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How EAA is A Model of Ethical Development

Ethical Development
With the ease and opportunity of the globalized market, it is typically advantageous for companies to outsource their production to developing countries where labor is cheap. This incentivizes manufacturers in these countries to cut their production costs as much as possible in order to maintain an edge over their competitors, which they often accomplish by slashing wages and overlooking workplace safety regulations. Described as a “race to the bottom,” this competitive dynamic forces manufacturers to constantly degrade their standards of production and places a crushing burden on workers, which impedes the ethical development of many poor countries globally.

Ethical Apparel Africa

Ethical Apparel Africa (EAA) offers an alternative to this race to the bottom by presenting a responsible model of outsourced production. EAA is an apparel manufacturing and sourcing company that currently partners with five factories in Benin and Ghana. It provides partner factories with expert guidance to improve the quality, capacity and efficiency of their production process. It also connects the partner factories with clients by persuading overseas companies to outsource their manufacturing needs to West Africa.

This operation is lucrative as the EAA facilitated roughly $5 million in exports in 2021 and the EAA expects to hit $7 million in 2022. In return for this boost in output, their partner factories reinvest their profits into the community by creating jobs, paying livable wages and offering generous employee benefits.

Job Creation

As of October 2021, EAA has created more than 1,000 local jobs and aims to create 4,000 more by 2027. On average, workers in the jobs make around four times their prior income and the workers also receive numerous employee benefits ranging from nursing care and subsidized transport to performance bonuses and free lunches. The free lunches are particularly impactful as only 33% of surveyed workers ate three square meals a day before working at EAA.

As part of its approach to ethical development, EAA is also committed to employing women, who make up around 70% of its workforce. Thanks in large part to the “race to the bottom” and its effects on exploitative workplace practices, the International Labor Organization (ILO) estimates that roughly 25 million people around the world are subject to forced labor. The practices disproportionately affect women and women make up 71% of forced laborers. Beyond the obvious moral objections to this modern slavery, promoting gender equality in employment is key for the region’s sustainable growth. Research shows that it equates with greater productivity, higher levels of economic resilience and more equitable distribution of incomes.

Why Africa?

There are several reasons why West Africa is a solid economic investment, and EAA’s model of ethical development shows how to utilize these advantages rather than exploit them.

  1. Duty-Free Access to the U.S. and Europe – Since the implementation of the African Growth and Opportunity Act in 2000, Africa has had duty-free access to the U.S. market, which gives it a 15% to 30% advantage in shipping costs over other foreign exporters. Africa also has duty-free access to the EU market thanks to its Everything But Arms initiative, through which it receives a similar edge over most other exporters.
  2. Strong Workforce – Africa will likely experience massive population growth over the next several decades. With the population expected to double by 2050, labor will be abundantly available. By investing in the region now, EAA is building long-term relationships with the emerging powerhouse of Africa’s workforce.
  3. Raw Material Potential – West Africa is the sixth largest regional producer of cotton in the world and exports more than four times as much cotton as East Africa. However, it currently exports 95% of this cotton in its raw form. Manufacturers including the EAA have the opportunity to invest in spinning and weaving capacities in order to boost this export value and redistribute it within the region.
  4. Longevity – Ghana has a long history of economic and political stability, which ensures the dependable utilization of any economic value that EAA generates. The West African middle class is also growing rapidly, which represents a promising supply of human capital and a potential consumer market.

These reasons mean that West Africa will likely become a major producer of international goods in the next several decades. EAA’s work in West Africa provides a model of equitable production that can help manage this expected growth in a responsible manner. By guaranteeing satisfactory wages and working conditions, their manufacturers are alleviating poverty and laying the groundwork for the region’s ethical development.

