Welcome

The Sustainable Food Lab is a consortium of business, non-profit and public organizations working to accelerate the shift toward sustainability in the food system globally.

“One of the greatest benefits that the Food Lab has delivered to CHRobinson Worldwide has been credibility. Food Lab is known for their education, networking and best practices as it relates to sustainability. Being involved with Food Lab has catapulted our involvement and understanding within the sustainability arena. In my opinion the Food Lab is the Ivy League of Sustainability.”

J.D. Grubb, Director of Procurement, C.H.Robinson Worldwide, Inc.

Rare Collaboration Points to Success for Kenyan Flowers in UK Markets

One of the Food Lab collaborations is blooming!  Summer 2010 saw arrival of smalholder flower bouquets in selected Asda stores.  The collaboration behind this offering involves Asda, a UK Walmart subsidiary, Rainforest Alliance, Wilmar Agro Limited, facilitated through the New Business Models for Sustainable Development project staffed by IIED and the Sustainable Food Lab. 

Wilmar Agro Limited is a locally owned flower intermediary based in Kenya that contracts and provides technical support to over 2,000 smallholders. The NBMSTR project works with Wilmar and its suppliers to create an alternative value chain supplying flower bouquets directly to Asda – a Walmart subsidiary and the second largest supermarket retailer in the UK – as part of the retailer’s 5 year commitment to increase sourcing from Africa to £30 million (~$45M). This represents a fundamental shift in Wilmar’s business model, which historically sold its flowers to the Dutch auction.

The Rainforest Alliance Certified™ certification guarantees that the flowers have been grown according to Rainforest Alliance strict principles on environmental protection and workers rights. By stocking the bouquets, the supermarket is helping small-scale and family run Kenyan farms ensure they are environmentally and socially responsible, while offering them the opportunity to enter the British flower market.

Early indicators show that this is a good financial opportunity for the farmers with stem prices paid by Asda regularly exceeding the equivalent auction prices. A number of lessons learned through the pilot will be incorporated into the scale up, scheduled to resume early next year.

Asda found that wastage in store was higher than average, due in part to inconsistent supply and quality, but also due to the challenges of competing against very colourful bouquets from industrial-scale producers. Constant communication is required to manage a relationship that pulls product, is information hungry, and dictates the work and product flows and timing.

Next year’s scale-up will involve a dual focus on product innovation, with Asda providing matching funds to trial new product varieties, improved market targeting by Asda, and continued capacity building at Wilmar. The aim is to create a sustainable trading link that will allow the Wilmar business to grow and include more farmers in the future.

This type of collaboration between African smallholders and modern retail is exceptionally rare, more often existing within tea, coffee and cocoa. Asda’s commitment highlights how the trade can work for small scale producers as well as big plantations. As part of the Rainforest Alliance certification, farmers commit to growing their flowers in a way that improves the productivity of their soil, while protecting rivers and ensuring their farms also provide habitats for wildlife.

Income from every bouquet sold at Asda can help families send their children to school, access better healthcare and meet their basic needs. Asda’s long-term commitment to these farmers and the steady income it provides, can allow these families to make long-term investments such as improved housing.

The New Business Models for Sustainable Trading Relationships (NBMSTR) grant supports pilot projects across four value chains to create, strengthen and improve trading relationships between smallholder farmers and modern markets, with the aim of identifying scalable models. One of the more successful of these to date is sourcing flowers from smallholders in Kenya. Flowers are the third largest export earner in Kenya. Although many of these flowers are grown on plantations, the value of smallholder summer flower exports was almost $8 million in 2009 despite being hit by the recession and drought.  

Oxfam and Sysco Team Up for Development

Food companies, farmers, aid organizations and researchers form a unique bond across the global vegetable chain to expand opportunities for rural communities in the highlands of Guatemala.

The Guatemala Highland Value Chain Development Alliance brings together world-class expertise on sustainable agriculture, poverty alleviation and agribusiness with market demand and technical assistance to improve small scale vegetable production and benefit rural communities in the region of Sololá, Guatemala.  The 3 year, USD$1.5 mill project is building the foundations for improved livelihoods for over 3,480 rural households. The Alliance organizations met in Antigua in June of this year to visit the farmers, lay out detailed work plans, objectives and key milestones.

