Issues  I  Value Chains

Across the world, agricultural commodities production has traditionally provided the agricultural mainstay for millions of smallholder farmers. It is commonly the case that producers of coffee, tea and sugarcane have few viable economic alternatives, and have come to rely heavily on these products for their income.

 
Tropical commodities

Coffee, tea and sugarcane are examples of the type of tropical commodities that sustains the livelihoods of rural economies across the developing world. The smallholder producers in India are at the base of value chains in which the overwhelming proportion of economic returns flow to companies at the final end of the value chain.

 
Terms of trade

Low returns and high risks experienced by producers are direct consequences of the combined effect of declining terms of trade, price volatility and corporate concentration. The producers and workers affected by this scenario fall into the poorest segment of the population.

 
Public concern

In recent years, growing public concern over the social and environmental impacts of agricultural commodity production has prompted responses from mainstream traders, processors, multinationals, retailers and finance institutions. Different initiatives have been developed to deal with specific pieces of the sustainability puzzle, separately for each commodity.

 
Sustainable production

Voluntary market and civil society initiatives, like certification schemes, have proven to be powerful forces in ensuring that companies include environmental and social dimensions in their production, and getting buyers to exercise preferential treatment in their consumption.

 
Mutual interest

These approaches vary in ambition, social and environmental impact, and political and technical feasibility. In India, different stakeholders identified areas of mutual interest, on both sides of the divide: production and demand. Prakruthi stimulates cooperation between producers, NGOs, governments, traders, processors and manufacturers to share the costs of adopting sustainable production practices at smallholder level.

 
Long-term sustainability

Prakruthi’s approach provides incentives for real and long-term sustainable production. Instead of loading the improvement costs of compliance onto producers, a step-by-step scenario addresses the social and environmental conditions at the producer end of the commodity value chains.

 

 


 
 
 
 
Bhagawanth Rao, 14, whose parents Soyam
Lachu and Lachu Bai cultivate about 20 acres of
dry land in Adilabad District,
 
   
 
 
 
 
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