Last month I was privileged to attend the G8 Symposium on global agriculture and food security in Washington DC. The presence of President Obama, Secretary of State Hilary Clinton, African Heads of State and senior UK government representatives raised the profile of this important event. As part of the symposium, I joined a selected group of leading businesses to sign a high-level declaration stating our commitment to economic growth and transformation in Africa, through participation in local agriculture and food production. This declaration came at an important time, as world leaders were about to reconvene for the G8 meetings at Camp David to review progress on food and nutrition security and their own G8 pledges made in L’Aquila several years ago.
It was an honour to be one of the representatives of the private sector and to be associated with real leadership in this fast moving space. Diageo were recognised alongside other leading international and African businesses who are making key contributions to Africa’s agricultural development through their work on local value chains. In particular, our work on piloting new varieties of sorghum in Tanzania and our recent agreement with the Ethiopian government for the local sourcing of barley, were singled out by The World Economic Forum.
If you had asked me a few years ago why this might be relevant to Diageo or any other consumer goods company, I probably would have said this is about good corporate citizenship in Africa, about corporate philanthropy and about developing and protecting a corporate reputation.. But now, today, it is clear this is worth considering from a broader strategic business perspective.
One of the reasons we are involved in agriculture and setting-up local supply chains in a number of countries across Africa is that it makes solid business sense. Buying our inputs in local currency allows us to hedge foreign exchange, and it also allows us to develop local supply options delivering inputs tailored to our needs. Importantly, our agro supply chains are valued by governments who understand that developing commercial agriculture for value-added products is core to broader socio-economic development. African governments are increasingly valuing Diageo for our role as a reputable buyer of local grains from both large and small farmers, and for the improved yields, know-how and economic security our business brings to the farmers and local businesses who supply us. This all makes strong business sense and fits very well into our established business footprint across Africa, where we have a long history, dating back to when Guinness was first shipped to Sierra Leone in 1827.
But our involvement in agriculture goes beyond supporting a business case. Given the crucial role agriculture, we see a great opportunity for us to tangibly and effectively contribute in improving livelihoods of smallholder farmers across Africa. This will eventually support the overall development of agriculture and help tackling issues around food and nutrition security. One could call this a ‘virtuous circle’ and that’s exactly where I see the power of public – private partnerships.
Yes, there are certainly many challenges that remain; infrastructure and linkages are the obvious ones, but movement of goods and issues around yield and effectiveness are equally important. However, this pre-G8 Summit meeting was one example of how the expertise and needs of the private sector can be leveraged to form part of a much bigger play, and how partnerships to promote agriculture and local economic growth not only dovetail with some of our business needs, but can enhance both our business and our reputation, but most importantly, the development of African communities.
At Diageo we tend to say that doing good for our communities, is good for business. Thinking about our involvement in agriculture, I am beginning to see it the other way round; doing good for business, is good for our communities.