Tea farmers in Kenya are at risk of having their livelihoods seriously disrupted as a result of the adverse effects of climate change. As a result the Ethical Tea Partnership (ETP) and German International Corporation (GIZ) have partnered with CIAT to identify potential solutions to this problem. The aim of this project is to identify future climatic change and forecast their projected impacts on local tea farmers.

Analysis of our data revealed that future climatic suitability for some of the major tea growing areas in Kenya will decline significantly by 2020 and even more so by 2050. Climatic suitability, however, will also increase in some areas and remain constant in others. Overall, the impacts will be highly localized and is likely to require site-specific adaptation strategies.
In a bid to develop these adaptation strategies, DAPA has examined the suitability of alternative crops for these areas under future climatic conditions. Alternative site that will be more climatically suitable have also been identified and the feasibility of such options have been documented. Sites that will maintain suitability will require farmers to adapt their agronomic management to maximize efficiency under the new climatic conditions of the area. Overall, this projects seek to inform policy decisions that will make the farmers agricultural practices more environmentally and economically sustainable. Full report can be viewed here.

“We just can’t be sure.” This five word excuse has been used by consumers and industry leaders alike to distance them from the production practices that so many of their products and parts embody. This week, a great article in the Guardian highlighted the need for greater research into value chains in order to really understand the impacts on the the individuals in developing countries who are involved in global value chains:

This is globalization in which supply chains crisscross continents, passing from company to company, and at every stage every player has an interest in obfuscation: either blatantly on the ground in Congo, where huge quantities of this million dollar trade are illegal; or closer to home with the polite refusal to engage, the citing of commercial confidentiality.

The obfuscation is hugely convenient…too many links in the chain have hidden behind the convenience of ignorance: “We just don’t know; we can’t be sure.”

The passion behind CIAT’s Linking Farmers’ to Markets program is understanding how we can better unravel global value chains to not just incorporate the global poor, but actually benefit them. Our English cohorts over at IIED are in the midst of a great webinar series on this very topic. Consideing the following questions in a series of “provocative seminars” and inviting global experts and stakeholders to share in the discussion. Key questions included:

• Why should we focus on fair trade if conventional markets can assure better prices?
• Why should we focus on commodities and export markets when rapid urbanization means that domestic ones are growing?
• How can we address market failures? Are fair trade standards still the ‘good’ standards?
• Aren’t we overlooking the role of the state with the new ‘trendy’ markets and value chains approach?
• How can we integrate individual expectations in collective actions?
• What about the non-organized small-scale producers which form the majority?
• Are we concentrating too much on the ‘external agenda’ and not enough on how small-scale producers are shaping this agenda and what mechanisms they are using?
• Are we seeing how real ‘agency’ works — for example, what makes small-scale producers sell their votes?
• Is removing people from farming the best way to development?
• Have we had to shift from markets for the poor to markets with the poor?
• How can we deal with farmers’ demands for opportunities, not charity, in national policies dealing with subsidies in other countries?
• Is the value chain approach and practice synonymous with small-scale producers’ emancipation? We need evidence.

Certainly there’s room for debate and improvement on how exactly to do this and any successes will certainly have a unique and regional focus. Hundreds of people and organizations around the world are fast at work trying to understand the current social and environmental impacts in various regions, and are attempting to imagine something different. Value chain development and small-holder integration is still in its infancy, and collaboration between the social and the natural science, in addition to businesses, NGOs and governments, is critical.

Links to audio or video of the first Making Markets Work for the Poor webinar series (which was excellent) may be found here.

Farmer in Rwanda

Agriculture is an uncertain activity. A resource poor farmer operates in an information poor environment where they do not know what weather, technology and the markets have in store for them tomorrow let alone at the time of their harvest. Despite this, small farmers and their families continue to plant, manage, harvest and sell the majority of the food consumed by the poor globally and especially in the Global South.

In the recently released Rural Poverty Report, IFAD takes a serious and broad-ranging look at what rural poverty means in 2010. One of the issue that comes out time and again is the issue of risk. Risk is the 800 pound gorilla that stops small farmers from adopting technologies and approaches that could improve their livelihoods. At the same time, it could be a growth field if taken seriously by entrepreneurs.

To IFAD’s credit, the report focuses on small farmers globally as an entrepreneurial group and not merely beneficiaries of aid programs. Despite the resilience and adaptive capacity shown daily by small farmers, there are many parts of the system that do them disservice and could be fixed in creative and potentially profitable ways. Let’s take a look at some of them:

Climate risk

Climate risk includes both climate change over time as well as unexpected climatic events happening in the short term (floods, drought, frost, etc.) This risk is fairly well understood and an entire industry has emerged in the developed world to assess and manage risk through weather and other types of insurance. This is a major business offered by mainstream insurance firms. Yet in the Global South, despite the best efforts of lots of people this remains at the scale of pilot projects like this, this and this. Why is this the case? Principally this is due to a poor understanding of the real risk facing farmers. The price of insurance is a function of the level of risk (or the probability) of an untoward event occurring and causing crop loss. If insurers and, principally, re-insurers do not understand the real risk they will over price their products which makes them unattainable for the rural poor.

Opportunities

• Make use of existing weather and crop models to better estimate basis risk across the tropics and build realistic pricing models that do not exclude small farmers
• Develop innovative, low-cost delivery mechanisms like this one in Kenya to lower transaction costs and increase coverage.

Market risk

Market risk is inherent in agriculture globally. Nonetheless the way the issue is dealt with in the North and the South is a study in contrasts. In the North, market risk is managed through private commodity exchanges and a robust set of government support programs. In the South, these are either incipient like this or this or do not exist. A best case scenario in the South may well be contract farming but this normally only covers export or high-value crops which account for, at most, 10% of total smallholder production.

Opportunities

• Develop market risk management mechanisms for wholesale and traditional market channels — e.g. wet markets — where the bulk of food is still traded globally
• Make use of emerging ICT tools — e.g. cell phones — to increase transparency in transactions, pricing and grading decisions

As the IFAD report notes, the rural poor are entrepreneurial, capable of engaging in commercial agriculture and nearly 1 billion strong. Seeing them as partners in business rather than recipients of hand-outs is a growth market. The only question that remains is who will be smart enough to see and serve this market in innovative and inclusive ways?

Share your examples of effective solutions in the comments.