Shared value, inclusive business models are key for resilient, stable communities

A core pillar of the Africa Centre of Excellence for Sustainable Cooling and Cold-Chain (ACES) is to develop new community-based business models and approaches which create and deliver shared value equitably (economic and social) to all participants. By building social capital across agricultural value chains, these can be a unifying force helping rural communities build resilience to future external shocks, such as climate change and extreme weather events. In parallel, we can also embed gender equality and social inclusion (GESI) principles deeply into the very fabric of these models, ensuring all community members - women, men, youth, and marginalised groups alike - share equitably in the value created. 

Rwanda has undergone a remarkable transformation. Rwanda's GDP increased nearly fivefold, rising from approximately $2.93 billion in 2005 to around $14.25 billion in 2024, with an average annual growth rate of 8.6% over the past four years (2020–2024)(World Bank, n.d.; World Economics, 2024). In 2024, the proportion of the population living below the poverty line stood at 27.4%, a notable decrease from 56.5% recorded in 2006 (NISR, 2024). Furthermore, it has been internationally recognised for its efforts to promote gender equality and empower women, especially in political representation, with women holding 63.8% of parliamentary seats following the July 2024 election (Kuteesa, 2024). In 2023, Rwanda was ranked 12th worldwide for reducing gender gaps in various social and economic indicators too (World Economic Forum). 

Rwanda’s economy and development goals rely heavily on agriculture, which is a significant contributor to the nation’s GDP and provides work and food for a large proportion of the population, many living below the poverty line. There is substantial evidence supporting the significant role of Government programs in establishing smallholder farmer cooperatives and thereby driving the current growth trajectory (Verhofstadt & Maertens, 2013, 2014), and it is this approach that we aim to catalyse through ACES.  

However, we also recognise that the long-term viability, resilience, and effectiveness of the approach will depend on building social capital across the value chains - the relationships between individuals, groups, and institutions that enable cooperation, collaboration, and collective action to achieve common goals. Critically, social capital encompasses both “bonding relationships”, which are internal to communities, and “bridging relationships”, which extend beyond communities and traverse social boundaries. Greater interconnectedness within a network of actors can enhance adaptive capacity (Aldrich & Meyer, 2015). 

At its core, social capital must be built on shared values - values that foster belonging, trust and cooperation among individuals and groups. For social capital to be truly resilient and beneficial in the long-term, these shared values must also be explicitly inclusive and equitable. In the context of smallholder farming communities, this involves empowering farmers - women, youth, and historically marginalised groups -to actively participate in designing and governing value chains; ensuring fair and transparent profit-sharing, and enabling equitable access to essential resources and opportunities, such as finance, technology, and market information.  

In Rwanda, the percentage of land used for agriculture significantly increased from 53% in 1961 to 73% in 2016, mainly due to land expansion activities such as reclamation and terrace construction (FAOSTAT, 2023). However, the majority of farmers are smallholders, with 45% cultivating less than 0.30 hectares (GoR, 2011); which is often too small a plot for them to individually secure a living income. 

Agricultural value chains today are primarily driven by the private sector and operate on local, regional, and global scales. Smallholder farmers often find themselves marginalised from markets and broader developmental opportunities, despite being the primary food producers. In Rwanda, smallholder farmers contribute to 83.1% of agricultural production (RBD, n.d.) but predominantly sell their harvests at the farm gate, encountering diseconomies of scale in both production and marketing.  

Rwanda’s farmers face numerous obstacles: they are dispersed and fragmented, suffer from high transaction costs and have limited access to end-to-end infrastructure for ensuring that food passes from farm to fork safely and securely while retaining quality. They typically struggle to capitalise on economic prospects within the market or influence government policies that affect their business prospects and outcomes. Asymmetric asset distribution and power imbalances with other stakeholders hinder smallholder farmers' access to the essential resources necessary to enhance productivity, market their products, and engage in decision-making processes. 

Integrating smallholder farmers and their wider communities into modern value chains is a pivotal strategy in rural development. However, there needs to be a systemic change to achieve implementation. The notion of inclusion must be transformed into a 'win-win' scenario where all actors – including farmers, traders, processors, aggregators, retailers and consumers - involved within the value chain benefit from their participation. This is especially true if the model is to be resilient. 

Looking ahead to future shocks and stresses - such as those induced by climate change - with risks of crop failures, food insecurity, or even displacement, social capital grounded in equitable and inclusive shared value will become increasingly critical for adaptation and endurance. History has shown that communities with robust internal bonds and external linkages are more likely to survive and thrive through crises, by sharing information, aiding one another, and collectively responding to change (Aldrich & Meyer, 2015; Morse, 2023). In essence, social capital built on inclusive shared value is both a shield against future shocks and a catalyst for continued development. 

The objective of ACES is to make smallholder farming based communities more inclusive and equitable partners in the value chain by collectively enhancing their capabilities, thus empowering individual farmers while also reducing vulnerability and business risks. Central to this is increasing the value which returns to the community (from food loss reduction and food processing, etc) and building inclusive operating and value sharing models at the community and household levels – especially amongst women and youth. Creating inclusive governance structures further enhance community empowerment and cohesion. Additionally, by forging external but equal partnerships with external actors in the value chain – such as buyers, input suppliers, financial institutions and government agencies - these inclusive shared-value practices build lasting resilience, ensuring communities collectively benefit from and contribute sustainably to both their own, and wider, socio-economic advancement. 

By prioritising communication and collaboration, providing training and capacity-building opportunities, and designing shared value business models with fair and transparent decision-making processes, governance structures, and accountability mechanisms, ACES can empower smallholder farmers and foster a sense of ownership and shared responsibility. Through these efforts, we can play a pivotal role in strengthening social capital founded on inclusive shared value within rural communities and across the wider value chain, enhancing their resilience, and enabling them to navigate challenges effectively while pursuing collective goals for sustainable economic growth. 

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