Monday, April 21, 2008

Vipani: Making Market Forces Work for the Poor

Farming is a tough business. Investment is up front, production is risky, goods are perishable, and market is uncertain. So it is not surprising that a vast majority of the world's poor are small farmers. George Thomas, founded Vipani (Sanskrit for marketplace) to make market forces work for the small farmer. "A farmer can produce tomatoes; but what good is it if he can't sell them when they are ready and ripe?" he says in Ode article. Vipani works by having staff members research community demand for crops and then recruiting farmer-agents to work with the organisation to create a network of farmers, buyers, suppliers and lenders. Micro loans, technology, education all improve/enable the farmers' lot. But if farmers cannot get fair prices for their crops these improvements make little difference.

Poverty is often seen as a failure of political policy or aid. But it is also a failure of market forces - in connecting the community. Vipani has demonstrated the validity of its approach in Kenya - where boosting income has also shown the ability to heal deep-seated ethnic conflicts.

As I was reading about Vipani, I was struck by the success of their social entrepreneurship approach. And it was a real plus to find that George is a fellow alum of the Digital Vision Program at Stanford and his acknowledgement that he researched the idea during his fellowship.

Vipani and George are demonstrating that market forces can be made to work for the poor; that even minor capital investments yield major social and economic returns; but it takes time and it takes dedicated leadership.

Tomatoes anyone?

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