Tag: value chains


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  • Good investments in agriculture and forestry can benefit smallholders and landscapes

Good investments in agriculture and forestry can benefit smallholders and landscapes


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The finance pavilion stands beside the indigenous people's pavilion at the GLF Bonn 2017. Photo by Pilar Valbuena/GLF
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With companies increasingly being seen as key partners in scaling-up efforts to achieve sustainable landscapes, a growing number of private actors are moving from ‘do no harm’ to a ‘do good’ approach.

In light of this, Tropenbos International (TBI) – along with the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), the Netherlands Development Organization (SNV), Finance Alliance for Sustainable Trade (FAST) and the Forests and Farm Facility – organized a well-attended panel discussion titled “Inclusive Finance and Business Models – Actions for Upscaling” at the recent Global Landscapes Forum (GLF) in Bonn, Germany.

Held in the Finance Pavilion, where FTA and TBI also shared a booth showcasing their work and research, around 40 participants came together to hear from five panelists, share ideas about what a do-good approach means in practice, and consider how it can be scaled up.

Watch: Inclusive Finance and Business Models – Actions for Upscaling

In opening the discussion, TBI Director René Boot said: “There’s a growing need for companies and for investors to basically upgrade their corporate social and environmental responsibility policy. We think it is time to move from ‘do no harm’ to ‘do good’.”

Boot pointed out that in order to make that step, it is important to know how to build businesses that are both profitable and can contribute to livelihoods, secure land rights, and make use of the entrepreneurial qualities of smallholders and small and medium enterprises. “Do we have enough information, do we have enough examples, to scale up?” he asked.

Attendees peruse the materials available at the finance pavilion. Photo by Pilar Valbuena/GLF

The first speaker, Herman Savenije of TBI, presented the findings of a working paper titled Improving the positive impacts of investments on smallholder livelihoods and the landscapes they live in, a joint effort from the Dutch Development Bank (FMO), TBI, Dutch organization for development HIVOS and the Royal Tropical Institute (KIT).

The report “developed some key points for the do-good approach for investment and business,” Savenije explained. The points in the report were divided into three categories: recognizing rights; active engagement; and “think landscapes” – which is also an overarching focus of the GLF. An increasing number of business cases show that the approach is feasible, but requires thinking, acting and partnering beyond a business-as-usual approach, he added.

Savenije suggested that mainstream investments and businesses often ignore and underestimate land governance, land rights and livelihoods issues, but failing to properly address the issues could lead to business and reputational risks. “So strengthening the position of smallholders and communities within value chains, within landscapes, makes business sense,” he said.

Carina van der Laan of SNV then discussed access to finance for smallholders in oil palm plantations in Indonesia, while Marcelo Cardozo of the Bolivian forest producer organization MINGA provided perspectives from indigenous producers on accessing finance for integrated territorial management, Francesca Nugnes shared FAST’s experiences in supporting small- and medium-scale enterprises on building workable, sustainable business models, and Paul Hol of Sustainable Forestry Investments (SFI) discussed investments in tree plantations in Ghana and Tanzania.

Aspects of the session echoed a discussion organized by TBI in September, which showed that a growing number of investors want to have a greater positive impact on people’s rights and livelihoods in areas where they do business.

Read more: Getting down to business: Seminar promotes shift toward inclusive investment

The finance pavilion stands beside the indigenous people’s pavilion at the GLF Bonn 2017. Photo by Pilar Valbuena/GLF

Following the panel discussion at GLF, TBI and FTA produced a report outlining its outcomes.

“In the context of agricultural and forestry production, a do-good approach means that commercial investments simultaneously improve the environmental integrity of the landscape and the livelihoods of the people living there, while making a profit,” the report read.

“This requires long-term thinking and investments, including investing in stakeholder engagement and building relationships. Initially, this may result in higher opportunity costs, which makes such investments risky for the private sector. How then can a do-good approach be operationalized on the ground?”

Finding ways to operationalize this approach should be one of the main goals of related research – to advance understanding not only on which business models have greater potential for sustainability and social inclusion, but also on the most effective ways for financial institutions to support scaling-up efforts – which is embraced by FTA’s work on innovative finance, said Pablo Pacheco, a Center for International Forestry Research (CIFOR) scientist leading the work.

Those involved are convinced about the need to team up to reach scale. The success of a do-good approach, thus, is considered to be largely dependent on collaboration and connections. The panel discussion was another step forward in contributing to these efforts.

Read more:

By Hannah Maddison-Harris, FTA Communication and Editorial Coordinator

This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

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  • Analysis of gender research on forest, tree and agroforestry value chains in Latin America

Analysis of gender research on forest, tree and agroforestry value chains in Latin America

11 January, 2018

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Latin America presents an important opportunity for research in gender and forest, tree and agroforestry (FTA) value chains due in part to the growth of its rural-urban interface, the region’s large expanses of existing forests, and the relatively limited research on gender and forestry themes in Latin America to date.

This paper seeks to analyze the principal themes and findings in the literature related to gender and FTA value chains in Latin America, and to provide recommendations for future areas of research. The analytical review focuses on literature from 2000 to 2017 and includes a total of 50 publications. Studies tend to analyze how the interplay of norms and policies can influence women’s and men’s benefits from participation in FTA value chains.

While a significant portion of the literature seeks to illuminate women’s contributions to FTA value chains, increased research on both women’s and men’s roles is necessary in order to understand gender dynamics along the chains. Additional research on gender equality impacts of women specific value chain interventions will also be important in order to assess opportunities and challenges for enhancing women’s empowerment in Latin America’s dynamic rural context.

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  • Financing farmers: Can funds for oil palm help save our forests?

Financing farmers: Can funds for oil palm help save our forests?