The partners believe that by working together not only can the opportunity be expanded to more Guatemalan farmers to participate in successful value chains, but through this alliance in investments in key productive infrastructure such as irrigation can be brought to these communities along with farmer support through capacity building and business development.  The combination of the  partners insight and expertise in business, participatory development and public policy, have the potential to make a valuable contribution to addressing the challenge of long lasting poverty reduction.

The project will support four farmer cooperatives (480 families) to capture the comparative advantage of the highly competitive global market by fostering the commercial sector in established Guatemalan highlands agriculture, with a special focus on women’s economic leadership. The new organizations entering the value chain will receive support on production of vegetables for the frozen vegetable market that meet all food safety and other requirements. In addition SUMAR, the exporter, has agreed to review the business model with farmers already supplying the frozen vegetable value chain (3,000 families) to provide broader social development opportunities.

At the end of the program, it is expected that increased rural productivity, diversified production, access to stable markets, innovation adoption, women’s participation and leadership and, last but not least, strengthening of the associations (POs, Coops, etc.) at local level will have contributed to the increased livelihood of about 3,480 rural households.  

Precompetitive investments

This project component focuses on financing infrastructure and equipment that can enable farmers and farmer organizations to participate in and benefit from this market opportunity in ways that are economically viable and financially sustainable.   Based on studies carried out between 2008 and 2010 and review of the investment plans of the new farming organizations, this project has recognized the need for investment in:

• Construction or improvement of micro irrigation systems to enable farmers to produce off-season vegetables and take advantage of better prices;
• Improvement of the office space and warehouses to provide the organizations with spaces for training, storage and value addition;
• The development of seedling production to reduce input costs and eventually generate new markets;
• The construction of composting sites to substitute chemical fertilizers, improve soil conservation practices and generate complementary economic activities;
• Transportation and value-addition equipment to increase the value generated by the linkage with the value chain that remains within the producer communities, providing farm related services and labor

For all infrastructure and equipment provided under the project, each farmer organization will be required to prepare a sustainability plan, using revolving funds and other financial mechanisms.  

All parties agreed that irrigation was the top priority, to reduce risk for farmers and value chain partners, and to increase the number of crops per year.  Land ownership is an important consideration, though interesting ideas for movable irrigation setups were discussed that could increase accessibility for farmers who rent land.  

The pre-competitive investments will be packaged into a program with organization specific investments for IFAD[1] by the end of the summer.

Community and Enterprise Development

To increase development impact, two funds will be set up to support community development priorities and the diversification of livelihoods opportunities (income streams and women’s economic leadership) through enterprise development.

The Community Development Fund will be made available as grants and will be targeted at each individual cooperative/association to support existing and new social development initiatives within these communities, focusing on education and health. The purpose of this fund is to enable the cooperatives/associations to improve the wellbeing of their communities, to reduce the need to migrate and commute in order to fulfill their needs for education and healthcare. The Enterprise Development Fund will provide start up and growth financing for non-core agricultural and enterprise in non-agricultural sectors via an intermediary financial services organization.

Capacity Building, Advisory Services, Extension for farmers and farmer organizations

Current work by Sumar and ADAM to support the communities in piloting broccoli production will be expanded into a plan for a comprehensive capacity building and training plan. It aims at ensuring that the linkage to the value chain is implemented with adequate technical and organizational backstopping. The project proposes a holistic approach to strengthening farmers and farmer organizations capacities to respond to quality and market requirements. In addition this component will upgrade the ability of the farmer organizations to succeed in the export market by linking to buyers in a transparent way and assisting in understanding market requirements, negotiating and respecting contractual agreements. The component will strengthen the capacities through planning on human resources in farmer organizations, providing on site technical assistance, capacity building and training, and covering the cost of the consultancies that should be required to plan and implement an effective advisory and extension system with farmers and farmer organizations. The project will plan and implement this component through the development of specific plan for each community.

