Smallholder Farmers: Partnership with Nestlé and PepsiCo
Who are smallholder farmers?
The definition of smallholders is different from geographical locations depending on the size of the land. Smallholder farmers own a small land and do farming work for livestock products or agricultural products. Mostly they work as a family business where all family members help out in farm activities.
Smallholder farms are smaller than five acres. Smallholders produce about 80% of the food worldwide. The estimation of the smallholder farms globally is around 475 million farms. Even if they are the main producer of the world, they are facing the consequences of climate change such as flooding and drought. Moreover, many sectors should provide enough support for them in terms of infrastructure, financing, and technology.
Figure 1: Farmers harvest their crop (top: sugarcane, bottom: celery)
What are the problems smallholders are facing in Thailand?
Due to the diversity of landscapes and resources in Thailand, the agricultural products and markets in each region are also different. Agricultural practices in Thailand have changed from domestic agriculture to trading markets since the Green Revolution in 1950. Many technological tools have been involved in this evolution, for example, machines which were used in agricultural practices.
Thai smallholder farmers are the main producers of the ASEAN economy. To meet the demand of the world’s market, their productions are tied with the fluctuated price in the market which leads to unstable living conditions. In this globalization, Thai farmers are facing many problems such as economic problems which affect their health and livelihood, shortage of resources, and natural disasters. Most farmers turn their back to agricultural work and enter to the industry and services instead. [Thesis from Rambhai Barni Rajabhat University, Thailand]
Figure 2: Drought in North-Eastern Thailand (2016) affected the sugarcane production
Source (MGR Online): https://mgronline.com/local/detail/9590000028947
Fairagora Asia engaged with Smallholders: Impact Project phase 1 and 2
In 2017, Fairagora Asia (FAA) partnered with Nestlé and PepsiCo to build the project called “Impact Project” (2017-2020) to reach their sustainability and responsible sourcing goals for sugarcane in Thailand to be aligned with Sustainable development goals from the United Nations. FAA engaged with the processing plant called Mitr Phol mill in Chaiyaphum province, Thailand. FAA conducted workshops for smallholder farmers engaging about Bonsucro Standard, the standard which helps farmers and mills to measure their productivity and key environmental-social impacts in sugarcane farming. The workshop covered all the components of the Bonsucro standard integrating with sustainability aspects. FAA had stakeholder identification from different sectors that can support the implementation of the Bonsucro Standard. VerifiK8 application is fully aligned with Bonsucro standards and available in both web-based and mobile application to fit farmers’ and users' tech skills. FAA team conducted the VerifiK8 training for farmers to do the data entry profile and identify new trainers (coach farmers). The trainers will be in charge to train other farmers and get their feedback about the application for IT development. In the project, there were 280 farmers who were introduced to VerifiK8 and 53 farmers were trained to be the trainer of the community. All smallholders who participated own the land less than 32 ha. The outcome of the project are, to bring technological adoption to farmers, to raise awareness in sustainable farming and Bonsucro Standard, and to support community development where farmers can help each other with technology.
To read more about Thai sugarcane industry and stakeholders: WHITE PAPER THAI SUGARCANE SECTOR & SUSTAINABILITY published by Fairagora Asia, coordinated by Bonsucro.
Figure 3: Sustainability workshop with smallholders in Impact project, Thailand (2017-2020)
In 2021, Fairagora Asia launched the “Impact 2 Project” partnership with Nestlé. The period of the project was from 2021 to 2023. The main objectives are to identify the main source of greenhouse gas emissions, to collect the baseline dataset for carbon footprint calculation, to identify mitigation activities, and to analyze social risk mapping in the supply chain. The project involved with processing plants in many different areas in Thailand such as Suphan Buri province, Sing Buri province, Khon Kaen province, etc. The dataset will be collected directly from the mills and the farms. The three main sources we plan to focus on are sugarcane burning, fertilizer use, and fossil fuel use. The calculation models are mainly based on the Verified Carbon Standard (VSC) methodology. Moreover, FAA team had a VerifiK8 training for farmers in the project so that they can use technology to collect the data. Human rights and social aspects were integrated into Impact-2 Project. FAA used the 12 Social Categories (Fair recruitment, Child labour, Health & Safety, etc.) implemented by FAA team and social experts to identify risk issues in the farms.