Sustainability is as much about conserving the environment as it is about protecting people's livelihoods. As demand for Earth's finite natural resources grows, everyone across the global food system must find ways to do more with less. This will require gaining access to the latest advancements in modern technology and developing new skills, tools and knowledge.
The world's biggest companies are increasingly aware of their impact on the planet, and as a result, they are investing in the future of their supply chain partners. Governments are allocating funds to agricultural research and development, and non-profits are convening allies on shared goals to increase food production and protect natural resources. At the core of our global food system are farmers and the communities in which they live. As they gain access to new technologies, modern techniques and new partners, they're able to produce more and provide for their families and those that depend on them.
How does sustainable food increase income for small farmers?
What are the tools farmers need to compete in the 21st Century?
Why should the biggest companies in the world help small farmers and their communities?
Editor's Note:
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Nick, thanks for posing these questions! To your last one - experience is revealing a range of reasons that companies should help - i.e., purchase from - small farmers. These include expanding and diversifying their sources of supply, reducing costs compared to imports, limiting vulnerability to global commodity price fluctuations, reducing the environmental impacts of transportation, etc. etc. Of course some of these apply only where small farmers are also local farmers but many of the "biggest companies in the world" are local as well as global. Coca-Cola, SABMiller, Diageo, and Unilever are all examples.
Another question I think would be pertinent to the discussion is "Why shouldn't the biggest companies in the world help (again, I prefer "purchase from") small farmers?" From their perspective there are lots of reasons not to do it. Small farmers are small. They're geographically dispersed and hard to reach via poor infrastructure. They may lack all the tools and technologies you mention, meaning yields are low and/or variable in quantity and quality. Etc. Etc. All of these increase the cost and risk of sourcing from small farmers and have the potential to negate the benefits, and while we all wish they had even more flexibility than they do, companies are legally accountable to their shareholders for making money. So I think it's important to address the reasons companies "should" and "shouldn't" at the same time.
Luckily, the reasons companies "shouldn't" purchase from small farmers are things donors and NGOs like yourselves "should" and "can" help address. You are already doing it - but it could be an interesting message for those taking more of an advocacy-first approach, pushing the corporate responsibility to source from small farmers. Do those groups then have a responsibility to address some of the barriers, perhaps in partnership with companies? Project Nurture, a partnership between The Coca-Cola Company, TechnoServe, and the Gates Foundation is a nice example. See recent blog posts by Coca-Cola, TechnoServe, and the CSR Initiative at the Harvard Kennedy School, which just released a comprehensive report on the effort (full disclosure: I'm one of the authors).
Sustainable food production should both create jobs and bring public benefit in improved and/or increased food supply.
It seems very unlikely that big companies can help small subsistence farmers - its just not in their mindset!
Providing appropriate technology and commercial 'know how' to enable small farmers to help themselves is probably the best way forward, but how do you reach them?
A pertinent topic given that we're hurtling towards the G8 and there's a big focus on agriculture and food systems. At events this weekend in London the spotlight will be on the New Alliance, an initiative which is about encouraging private sector investment in agriculture and which has divided opinion on whether it will be deliver a sustainable agriculture. Many development organisations are worried that smallholders are not given proper consideration and given their importance (ref recent ODI report: Smallholder farms in sub-Saharan Africa- 33 million, represent 80% of all farms, and contribute up to 90% of food production in some countries) this is both a risk (exacerbating poverty) and a missed opportunity. Why is it a missed opportunity? We have to consider whether given the food demands of a globalising population small farmers can be viable. If we think they can and should be then we need to consider what the incentives or disincentives are for key players: the incentives for a smallholder to stay in an isolated rural area; for traders or input suppliers to expand their operations into those areas; for large companies to establish supply/buying networks, for governments to provide conducive enabling environments.
We have found it helpful to use participatory approaches that identify why different players are likely to behave in a certain way, rather than looking at what players like big companies should or shouldn't do.
