Day 2 - Thursday, 4 August 2016    13.30 - 15.00   

Taking deforestation out of the supply chain while including smallholders

Agricultural expansion has driven economic development and benefited billions of people, but it has often done so at the cost of extensive deforestation and forest degradation, particularly when associated with global crop commodities. In the context of global climate change, biodiversity loss and large-scale natural resource degradation, there is a growing need to keep forests standing.

Demand for agricultural commodities is expected to double in the coming decades, increasing pressure on sub-tropical and tropical forests, mainly in developing countries with proper conditions for the development of these commodities. In order to mitigate climate change and reduce the negative impacts of agriculture on forests, strong pledges have been made by governments and multinational corporations to eliminate deforestation from agricultural commodity supply chains by 2020. This session discussed one of the major stumbling blocks: smallholders.

Smallholder farmers play a key role in the production of agricultural crops and products for local, national and, increasingly, international markets, including high-value tree crops. As commercial-scale agriculture has expanded and markets have become more integrated, smallholders are now forced to compete with agribusiness to meet a rising demand for food, fiber and fuel. But smallholders remain informal and disenfranchised, often facing economic, financial and institutional constraints that make the adoption of more efficient practices and technologies more difficult and limit productivity. Limited productivity on existing holdings, combined with easy access to unprotected, frontier forested lands, provides an incentive for smallholders and other investors to expand.

As corporate commitments are made to eliminate deforestation from supply chains, inclusive business models that empower smallholder production and improve livelihoods are essential. Such commitments have the potential to improve management of forest landscapes, support sustainable supply chains and improve the livelihoods of smallholders in the Asia-Pacific region. This panel explored partnerships between corporate stakeholders and smallholders in the region, looking in particular at the palm oil, timber, coffee and shrimp sectors.

Key questions

  • What incentives and disincentives can companies put in place to stop unsustainable practices and encourage more sustainable land use practices?
  • What is beyond the control or influence of companies? What do we need from government, civic society, the financial sector, and entrepreneurs?
  • What are the key components of successful smallholder inclusion projects? And what is needed for scaling up successful initiatives?

Background reading

‘Implementing Deforestation-Free Supply Chains – Certification and Beyond’

‘How can the financial services sector strengthen the sustainability and inclusivity of smallholder farming in the supply of global commodity crops?