Our key takeaway: Companies in the agricultural sector are increasingly seeing that “farmers must be placed at the center of business practices through new ways of working.” This quote is from a recent Guide by Business Fights Poverty and the Farmer Income Lab which highlights the tool of farmer segmentation. As with segmentation methodologies familiar to the business world, this approach helps to divide up a larger group (in this case, farmers) into distinct groups to enable more nuanced understanding and ultimately more effective solutions. It helps companies to think more robustly about how to tailor their interventions, or where and how they should use leverage over other parties. Such thinking therefore improves “the effectiveness of both sustainable sourcing strategies and smallholder support activities.” To build a future where both businesses and small-scale farmers thrive, “farmers must be placed at the center of business practices through new ways of working.” Novel approaches, such as farmer segmentation can help improve the effectiveness of both sustainable sourcing strategies and smallholder support activities.
Business Fights Poverty and the Farmer Income Lab published Farmer Segmentation: how companies can effectively target support for smallholder famers in global supply chains (December 2022). It is a guide for procurement teams explaining the concept of farmer segmentation and offering practical guidance on how it can be applied to benefit both farmers and businesses: