Smallholder farmers, estimated at 450-500 million farmers worldwide and representing 85% of the world’s farms, play a crucial role in every country’s food value chain and ensure global food security and nutrition (Harvey et al. 2014). However, they are subject to a wide range of problems, including lack of access to capital, market, and technology, as well as an increasing number of contemporary climatic, health, and financial risks. As a result, it is not a surprise that smallholder farmers make up the majority of the world’s poor and hungry.
This reality further emphasizes the need for support to this important yet vulnerable group. In response to such need, Evergreen Labs (EGL) developed our first social enterprise, HealthyFarm, with the sole purpose of supporting smallholders and providing market access to their high-quality products. After over 5 years of working in this sector, we propose the following three actions that individuals and communities can do to contribute to a better life for smallholder producers. Learn more about our work throughout this article.
Action #1: Buy local
Agricultural products undergo a long journey from smallholder farmers to consumers. For example, they could go from farmers to small traders, commission agents and large traders, then to wholesalers and retailers, which eventually reach customers. This chain can also end up across oceans as the products can be shipped for export. This journey involves many middlemen and additional services in every step, which can increase product prices, and result in overpriced products for consumers yet little gains for small producers, not to mention mounting environmental impacts due to long-distance transportation of goods. However, this issue goes generally unnoticed and remains invisible to the average consumer who frequents traditional retail grocery stores and supermarkets.
Buying local is the simple solution to this issue. As the name implies, to buy local is to directly source food and other agricultural products from farmers in close proximity. From consumers’ standpoint, finding high-quality, local products becomes the challenge. This is especially true in countries where there is a lack of government regulations and standards to manage production processes. Opposingly, in countries with strict regulations on food quality where local, smallholder farmers are complying with high production standards, local products might actually be safer than imported ones. From smallholders’ standpoint, profits will be gained in full without being captured by intermediaries.
However, what about countries where regulations on food quality are not enforced, which leads to subsistence-oriented behavior by smallholder farmers, and consumers end up not trusting locally sourced products as a whole? This brings us to the next action.
Action #2: Identify and choose to support reliable smallholder farmers
As Vietnam is developing with increasing per capita income in recent years, more and more consumers are looking for clean and safe food, despite slightly higher price points; and the demand for such food will only go up from now on. The problem lies in identifying reliable smallholder farmers, who usually do not receive much attention and credit for their work, and connecting them to the aforementioned consumers.
This is a gap where social innovators and entrepreneurs can consider closing, and many have in fact ventured in this area. One of these innovators is HealthyFarm, the very first social enterprise operated by EGL in Da Nang, Vietnam since 2016. The venture has not only identified reliable smallholder farmers in Da Nang to create relationships between them and struggling consumers, but also closely supported over 300 smallholder farmers and 30 farming groups, technically and financially, and ensured consistently up to par outputs from these farmers.
Another perk of this action is that, with reliable smallholder farmers being given the spotlight and more consumers supporting them (and boycotting unsafe, low-quality products), it would signal the supply side to either improve their production to meet demand or drive out inefficient and unethical producers. Thanks to market forces, it is possible to believe in a future where all smallholder farmers would supply clean, fresh, safe, and high-quality food.
Action #3: Facilitate movement of products from smallholders
In one of our past blog posts, EGL has provided an example on how smallholder farmers in Vietnam were supported by the Department of Trade Promotion (VIETRADE) and e-commerce companies to distribute their products on digital platforms, during the COVID-19 pandemic. Such action is commendable – but it would be better if actions like this, which essentially improves movement of smallholders’ products and ‘exposes’ small suppliers to a larger, growing group of potential online customers, could go beyond the pandemic and into the future.
There are many ways to facilitate movement of products from small producers. One example could be seen in VIETRADE’s proposal on a future education program for smallholder farmers on digital marketing and trade, in order to create more sales channels and turn e-commerce into a sustainable channel for the whole industry going forward.
Another example could be, again, seen in HealthyFarm. In short, HealthyFarm opens its own shop that mainly sells locally sourced products, which allows farmers to have their products exposed to a larger, more diverse group of individual customers. The venture has also connected these reliable producers to numerous wholesale clients including Hyatt Regency Danang, Four Seasons Nam Hai, Pizza 4P’s chain and Novotel struggling to find clean and safe agricultural products over the past five years.
In conclusion, smallholder farmers are the backbone of our economy. Therefore, supporting these farmers by buying locally sourced agricultural products, making them seen by the larger community, and facilitating product movement are three of the simple yet impactful solutions that any of us should be undertaking from this point onwards.
Learn more about our work in Agriculture!