Why improving farmer livelihoods is material to our business
Agriculture is the single largest employer in the world, providing livelihoods for 40 per cent of today’s global population. It is also the largest source of income and jobs for poor rural households (United Nations, Rio+20).
As an agri-business, sourcing and trading crops such as cocoa, cotton, pepper and tomatoes for our customers, we depend heavily on farmers across the world. It is therefore essential that today’s farmers and future generations see a good livelihood in agriculture, whether they live in California or in Cameroon. If they don’t, and decide to pursue a different source of income, our future volume of supply is at risk. Even with our own plantations, farms and orchards we cannot hope to match the supplies of the 4 million farmers in our supply chains. Many of the challenges facing large and
small-scale farmers are the same – everyone is at the mercy of the weather, climate change impacts, disease, over- and under-supply, exchange rates and global financial shocks. In 2015, our farmer suppliers were coping with:
- Over 4 years of drought in California (almonds, garlic, onions and tomatoes)
- El Niño weather cycles, which meant not enough rain in some countries (such as Indonesia, impacting cocoa, coffee and palm) and too much in others
- Depreciating currencies against the US dollar, such as in Nigeria and Ghana
Of course, for smallholders these issues are magnified 100-fold because they do not have the same level of access to the technology, science, and finance (including subsidies) reducing their resilience. There is a clear difference between being a farmer in either an emerged or emerging economy.
For this reason, we focus on smallholder livelihoods under this material area. Key points our stakeholders have raised include how we:
- Help smallholders improve incomes through better yields and quality
- Help smallholders gain access to markets
- Help smallholders diversify incomes
- Measure systematically the impact of our initiatives
- Support women
Whether small or large, Olam seeks to apply the principles of the Olam Livelihood Charter to help farmers achieve their potential. In this way, farmers are more inclined to view us as a trusted partner for the long-term.
Image: farmer picking chilli in India.
Next section: How we support small-scale farmers