How business can drive forest positive action and community resilience in smallholder farming landscapes

Over recent years the “landscape approach” to addressing sustainability has become the buzz phrase. Yet, as Innovation Forum’s recent smallholder research has demonstrated, this ambition is far from being a practical reality on the ground.

Our report found that activities to create sustainable smallholder supply chains remain siloed in commodity-specific, project-based approaches. Engagement with local governance and institutions remains patchy, and the sustainability issues in the supply chain between farm and port remain largely unexplored. We uncovered significant opportunities for supply chain actors to enhance the lives and resilience of smallholder communities in these areas.

The next phase of our smallholder project is addressing this challenge directly. Our Innovation Accelerator initiative is acting as a convenor to bring together a range of actors in specific geographies to turn aspiration and global policy into practical action on the ground. Our first projects, based on our initial research findings – click here for a webinar on these – are in Indonesia and India, and we are looking for partners to join us in other projects.

With multiple pilots to test our research in real-world environments and to delve deeper into the opportunities for positive impact, we can further develop the evidence base, and discover practical ways to enhance livelihoods.

Our intention is that this new phase of work will demonstrate how to create a truly landscape approach, which both acknowledges the inseparability of the social and environmental agendas and builds on the need for a collaborative approach. For example, how can interest in tackling scope 3 climate emissions be leveraged to drive community incomes and resilience in smallholder agriculture?

This new phase builds on the research in 2020, which brought together insights from a range of different smallholder commodity supply chains. It identified a clear set of issues that need to be addressed if these supply chains are to be made genuinely sustainable. However, it will also focus on how to turn the increasing commitment that many companies are making to “forest positive” strategies into action.

A key part of many smallholder projects is to encourage farmers to diversify away from reliance on one core crop, for example cocoa or coffee, by growing an additional cash crop. Currently, a key challenge for these farmers is to gain access to non-domestic markets for these additional crops in order to maximise their income.

Part of the problem is that farmers in a region often grow a wide variety of other cash crops, which means that this region is not able to offer a critical mass of any one product to international buyers who might be interested in buying three or four crops from one ‘landscape’. How could a more joined-up approach focus on greater quantity in fewer additional crops? What other markets may be available, for example large multinationals in the country?

The data strongly suggests that, over the long term, the current model of smallholder farming is unsustainable. Population growth, with the consequent diminution in farm size means that, in reality, the problem will only get worse. Therefore, diversification of crops, and reaching better markets will not be enough in the longer run.

What changes, in this case, are needed to develop a more diversified rural agricultural economy in which there are fewer, larger, and more efficient farms supporting other employment creation? What are the implications of this, for example, in mobilising greater investment in onward processing of smallholder commodities? In turn, how do we understand and engage with institutional challenges such as land title reform?

Many companies have “forest positive” strategies, but these often lack operational detail. It is one thing for a chief executive to commit to their company becoming carbon neutral, but this can only be delivered by changes in behaviour in multiple locations across the world. Our aim is to help companies to turn global strategies into tangible action on-the-ground.

However, we also want to facilitate a move from exhorting smallholders not to damage habitats, to providing a strong incentive to protect them. We will do this by exploring how carbon sequestration might become a product that smallholder farmers can sell to international markets. This will, of course, require understanding the mechanics of carbon capture, measurement and accounting, how technology and on-the-ground assets can be used to measure carbon, as well as how carbon reductions can be apportioned.

Innovation Forum’s role for a number of years has been to convene a wide range of different partners to discuss developments in the sustainability debate. We are now applying that same convening power to make things happen on-the-ground. In each country programme we are first mapping existing activities with smallholder farmers. We are then using the findings of our smallholder research to develop a roadmap to genuine sustainability in each location. We do not have an axe to grind, which means that, in each place, we can provide a forum for collaboration and collaborative action.

At the same time, we will work with international buyers to develop models for direct sourcing from the focal landscapes. This will include engagement with logistics and transport companies to understand how these aspects of the supply chain might need to change if a properly sustainable model is to be developed. We will also explore the role of technology and other means to assure chain of custody for goods, and to provide transparency on carbon capture.

Through acting as a convenor on the ground, Innovation Forum’s Innovation Accelerator initiative will enable companies to turn aspiration and global policy into practical action. Creating a genuinely landscape approach will help to shift the ‘balance of power’ in supply chains towards small-scale producers, so allowing them to benefit from a greater proportion of the value of the goods they produce.

It will also enable proper exploration of the onward issues in the supply chain – between farm gate and port side – which are largely neglected by current approaches. In turn, this will enable end-to-end traceability – not mass balance – of produce from farm to end user, and provide evidence-based research and help define positive incentives to farmers for forest protection

Companies with smallholder-based supply chains are facing a dual challenge. First, they need, rapidly, to devise clear actions on the ground to deliver on their increasingly ambitious sustainability ambitions. Second, they are facing an increasingly challenging legal environment, in which many jurisdictions, for example the EU, are likely to introduce supply chain due diligence legislation.

What our new approach provides is a market-based approach to addressing smallholder supply chains, which will respond to core to commercial priorities, and can be integrated into core business operating systems.