Boosting Profitability in Rural Business Chains

Having a stable and formal job in the countryside is possible. And so is making a decent living from family farming and having a profitable beekeeping business. A clear proof thereof is the rural business chain in Bolivia’s Chaco, a region where 40% of the population in rural areas live in extreme poverty, and yet shows a number of success stories with value-added products derived from beekeeping.

A total of 342 beekeepers from 6 associations have capitalized on the Promiel Monteagudo productive innovation center, selling honey, propolis, pollen and wax, as value-added products such as shampoo, soap and candles under the trademark Promiel.

“We work as part of a chain with the company, and that has strengthened us so that we can produce safely and have a secure market,” said Oscar Mendez, a beekeeper in the Cadema association. 

Other benefits of this chain include training, technical know-how, administration and ongoing support to beekeepers, which has been an incentive to boost production.

As Primitiva García, a beekeeper in the Cadema association, puts it: “Before, we knew how to grow corn, peanuts, even breed pigs, but we were not making any profit. Now, with the beekeeping business, we are profitable, we sell 20 or 30 cases, and that’s enough to make a living.”

“This project shows that the opportunities of having an anchor company committed to working with small producers, under proper conditions to ensure a stable market, is a virtue that helps consolidate business chains that generate shared value,” said Andrés Oneto, head executive of the Productive Sector at CAF—development bank of Latin America—, who has led this initiative together with the Dutch Development Cooperation Service (SNV Bolivia).

We want to replicate such examples across the region. In Colombia, academia has taken the lead in this initiative with the proposal of a ”Grand agreement for the comprehensive development of the rural sector” with the aim of boosting productivity, competitiveness, revenue generation and creating jobs. To this end, work has been carried out with public and private sectors, headed by the Hernán Echavarría Olózaga Institute of Political Science (ICP), for which the Ministry of Agriculture and Rural Development has already pledged its commitment.

“This agreement seeks to promote a State policy to promote the rural sector´s long-term development in a sustainable and competitive way; to promote agricultural production both for family consumption and for marketing, with a view to consolidating a competitive national market and allowing productive chains to insert the country into global value chains, defining the integral development of the rural sector as a matter of interest national ”, is manifested in the document of agreement for the integral development of the rural sector.

Export chains

The progress of Peru´s agro-export sector is another example that Colombia and other countries of the region can replicate to promote economic reactivation and job creation to reduce poverty and informality, as well as access to social security.

In 2005, 33% of Peru´s economically active population (EAP) was in the agricultural sector, and in 2018 this percentage stood at 25%; however, the growth of labor productivity was 76%. Currently, there are a million direct and indirect jobs in agro-export, without counting induced jobs.

The COVID-19 pandemic is not only a crisis, it also represents opportunities. One of them will be the reconfiguration of some value chains at a global level and Latin America can seize this process of a greater regionalization of value chains.

To achieve this, it is essential to undertake a decided and defined integration process, which must start from a much more powerful public-private dialogue to improve political institutions, public capacities and regional integration; Cases such as Primitiva García in Bolivia, public-private alliances in Colombia, and Peru´s rural sector´s progress are the best examples of the roadmap that can be followed.