Opportunities for SYSCO staff to contribute directly to capacity building for Sumar staff, potentially lead farmers, and ADAM staff will be also explored in the upcoming year.

Project Management and Communication

The project is managed by Oxfam GB and implemented through the partner organizations.  Critical to learning and evaluation will be a well-developed research component, a clear communications component, and a monitoring, evaluation, and learning component.

The research will include existing small-scale producers in the SUMAR supply chain by reviewing the existing trading model and identifying opportunities to increase development impact and increase investment in social development.  The existing Value Chain analysis will be used to guide the design of a more extensive household analysis that will (a) create a baseline to measure social, economic, and environmental impacts and (b) better understand the needs and opportunities with the existing smallholder base to guide future development investments.   The research design will be done over the summer with implementation in the fall.

The communication component will include internal communication, communication with farmer and producer organizations, and to external stakeholders. ADAM and Sumar will continue to be the primary communication link to the producers. 

Climate Change Mitigation and Adaptation Analysis

This project component looks at the potential impact of climate change and maps out potential mitigation and adaptation strategies.  CIAT and SFL have completed the process design for both the adaptation and mitigation analysis and fieldwork with farmers is ongoing, with the goal of having results ready for discussion by November 2010. 

50 year deluge leaves vegetable farmers in need of emergency aid

During the first 2 weeks of September, Guatemala experienced extremely heavy rains, the quantity and intensity of which hadn’t been seen for many decades.  Included in the communities hardest hit were the 4 farmer cooperatives involved in the Guatemala Highland Value Chain Development Alliance (see previous article), of which the Food Lab is a facilitating member along with Oxfam GB, SYSCO Corporation and Superior Foods.  The farmers in this project have been receiving technical assistance to grow broccoli for the demanding frozen vegetable export market.  They were preparing for their second pilot harvest of broccoli when the torrential rains hit.  Many farms were destroyed by the resulting landslides and some community members lost their lives in the disaster, including the husband of the president of the ALANEL Cooperative.

These are farmers that cultivate tiny parcels of steeply sloped land.  They rotate the cash crops with food crops for home consumption. The rains have threatened their livelihoods for this year, as broccoli is an important income-earning crop.  Much of the harvest was lost either to landslides or due to road closures, with total production in the region down 60%. 

Oxfam GB, Oxfam America and their local partners at the Association for Agricultural and Small Business Development (ADAM) are supporting the communities in four major ways: 1) providing emergency food aid to families; 2) food provisions in exchange for labor to rebuild community infrastructure; 3) providing the materials to rebuild community infrastructure; and 4) by supplying materials to re-establish damaged water systems.  To donate to the emergency response, please visit

http://www.oxfam.org.uk/oxfam_in_action/emergencies/oxfam365/ or
http://www.oxfamamerica.org/whatyoucando/donate.

Global Agriculture Climate Assessment
October Update

Food Lab staff report a number of highlights in the work being done throughout the world to estimate agricultural GHG emissions.  The Global Agriculture Climate Assessment uses the Cool Farm to find the most effective routes for farmers to reduce their production footprints in partnership with supply chain partners. 

 QUICK NEWS

• Assessment has 17 sponsoring partners and 21 farming systems
• A new release of the Cool Farm Tool is expected this month with improved functionality in the Cool Farm Tool for livestock, residue handling, transport, above-ground biomass and usability.
• Carbon Disclosure Project is considering the Cool Farm Tool for use in its new agricultural module and will be piloting its use with three companies this year.

 SPONSORS & SYSTEMS

Committed Sponsors           

Unilever, PepsiCo, Heinz, Sysco, Costco, Pulse Canada, Yara, Marks & Spencer, Oxfam GB, GTZ/Sangana Commodities, Heineken UK, Ambootia Tea Group, Ben & Jerry’s, Catholic Relief Services, Sekem and the Canadian Canola Growers Association

Farming Systems

Apples, Barley, Coffee, Canola, Cotton, Dairy, Eggs, Lentils/Navy Beans, Lettuce, Potatoes, Mixed Vegetables, Tea, Tomatoes, and Wheat

