Do poor farmers really benefit from teaming up with big companies - I think so, but...

Hi All,

See below for some fascinating research - there's a lot to debate in here. I think it makes a general point that I would query, but some of the specifics are to my mind correct, i.e. the need for finance and organisational capacity. I am concerned that as they note there are considerable compliance costs to break into some high-governance markets and Malawi in particular is poorly set up to benefit. Partners that understand these limitations and are able to accommodate them are what is needed for PSD work in Malawi and in other similar countries.

Welcome your thoughts!

Andrew

Partnerships mirror the changing nature of the relationships among state, business and civil society organizations, and are often considered as innovative mechanisms to overcome single actor failure in the context of globalization. This thesis analyzes the capacity of partnerships to promote sustainable change in global agricultural commodity chains, using the global coffee, cotton and cocoa chains as main fields of application for the empirical analyses. All three chains are characterized by various sustainability challenges, including environmental degradation, abundant use of agrochemicals, poor working conditions, and widespread poverty. From a governance perspective, the emergence of partnerships is largely positive inasmuch as partnerships act as initiators and agents of change which, although still mostly confined to niche markets, unfolds a chain-wide governance effect. Partnerships create new practices focusing on technological change and performance at the production level. While many partnerships promote standards as competitive strategies to safeguard the application of the new practices, other partnerships link up in networks and exchange resources to facilitate sustainable change. From a development perspective, the positive effects of partnerships are rather indirect and ambiguous. Several aspects of partnerships can be viewed critically and challenge their capacity to promote sustainable change. The benefits for producers are often uncertain as partnerships largely operate in a business-driven and top-down mode, and do not address certain development concerns, such as the strengthening of organizational capital. These differing conclusions on the capacity of partnerships can be explained by the fact that partnerships largely embody the neoliberal agenda, which appears to marginalize certain development concerns, including the issue of smallholder empowerment, the costs and benefits of different certification schemes, or the implications of partnerships for the poorest segment of producers. The dominance of business objectives over development concerns shows that partnerships are constrained in their capacity to reshape the relationship between business and development without external incentives. Ultimately, they might adjust current structures, but it is unlikely that the incremental change pursued by many partnerships would lead to a more fundamental change. This indicates that such concerns cannot be addressed through a collaborative attempt to make a business case, as is the underlying assumption of partnerships. As a result, it might be hypothesized that the resolution of such issues would require a political struggle of social contestation rather than collaboration in order to re-negotiate the relationship between business and development. Given the active role of NGOs in initiating the partnership trend by challenging firm behavior, it depends mostly on NGOs to re-politicize their interactions with businesses, and achieve a broader framing of the sustainability problems than businesses are willing to endorse

Interview with Verena Bitzer , who promoted in February 2011 at Utrecht University.

Research belies the idea that farmers are better off if they cooperate with companies like Starbucks. They have to make a lot of cost to develop and meet the necessary sustainability criteria.

Small farmers in developing countries themselves scarcely benefit from making value chains and production more sustainable. Developmental objectives remain subordinate to the interests of industry, according to research by Verena Bitzer (28). She promotes tomorrow at Utrecht University on the subject.

Bitzer investigated dozens of public-private partnerships (PPP) that try to make value (supply) chains of coffee, cocoa and cotton more sustainable. The research “ Partnering for Change in Chains”, funded by the Dutch Organisation for Scientific Research (NWO), focuses on the partnerships that have developed or use labels such as Utz Certified, Starbucks, and Fairtrade.

What exactly have you researched?

"I've looked at the ability of cooperation between governments, companies and organizations to develop more sustainable agricultural product chains. Then you will see positive effects on the environment or human rights, depending on the purpose of the label. And there are certainly economic prospects. For example, farmers get more chances to sell their products and are trained in more efficient and responsible production. But that effort is primarily commercially oriented; the companies have an interest in a guaranteed supply of raw materials to meet their own sustainability criteria. There is no evidence that farmers are better off if they do business with Starbucks for example, because they also have higher cost to meet the sustainability criteria. "

So Farmers do not benefit at all from all the well-intentioned help?
"Farmers are best served by strengthening their own organizations. That gives them a better bargaining position and also better ways to obtain financing for new investments. This contribution to the empowerment of the local community I have not seen. The farmers just do what they are told by the companies, pay more attention to the environment or end child labour. But with these social benefits farmers themselves are not necessarily better off. Certainly not when their products have to compete with different sustainability labels causing that prices come under pressure and decrease. In that situation the benefits do not outweigh the costs. "

Hence the NGOs have been fooled by the industry?
"The intention to seek cooperation with companies is good. This allows you to connect an economic engine to development objectives. But in practice, too much focus shifted to the economic goals, ensuring the supply of sustainably produced raw materials. Many structural problems within the local community are not tackled. Consider the difficulty farmers have to get a loan, the lack of management capacity within producer organizations or poor infrastructure.'

What should happen then?
"From the business you can not expect that they keep in mind the producers' interests, as these may clash with their own interests. But from NGOs one may expect to have an eye for the bigger picture. However this does require a long term effort. Often parties agree a partnership for a period of two or three years. That is too short for structural improvements in the degree of organization of farmers. If the partners then leave, the whole thing can collapse again. Without external assistance the farmers' can loose the certification and then the investment has been for nothing. "

And what is the role of government?
"The usefulness of public-private partnerships has still been insufficiently proven. Reporting is lacking. A beautiful brochure with a picture of a happy farmer is no guarantee of success. Sustainable agricultural production is good for the environment, but the farmer is not much wiser, according to research by a PhD student.”