Making global supply chains work for farmers

I had the privilege to address the Concordia Summit this week in New York on the margins of this year’s United Nations General Assembly.  I shared the stories that have shaped my outlook on an issue that so many of us care deeply about – poverty among the farmers who fuel global supply chains.

Nearly 20 years ago, I was fresh out of college and ready to change the world. I went to work for Oxfam, a global NGO focused on fighting poverty. Oxfam sent me to Vietnam to help a community in crisis. Deep in the mangrove forests and rice paddies of the Mekong Delta, rice farmers were starting to grow shrimp, lured by the promise of a better life in a booming market.

But making the switch without experience proved disastrous. These new shrimp farms quickly failed, and farmers were losing what little they had. In this remote region, there were few government resources, and NGOs were few and far between.

But business was seemingly everywhere. Representatives of a global seafood company were visiting farmers in their homes, providing them with training and coaching on how to succeed in this new business.

The company was there for a simple reason – it wanted to buy shrimp from these farmers to sell on global markets. It had a strong economic incentive for them to succeed. And as the weeks and months went by, I saw the hope on the faces of many farmers as they began succeeding and putting money back into their pockets.

I was surprised and intrigued by the powerful potential for progress at the intersection of business interests and the interests of smallholder farmers. Inspired by this experience, I decided to leave the nonprofit world and to try my hand at a career in business.

A few years later, I was working at The Coca-Cola Company – embedded in its juice business to advise on integrating sustainability into its plans.  An opportunity emerged to test my hypothesis about the significant value for business and smallholder farmers when their interests strongly aligned. 

Coca-Cola wanted to expand its juice business in East Africa, but there was no local supply chain for fruit juice purees, despite the fact that suitable fruits were grown plentifully on local smallholder farms. 

To solve this business problem, we built Project Nurture – a partnership with The Gates Foundation and others that linked 50,000 farmers to new local juice processors and provided them with training and financing so that they could earn higher incomes from the fruit grown on their farms. Within just a few years, the average farmer’s income from fruit had doubled.

Progress is indeed possible when the interests of business and smallholder farmers intersect. And yet, there is so much potential not yet unlocked. 

Of the 500 million smallholder farmers who are now living in poverty, on less than $2 per day, some experts estimate that as many as 100 million of these households may be linked to global supply chains. 

I see this as a massive opportunity – a chance to improve 100 million lives while also driving stronger, more sustainable businesses. When farmers aren’t thriving, the businesses who depend on them run serious risks. Their vulnerabilities are our vulnerabilities.

But for every success story like Project Nurture, there are many more examples of failure – projects that haven’t succeeded in improving incomes for farmers. Remarkably, there isn’t a strong consensus among experts as to what global companies can and should do to have the most positive impact on farmer income.

To unlock this opportunity to strengthen businesses and improve the lives of farmers, Mars wants to crack the code on what really does work in increasing farmer income.  Together with other companies, NGOs, farmer groups and a range of other stakeholders, we want to drive new research, new actions and new dialogues that push us out of our comfort zones and identify breakthrough, transformative new solutions. 

That’s why we founded the Farmer Income Lab in 2017 – a collaborative ‘think-do tank’ that aims to explore, identify and test what global companies at the far ends of supply chains can do to enable farmers at the other end of supply chains to increase their income. It presents a unique opportunity for Mars and other participating companies to leverage their purchasing power, shift supply chain norms, influence and convene diverse stakeholders, and advocate for impactful new public policies.  

In the Lab’s first year, we decided to take a look back before stepping forward. Together with Wageningen University and Dalberg Advisors, and with the guidance of Lab partner Oxfam, we reviewed the available evidence from decades of work in farm communities to determine what works. This evidence review highlighted three valuable insights.

First, it is possible to raise farmer incomes through programs like Project Nurture, in which farmers receive a package of supports that address a range of barriers they face. However, even these most successful programs only raise farmer incomes to a degree – and rarely enough to cross the poverty line. 

Second, we found that many of the most commonly used types of programs – such as productivity initiatives – do not have a strong track record of success when not activated as part of a package. 

Third, we found that the enabling environment is critically important – without the right structural supports, public policies and social protections in place, meaningful progress is very difficult to achieve.

Drawing on these early insights, we’re now shaping the agenda for the future of the Farmer Income Lab. Together with Oxfam, and in dialogue with a wide range of others, we’re considering how best to activate the ‘think’ and ‘do’ work going forward. 

As we ‘think’, we want to ask provocative, new questions that we hope will deliver breakthrough insights. And we want to take action on the basis of what we learn – both as Mars through our own supply chains and with other global companies also acting in their supply chains.

In fact, action is already underway in our cocoa, mint, rice and vanilla supply chains, and we’re keen to enhance and adapt it as we learn more through the Lab. Together with partners like the Livelihoods Fund for Family Farmers, we’re seeing what’s possible when we re-design supply chains with the interests of farmers at their heart. 

As a global business we are investing more than $1 billion over the coming years through our Sustainable in a Generation Plan. Our long-term vision is for all farmers in our supply chains to earn a sufficient income to maintain a decent standard of living. 

It will take the efforts and energy of us all for the Farmer Income Lab to create real value. At the Farmer Income Lab website, you can sign up to stay in touch and get involved.  

We all have a role to play unlocking the potential at the intersection of the interests of smallholder farmers and global businesses. Join us!