– Jack Leist
Photo: Flickr

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3 Groups Creating Jobs in Underdeveloped Countries

3 Groups Creating Jobs in Underdeveloped CountriesPoor infrastructure and lack of job opportunities are among the top reasons that underdeveloped countries remain in poverty. Creating jobs in underdeveloped countries is key to achieving developmental goals and providing economic and political stability that can help many developing countries out of destitution. Furthermore, jobs provide income, independence and choice to individuals. It is for these reasons that creating jobs in underdeveloped countries can improve conditions and help in eliminating hunger and poverty. Creating new job opportunities can also help advance gender equality and many other pending societal issues.  In September 2015, many organizations came together to establish the U.N. 2030 Agenda for Sustainable Development, which recognized the importance and impact of jobs on these economies. Since then, corporations and organizations have been launching efforts to try and reduce global poverty by creating more jobs in developing countries.

3 Groups Creating Jobs in Underdeveloped Countries

  1. The Overseas Private Investment Corporation (OPIC): This U.S.-based finance development organization has long created jobs in underdeveloped countries that have boosted countries’ economies. OPIC has supported major infrastructure projects such as airports and hospitals, which have created many construction jobs. It also has provided and allocated financial resources to entrepreneurs in developing countries. These resources give entrepreneurs the means to start and grow their businesses, which will, in turn, produce more jobs. In 2019, OPIC merged with the Development Credit Authority, which was a part of the United States Agency for International Development (USAID), to form the Development Finance Corporation (DFC). The DFC partners with the private sector to invest in energy, healthcare and technology initiatives, as well as infrastructure and jobs.
  2. The World Bank: The international organization works to reach goals in the employment sector by launching efforts to improve financial access, provide financial training and build more robust infrastructures for lacking governments. Due to the World Bank’s international efforts, countries are recognizing the top challenges they face using job diagnostics. After evaluating data, governments can focus on more pressing socioeconomic issues. This will create jobs that benefit people in need and give them more economic stability. The World Bank counsels governments to invest in transportation, information and communications to connect more people to job markets. Finally, the World Bank is responsible for developing programs that promote entrepreneurship in small-and-medium-sized businesses.
  3. Mother’s Service Society (MSS): Founded in 1970, MSS is a social science research institute in Pondicherry, India, that leads research and conferences on subjects from global leadership to economic theory. MSS research projects and conferences develop action plans to increase employment and create jobs in developing nations. These plans detail multiple factors that, when combined, generate employment and boost the economies of these countries. According to MSS, the Newly Industrializing Economies (NIEs) in East Asia have demonstrated that more comprehensive strategies for job generation have yielded the most progress. More comprehensive strategies for job generation can include ideas such as having more of an emphasis on agriculture, promoting small businesses, improve marketing efforts, develop exports and employment planning.

More Strategies

Besides the great work of these groups, other comprehensive strategies for creating jobs in underdeveloped countries include extending basic education, improving higher education, raising productivity and upgrading the skill level of workers. By implementing these strategies, economies can close socioeconomic gaps, join the global market and create more job opportunities.

– Annamarie Perez
Photo: Flickr 

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Silk Invest: Africa Food Fund Helps Local Businesses

Silk InvestSilk Invest is a private equity firm founded in 2008 that invests in emerging markets that demonstrate the potential for long-term economic growth. The largest private equity fund managed by the firm is called The Silk Africa Food Fund. Investments made from this fund target companies involved in food processing and distribution throughout Africa.

The Silk Africa Food Fund

The fund was started in June 2012 and focuses primarily on businesses that distribute food to African consumers. Countries that attract investment the most are those which are institutionally and politically stable enough to support long-term economic growth. Silk Invest is distinct from many other foreign investment funds that support the effort to reduce hunger in Africa in that it does not target agriculture but rather the distribution of food to consumers.

The three largest investments the fund is involved with are Nigeria’s Sundry Foods Limited, Ethiopia’s Nas Foods Plc and Egypt’s El Rashidy El Asly. Of these three, Nigeria’s Sundry has seen the most significant success and expansion following its partnership with Silk Invest.

The Success of Sundry Foods Limited

The company runs the popular restaurant chain, Kilimanjaro, as well as bakery and food catering services throughout the country. When Silk Invest first gave funds to Sundry in 2012, the company had seven restaurants open and a revenue base of around $3.4 million. In 2020, just eight years later, Sundry has 40 restaurants and a revenue base of around $34 million. The entrepreneurial effort of the company’s founder, Ebele Enunwa, has been instrumental in this progress.