Geographies         

Azerbaijan, Canada, Colombia, Egypt, Germany, Guatemala, Holland, India, Jamaica, Kenya, Nicaragua, Tanzania, UK, USA

FEATURED SYSTEM: Coffee in Kenya                                                                                        

GTZ and Sangana Commodities, Ltd, the Kenyan subsidiary of Ecom Agroindustrial Corp, are co-sponsoring the use of the Cool Farm Tool in smallholder coffee in Kenya.  We have worked with them since March to impliment adaptations in the Cool Farm Tool for agroforestry systems including adding above-ground carbon sequestration calcuations to the tool.  The work with the Cool Farm Tool is part of a private-public partnership to develop a stand-alone climate module and pilot effective data collection for carbon footprinting for large smallholder chains.

Preliminary results are being reviewed for the coffee product carbon footprint per kilogram of parchment coffee produced and processed in Kenya, and will be competed in early 2011.  The farms in this assessment include a moderate level of shade cover already and the most promising scenarios within this farming system to reduce net emissions have been identified as:

Reduction on fertilizer use by adopting composting methodologies

Reduction on pesticide use by taking on Integrated Pest Management (IPM) technologies and

Exploiting the opportunity of agriculture to store carbon in soils and biomass optimally by using reduced tillage, agro-forestry and avoiding land-use change. 

PROJECT STATUS                                                                                              

Since our last update, the project team has been digging in with each sponsored farming system to understand the level of technical expertise in their field operations, how the Cool Farm Tool needs to be adapted to their particular crop and initiating the data collection and farmer interview process. Many sponsoring partners and growers are starting to gain an understanding of the carbon dioxide sources and sinks in their farming operations.

Progress Highlights

The following farming systems have performed dry-runs to test the Cool Farm Tool (CFT): 

• Pulses
• Tomatoes
• Potatoes
• Coffee
• Tea
• Eggs
• Mixed Vegetables

Customizations of the Cool Farm Tool

• Tree crops–include sequestration of above ground biomass (complete for coffee)
• Eggs / dairy / livestock – include functionality for multiple feed sources (complete)
• Hybrid CFT / DNDC building better N2O and soil carbon calculations into CFT (by early 2011)
• Global database constructed (complete)

Science Advisory Group 

• Convened group of 12 advisors with broad content and geographical expertise
• Focus on boundary, allocation and scope guidance for use of CFT
• Starting to explore possible updates to the N2O emissions calculation methods (the Bowman Model)
• Subgroups on particular issues such as emissions from compost

Why sustainability needs big business, and why that’s not enough: the story of the Sustainable Food Lab

Hal Hamilton

This article was a result of a talk I was asked to give to the annual gathering of sustainable agriculture grant-makers. My goal for the talk was to describe partnerships between nonprofits and businesses, their promise and their challenges.  I spoke from my experience in the Sustainable Food Lab, and I knew I would face a skeptical audience.

I was right. Many participants were skeptical. The most common attitude that sustainable agriculture funders and activists express is something like, “Corporate agribusiness is damaging the earth and exploiting people, and big corporations’ engagement in sustainability is primarily to green-wash their reputations. We need a whole new paradigm: small local production.”

Since the Food Lab gins up sustainability projects with large businesses, we are always ready with examples of reduced pesticides on hundreds of thousands of acres or improved livelihood for tens of thousands of small farmers.  Big companies can have huge positive impacts if they do the right things. The core criticism of business, however, is that short term numbers usually trump sustainability and fairness. This criticism is frequently accurate, but leads me to a question that guides our work with businesses and their nonprofit partners: “What would it take for sustainability and fairness to have equal standing as goals with stock value and profits?” 

Businesses are easily consumed by the need to chase quarterly numbers and cut costs. Over the long haul, however, successful businesses are often those that do long-term accounting of a range of costs and benefits, including costs and benefits to the people and places touched by their business networks. One senior executive of Unilever recently told me that he considered genuine achievements in sustainability and social responsibility as essential to their “license to grow,” particularly in emerging markets.