Environmental considerations are, as Nick says, an inextricable part of sustainability. If actors (public or private) do things for short term gains there will be long terms consequences. Enabling farmers to achieve affordable access to the kinds of services, support and inputs that will enable them to make choices about what to produce, when, for whom is key. A development actors role is to facilitate the emergence of a system that can deliver this. There are a number of tools for this (including our own!). What's really important is to engage players in the understanding of the system so all actors can see how they fit together and what kinds of behaviours and actions are needed for the agriculture system to deliver benefits into the future.
The biggest companies in the world have identified small scale farmers as the problem that is in their way.
It is not in their interest to support the 80% of family farmers who still grow most of the food in the world today.
Even GMO giants claim to provide sustainable Ag. models, to increase the income of small farmers, mitigate Climate Change and solve world hunger. But by now everyone should know better that this is not true at all !
A nice and comprehensive collection of policy proposals towards a regenerative Agriculture and Agroecology you can find here at www.futurepolicy.org - (see below Agriculture & Food - - Sustainable Forests)
I agree with you. But i believe if big company can set-up or design a good direct marketing chain for small farmers and support ( training & equipment) them with modern technology. This will create sustainable food production, reduce unemployment , poverty, insecurity thereby providing sustainable democracy when there is peace and good governance.
The African Enterprise Challenge Fund (AECF) provides funding for innovative business ideas in among other areas agribusiness, financial services and information services with the aim of improving the situation for the rural poor, so its right in this space. At the AECF we strive to maximize the development impact of sustainable agribusiness ventures in rural Africa through the innovative use of knowledge, technology and inputs.
The use of out-grower schemes is at the heart of this discussion and has a number of implications for the small-scale farmer. By choosing to source from small farmers instead of large agribusinesses, the investments made impact a larger amount of people directly. Besides providing employment and livelihood, this means access to new markets and often the possibility of growing cash crops, which creates greater income and improves the economic situation and strengthens the food security in rural communities.
Further, as the sourcing company strives to improve and maintain both high yields and quality products in an out-grower scheme, knowledge and technology transfer takes place. Knowledge of farming practices and technical know-how are important tools for these farmers especially when they start growing new crops (e.g. soya).
The AECF is also funding several weather based crop insurance projects: the aim is to provide affordable crop insurance to small scale farmers. Another AECF grantee provides soil testing services coupled with a fertilizer blending service which provides small scale farmers with a customized fertilizer optimized for their soil type - this reduces the use of fertilizers and also the costs for small farmers. These practices have implications both for the companies, the farmers and the farmers’ social network, as agribusiness best practice is then shared.
The end result is more knowledgeable farmers, efficient production, better quality produce and higher incomes both for the farmers and the companies.
I'm looking forward to welcoming you all to this live discussion - starting in just under 30 minutes! Please do post your comments in advance or during the session.
Blind spot in Agriculture: Nutrition security in cash crop production
A Call to Action: Increasing cash crop productivity through improved nutrition
It has been assumed that increased food production, reduced food prices and growth of household incomes would contribute to poverty reduction and improved nutrition. However, in 2007 the World Bank demonstrated that simply increasing agricultural production and household income does not sufficiently reduce under-nutrition. Despite estimates that under-nutrition causes losses in GDP of 2-3%[1], IFPRI reported that improvements to nutrition often lag behind economic development. FAO concluded in 2012 that agricultural growth will not necessarily result in better nutrition and calls for “nutrition-sensitive” agricultural growth to address under-nutrition and the related losses in GDP.[2]
Today, critical social and economic issues that have an influence at smallholder producer level include food insecurity and low productivity. These issues in combination with increased production costs lead to a drastic reduction of the producer’s income, while the worldwide demand for cash crops grows steadily. Under-nutrition plagues the majority of coffee, cocoa and tea producing areas, such as Indonesia, India, Ivory Coast, Ghana, Kenya, Vietnam and Ethiopia. Unremitting under-nutrition leads to a vicious cycle of under-nourished farming families over generations. As a consequence, under-nutrition contributes to continuing productivity losses in the cash crops sector.
Looking at trends in the coffee, cocoa and tea sector sector, around 16% - 40% of the global production is currently certified. Ideally certification standards will integrate training tools on nutrition security as a mandatory element in their curriculum in areas of high malnutrition and coffee production for smallholders and plantation workers.