Sundry is a company firmly rooted in supporting its fellow local businesses. Instead of setting up in the more commercial capital of Lagos, Enunwa established headquarters in Port Harcourt where he is a local entrepreneur. Its management team consists of local hires and its supply chain uses locally sourced raw materials, including chicken and rice from rural areas.

Sundry’s Impact and Potential

Sundry Foods Limited represents an example of the enormous potential which exists for businesses in developing nations when the proper investment is made. By providing capital to Sundry, Silk Invest gave the company the tools it needed to expand its operation. By doing so, Sundry has not only offered an improved service to consumers throughout Nigeria but has also stimulated its broader community’s own economy by maintaining a steady and even increasing demand for local products.

The impact made by Sundry’s growth is palpable. Over the last 10 years, the company has created over 2,000 jobs. Silk Invest’s Africa Food Fund is hugely impactful in the effort to reduce poverty in developing nations not only because of the direct benefit the invested capital provides to individual businesses but also because of the economic growth created in broader communities as an indirect result.

The Importance of Investing in Africa

This impressive progress was all stimulated by a $2.4 million investment. The high return for Silk Invest demonstrates that funding businesses in developing countries is not only beneficial to the growth and development of those businesses but is also a practical and sound investment for the firms offering the capital.

Investing in the effort to reduce world hunger presents impactful and beneficial opportunities for all parties involved. By establishing the Africa Food Fund, Silk Invest has committed itself to this effort while simultaneously supporting developing economies.

– Haroun Siddiqui
Photo: Flickr

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AgDevCo: Impact Investing in Rwanda

Impact Investing in RwandaImpact investing is a growing industry with huge potential for combatting poverty around the world. The practice consists of firms and individuals directing capital to businesses and enterprises that have the capacity to generate social or environmental benefits. Traditional businesses tend to avoid such investments due to the high level of risk, low liquidity and general difficulty to exit if returns are not satisfactory. Most impact investing is done by particularly adventurous capitalists as well as nongovernmental organizations (NGOs) that aim to create social change. Impact investing in Rwanda, in particular, has yielded positive results.

AgDevCo

AgDevCo is an example of a social impact investing firm that aims to invest with the intention of reducing poverty and increasing opportunity in developing regions. Based in the United Kingdom, AgDevCo was incorporated in 2009 and has engaged in numerous projects since.

The firm’s specific area of investment is in African agriculture, where it believes that impactful investments have the potential to be a significant force in reducing poverty. The firm is currently investing in eight different African countries. Its portfolio includes $135 million worth of funds in 50 different companies. These investments have engaged more than 526,000 customers and have created or sustained more than 15,000 different jobs.

Uzima Chicken Limited

One of its investment projects is a partnership with the East African poultry company, Uzima Chicken Limited. Uzima Chicken produces and distributes the Sasso breed of chickens. Sasso chickens are resistant to disease and can feed through scavenging. These beneficial traits make Sasso chickens particularly useful in the struggle to reduce poverty in East Africa.

In 2017, AgDevCo invested $3 million to support Uzima’s establishment in Rwanda. As a result of the investment, Uzima gained funds necessary for rapid operational growth as a domestic producer of poultry. This is in line with the government of Rwanda’s strategy to achieve poultry self-sufficiency in two to three years. Uzima has also been able to expand into Uganda, where its business is rapidly scaling upwards.

The Uzima Business Model

The Uzima model of business involves the employment of company agents who raise the chicks for six to eight weeks before selling them to low-income households in rural areas. Such a model provides benefits to farmers, who can increase income through the sale of the more valuable Sasso chickens, as well as the agents.