01 November, 2017

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A worker wheels a barrow of oil palm fruit. Photo by Icaro Cooke Vieira/CIFOR
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Oil palm fruits in Jambi, Indonesia. Photo by Iddy Farmer/CIFOR

Palm oil: people love it, hate it or maybe just use it without even knowing. The controversial vegetable oil is found in thousands of consumer products from soap to lipstick, frozen pizza, ice cream and even fuel.

World demand continues to increase rapidly and is placing pressure on forests, mainly in Indonesia. But, for now, the profitable commodity is here to stay. So what can be done to reduce the pressure on forests?

Efforts are ongoing to stop the rapid destruction of tropical forests through more sustainable business practices. In 2004, the Roundtable on Sustainable Palm Oil (RSPO) was launched with the vision to “transform markets to make sustainable oil palm the norm”. Pressure from activists on big corporations that use palm oil in their products has also had some impact, leading them to make commitments to sustainable supply and zero deforestation.

Most action to date has focused on how large palm oil companies do business but increasingly, concerns comprise what the implications are for smallholders, and how smallholders can capture greater benefits from engaging in palm oil supply chains.

In Indonesia — one of the biggest palm oil producing countries alongside Malaysia — up to 40 percent of the land used to grow oil palm is cultivated by smallholders who farm, on average, just 2 hectares each.

The sustainability of the palm oil sector has also triggered Indonesian government efforts to improve the policy environment for inclusion of smallholders, and channeling resources for them to improve practices in management and replanting. There is also an ongoing effort to strengthening the national standards for sustainable palm oil (ISPO).

Read more: Towards responsible and inclusive financing of the palm oil sector

Three teams of researchers from the Center for International Forestry Research (CIFOR) as part of its work under the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) and from partner institutions have produced a series of infobriefs looking at how smallholders can improve their lives and, at the same time, protect remaining forests. The major challenge, according to their findings? Money.

“Oil palm provides more economic benefits to smallholders than other crops, and it’s expanding,” says Pablo Pacheco, a Principal Scientist at CIFOR. “Yet smallholders have to adopt more sustainable practices. Research has to contribute to this, and identify options for them to improve their practices, as well as identify what resources are needed to make that change happen.”

“That’s where financing comes in, and becomes an important key resource for smallholders to be able to access,” he adds.

THE REPLANTING CHALLENGE

A worker wheels a barrow of oil palm fruit. Photo by Icaro Cooke Vieira/CIFOR

The Indonesian government estimates that a total of 175,000 hectares of oil palm farmed by smallholders needs to be replanted each year, and this alone creates major challenges for farmers. 

Hans Harmen Smit, global coordinator for palm oil at the Netherlands Development Organization (SNV), one of the partner organizations, was part of the team that examined current finance practices. Their focus was on Indonesia and Malaysia, which together account for about 85 percent of total global palm oil production. Smit says that without proper financing, farmers only replant when they can afford to.

“The problem is, once they replant, they have to wait three years at least for the new plantation to become productive, and during that time they have no income,” he says.

Smallholder income from oil palm varies. On average, smallholders with around two hectares of land can earn a gross monthly income of US$290 to US$400.

Researchers say that without financial support, farmers do not have the resources to replant year after year on the same plot, and so they tend to move to peatlands and forested areas, “slash and burn” the land, and plant the only crops available to them, which are often low-quality varieties.

Smit points out that in Malaysia, the sector has better systems in place for replanting, and smallholders can more easily obtain financial support. In Indonesia, there is the Crude Palm Oil (CPO) Fund that supplies replanting loans, but it is often difficult to access, especially for smallholder farmers with limited funding.

“The lesson learned here is that saving for replanting is often not done as it should be. The government needs to engage more and manage programs to help farmers save for replanting,” says Smit.

He adds that one of the main problems is a lack of available information for financial service providers (FSPs) to evaluate the lending risks and set appropriate interest rates. He says the loans are often too small on an individual level, and this makes the loan origination costs too high compared to their value.

“We need to start by supporting better data collection on the cash flows of smallholders. Once this data is available, we can create investible portfolios for investors,” says Smit.

Read more: The long and winding road to sustainable palm oil

FUNDING THE GAPS

A couple works together on a plantation. Photo by Icaro Cooke Vieira/CIFOR

The researchers also identified major gaps between existing credit schemes and what farmers actually need. Addressing this could pave the way for more sustainable palm oil for smallholders.

One key finding was that lenders who do offer credit only provide it in the short term. But what smallholders actually need is both working capital and credit in the long term for replanting and financing other management practices.

“Most lenders also don’t have schemes that take into account the fact that oil palm farmers don’t make any money in the first three or four years, so they can’t make payments at this time unless they find additional sources of income, which is difficult,” says Pacheco.

Another issue is repayment of loans. When ‘tied’ farmers, who are under contract with oil palm plantations, access funds through a cooperative, profits from their harvest are used to pay back their loans. But when individual farmers seek loans, they have to pay back in cash.

Smallholders trying to access loans also face major challenges when trying to meet the requirements of most FSPs.

“Sometimes they don’t have savings accounts or own the land, so they can’t provide collateral,” says Pacheco.

Pricing of the fresh fruit bunches (FFB) produced by oil palm can also be a challenge for farmers. FFB prices are set by governments and oil palm companies, and tied farmers are paid more than independent farmers.

But there are ways to help smallholders overcome these challenges. Incentives and technical support to meet sustainability requirements, land tenure security, and support for FSPs to assess and manage risks, and build the capacity of smallholder organizations, could all have an impact, the research finds.

FINDING SUSTAINABLE FINANCE

Most of the financing for major palm oil companies comes from FSPs based in Asian countries like Japan, Malaysia, Indonesia and Singapore. And on the whole, these do not employ adequate environmental, social and governance (ESG) policies, the research suggests.

“American- and European-based FSPs’ policies are more advanced, but even they don’t fully address how financial resources can be better channeled to smallholders,” says Pacheco.

