March 2012 Newsletter

Welcome

The Sustainable Food Lab is a consortium of business, non-profit and public organizations working to accelerate the shift toward sustainability in the food system globally.

We hope to see many of you at our 2012 SFL Annual Leadership Summit in Puerto Plata, Dominican Republic April 29 - May 3.  This event includes Learning Journeys and a two day meeting to energize collaborations, new learning and development in cross sector pilot projects and industry wide discussions of standards and verification and much, much more.  

Register, check out the agenda and logistics HERE.

Mainstreaming Sustainability in Agriculture through Sourcing Strategies

The 2012 Sustainable Food Lab Leadership Summit will address many of the provocations raised in this article.

Jan Kees Vis
Unilever Global Director Sustainable Sourcing Development

Introduction
The document “Realizing a new vision for agriculture; A roadmap for stakeholders” (further referred to as NVA) which was published by the World Economic Forum in 2010 sets out in detail what could be achieved by cooperation between Public Sector, Civil Society and Private Sector on “a new vision for agriculture”. It deals with the need for a new vision, the timing of the challenge, the use of innovative tools, the virtuous cycle of increasing skill and investment, and indeed the critical roles each stakeholder has in the process.

This paper is an attempt to address some of the questions that arise once one begins to think about building the roadmap the document refers to. The perspective used is that of a food company, i.e. a company which sources agricultural raw materials to process into consumer goods. The objectives for implementing sustainable sourcing strategies (for agricultural raw materials) are therefore considered to be two fold:

• Security of supply (of agricultural raw materials) 
• Improvement on the ground in terms of economic results (of farms), quality of the environment and quality of livelihoods (mainstreaming sustainability in agriculture through sourcing strategies).

Food security
One of the reasons why a new vision for agriculture is needed is because population growth is outpacing agricultural yield improvement, thereby raising concerns about food security. Food security is both about availability of food, at global and regional scale, and accessibility of food, i.e. whether people can afford to buy the food that is available. Concerns about food security impact on the possibility of food companies to source raw materials, since arguably buying agricultural raw materials for processing competes for land for local staple food production. As a consequence, one could argue that food companies trying to set up new sources of agricultural raw materials will always have to take into account local food security.

Point 1: Local food security needs to be an element of consideration in any sourcing strategy.

Policy development
The NVA argues that “government policy is critical for investment in agriculture”. NVA gives the reasons why and gives two examples where this happened and was successful over the last 20 years: China and Vietnam. Yet, there are few signs of other governments making similar moves. For businesses to further invest in the agricultural part of the food chain and play a role of Change Agents, it is crucial that business convinces governments to develop supportive policies.

Point 2: Food businesses need to find ways to pressure governments  in making policy changes conducive to investment in agriculture. This could happen through the Consumer Goods Forum and become part of the dialogue in the World Economic Forum summits in Davos.

How to reach large numbers of farmers?
Consumer goods businesses typically are not primary converters. They typically buy semi-processed materials from primary converters who in turn buy fresh produce from farmers. Consumer goods businesses and primary converters alike usually do have knowledge of farming, plant breeding, variety selection, quality assurance, food safety, market development etc. But reaching the number of farmers required to build a reliable supply of raw materials for global markets may be beyond their capacity. The farmer numbers run into the hundreds of thousands, and millions. This calls for government run extension services.  Also, in order to ensure that future trading relationships with farmers are designed to be transparent, equitable and fair, it is probably better to involve civil society organisations in the community development and business development stage. This means that there is a need for revitalising government run agricultural extension services, and civil society supported community development programmes.

Point 3: Governments should run extension services, civil society organisations should support community development programmes.

How to involve farm input providers?
Farm input providers (e.g. fertilisers, crop protection chemicals, farm machinery) have knowledge of local farming systems and access to infrastructure and distribution channels to farmers. However, much of their business is driven by volume (of chemicals sold). Small scale farming systems with sometimes complicated cropping patterns with large variety in the type of crops being grown call for specialised and targeted farm input solutions though.

Point 4: Farm input providers need to find solutions to cater to the varied needs of small farmers.