Agents typically make a 25% profit from selling chickens. A survey of Uzima agents found that, on average, 27% of household income came from selling Sasso chickens. By providing a reliable source of extra income for employed agents, Uzima helps to alleviate the burdens of poverty for these people. As of 2017, the efforts had created 150 new jobs, 40% of which are held by women. Rwandan women have benefitted significantly from Uzima’s employment with 64% of women agents reporting that the income they earned from selling Sasso chickens led to a positive change in the decision-making power they had in their households.

Impact Investments for Poverty Reduction

Uzima’s Sasso chickens grow faster, live longer, produce more eggs and have higher market prices. They are disease-resistant and thrive in local, rural conditions. Out of all the customers buying these chickens, 54% live below the $2.50 poverty line. AgDevCo investment gave Uzima the capital necessary for operational expansion, and as a result, a greater quantity of impoverished people in East Africa could buy superior chickens and increase income. Uzima’s business also has clear potential for women’s empowerment, making it a great tool in the effort to reduce poverty and inequality in the region.

The impact investments made by firms like AgDevCo have clearly measurable impacts in impoverished regions, particularly noting the success of impact investing in Rwanda. This makes impact investment firms an important part of the global effort to reduce all poverty.

– Haroun Siddiqui
Photo: Flickr

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Poverty: The Potential of Video Games in Africa

Video Games in AfricaThe global video game industry is valued at $140 billion and Africa is primed to take a piece of the action. Between 2014 and 2018, the number of African gamers rose from 23 million to a staggering 500 million, opening up a lucrative opportunity for the African gaming industry to become a major player. Video games in Africa have the potential to transform poverty in the continent.

Video Gaming Industry in Africa

Every year, the African gaming industry grows by more than 8%, with new gaming companies opening frequently. The Festival of Electronics and Video Games of Abidjan (FEJA), is a video gaming event in Africa with the main aim of creating jobs in the industry. The event’s organizers see the three-day event as an opportunity to exemplify the immense potential the industry has in Africa.

Although there are already innovative African gaming companies such as Work’d and Paradise Game, video games in Africa are often overlooked. However, Paradise Game founder and CEO, Sidick Bakayoko, predicts that by 2025, West Africa alone will have room to create over one million jobs in the gaming sector and the continent as a whole could create five million jobs.

Urgent Evoke Video Game

A game designer named Jane McGonigal has developed a game specifically promoted to African gamers called “Urgent Evoke”. The game exists both online and in the real world. To progress in the game, players must complete real-life activism such as reaching out to government leaders, researching environmental solutions, contributing time to alleviate poverty and other acts of contribution. Players must document these actions and submit them to advance in the game.

McGonigal’s goal with “Urgent Evoke” is to empower Africans to become active problem-solvers and tackle poverty and other issues in their communities. In addition to promoting and requiring activism, the game awards prizes to winners, including mentorships, scholarships, internships and startup money to foster entrepreneurship.

Video Games and Perception

Game developers like McGonigal and Bakayoko aim to use video games in Africa to change the way Africans view themselves and their continent as well as change how the world views Africa. The continent is often seen as a dangerous place filled with hunger and war. By creating games set in Africa led by positive African characters, developers can change perceptions and help Africans see themselves through a more confident, leadership lens.

These games have the power to reduce prejudice toward poverty and help people understand impoverished nations and join the fight to help them. Many hold the false belief that poverty is something self-inflicted or personally controllable. Cultivation theory states that the media that people absorb affects the way they perceive the world.

Video games in Africa have the influence to create a more accepting and representative industry. Games such as “Urgent Evoke” change perceptions, allowing African gamers to be their own heroes both online and in the real world.

Potential for Poverty Reduction in Africa

The growing industry of video games in Africa has created a plethora of jobs but there is a lack of skilled labor. Unfortunately, many Africans have not realized the immense potential that video games in Africa have for the continent.

Most parents do not see video games as a lucrative skill-building task. For the video game industry in Africa to truly flourish, the younger generation must have access to coding and tech education.

This is not yet at the forefront of mainstream education, but the continent, especially South Africa, is abundant with resources to educate Africans in the gaming industry. Even without money for a proper university, coding boot camps or proximity to a city, Africans can take online coding courses to get their foot into the tech industry and contribute to Africa’s immense gaming growth.

