Agriculture and Development: Poverty alleviation through linking small-scale producers to formal markets  

The Food Lab and its members are facilitating new market connections between multinational food companies and small-scale farmers in Central America and Africa. We have developed and are implementing new business models that distribute risks and rewards more evenly across the supply chain, improve the flow of market information, and increase access to credit and technical assistance.

The Food Lab works on smallholder issues in partnership with buyers and development organizations using an action-research approach. The shared reflection and learning process aids in understanding how sourcing from small scale farmers in global food chains can be done responsibly and deliver much needed economic and social benefits to farming communities in the developing world.

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Smallholder Sustainability Assessment: Supply Chain Performance Measurement

A growing number of companies are expanding their smallholder sourcing programs and many are interested in better systems of tracking impact of purchases on existing small farmer suppliers.  Development organizations are looking for practical ways of building livelihood monitoring into their agricultural enterprise work to complement their more rigorous impact assessments.  Building light-weight, cost effective performance monitoring systems is a step towards the goal of transparent and inclusive agricultural value chains.

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In the Fall of 2011 the Sustainable Food Lab convened a cross-sector workshop and uniquely designed field trips 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 at the end of this report.  Once back together, the group developed and explored the key themes that emerged. 

READ THE REPORT HERE 

Agriculture remains the best opportunity for the estimated 1.5 to 2 billion people worldwide living on small farms to work and trade their way out of poverty. Linking smallholders with well-functioning markets plays a critical part in long-term strategies to reduce poverty and hunger.  At the same time, including smallholders in supply chains offers companies a chance to diversify and increase resilience in their supply base, while also appealing to ethically-motivated consumers. While the potential benefits are great, organizations also struggle with the challenges of linking diverse and fragmented smallholders to formal markets – and there are real barriers and risks that must be addressed.

This website is a resource for practitioners and researchers who are taking on these challenges.  It facilitates the sharing of experiences and “new business models” through research papers, case studies, tools, impact studies, and descriptions of active “action-learning” projects – thereby helping companies and NGOs become more effective at realizing both development and commercial benefits.

VISIT WEBSITE

In October 2010 in Rome, Italy, Don Seville of the Sustainable Food Lab and Mark Lundy of the International Center for Tropical Agriculture (CIAT) facilitated a workshop at IFAD to look at the potential for more strategic partnering and collaboration between private sector investments in inclusive value chains and public sector funding in agricultural infrastructure intended to benefit the poor.  The Sustainable Food Lab and CIAT brought together partners working on private sector partnerships -- including SYSCO, Superior Foods, Unilever, and Oxfam GB -- to share how we are working together to create opportunities for marginalized farms to participate in global supply chains.  The group discussed the benefits of public investment in infrastructure to enable these kinds of producers to successfully engage in global markets.   This meeting focused on the challenge of bringing together IFAD’s primary focus --  long term government led agricultural investment -- with the fast moving and focused opportunities for smallholder to participate in commercially led supply chains opportunities.

For more, please click HERE
For more about IFAD, please click HERE 

New Business Model Projects

The new business model project is a four-year action-research effort coordinated by the Sustainable Food Lab to develop and implement "new business models" that link small scale producers to formal markets.   New business models are prototypes of supply chains that distribute risks and rewards more evenly across the supply chain, improve the flow of market information, and increase access to credit and technical assistance. 

The project is working in four value chains with a cross cutting research agenda: fine flavor cocoa in Ghana, certified cocoa in Ghana and Côte d’Ivoire, smallholder flowers in Kenya, and dried beans in Ethiopia.

For each of the value chains, the project is focused on (1) building demand for the product, (2) improving trading relationships through the emerging new business model for sustainable trading relationship framework, and (3) improving production and processing practices to increase productivity and meet the requirements of the market.

Publications:

Linking worlds: New Business Models for Sustainable Trading Relations between Smallholders and Formalized Markets.  Vorley, Ferris, Seville, Lundy, February 4, 2009.  

Think Big. Go Small:  Adapting business models to incorporate smallholders into supply chains  --   Read full briefing (PDF 1.69MB)

READ MORE HERE 

 Small holder certified flowers, Kenya

Project Goals:

• Link very small-scale farmers with one of the most demanding markets through a locally owned intermediary.
• Analyze and improve the inclusiveness of the chain’s business models, expand to other products and measure impact on livelihoods and trading relationships.

Led by the International Institute for Environment and Development, this project has built on ASDA's commitment to increase sourcing from Africa by developing the world's first smallholder outdoor flower supply chain to be certified by Rainforest Alliance. Rainforest Alliance certification both ensures sustainable production practices and helps communicate the positive story to customers.

Project Partners:
ASDA, Rainforest Alliance, Wilmar Naturegrown, IIED, SFL

Publications about this project

ASDA Press release

READ PROJECT INFORMATION HERE

 Fine Flavor Cocoa, Ghana

Project Goal: to increase growers’ capacity to grow high-quality, fine flavor cocoa and develop a super-premium brand of cocoa that is recognized worldwide and to work with buyers to develop a transparent supply chain that delivers much of the premium back to the growers.

