Connecting with smallholder farmers to enhance livelihoods
We're building stronger, closer connections to the smallholder farmers who supply our business with essential agricultural raw materials – providing them, and us, with the foundation for future growth.
Time for change
Estimated number of people worldwide reliant on smallholdings
Today, an estimated 450 million people earn most of their income by working on their family smallholding. With their wealth of collective experience and knowledge of local conditions, they play a vital role in feeding the planet.
But smallholders often face barriers that prevent them from unlocking their full potential in terms of both agricultural yields and incomes. Despite their contribution to the global food system, many smallholders themselves live in poverty, and deal with chronic food insecurity and malnutrition. For too many, a life of continuous toil does not currently provide a sustainable livelihood. An unexpected drought or family bereavement can make this even harder to achieve.
The system needs to change. And with the world needing to feed 8.5 billion people by 2030, the time to act is now. Change won't be easy. But we believe it will create opportunities for smallholder farmers, for the world's food systems, and for our business.
Feeding the future and securing our growth
A sustainable future for smallholders is one in which their incomes and living standards rise, so that current and future generations see smallholding as viable and attractive. That will be key to feeding the world's growing population.
And our future success will depend on theirs. We rely on smallholders for a sustainable supply of some of our most important ingredients, including tea, palm oil, vegetables, cocoa and vanilla.
By strengthening our connections to smallholders and helping them flourish, we will make our supply of sustainably sourced ingredients more secure and more transparent. That can reinforce the trust that our consumers have in our brands and help us continue to grow.
Helping to transform smallholder farming will be key to achieving the ambitions of our Unilever Sustainable Living Plan. At the same time, it plays a vital part in contributing to the UN Sustainable Development Goals, especially No Poverty (SDG 1), and Decent Work and Economic Growth (SDG 8).
A holistic approach to tackling the barriers
Smallholders enabled to access initiatives aiming to improve their agricultural practices by 2018
We're committed to improving the livelihoods of smallholder farmers and their communities – in particular by helping them improve their agricultural practices and to look at income diversification. By 2018 we had enabled around 746,000 smallholder farmers to access initiatives aiming to improve their agricultural practices.
Smallholder farmers often lack access to markets, financial support, and information and training. That means they are sometimes constrained when it comes to investing in their farms, and in their choices of when, how and what to grow. The result is often missed opportunities for improved yields and quality.
Many other factors can also hold them back – including lack of income diversification, poor diet, gender inequalities and health problems, such as those caused by inadequate sanitation. These barriers must be addressed holistically and systematically. We're working to do this in a number of ways: directly with smallholders; with a range of partners; and through certification and other programmes.
Strengthening smallholder communities in Madagascar
Helping smallholder farmers and their communities increase yields sustainably is key to our strategy. But our programmes address other barriers to smallholders' growth too.
In Madagascar, our strategic alliance with our supplier Symrise, the German Development Agency GIZ and NGO Save the Children aims to improve livelihoods by supporting vanilla smallholders and the wider community. The development partnership is supported through the develoPPP.de programme of the German Federal Ministry for Economic Cooperation and Development (BMZ).
The partnership aims to reach 50,000 people in 10,000 households in the Sava Region by 2019, by increasing access to fair financial services, providing community education on health, hygiene and child protection, as well as helping farmers improve their agricultural and business skills.
By the end of September 2018, the programme had reached over 40,000 people in over 9,000 households, including around 6,000 smallholder farmers who had accessed agricultural training.
Working directly with individual farmers
At the systems level, we're working with a wide range of partners to improve the infrastructure in which smallholders operate. That includes collaborating on improved regulatory, market and financial processes.
At the same time, through our programmes, we're working to help smallholders improve their yields, and increase the quality and consistency of the crops they grow. That gives them the platform to boost their incomes, while giving us the visibility and resilience we need to achieve a truly sustainable supply chain.
By working more directly with smallholders, we can support them in areas like income diversification, health, nutrition and education, as well as training, professionalisation and sustainable agricultural methods.
Towards a 'living income' to make cocoa farming sustainable
Smallholder farmers who rely on growing a single commodity for their income are vulnerable to unexcepted shocks like a poor harvest. We're exploring ways in which helping them find additional sources of income can build their resilience. It is a move towards the concept of a 'living income' for smallholders – a household income sufficient enough to earn a decent standard of living including diet, housing, access to services and savings.
In Côte d'Ivoire, the ASPEN project is exploring how cocoa farmers can diversify their incomes by acting as sales agents for products like soap, detergent and toothpaste in their local community. The project also helps us develop what we call 'last-mile' distribution networks – getting products to consumers in communities that can be hard to reach. In 2018, 56 sales agents and helpers were trained and offered business coaching to support them in setting up small business ventures through ASPEN. Around 40% of the participants were women farmers.