– Veronica Booth
Photo: Unsplash

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The Insulated Wonderbag Combats Global Poverty

insulated WonderbagIn Africa, nearly 90% of women use open fire cooking methods. The same is common for women in developing countries throughout the world. This system can often take hours to cook a full meal. The insulated Wonderbag, a heat retention cooking device, aims to change lives and create a sustainable life for those living in poverty, especially women.

The Insulated Wonderbag

In developing countries, gendered roles like cooking and tending to the household take up a lot of time.  The amount of time spent cooking could be better used on activities that result in the progression of women, such as education and development. Often, women are disproportionately responsible for cooking meals and the labor that goes into the open fires that are required for such cooking. A South African entrepreneur decided to design an invention to help address these difficulties. The insulated Wonderbag is an eco-technology innovation that saves girls and women hours of time and labor and improves indoor air quality and overall health, among other benefits.

How the Wonderbag Began

The idea behind this invention comes from Sarah Collins, a local South African innovator with extensive knowledge of social development and a love for the environment. Collins grew up watching the women before her use cooking tricks to keep food warm when the power went out. One of these tricks, used by her grandmother, was letting hot pans of food sit in cushioned pads to remain warm. A life-changing yet straightforward concept that Collins took and made her own.

The Simple Magic of the Wonderbag

First and foremost, the Wonderbag is a product meant to alleviate women and girls’ daily struggles as caregivers and enable them to pursue education and employment. The Wonderbag works without electricity or gas and is made of upcycled materials such as poly-cotton and chipped-foam. Essentially, it functions similarly to a crockpot or a slow cooker. The insulated Wonderbag allows food, once brought to the boil by traditional cooking methods, to continue cooking for up to 12 hours inside the Wonderbag.

The Benefits of the Wonderbag

  • Females regain four to six hours of their day
  • Boosts household incomes up to $2 a day
  • Saves more than 1300 hours for girls and women each year, enabling them to go to school, learn skills and find employment
  • Raises incomes of women living in poverty
  • Decreases the use of fossil fuels for cooking by 70% and thus also the associated negative health impact
  • Allows women to re-invest their earnings into providing healthier meals for their families

The Impacts of the Wonderbag

Since 2008, the revolutionary Wonderbag has been distributed around the world. Thus far, it has had an impressive impact. The introduction of the Wonderbag into communities allows women the chance to build their own businesses and create jobs for others. These businesses range from serving warm meals to sewing new bags. Moreover, every time a Wonderbag is bought, another is donated to women in need in Africa, continuing the cycle of prosperity.

More than 130 NGOs in Kwazulu Natal, South Africa, benefitted from reselling Wonderbags to generate an income, especially during the COVID-19 pandemic. Collectively, these NGOs generated almost two million South African rands to sustain their operations.

Overall, the global need for the insulated Wonderbag continues to grow. So far, there are more than one million Wonderbags worldwide. With every purchase, $1 goes toward subsidizing bags for people in vulnerable communities. The Wonderbag is an innovative solution to combat global poverty.

– Sallie Blackmon
Photo: Flickr

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Investing in Africa’s Music Industry

Africa’s Music IndustryIn April of 2020, the world’s most popular music streaming platform and one of the world’s biggest independent recording companies inked a new global licensing deal that will allocate more resources to new and existing entertainment markets in Africa. Spotify Music and Warner Music Group are working together to create new opportunities for artists to achieve international success in various countries, but Warner Music group is focusing on elevating the music streaming sector in Africa by investing in Africori, “a leading digital music platform for African artists and record labels.” Investing in Africa’s music industry could potentially contribute to lifting the continent out of poverty.

Warner Music Group Elevates Africa

Spotify has been available in Africa since 2018 in countries like Algeria, Egypt, Morocco, South Africa and Tunisia. While the company has hinted at future expansion in more African countries, its current licensing deal with Warner Music Group is working to elevate its global initiatives for Warner Group artists to grow the music industry worldwide.