I don’t mean to imply that business sustainability strategies are sufficient to the pace and scale of change needed. They aren’t. For example, climate change and chronic poverty are worsening faster than business practices are improving. Nevertheless, new commitments and implementation of sustainability goals by business are heartening, as are new forms of collaboration between businesses and non-commercial sectors.

This moment in history is full of paradox. It’s not easy to hold the hope and the challenges in our minds at the same time. Sustainability work is mushrooming, and we are hitting barriers. Unilever, for example, invested considerable effort in the development of sustainability standards for palm oil, one of the most ubiquitous food ingredients in the world. Those standards are being adopted by a critical mass of the industry, yet deforestation in Indonesia, related to the growth of palm oil plantations, is still spreading like a cancer across critical forests. As a result of the unsolved challenges to the forests, and indirectly to the earth’s capacity to sequester carbon, Unilever is faced with protesters pushing them to do more.

One of the challenges we’re now facing is that governments have an important role to play, even though governments are frequently cumbersome. Unilever and some of its competitors have made new commitments to palm oil standards, but only government can make rules that affect everyone. 

What do we all want?

Virtually everyone in business, nonprofit organizations, and government wants agriculture and food systems to be environmentally sustainable, just, and fair, while producing healthy products and enabling community well-being. Despite agreement on this goal, however, it is difficult to come to consensus on methods.  One of the projects supported by members of the Food Lab is the Stewardship Index for Specialty Crops, which is governed by both industry and activist groups. All the groups agree that toxicity and labor are important issues for produce operations, but when we discuss specific ways to address pesticide toxicity and labor rights, the conversation becomes contentious. In another instance, when the Sustainable Food Lab co-hosted a national conference with the Keystone Center’s Field to Market Alliance, acrimony arose between organic and conventional leaders. Each camp takes the stance, “My solution is the solution.”

Difficult and unresolved as these disagreements are, I believe that we nevertheless can make progress in the right general direction.  I don’t think that everyone needs to agree on the methods. The language we choose to use in these conversations is crucial. At a conference that the Sustainable Food Lab organized, titled “21^st Century Agriculture Revolution,” we discovered that the word “revolution” was threatening to some people who shared our goals but found this emotional approach too aggressive. My experience is that if we learn to use inclusive language, and if we hold differences in a container of respect and encourage practical actions among unlikely allies, people end up agreeing more than they thought they would.  

After a workshop of the Sustainable Food Lab’s founding leaders, I took the following comment from a Brazilian industry executive as high praise: “You have been able to put dogs and cats in a closed bag. Everybody got out alive and, more amazing, respecting each other’s different points of view and agreeing that we could achieve something together.”

The three common nonprofit approaches 

Projects of sustainable agriculture nonprofits can be grouped in the following three categories: (a) build alternative models; (b) tweak the mainstream system; or (c) attack the mainstream system.  My sense is that each of these approaches is sometimes useful, but none of them is proving adequate.  One of our colleagues, Adam Kahane, likes to say that, “Change from the top down doesn’t work, and change from the bottom up doesn’t add up.” Adam means that systemic change that improves life for people and communities without power will always need leadership from those same people and communities; similarly, systemic change in the way markets work will always need leadership by those who know markets from the inside of business. Adam’s inclusive formulation has the advantage of including those who know most about how production and commerce function, but most NGOs choose a bottom-up outsider stance. 

Many nonprofits focus on local food chains and see themselves as creating models of farming and marketing that are substitutes for the large industrial system. These “alternative models,” from community supported agriculture farms to new urban markets, are frequently inspiring. Local food is my personal choice for freshness and flavor. I also like to think that my food purchases support local economies. These approaches, however, are not easily scalable, and global challenges are so acute that I believe they must be addressed at scale, even as many groups work on local projects. 

To achieve a scale of impact greater than small farm and community projects, some large NGOs now pursue a second approach, supporting the incremental sustainability improvements of big business. When large companies agree to environmental or social improvements, they can help NGOs like WWF or Oxfam fulfill their public mission. For example, when Sysco established an IPM program for frozen and canned produce, they eliminated the use of 300,000 pounds of active ingredients of pesticides on more than 500,000 acres in just the first year of the program. However, Sysco executives are the first to add that these improvements don’t yet add up to “sustainability”.