The project is supported by TRANSFORM (a joint initiative between Unilever and the UK’s Department for International Development) and our supplier, Cargill. If the piloted model is successful, it has the potential to be expanded to other smallholder communities.
This work contributes to the UN Sustainable Development Goal
Joined-up working across our USLP
Our holistic approach recognises that social, environmental and commercial progress are all interconnected. This relationship is reflected across other sections of the report. As our interactive map shows, closer relationships with smallholders help us run projects to advance sustainable agricultural practices, increase yields and reduce environmental impacts – such as deforestation. These aims are central to our ambitions on sustainable sourcing.
They also help us promote human rights and empower women, and increase access to better hygiene and sanitation. Improving smallholder nutrition contributes to our goal of helping hundreds of millions of people achieve a healthier diet.
The importance of partnerships
Addressing the complex barriers faced by smallholders and giving them access to the resources they need, requires collaboration with our suppliers, across industries and sectors, and with NGOs and governments.
Implementing our programmes is itself often a collaborative process. We have global partnerships with many organisations including Acumen, Clinton Giustra Enterprise Partnership, the Ford Foundation, the Sustainable Trade Initiative (IDH), the International Fund for Agricultural Development (IFAD), Global Alliance for Improved Nutrition (GAIN), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Oxfam, Population Services International (PSI), the Rainforest Alliance, Save the Children and Solidaridad, along with national and local government agencies.
More inclusive sourcing through the Enhancing Livelihoods Fund
How can we find innovative supply models that enhance the livelihoods of smallholders while securing our ingredients sustainably? That's the mission of the Enhancing Livelihoods Fund (ELF), a joint initiative between Unilever, Oxfam and the Ford Foundation which has financial support from the Ford Foundation and Unilever.
ELF awards grants to partners in our supply chains who have projects that improve their social impact in sourcing from smallholder producers. The projects must either minimise risk for the smallholders, empower women in the supply chain or improve conditions for workers. They must also support our sustainable sourcing objectives.
Since ELF was launched in 2015, it has funded five projects, covering a range of crops. In Indonesia, we're working with farmers who produce coconut sugar, a project described below. In Côte d'Ivoire, ELF has begun supporting a project to help cocoa farmers grow maize in order to diversify their incomes. And in Comoros, we work with growers and pickers of Ylang Ylang, which we use as a fragrance in some of our Home Care brands.
Launched in 2017, the Comoros project works with our supplier, Firmenich, to ensure a better representation of women in the supply chain and to help them to get a higher and more stable income. The 250 women involved are receiving training in sustainable agricultural practices. They are also building their knowledge in areas such as literacy and numeracy, entrepreneurship and family planning. Access to a health insurance scheme and income diversification activities are other key elements of the initiative.
Encouraging agents of change
We're seeing results from projects funded by ELF that have been through their evaluation stage. In India, a programme with our supplier Marcatus QED supported a network of gherkin growers with farmer education, climate-smart agricultural practices, and farmer family nutrition and hygiene guidance. In Haiti, a focus on income diversification and gender empowerment underpinned a project working with around 450 vetiver growers and their communities, which concluded in 2018.
Coconut sugar: new crop, new skills, new income
Coconut sugar is a new crop for the farmers in Kotawaringin Timur, Indonesia. But as they look to diversify from their typical crops of rice and copra, farmers need new skills, finances and equipment to make the most of an opportunity that could bring enhanced incomes to their community.
Through the Enhancing Livelihoods Fund (ELF), Unilever and the Ford Foundation have provided funding to help set up a Farmer Field School which is delivered by the Puter Foundation. Farmers receive a comprehensive ten-day training programme designed to give them the skills and knowledge to both sustainably grow ingredients and engage in the full end-to-end production process. They will also get support in forming a cooperative that will establish an important link to international markets and provide members with a start-up loan to reduce set-up costs.
Training sessions held at the Farmer Field School will be replicated in the community. This is designed to help the project reach women in particular, even if they are unable to attend the Field School sessions. Women will also be trained in management skills so they can take on positions of responsibility within the newly formed cooperative.
By 2020, we have a target of enabling 335 farmers to sustainably produce coconut sugar for sale on local/international markets or directly to Unilever.
This work contributes to the UN Sustainable Development Goal
Working with smallholders on sustainable palm oil
Smallholder farmers play an important role in palm oil production. They represent 40% of all production in South-East Asia – and the majority of the palm oil we buy is grown in Malaysia and Indonesia, the biggest producing countries worldwide. But many smallholder farmers face issues in terms of productivity, profitability and sustainability. These can include land tenure, poor agricultural practices and a lack of access – both to finance for good seeds for replanting and to markets.
We aim to support 25,000 farmers by sourcing or buying RSPO certificates directly from independent smallholders, and by working with NGO partners to help and incentivise smallholders to adopt sustainable management and agricultural practices. Find out more about the importance of smallholder farmers in the palm oil industry.
