Responsible Business and Sustainable Food: Smallholders in the Globalising World

The United Nations declared 2014 as the International Year of Family Farming and Smallholder Farming. Their contribution to food security has globally been gaining in importance, in Europe as well as in less developed and transformation countries. Small farms and other small and micro-sized food businesses play an important role in supporting the local economy and food security in rural areas. The majority of smallholder and subsistence farms are self-sufficient. According to the German Investment Corporation (DEG), 85% of farms worldwide are smallholders. In Asia, 90% of farms are owned by small-scale farmers, working 54% of the arable land, and in Africa the share of smallholders is 78%, cultivating 28% of the arable land. Considering these high percentages it is of major importance to ensure that small scale farmers are put into the position to farm their land in a responsible (sustainable) manner.

Despite differences around the globe, smallholder farms show certain similarities: They have only restricted access to resources such as land, water and capital, they struggle with non-existent or underdeveloped markets and have difficulties in earning the necessary extra income to support their families.  Many smallholder farmers are forced to sell their produce when prices are extremely low, i.e. during harvest season, while they have to purchase food later in the year at a higher price. Considering their conditions, the question arises whether small and family farms will reach a “balance” between economic, environmental and social sustainability. The International Fund for Agricultural Development stresses the necessity of an adequate market access for smallholders as a solution to combat poverty “[b]ut only if it is productive, commercially oriented and well linked to modern markets”.  Next to identifying adequate supply chains (international/local/regional markets) it is equally important to determine other requirements, e.g. infrastructure (transport, energy, communication etc.) and governance (local/global) needed to achieve such a balance.

Apart from gaining access to domestic and export markets, it is also essential to develop models which assist small-scale farmers to add value to their agricultural produce. Rural producer organizations, cooperatives as well as farm associations can be instrumental in addressing some of the challenges facing smallholder producers. Purchases from a larger number of fragmented small-scale farmers are perceived to entail high transaction costs and increased risks. Small-scale farmers are also considered to be less reliable in honoring trade agreements, as they do not have the technical skills nor technology to produce the right products at the right time (quality, punctuality and consistency). Including farmers in a certification process depends significantly on the way they are organized. The certification of agricultural production can have a positive impact on education, infrastructure investment, and financial savings. When smallholders and family farms decide to join forces, they gain better access to agro-processing as well as financial markets. Based on raised issues above during the panel we would like to discuss models towards a balanced and fair financial income for small scale farmers, responsible farming and food security in line with the globalized value added chain.