He warns that there is the danger of a two-tier marketplace developing: one in Asia, where there is less consumer pressure for sustainable palm oil, and a second focusing on US and European markets that have adopted more sustainable practices.

INVESTING IN PEOPLE

Pacheco says the future of smallholders holds a real dilemma. If they become more integrated into the existing supply chain, more productive, use better practices and have access to good financing and markets, they are likely to become more and more dependent on supply chains and companies for their livelihoods.

“You want smallholders to improve system practices, their knowledge of fertilizers, harvesting and so on, but without losing their freedom,” says Pacheco.

It all comes down to how farmers are empowered to negotiate prices, conditions with companies and so on, he adds.

“For me, social empowerment is critical, and I think that needs to be included in the debate. Up to now, the focus has been on efficiency, sustainability, less impact on forests — and not enough attention has been given to empowering these important players, the smallholders, who are trying to reap as much benefit as possible in the market,” he concludes.

By Suzanna Dayne, originally published at CIFOR’s Forest News. 

For more information on this topic, please contact Pablo Pacheco at p.pacheco@cgiar.org.

This research was conducted by CIFOR in partnership with Profundo, the International Center for Applied Finance and Economics (InterCafe) at the Bogor Agricultural University (IPB), the Netherlands Development Organization (SNV) and Financial Access (FA).

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors. 

This research was supported by the United States Agency for International Development (USAID) through the project “The Role of Finance in Integrating Oil Palm Smallholders into Sustainable Supply Chains.”

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Financing farmers: Can funds for oil palm help save our forests?


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A worker wheels a barrow of oil palm fruit. Photo by Icaro Cooke Vieira/CIFOR
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Oil palm fruits in Jambi, Indonesia. Photo by Iddy Farmer/CIFOR

Palm oil: people love it, hate it or maybe just use it without even knowing. The controversial vegetable oil is found in thousands of consumer products from soap to lipstick, frozen pizza, ice cream and even fuel.

World demand continues to increase rapidly and is placing pressure on forests, mainly in Indonesia. But, for now, the profitable commodity is here to stay. So what can be done to reduce the pressure on forests?

Efforts are ongoing to stop the rapid destruction of tropical forests through more sustainable business practices. In 2004, the Roundtable on Sustainable Palm Oil (RSPO) was launched with the vision to “transform markets to make sustainable oil palm the norm”. Pressure from activists on big corporations that use palm oil in their products has also had some impact, leading them to make commitments to sustainable supply and zero deforestation.

Most action to date has focused on how large palm oil companies do business but increasingly, concerns comprise what the implications are for smallholders, and how smallholders can capture greater benefits from engaging in palm oil supply chains.

In Indonesia — one of the biggest palm oil producing countries alongside Malaysia — up to 40 percent of the land used to grow oil palm is cultivated by smallholders who farm, on average, just 2 hectares each.

The sustainability of the palm oil sector has also triggered Indonesian government efforts to improve the policy environment for inclusion of smallholders, and channeling resources for them to improve practices in management and replanting. There is also an ongoing effort to strengthening the national standards for sustainable palm oil (ISPO).

Read more: Towards responsible and inclusive financing of the palm oil sector

Three teams of researchers from the Center for International Forestry Research (CIFOR) as part of its work under the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) and from partner institutions have produced a series of infobriefs looking at how smallholders can improve their lives and, at the same time, protect remaining forests. The major challenge, according to their findings? Money.

“Oil palm provides more economic benefits to smallholders than other crops, and it’s expanding,” says Pablo Pacheco, a Principal Scientist at CIFOR. “Yet smallholders have to adopt more sustainable practices. Research has to contribute to this, and identify options for them to improve their practices, as well as identify what resources are needed to make that change happen.”

“That’s where financing comes in, and becomes an important key resource for smallholders to be able to access,” he adds.

THE REPLANTING CHALLENGE

A worker wheels a barrow of oil palm fruit. Photo by Icaro Cooke Vieira/CIFOR

The Indonesian government estimates that a total of 175,000 hectares of oil palm farmed by smallholders needs to be replanted each year, and this alone creates major challenges for farmers. 

Hans Harmen Smit, global coordinator for palm oil at the Netherlands Development Organization (SNV), one of the partner organizations, was part of the team that examined current finance practices. Their focus was on Indonesia and Malaysia, which together account for about 85 percent of total global palm oil production. Smit says that without proper financing, farmers only replant when they can afford to.

“The problem is, once they replant, they have to wait three years at least for the new plantation to become productive, and during that time they have no income,” he says.

Smallholder income from oil palm varies. On average, smallholders with around two hectares of land can earn a gross monthly income of US$290 to US$400.

Researchers say that without financial support, farmers do not have the resources to replant year after year on the same plot, and so they tend to move to peatlands and forested areas, “slash and burn” the land, and plant the only crops available to them, which are often low-quality varieties.

Smit points out that in Malaysia, the sector has better systems in place for replanting, and smallholders can more easily obtain financial support. In Indonesia, there is the Crude Palm Oil (CPO) Fund that supplies replanting loans, but it is often difficult to access, especially for smallholder farmers with limited funding.

“The lesson learned here is that saving for replanting is often not done as it should be. The government needs to engage more and manage programs to help farmers save for replanting,” says Smit.

He adds that one of the main problems is a lack of available information for financial service providers (FSPs) to evaluate the lending risks and set appropriate interest rates. He says the loans are often too small on an individual level, and this makes the loan origination costs too high compared to their value.

“We need to start by supporting better data collection on the cash flows of smallholders. Once this data is available, we can create investible portfolios for investors,” says Smit.

Read more: The long and winding road to sustainable palm oil

FUNDING THE GAPS

A couple works together on a plantation. Photo by Icaro Cooke Vieira/CIFOR

The researchers also identified major gaps between existing credit schemes and what farmers actually need. Addressing this could pave the way for more sustainable palm oil for smallholders.

