THE ROLES OF DIFFERENT ACTORS
What are the roles that different actors can play in driving improvements for smallholder incomes?
In addressing issues around smallholder incomes, it is impossible that any individual actor, or even sector, has the power to make the necessary improvements. It is important to recognise however, that individual actors do have specific tools that they are able to implement, or levers that they can pull, to drive change, which when combined in collaboration with appropriate actions of other types of actor, can have a profound and multiplying effect. This page discusses the potential roles of different actors in striving for living incomes and why collaborating in this effort might be important for them.
Business and the Private Sector
Businesses associated with agricultural sourcing have a strong influence over smallholder livelihoods, both directly and indirectly, and therefore have a significant part to play in improving incomes, although they are by no means solely responsible for taking action.
The private sector has an important role in influencing the demand for particular crops, with the ability to implement pricing mechanisms and agree specific terms of trade. In partnership with other actors or on their own, companies can provide farmers’ access to training and low-cost inputs. They can also facilitate the access to financial products such as cheap credit and loan schemes, and help to ensure labour rights are respected and decent wages paid.
It is within the interest of private sector actors to consider living income as a vessel for achieving their UN sustainable development goals and to act on cooperate social responsibility promises. Taking approaches to achieve living incomes can help businesses achieve social accountability goals and KPI’s related to poverty reduction, food security, decent work, economic growth, equality and cross-cutting collaboration.
The Living Income Community of practice provides a space for businesses to find collaboration opportunities, learn from the endeavours and experiences of other actors, and get information on how to bring about change in the right way. Additionally, LICoP has created a toolkit for the private sector, a guide for companies seeking to address poverty and economic viability with smallholder farmers in their supply chains.
Voluntary sustainability standards associated with smallholder agriculture are well positioned to help close the income gap for smallholder farmers. Due to their nature, many sustainability standards are inherently pro-active in the income space; completing, and having accomplished, extensive work on the smallholder livelihoods topic.
Some standards strategies have direct effects on the supply chain; ranging from, but not restricted to, setting codes for practices and standards clauses that help to ensure sustainable incomes for, providing technical assistance and implementing location specific pricing mechanisms. They are also strongly positioned to provide decent market access, strengthen producer groups and act as conveners and facilitate collaboration between actors, due to their linkages with various parts of the supply chain, engaging with policy makers as well as advocating for livelihoods causes.
Through the implementation of strategies that aim to close the income gap, sustainability standards also support the achievement of UN sustainable development goals. Driving change in areas such as farmer incomes and agricultural productivity, standards directly contribute to SDG 1 (no poverty), SDG2 (Zero hunger) and SDG 8 (Decent work and economic growth). These can also impact other goals, such as SDG5 (Gender equality).
The Living Income Community of practice provides a space for Sustainability Standards to share learnings on new approaches and strategies to close the income gap as well as provide a space to find collaboration opportunities.
NGO and Civil Society
The activities of civil society organisations can have a significant influence on farmer livelihoods. Through the provision of expertise and capacity building programmes, they can have the ability to help farmers achieve better equity, improve community engagement, expand farming techniques, increase access to education and skills, and optimise resilience. They have also the ability to help bring farmers together, which has a proven effect in reducing transaction costs, increasing bargaining power, building local collaboration and sharing of knowledge.
Civil society organisations can also act as community representatives, strengthening farmer groups and supporting their access to various services, such as finance and insurance. They can campaign and advocate for farmers interests, putting their needs on the agenda of governments and private companies.
By considering the concept of living income, civil society organisations also contribute to achieving a range of UN sustainable development goals. Indeed, clear links can be drawn with SDG 1 (no poverty), SGD 2 (zero hunger), SDG 8 (Decent work and economic growth), SDG 10 (reduced inequalities) an SDG 17 (partnerships).
The Living Income Community of practice provides a space for civil society organisations to voice their concerns, share experiences and find collaboration opportunities to expand their work.
Governments have a fundamental role to play in creating an enabling environment and the necessary conditions for farmers’ income improvement. They are the vehicle for farmers to access important services such as good education, adequate health care and clean water. Governments have influence over areas such as infrastructure and guaranteeing agricultural extension. Furthermore, they can help transition farmers to more resilient crops, facilitating farmers’ access to more sustainable inputs and practices, and provide them with the expertise to face environmental challenges (e.g. water scarcity).