Warner Music Group’s investment in Africori will make this possible by promoting existing African artists abroad, being able to sign global licensing deals with new artists and tap into a market that can provide opportunities for rising African stars. The main reason for investment will be to make African artists global by marketing their music to a global audience and giving newly signed artists the resources they need to grow their brand over time.

What is Africori?

Africori is an African digital music platform that is involved in almost every method of artist promotion. Its services include marketing, publishing, artist development, video distribution and booking artists around the globe. It was launched in 2009 “in response to the lack of opportunities available for African artists,” who now aim to make Africa a global source of inspiration. Africori already distributes to more than 200 domestic and international platforms because of their unique understanding of the African market.

This investment will transform Africa’s music industry by filling hundreds of job opportunities that are needed to manage global artists.

Investing in Africa’s creative minds has the potential for a big return for Warner Music Group as Africa’s music and entertainment sector is on course to reach 177.2 billion African rands of revenue in 2022, which equals $11.5 billion.

5 Reasons to Invest in Africa’s Creative Minds

With the investment deal being highly publicized, this move can inspire other U.S. or international entertainment groups to invest more in Africa’s music industry and entertainment sector.

  1. Music is a driving factor to economic success. Besides the artists themselves bringing in a high amount of revenue, a booming entertainment sector can create a multitude of jobs from publicists, directors, dancers, managers, set designers and more. Africa’s music sector is currently on the rise compared to many countries that already have established major entertainment deals.

  2.  Artist success leads to other business ventures. This could mean brand deals and sponsoring artists with products. Artists can partner up with African product companies, clothing companies, social media and more, to simultaneously promote themselves and other businesses.

  3. African artists are cultural magnets and trendsetters. Brian Nadra, an African musician labeled “an artist to watch in 2020” was called “an ambassador of East-African pop culture” in a region where there have not been many successful male singers. African artists are already being noticed globally which opens the door for new artists to achieve that same title.

  4. Africa’s music streaming platforms are on the rise. Currently, smartphone usage in Africa is estimated to grow exponentially in the next few years. Widespread smartphone usage will increase revenue per stream, platform subscriptions and music video views.

  5. Alleviating poverty in Africa. Growing the music scene in underdeveloped African countries can give people hope and an opportunity to pull them out of poverty. Many artists do not reach their goals because they lack the proper team or funding to continue to do so. Receiving funding to improve development gives communities a chance to prosper.

Africa’s creative minds have proven to be an untapped source of talent and inspiration. Africa’s music industry has the potential to grow itself and many other areas of the business to support artists for years to come. Warner Music Group’s decision to invest in Africori is just the beginning of supporting Africa’s ability to prosper.

– Julia Ditmar
Photo: Flickr

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Entrepreneurship: Initiatives Help Yemeni Women

Help Yemeni WomenOn top of the constant violence occurring in Yemen, almost 13% of the population face unemployment. Most women in Yemen work as homemakers, but a 2012 study, Measuring Women’s Status in Yemen, shows that almost one in two women (47%) would like to start their own business. Initiatives in Yemen offer women free business training, skills training and loans to help Yemeni women generate an income.

The Small and Micro Enterprises Promotion Service Agency (SMEPS)

SMEPS came to Yemen in 2005 and works to enhance the lives of Yemeni citizens through the creation of jobs and skills training. SMEPS has taught Yemeni women the best growing, harvesting and post-harvesting techniques for coffee beans. Yemeni women helped create a coffee that entered the gourmet market at a premium price. SMEPS also helped coffee farmers in Yemen. The aim was to create business resilience by expanding the production of farmers through improving the value chain by using modern technologies and better farming methods.

In 2010, SMEPS partnered with The International Labour Organization (ILO) to provide business training for women entrepreneurs. ILO came to Yemen in 1965 and has created opportunities for citizens to rise out of poverty. In one year, the workshops targeted around 500 Yemeni women who had taken out a loan to either start a small business or expand their existing businesses. The second phase of the program aims to reach 2,000 more women. Results indicate that after the training courses, the women had a higher level of business knowledge and competence to start or improve their own businesses. Overall, the women improved their quality of life with the income they earned.