One key finding was that lenders who do offer credit only provide it in the short term. But what smallholders actually need is both working capital and credit in the long term for replanting and financing other management practices.

“Most lenders also don’t have schemes that take into account the fact that oil palm farmers don’t make any money in the first three or four years, so they can’t make payments at this time unless they find additional sources of income, which is difficult,” says Pacheco.

Another issue is repayment of loans. When ‘tied’ farmers, who are under contract with oil palm plantations, access funds through a cooperative, profits from their harvest are used to pay back their loans. But when individual farmers seek loans, they have to pay back in cash.

Smallholders trying to access loans also face major challenges when trying to meet the requirements of most FSPs.

“Sometimes they don’t have savings accounts or own the land, so they can’t provide collateral,” says Pacheco.

Pricing of the fresh fruit bunches (FFB) produced by oil palm can also be a challenge for farmers. FFB prices are set by governments and oil palm companies, and tied farmers are paid more than independent farmers.

But there are ways to help smallholders overcome these challenges. Incentives and technical support to meet sustainability requirements, land tenure security, and support for FSPs to assess and manage risks, and build the capacity of smallholder organizations, could all have an impact, the research finds.

FINDING SUSTAINABLE FINANCE

Most of the financing for major palm oil companies comes from FSPs based in Asian countries like Japan, Malaysia, Indonesia and Singapore. And on the whole, these do not employ adequate environmental, social and governance (ESG) policies, the research suggests.

“American- and European-based FSPs’ policies are more advanced, but even they don’t fully address how financial resources can be better channeled to smallholders,” says Pacheco.

He warns that there is the danger of a two-tier marketplace developing: one in Asia, where there is less consumer pressure for sustainable palm oil, and a second focusing on US and European markets that have adopted more sustainable practices.

INVESTING IN PEOPLE

Pacheco says the future of smallholders holds a real dilemma. If they become more integrated into the existing supply chain, more productive, use better practices and have access to good financing and markets, they are likely to become more and more dependent on supply chains and companies for their livelihoods.

“You want smallholders to improve system practices, their knowledge of fertilizers, harvesting and so on, but without losing their freedom,” says Pacheco.

It all comes down to how farmers are empowered to negotiate prices, conditions with companies and so on, he adds.

“For me, social empowerment is critical, and I think that needs to be included in the debate. Up to now, the focus has been on efficiency, sustainability, less impact on forests — and not enough attention has been given to empowering these important players, the smallholders, who are trying to reap as much benefit as possible in the market,” he concludes.

By Suzanna Dayne, originally published at CIFOR’s Forest News. 

For more information on this topic, please contact Pablo Pacheco at p.pacheco@cgiar.org.

This research was conducted by CIFOR in partnership with Profundo, the International Center for Applied Finance and Economics (InterCafe) at the Bogor Agricultural University (IPB), the Netherlands Development Organization (SNV) and Financial Access (FA).

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors. 

This research was supported by the United States Agency for International Development (USAID) through the project “The Role of Finance in Integrating Oil Palm Smallholders into Sustainable Supply Chains.”

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  • CIRAD research featured in new book on corporate governance

CIRAD research featured in new book on corporate governance


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At a sustainably certified sawmill in Jepara, men carefully cut logs of wood that are then measured and marked. Photo by D. Ramsay/CIFOR
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A sustainably certified sawmill in Jepara, Indonesia. Photo by D. Ramsay/CIFOR

How does the complex pattern of shareholdings and subsidiaries – entangled, hierarchical and pyramidal – influence actions, decisions, policies and strategies? It could be said that the behavior of conglomerates and mega corporations is influenced by their ownership structure.

A new book, Minister of Finance Incorporated: Ownership and control of corporate Malaysia, looks at quantitative methods to decipher corporate governance, from biomass, forest and plantations to Malaysia’s corporate finance.

How the structure of commodity corporates could impact the sustainability of agricultural landscapes is of direct interest to the French Agricultural Research Centre for International Development (CIRAD), one of the CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) partner institutions.

Jean-Marc Roda speaks about the new book. Photo by IDEAS

Read more: Sustainable value chains and investments to support forest conservation and equitable development

This is because many activities linked to deforestation; forest management; the sustainability of palm oil, rubber and timber plantations; biomass and biofuel strategies are driven by the choices of international finance and mega corporations.

CIRAD’s activities concern the life sciences, social sciences and engineering sciences, applied to agriculture, the environment and territorial management. Its work centers on food security, climate change, natural resource management, the reduction of inequalities and poverty alleviation.

In particular, in Southeast Asian countries such as Malaysia and Indonesia, research by CIRAD and its public- and private-sector partners focuses on natural resource management, food security, biodiversity studies and the sustainability of tree crop-based systems, paying particular attention to island agro-ecosystems, which are particularly sensitive to climate change.

ET Gomez presents during the book launch. Photo by IDEAS

In 2010, CIRAD’s Jean-Marc Roda and his Malaysian team at Universiti Putra Malaysia started to develop methodologies aimed at deciphering corporate governance and their environmental commitments among Southeast Asian transnationals. Deciphering corporate governance and environmental commitments among Southeast Asian transnationals: Uptake of sustainability certification was subsequently published in 2015.

The paper’s coauthor Norfaryanti Kamaruddin, who also contributed to the recently launched book, previously completed a PhD that was partially supported by FTA.

An important debate on global trade and sustainability relates to the role that corporate governance has on the uptake of sustainability standards. The paper suggests that financial factors, such as ownership structure and flexibility in decision-making, may have a fundamental role in understanding the adoption of sustainable standard systems in the corporate sector. This is based on the analysis of four major Asian agribusiness transnationals comprising about 931 companies.

In addition, this paper explores as a way forward the convergence of environmental sustainability with long-term family business sustainability.