The reason that incremental improvements don’t cascade through the industry at a sufficient rate is that the very structure of our economy resists systemic change. All publicly traded companies must increase their quarterly numbers in stock value. Large food-service companies are dependent upon volume discounts, and retail chains frequently charge stocking fees. These structures reward mass production and ensure that companies chase short-term goals. Sustainability is about creating long-term value, but many structured incentives reward short-term measures that might even sacrifice long-term value. Global commodity markets reward mass efficiencies and penalize any initiatives that increase costs.

Activists often respond to this structural resistance to change within the economy with the third common approach: organizing campaigns that criticize mainstream businesses—Greenpeace campaigning against purchasers of palm oil, for example. These anti-corporate campaigns have mixed effects. On the one hand, they can create an environment in which businesses face increased reputational risk and need to demonstrate responsibility. Such an environment can stimulate positive innovation. On the other hand, many campaigns attack the very brands that are leaders in sustainability and thereby provide signals to others that the risk of being criticized for not doing better is so high that it’s safer to do nothing. Campaigns also make companies very skittish about being transparent.

What would it really take?

My core answer to the question “What would it really take?” is that collaboration across boundaries is essential because no single sector has enough of both insight and influence. Farmers and communities can act only within limited boundaries.  NGOs have the public good as their purpose, but NGOs have their hands on only a few levers. Businesses know how to deliver the most value for the least cost. By themselves, however, without the persistent presence of external stakeholders, businesses are governed by the “invisible hand” of markets and will exploit resources and externalize costs. Government has to set the rules, but government moves at the slowest pace of any of the sectors, and government can be influenced by special interests to betray the common good.

A web of active partnerships is emerging, primarily among businesses and NGOs. I will describe some of the partnerships developed in the Sustainable Food Lab because they make me more hopeful about systemic change than I have been in more than 40 years of social change activity. I’m hopeful because sustainability and social justice are becoming mainstream. 

Sustainable Food Lab

The Sustainable Food Lab is only six years old but already a group of amazing leaders from different continents and different parts of the system have inspired one another to try out innovative projects within supply chains. They know they have a long row to hoe, but they are learning along the way. Each of these projects marries profit with sustainability. Sometimes this marriage is an uneasy one, but, in the end, sustainability is shifting from niche to mainstream more rapidly than I would have predicted. 

The following description of the Lab came from Larry Pulliam, Executive Vice-President of Sysco. Larry makes billions of dollars in purchasing decisions every year:

It’s pretty unusual that fierce competitors like Sysco and US Foodservice can come together and work for the higher good. That’s what it’s all about. The essence, the power, of the Sustainable Food Lab is that we can do a hundred fold, a thousand fold, more together than we can do by ourselves. What we’re doing is the right thing to do, the good thing to do—for the world. It’s also good for our businesses. There’s a competitive advantage for Sysco to be involved, but we can’t fully realize that competitive advantage without working together with others in this group to mainstream sustainability.

One of our early conversations among founders of the Sustainable Food Lab involved Jan Kees Vis from Unilever, one of the three largest food manufacturers in the world, and Oran Hesterman from the Kellogg Foundation, at that time the largest funder of sustainable agriculture projects in the United States.  Jan Kees and Oran described their ongoing investments in sustainable agriculture projects and their desire to influence the mainstream, but each also expressed a sense that neither the Kellogg Foundation nor Unilever was powerful enough to do this alone.  Partnerships were needed. 

Over the succeeding year and a half, Adam Kahane, Don Seville, and I interviewed dozens of food system leaders in the United States, Europe, and Latin America. From among these interviewees, individuals were invited to join the Food Lab. The intention was to bring together entrepreneurial leaders seeking more rapid and far-reaching change in the direction of sustainability than their current efforts had achieved.  By June 2004, a group of thirty-two pioneering leaders from different sectors—business, government, social and environmental NGOs—came together in the Netherlands. Now, many more have joined, and about eighty organizations are involved.

