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Food and beverage companies are facing a rapidly changing world
. Global demand is rising as the world’s population grows. Yet the planet’s ability to meet this demand is threatened by factors such as droughts and other expected consequences of climate change, together with land degradation and biofuel production. At the same time consumers everywhere are growing more knowledgeable and concerned about the ethics of where and how their food and drink are produced.
A number of innovative companies have begun integrating smallholders into their supply chains. There is evidence that this strategy can attract customers and manage supply risks. The investment by a company can be relatively modest if the company collaborates with farmers’ organisations, government, and other non-commercial actors. This approach to investment can have broader impacts on the rural sector, ensuring that trade benefits men and women farmers who are normally marginalised from wealth creation.
Ensuring a smallholder sourcing programme can deliver both commercially viable products and value to the smallholder, requires a number of structural challenges to be overcome. An increasing number of new business models are emerging of global and domestic companies that have adapted to overcome these challenges.
Key principles
Five principles to underpin sustainable trading relationships that ensure both corporate and smallholder value:
- Chain-wide collaboration and innovation
- Market linkages
- Fair and transparent governance
- Equitable sharing of costs and risks
- Equitable access to services
This briefing builds on the Sustainable Food Lab work on ‘New Business Models for Sustainable Tarding relationships’ and Oxfam agricultral market programmes. Initial findings were shared at the Oxfam GB event in May 2009, ‘Business Models for a Better World’, with the briefing launched at the 2010 art of farming conference
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In Austria organic farming boomed since the early nineties with over 70% of organic farms located in mountain regions
. Organic farms comply with the EU regulation for production, labelling and inspection. Production is monitored by independent control agencies. The label ‘from organic production’ supports marketing and promotion of organic goods.
The support for organic farming under the Agri-Environmental Programme is a core element of the PES program in Austria. In 2008, the compensation averaged 240 Euros/hectare or 4.640 Euro per organic farm with a total of 88.5 million Euros (17% of the AEP).
The lesson learnt is that organic farming can work as a PES but requires a certification process, auditing and creating demand for premium-priced organic products. Govt. Subsidies like AEP may be needed to compensate for these additional risks and tasks. This example shows that organic farming in mountain regions can be a basis for sustainable mountain development with adequate government support and controlling and marketing measures in place.
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What opportunities are there at farm and local community level to increase the incomes of small-scale farmers? This series of booklets aims to raise awareness and provide decision support information about opportunities for increasing the incomes of small-scale farmers
. Each booklet focuses on a farm or non farm enterprise that can be integrated into small farms to increase incomes and enhance livelihoods.
The booklets are primarily aimed at people and organisations providing advisory, business and technical support to resource-poor small-scale farmers and local communities in low- and middle-income countries. They are also intended for policymakers and programme managers in government and non-governmental organisations.
The enterprises selected are considered suitable for smallholder farmers in terms of resource requirements, additional costs, exposure to risk and complexity.
This booklet covers how vegetables can be grown for the home and for the market
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The territory of modern-day Georgia has been continuously inhabited since the early Stone Age and affected by human communities for tens of thousands of years
. On average, nearly half of the land in the region is already transformed by human activities. Nevertheless, several pristine areas remain in the hotspot, mostly in remote high-altitude areas and inaccessible gorges. About 12 percent of the original vegetation is considered pristine. Most of the hotspot's intact ecosystems are concentrated in high mountain sites, while the plains and the foothills have suffered the most habitat loss. Therefore, urgent steps should be undertaken to protect remaining biodiversity in the area.
The two main problems threatening Georgia’s mountain biodiversity in the modern age are anthropogenic impact and global climate change. Traditional agriculture in Georgia in the past was sustainable and did not seriously threaten biodiversity in Georgia. The main impact was generated in the Soviet period, when Georgian agriculture supplied by-products such as wine, vegetables, wool and cheese to Russia and other Soviet republics. This caused an increase in sheep and cattle herds up to several million heads on the relatively small territory of the country. While still shepherded in the traditional way, the herds became so large and rotations became too short, so that they threatened many high mountain pastures and caused soil erosion. This problem reduced after the disintegration of the USSR in the early 1990s, when Georgia became responsible mainly for production of agricultural products for its own market
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Markets play a basic role in economic welfare
. In rich countries life would be unimaginable without access to a wide array of reasonably well functioning markets, from food to credit and insurance. It is almost never the case that a rich-country household has to produce something in order to consume it, or that its members cannot sell their labour for a salary or wage. Credit markets function for small businesses and farms to finance investment projects, credit cards can be used to help households cover income shortfalls and insurance markets help protect people from unexpected income and health shocks.
Access to markets is just as compelling for a poor rural household in Rwanda, India or Peru. Without good access to markets, a poor household cannot market its produce, obtain inputs, sell labour, obtain credit, learn about or adopt new technologies, insure against risks, or obtain consumption goods at low prices. Equally important, it cannot use its scarce resources like land and labour efficiently. Its decision making is constrained. Cut off from markets, it is forced into self-sufficiency, whether for food, labour or other items. Its own subjective valuations, rather than market prices, then determine how its resources are used.