How to keep farmers motivated?
More often than not, sustainable sourcing programmes in the past helped farmers reach a point where they could get certified against a sustainability standard. But support dwindled or disappeared once that point was reached. And often, only part of the produce could be sold as certified in a premium market, whereas the rest had to be sold as conventional. This de-motivates farmers. The benefit of applying sustainable practices in farming (codified in a standard or not) should be in the fact that farmers can improve the quality of their soil, the quality of their produce, their yield levels, and their livelihoods. The benefit for the farmer should therefore take centre stage in any approach to sustainable sourcing.

Point 5: Farmers should be the first to benefit from implementation of better  farming practices.

How to continuously improve at farm level?
Most approaches to sustainability include a principle on continuous improvement, if only because one cannot aspire to absolute sustainability in a fossil fuel dependent economy. In many sectors of the economy, continuous improvement is fuelled by continuous education (of workers and executives both) and technology development. Farming is the oldest economic activity of mankind, but innovations in farming seldom reach the farmers that need innovations most. Achieving continuous improvement at farm level will therefore have to depend on offering continuous support through extension services to farmers, and organising access of said extension services to the total body of knowledge available on better farming practices.

Point 6: Continuous improvement at farm level is critically dependent on continuous access to knowledge on better farming practices.

How to monitor impacts effectively?
Since the objectives for implementing sustainable sourcing strategies are considered to include “Improvement on the ground in terms of economic results (of farms), quality of the environment and quality of livelihoods”, there have to be ways to monitor the impacts of implementing better farming practices on these outcomes. Many impact monitoring systems have been designed, the vast majority of them at farm and field level. One reason for this is that in case certification is used as a way to make farm production more sustainable, the unit of certification is usually the farm. However, if one has the ambition to scale up to reach hundreds of thousands of farmers, this model is too resource intensive. Also, just like quality of the environment is better determined at a landscape level, quality of livelihoods is better determined at a community level. Results at farm and field level are relevant, but form only part of the change intended with the intervention. Such impact monitoring can be seen separately from the dashboard type indicator system a farmer might use to optimise his results.

Point 7: Monitoring of impacts (of introduction of better farming practices) should happen at landscape and community level.

How to create “generic” standards?
“Do not teach people what to think, but how to think” (Jason Clay, WWF-US). Most, if not all, interventions aiming at sustainability in the area of agricultural sourcing are based on standards. These can be either independent standards (e.g. Food Alliance, Rainforest Alliance, GlobalGAP, FairTrade, Organic, RSPO, RTRS, Bonsucro, etc.), or company internal standards. Most standards are rule based (i.e. do’s and don’ts) and therefore teach people what to think. Many of the independent standards have become brands in their own right, and see little incentive in harmonisation. So perhaps creating generic standards is an illusion. Instead, it might be easier to agree, on a case by case or region by region basis (see point 7), which impacts are the most important ones to monitor (teach people how to think), as evidence of change towards sustainability.

Point 8: Convergence of standards is not likely because of competition, but it should be possible to agree which broad impacts need to be monitored across a geography (e.g. landscape, valley, water catchment) and community to validate evidence of greater sustainability.

How to involve food  companies?
Arguably, of all the food produced in the world only a small proportion is used for processing. And of all food companies in the world, only a certain percentage have committed to programmes of sustainable sourcing. If the ambition is to take sustainable sourcing mainstream, in order to realise the New Vision for Agriculture, then alliances need to be formed. Quite a large number of initiatives exist that bring food companies together on subjects of sustainability, CSR, etc. Examples include Sustainable Agriculture Initiative Platform, Sustainable Food Laboratory, BSR Food  & Ag programme, Keystone Farm to Fork programme, etc. All of these would need to be mobilised around this agenda.

Point 9: Food companies need to be involved through alliances, which can be forged in existing associations, programmes and initiatives. Outreach to these would need to be organised.

Conclusion
Starting from the New Vision for Agriculture, this document tries to formulate the questions that need to be answered in order to create roadmaps that food companies can travel to realise this new vision. Comments are welcome.

 

Acknowledgements:

With inputs from Reinier de Man (Consultant, Leiden, the Netherlands), Peter Erik Ywema and Emeline Fellus (SAI Platform).

 

Cool Farm Tool Gains Momentum:
Along With Other Sustainability Metrics for Agriculture

Measuring sustainability performance in agriculture has passed from infancy to adolescence. The Stewardship Index for Specialty Crops is piloting the second version of a suite of metrics developed by grower, industry and nonprofit groups.

