Despite extensive progress being made under its Livelihood Charter, global agri-business Olam predicts that smallholder productivity across Africa, Asia and South America will still be “massively hindered” by lack of access to finance, equality for women and climate change impacts, unless far greater collaboration and knowledge sharing across supply chains becomes a reality.
“Smallholders grow globally consumed crops such as cocoa, coffee and cashew and if they don’t see farming as a viable livelihood then they will seek other work, typically in the cities. Since we launched the Olam Livelihood Charter (OLC) five years ago, we’ve gone from supporting 64,290 smallholders to just under 345,000, accounting for 23 per cent of our 2015 smallholder procurement. Thanks to our teams ensuring all eight OLC Principles are applied, plus the support of our NGO, customer and finance partners, we are definitely seeing yields, quality and income improve so it’s working as a business model. However, it’s fair to say that five years on, there is always more to be done,” said Chris Brett, Olam’s Global Head of Corporate Responsibility and Sustainability.
“Let’s take access to finance. Although innovation in mobile payments and banking services has improved, limited rural banking infrastructure and lack of credit history is still severely restricting farmers and their ability to buy agricultural inputs like fertiliser, hire labour, or invest. Even when lenders are present, banks are risk averse, while informal lenders charge high rates. So the finance gap is still being filled by the agri-sector. In 2015 Olam alone provided over US$177 million in finance to cocoa, coffee, cashew, cotton, chilli, hazelnut, rice, sugar and sesame farmers.
“By 2020 our aim is to embrace about 500,000 smallholders across 1 million hectares under the OLC but there are millions more who need support. We have therefore identified another five key learnings to share with others in the field that may be facing similar challenges. We have to navigate local customs sensitively to empower women; smallholders need to be equipped to deal with climate change now; training needs to go beyond the classroom with financial reassurance; we can’t just focus on cash crops – farmers need to grow a balanced diet; technological advances will benefit both farmers and customers in ways we have not yet foreseen.”