Consider, for example, a poor farmer who can produce high-quality berries at a low price. In town, exporters are willing to pay 20 cents a basket for berries like the ones he can grow; however, poor roads and information about buyers make marketing this perishable crop too expensive and risky. So the farmer produces a few baskets for his family's own consumption and he spends the rest of his time doing low-wage work, when available, on a nearby ranch. A basket of berries costs him 10 cents to produce. Implicitly, then, this is his decision price, or the price at which he is willing to produce berries. If he could become part of the export supply chain, his decision price would increase to the market price. He could be more efficient, shifting some of all of his time from low wage work to berry production and he would have an incentive to invest in his farm. Most importantly, he could generate badly needed cash for his family.
When a household's production and consumption decisions are based on subjective valuations instead of market prices, the household can reap gains, perhaps significant ones, by acquiring better access to markets. For example, without access to a labour market, a poor family's time may be "trapped" in low-return activities on the farm instead of being sold for a wage in higher-return activities on another farm or at a business in a nearby town. When high transportation costs or marketing risk keep a farmer from selling a cash crop, her fallback is to produce a lower-value crop that can be eaten at home. When a farmer cannot obtain fertiliser or hire labour at the times needed, or when he lacks the cash to pay for these inputs, less land is sown, output falls and more productive technologies may not be adopted. Efficiency is critical, because even a small income gain can make a significant difference for an impoverished household
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This book is one of the outputs of the programme of work undertaken in 2005-2008 by IUCN's Commission on Ecosystem Management (CEM)
. In selecting the case studies, it was CEM's view that the Ecosystem Approach had to be applied in multiple-use landscapes where Protected Areas formed no part, or only one among several parts, of the whole ecosystem.
These cases make it clear that the 12 Principles of the Ecosystem Approach as they stand contain two major weaknesses. First, they do not address in any way the institutions through which ecosystem management stands or falls. Second, the impact of on ecosystems of markets and other economic forces is under-recognised
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Like other mountainous regions in the world, the High Atlas suffers from a number of disadvantages, primarily related to its marginality, topographical fragmentation, and harsh environmental conditions
. It is characterised by limited, fragile, and highly degraded natural resources, low incomes, and a high poverty level. People living in mountainous areas are among the poorest in the Near East and North Africa. The present study analyzed the importance of a cooperative ? as one example of a rural institution ? in facilitating smallholders' access to markets, its impact on the livelihood strategies of households, and the implications for poverty reduction. Communities in two valleys with similar bio-physical conditions in the Moroccan High Atlas, Taddarine and Anougal, were compared. Whereas Taddarine has a paved road but no marketing institution, Anougal features a dairy cooperative but does not have a paved road. Rapid rural appraisal methods and household surveys were used to gather data on livelihood assets and activities. The value chains of the main product in either valley ? apples in Taddarine and milk in Anougal ? were analyzed using market mapping methodology. In Anougal, with no paved road and no electricity, the milk collection center of the dairy cooperative has made dairy production the most important source of income for the farmers. In contrast, dairy production and marketing has not developed in Taddarine, which has a paved road and electricity but no dairy cooperative. The most important source of income for these farmers is fruit production, with transport being facilitated by the paved road. The study shows that although road infrastructure in remote mountain communities is a necessary condition for market access, it is not sufficient. The development of local institutions?in this case a dairy cooperative?that facilitate market access by reducing marketing costs and opening up ?economies of scale,? is essential
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Integrating cover crops and green manures helps farmers rehabilitate degraded soils in highland areas
. In Ecuador, farmers experimented with this conservation practice. They found that it improved their farming system in many ways, increased productivity in their main crop, decreased weeding time, provided them with an extra crop (for food, fodder, marketing), besides rehabilitating their soils
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In 2001, world coffee prices tumbled to all-time lows, devastating coffee-dependent farm families and their communities, in what became known as the global “coffee crisis
.” Out of necessity, many farm families left their communities to find wage labour, while others cut down their coffee plants and shade trees in favour of cattle pastures. The integrity of coffee producing communities in Mexico and Central America was strained by emigration, biodiversity was threatened by deforestation, and denuded and trampled hillsides started to wash away in the tropical rains. That same year, a group of researchers formed a network based on long-term relationships with various Latin American farming communities, all of which were suffering the effects of the crash in coffee prices. They formed the Community Agroecology Network (CAN), a U.S.-based non-profit organisation, to support each other as researchers, to share knowledge and information with the farming communities, and to promote local empowerment and biodiversity conservation
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Due to past civil conflict, the northern part of Uganda had a lagging economy
. The agriculture production in this area was limited and farmers mainly cultivate groundnuts, onions, cassava, beans, sorghum and vegetables. So, the National Agriculture Advisory Services (NAADS) collaborating with other NGOs started to strengthen farmer institutions by advising farmers and introducing technologies to develop market linkage. During the project, the farmers were first linked to the markets and worked with NAADS coordinators. The plan involved assessment of groundnut and onion yields, development of buyers’ profiles, gathering market information and negotiation between farmers and buyers. The implementation of this plan improved selling of more than 20 tonnes of groundnut and 2 tonnes of onion in a short time and at better prices than before.
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