The Problem: Small-scale regional agriculture produces up to 80% of the food consumed in the developing world. It is also an important source of income in those countries for the 1.5 billion people who rely directly on the food and agriculture sector for their livelihoods. Supporting the expansion and efficiency of small farms will increase food security and foster the emergence of a new consumer and employee base.
The Solution: Companies and governments should work together to reach a maximum possible number of smallholder farmers in order to sustainably improve their livelihoods. They can do so through partnership platforms that can attract investment in initiatives that complement national agriculture-sector strategies, facilitate knowledge exchange of best practices and enable stakeholder engagement. These platforms can support the development of key infrastructures, the implementation of effective training and uptake of best management practices to ensure local food security as well as better management of natural resources.
It’s a competitive advantage. Businesses that support small-scale agriculture growth will have an early-mover advantage. As the market grows, companies with activities already in place are most likely to benefit.
It minimizes supply chain risks. By investing in their relationships with smallholder farmers, companies can secure and diversify their supply chains and ensure they have sustainable access to key agricultural products.
It provides new market opportunities. There are 500 million poor rural smallholder farmers globally who represent a large potential market that can also contribute greatly to global food security. Supporting the development of a local food processing industry with added value can also support the emergence of a new consumer base and ensure that consumers receive the necessary nutrients.
An example. In Ghana, SABMiller partnered with the Agricultural Development and Trading Company, which has designed a mobile processing unit transportable to cassava-growing regions for processing the root in situ, thereby preserving the integrity of the starch. The resulting model has been endorsed by the government of Ghana as a means of ensuring a new income stream for cassava farmers. Source: Grow Africa (2013). Investing in the future of African agriculture.
Companies could seek an engagement with existing growth platforms such as the Grow Africa (developed by the World Economic Forum, the African Union Commission and the New Partnership for Africa’s Development) or Grow Asia Platforms:
Help catalyze additional funding and engagement in Grow Africa, through identification of organizations/companies that can join and support the platform.
Continue sharing successful models of collaboration.
Develop and implement large-scale capacity building programs for farmers in specific regions.
Ensure that water, land and ecosystems approaches are included in all projects, through close collaboration with environmental organizations.
Scale up existing best practice:
Institutional finance. Unlock access to financing to boost existing collaborative platforms.
Partnerships. Engage with additional actors to share successful models for collaboration and best practices.
Capacity building. Train farmers on techniques to increase yields, ensure efficient use and conservation of water, soil and biodiversity. Training activities can also focus on entrepreneur skills or on specific knowledge that can contribute to the development of a local food industry.
Number of smallholder farmers positively impacted by the activities.
Aggregated investment level (private, donor, banks).
Smallholders’ participation in markets is crucially important for improved food security and poverty reduction.
Attempts to improve smallholder productivity will have limited success if smallholder linkages to markets are not strengthened simultaneously.
Smallholders are very heterogeneous, facing different types of constraints and opportunities, and will react differently to new market opportunities.
Source: FAO (2013)