Environmental Audit CommitteeWritten evidence submitted by The Co-operative Group

Summary

In its inquiry into the Rio+20 Summit, we recommend that the EAC highlights the role the UK Government can now play in championing the commitments made in “The Future We Want” declaration on supporting smallholder farmers and co-operatives, both through its own activities and investment, and on the international stage.

Public policy work to champion the role smallholder farmers and co-operatives can play in feeding the world fairly and sustainably

1. There are around 500 million smallholder farming households in the world, together feeding nearly a third of the world’s population. This figure is even higher in sub-Saharan Africa and Asia, where smallholder farmers produce up to 80% of food. Despite this, the majority of smallholder farmers still lack investment and consequently struggle to produce much beyond subsistence levels. Additionally, one in seven people around the world goes to bed hungry every night and, with global population predicted to reach 9 billion by 2050, global food production will need to increase by 70%.

2. There is broad international agreement that smallholders can provide much of the extra food needed to feed the world’s growing population.1 The major contribution made by co-operatives to sustainable development, the competitiveness of smallholders2 and global food security has also been internationally recognised and the United Nations Food and Agriculture Organisation (UN FAO) has designated “Agricultural co-operatives: key to feeding the world” as the theme for World Food Day in 2012.3

3. In February 2012, The Co-operative launched a campaigning partnership with Oxfam to call on the UK Government to unlock greater support for smallholder farmers and co-operatives to feed the world fairly and sustainably, particularly highlighting the role of co-operatives in supporting smallholders to pool resources, realise economies of scale and secure fairer prices. We are asking the UK Government to champion:

(i)Fair and sustainable methods of increasing global food production.4

(ii)The crucial role of smallholder farmers and co-operatives.5

(iii)Increased investment in sustainable smallholder agriculture to lift farmers—many of whom are women—out of poverty.6

4 In the run-up to the UN Conference on Sustainable Development in Rio in June 2012, almost 18,000 Co-operative members and Oxfam supporters called on the UK Government to champion smallholder farmers and co-operatives at the Summit. A group of campaigners from The Co-operative and Oxfam met Deputy Prime Minister Nick Clegg ahead of his departure for Rio to represent the 18,000 people who took action. During the Summit, the UK Government announced Department for International Development (DfID) funding that will support six million smallholder farmers through the UN International Fund for Agriculture and Development’s (IFAD) Adaptation for Smallholder Agriculture Programme (ASAP).

5 Given the mandate from the 18,000 Co-operative members and Oxfam supporters across the UK to champion smallholder farmers and co-operatives, as well as the numerous case studies within The Co-operative’s supply chain demonstrating the benefits of building the capacity of smallholders and co-operatives (see Appendix), we recommend that the EAC highlights the following points in its “Inquiry into the Rio+20 Summit”:

“What role the UK Government should now play internationally in taking forward the Rio agenda”

6. The UK Government has an important role in ensuring that recommendations made in the Rio declaration regarding smallholder farmers and co-operatives are supported internationally. We believe the UK Government should champion the following points within the declaration:

recognition of the importance of smallholder farmers and co-operatives to sustainable development (52);

ensuring that green economy policies around sustainable development and poverty eradication enhance the welfare of marginalised groups such as women and smallholder farmers (58);

enhancing the access of smallholder farmers to various necessities such as credit and other financial services (109);

the development of national, regional and international strategies to promote the participation of farmers, especially smallholder farmers, including women, in community, domestic, regional and international markets (118);

encouraging private sector partnerships with co-operatives in order to enhance job creation for poor people (154);

acknowledging the role of co-operatives in contributing to social inclusion and poverty reduction in particular in developing countries (70); and

ensuring that developing strong agricultural co-operatives and value chains is a key area for investment and support (110).

“How well the UK Government’s policies and initiatives match the commitments and calls-for-action set out in “The Future We Want” declaration, the areas in which the Government has more to do, and where the Government’s priorities should lie”

7. Against a backdrop of declining global investment—between 1983 and 2006, the share of agriculture in official development assistance fell from 20.4% to 3.7% in real terms7—we welcomed Deputy Prime Minister Nick Clegg’s announcement at Rio+20 on DfID’s commitment to support six million smallholder farmers. We believe this is an excellent starting point towards helping smallholder farmers and co-operatives to build capacity and grow more food and we would recommend that as the UK Government’s aid budget increases to 0.7% of Gross National Income from 2013, a greater proportion of the budget allocated to Economic spending should be invested in agricultural development.

8. We are also hopeful that DfID’s announcement can help to raise awareness internationally of the need to increase investment in smallholders and co-operatives, and we believe the UK Government should play an important role in advocating that G8 and G20 members commit at future meetings to increase support for smallholders and co-operatives.

9. In summary, in its inquiry into Rio+20 we recommend that the EAC highlights the role the Government can now play in championing the commitments made in “The Future We Want” declaration on supporting smallholder farmers and co-operatives, both through its own activities and investment, and on the international stage. We hope that the Committee can draw on the evidence presented in the following Appendix, demonstrating the benefits in practice of building the capacity of smallholder farmers and co-operatives, to support its recommendations.

