REPORT: Innovation Accelerator: Building resilient smallholder supply chains

Innovation Forum (2020) Innovation Accelerator: Building resilient smallholder supply chains. The Clinton Foundation, COLEACP, CottonConnect, GIZ, Golden Agri-Resources and Nestlé. 51 pp

This report builds on more than 60 interviews with key people from each member organisation, and with other commentators, and on an extensive literature review.

At the end of the supply chain are the end users of these agricultural goods – the consumers who buy coffee, chocolate bars, tea, vegetables and a plethora of other products. It is clear that key to improving livelihoods and environmental impacts of agricultural supply chains is to drive more resources to farmers. If this is the case, then an obvious part of the solution would be to expect consumers to pay more for the goods they buy. It is not clear that consumers’ expressed willingness to buy sustainably-produced goods is always reflected in actual purchasing decisions. 

Four key issues therefore emerge from this research as key areas for attention by the Innovation Forum working group, and for the wider community working to improve smallholder supply chains: 

1. Smallholder farmers are caught in an on-going poverty trap. This can be sustainably addressed through, for example, systemic reforms around farm size and land consolidation, and an improved enabling environment for that. 
2. Currently, work on smallholder supply chains is largely undertaken project-by-project. How can a more systemic approach be developed? 
3. The need for greater collaboration and partnership is clear. Yet, despite repeated exhortations, cooperation remains a rarity. How can this be changed?
4. At present, smallholder sustainability efforts are not sustainable. They are not effectively joined up, and remain insufficiently linked to core business operations of sourcing companies. How can this change over time?

This report is intended as the first step in Innovation Forum’s Innovation Accelerator (IA) rural and agricultural reform research, designed to share initial lessons between members, and to define a clearer agenda for work in specific geographic locations. The next steps for this project are therefore as follows: 

In four selected geographic areas: 

• Map and examine potential for collaboration between different initiatives working in each location, and for better linkages to work being done by the country government and by international development actors. 
• Analyse in more detail the political economy in each location. It is clear that working through and with local power structures is an important factor in gaining traction with farming communities. Developing a more-shared understanding may allow work to go further and deeper. 
•  Explore the areas of supply chains that seem less understood. In particular, develop more insight into the ‘farm gate to port’ element looking, for example, at conditions for those working in transport and processing. 
• Develop better government engagement and understand where points of access may be available that are currently under-explored. 

The ‘international landscape’ 

• Explore how current supply chain models might be modified over time, to make them more effective in supporting smallholder sustainability. 
• At present there is no coherent process for matching sustainably produced goods with a market for them. What might a ‘sustainable commodities marketplace’ look like and how might it be developed? 

Related:

22 April 2021. Real rural resilience: How to connect smallholder farmers directly to global markets 
The ‘Innovation Accelerator’ action research programme recently published ground-breaking research on how companies can enable smallholder development beyond siloed purchasing and initiatives. Through 80+ interviews with those on the front lines of smallholder engagement, it uncovered opportunities for sourcing companies to link directly with smallholders growing a variety of crops. Many of these can help lift communities out of poverty if market access can be enabled.

This 60 minute webinar, (see podcast) discussed how buyers can use a “Sustainable Commodities Marketplace” to increase broad based economic development in supplier countries by sourcing multiple crops and collaborating on sourcing opportunities for smallholder communities.

• Goetz Martin, head of sustainability implementation, Golden Agri-Resources
• Alison Ward, CEO, CottonConnect
• Ruth Thomas, director, Global Agribusiness Action on Equitable Livelihoods (GAA-EL)
• Silke Peters, team leader, sustainable agricultural supply chains initiative, GIZ
• Lea Rankinen, director, sustainability and public affairs, Paulig Group
• Dr Peter Stanbury, senior associate, Innovation Forum

Background:

The SmallholderInnovation Accelerator Collaborating to develop durable smallholder supply chains: an action research project to share lessons and drive better practice

• Since summer 2020, Innovation Forum has been running an action research project – we call it our “innovation accelerator” – to develop actionable lessons which can build durable commodity supply chains based on smallholder farming. 
• This project was established to respond to the fact that, despite almost decades of effort by companies, campaigners, NGOs and others, considerable social and environmental challenges still remain in smallholder-based commodity supply chains. 
• The project brings together six varied organisations to share the lessons they have learned over many years, and also builds on a comprehensive review of various reports, papers and other written information. 
• It also aims to look at commodity value chains in their wider context – at societal and international level. To that end, it brings in perspectives from areas of expertise such as development economics, anthropology and political economy.