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How to source from small-scale agricultural producers
Dr Lea Borkenhagen and Jo Zaremba
Take Home Messages
• Having smallholders in supply chains is now core business
• It is doable and you can make it happen
Outline
• Drivers changing sourcing practice
• What smallholder agriculture can do for your business
• What your business can do for development
• Examples: Body Shop, Plenty Foods, Marks & Spencer
Drivers changing sourcing practice
Drivers changing sourcing practice
• Consumers
• Managing risk in the supply chain
• Reducing Rising Costs
• Others are doing it
• Governmental Policy
What smallholder agriculture can do foryour business
Smallholder agriculture and your business
• New sources of supply
• Productivity increases
• Transparency
• Development costs offset
Smallholder agriculture continued
• Consumer satisfaction
• Brand
• R&D
• Company change
What your business can do for development
What your business can do for development
• Investment in smallholder agriculture pays
• Small corporate investments can support large-scale change
• Getting it right for women is critical
• Long term gains: more political stability, better opportunity for business
Case Studies
Body Shop – The company & Market
• Started 1976
• Ethical values and community trade
• BRAND depends on traceability & quality = ethical reputation
• 65%+ “wet product” contains CT ingredients– 31 suppliers in 23 countries– >25,000 direct beneficiaries
Body Shop – Business Model
• Manufacturing –commercial contractors required to meet ethical codes of conduct, including FAIR PRICE
• Sourcing – all CT ingredients traceable to Body-shop-nominated producer groups (E.g. ethanol from CADO)
• Supplier assessment to assess ‘fit’: – Community organisation– Community needs– Direct benefits– Commercial viability– Environmental sustainability
• Work WITH communities to develop capacity / avoid ‘dependency’
Body Shop – Outcomes & Benefits
Producers:• Direct benefits to producers & families: fair price (income); forecast
demand; community fund projects
Company:• Sustainable, dependable, quality ingredients
Customers:• Products meeting their expectations in terms of ethics & quality
“If you can’t hear the voice of the farmer in everything that you do then what you are doing is wrong.” Anita Rodrick
Plenty Foods – The company & market
Plenty Foods – Business Model
Manufacturing / Processing• Fully owned by Plenty Foods
Sourcing• Majority of inputs directly from farmers• Additional ingredients (sugar / coconut / vitamins etc.) from market
Production• Forward contracts / guaranteed floor Price• Multi-stakeholder approach (Government, NGOs; Business)• Farmer organisations or individuals• Facilitate Service provision (loans; insurance)• Input provision, training, capacity building
‘Farmers interests are absolutely our interests
– we are committed to their profitability.’
Mohan Rattwate, CEO
Plenty Foods – Outcomes & Benefits
Producers• Guaranteed floor price• Capacity building; access to services; viable business
Company:• Reliable supplier base (quantity; quality; price)• ‘Image’ - Trust bt. company & producers• Brand reputation/vision & objectives
Customers:• Trust in company• Reliable, quality, price worthy
products
Oxfam and Marks & Spencer: Finding Common Ground
Oxfam & Marks & Spencer: Mali Cotton Initiative
Depressed and volatile
cotton prices undermine livelihoods
Support farmers to scale-up and
produce organic and Fairtrade Cotton
Mitigate market
uncertainties
Oxfam:• Targets 70% of 8,250 farmers at sustainable yields by 2011 (est.
600kg/ha)• Promoting rural women’s empowerment • Increasing farmer organisations’ autonomy & effectivenessMarks & Spencer:• 80 tonnes in 2007, 160 in 2008 and 120 in 2009 for Childrenswear• Promoting sustainable cotton & committing to Fairtrade cotton • Partnerships with Oxfam and Helvetas
Oxfam & Marks & Spencer: Clothes Exchange Programme
35million tonnes of
waste thrown
away from households each year
2.4 billion items of unworn
clothing in the British wardrobe
1 million is clothes destroyed or landfill
Since launch in January 2008 • saved over 2000 tonnes of M&S clothing from landfill• raised over £2 million for Oxfam.