The Field to Market Calculator was built from US databases of sustainability
impacts and is used in pilots in both the US and Canada. Our colleagues at SAI Platform in Europe have created a Sustainability Performance Assessment to standardize farm level data collection for all key sustainability indicators. Many hope that data from different tools will flow into Sustainability Consortium systems to build out product information.

Within this suite of tools, The Cool Farm Tool has emerged as a standard for estimating carbon footprints and identifying practice change scenarios. Building from the experience of more than twenty organizations piloting the Cool Farm Tool over the last two years, a new Cool Farm Institute will be launched in 2012.

In its first applications the Cool Farm Tool has helped producers and their supply chain partners identify the biggest opportunities to make a difference with greenhouse gas emissions. One key mitigation opportunity for barley, for example, is to use fertilizers produced with more efficient methods. For canola a key opportunity is to increase carbon sequestration from reduced tillage; for organic cane sugar, management of crop residue is key; for potatoes increased yields, better irrigation management and fertilizer production and use are the target mitigation activities; for cotton, recycling on-farm biomass is the focus; and for dried beans, both fertilizer use and carbon sequestration from reduced tillage. The synthesized results are useful for the creation of incentives and education. In order to support decision-making on the farm, each producer has to enter data for their specific operation.  Costco egg suppliers found that the most important practice changes differed from place to place: some discovered the need to focus on electricity, others on feed selection or transport, and others on manure management.

In addition to the large farm systems, the Cool Farm Tool has also been used to analyze options in small scale farming systems—tea in India, coffee in Kenya and Nicaragua, cotton in India, and vegetables in several countries. In these systems adaptation to climate change is more front-and-center than mitigation, although all farming systems benefit from practice change scenarios connected to GHG footprints.

The Cool Farm Tool, like many sustainability metrics initiatives, is being developed in a pre-competitive space. Carmel McQuaid from Marks & Spencer commented that supporting the tool is an excellent investment because Marks & Spencer learns not only about cotton, which they directly sponsored, but also from the analysis of footprints and practices in crops and livestock enterprises sponsored by other organizations.

Unilever, the University of Aberdeen and the Sustainable Food Lab created the Cool Farm Tool, and many other organizations have contributed significantly to its development and expanded functionality. The Cool Farm Tool differs from other GHG calculators in that it:

• Reflects the impact of some of the key management choices farmers have on their farms, while being designed to work almost entirely from data farmers normally know off the top of their heads;
• Has strong backing from, and was co-developed by, a number of organizations, including PepsiCo, Yara, Soil & More, Marks & Spencer, McCain, Heinz, Sysco, and Costco;
• Has been tested widely with farmers, who like that the Cool Farm Tool is relatively easy to use, gives instant results and invites exploring ‘what-if’ scenarios;
• Works in a generic and consistent manner across the globe in diverse agricultural production systems.

Several of the companies involved in the tool’s development are now creating an institute to continue its improvement, share data from its use, and develop a web-based software platform.

For more information contact Daniella Malin (Daniella at sustainablefood.org)

Don Seville, Co-Director, Sustainable Food Lab

In the Fall of 2011 the Sustainable Food Lab convened a cross-sector workshop and uniquely designed Learning Journeys in Ethiopia to share experiences and lessons in connecting small scale producers to modern markets.  For non-profits improving market access, productivity, and quality of small-scale producers is a high leverage point for improving livelihoods and food security.  For domestic and international companies, it is a strategy for developing new supply chains that also have social benefits.  For both, sustainability of practices and durability of the trading relationships are important.

This workshop brought together NGOs from eight countries, researchers, domestic businesses, and some international businesses.   The meeting kicked off with four Learning Journeys to see honey production, coffee production, dried beans, and smallholder outdoor flowers. Each trip visited with growers, businesses, and various support organizations.  The descriptions and reports from each trip are available in the linked report PDF at the end of this article. Key themes from the Learning Journeys emerged as the groups gathered to share the learnings:

There are real opportunities for small holders at the moment – but specific value chain time windows are limited.

The role of domestic companies in reaching large numbers of smallholders (for both local and export markets) is absolutely critical. a This event had representation on all the trips from regional businesses.   The rural training and buying centers set up by a number of the companies visited seemed very successful for building production and quality and loyalty – as indicated by the growth of the honey coop from 125 members to 1100 members in a single year.

