Photo: MIF 2009 Cambadu retailers, Uruguay.
Today more and more consumers are demanding that the food they eat is not only healthy but produced in a way that enhances the lives of producers, their communities, and the environment. From multinational food companies to neighborhood coffee shops, sustainable sourcing in agriculture has become a priority in the way companies do business.
Last month, the Cracking the Nut Conference on Sustainable Sourcing for Agricultural Supply Chains brought together more than 180 representatives of financial institutions, multinational food companies, technical assistance providers, and donor agencies to discuss some of the challenges and new approaches related to sourcing agricultural products sustainably. Over two days there were more than 20 sessions organized according to three themes: Ensuring food safety and sustainability, Facilitating traceability and certification, and Creatively financing supply chains. Building sustainable agricultural supply chains that benefit producers, their communities, and the environment is a key part of the MIF’s work on improving access to markets and capabilities in Latin America and the Caribbean, where more than 40% of the population relies on agriculture as a main source of income. The MIF is a key player in agricultural value chain development in Latin America and the Caribbean and was sponsor of the conference. The conference raised many interesting questions and offered a number of cases and models that have the potential for scale and replication in our region. While it’s impossible to summarize everything that was said, here are a 3 take-aways gathered from my interactions with fellow nut crackers:
1. Local sourcing for local markets can be a big opportunity for integrating small scale producers into value chains and diversifying markets. Much emphasis has been placed on export-oriented supply chains, but a number of cases at the conference (including the bean and amaranth value chains in Bolivia and Heineken’s decision to source locally grown sorghum in Sierra Leone) demonstrated that local sourcing for local supply chains can have a positive impact on smallholder livelihoods and improve nutrition and food security domestically.
2. New and innovative sources of finance for value chains are emerging. Although banks and financial institutions have a major role to play in delivering finance to agricultural value chains, unconventional players are entering the markets. In Latin America, Grow Ahead is connecting producers and consumers through a crowdfunding platform that allows the consumer to directly invest in the cooperatives from which their coffee is sourced. Although these types of initiatives are small, their numbers are expected to grow in the coming years as the power of technology breaks down distances between consumers and producers.
3. The benefits of certifications should flow two ways, to consumers as well as producers. Leading food companies such as Mars and Mondelēz have committed to source 100% certified coffee and cocoa by 2020. Certifications have been beneficial for the consumer in ensuring food safety and traceability, but rigorous assessment on the cost and benefits of certification for farmers has yet to be quantified. Certifications should go beyond compliance to demonstrate real impact and outcomes on farmer's livelihoods. Going forward, the industry has work to do in ensuring that certifications are beneficial for both the farmer and the end consumer.
Now that I’m back in the office, a few questions linger: How can we integrate more farmers into these sustainable supply chains in LAC, especially the poor? How can we get greater buy-in from banks and financial institutions to invest in smallholders? How can we consistently collect the right data to show impact on farmers and communities? None of these questions is easy to answer but these are some of the challenges we are dealing with at the MIF as we work with our partners in the region. Please share your thoughts!