Each person in the original core group joined with an intention to address problems that were too complex for their own organizations or sectors to tackle alone. Businesses needed NGO expertise on watersheds or poverty, for example, and NGOs needed business influence on market standards. One of the founders put it this way, “We are frustrated that the changes we see are too slow.  They are not delivering the kind of improvements that secure the resource base for the industry for the next twenty years.  How can we generate faster change? We are intrigued about the possibility that the Food Lab can get such a diverse group working together creating something at the ground level and delivering change at the top of the system.”

Both corporations and NGOs are evolving. Unilever, for example, has made a commitment to source all its renewable ingredients from sustainable production within ten years, and they recently began certifying 12 percent of the world’s black tea, under the Lipton brand, with Rainforest Alliance. Oxfam has added a corporate engagement program to its portfolio of campaigning programs. In many cases, Oxfam sees working with corporations as an effective way to meet its social justice mission. In one of our projects, Oxfam GB partners with Sysco in supporting about three thousand small vegetable farmers in the highlands of Guatemala to sell into a frozen food chain, increasing their capacity to also sell into local markets. 

After an earlier project the Food Lab coordinated with Costco became an inspiration to senior executives, Costco established new sustainability guidelines inside procurement for seafood, dairy products, fruits, and many other products. Costco partnered with other organizations like WWF or the Gates Foundation as needed. From another project, socially responsible perennial flowers from Kenya have been successful enough on Asda grocery shelves in the UK to stimulate a new buying program for small farm products from all over Africa. In the United States, CH Robinson, a $7 billion distributor, has experimented with providing logistics, warehousing, and technical support to local farmers in local supply chains to retail stores around the country.

The Sustainable Food Lab’s role is to germinate and support these projects and then share learning to accelerate replication. Sometimes the projects are with specific companies and NGO partners, and sometimes the projects involve consortia of organizations. In one of our new initiatives, we have 19 company sponsors of a project to reduce the carbon footprint of agriculture around the world. We’re also doing a project with the Ford Foundation and the International Fund for Agricultural Development, along with our business and NGO partners, to design ways that global supply chains can best benefit small farmers and the poor. 

The next phase

Even though my colleagues and I see enormous potential for business NGO partnerships within major value chains, and even though we can measure impacts on hundreds of thousands of acres and for tens of thousands of small farmers, we are running into barriers. Companies only make changes that are cost neutral or that gain consumer support. They cannot add costs, in isolation, that make them less competitive. They would not survive. Some of the costs of sustainability require co-investment by other sectors.

The limits to change within individual value chains or competitive markets will frame the next frontier of large-scale change. Some of the most experienced leaders are describing these limits to one another, articulating the fact that they see the limitations of acting alone, particularly where they run into costs that can’t be borne by the supply chain in the current competitive structure, or where the competitive structure itself includes perverse incentives. These frustrations lead either to backsliding or to a search for new ideas.

The most important collaborative initiatives will marshal the best competencies of business, NGOs, and the public sector. The fertile ground of systemic change is in this partnership space, trying out new organizational forms that enable practical management of the environmental commons as well as coordinated investments in opportunities for the poor. We need to execute as well as dream.

Clinton Global Initiative features SFL Collaboration

Frederick Payton, Sustainable Food Lab founding member from AgroFrontera in the Dominican Republic, talking about the Food Lab and his farmers’ coop’s link to SYSCO Corporation starts in minute 29 of the video found HERE.

Food Lab Co-chair and Rainforest Alliance president Tensie Whalen opened a panel discussion moderated by SFL Co-Director Hal Hamilton at Clinton Global Initiative. Panel included Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture;  Jim Carrey, Actor and Founder, Better U Foundation; David Griswold, Founder and President, Sustainable Harvest Coffee Importers; Safira Gerald Lazaro Gwimo, Coffee Quality Control Manager, Kanyovu Coffee Cooperative; Howard-Yana Shapiro, Global Staff Officer Plant Science and External Research, Mars, Incorporated; Adjunct Professor, Department of Plant Sciences, College of Agriculture and Environmental Sciences, The University of California, Davis. CLICK HERE.

