In the face of the climate, nature, poverty and inequality crises, the world needs a new approach to help the planet survive. It can no longer be “business as usual” – it needs to be “business unusual”, according to a new report by IIED.

This is particularly important when it comes to smallholder and family forest and farm producers which produce around 80% of the world’s food and face the brunt of climate change. Whether that be spreading risk by diversifying what is grown in sustainable, ethical supply chains, working together in forest and farm producer organizations (FFPOs) that can aggregate the volumes markets want of multiple crops grown in diverse smallholdings, or mobilizing their own saving and credit facilities to finance experimentation and value added processing. 

It’s complicated – and that’s OK

By their very nature, smallholder forest and farm businesses are very different to conventional, monoculture agribusinesses. To help these small, rural businesses develop, we need flexible approaches that embrace the complicated way in which they need to operate. They mainly face complexity in three areas: 

1. Social complexities because smallholder producers need to combine forces to access markets. This means small producers need to work together in organizations that share common goals, and develop systems to maintain trust and accountability, which can be challenging to coordinate.  

2. Environmental complexities because, in the face of a changing climate, producers need to diversify their income through a growing a wide variety of crops, trees and livestock to protect their livelihoods. Embracing agrobiodiverse farming is better for ecosystems and the planet, but challenging to do in practice. 

3. Economic complexities because producers are trying to make money from the wide range of products that emerge from their agrobiodiverse farms. This is not generally supported by conventional banks and funders which is why cooperatives often set up their own savings and credit schemes that can meet their needs. 

Changing the mindset

So what’s the answer? The solution to supporting these smallholder producer organisations is to leave the beaten track behind and chart a new course. To be brave and embrace ways of operating that challenge the existing business and investment paradigms and the “David and Goliath” power dynamic between the rural farmer and the large agribusinesses, banks and investors. 

What we need is a fresh mindset that sees the benefit in working not just for economic profit, but for social inclusion and environmental diversity too, and that spreads wealth more equally and regeneratively. 

Often smallholder forest and farm cooperatives do not have the same structures in place as a large company – for example, aggregation or stock yards for storing and selling on crops, processing facilities to maintain quality standards, credit facilities suited to their member’s diverse needs. Collective facilities are important in order for the organisation’s members to thrive and in turn provide a more reliable supply of their multiple products – be it honey, cocoa or wood, for example – to their markets. 

Luckily, there are already some investors and businesses who are thinking outside the box to help forest and farm producers flourish. 

Investing at grassroots level to secure baobab supply

One example is Aduna – a UK healthfood company – which is working with Kassena Nankana Baobab Cooperative Union (KANBAOCU) in the Upper East Region of Ghana which produces baobab fruit, shea butter and moringo powder. 

Aduna, was keen to buy the baobab produced by KANBOACU for its health benefits, but recognised that in order to secure a reliable supply, it was first important to invest in the broader social, environmental and economic ambitions of the cooperative, to make it stronger. 

Instead of going directly to KANBOACU and buying baobab from its members at a profit-making margin for itself, Aduna crowdfunded to raise money to engage the support of ORGIIS (Organisation for Indigenous Initiatives and Sustainability Ghana). 

ORGIIS is a technical NGO which helps strengthen KANBOACU in many different ways, such as by developing support structures for maternal care to allow women’s involvement, or  helping set up its own credit union – the Jwa Ngwaane Community Cooperative Credit Union. The credit union enables members pool their savings that were once held in many separate saving and loan groups, allowing them to access larger amounts of low-interest credit at fair and competitive rates, and provides quality financial services for members who do not have access to the traditional commercial banking systems. 

By providing the broad support that KANBOACU’s members needed to thrive, Aduna were able to secure an ethical and sustainable long-term supply of baobab. They invested in strengthening the broad social, environmental, and economic goals of a local cooperative in order to secure their own narrower goal of sustainable product supply. 

Supporting business unusual

Key to business unusual are four key elements.

• First is the recognition that smallholder producer organizations often conserve agrobiodiversity in order to spread risk to survive as so offer a uniquely ‘green’ or ‘ecofriendly’ investment opportunity.
• Second, they often also develop (or can quickly develop) their own finance mechanisms that allow members to experiment and establish appropriate value added technologies – remembering that the World Council of Credit Unions (WOCCU) number 82,758 unions with USD 3.6 billion in assets.
• Third, these producer organizations, working together, can produce products at market scale, ready for private sector buyers to invest, with the potential to attract more conventional investment over time.
• Finally, business unusual models recognise that what buyers want can best be achieved by investing in the broader social, environmental and economic goals of those trust-based smallholder producer organizations – not by forcing those organizations to supply only what buyers want. 

A handful of organisations are already pioneering these new approaches. These include Tony Chocolonely, Root Capital, Synchronicity Earth and others. But in order for more to join them, the report puts forward four key recommendations which are necessary to make a successful shift to business unusual practices: 

• Governments must adopt policies to shift incentives towards businesses that embed social inclusion and environmental sustainability into their ownership, decision-making and profit-sharing processes. 

• Public and private investors and businesses need to adopt different ways to secure product, invest healthily and measure progress – not everything fits neatly in a box, smallholder forest and farm businesses require a broader more flexible approach. 

• Public funders and philanthropists must explore creative ways of supporting smallholder producers finance – such as by finding innovative ways to top up or partner with local saving and credit cooperative unions established by the smallholder farmers themselves, helping them to finance experimentation and diversification that spreads risk. 

• Development and environmental agencies must facilitate learning between the pioneering organisations already living “business unusual” practices and conventional businesses to help drive wider change and help shift mindsets. 

We have the tools to make business unusual practices happen. All that is needed now is for the world to be open to embracing this change. 

Download the Business Unusual report (pdf)