It was a challenge for smallholders to meet quality and productivity in all the value chains.  It was clear that smallholders COULD succeed and could increase returns through better productivity, better quality, and better access to markets.  In honey, 3 modern hives were enough for a woman to bring in 4000 birr.  In flowers, the income could be up to four times that of tea.  Dried beans could double income through better practices and varieties.  Yet in the Ethiopia chains, it was challenging to increase production and quality and become reliable suppliers at sufficient scale and fast enough for the buyers to meet their commercial commitments.  While there may be flexibility and commitment to small-scale producers during a ‘honeymoon’ period in the relationship, ultimately penalties occur as normal commercial relationships are established.  

We saw some very interesting business models to stabilize price and volume for growers, such as the business model strategy in the flowers chain to buy consistent volumes of flowers from the farmers despite weekly variability in the market.  This creates a stable income for the farmers, and ensures that the farmer produce enough for the peak times.  More could be done to synthesize and share these types of strategies.

Many of the companies present emphasized that their priority was to stimulate increases in high quality supply.  Prices were less important than getting sufficient production and developing a reliable / loyal producer network.   In contrast, many of the NGOs grew up working on “fair trade” during “demand constrained” times when the greatest concern was around fair prices and durable relationships for the farmers.  During these “supply constrained” times in Ethiopia, the dynamics are very different with companies being willing to pay more and invest in quality and productivity.  HOWEVER several companies underlined that there is a limited time in which to develop a reliable smallholder supply because they have to secure supplies through large scale farm investment or imports in order to meet their production commitments.

There were consistent barriers mentioned.

Lack of input availability was a barrier to realizing the potential productivity in all the systems – from modern beehives to accessing new varieties and fertilizer.

All of the supply chain actors in the honey chain – farmer, cooperative, union ambrosia - struggled with a shortage of working capital that delayed investments and delayed adoption of more productive practices.

There was tension between cash crops and food security.  Can we maintain quality of a cash crop alongside a diverse farming system that supports food security?

Through most of the experiences, a consistent weak point was the profitability and management capacity of farmer groups and cooperatives.   Cooperatives in the honey, coffee, and beans chains struggle with profitability and leadership.  Many farmers choose to sell to traders.  Yet the government and NGOS continue to promote cooperatives as the key to bringing services and access to markets to smallholders.  Can we be more effective in bringing business management into cooperatives?   Can we work effectively with direct traders and still increase farmer empowerment?   Despite the leadership challenge in many of the cooperatives, we saw very positive gains from the foundational work of women’s savings groups and farmer self help groups in building confidence, empowerment, and planning skills.

Partnerships to support smallholders entering markets must be flexible. 

All the projects/value chains we discussed evolved considerably from their initial concept. 

All the chains showed the need to bring in and bring along buyers and manage risk to the smallholders.  Finding ways to engage buyers beyond raw material purchase is critical for developing long-term relationships and taking advantage of the technical expertise they bring, and identifying additional opportunities for producers to upgrade their positions.  Because the concepts evolved, the continual engagement was critical.

It is important to look for opportunities to develop lower quality product lines, particularly for those involved in high quality, international export crops.  This can help lower the risk for small scale producers by ensuring that there is still value for a crop that cannot meet high product spec.

Intermediaries play an essential role in linking small-scale producers with markets and with resolving or managing particular issues such as quality control and aggregation of supply, or developing alternative market opportunities.  There are a number of different models for how these intermediaries are structured and function, but it is crucial that these can ultimately stand alone without NGO support.

From this experience, we saw real potential – local and international companies worried more about stimulating production and reliability in supply chains, farmers eager to improve quality and participate in these markets, and stories where partnerships between NGOs and companies bring together the strength of both worlds.  The challenges included shortage of working capital, upgrading quality and production at scale, business effectiveness of the intermediary, reliability of the smallholders in selling into the chains, the need to reduce risk for companies and farmers, and a short time frame to get it right before the companies seek alternate large scale production. These challenges all give plenty of reason to continue working together and learning from diverse experiences in the field.

