Boosting farmer incomes in agricultural supply chains
This review, by Standfords Social Innovation Review, examines how to take major, structural steps forward on farmer income by analysis nine high-performing cases. The review exposed three patterns that help explain the succes of these cases: 1) Greatly strenghtening farmer market position. Farmers’ participation in markets offers greater stability, negotiating power and choice so that farmers have greater control over when and where to sell, for what prices. For example by strengthening farmers’ organizations or making direct connections between farmers and buyers. 2) Businesses playing an important role, but not through business as usual. Companies can have a serious positive impact on farmer incomes, if they design and manage their business models to serve farmers’ interest as well as their own. 3) Tapping into growing domestic markets. In more and more countries, population growth, urbanization, and economic development are rapidly expanding domestic food demand, and fueling the rise of modern supply chains serving domestic food companies and retailers. Most of the cases reviewed emphasized some degree of selling into these domestic supply chains. These patterns suggest three takeaways for global food and agriculture companies that aim to improve farmer income in their supply chains. First is to work with farmers as strategic business partners and understand what farmers need to thrive in the business of farming. Secondly, revisit the purchasing practices. Re-examine the way commodities grown by smallholders are bought and the way you engage with your direct suppliers. Lastly, the researchers urge to not wait. The private sector is hailed as nimble, innovative, and entrepreneurial, and it’s time to use these qualities to eliminate poverty in global supply chains.