Inclusive Agriculture Bears Fruit in Laos

Vientiane, Laos, September 6, 2016 /3BL Media/ – Ironbark Lao, a subsidiary of Australia-based Ironbark Citrus, has joined the Business Call to Action (BCtA) with a commitment to engage 250 smallholder farming families in its value chain by 2021. Through its Vilabouly Citrus Project, the company pledges to increase household incomes six-fold and create entrepreneurship opportunities for local communities throughout the citrus supply chain.

The BCtA is a global initiative that aims to support private sector efforts to fight poverty through its core business. It is supported by several international organizations and hosted by the United Nations Development Programme (UNDP).

In rural Vilabouly, Laos, many families are struggling to grow enough food for their own subsistence. Despite favorable soil and climate, and a high demand for agricultural products in external markets, the region’s poor roads and farmers’ lack of knowledge about crop productivity isolate rural communities from livelihood opportunities. Farmers in the region mainly grow rice: because of prohibitive costs and low market prices, they have not been able to diversify their crops in order to bring in needed cash for a more balanced diet.

Family-owned Ironbark Citrus is helping farming communities in this region to improve their lives by providing them with citrus trees from its nursery, training in sustainable agriculture, extension services and, most importantly, a fair market price for their produce. Farmers can also access micro-loans through Ironbark’s revolving loan fund (since Laos’ banking system does not offer suitable loan products for small farmers to expand into tree crops like citrus).

With a growing market for citrus fruits among the burgeoning middle class in Southeast Asia (where expensive imported fruits are traditionally offered as gifts and, increasingly, for everyday consumption), the crops offer rural farmers a sustainable source of income and are tough enough to transport over Vilabouly’s rough roads without incurring damage.

Ironbark’s inclusive model grew out of its founders’ experience producing citrus for export from their own family farm in Australia. Noting the rapid growth of the Thai and Vietnamese economies, the company’s leadership saw a major opportunity to develop high-value crops in Laos to supply these markets. At the same time, they saw that this expansion would provide a means for Lao farmers to shift from subsistence to sustainable incomes through supplying these economies. In 2014, the social enterprise Ironbark Lao was born.

According to Susan Jenkin, Ironbark’s Chief Executive Officer, “Our Vilabouly initiative is not only about giving farming families opportunities to diversify their livelihoods. It has also created an entirely new value chain for citrus in rural Laos. As it grows, this value chain will provide employment in nurseries and packing facilities, not to mention the opportunities it creates for supportive enterprises. That is the ultimate goal of Ironbark Lao.”

In recognition of women’s critical – and often unrecognized – role in family farming, Ironbark has made women a special focus of its inclusive model, encouraging their participation in contracting and agricultural training. This encouragement has led women farmers to become noticeably more confident and deepened their engagement in dialogue – with both the company and other farmers.

To ensure sustainability, Ironbark enters into long-term contracts with farming families, providing a competitive price that boosts farmers’ confidence in their participation. In addition to providing citrus trees, the company transfers knowledge and best practices in sustainable agriculture such as integrated pest management, targeted fertilizer application and efficient watering practices.

As a result of their participation in its value chain, Ironbark’s management anticipates that family incomes will increase six-fold and that most will be able to repay loans from the company’s revolving fund within six years. Ironbark also benefits since the citrus growing seasons in Laos and Australia are complementary: the company can now satisfy its customers’ demand for citrus year-round and expand its market share.

“By providing subsistence farmers with sustainable livelihoods, Ironbark Lao embodies the core concept of inclusive business,” said Paula Pelaez, the BCtA’s Programme Manager. “This company has shown remarkable dedication to lifting people out of poverty and empowering women. We are delighted to welcome Ironbark to the Business Call to Action.”

In the future, there are plans for Ironbark Lao to be managed independently of its parent company by local staff, leaving the profits in Laos and expanding the inclusive business into other areas of the country.

For further information:
Business Call to Action: Tatiana Bessarabova at tatiana.bessarabova@undp.org

Ironbark: Susan Jenkin, CEO at susan@ironbarkcitrus.com.au

Membership in the Business Call to Action does not constitute a partnership with its funding and programme partners, UNDP or any UN agency.

About the Business Call to Action (BCtA): Launched at the United Nations in 2008, the Business Call to Action (BCtA) aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that offer the potential for both commercial success and development impact. BCtA is a unique multilateral alliance between key donor governments including the Dutch Ministry of Foreign Affairs, Swedish International Development Cooperation Agency (Sida), UK Department for International Development, US Agency for International Development, and the Ministry of Foreign Affairs of the Government of Finland, and the United Nations Development Programme — which hosts the secretariat. For more information, please visit www.businesscalltoaction.org or on Twitter at @BCtAInitiative.

About Ironbark: Established in Mundubbera, Queensland in 1990, Ironbark Citrus has grown to become Australia’s premier boutique citrus grower, including over 200 hectares of citrus orchards in Australia. The business is committed to the highest levels of food safety, quality and sustainability, producing ‘clean and green’ premium Australian citrus for export. Its social-enterprise subsidiary, Ironbark Lao, was founded in Vilabouly, Laos in 2014 to increase farmers’ incomes through supplying citrus fruits to regional markets. Ironbark Lao operates a citrus nursery that provides trees to farming families, offers horticultural extension services and training, and packs and markets the fruit it purchases from participating farmers. It has also established a revolving loan fund for farmers who are unable to access financing through traditional banks. For more information, visit http://businessfordevelopment.org/ironbark/.