“Ghanaian cacao farmers are some of the best growers in Africa. By bringing superior cacao clones to Ghana, and teaching Ghanaian farmers to grow them, they will increase their income with a sustainable crop, while we will get a reliable supply of excellent cacao. Everybody wins.” John Scharffenberger

Project Partners: Scharffen Berger Chocolate Maker, now a brand of The Hershey Company, Agroeco-Louis Bolk Institute, Cocoa Research Institute of Ghana (CRIG), CIAT, Sustainable Food Lab.
Additional expertise has been provided by Ed Seguine, Mars Chocolate and the ICCO Fine Flavour Committee Chair, Dr Darin Sukha of the Cocoa Research Unit at the University of the West Indies, Trinidad & Tobago, and Chloe Doutre- Rousel, Chloe Chocolat, France.

Project Timeline: 2007-2011

Progress Report Nov. 2010:  Read the Report

Publications about this Project:

 Cocoa West Africa

Project Goal: to increase demand and supply in West Africa for Rainforest Alliance certified cocoa and to test whether voluntary certification with sustainable practices provides a net benefit to small holder cocoa farmers that can be sustained by the value chain without ongoing subsidy. This project has assisted over 17,000 farmers in West Africa to achieve certification to date.

Rainforest Alliance is innovating new business models through this project to increase the access of farmers to the certified market while piloting group certification through traders and rural input stores.  These innovations are focused on reaching the non-organized farmers who do not belong to an operating cooperative.  These farmers comprise a large percentage of the cocoa farmers in West Africa. 
Project Partners:  Rainforest Alliance, AgroEco-Louis Bolk Institute, Sustainable Food Lab

Project Timeline: 2007-2011

READ MORE HERE

  White Pea Beans Ethiopia

Project Goal: The new business model supports smallholder producers and is focusing on a flexible approach to chain-wide development that improves relationships among value chain actors. In addition to facilitation in linking producers with buyers, the project supports upgrading of the bean value chain through interventions aimed at increasing productivity and improving quality of product and trade relationships.  White pea beans (navy beans) have long been an export crop from Ethiopia.

The project has closely partnered with ACOS, the largest exporter with a significant processing facility in country, to invest in new varieties and training to improve productivity and quality, to improve links between farmers and intermediary traders and to develop a chain wide support system that enables communication, traceability and builds confidence from end-to-end in the chain.

Project Partners:  ACOS, Catholic Relief Services, Sustainable Food Lab

Project Timeline: 2007-2011

Publications about this Project:

Pea Beans In Ethiopia: Challenges of Creating New Business Models for Sustainable Livelihoods.  Seville, Systems Thinker, Vol. 19, April 2008.

Review of the role of commodity exchanges in supporting smallholder farmer market linkages and income benefits. Peter Robbins, July 2010.  

 

READ THE LATEST DEVELOPMENTS HERE

READ A REPORT OF THE PROJECT HERE

 Frozen Vegetables, Guatemala

The Guatemala Highland Value Chain Development Alliance brings together world-class expertise on sustainable agriculture, poverty alleviation and agribusiness with market demand and technical assistance to improve small scale vegetable production and benefit rural communities in the region of Sololá, Guatemala. 

This innovative partnership focuses on building transparent and equitable business relationships between transnational corporations and small-scale producers. Farmers and buyers alike face complex challenges to stable farms and supply chains, such as the effects of climate change, eroding soil fertility and volatile global markets. 

The project works with the existing 3000 smallholder supply base while expanding opportunities for new producer associations in the highlands of Guatemala.  Through this engagement, the farmers expect to increase productivity, gain access to stable markets, diversify production, and increase participation and leadership of women. 

Project Partners:  Oxfam GB, SYSCO, Superior Foods, SUMAR, SFL, CIAT, ADAM

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 Fresh Produce, Dominican Republic

The project goal is assisting agricultural communities improve economic profitability, environmental soundness and social equity of food and farming systems as practiced by small-scale and limited resource farmers in the northwest Dominican Republic.  This is accomplished through expanding opportunities that link fresh produce grown by small-scale farmers to high value markets, both export and domestic (i.e. tourist hotels and restaurants and supermarkets).

SYSCO in partnership with Agrofrontera, a local Dominican NGO, lead the project introducing certified GAP production practices.  The project is developing and piloting a new form of commercial intermediary for the packing and grading.  The intermediary is commercially nimble, transparent and fair to its farmers.

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http://www.agrofrontera.org/proyectos.html

Oxfam/Unilever Smallholder Sourcing, Azerbaijan

In 2007, Oxfam Great Britian made an unusual move in their effort to engage the global private sector in addressing rural poverty. Rather than critiquing how companies work (or don't) contribute to poverty alleviation, Oxfam asked the Sustainable Food Lab to facilitate a learning journey to bring the some private sector colleagues to rural Honduras where Oxfam had been working with marginalized farmers.  Together they walked through numerous remote farming systems, met with farm leaders, saw local market access initiatives, and brainstormed about how Oxfam and the private sector could partner more together to bring about economic opportunities.  

This journey inspired Oxfam GB and Unilever to look for ways to integrate small - scale farmers into Unilever's supply chains in ways that maximize the potential development impact.  Through a program of joint activity, Oxfam and Unilever are exploring ways of involving more smallholder farmers in Unilever's global supply chains as part of integrated development efforts that also work on local markets, gender issues, and food security. A project to source dehydrated vegetables from smallholders in Azerbaijan is now underway. 

"We believe that securing our supply of raw materials can go hand in hand with economic and social development in rural areas, providing better incomes to smallholder farmers and agricultural workers." ---Jan Kees Vis, Unilever

More at: 

http://www.sustainable-living.unilever.com/the-plan/better-livelihoods/smallholder-farmers/  
http://www.oxfam.org.uk/resources/issues/privatesector/business-models/index.html?ito=1940&itc=0