Read more: Soils, governance, big data and 99 tropical countries: Best reads in forests, trees and agroforestry

The new book looks at corporate ownership and control in Malaysia.

Research tools developed throughout the project proved extremely accurate for deciphering any kind of corporate financial structure. Such quantitative methods of ownership structure analysis, initially designed for the analysis of the forest and agriculture financial sectors, were successfully employed to independently confirm and illustrate previously published results from ET Gomez.

Roda and his team were able to demonstrate how a core of 26 corporations controlled the Malaysian corporate sector and to provide details on how that control spread throughout the financial network, leading to the chapter “Understanding the network typology of the seven government-linked investment companies (GLICs)”.

The book was launched by the Institute for Democracy and Economic Affairs (IDEAS) in August 2017. It covers all Malaysian financial sectors, with Chapter 4 focusing on the plantation sector and on quantitative methods used for comparison and validation.

Adapted from the article by Jean-Marc Roda, originally published by CIRAD.

This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), which is supported by CGIAR Fund Donors.

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Gender-responsive methodology for value chain development


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Testing the 5Capitals-G methodology in India. Photo by Shrinivas Hegde
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Testing the 5Capitals-G methodology in India. Photo by Shrinivas Hegde

Over the past decade, value chain development has been widely promoted as a catalyst for rural economic growth.

As smallholder farmers become increasingly integrated into value chains, how can scholars and development practitioners ensure that the benefits of participation accrue equitably to both women and men? This was the topic of a workshop hosted by Bioversity International and the World Agroforestry Centre (ICRAF) at the recent Tropentag 2017 conference.

The workshop centered around insights resulting from the testing of 5Capitals-G, a gender-responsive methodology building on the 5Capitals toolkit for assessing the poverty impacts of value chain development. It addresses the principal gaps identified in existing guides for gender-equitable value chain development. These gaps include limited coverage of the way norms influence gender relations, gender-equitable opportunities in collective enterprises, and how value chain development can effectively transform inequitable gender relations.

For this reason, 5Capitals-G examines gender-differentiated asset endowments at the level of both smallholder households and the collective enterprises they are often linked with, and by identifying gender-based constraints shaped by cultural norms and values.

Read more: Piloting gender-responsive research tool 5Capitals-G in three countries

“We started with an overview of strengths and weaknesses of common guides for gender-equitable value chain development designed by international organizations” said Dietmar Stoian, Senior Scientist for Value Chains and Private Sector Engagement at Bioversity, and a coorganizer of the workshop.

“With these in mind, we presented findings from our recent validation of 5Capitals-G as to how women and men have access to, control, and build assets at household and collective enterprise level. Based on this, we can determine the extent to which asset endowments and asset building are gender equitable and adjust value chain interventions accordingly.”

Assessing the poverty impacts of value chain development

Addressing the principal gaps identified in existing guides for gender-equitable value chain development, Bioversity International and ICRAF have joined forces to strengthen the gender dimension of 5Capitals. This new version of the methodology allows for the establishment of gender-responsive baselines and the assessment of gender-differentiated impacts of value chain development among smallholders and other resource-poor groups involved in value chains.

“Two interrelated ideas underpin the design of 5Capitals-G: the poor’s access to assets is a critical entry point for their effective participation in value chains, and the poor’s capacity to build assets through value chain engagement can provide a viable pathway out of poverty,” explained Jason Donovan, Leader for Value Chains and Transformational Change at ICRAF.

“5Capitals-G provides insight into what assets are available in households and collective enterprises, which of these are more controlled by men or women, and which are managed jointly. We are particularly interested in understanding positive feedback loops between asset building at household and asset building at enterprise level.”

Insights from Asia and Latin America

5Capitals-G has been tested across diverse settings in Guatemala, India and Peru, providing valuable insights for improving the design of the tool and guidance for the interpretation of results. These adjustments ensure that practioners will be able to count on a validated methodology for enhancing the design, implementation and assessment of gender-equitable value chain development initiatives.

Panelists at the workshop on gender equitable value chains held at Tropentag 2017 included Ana Maria Paez-Valencia (left to right), Trent Blare, Jason Donovan, Dietmar Stoian, Gennifer Meldrum and Hugo Lamers. Photo by Susan Onyango/ICRAF

Hugo Lamers, Associate Scientist in Socioeconomics and Marketing at Bioversity International, used the methodology in the value chains of non-timber forest products such as mango, murugulu (Garcinia indica) and uppage (Garcinia gummigatta) in Karnataka, India.

“Besides taking care of domestic activities, women contributed substantially to income generation through wage labour, farming and collection of forest products,” said Lamers. “We learned that the major bottleneck for women’s participation in local cooperatives is the rule of ‘one member per household’, resulting in a largely male-dominated member base of most cooperatives.”

Gennifer Meldrum, Research Fellow in Nutrition, Marketing and Diversity at Bioversity International, tested the methodology with local partners in millet value chains in Tamil Nadu and Madhya Pradesh, India.

“The collective enterprise we studied has contributed to asset building across all the five capitals. Women’s participation in cooperative leadership and millet value chain activities are strongly encouraged by the Federation,” she said. “However, a male bias remains due to women’s limitations in terms of time and mobility. Physical assets households have acquired through value chain participation are very rarely controlled by women alone, but often benefit the household as a whole.”

Read more: Gender and forestry gain increasing attention worldwide

Further testing of 5Capitals-G was done in the cocoa value chain in Peru. “In addition to the important role women play in the production of cocoa, we were surprised to discover the strong influence they had in production and marketing decisions,” said Trent Blair, Markets and Value Chain Specialist at ICRAF.

“We realized that a stronger role of women in cocoa and other value chains in Peru is hampered by their limited access to information, technical assistance and training. This requires specific efforts for targeted value chain development interventions to ensure equitable capacity development.”

