Value Chain Upgrading
This paper introduces several methods for increasing the
farmer's relative power in an agricultural supply chain.
Only by doing so can more of the final product value
accrue to his community.
The paper further describes the elements of a 'social
business' which is the best means of commercializing the
Revolving Aid Fund
Most developing economy aid has a temporary impact on
the recipient community, as is well documented in recent
literature on the subject. This paper proposes a hybrid
approach merging the best of micro-credit with venture
capital by creating a revolving aid fund.
Aid funds that would normally be spent on distribution of
seeds or water systems instead are directed into a social
business. The profits from the business are then used to
do the same community projects, but now they are
If you give a man a fish, you feed him for a day.
But if you give him a fishing rod, you feed him for a lifetime.
PBV has proposed a new model for rural agricultural community development in less
developed countries that facilitates economic sustainability and reduces need for
recurring donor aid. These proposals are documented in our white papers.
Capitalism based on competition remains the best model for allocating capital in an
economy, but it has to be applied on a level playing field. Too many subsistence farmers
lack cultivation best practice, aggregation, visibility of demand signals in their supply
chains, and market pricing power. This is addressed by moving value-added processing
closer to their communities, creating social businesses to manage product flow and
dissemination of best practice, and reinvesting profits back into the communities.
Micro-credit works at a household level. We have proposed a new approach for investing
at the community level that is ultimately cost neutral for donors.
Value chain upgrading must be coupled with reliable startup funding, the largest
component of which is typically accounts receivable financing. We recommend that
government aid donors like USAID and BMZ (Germany) create a revolving aid fund for
community social business investment, with the intent that profits are returned to the
fund to ensure its ability to invest in subsequent projects.
A Better Approach to Development Aid
Copyright 2015 Pacific Business Ventures
Website by PBV Technologies
Pacific Business Ventures
The Social Business Revolving Aid Fund: A Tool for Economic Empowerment in Lesser Developed Countries
Economic Empowerment in the Agricultural Supply Chains of Lesser Developed Countries