SPARK’s Agri-Business Creation Programme (ABC)

SPARK came to Yemen around 2012 to assist citizens in agriculture, helping them earn an income from their crops. SPARK created a program called Agri-Business Creation (ABC) to help agri-entrepreneurs through training, mentoring and business plans. The program has notably assisted Yemeni women in developing agricultural businesses. Four female-run businesses were awarded microloans to expand their business after the training they received in business skills from SPARK’s ABC program. The loans help Yemeni women to generate more products and expand their businesses. Besides seeing an increase in income, the success of their work contributed to a boost in confidence and a sense of independence in the women.

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

GIZ came to Yemen in 1965 and assisted citizens with basic necessities and the provision of educational opportunities. First, GIZ helped Yemeni women develop businesses. Nearly 200 women attended training on how to develop a successful business idea and how to establish a business. Many women found prosperity in their new businesses and employed other women to assist them in their work. Secondly, around 300 women with existing businesses received additional business training via coaching. After the training, many women tripled their income and hired more women to work for them. Lastly, GIZ created opportunities for homemakers to sell handmade goods overseas. GIZ took handmade baskets made by Yemeni women to Germany and showed off their goods in exhibitions. This strategy helped 300 women in rural areas earn a steady income.

Although the raging war in Yemen has resulted in high unemployment, organizations like SMEPS, SPARK and GIZ offer programs and strategies to help  Yemeni women earn an income by developing entrepreneurial businesses.

– Samantha Rodriguez-Silva
Photo: Flickr

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How Mexican Avocados Are Reducing Poverty

mexican avocadosMexico is the second-largest nation in Latin America with over 130 million residents. Mexico exports an abundance of fruits and vegetables but its number one export crop is avocados. Not too long ago, avocados were not the number one crop being exported from Mexico. Today, the economic impact of Mexican avocados has helped many people escape poverty.

Poverty in Mexico

According to the World Bank, in 2018 almost 42% of Mexicans lived in poverty, with the rural population being the most impacted. Moreover, around 62% of Mexican children make it to high school and only 45% graduate. To reduce poverty, Mexico has increased its social spending to help those in need. The Mexican government has implemented programs such as cash transfers, farmland subsidies, scholarships and subsidized medicine. These programs are put into place in the hope of reducing poverty in Mexico.

The Mexican state of Michoacan is one of the poorest in the country. A whole 46% of people in the state lived in poverty in 2018.  However, Michoacan is rich in agriculture. In fact, around 20% of the land is used for agriculture and the industry employs 34% of the population. Moreover, Michoacan’s most popular crop is the avocado.

The Avocado Industry Boom

Michoacan is the top producer of avocados not only for Mexico but for the entire world. Increased demand for avocados has created an economic boom in the country. Mexican avocados make up 82% of all U.S. avocado sales. Furthermore, Mexican avocados have created more than 30,000 U.S. jobs and have an economic output of $6.5 billion. Even during the COVID-19 pandemic, avocado sales were flourishing.

The United States had banned the import of Mexican avocados in 1914 due to fears of insect infestation. In 1994, The North American Free Trade Agreement (NAFTA)  implemented between Mexico, Canada and the United States resulted in the ban being lifted. The agreement led to the free flow of Mexican avocados into the U.S. The company Avocados From Mexico (AFM) has sold 2.1 pounds of avocados in 2020 and expects 2.3 pounds to be sold in 2021. Mexican avocados have had such a great economic impact that they are called “green gold” by the locals.

Impact of Mexican Avocados

The increased demand for Mexican avocados has led to less migration of Mexicans into the United States. The competitive wages avocado farming has produced has meant many more Mexicans are willing to stay in their home country. The popularity of avocados has led to the creation of thousands of jobs in Mexico. Due to this fact, families do not feel the need to migrate to the United States for employment.

