Shift and the Living Income Community of Practice (LICOP) have released ‘Technical Guidance on Due Diligence for Living Income’ (March 2026) offering companies a clear and practical pathway to tackle farmer poverty: applying human rights due diligence to action on living income.
Human Level’s Take:
- The key message of the guide is straightforward: living income for farmers sits at the heart of resilient supply chains and meaningful human rights action.
- This is because agriculture is the primary livelihood of 40% of the global population, with smallholders producing more than a third of the world’s food, but most remaining economically vulnerable not earning a living income.
- Climate change is widening these income gaps, increasing not only economic pressure for farmers but also the risks of child labour, forced labour, unsafe working conditions, and food insecurity.
- For business, these human rights risks are also strategic risks: sustained pressure on farmers threatens supply stability, product quality, and long-term sourcing viability as producers exit the sector.
- The guide sets out a clear, step-by-step approach for agribusinesses to support living incomes: (1) identifying living income risks in your agricultural supply chain; (2) prioritising risks based on severity and likelihood; (3) embedding living income in corporate governance; (4) reviewing purchasing practices, adopting approaches to sharing risk and establish criteria for price; (5) working with suppliers to cascade action and source from farmer collectives; (6) using leverage with those you have influence with; (7) leaning into living income challenges; (8) tracking performance and effectiveness through meaningful KPIs; and (9) communicating progress and learnings with stakeholders, including with farmer organisations.
- Now that more companies and sectors transition to using biomass for energy, bio-polymers and other bio-materials, the relevance of this guidance extends beyond agriculture, offering valuable insights and good practice examples for a wide range of companies.
Some key takeaways:
- What is living income and why it matters more than for farmers today. Agriculture is the primary livelihood for 40% of the global population. Five out of six farms are smaller than two hectares, and these smallholders produce over 35% of the world’s food. Despite their central role, many farmers earn far below a living income, defined by the Living Income Community of Practice (LICOP) as the net annual income required for a household in a specific location to afford a decent standard of living, including with a provision for unexpected events. This income gap for farmers persists due to structural and systemic factors such as insecure land tenure, small farm sizes, market prices that do not cover the full cost of production and volatile commodity markets – as well as climate change impacts. Farmer income gaps are connected to a number of other issues and increase both the severity and likelihood of risks like child labour, forced labour, unsafe working conditions and food insecurity.
- Why apply HRDD to your work on living income for farmers? In response to current farmer income gaps, the guide proposes that applying a human rights due diligence (HRDD) lens to address living income issues can strengthen and prioritise efforts where they are needed, especially as laws like the EU CSDDD and CSRD increase the focus on social risks and impacts. While many businesses are already implementing initiatives to address living income challenges, they may not be doing so in a systemic way or in a way that is integrated with their due diligence efforts. Instead, applying a HRDD lens to living income efforts can increase momentum and effectiveness by: (1) providing a clear direction and prioritisation of which commodities, locations and communities to prioritise; (2) helping identify business practices, prices or purchasing practices contributing to those income gaps; (3) building in stronger company leadership and oversight of actions on living income through HRDD alignment; (4) increasing engagement and collaboration along the value chain on these issues; (5) helping brands and companies use their leverage to influence broader and collective action – addressing systemic barriers; (6) increasing companies’ efforts to track progress on this issue and measure the effectiveness of their actions; and (7) helping teams understand that living income challenges are systemic but require persistent efforts.
- How to apply HRDD to the issue of living income for farmers: step-by-step
- Identify living income risks in your agricultural supply chain, by mapping your agricultural supply chain, both upstream and downstream, and assessing risks to people linked to farmer poverty and living income gaps, identifying actual or potential adverse human rights impacts, and reviewing and updating this risk map, with new information and data.
- Prioritise risks based on severity and likelihood, linked to living income.
- Embed living income in corporate governance, including by engaging senior leadership and the board to create awareness and buy-in for action on living income, emphasising the business case for supporting farmer resilience, and embedding it in in key operational guidance and policies (e.g., for sourcing).
- Review purchasing practices, adopt approaches to sharing risk and establish criteria for price, to work towards the payment of a Living Income Reference Price (LIRP) – that is, the price for a typical farm to achieve a living income from the crop.
- Work with suppliers to cascade action on living income and seek to source from more direct options like farmer organisations.
- Use the leverage with those you have influence with to improve income outcomes for farmers, use collaborative approaches to action and strengthen farmer and community voice including through support for farmer organisations, affected stakeholder engagement and grievance mechanisms.
- Lean into living income challenges, and support farmer resilience
- Track performance and effectiveness through meaningful KPIs, that is, outcome-oriented, time-bound, and measurable targets and metrics.
- Communicate progress and learnings with stakeholders, including with farmer organisations.