Empowering smallholders to produce sustainable palm oil, village by village
Smallholders working on family plots are an important part of palm oil production. Together, they produce around 40% of the global supply. But the challenges they face in getting access to markets, finance and the training that could help them improve their yields mean that their incomes often remain low. This, in turn, can drive deforestation and loss of biodiversity as they seek new land to cultivate.
Since 2017, we have worked with partners on a pioneering new approach to help independent smallholders in Indonesia produce more oil and generate higher incomes while having a lower environmental impact.
This is part of a ‘jurisdictional approach’ programme we are supporting in the district of Kotawaringin Barat but we also prefer to think of it as creating 'sustainable villages', as we focus on a per village level first to create scale. It is a way of working with communities of smallholders and local government to increase yields and prevent deforestation within a set geographical area, while assuring us of a sustainable source of palm oil.
We began with the village of Pangkalan Tiga, In October 2017, our programme helped 190 independent smallholders of the village's KUD Tani Subur farmer cooperative achieve RSPO and ISPO certification – the first cooperative in Kalimantan to do so.
Alongside sustainable palm cultivation, the cooperative involves an integrated livestock farm and a fish farm, so that palm by-products such as fronds are used in feed for livestock, cow manure is used for fertiliser for the oil palms, and palm oil mill effluent is used in fish feed. This integrated model gives farmers an opportunity to earn additional income, while the support of the district and provincial government helps monitor farming and combat deforestation.
This year our public–private partnership with the provincial government of Central Kalimantan, the district government of Kotawaringin Barat and Yayasan Penelitian Inovasi Bumi (INOBU) is on target in scaling this project to a total of three villages to have more than 1,000 independent smallholders achieve RSPO certification. If it continues to succeed, we aim to scale it up further to the other parts of the district to reach as many as 12,000 farmers.
This work contributes to the UN Sustainable Development Goal
A brighter future for tea smallholders
Our tea brands – such as Lipton, Brooke Bond and PG Tips – have worked with tea growers and smallholders for generations. It isn't surprising, then, that some of our most mature smallholder farmer programmes are in the tea sector. For many years, these have consistently focused on sharing sustainable agriculture best practice, with the aim of improving yields and quality.
Between 2006 and 2016, for example, we worked with the Kenya Tea Development Agency (KTDA) and the NGO IDH to provide education and training through Farmer Field Schools. The programme enabled 86,000 lead farmers, including around 42,000 women, to access initiatives aiming to improve their agricultural practices. It helped over 580,000 farms achieve the certification standards set by the Rainforest Alliance – establishing a solid foundation for tea growing in Kenya which continues to be run by KTDA.
Many of our initiatives in tea have successfully used certification programmes to raise standards – but they are not a one-size-fits-all solution. We implement our programmes with a variety of approaches, including working directly with individual smallholders and groups. As with other sectors in our supply chain, certification plays a very important role in ensuring we do business with suppliers who have equal commitments in place on environmental and social sustainability. At the same time, we need to focus on ensuring we have visibility of what happens in our supply chain through traceability initiatives and programmes that tackle specific issues on the ground.
We continue to expand the scope of our tea programmes. By 2018, we had around 40 separate initiatives in tea worldwide, many in partnership with NGOs and government stakeholders. Each programme addresses issues relevant to the industry and the local context. They have a range of objectives, including increasing smallholders' incomes, improving health and sanitation, empowering women, supporting biodiversity and addressing climate change. We describe some of these initiatives in the sustainable tea section of this report.
Partnership in action: Seeds of Prosperity
The Seeds of Prosperity programme shows how this approach works in practice. A partnership between Unilever, the Global Alliance for Improved Nutrition (GAIN) and the Sustainable Trade Initiative (IDH), it is designed to address the fact that disease and malnutrition are as much barriers to smallholders' livelihoods and productivity as issues such as agricultural practices and routes to market. The programme, therefore, provides training in hygiene and diet, alongside advice on sustainable agriculture.
Seeds of Prosperity began as a pilot in India, reaching 2,600 people in Tamil Nadu with a nine-week behaviour-change programme dedicated to encouraging more diverse diets and handwashing. By 2018, around 75,000 people in India had participated in training.
In 2017, the partnership began to replicate the programme in tea farming communities in Assam and Tamil Nadu, as well as in Kenya. In 2018, we brought the programme to Tanzania, working with 6,000 employees at our Mufindi tea estate, and a further 400 at Njombe. We aim to reach an additional 300,000 people and are encouraging other businesses to help us scale the programme even further.
More to do
We do not claim to have all the answers when it comes to addressing sustainability issues in our agricultural supply chain – nor the issues facing the smallholder farmers we depend on. But we know that the status quo is not sustainable and that more change at a systems level is needed. For our future work with smallholders, this means continuing to broaden out our activities beyond improving agricultural practices, in areas such as access to finance, income diversification and resilience to the effects of climate change.