The demand for Mexican avocados has led to employment opportunities, less migration and closer economic ties to the United States. The Mexican avocado industry is playing a part in reducing global poverty.

– Andy Calderon Lanza
Photo: Flickr

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How Agroforestry Can Reduce Global Poverty

Agroforestry Can Reduce Global PovertyForests provide food, medicine, fodder and energy for 250 million of the world’s extreme poor. If utilized properly, the method of agroforestry can reduce global poverty. The resources and benefits that forests can provide are often inaccessible to those in poverty due to the private ownership of forests.

Ownership of Forests

Approximately 77% of the world’s forests are owned and administered by governments that do not recognize the claims of indigenous peoples and local communities to the land. Since government priorities do not always align with community needs, the locals who need the forests to survive do not receive the benefits that they should. For example, the timber and ecotourism industries in Africa are skyrocketing but the locals do not share in the profits.

Agroforestry

Agroforestry, the agricultural practice of growing trees and shrubs around crops or pastureland, can ameliorate this problem. Agroforestry builds on existing agricultural land already owned by communities to create new forests not owned by the government, thereby circumventing the ownership problem and guaranteeing that profits remain in the community. Agroforestry systems are smaller in scale than typical forests but they still deliver many of the same positive results: they diversify production, restore soil fertility and increase biodiversity.

The benefits of agroforestry extend beyond environmental issues. Agroforestry can reduce global poverty by increasing food resources and security, improving nutrition and increasing profits for farmers.

3 Countries Using Agroforestry

  1. Bolivia uses agroforestry to reduce food insecurity. Bolivia is one of the biggest producers of organic cacao, which despite being edible, is not a major food crop. Cacao is grown mostly wild or in monocultures, though there is a growing shift to agroforestry systems where cacao trees are intercropped with shade trees and other by-crops like bananas and avocados. Over 75% of Bolivian households lack regular access to basic foods. Thanks to agroforestry, 40% of the population who depend on agriculture for their livelihoods can both produce more food and earn more money to buy what they do not grow. The Research Institute of Organic Agriculture (FiBL) found that the return on labor was double for agroforestry systems compared to monocultures even though the cacao yields were 40% higher in the monocultures. The revenue difference came from the sale of the by-crops, which offset the lower cacao yield. The by-crops helped farmers earn a profit but also represented a food source for the communities.

  2. Burkina Faso uses agroforestry as a means of women’s empowerment. The U.N. Development Program estimates that an average of three million African women work directly or indirectly with shea butter. Women have historically played an important role in the extraction of shea butter but they have not always been compensated for their work, even as the industry and profits grew. Agroforestry allows for more community involvement in farming, which in turn opens up opportunities for women. NGOs like CECI and WUSC help to train women in shea harvesting as part of the Uniterra project, which aims to get women involved in entrepreneurial ventures such as developing their own shea butter businesses for international exports. As a result of agroforestry, more women are empowered to take themselves out of poverty.

  3. India is a global leader in agroforestry policy. India was the first country to create a national agroforestry policy in 2014 despite existing policies that were unfavorable to agriculture, weak markets and a lack of institutional finance. The country set the ambitious goal of increasing national tree cover to 33% as a way to make agriculture more sustainable while optimizing its productivity. Agroforestry is currently in use on 13.5 million hectares in India but the government hopes to expand it to increase benefits like reducing poverty and malnutrition by tripling crop yields. Already, agroforestry provides 65% of the country’s timber and almost half of its fuelwood. Timber production on tree farms generates 450 employment days per hectare per year, which can reduce rural unemployment, and in turn, rural poverty.

The Potential of Agroforestry in Poverty Reduction

Many other rural communities in Latin America, Sub-Saharan Africa and Southeast Asia have relied on agroforestry throughout history, with and without government backing. As a whole, agroforestry is underused in the fight against global poverty. Nations with large agricultural sectors need to adopt agroforestry policies and promote the training needed to help farmers implement agroforestry on a large scale. These agroforestry efforts have the potential to significantly contribute to global poverty reduction.

– Brooklyn Quallen
Photo: Flickr