Agriculture and Carbon Markets News

The Food Lab helps find business-savy ways to encourage better agricultural practices. In the case of climate change the solutions may not all have to come from within the supply chain.  Carbon Markets may supplement supply chain incentives (the term “carbon market” refers to the buying and selling of units of carbon sequestered in soil or units of agricultural GHG emission reductions). These markets, though nascent, have potential to provide growers with additional revenue streams for the ecosystem services they provide (such as climate regulation).

The hope and promise of carbon markets represents a win-win not just for the grower and planet but also for agri-food companies.  Suppliers will utilize increasingly better practices, get paid more for doing so and keep prices steady.

The Food Lab closely tracks, maps and where possible, encourages the development of agricultural protocols that will enable growers to receive additional income for good agricultural practices.

Presentations from June 10 and June 17, 2010 Events Available now

 Phase 2 Report
Agriculture Sector Greenhouse Gas Quantification Protocol Benchmarking

Think Big. Go Small.

Adapting business models to incorporate smallholders into supply chains  

Read full briefing (PDF 1.69MB)

Summary

Food and beverage companies are facing a rapidly changing world. Global demand is rising as the world’s population grows. Yet the planet’s ability to meet this demand is threatened by factors such as droughts and other expected consequences of climate change, together with land degradation and biofuel production. At the same time consumers everywhere are growing more knowledgeable and concerned about the ethics of where and how their food and drink are produced.

A number of innovative companies have begun integrating smallholders into their supply chains. There is evidence that this strategy can attract customers and manage supply risks. The investment by a company can be relatively modest if the company collaborates with farmers’ organizations, government, and other non-commercial actors. This approach to investment can have broader impacts on the rural sector, ensuring that trade benefits men and women farmers who are normally marginalized from wealth creation.  

Ensuring a smallholder sourcing program can deliver both commercially viable products and value to the smallholder, requires a number of structural challenges to be overcome. An increasing number of new business models are emerging of global and domestic companies that have adapted to overcome these challenges.

This briefing builds on the Sustainable Food Lab work on ‘New Business Models for Sustainable Trading relationships’ and Oxfam agricultural market programs.

Authors: David Bright (Oxfam GB), Don Seville (Sustainable Food Lab) and Lea Borkenhagen (Oxfam GB)

Commodity Exchanges in Africa

Review of the role of commodity exchanges in supporting smallholder farmer market linkages and income benefits

Read full paper here

Recently the government of Ethiopia mandated that all of the navy bean trade is to done through the new commodity exchange.  But the new business models for sustainable trading relationships team has been working on this crop in Ethiopia since 2008 to develop direct and transparent trading relationship to the final buyer.  What are the implications?  What is the potential for the commodity exchange to benefit small scale producers?

To gain insight into how the project might work with the new commodity exchange and still benefit small scale producers, the project commission a study of the 5 working country level exchanges in Africa. The results are provocative -- while commodity exchanges have the potential to benefit producers through clear prices signals and uniform and regulated warehousing and trading system, none of these exchanges to date have made the investments infrastructure that would allow the small scale producers to achieve the potential benefits.

A New Business Model for Sustainable Trading Relationships publication

Author: Peter Robbins July 2010.

Public Interest in Private Label

How new relationships between NGOs and Retailers can help build trade to benefit the developing world's small scale farmers

Read full paper here

NGO's know there’s a development case that improvement in small scale farming is directly associated with a reduction in poverty and hunger. For retail buyers there can be a business case about differentiation, managing reputational risk through engagement and securing new efficient sources of raw materials. 

This paper is intended to support building successful relationships between NGOs and retailers with benefits for international development and for business.  The NGO reader will find out how modern retailing works. There’s a range of commercial models that will be described and recommendations for good practice in relationships.

A New Business Model for Sustainable Trading Relationships publication.

Author:  Chris Anstey, based on an MIT L-Lab Student Research Project, July 2010

New on SFL Website

• Agriculture and Development section (previously Poverty and Market Access)
  
• Advisory Board Introductions
  
• Global Agricultural Climate Assessement pages