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Market-Based Approaches

The global community has a grand plan. By 2030, all hunger should be eradicated. Public funds alone are insufficient to finance it – further funds from the private sector must be mobilised.

Three children playing with rose blossoms.
Three children playing with rose blossoms. © Ursula Meissner
Jasmin Koottummel Team Sector Strategy, Knowledge & Learning

In order to support people in poorer, rural regions on a long-term basis, Welthungerhilfe (WHH) is adopting, among other things, market-based approaches.

An Afghan rose farmer at his first harvest. © Michael Oesterreich
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A man signs his receipt about a rose delivery © Kai Struthoff
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Children play with the rose petals. © Ursula Meissner
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Promoting business ideas in the countryside – two examples

In the region of Nangarhar in Afghanistan, for example, WHH has been supporting rose oil production since 2004. ‘Roses not opium’ was the initial guiding principle. The result today: high-quality rose oil at organic world market quality. Today, the product secures incomes for around 800 families, a former project employee manages the rose oil production as an independent entrepreneur.

13 agricultural training centers in India are another proven test case for social business. With government financial support, the ‘Green Colleges’ offer know-how and services along agricultural value creation chains for socially disadvantaged groups in rural India. These training centers should create competencies in the areas of cultivation, processing and marketing and should be financially self-sufficient – in close cooperation with government and civil society.

Combating poverty with economic methods

The targeted promotion of trade and services is of vital importance for the development of rural areas. Prerequisites for this include the development of infrastructure – roads, communication and energy, for example. Market-oriented models must guarantee that people living in poverty become actors: as customers and consumers, producers, employees or entrepreneurs. In practice, different business models can apply: for example, new marketing concepts for agricultural production centers, in order to achieve higher incomes. Or the development of a service that is brought to market maturity through cooperation between WHH and a private firm. It is also possible to finance a local enterprise that needs an immediate, modest seed capital but cannot obtain this from local banks due to its small size.

Advantages to integration of market economy approaches

The Welthungerhilfe strategy refers explicitly to the strengthening of new alliances with the private sector and of pro-poor business approaches in connection with the implementation of innovative ideas. The work of the organization is about "transforming aid recipients into proud actors in the form of consumers, producers and/or entrepreneurs".

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