Meaningful stakeholder engagement with smallholder farmers in due diligence processes of companies
FTAO and Transform Trade launch new report on meaningful stakeholder engagement with smallholder farmers. In spite of the undisputed importance of stakeholder engagement, little research has been done on engagement with smallholder farmers. This publication aims to fill this gap. The report provides recommendations for companies and policy makers how to include smallholder farmers in due diligence processes.
Meaningful stakeholder engagement in due diligence processes
As part of their due diligence process, companies are expected to involve stakeholders in a meaningful way in all the due diligence steps. This means that stakeholders, such as smallholder farmers, should be included when mapping human rights and environmental risks, when mitigation and prevention decisions are made, or when remediation is needed for harms caused. Little guidance exists on what this engagement should look like. The aim of this research was to ask smallholder farmers what experience they have with stakeholder engagement and what their suggestions are based on this experience.
Research in Tanzania and India
The focus of this research is on smallholder tea farmers in the Iringa, Mbeya, and Njombe regions in Tanzania, and smallholder cotton farmers in the Odisha region in India. The majority of farmers indicated that they did not have any contact with international companies and that their experience with meaningful stakeholder engagement, in any form, was minimal. The conversations with the farmers lead to several recommendations to improve the effectiveness of engagement with the farmers. However, for this to take place in a meaningful way, some enabling factors need to be in place, such as living income and improved power balances.
Living income as a starting point
One of the main findings of the research is the importance of a living income. Farmers indicated that they would like companies to be aware of their situation. They have concrete examples and stories to share about the human rights and environmental risks in their work. However, because they have difficulty making ends meet, they don’t have the capacity to participate in meaningful stakeholder engagement if their income does not improve. Companies should therefore make sure that they practice responsible purchasing practices and pay a price that makes it possible for farmers to earn a living income.
Improve power balance and transparency
Smallholder farmers, being at the end of the supply chain, have little information about the companies that end up using their produce. They would like to get more insight into the different actors in the supply chain and what agreements are made between them. Additionally, farmers need more information about what due diligence procedures entail and what human rights they have. As long as this information is only present at (international) company level, the engagement between companies and farmers will never be on equal terms and will not be meaningful. Companies should be more transparent about their sourcing locations and sustainability policies.
Co-create stakeholder engagement mechanisms with stakeholders
In the little instances that smallholder farmers did see engagement methods, they were often not inclusive. Some farmers gave suggestions for improvement. The stakeholder engagement method should therefore be designed together with the stakeholders themselves, to make sure it is a mechanism that is useful and workable for them. Concrete recommendations for setting up meaningful stakeholder engagement with smallholder farmers can be found in the publication.