Interviewing smallholder households in Peru. Photo by Trent Blare/ICRAF

Stoian, together with local partners in Petén, Guatemala, tested 5Capitals-G in value chains of valuable woods including mahogany and tropical walnut, and non-timber forest products such as Chamaedorea palm and Maya nut (Brosimum alicastrum).

“We found evidence that under given conditions income derived from forest products can help people move out of poverty. In terms of reinvestment of forest-based income we learned that decision making at household level was rather equitable with regard to building human and social capitals, while investment decisions on natural, physical and financial capitals were more skewed toward men,” he shared.

“At the level of community forest enterprises, women have recently assumed stronger roles in production and decision making, particularly as regards non-timber forest products, but timber activities and related decisions continue to be largely a male domain.”

Implications for gender-equitable value chain development

“Gender dimensions of access to and control over assets and other resources have an important impact on the opportunities and constraints that women and men face when participating in value chain development initiatives,” said Ana María Paez Valencia, Gender Social Scientist at ICRAF, who moderated the workshop.

In synthesizing the discussion, she pointed out that differential access and control over assets has implications on women’s bargaining position within households to make strategic household and life decisions, as well as their ability to assume new roles or opportunities resulting from value chain initiatives.

“Looking forward, it would be interesting to use 5Capitals-G for insights into the impact of the gender asset gap on household livelihood outcomes in the context of value chain development; and to better understand the trade-offs between increased value chain engagement of women and the time they invest in other activities including those related to household care,” she added.

Outlook 

Participants at the workshop expressed interest in 5Capitals-G, which will be available in early 2018, along with the documented findings of the case studies. As Stoian and Donovan summarized at the end of the workshop: “5Capitals-G will be a key methodology for all practitioners interested in asset-based approaches to value chain development with a gender lens.”

By Susan Onyango, originally published at ICRAF’s Agroforestry World. 

This work was supported by the CGIAR Research Programs on Policies, Institutions and Markets (PIM) and CGIAR Research Programs Forests, Trees and Agroforestry (FTA), which are supported by CGIAR Fund Donors. 

Bioversity International and ICRAF thank Lutheran World Relief, Rainforest Alliance and USAID for funding this work. 

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  • Getting down to business: Seminar promotes shift toward inclusive investment

Getting down to business: Seminar promotes shift toward inclusive investment


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Carpenter Hervé Bougar makes a living from doors and furniture in Yaoundé, Cameroon. Photo by O. Girard/CIFOR
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Tropenbos International Director Rene Boot speaks during the seminar on inclusive investments and business models. Photo by Nguyen Phuong Ha/Tropenbos International

A growing number of investors want to have a greater positive impact on people’s rights and livelihoods in areas where they do business. 

Tropenbos International (TBI), one of the CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) partner institutions, held on Sept. 14 a workshop titled Towards inclusive investment and business models for improved land governance and livelihoods: Are we on the right track? in Ede, the Netherlands.

Part of a broader series of annual seminars on sustainable forest management in the tropics, the event brought together finance, business, land use and development experts to address how to work with smallholders and learn from existing business cases.

Amid cases in which large-scale agricultural investments have damaged local livelihoods and ignored biodiversity and traditions, international organizations have established guidelines to help mitigate the adverse effects of investments. However, a growing number of businesses and investors want to exceed such guidelines, aiming for a positive impact on local communities’ livelihoods and tenure rights through their investments.

Carpenter Hervé Bougar earns a living from making doors and furniture in Yaoundé, Cameroon. Photo by O. Girard/CIFOR

“A growing number of investors aspire to make the transition from ‘doing no harm’ toward ‘doing good’,” TBI director René Boot said in opening the seminar. “The positive news is that this can be done.”

The discussions not only raised awareness on the importance of moving from the do-no-harm to the do-good approach in investing in smallholder land management, but also provided evidence of the feasibility and scaling-up opportunities from such an approach.

Participants shared experiences on best practices and made recommendations on strategies, mechanisms and follow-up actions to enhance investment in inclusive business models that improve the livelihoods, land security and entrepreneurial potential of smallholders.

Read more: Attention to detail is necessary for zero deforestation intentions to succeed, say scientists

Furthermore, the seminar contributed to the improvement of a working paper titled “Improving the positive impacts of investments on smallholder livelihoods and the landscapes they live in.”

Discussions on the paper covered ways for investors to improve the positive benefits of their investments, namely recognizing rights, effectively engaging, and the need to “think landscape.”

The findings of the seminar indicated that by recognizing local practices, as well as working with local communities, investors can benefit from greater local support. The findings also stated that understanding on a landscape scale could lead to production diversification and improved local food security.

The seminar, which was organized by TBI and other organizations working in the Netherlands, can be seen as a precursor to future work that TBI will carry out as part of FTA’s research theme on sustainable value chains and investments to support forest conservation and equitable development.

Timber is piled outside a building as part of the Kanoppi Project in Yogyakarta, Indonesia. Photo by A. Erlangga/CIFOR

Key scientists intend to build upon the body of work under FTA in order to make explicit the connections between responsible financing schemes and the development of inclusive business models, as part of the conditions needed to support more sustainable landscapes.

“The approach undertaken by TBI constitutes a key piece in building financing schemes that can contribute more positively to business models that work for the environment and smallholders, supporting broader agendas on sustainability and inclusivity,” said FTA Flagship 3 leader Pablo Pacheco.

“The research on value chains and finance in FTA will continue building in these innovative approaches,” he added.

Read more: Sustainable value chains and investments

“At TBI, we see the report and the seminar – and all the preliminary work – as an important contribution to FTA research and engagement work, in advancing the agenda for it, and on which to base further collaborative activities, particularly in the field of inclusive business and finance,” said TBI program coordinator Herman Savenije.

