Academic journal article Management & Marketing

Leveraging Low Income Farmers' Performance through Empowerment: Analysis of a Sustainable Initiative in Mexico

Academic journal article Management & Marketing

Leveraging Low Income Farmers' Performance through Empowerment: Analysis of a Sustainable Initiative in Mexico

Article excerpt

Introduction

Despite its being an ancestral problem, the topic of poverty has become fashionable in the global public agenda in response to the objective of the Millennium Development Goals of halving the number of people living in extreme poverty, by the year 2015, outlined by the Organization of the United Nations (UN, 2008). According to the Development Goals, two of the primary ways to generate development are: Goal #1, Eradicating extreme poverty and hunger, and Goal #2, Promoting gender equality and empowering women. This objective has also been adopted by other international organizations, such as the International Monetary Fund, the World Bank, the Inter]American Development Bank, and the Organization for Economic Co]operation and Development; however, the challenge is enormous. Currently, two out of three people in the world live in poverty; most of these live in emerging economies (Prahalad, 2004).

This part of the worldfs population has been called the "Bottom of the Pyramid" or the "Base of the Pyramid" (BoP), indicating this groupfs huge size and lower position in the economic order (Prahalad and Hart, 2002). Prahalad (2004) in his seminal book The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits mentioned that more than 4 billion people live at the BoP on less than $2 USD per day. However, this BoP definition is not the same for some companies, for example the Brazilian Casas Bahia claim to target the BoP, and their average customer has an income of $6.66 per day (Karnani, 2007). Obviously, the BoP of citizens of different countries depends on cultural and socio]economic scenarios. Another example of this, according to Szekely (2005), is Mexico, where the number of poor people has reached approximately 50 million.

To better understand these 50 million people in Mexico, the Mexican Association of Market Research and Public Opinion Agencies (AMAI in Spanish) classifies the Mexican population into six different socio]economic segments or tiers. Socioeconomic status in Mexico is measured using the "10x6" AMAI rule. This rule is an index that classifies households into six levels, accounting for nine characteristics, including household possessions and schooling of the household head, but, the people living in poverty (not necessarily in extreme poverty) account for more than 60% of the Mexican population (AMAI, 2009). Thus, in this article, we will define the Low]Income Sector (LIS) as AMAIfs levels D, D+, and E.

To better understand these decisions, it is important to describe briefly the different socioeconomic levels in terms of their possessions. In accordance with these socioeconomic levels, half of the population at the D+ level are homeowners, most households have showers but only two thirds have a water heater, one out of four families owns an automobile, two thirds have a telephone, and the household headfs education ranges from junior high to incomplete elementary school. Half of the populations from the D level are homeowners, one out of four does not have a restroom at home, they do not own automobiles, two out of five have a telephone, and the household head has finished only elementary school education. Those in the level E houses have floors of soil, three out of five of these homes are not connected to a sewer system, they do not have toilets, they do not own any automobiles, only a few have a telephone, and the household head has not finished elementary school (AMAI, 2009). As we can see, from socio-economic level D down, the people begin to face increasing challenges to day-to-day living.

Going forward, in order to understand the LIS in the article, it is necessary to understand the best ways to eradicate the poverty, particularly in Mexico. For example, during recent years, several entrepreneurial perspectives, such as the BoP stream (Prahalad and Hart, 2002) and the socially inclusive business (Karnani, 2006) approaches, among others, have contributed to solving this problem (Bruton et al. …

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