Ms. Mamawse Sandra, farmer and credit officer of APDAL. Photo: Anna Fawcus / Oxfam America

Our current food system is set up in a way that offers the least to those who it most depends on: farmers. A few recommendations for how companies can give those who grow our food, their fair share.

Co-authored by Ioan Nemes, Private Sector Policy Advisor at Oxfam America.

Do you know where your food comes from? I mean, really know?

I think we’re all aware that the food we eat does not grow on the packaging lines of large food brands. Nor does it grow in supermarkets. Still, we don’t seem to think much about where it does grow: in the care of farmers – many of them small-scale farmers – who ensure it has the land, water, and light it needs to grow well and eventually make it to our table.

These farmers are the ones who worry every day about whether crops are safe from adverse weather conditions and whether livestock has enough to eat and drink. They bear the brunt of failing crops from disease, floods or other shocks. And though risks like these are not new to agriculture, many farmers, and especially small-scale farmers, are increasingly vulnerable to these challenges. Changing temperatures and precipitation patterns are affecting crop growth rates, livestock performance, pest incidence, and water supply – not to mention more frequent and more extreme weather events. And yet, small-scale farmers receive little respect, recognition and financial compensation to offset the challenges they are faced with daily.

Current food supply chains are built in a way that maintains the poverty of small-scale farmers. In the food and beverage industry, the companies responsible for driving up greenhouse gas emissions while reaping mega-profits, are the same ones leaving small-scale farmers to overwhelmingly bear the risks and increased costs of climate change. This is the injustice at the heart of climate change: putting those who are least to blame for the crisis at the highest risk because of it. For example: the world’s Least Developed Countries, which make up only 12% of the global population and contribute just over 1% of global emissions, have suffered 40% of all casualties from “natural” disasters from 2000 to 2010. And the situation only stands to worsen for them.

And the irony of it all is when extreme weather events or other climate shocks impact agricultural production in countries around the world, companies almost always have the luxury of packing their bags and sourcing commodities elsewhere. As Fairtrade International explains: “By largely setting the rules for prices, costs and standards in the supply chains they govern, companies can determine through their ‘buyer power’ where most costs fall and where most risks are borne. Usually costs and risks are passed down onto the weakest participants who are the farmers and laborers at the bottom.”

So, how can we fix this?

In addition to the obvious need for food companies to reduce their own greenhouse gas emissions, they also need to make key changes that support the ability of the farmers that support them to earn a living income and build resilience. Small-scale farmers will only be able to withstand the shocks of climate change and other adversities when they are able to earn a living income from their work. A living income is one that not only covers the costs of producing their goods, but leaves enough for them to support a basic lifestyle that includes essentials like decent housing, nutritious food, clean water, education, etc. for themselves and their families.

This may sound like common sense, but it’s far from common. Importantly, some of the large food companies are recognizing this situation. In fact, just this past June, Mars and Danone jointly launched the Livelihoods Fund for Family Farming, a 10 year, €120 million project that aims to address environmental and social issues in their supply chains. In an interview marking the launch, a Mars spokesperson said:

“The reality is that many of these farmers are a long way from being economically successful, they are a long way from earning a living income. Some are in poverty, some are in extreme poverty. The gap is big, so increasing their income by 10 or 20% is not sufficient. This is often about doubling or tripling their income to make them truly sustainable and that is a massive challenge which isn’t solved by small improvement. You need transformational change and that typically will come from new techniques, new planting materials and sustained support.”

While such statements are very welcome, it remains to be seen whether initiatives like this will go far enough to raise the incomes of small-scale farmers. If companies are really serious about making their farmers (and therefore their businesses) better off, they should consider the following:

1. Increasing the share of the value returned to small-scale farmers from the companies’ products by increasing the prices they receive for the commodities they source from smallholders;
2. Ensuring fair contract terms for small-scale farmers, including fair and stable prices that cover the costs of sustainable production;
3. Allowing small-scale farmers to create and join farmers associations to discuss supply conditions and increase their power in negotiations; and
4. Providing technical and financial assistance on sustainable agricultural solutions for small-scale farmers, to increase agricultural productivity and income.

These four changes will make a huge difference in the resiliency of small-scale farmers, which means greater resiliency for companies as well. Small holder farmers are the foundation of food supply chains around the world – they can’t afford for companies to short change them, and neither can we.