Building ethical and transparent supply chains is key to helping famers achieve fairer and more stable returns for farmers, according to coffee pioneer Konrad Brits.
Delivering the Frank Parkinson lecture at the Oxford Farming Conference, Mr Brits said the viability of farms could be improved if businesses moved away from a buy-low, sell high model to one which was more nurturing.
And he said that following the example of small-scale coffee producers overseas could help Britain’s farmers secure better returns from the market place.
Mr Brits, founder of Sussex-based Falcon Coffees, trades $95m-worth of coffee each year, buying beans from farmers in 18 countries around the world.
And while farming a tropical crop was a long way from British agriculture, he said there were lessons to be shared as producers across the world faced the growing pressures of economic austerity whilst raising standards.
“Retailers put price pressure on suppliers, who put that pressure back down the supply chain until it reaches those who produce the raw material - the farmers,” he told delegates.
“They often have the lowest resources, which means they have the lowest negotiation power.”
Mr Brits said there was a disconnect between the retail market forces and the real costs of ethical farming, and that to create a sustainable future the supply chain had to change.
Using his own experiences in the coffee industry, he explained how up to 70% of the world’s coffee is produced by 25m smallholders in 50 of the poorest countries.
“It means my industry relies on tens of millions of farmers who are made vulnerable through education, healthcare, markets and poverty,” he said.
“The flip side is we have a $110bn coffer industry which is growing 2% every year and has decades of growth ahead of it. Where will the raw material come to feed that growth?”
Mr Brits said that the approach needed to shift from the competitive buy low/sell high culture, to a more nurturing approach.
“We have to invest in the quality of life of the farmers we rely on. We have to create hope and dignity that farming is a mean to improving their lives, and that we treat them as equals.”
In his company, that had involved working with a sister company in Rwanda to provide training on agronomy and financial literacy for smallholders.
A pilot scheme working with 6000 farmers had seen their coffee yields increase by 155%, while household income had risen by 61%. By the third year of the scheme, export volumes had increased so much that the costs of the training were recovered.
While it was a good story to tell, Mr Brits admitted it was tough for companies to fully embrace sustainable practices.
But he said more and more consumers were interested in ethical production and the story of a product, and those businesses which ignored sustainability would ‘commit a delayed form of commercial suicide’.
“A lot of talk around sustainability is action, but a key point is culture,” he added.
“When you have people negotiating and they have different resource pools its not a fair fight. We need to be more nurturing, and recognise sustainable supply chains are about the viability of every single player in it.”