Traceability and scale – the big smallholder challenges

Over the course of two days of robust and engaged debate at Innovation Forum’s recent business and smallholder farmers conference in Jakarta, Indonesia, one thing was clear. The scale of the challenges involved in reaching out to thousands of farmers that supply the world’s agricultural commodity requirements remains daunting.

Many companies and their development partners are working on successful pilot projects and programmes that demonstrate the improvements to smallholder livelihoods and, in parallel, to long-term supply security, that can be achieved. How the lessons from these can enable impact at scale – that remains the big question.

In trying to help answer that, here are four themes that emerged from the discussions.

(1) The scalability problem – pilots never fail, but pilots don’t scale

There are lots of good pilot programmes out there, but scaling up the impact remains the big challenge. There is no easy fix and we need lots of different pathways to scale.

Solutions that work are necessarily bespoke and localised geographically and by crop – what works for palm oil in one place won’t work for soy somewhere else. That said, many principles are transferable. It’s finding the right balance on each occasion.

And, of course, not every project will scale. Some programmes can only reach a certain number of farmers. In this instance, a replication model can work – repeating the same project elsewhere and extending impact that way.

Technology can provide tools for scaling up impact. Where you have a sector that involves millions of participants, you can’t fly in consultants and engage suppliers on a one-to-one basis. But satellite, mobile and smart technology solutions can reach the farmers.

While more input engaging with smallholder farmers is urgently needed, the roles that different parties take are becoming less clearly defined. Companies are building roads, for example, while some NGOs are becoming more focused on profits and being self-sustaining.

Sometimes government must take the lead. The right broad enabling environment from government is required before real transparent and sustainable value chains can be effectively set up. Moving from the “good idea” stage to actual action requires leadership at all levels – in companies and government – to recognise the innovative solutions needed.

There was some robust to-and-fro at the conference about when certification can help companies improve supply chain traceability and engagement with small holders.

While there are of course many details and complications in individual cases and examples, the arguments in favour of certification remain principally around the fact that many companies see big benefits from standards and certification, that drive improvements in supply chains and help ensure continuity and certainty of product quality and supply. The use of certification is also something that businesses can sell internally – it is a route that they can take to better performance.

Others argue that, in some respects, many standards and certification by definition lack scalability – they are designed to identify something that is better than something else. And when it doesn’t work, certification is a unilateral view on imposing sustainability on farmers – a mechanism of control that replaces the link of trust, which has been broken. Better impact can be gained, it is argued, from a more systematic case-by-case approach.

For success, external stakeholders, suppliers, buyers and farmers have to align to push change. Each party can come at the problem from a different perspective but end goals need to coalesce. Making incentives that work up and down the value chain is vital, making it relevant for everyone – that’s when proper impact will occur. And farmers need to be involved in the design of projects to see the benefits.

Simple things can work well. Ask farmers what they are doing already – they know their land and their soil better than anyone. Improving livelihoods and introducing better practices will make farming more attractive to the next generation of potential farmers, who are currently moving to the cities. Better seeds, use of technology and opportunities for entrepreneurship will keep younger people interested.

Increasing yields – productivity is a key route for properly raising famer incomes and cutting deforestation rates. This means engaging business models and a careful intensification of smallholder farms, which typically can be only 50% as productive as plantations operated by big companies.

Hear from Anita Neville, vice president, corporate communications and external affairs at Golden Agri-Resources about the challenges of achieving traceability and sustainability targets for smallholders farmers in a podcast here.