The World Benchmarking Alliance (WBA) published Transforming Food Systems with Small-Scale Producers: Insights Report (August 2024). The report brings together insights from WBA’s assessment of the practices of 350 large companies in its 2023 Food and Agriculture Benchmark.
Human Level’s Take: We live in a world where a large proportion of the global population can’t afford nutritious food—including the people who help to produce that food. The small-scale farmers and fishers who play a central role in the world’s food system are struggling to earn a living income, impacting the economic viability of their businesses. And global problems like climate change and nature loss are putting an already precarious system at a tipping point. The World Benchmarking Alliance (WBA) finds that large companies in the agriculture and food sector have an important role to play in securing food systems, increasing environmental sustainability and supporting the livelihoods of small-scale producers. One key action area is investing in training and capacity-building programmes, especially those that promote climate-resilient practices while taking into account local traditions and contexts. Downstream companies can also provide access to inputs and technology, finance infrastructure development, and help small producers gain access to credit, financing and global markets. WBA also underlines the importance of companies reporting transparently on the involvement of small-scale producers in their supply chains to improve visibility and accountability for sustainable, rights-respecting practices.
Key points from the report:
- Small-scale producers are fundamental to our food systems: Small-scale farmers generate a third of the world’s food. According to WBA, 96 of the companies assessed in the 2023 Food and Agriculture Benchmark, representing revenues of USD 3 trillion, have 75 million small-scale farmers and fishers involved in their supply chains. Despite their outsized role in our food economy, small-scale producers—along with a large part of the world’s population—are living in poverty without secure access to the food they help create. The report points to data showing that more than three billion people globally can’t afford a healthy diet, and 2.3 billion people are moderately or severely food insecure. Shifting the way our food systems work could have a big impact on these problems. WBA cites research showing that, “if we move towards more sustainable production and consumption patterns, we could feed over 10 billion people while staying within planetary boundaries.” Making small-scale production economically viable and sustainable is a central part of the solution.
- But small-scale producers face steep challenges: Small-scale farmers and fishers often have limited access to the necessary inputs for business, including technology and financial capital. Further, many of these producers are located in least-developed countries, where weak infrastructure, gaps in market information, and geographical isolation make it even more difficult to earn a living as a small-scale producer. The challenges can be enhanced in countries that are commodity-dependent, defined by the United Nations Conference on Trade and Development (UNCTAD) as countries where commodities constitute 60% or more of the share of exports. While commodities are a crucial development opportunity for these countries, being commodity-dependent can also pose high risks: shocks to pricing and volume can reverberate strongly, creating both short-term and long-term impacts on the economy and on the livelihoods of small-scale producers. WBA highlights that a second challenge to addressing the risks in our food system is in defining who is part of this group. There is no commonly-agreed-upon definition of a small-scale producer, but defining them is important for promoting transparency and accountability in how companies source raw materials and for providing better oversight of environmental and labour practices in food supply chains.
- The role of large companies in sustaining food systems: The WBA underscores that partnerships between large food and agriculture companies and the small-scale producers in their supply chains are the way forward to a sustainable food system. One way that downstream companies can support small-scale producers is through investing in capacity-building and training programmes that enhance competitiveness, help producers adopt sustainable practices, and create inclusive economic growth. It’s important that these programmes are grounded in the local context and traditions, which helps ensure better uptake and practical application of the training. Companies also support small-scale producers by providing access to finance and markets, especially as many small producers struggle with limited access to credit, high interest rates and a lack of collateral. Strategic collaborations between large companies and small producers can help ensure farmers have access to markets and can sell their goods efficiently and at higher prices. In addition, private sector investment supports development of the necessary infrastructure for resilient food production, and can help small-scale producers purchase equipment and expand production capabilities. Other actions include investing in innovation and research that tackles the issues faced by small-scale producers, helping small suppliers to gain certifications and boost quality, and advocating for policies that support farmers and fishers.
