Participation in Agriculture Value Chain Development: Increasing Market Power of Family Farmers

Participation in Agriculture Value Chain Development: Increasing Market Power of Family Farmers
Lead Organizer: Asian Farmers Association for Sustainable Rural Development (AFA)
June 10, 2021, 4:00 PM – 6:30 PM Philippine Standard Time (16.00-18.30 UTC+8)

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Background

Understanding the Food Systems Summit   

The UN Secretary-General, António Guterres, has called on all world leaders to take part in the Food Systems Summit in 2021 to help establish the future direction for food systems in the world and accelerate collective action to that end. This reflects the recognition that transforming food systems is central in efforts to achieve all the 17 Sustainable Development Goals (SDGs) by 2030. The Summit will be held in New York in September 2021 and will be preceded by a Pre-Summit in Rome in July 2021.

The Food Systems Summit will launch new actions to deliver progress on all 17 SDGs, each of which relies to some degree on healthier, more sustainable, and equitable food systems.

The Summit expects the following outcomes:

• Dramatically elevated public discourse about the importance of food systems leading to the achievement of the SDGs.
• Significant action, with measurable outcomes. (This will include highlighting existing solutions and celebrating leaders in food systems transformation, as well as calling for new actions worldwide)
• A high-level set of principles established through the process that will guide Member States and other stakeholders to leverage their food systems capacity to support the SDGs.
• A system of follow-up and review that will drive new actions and results; allow for sharing of experiences, lessons, and knowledge; and incorporate new metrics for impact analysis.

However, debates are surfacing as to what direction the food systems summit will take to ensure that issues on hunger, malnutrition, social justice, and the planet will be at the fore of these solutions. A revisit and evaluation of our present food system is also imperative if we are to chart a transformative, just, resilient, and sustainable food system that puts the interests and needs of food producers and consumers across the globe. As such, the said summit matters to everyone, from the food producers to the consumers, and has never been timelier given the challenges of the Covid 19 pandemic.

Food Systems Summit Dialogues

In preparation for the Summit, the UN Special Envoy for the Food Systems Summit Dr. Agnes Kalibata has invited all sectors of society to share their perspectives and solutions. These Dialogues obtain input from a global audience (from youth activists to indigenous leaders, from smallholder farmers to scientists and CEOs) both before and after the Summit with the aim to transform the way the world produces, consumes, and disposes of food.

Independent Summit Dialogues, such as this event facilitated by Farmers Forum, will only connect to the Summit process through an official feedback mechanism. Independent Summit Dialogues will offer opportunities and spaces for citizens to critically engage and propose pathways towards sustainable food systems, exploring new ways of working together and encouraging collaborative action.

The outcomes of the Dialogues will feed into the Summit’s five priority Action Tracks and the preparatory work of its Scientific Group to support changes in global food systems to deliver the SDGs by 2030.

Independent Dialogue on Participation in Agriculture Value Chain Development: Increasing Market Power of Family Farmers

Today’s food system is highly unsustainable as shown by its adverse environmental impacts including huge greenhouse gas emissions, and high economic costs, and susceptibility to price spikes, and artificial shortages. It is also extremely unhealthy as evidenced by persistent malnutrition.

The most important underlying factor beneath unsustainable food systems has been looking at food systems in isolation with the well-being of farmers and especially small, landless farmers and food producers. The estimated 500 million small farmers in developing countries are among the world’s poorest and most vulnerable people. Globally 80% of the extremely poor and 75% of the relatively poor live in rural areas and most of these work in agriculture. In many countries (like India) famers debt have risen by 400%; while their incomes have dipped by 300% in the last decade.

The results of the Asia Pacific survey show that financialization of food systems;, unjust trade policies and agreements; increasing corporate control on the entire food chain including land, seeds, and other natural resources; dispossession and lack of secure land tenure especially for women farmers; rising input costs and indebtedness; the increasing adverse tradeoff between food and energy and meat industry, and the siloed approach to food and agriculture on one hand, and health and nutrition on other, threaten food and nutrition systems and put agriculture and farmers in precarious conditions.

