Multinationals: Self-Interest Drives New Attitudes to Agriculture

Thursday, January 28, 2010

Global agribusiness companies are waking up to smallholder farmers. Long used to buying their produce through intermediaries, companies are now meeting farmers in the fields. Cadbury is committed to making its leading Dairy Milk brand Fairtrade by supporting small cocoa farmers in Ghana.

Unilever is offering 5,000 small farmers guaranteed markets, access to finance and technical assistance to grow black soybeans in Indonesia. Blue Skies – a business supplying processed tropical fruits to Europe – is training workers to meet international accreditation standards, increasing exports from Ghana.

This trend is recognised by some of the most senior authorities in the field. Oscar Chemerinski is director of global agribusiness at the International Finance Corporation (IFC), the investment arm of the World Bank. “There is an increased realisation by global agribusiness that their success or failure in the medium and long term is tied to the success of the small farmer, both financially and environmentally.” He says: “The balance of power may be shifting in favour of the producer.”

The challenges facing smallholder farmers, however, remain high. There are an estimated 1.5bn of them on the planet, but only a tiny proportion are involved in the global food supply chain. Many farmers complain about poor credit access, the burden of risk and international trading standards that they cannot understand or afford to implement. Increasingly, farmers are migrating to urban areas in pursuit of higher wages, letting their farms fall into disarray.

Source: Financial Times (link opens in a new window)