The captains of the food industry have come a long way over the last few years. The “Big 10”, the world’s 10 largest food and beverage companies, have moved from being seemingly unaware of the great injustices at the bottom of their supply chains to now acknowledging these and making commitments to address them. Land rights, women’s empowerment and climate change are where there’s been particularly impressive progress. Strong commitments are now also arising looking at how farmers and workers are treated, and how companies deal with water and transparency.
Despite good progress two fundamental challenges remain. First companies need to actually implement the commitments they have made and secondly, we are yet to see true transformation in the business model of how the sector operates.
Supply chain Implementation
Companies need to shift up a gear and start turning policy commitments into company practice. This starts with moving beyond their own operations to ensuring that new standards and approaches are implemented by suppliers too. Most of the big companies don’t get their boots dirty on the ground – that role is left to their suppliers who either grow the crops they use directly, or buy from others, including small scale producers. Only when suppliers come on board will corporate commitments really start to bite.
For instance, Illovo Sugar (a subsidiary of ABF), Coca-Cola, PepsiCo, Nestlé, and Unilever all committed to zero tolerance for land grabs in their supply chains. This will only translate into real change for communities when company suppliers start to implement these policies. Applying the principle of free, prior and informed consent, supporting access to grievance mechanisms and supporting women producers’ land rights all need to be applied at community level if companies are to effectively implement their land policies.
Similarly, eight of the Big 10 companies committed to take steps to better understand the specific challenges faced by women in their supply chains. If these companies are serious about addressing the rights of women change will only happen when the companies focus on their supplier’s actions to ensure that the discrimination that women producers face is eliminated. This includes- supporting greater leadership and voice for women, improving women’s access to and control over land and, assuring that access to services like credit and training are made available to women too.
Finally, despite the strong movement we have seen on climate by the Big 10, we will only see real progress in reducing agricultural emissions when suppliers of the Big 10 take necessary action in their own operations. This includes- taking measures to stop deforestation and reduce the carbon footprint associated with growing, transporting and processing the food and drinks that millions of consumers love.
Business models that share value fairly
But even were the Big 10 to do all this, there would still be a massive structural problem. Transformation in the food system is desperately needed and will require a fundamental disruption of the dominant business models across the sector. The last few decades have increasingly seen power and value concentrated among a smaller and smaller set of traders, processors and other corporate actors in value chains. Meanwhile, small scale producers and farmers have been left with an ever-decreasing share of the total value that consumers pay for their food. As a result, millions of workers on plantations earn poverty wages and small-scale producers earn incomes barely enough to live on. A cocoa farmer today gets less than 6 per cent of the value of a chocolate bar. 30 years ago, that farmer got 18 per cent. Business models that squeeze value away from farmers and workers must be transformed so that farmers and workers can thrive, and so that the food system can work for us all. Good practice is starting to emerge and some of the best examples being commercial business models where farmers own businesses that capture more value (for instance through processing). Models like KTDA, where 550,000 small-scale tea farmers co-own processing plants result in farmers receiving 75 per cent of the final tea price (while tea farmers in nearby countries like Rwanda receive 25 per cent) . Business models such as these must become the future of the food sector if we are to allow farmers and workers to thrive so they can continue to feed us all.