nanza village is a forest-fringed tribal village in the Yawatmal district[3] of Maharashtra. The Maharashtra Institute of Technology Transfer (MITTRA)[4] launched a lac production project involving the local tribals to help them augment their income since they practiced mono-crop (mainly cotton cultivation) and rain-fed agriculture. The tribals believed that lac was a naturally occurring substance and were unaware of the fact that it could be "cultivated."

In November 2007, MITTRA purchased brood lac and trained the tribals and some local Self Help Groups (SHGs) in lac inoculation and maintenance. This trial was undertaken at a volunteer farmer’s land. After the training, the farmer harvested the mature lac. A quintal of lac from the first harvest, fetched the participating farmer 3,000 Indian rupees. He sold more lac in the following year (2008). This motivated other villagers who were encouraged by the outcome.

Soon thereafter the tribals were counseled on the benefits of pooling their efforts and land resources together to benefit from their combined efforts from the inoculation stage through marketing. The profit generated was to be distributed among the members. The traditional destructive method of harvesting by using an axe was replaced by the more sophisticated option of using secateurs that were supplied to the villagers by MITTRA. On maturation, 360 kg of lac was harvested which fetched a joint income of 10,000 rupees.

The success of this experiment encouraged farmers from neighboring villages to come forward and obtain the necessary training from MITTRA. The next step that MITTRA is working on is to find market linkages such that this forest resource, which is the lifeline of the tribals, can be used to ensure a sustainable livelihood solution. They have also rolled out the lac cultivation project to other drought prone areas like Washim district and Vidharbha district—which witnessed a record number of farmer suicides in the mid 2000s due to mono-crop failure and dependence on the rain-fed model of agriculture.


[2] The author acknowledges the inputs received from Rupali Bidkar of BAIF-MITTRA Pune India.and from Mr S.E Pawar , Mr Girish Sohoni & his team whose relentless work and commitment has  transformed many lives.(www.baif.org).

[4] The word ‘MITTRA’ is a Marathi word for ‘friend’. It’s also the acronym. For details see http://www.mittra.org/

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Tags: agriculture, development, economy, microfinance, poverty, sustainability

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