“We see this topic of inclusive finance and business as an important one in which we can learn a lot by actively engaging with those worlds. In the Netherlands I feel the thinking in the finance and business worlds on inclusiveness has advanced somewhat, though still with some frontrunners, and we have started building networks with them,” he added.

The day of presentations from nine speakers yielded numerous insights and ideas – including that scaling up is easier if one can show clear profits; that there is a clear ‘missing middle’ between small and large investments; and that transparency is vital – many of which are contained in the summary report.

Evidently, research on investments for improved land governance and livelihoods, which will be built upon by TBI and other institutions as part of FTA, is indeed on the right track.

By Hannah Maddison-Harris, FTA Editorial and Communication Coordinator

This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

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  • FTA gender scientists to launch 'The Earthscan Reader on Gender and Forests' during IUFRO congress

FTA gender scientists to launch ‘The Earthscan Reader on Gender and Forests’ during IUFRO congress


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A Nepali woman prepares rice for cooking. Photo by M. Edliadi/CIFOR
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Clouds cover the hills in Nalma village, Nepal. Photo by M. Edliadi/CIFOR

During the International Union of Forest Research Organizations (IUFRO) 125th Anniversary Congress, CGIAR Research Program on Forests, Trees and Agroforestry (FTA) scientists Bimbika Sijapati Basnett of the Center for International Forestry Research (CIFOR) and Marlène Elias of Bioversity International will officially launch The Earthscan Reader on Gender and Forests. This reader has been edited by Carol J. Pierce Colfer, Elias, Sijapati Basnett and Susan Stevens Hummel.

“The reader gives an overview of a collection of key articles on gender and forests published over the last 30 years. This way, the collection makes it possible to easily access excellent forestry-relevant social science within an overarching gender analytical framework and demonstrates the leading debates in the field,” said Elias.

The IUFRO congress, which will be held from Sept. 18-22, is fully booked. With a total of 2,100 researchers, practitioners and policymakers present, launching the book – on Sept. 21 from 12:30pm to 1:15pm CEST – during the conference will attract many people interested in the topic of gender and forests.

Read more: FTA Focus on Gender newsletter

Why a book about gender and forests?

“As we have seen over the past years, there is currently much interest in, and an expressed need for, mainstreaming gender in natural resource management, including forestry,” said Sijapati Basnett.

The focus of the book is on the role of gender relations in people and forest interactions, as told through the collection of various studies from both developed and developing countries. It includes theoretical analyses, methodological pieces, case studies and cross-country comparisons, and forms a companion volume to Gender and Forests: Climate Change, Tenure, Value Chains and Emerging Issues (2016), also edited by Colfer, Sijapati Basnett and Elias.

Published earlier this year, the Earthscan Reader on Gender and Forests has already been well received and is of great value to biophysical science and social science students, both seasoned professionals and professionals in training.

Read more: Material galore: FTA scientists working on a second book on gender and forests

Presentation during gender and climate policy session

A Nepali woman prepares rice for cooking. Photo by M. Edliadi/CIFOR

During the IUFRO conference, on Sept. 20, Sijapati Basnett will also give a presentation on the topic of “Gender norms and gendered impacts of oil palm conversion in Indonesia: Challenging private sector commitments to climate change mitigation.”

According to the abstract for the session, the ‘zero deforestation’ movement has received recognition across a wide spectrum of actors for bringing together private sector corporations to commit to climate change mitigation. This is particularly the case in Indonesia where lowland tropical forests continue to be converted to make way for oil palm production, and some state-led measures are considered to have failed in reducing and halting deforestation.

The abstract adds that although women in oil palm-dominated landscapes play integral roles as oil palm producers and workers, alongside their responsibility for household food security, critical questions about gender equality have thus far been absent from the zero deforestation policy agenda.

Sijapati Basnett will participate in the session to present on case studies that illustrate the role of gender norms in enabling particular kinds of oil palm investment on the one hand, and in shaping pathways to inclusion, exclusion and dispossession on the other.

Both the book launch and the lecture will be filmed and posted online, will details to be announced. FTA will also present a subplenary session at the same event, in cooperation with IUFRO, titled “Research for sustainable development: Forests, trees and agroforestry” to debate the key priorities for trees and forests in sustainable development, which will also be livestreamed.

By Manon Koningstein, FTA Gender Integration Team. 

This work forms part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), which is supported by CGIAR Fund Donors. 

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Sustainable value chains and investments

04 September, 2017

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The CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) work on sustainable value chains and investments to support forest conservation and equitable development is one of its five research themes. This work facilitates innovations in public policy, business models, private investments and finance to stimulate the sustainable supply of timber from natural and planted forests, enhance the sustainable production of high-value tree crops and reduce the impacts of agricultural expansion in forests.

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  • Challenges and approaches for inclusive value-chain development: introduction

Challenges and approaches for inclusive value-chain development: introduction

22 June, 2017

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Overview 

Growing demand for higher-value agricultural products presents new opportunities for smallholders and market agents in developing countries. However, responding to these opportunities can require significant investment for enhancing productive capacities, business skills, and infrastructure.

Nongovernmental organizations (NGOs), government agencies, and food processors recognize the opportunity — and need — to support the integration of smallholders and small and medium-sized enterprises (SMEs) into value chains. Chapters in this part shed light on critical issues for the design, implementation, and assessment of programs that support value-chain development (VCD).

Chapter 1 (Donovan et al.) identifies the strengths and limitations of widely used methodological guides for designing value-chain interventions. Chapter 2 (Stoian et al.) stresses the importance of adopting a livelihoods perspective when engaging smallholders in VCD and advocates an asset-based, multi-chain approach toward this end. Chapter 3 (Donovan and Poole) applies an asset-based approach to assess smallholder capacity-building interventions for participation in certified coffee markets. Chapter 4 (Minot and Sawyer) reviews experiences with contract farming — a specific private-sector-initiated intervention in value chains, the inclusive nature of which has been questioned in the literature.

