The business tool is developed by Fair & Sustainable Consulting as part of the Follow the Food project. This project aims to generate knowledge on how foreign businesses can contribute to food security in Ethiopia, Kenya and Ghana.
Food security in this context is when people at all times have access to sufficient and appropriate quality food. They should not risk losing access to food as a consequence of sudden shocks (e.g. an economic or climatic crisis) or cyclical events (e.g. seasonal food insecurity). This is the definition of the Food and Agricultural Organization of the United Nations.
The business tool can help companies or public-private partnerships to:
● gain insight in the possible consequences of the choices that they make
● improve their due diligence or social impact assessment
● gain insight in how they can contribute to food security
The tool is not exhaustive, but a visual display of the main findings of Master and PhD students of Utrecht University and St. Mary’s University (Addis Ababa, Ethiopia), involved in the Follow the Food project.
How to use the tool? If you move over one of the icons, it flips and provides information.
Implications of the Business Model
The Follow the Food project looks into businesses that contract small-holder farmers. Business owners can make amendments to their business model in such a way that it positively influences the food security of the contracted farmers and their families.
Depending on the crop, farmers are paid in terms or after harvest. Research shows that farmers who are regularly paid, are more likely to spend this extra income on food and thus increase their food security. When farmers are paid after harvest of the crop, they tend to invest more in assets. In public private partnership settings it is advised to discuss this issue with the participating farmers.
Percentage of land for business' crops
In an area where little or highly priced food crops are on the market, farmers should be able to use part of their land to grow crops for their own consumption to become food secure. If this is desired and the size of the part for own consumption, should be decided by the farmers.
Export or local crops
Locally consumed crops can be eaten by the farmers, if a surplus occurs. This is not the case for crops that are uneatable or not consumed locally.
Inputs given to the contracted farmers (seed, fertilizers, training etc.) should be of high quality. They should also be given on the right moment so crops have the maximum potential to develop and farmers do not run out of stock of the input. It is up to the company to decide whether they provide the inputs or partner with service providers. The latter will be more sustainable as the service providers continue to supply inputs as long as they have various clients.
Farmers to include in the business model
Business owners can contribute to food security of their contracted farmers if they critically look at which farmers to select. Below, an overview is given which factors are important to include in the selection process.
If farmers with a small plot of land can be selected, it is important to check if they can keep a portion of their land for own consumption production next to the cash crop.
Access to irrigation
If irrigation is required for the production of the cash crop it is important to check if access to irrigation can be included in the program, instead of only selecting those farmers who already have access to irrigation.
Generally, farmers with low resources, such as income, assets and capital, are less or not food secure. The company can contribute to food security when these farmers are selected to participate and supports them to grow their resources.
Companies that include women enhance their productivity, increase the quality of their production and reduce absenteeism and staff turnover. In addition, women are the ones buying food and producers of crops, and are therefore more likely to contribute to the food security of their family.
Youth often easily adopt new tools and techniques and are therefore interesting to contract. However, they do not always own land themselves, but farm (part of) family owned land. Ownership of proceeds needs to be assured at the beginning of a project. . By including youth in the business model, they can contribute to the family income and hence food security.
Degree of organisation
As a company you can choose to work with farmers that are organized in a cooperative or group or work with individual farmers. Farmers that are able to organize themselves are often less poor and more food secure. This could plead to work with individual farmers.
Stakeholders in the local context
Companies do not operate alone, there are other actors present in the environment of the farm. To reinforce each other’s activities and to make sure that no counterproductive activities occur, it is important to stay in close contact with these other actors.
Other private sector players
The salary scales, benefits, etc. of other private sector actors in the area are important to know, to be able to engage farmers. The reaction of other stakeholders on the operations and impact of private sector actors in the area, and how private sector actors deals with those reactions gives a good indication of the chances of success and impact of your business. This can all be investigated in a Social Impact Assessment.
In most regions it is important to build a good relationship with the community (leaders). They can help select farmers, give insight in various groups within the community or support awareness raising activities on for instance importance of food security. It should be an ongoing process to involve/update the community on the company’s operations.
Local and/or national government set important rules and regulations that have an effect on the sustainability and impact of the operations of your business. It is therefore important to keep them involved.
NGOs might have support programs in the surroundings of the company, that can complement what the company aims to do. To reinforce each others operations, it is important to find out what is already happening in the area. This can be investigated in a Social Impact Assessment.
Be aware that your company will probably have an influence in other areas as well, such as water usage, availability of food and local market prices. These issues are beyond the scope of this tool, but should be included in your due diligence and social impact assessment.
The business tool is part of the project Follow the Food: Dutch agribusiness and local food security in Ethiopia, Ghana and Kenya. Partners in this project are:
● Utrecht University (lead)
● St. Mary’s University (Addis Ababa, Ethiopia)
● Solidaridad East and Central Africa
● Solidaridad West Africa
● Solidaridad The Netherlands
● Fair & Sustainable Consulting