Although cultural barriers exist to the elimination of child labor in India, we believe that with community prosperity, increased infrastructure, and growth, the need for child labor will disappear. We do not feel that Bayer should directly invest in creating schools for children or water treatment facilities, as these activities are clearly outside the bounds of Bayer’s expertise. We feel that there is a natural progression in prosperous societies to move away from child labor, as has been the case for most western nations in the last century.

Although Bayer had been in India for over 100 years, its cottonseed business there was quite young. Bayer acquired Proagro Seed Pvt Ltd in 2002. Even though many companies in the country considered child labor “business as usual”, Bayer had a zero-tolerance policy for it, which was underscored by its corporate mission statement. After Bayer was named in a report produced by the India Committee of the Netherlands, which was the result of an investigation on child labor in India, the company found itself in a difficult position. Roughly 6% of Indian children between the ages of 5 and 14 participated in the labor force, accounting for 20% of India’s economy. Bayer could either exit the cultivating industry in India or develop a solution to the problem. Cotton seed production was a profitable activity for both Bayer and the farmers. Eliminating child labor would be an uphill battle in that cheap labor was the only leveraging tool available to create profit for farmers. Regulating the activities of farmers by mandating the elimination of child labor is only effective with heavy policing, a practice that is not only costly, but unsustainable in the long run.

All too often, corporations pursue a relatively shortsighted view of creating profitability. We believe that corporate strategy does not have to be a zero-sum game with only one winner. Through the creation of shared value, corporations and farmers can both benefit, as shared value expands the total pool of economic and social value, not just one participant’s share 1. Our recommendation is to follow a shared value strategy in the underserved agricultural communities in which Bayer operates. We believe that by increasing profitability for the farmers, the necessity for child labor in these communities will be naturally eliminated.

The shared-value strategy not only improves profitability for both Bayer and the farmers, it creates sustainable growth and prosperity for both partners. Shared value in the Indian agricultural communities that Bayer relies on, means those communities will become more empowered and dependable trade partners. Through investments in roads in these communities throughput of production is increased. Sharing technology and agricultural knowledge with these agricultural communities will result in increased volume of output and improved quality. As a large multinational corporation, Bayer is in a unique position to improve access to finance for its trade partners. Ease of access to financing will enable farmers to leverage their agricultural production, and as profits rise, so, too, will the return on investment for Bayer. Another idea to be considered is the establishment of local, modernized distribution facilities by Bayer. These facilities will improve the volume and quality of Bayer’s products as well as enhance distribution. Similarly, access to these local distribution facilities will have profoundly beneficial effects on the small farming communities. The improved volume and quality will offset the costs associated with developing the infrastructure. The socioeconomic costs to business in these poor agricultural communities are likely substantial, and it is unlikely that these costs have not been factored into the cost of doing business

By improving access to healthcare for these communities, the workforce will become more dependable and thereby more profitable. We believe that access to education will naturally improve and will occur without direct investment by Bayer. Improved access to public education will result in prosperity by allowing children to make greater contributions to their own communities. With increasing economic prosperity in these agricultural communities, we will expect to see a sustainable, natural reduction in the child labor force; however, we understand that the effects will take some time to become apparent. Having a solid plan to move forward will vastly improve Bayer’s media relations. Creating lasting value in the communities in which it operates will ensure Bayer’s success for years to come.