In Asia, where 80% of family farmers are located, and where they produce 19% of global food, hence are top exporters of food, farmers are purely regarded as mere producers, has low if no participation in the value chain, and heavily rely on middlemen and traders thus cannot demand a better price for their products.  In Southeast Asia, while there is an increased aggregate GDP of ASEAN member states – an average of 4.5% GDP growth and a reduced incidence of poverty, poverty remained a challenge, with 76% of the poor live in rural areas and rely on agriculture for livelihood. There is an indication of a positive future outlook for some agricultural commodities, but the prices of other commodities are on the downtrend, notwithstanding challenges related to climate change.

In 2012, following a major farming revenue crisis DG Agri has launched a large study “Support for Farmers’ Cooperatives”: The specific objectives of this study: 1. provide a comprehensive description of the current level of development of cooperatives in the EU; 2. identify laws and regulations that enable or constrain cooperative development; 3. identify specific support measures which have proved to be effective and efficient to promote cooperatives and producer organizations.

The starting point of this study is the assumption that there are at least three main factors that determine the success of cooperatives in food chains. These factors relate to

1. Institution Environment including Policy measures
2. Position in the food chain
3. Internal Governance

Cooperatives play a significant role in addressing these success factors and by doing so family farmers can have bargaining power and maximized their share of the value-added, hence having a large market share for cooperatives in a region can increase the price level and reduce volatility.  Cooperatives are important for reducing the risk of receiving payment for the deliveries and also adapting technologies that would address climate change. The type of cooperatives in managing these risks depends largely on a given context and how to motivates farmers to join and organize cooperatives but many cooperatives have expanded their activities in downstream stages of the food chain, strengthening their consumer orientation and promoting other farmers’ interests.

The challenge now is how the agriculture cooperatives and other stakeholders can work together in addressing key success factors mentioned above.

Farmers have many options in organising their cooperative’s internal governance to work optimally, and internally among them, there is much room for professionalization and options to choose from that fit the strategy of the farmers’ cooperative.

How agriculture cooperatives position themselves in a particular value chain is another challenge and this is addressed by looking at the context of a particular situation, preparing a good strategic and business model or goals where farmers can commit to achieving these shared goals.

Another crucial point to this challenge is how stakeholders can work together for a conducive policy environment for the growth and sustainability of agriculture cooperatives.  Cooperative laws and regulatory requirements either need to be reviewed, harmonized, simplified, or enact new ones to address these policy gaps.

Hence it is crucial to recognize the role of small farmers in producing 80% of the world’s food, and their innovations in producing many stellar examples in food production, agro-ecology management, adopting technology, and strengthening local food systems, and ecological conservation.

Agricultural cooperatives need to get into the existing and growing agricultural markets and trade opportunities for agricultural commodities, which are rapidly growing in Asia and beyond. Challenge is to add value and integrate into the value chain within the agricultural cooperative. At the same time cooperation with business is needed to get products to the consumer and attain the price farmers need. At the same time, business mentality and providing quality can be challenging for small agricultural cooperatives.

Civil Society Organizations, Governments, and more importantly farmers’ organizations can work together of putting good business deals and fair sharing in the local and global value chains that can provide a positive impact to farmers. In facing the existing and potential markets, family farmers and their cooperatives can use a renewed business mentality for jumping into new types of businesses for farmers and coops like agro-tourism, environmental services, CO2-credits business, agroforestry, tapping digitalization and e-commerce platforms, etc.

Several other innovative solutions are in the pipeline and it is extremely important to identify lessons learned and identify what works and what doesn’t work, and what are propose solutions to address this perennial problem of lack of access to markets.

For this theme, a 2-hour session is designed in such a way that farmers’ organizations and agriculture cooperatives themselves, and their national networks will take the driver’s seat in sharing their experiences on the key issues and challenges affecting them. They will also have an avenue to share their initiatives or game-changing solutions that were able to address these challenges in participating in value chain development hence enhancing access to markets.

Objectives

At the end of the session, participants will be able to:

1. Inform, educate, and learn about the issues and challenges of the challenges facing family farmers in accessing markets in local and global value chains;
2. Identify other innovative and game-changing solutions that address these key issues and challenges;
3. Propose specific recommendations including how stakeholders can work and connect together on game-changing solutions and increase the market power of family farmers especially in the COVID 19 crisis.

Participants

Participants to the session are family farmers’ organizations, agriculture cooperatives, Civil Society Organizations, private sector, government representatives, multilateral donors.

Program

Moderator: Bernie Galang,  M&E Officer, AFA