Working with small-scale tomato farmers in India, Anglo-Dutch consumer group Unilever helped introduce sustainable cultivation practices. After 18 months, productivity increased by 300 per cent, raising farmers’ incomes, allowing them to invest in their businesses and improve living standards.
However, Unilever argues it is not only farmers benefiting from this kind of project. “Some 40 per cent of our food is still produced by smallholders,” says Gail Klintworth, Unilever’s chief sustainability officer. “So if smallholders can’t make a living or increase yields, that has a huge impact on all of us.”
While people often think of agri-businesses or international policymakers having the biggest clout when it comes to delivering food security, millions of smallholder farmers in developing countries play a critical role in underpinning global agricultural supply chains.
The challenge for a company like Unilever, which relies on them for much of its raw materials, is to find ways of helping increase their productivity sustainability.
Of course, it would be impossible to engage with them individually as Unilever has an estimated 1.3 million smallholders in its supply chain across different sectors.
Millions of smallholder farmers in developing countries play a critical role in underpinning global agricultural supply chains
So one solution is to work with larger supplier companies. An example is Barry Callebaut, which supplies much of Unilever’s cocoa and chocolate products. In Ivory Coast, the two companies have launched an initiative to help farmers improve their productivity sustainably. “There, the strategy partnership is to work on farmer schools and train-the-trainer programmes,” explains Ms Klintworth.
Another route to smallholder farmers is through non-governmental organisations (NGOs) and certification programmes. For example, Unilever has joint projects with UK anti-poverty charity Oxfam to improve smallholder livelihoods.
It also works with the Rainforest Alliance, a US-based NGO that helps companies and farmers to improve their social and environmental standards, and certifies their produce. About 36 per cent of Unilever’s cocoa is now certified by the Rainforest Alliance, for example.
However, the results must be carefully monitored. “We have to ensure that the livelihood improvements we’re looking for as a result of linking smallholders into our business are achieved,” says Ms Klintworth, “because there are sometimes questions about whether the certification industry actually does provide benefits to smallholders.”
Moreover, not every programme makes business sense. One of Unilever’s first joint initiatives with Oxfam was in Azerbaijan, where it helped onion farmers improve their productivity.
“The choice of area was driven more by Oxfam wanting to add value, than it making sense for our supply chain,” says Ms Klintworth. “So we have a lot of onions in a place where it doesn’t make business sense to ship them.”
The company is now looking more strategically at parts of the world where it can both improve farmers’ lives and enhance its own supply chain.
For Unilever, this is the sweet spot. “A large part of our raw-material base comes from smallholders, so we have a self interest in securing a decent supply,” Ms Klintworth concludes. “But for farmers, the gains in livelihood, yield improvement and managing their businesses more efficiently are hugely beneficial.”