Governments have the convening power to facilitate collaboration between private companies,, civil society organisations and other actors; leading a transition towards a more enabling environment for farmer income improvement.
Supporting activities focused on improving smallholder farmer incomes towards living incomes can act as a means for governments to achieving their UN sustainable development commitments. Taking approaches to achieve living incomes can help the government achieve goals related with, for example, decent work, economic growth, equality and cross-cutting collaboration.
The Living Income Community of Practice has created a guidance document for governments with the aim to inspire public policy-makers around the world that wish to take action and are committed to ensuring that all farmers along the value chains receive a Living Income. LICoP provides a space for governments to learn about the activities of others in the income improvement space and identify actors to collaborate with to create change.
Research Institutions and Consultants
Research institutions and consultants have an important, yet fundamental, indirect role in improving smallholder livelihoods. They are key to supporting other stakeholders with the provision of key resources and information for making decisions. Those range from calculating living income benchmarks to exploring new frameworks or tools to increase farmers’ income; both necessary prerequisites to action. They also provide services such as carrying out studies to understand the contextual environment of farmers, analysing regulatory contexts and recommending improvements.
The information and insights they can provide, researchers’ and consultants are the backbone of other actors’ strategies aiming at the achievement of a decent standard of living for smallholder farmers’. In doing so, they also indirectly support them achieving their UN sustainable development goals such as poverty reduction and economic growth.
The Living Income Community of practice provides a space for researchers to share relevant work, explore the methods of others, receive guidance on measuring and reporting existing and living incomes as well as identify new research opportunities.
Finance and Service Providers
Service providers, such as the financial sector (e.g. insurance and credit) have a strong influence over smallholder livelihoods, both directly and indirectly, and therefore can have a significant impact on income improvement. Potential instruments service providers can implement range from providing low-cost loans and credit, providing affordable insurance to cover farm resiliency, creating associations and facilitating financial skills training. They have proven to play an important role in developing products, often leveraging digital solutions in conjunction with other actors, that help farmers improve their savings as well as empowering women active farmers, for example through women’s groups saving schemes.
By engaging with actions that contribute to closing income gaps, service providers also contribute to the achievement of certain UN sustainable development goals such as poverty reduction, food security, decent work, economic growth, equality and cross-cutting collaboration.
The Living Income Community of practice provides a space for service providers to find collaboration opportunities, share needs around income focused impact investing, learn from other actors experiences, and get information on how to improve their impact.
LEVERS FOR IMPROVING INCOMES
What are the different levers that can be pulled to drive improvements to smallholder incomes?
Levers for improvement
It is important to recognise that there is no silver bullet for driving improvements for smallholder incomes and neither is any individual actor solely responsible for taking actions for change. Despite this a variety of levers and methods exist for improving incomes, appropriate for different actors, that can be applied holistically and can be implemented in various combinations dependent on the context.
A recent study by the Sustainable Food Lab and Business fights poverty took input from, and conducted interviews with, experts from business, NGOs, donors, UN bodies and research organisations to clarify roles and levers for different actors to help increase smallholder incomes. Providing a number of case studies and examples the paper disseminates 5 key levers of which different types of actors have different roles in addressing and a strong emphasis is put on collaboration and links to the SDG's. These 5 levers are:
1) Agricultural Services - This relates to improvements to smallholder know-how, farm inputs (e.g. seeds, fertiliser, tools), warehouses, drying sheds, and post harvest machinery. Links to SDGs: 2, 12, 13
2) Provision of Financial Services - This includes improving affordability and access to credit, loans, savings and insurance. Links to SDGs: 1,8,9,10
3) Decent market access - This relates to stablising demand, payment of fair prices and favourable terms of trade. Links to SDGs: 2, 8, 12
4) Gender equality - This relates to women’s participation in smallholder farming and equal economic empowerment. This is a cross cutting theme which is applicable to all the above levers. Links to SDG 5, 10
5) Provision of basic services - This relates to services which aren't always directly linked to farming including the availability and accessibility of quality education, health and water. Links to SDG 6
For each of these overarching levers there are a wide variety of interventions specific to different types of actor (namely national government, international donors and UN agencies, civil society, financial institutions, private sector actors and industry bodies/multi-stakeholder platforms). Many of these 'sub-levers' are in fact cross cutting and for each overarching lever the most significant interventions for driving change are highlighted. Click here to find out more...