Addressing nutrition security can be achieved by combining Good Agricultural Practices with Good Nutritional Practices, developing nutrition sensitive value chains for local products, increasing household production of nutritious foods, strengthening the role of women and educating people about the importance nutrition.
Investments in better nutrition have an exceptionally high benefits to cost ratio. The Global Alliance for Improved Nutrition (GAIN) encourages the coffee/cocoa and tea industry to invest in nutrition sensitive coffee chains in areas experiencing high rates of malnutrition to prevent future generations of undernourished producers and plantation workers with decreased productivity.
Alison, wholeheartedly support your focus on incentives, or in other words, the "whys" behind the various players' actions. Understanding this is fundamental to any strategy for change!
Welcome to this live discussion. We're delighted to be joined by Jason Clay, Senior Vice President, Market Transformation, World Wildlife Fund and Simon Winter, Senior Vice President of Development, TechnoServe. Please post your comments and questions now!
First, thanks to Business Fights Poverty and World Wildlife Fund for hosting this discussion!
We need to produce an estimated 70 percent more food by 2050. The greatest potential for productivity gains lies in the millions of small-scale farms in Africa, Latin America and Asia. But as the pressure grows to produce more food, unsustainable practices like slash-and-burn agriculture and excessive tilling of cropland threaten ecosystems and contribute to climate change.
At TechnoServe, we believe that with the right skills and knowledge, smallholder farmers can better feed themselves and the world while setting an example of environmental sustainability. But we must keep in mind a core truth: farms are businesses, and smallholder farmers should be viewed as businesspeople. Lasting change will happen only when farmers are implementing sustainable approaches because they can make money doing so.
This means that promoting environmentally sustainable practices should go hand-in-hand with efforts to bring smallholder farmers into commercial markets. Civil society, governments, the private sector and donors must work together to find the intersection of environmental protection and commercial opportunity. If done right, this approach can help protect the planet, feed a growing population and raise living standards for farming families.
I agree that there is a real need to focus on nutrition, not just production or even productivity and other efficiency measures. The global food security discussion has certainly moved in this direction over the past 10-15 years. The issue is where is the best place to do this and how. While it is clear that most retailers and brands would probably not want to buy "certified poverty" or "certified malnutrition". I think we should be able to expand certification systems to include performance based standards for productivity and producer income which they do not do at this time. These could be short-term proxies for well being, but would not be nutritional measures per se. It is not clear that certification programs are the best way to address nutrition, however. I have been involved in the development of many standards for specific ag commodities. It has been hardest to get input and participation for social issues of any kind much less nutrition. And, regarding nutrition, many farmers, including most of the world's poorest, are not and probably will never be certified given the nature or focus of their production. Yet, it is them and their children where chronic malnutrition is most common. So the question, too, is how to get a nutrition focus and overall improvement for those commodities that are destined for more local markets (88% of food still does not cross international borders). Just one more thing to note here is that now the BRIICs seem to have shifted from taxing ag to subsidizing it heavily. China's ag subsidies are now nearly twice what the US and EU are. It this is going to continue to be the case, perhaps some of these subsidies could be directed towards nutrition.
WWF is finding that producers that adopt more sustainable practices or that even become certified are actually more productive in terms of overall production but especially in terms of efficiency of input use and more profitable. While this is anecdotal, we need to begin to document this more carefully. We have done this with cotton in India and Pakistan and showed signficant reductions of water, pesticide and fertilizer use, coupled with increased production and income. Cash crops that produce higher net income can be good for nutrition, too, but that also involves complicated decisions about how income is spent.
That’s a very important point: productivity gains don’t have to come at the expense of environmental sustainability. The two can complement one another. In general, improving post-harvest processes is a key element in improving both food security and sustainability. TechnoServe is exploring a number of different models that will help farmers store their own staples, allowing them to sell when prices are advantageous and keep some food for their own families. Good post-harvest practices can also help reduce losses, which can make a huge difference in improving the quantity of food available. In sub-Saharan Africa alone, post-harvest losses for grains are estimated at nearly $4 billion a year out of $27 billion worth of grain production.
