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Decision and Policy Analysis Research Area – DAPA

Are private standards in the food industry truly set to impact on smallholder farmers? A study in Northern Cauca, Colombia.

Versión en español

Type smallholder farmers (SHF) on Google and about 3,000,000 results will flood your computer screen. Has it ever become a trend topic on the Internet though? Perhaps not yet.

Over the past few years we have witnessed how the issue of smallholder farming went on from being a category of agricultural statistics to become a much-talked about “hot topic”. People have become increasingly aware of it, especially since the United Nations Conference on Sustainable Development, held in Brazil last year. Kanayo F. Nwanze, the President of the International Fund for Agricultural Development (IFAD), raised the subject and pleaded for increased engagement of smallholder farmers in current agricultural systems.

IFAD President Kanayo F. Nwanze at Rio+20. Source: IFAD

Apart from siding with small-scale producers, Mr. Nwanze, on the eve of the summit, also remarked that Private sector investment, both domestic and foreign, can be a critical ingredient in achieving sustainable agricultural development and food security. But it needs to be clearly directed towards enabling farmers to increase their productivity and income”.

But how can the interests of a profit-driven company align with the needs of less-privileged smallholder farmers?

So far, some of the largest companies have drawn dedicated plans and programmes to include small-scale farming produce in their global sourcing strategy. Unilever, a multinational consumer products company, appears to be leading the sustainability race in the food industry.

In 2010, after nearly 15 years of isolated sustainable business actions, this company launched the Unilever Sustainable Living Plan. While embedding the concept of sustainability into its business strategy, it appointed smallholder farmers as one of the keys to business success.

Meanwhile, the Linking Farmers to Markets team (LFM) at the International Center for Tropical Agriculture (CIAT) intended to identify how small-scale plantain farmers from Northern Cauca, Colombia, comply with Unilever’s sustainability standards.

How does Unilever address SHF inclusion in its approach? To be eligible, farmers must comply with a series of requirements listed in the Unilever Sustainable Agriculture Code (UL-SAC). The UL-SAC covers a large array of sustainable agricultural practices that both suppliers and farmers should comply with. The core of the Code contains sustainable practices divided into 10 areas: Agrochemicals and fuels, Soils, Water, Biodiversity, Energy, Waste, Social and Human Capital, Animal Welfare, Value Chain & local economy and training.

To assess SHF compliance with this Unilever code, the LFM team, led by Yeray Saavedra, developed a tool that “translates” the code into measurable parameters in small-scale conditions. Once the tool was set, the team collected and analysed valuable data from ten plantain SHFs in Guachene and Padilla, Northern Cauca.

The study indicated that those smallholder plantain farmers who supply formal markets, such as large supermarket chains or local supermarkets, fare better with the code than those who supply informal markets. This is due to a more integrated crop management during the production stages (mainly entitled to the agrochemicals and soils sections).

With formal markets currently demanding high-quality and size products, some farmers face hardship due to resource scarcity and time constraint. The LFM study shows, however, that plantain farmers who supply formal markets possess an increased awareness of sustainability during crop production, which will ultimately improve the final product.

Moreover, the study confirms that plantain farmers who supply formal markets obtain higher income than those who do not.

From the above, we can assert that formal markets generate a higher income for the plantain SHF who meet market requirements than those who do not, and in doing so farmers invest more time and resources to apply sustainable sound practices.

The study, beyond the code compliance results yielded from the analysis, also endorses that by testing the applicability of the Unilever code we could indirectly demonstrate that sustainability in smallholder farming conditions may directly relate to the market orientation.

The long-awaited private sector investment might indeed improve the living conditions of thousands of smallholder farmers across the globe. However, if smallholder farmers continue to establish close links with formal markets, millions of SHFs could thrive by applying sustainable practices.

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