CCP Intersessional Event

“Towards more sustainable and resilient agrifood systems: The
importance of responsible global value chains”

Background
Global value chains have become an essential component of agrifood systems. The
FAO flagship report The State of Agricultural Commodity Markets (SOCO) showed that
approximately one-third of the world food and agricultural exports are traded within
global value chains that involve at least three countries.
Policies and regulations for responsible business conduct (RBC) have an important
role to play in shaping agrifood value chains and systems, along all steps from
production to consumption. A rising number of governments, including in major
agricultural importing markets, have introduced legislation to reduce the risk of
adverse environmental and social impacts in global supply chains by requiring
companies to establish mandatory risk-based due diligence systems. While some of
these regulatory initiatives follow a horizontal approach (i.e. they apply inter-alia to
agricultural and food value chains), others specifically aim to support sustainable
agricultural and rural development.

However, there are significant trade-offs to consider when implementing such
policies and regulations. For example, they may result in additional costs for farmers
and companies, not only in terms of the necessary investments to comply with them
but also through the various verification and reporting requirements that they often
include, creating recurring costs for businesses. Policies that aim to reduce the risks
of adverse environmental and social impacts in agrifood supply chains should avoid
placing an excessive economic burden on businesses, and a balance needs to be
found across all three dimensions of sustainability, which are strongly intertwined.
Suppliers in the upstream part of agrifood supply chains, especially smallholder
farmers and small and medium enterprises, can face significant challenges in
adapting to these new policies and meeting the new requirements. The resilience of
these farmers had already been put to the test by the COVID-19 pandemic and the
elevated fertilizer prices observed in the last years. In this regard, it is essential that
policies for responsible global value chains consider such challenges and be
complemented with adequate support measures. Otherwise, smallholders and small
and medium enterprises, particularly in developing countries, may face difficulties to
meet these new requirements and maintain their access to traditional export
markets.

Furthermore, the effects of RBC policies on agrifood value chains and systems might
vary across countries in different ways, depending on many factors, such as the level
of development of the agrifood sector, the trade orientation of the country and the
level of engagement of the private sector. Such factors need to be carefully analysed
for adequate complementary policies to be developed.

FAO and other international institutions such as the Organisation for Economic
Co-operation and Development (OECD) have contributed to this debate through
several activities, tools, and publications. In 2016, they launched the OECD-FAO
Guidance for Responsible Agricultural Supply Chains, which provides a common
framework to help agri-businesses and investors contribute to sustainable
development by identifying, managing, and reducing the risk of adverse impacts.
Most recently, the two organizations developed the OECD-FAO Business Handbook
on Deforestation and Due Diligence in Agricultural Supply Chains. The Handbook will
be launched at FAO headquarters on 16 November 2023 in conjunction with the next
meeting of the FAO-OECD multi-stakeholder Advisory Group on Responsible
Agricultural Supply Chains.

High-level discussions in the context of the Group of Seven (G7) have also addressed
responsible business practices and promoted the adoption of the OECD-FAO
Guidance for Responsible Agricultural Supply Chains. In 2021, the United Kingdom G7
Presidency launched the Sustainable Supply Chain Initiative with a group of large
multinational agrifood companies. In 2022, the German G7 Presidency commissioned
an OECD study on the G7 members’ due diligence regulations related to agricultural
supply chains. Under the Group of Twenty (G20), the communiqués of agriculture and
trade ministers illustrate the need to strengthen inclusive, resilient and responsible
supply chains. the six complementary elements of a policy agenda to achieve both
food systems and climate objectives.

Objectives
The event will provide a platform to discuss challenges and possible solutions to
ensure that policies and regulations for responsible agrifood value chains effectively
benefit agricultural producers, including small and medium-scale farmers in
developing countries, and support the transition to more sustainable and resilient
agrifood systems.

The event will start with a presentation on the current trends in policy developments
for responsible agrifood value chains and the available practical guidance tools. Then,
the panellists will share their experience and provide their perspectives on the
subject by addressing the following guiding questions:

1. What are currently the main elements of the policies and requirements for
   responsible agrifood value chains adopted by major importing countries?
2. What are the challenges faced by farmers and agri-businesses (including
   cooperatives) in exporting countries in adapting to policies and
   requirements for responsible agrifood value chains adopted by major
   importing countries?
3. How can countries help their farmers and agri-businesses to overcome
   these challenges?
4. What are the challenges for smallholder farmers to adapt to the new rules
   and requirements and what specific support do these groups need in this
   regard?
5. How can developing countries be assisted in adapting to the new policies
   and regulations?
6. What can international development agencies do to support developing
   countries in ensuring that their producers and exporters actually benefit
   from the new requirements?

Date and venue
The event will be held on 30 October 2023. It will be organized in a hybrid mode to
allow for broad participation, especially from capitals. The in-person meeting will be
held at FAO headquarters.

Participants
The event is aimed primarily at Permanent Representations to FAO and government
officials from capitals.

Related links

Documents