I'd also be interested in the panel's thoughts on the greatest gaps that currently exist related to "tools that small-scale farmers need" to become more viable players in sustainable agriculture value-chains. Do you see access to capital as a significant constraint for small farmers and outgrowers?
Just going to Project Nuture in the Havard report its noted the Coke will recover its investment many times over. And here's the point: an initiative like this is commendable however without a doubt Coke's will message this in its marketing to build brand value/equity and drive up its NBAV (net brand asset value). So there'll be exponential ROI for Coke. The question is - in the full knowledge of how its efforts with Project Nuture will enhance NBAV - is the arrangement truly equitable? On balance its seems very one-sided.
Perhaps the best way to frame this is to recount how Anita Roddick, personally cashed out making around $400 million selling Body Shop to L’Oreal in a deal valued at $1,2 billion. She masterfully manipulated Body Shop’s version of Fair Trade with her “Body Shop Supports Communities” campaign. Take the Brazil nut oil ingredient example: Roddick is recorded, saying that Body Shop paid at least twice the local price for Brazil nut oil and thereby could justifiably claim that indigenous communities benefited greatly from the venture. Body Shop milked the “we-are-buying-the-Brazil-nut-oil-story-from-the-poor-forest-communities”, claiming this supported the Amazon forest communities’ struggle to preserve their way of life, was promoting the need for Amazon conservation, and forging the partnerships needed to manage a great Amazon biological treasure trove of species. In so doing the Body Shop saw a significant increase in their corporate brand’s value from the bounty of favorable PR marketing that the Brazil nut containing products generated. Stoking the fire of the Body Shop brand story to take advantage of her customers’ charitable instincts, led to mega-millions for Roddick but nothing for the thousands of Body Shop forest-based communities or Developing World suppliers she so frequently used and dropped as she moved to the next flavor or ingredient of the month. It is without question morally wrong and exploitive – and very much against the spirit of Fair Trade – to pay a few extra pennies more to poor community suppliers and then leverage this to build brands and businesses worth millions. Very disappointing insights for those who believed that Roddick operated with a superior moral compass to other business operators and most astounding of all she gets a knighthood for this!! ( this is another Roddick perspective not widely considered http://www.dailymail.co.uk/femail/article-482012/Queen-Green-Roddic... ) It would have been infinitely preferable if she had allocated Body Shop's Community suppliers say 10% of Body Shop's equity - at the time of the L’Oreal sale this would be worth $124 million. Instead of the extra pennies she paid for thier ingredients they would have built real wealth.
Coming back to Project Nuture of course its great that thousands of farmers are earning, that they are embedded into a successful brand's supply chain however the model needs to configured mor inclusively so that these farmers move from suppliers to brand co-owners. We've worked on this and our efforts are currently framed like this:
Promoting co-ownership and sharing Intangible Brand Value with poor producers, EquiTrade™enables small-scale farmers to share via equity in the value of a brand-led business. It is a huge multiplier of value andsets the standard for life-changing upward financial mobility for farmers, producers and small enterprise owners who are traditionally at the base of the global economic pyramid. EquiTrade™represents a staggering, high-powered economic pathwayout of poverty. EquiTrade™ is wealth-constraint alleviation andenables the poor to increase their market power and rise out of poverty by sharing ownership of the crown jewels of capitalism—Intellectual Property (IP) andSuccessful Brands.
Hope brand-owners can get on board with this an catalyze a whole new pro-development brand genre wherein they configure and launch EquiTrade™ type brands in partnership with their poor farmer suppliers.
if I could also add, it is important to also look at what offers the greatest opportunity for value addition in lower margin staple grains. Often for the smaller producers, that is livestock (which convert grain into protein.) Small farmers are often able to produce poultry and animal products (for example dairy) competitively with alrger farms given certain infrastructure and aggregation actors are in place. Small scale 'value addition' of grain otherwise often isn't competitive. Livestock can play a critical income role in smallholder systems. I know that you have experience specifically with poultry and dairy in Africa.
