Posted by Catherine Morgans

Looking over the farm fence: area-based approaches to agricultural supply chain improvements

Business are faced with an ever-growing selection of tools and approaches designed to generate more ethical supply chains. One approach increasingly valued, particularly in agricultural supply chains, is the ‘area-based approach’.

This way of working goes by a multitude of names, including geographies-based approach, landscape approach and jurisdictional sustainability (see this excellent quick primer on them), to name only a few. Irrespective of title, the core concept retains the same key elements:  advocating collaboration, fostering local government and community buy-in, and developing initiatives that go beyond individual farms or production units, within a certain geography.

This area-based approach is not new. It has been championed and led by non-profits and governments for some time and has already been well-utilised in environmental sustainability programmes on issues such as deforestation (see for example IDH Landscapes work in the Mau Forest in Kenya, involving tea, timber and energy industries), as well as child labour in certain commodities, such as cocoa, with the collaboration of several major private sector companies.  However, it remains relatively uncharted territory for most corporates. For example, companies in agribusiness, logging and mining sectors have reportedly been involved in less than 10% of the existing initiatives – the majority of which are environmentally-focussed.

Tackling issues beyond an individual company’s supply chain

Lack of engagement among some businesses is perhaps understandable. The approach offers no off-the-shelf solution, and it can appear daunting for businesses. Challenges include difficulties in fostering buy-in among communities, reaching consensus among stakeholders, and multiple issues with government engagement (e.g. political turnover, weak capacity, or support). Furthermore, there is no established right or wrong way of going about an area-based approach. Since all circumstances are different it requires creativity, and considerable thought in terms of local adaptation and ways of keeping everyone on track.

What is recognised as the real strength of the approach, however, is its ability to tackle some of those issues that often seem intractable to business: the environmental or social issues that tend to transcend boundaries, implicate actors outside the company’s direct operations, and thus require more inclusive and holistic solutions than those restricted to an individual company’s supply chain. Examples of these include living income, endemic child labour, workforce availability, socially-based discrimination and land disputes.

Improving sustainability, avoiding duplication

Besides offering a way into addressing challenges that business alone cannot solve, there can be many additional benefits. Firstly, it can be an effective way of future-proofing a supply chain that a company depends on, be it in terms of natural resources or labour. For example, the approach can begin to improve labour retention in agricultural areas – a serious concern for the food and beverage industry at present, and one that is widely acknowledged as an issue deeply rooted beyond farm gates. A handful of agricultural companies have started to realise the value of working with producing communities to secure the next generation of farmers.  Additionally, the approach’s emphasis on real community engagement can help provide companies with continued licence to operate in an area, while boosting customer confidence in the product.

Furthermore, while perhaps appearing complex and potentially costly at the outset, the approach can have real benefits in terms of protecting, respecting and remedying community and workforce concerns. We repeatedly hear about companies duplicating pilots with the same suppliers, or organisations replicating issue-related programmes in the same geographical areas and expecting stakeholder engagement with the same communities. The area-based approach seeks to cut this replication, bringing diverse stakeholders to the same table, and pooling their resources – including finances, as well as knowledge. This can take the form of attracting new investments, co-funding existing work, or identifying other opportunities for cost savings. Moreover, depending on context, the approach can offer companies valuable local insight and knowledge of risk, improved traceability, better compliance with corporate commitments, and more. Such gain have real impacts on bottom lines.

For communities, area-based approaches hopefully bring sustainable positive change, tackling seemingly intractable issues, while leveraging investment in the region and its communities. Importantly, as noted in impact assessments of IDH’s work in countries such as Kenya, communities value their opportunity for input, and feel a greater sense of ownership with such approaches. Also, by involving local government, communities can access channels of power that are not always readily available to them, as well as potentially greater financial resource too.

A place in the toolbox

For agribusiness – a sector that will continue to face some of the highest sustainability risks, both human and environmental – the area-based approach has much to offer. As more and more companies recognise that securing ethical supply chains is a lasting commitment, it is also being acknowledged that no single tool will do the job. In this respect, area-based initiatives have certainly earned their place in the toolbox.