How bottom line brands’ and retailers’ Covid-19 recovery strategies could threaten smallholder farmers and what governments and businesses can do about it.
Covid-19 has exacerbated existing challenges that smallholder farmers face participating in international supply chains (the climate and environmental emergency, the global economic slowdown, natural hazards, trade protectionism, political populism, widening inequality and rapid geopolitical shifts). Now, international businesses’ Covid-19 recovery strategies themselves could create further risk. The UN estimates that 130 million people are at risk of acute hunger by end 2020 as a result of Covid-19 - on top of the135 million existing hungry people. De-risking smallholder farmers is critical to prevent them being hit further by a hunger pandemic.
International businesses have recalibrated the threat of supply chain disruption and recovery strategies demand that businesses have strong supply chain visibility to minimise risk. Risk mitigation is at the forefront of recovery strategies and threatens the future of smallholder farmers who can be perceived as the riskiest link in the chain. Businesses catering to the bottom line may switch to larger farms who may have clearer risk management strategies in place, or switch to suppliers in countries that are predicated to have a more stable geopolitical or trading relationship with the country of operations. Where a product is available closer to home, in order to shorten supply chains and overcome Covid-19 related logistical complications, businesses may prioritise security of supply over cost and switch to more local suppliers. Interpreting supply chain agility in this way could force some smallholder farmers into poverty and hunger overnight.
But with increased visibility of supply chains comes an opportunity for businesses to actively engage with and partner with smallholder farmer organisations, governments and service providers to overcome their challenges. Increased transparency can lead to mutual accountability – a step towards building more equitable and sustainable supply chains that deliver better outcomes for smallholder farmers and international businesses. As supply chain disruption becomes more common place, investing in the riskier links in the chain to de-risk smallholder farmers is a promising long-term supply chain management strategy. Responsible businesses that have transparent and collaborative supply chain relationships based on trust have proved more effective in weathering the storms thus far and have greater confidence building forward. Business confidence at this point in time, is worth its weight in gold.
Governments also have an important role to play to de-risk smallholder farmers. Digitising trade and agriculture can facilitate this. Supply chain transparency can be achieved through automated procedures that ensure product traceability and compliance with product safety standards. Upgrading to globally compatible automated customs procedures ensures that red tape does not risk further slowing supply chain operations. Agricultural extension to improve product quality, productivity and sustainability can continue to be delivered by sms or online if no longer feasible in person. Online market places connecting buyers and sellers can improve transparency, thereby increasing trust and decreasing supply chain risk.
Digital agricultural interventions must be accompanied by the relevant government policy framework and regulations to be activated and to protect against widening urban/rural, male/female and youth/older generation digital divides and data misuse. Typically, smallholder farmers have limited access to affordable credit. A banking app on a smart phone will not magic finance into farmers bank accounts, but a policy that incentivises lending and de-risks borrowing can give farmers more favourable access to credit to re-invest in their farms and communities at the most and stay solvent at the least.
De-risking smallholder farmers is not a new concept, but it is an urgent one if governments and businesses are committed to achieving the UN sustainable development goal of zero hunger. Covid-19 has made society acutely aware of the need to protect agri-food sector supply chains. This needs extend to the farmers and workers within them to ensure the human right to access food is upheld at both ends of the supply chain.
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