We have seen during Covid-19 the importance of strengthening value chains so they can withstand external shocks and market volatility in the long term. James Jenkins share recommendations for businesses embarking on sustainable sourcing projects in developing countries so they can truly achieve impact for farming communities, in addition to commercial and sustainability goals.
Approximately 78 percent of the world’s poor, or 800 million people , live in rural areas and rely on agriculture for a living. Most of those smallholder farmers are operating at extremely low levels of productivity and are excluded from formal markets. Meanwhile, there is a growing demand for locally-sourced food, particularly in growing urban hubs in developing countries. While there is often willingness by formal market buyers, such as large food producers, retailers and fast food chains to purchase crops from smallholder farmers, it is difficult and risky for them to procure directly from such fragmented and irregular sources.
Fortunately, over the past decade, we have witnessed increasing investment in innovative models that act as benevolent intermediaries connecting smallholder farmers to such businesses. These models have the potential to transform small-scale agriculture in developing countries. The most successful models utilize philanthropy to first build farmer capacity, combined with commercial models (often social enterprises) for market linkages, and are then supported by long-term sourcing commitments from corporate businesses.
At Acceso , we have been building social agribusinesses that formalize and manage entire value chains from small farmers specifically into large supermarket chains, international restaurant chains, and food processors. These agribusinesses typically double and often triple the income of participating farmers while creating robust local food systems. Based on our partnerships with many of those buyers in Latin America, the Caribbean, Asia, and Africa, and our experience managing corporate supply chains throughout the Covid-19 pandemic, we have the following recommendations for businesses embarking on sustainable sourcing projects in developing countries :
Sustainable sourcing from large businesses holds great promise for small-scale agriculture and can provide higher, more certain incomes for farmers while reducing risks they often face when trading with less benevolent informal market actors. Meanwhile, businesses can benefit from shorter, more responsive, and transparent supply chains while supporting rural development. We have seen during Covid-19 the importance of building and strengthening value chains for the long term so they can withstand even the most exceptional external shocks and extreme market volatility. During the pandemic, these supply chains have provided critically needed incomes stabilizing smallholder farming communities whilst providing essential food to urban centers, despite regional trade restrictions and fluctuations. Heading towards Business Fights Poverty Online 2020 and looking ahead to the 2021 Food Systems Summit , we look forward to ongoing engagement with businesses and following their commitments to building stronger and more equitable supply chains.
This article is part of Business Fights Poverty NYC Online 2020, a one-week, online conference (21 to 25 September) that builds on our recent online conference Business Fights Poverty Online 2020 (13 to 17 July) to drive forward connection, conversations and collaboration around how we rebuild better - how together we create an equitable and resilient world. The week consists of inspiring and engaging content, live events, peer networking and community-led learning. The week also builds on our Business and COVID-19 Response with Harvard Kennedy School Corporate Responsibility Initiative, and supported by DFID and a number of our corporate partners.
Each day, we will focus on a specific theme: Imagining the Future We Want (Monday); Creating an Equitable World (Tuesday); Helping People Survive and Thrive (Wednesday); Building Resilient Livelihoods (Thursday); Shaping System-Level Partnerships (Friday).
You can register here to join us at the online event.