These chapters provide guidance on the design of future value-chain interventions and investments for smallholders and SMEs, found in Devaux, A., Torero, M., Donovan, J. & Horton, D. (eds). Innovation for Inclusive Value-Chain Development: Successes and Challenges, p. 37-46.

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  • Linking sustainable supply, inclusive business models and innovative finance

Linking sustainable supply, inclusive business models and innovative finance


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Pressures on forests and lands forests and lands are increasing as the world population and economies keep growing. Oil palm workers in Indonesia returning home. Photo: Icaro Cooke Vieira/CIFOR
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Pressures on forests and lands forests and lands are increasing as the world population and economies keep growing. Oil palm workers in Indonesia returning home. Photo: Icaro Cooke Vieira/CIFOR

By Pablo Pacheco, Team Leader – Value Chains, Finance, & Investments, Center for International Forestry Research (CIFOR), Coordinator of Flagship 3

Pressures on forests and lands are increasing as the world population and economies keep growing. This pressure also leads to better solutions from public and private actors to enhance sustainable supply mechanisms and integrate smallholders in supply chains. In this context, Flagship 3 Sustainable global value chains and investments for supporting forest conservation and equitable development embraces the challenge of researching and providing options of how value chains and investments can be made more sustainable and inclusive, and leverage the potential of finance for scaling up.

In 2017, Flagship 3 will identify knowledge gaps, distill best practices, produce methods and tools, convene stakeholder meetings, engage in business and multi-stakeholder platforms, support learning initiatives, and co-generate options of policies and practices to:

  • Improve the sustainability of forests, agricultural and tree-crops production in forest landscapes by identifying complementarities between public regulations on the one hand, and private standards and commitments on the other hand;
  • Inform businesses and service providers about business models that are more inclusive, gender-responsive, economically viable and environmentally sustainable;
  • Increase investment flows in forest and tree-crop sectors by helping develop innovative finance mechanisms to support smallholders and small- and medium-scale enterprises (SMEs).

The three groups of activities we embrace have interconnected goals and approaches. The first goal examines the policy and institutional environment shaping the governance of supply chains, with special emphasis on supply chain and territorial interventions.

Assessing the impacts of certification standards in cacao and coffee is part of the work on value chains.Photo: Icaro Cooke Vieira/CIFOR

The second goal focuses on business models in timber and tree-crop value chains that link corporations with smallholder farmers and small and medium enterprises (SMEs).

The third goal assesses how the financial sector influences the social and environmental performance of value chains and businesses, and how innovative finance provides opportunities for smallholders and SMEs.

Enhancing public and private arrangements for sustainable supply

Research under this theme will equip farmers, businesses and the public sector with knowledge of institutional arrangements and management systems to produce agricultural crops and manage forests in more integrated and sustainable ways—and in compliance with social and environmental standards.

We will focus our efforts on producing synthesis to engage in two international processes (e.g. FLEGT, zero deforestation) and to inform two regional/national policy dialogues on the public-private governance mechanisms that are needed to enhance sustainable supply in order to ease the pressures on forests. Our primary focus will be on timber in Central Africa and oil palm in Southeast Asia.

Timber is another key commodity in this research area. Photo: Tomas Munita/CIFOR

We will complete analysis on the governance of timber value chains (Cameroon, Zambia, Uganda) and of palm oil in Indonesia, and link analysis on the connections between global sustainability processes (e.g. FLEGT VPA, RSPO, ESPO) with national regulations and initiatives to enhance sustainable supply in the timber and oil palm sectors.

More complex policy regimes are emerging linking public regulations and private standards, yet there is need to connect them and build complementarities between them.

We are also supporting the development of monitoring tools and approaches to assess progress in performance of corporate commitments to sustainability with focus on oil palm, cacao and timber. We are also assessing the impacts of certification standards in cacao and coffee.

Supporting initiatives to foster the development of inclusive business models

Better knowledge is needed on how to build business options and fair partnerships that create opportunities for smallholder farmers who are increasingly involved in global value chains. This research also aims at safeguarding the rights of marginalized groups such as women and indigenous people.

We will advance work on inclusive business models by operationalizing a strategic partnership with the Dutch development organization SNV. This partnership is aimed at building and testing approaches and interventions that improve the effectiveness of inclusive business models across several SNV projects. In addition, we will support ongoing multi-stakeholder processes for strengthening capacities and policy environments for smallholders and SMEs in the timber and oil palm sectors in some select countries and landscapes.

Our main efforts will be on assessing the technical and economic performance of independent oil palm smallholders in West and Central Kalimantan, Indonesia and of outgrower schemes implemented in the oil palm and sugarcane sectors across some select countries (e.g. Brazil, Tanzania and Mozambique). This will yield some recommendations on building more inclusive models.

We are also working on developingapproaches to design project interventions that consider the specific needs of women and youth in more inclusive business models.

Engaging with responsible finance institutions and impact investors

We want to build bridges to connect responsible financial institutions and innovative financing mechanisms with smallholders and land users in forest landscapes. The goal here is to embrace more sustainable practices and inclusive business models under reduced financial and territorial risks, and to achieve greater social benefits for smallholders and SMEs accessing those financial resources.

Our work on finance and investments, with support from our partners (e.g. The Finance Alliance for Sustainable Trade, FAST), will engage key financial institutions and impact investment funds and managers to identify the demand for responsible finance and their challenges to undertake investments at scale especially in forest landscapes.

We will focus on identifying existing schemes and demand for responsible finance and impact investment, and their challenges. Besides that, we will advance studies on palm oil in Indonesia and cacao in Ghana related to innovative finance schemes to overcome barriers facing smallholders who want to take up more efficient and sustainable practices. This work has the potential to trigger transformational change.

 

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