FULL WORKSHOP REPORT PDF

Four New Case Studies Available

To meet rising industry commitments to source certified cocoa, Rainforest Alliance (RA) needed to rapidly scale its network of certified farmers in the cocoa-producing countries of Ghana and Côte d’Ivoire. After initially planning to work primarily with farmer organizations, soaring demand for certified cocoa pushed RA to reach out to the vast majority of cocoa farmers who were unorganized. By working with supply chain companies and trader networks, reducing the costs of certification to farmers, and finding ways to increase potential benefits, RA was able to certify tens of thousands of small farmers in just three years. Political instability in the Côte d’Ivoire, however, disrupted global supply chains and revealed the importance of geographic diversification in minimizing risk.

Principal Authors: Don Seville, Melissa Paschall February 2012

Dried Beans in Ethiopia
Increasing Food Security Through Trade

Read/Download Full Paper (pdf)

In 2007, Catholic Relief Services (CRS) teamed up with the Sustainable Food Laboratory (SFL), the International Institute of Environmental Development (IIED), Rainforest Alliance (RA) and the International Center for Tropical Agriculture (CIAT) to find ways of linking poor smallholder farmers in Africa with modern commercial markets in Europe. This case study describes the team’s efforts in Ethiopia, where they worked with approximately 15,000 farmers to improve the trade of white beans into retail markets in the United Kingdom. Activities were facilitated by CRS, which had a long-term field presence in Ethiopia; SFL and IIED provided technical support for interactions with formal private sector partners; RA provided technical support to the monitoring and evaluation process.

Principal Authors: Shaun Ferris, Melissa Paschall and Don Seville, October 2011

Fine Flavor Cocoa in Ghana
Reaching High Value Markets

Read/Download Full Paper (pdf)

In 2008 it was estimated that cocoa producing households in Ghana had a mean per capita daily income from cocoa of US$0.42 out of a total income of US$ 0.63. Fine flavor cocoa production has the potential to raise farmer incomes substantially, but requires specialized skills and technology and direct market linkages. This case describes a collaboration among international NGOs, Ghanaian government agencies, and the chocolate industry to: 1) increase growers’ capacity to grow high-quality, fine flavor cocoa, 2) develop a super-premium brand of cocoa that is recognized worldwide, and 3) to work with buyers to develop a transparent supply chain that delivers much of the premium back to the growers. Over the course of the project, the team must overcome key technological and organizational challenges.

Fresh Flowers in Kenya
The Role of Ethical Agents

Read/Download Full Paper (pdf)

Presented here is a case study of ethical agents which, although supported by development project funds, can offer a commercial model for aligning the business models of smallholders, SME suppliers, and demanding modern retailers. In this project to bring Kenyan smallholder flowers into the supermarkets of the UK and US, two ethical agents intervened at multiple levels of the chain, creating new market opportunities, building capacity of the Kenyan SME aggregator/supplier, negotiating the terms of supply (representing the Kenyan intermediary whilst respecting the demands of the retailer), and enabling some flexibility at the retailer end. The agents also contributed to the development of a more smallholder-friendly environmental standard.

Principal Authors: Abbi Buxton, Bill Vorley, Steve Homer, and William Van Bragt, October 2011

Announcements

2012 SFL Annual Leadership Summit in Puerto Plata, Dominican Republic April 29 - May 3 includes Learning Journeys and a two day meeting to energize collaborations, new learning and development in cross sector pilot projects and industry wide discussions of standards and verification and much, much more.  Register, check out the agenda and logistics HERE.

Corporate Social Responsibility and supply agreements in the agricultural sector, Decreasing land and climate pressures. Gabrielle Kissinger

Corporate social responsibility (CSR) and supply agreements in the agricultural sector have a significant role to play to promote agricultural climate change mitigation and decrease pressure on the earth’s land and climate. Private sector engagement can also promote food security and positively affect the livelihoods of smallholder agricultural producers in developing countries. Based on a comprehensive literature survey and 15 interviews with key organizations, companies and financiers or lenders, this report investigates: current private sector climate change mitigation activities in agriculture and food production, highlighting current innovations affecting production and supply chains of key commodities; explores how CSR and supply chain commitments can improve their contribution to reductions in agricultural GHG emissions; and surveys the role of governments, finance and investment in promoting sustainability in the agricultural sector. Key findings identify a strong need for harmonization among product standards, certification and by commodity roundtables, and the need to mainstream sustainability criteria in agricultural finance and lending activities.

Unilever explains Value Chain with YouTube.  See it HERE

New Member Welcome

Monterey Bay Aquarium

Theo Chocolate

Soil and More