APPENDIX

THE CO-OPERATIVE’S SUPPORT FOR SMALLHOLDER FARMERS AND CO-OPERATIVES

10. The following seven examples of The Co-operative’s projects and initiatives demonstrate the benefits in practice of supporting smallholder farmers and co-operatives to build capacity, grow more food and access international markets.

Fintea tea co-operative, Kenya

11. Traditionally, small-scale tea farmers face numerous challenges. The global price of tea is highly unstable and with only a small farm, individual growers often have no bargaining power to negotiate decent terms of trade. In a project which secured match-funding from the Department for International Development (DFID), The Co-operative has supported over 11,000 tea smallholders in Kenya to form into co-operatives, become Fairtrade certified and supply into our “99” Fairtrade tea blend.

12. In Kericho, where the project is located, the high cost of production coupled with the ever-declining tea prices meant many of these farmers were living under the poverty line. In addition, many farmers had no other income source and were getting poorer. By organising into five producer co-operatives, overseen by the Fintea Growers Co-operative Union, the 11,000 farmers, half of whom are women, are benefiting from a stronger negotiating position and can collectively own and share the profits from the business, increasing the incomes of participating tea farmers by as much as 30%. They are also being given the opportunity to diversify into other products to reduce their dependency on the volatile tea sector and improve local food security.

Kuapa Kokoo cocoa co-operative, Ghana

13. After years of government monopoly control over Ghana’s cocoa trade, the industry was restructured in 1993 and cocoa farmers began to organise themselves and market their own cocoa. Kuapa Kokoo co-operative was formed, aiming to empower farmers to gain a dignified livelihood, increase women’s participation and enable environmentally friendly cocoa cultivation. The co-operative originally had 200 members in 22 village societies and has grown to over 1,300 village societies, representing over 48,000 farmers, 28% female.

14. In the year 2000, we launched the first own-brand product in the UK to be Fairtrade certified—The Co-operative Milk Chocolate. The conversion signalled the start of a relationship with the Kuapa Kokoo growers, who have been benefitting ever since. Fairtrade premiums received from sales of The Co-operative’s products have been significant, and have helped to improve access to clean water and health services in cocoa growing communities.

15. The Co-operative also goes beyond Fairtrade and pays a further premium on all the Fairtrade cocoa sourced from Kuapa Kokoo through Divine Chocolate’s own “producer support and development fund” which aims to develop the co-operative’s capacity and strength, for example investment in ground nut milling equipment has helped create additional sources of income. Today Kuapa Kokoo supplies big brands in the UK, such as The Co-operative, Cadbury’s and Divine—a company in which the farmers themselves own a 45% stake.

Apicoop co-operative, Chile

16. In 1980, a community bee-keeping group was formed in Chile as part of a church project aimed at supporting poor smallholders during the Pinochet dictatorship. Almost two decades later, a number of beekeepers formally registered as the Apicoop Co-operative. Today, Apicoop counts 300 members, who are spread throughout Chile with some being up to 1,200 km apart, an arrangement that limits the impact of bad weather. In 2007, to increase the co-operative’s viability and to reduce its dependence on a single commodity, Apicoop diversified into blueberries. In 2011, The Co-operative, which was already sourcing Fairtrade honey from Apicoop, also began to buy its Fairtrade blueberries, and with support from Traidcraft, The Co-operative is now going beyond Fairtrade to help Apicoop increase its capacity to harvest blueberries and own more of the value chain.

17. The investment is supporting Apicoop with improved infrastructure and agricultural machinery to help them manage their increasing volumes of blueberries. Through a new packing facility, Apicoop is now able to pack its own blueberries, helping to increase its ownership of the supply chain and return increased incomes to its members. The welfare of Apicoop’s permanent and seasonal workers is also being improved through new accommodation and sanitation facilities. In total, around 20,000 people in the wider community are expected to benefit from the project.

FEDECOCAGUA coffee co-operative, Guatemala

18. In March 1969, thousands of small coffee growers organized into 19 co-operatives across Guatemala to form FEDECOCAGUA (Federación de Cooperativas Agrícolas de Productores de Café de Guatemala—Federation of Guatemalan Coffee Producer Co-operatives). FEDECOCAGUA started to export Fairtrade coffee in 1997, and today, 30% of its coffee exports are sold under Fairtrade terms.

19. Today, FEDECOCAGUA is made up of 54 primary co-operative societies representing 20,000 smallholder coffee farmers. To enable FEDECOCAGUA to sell more coffee under Fairtrade terms, The Co-operative is supporting twelve of its primary co-operatives with capacity building and training, in particular helping them to achieve Fairtrade certification. The project is also supporting three other groups of coffee producers to form into co-operatives, achieve Fairtrade certification and become member co-operatives of FEDECOCAGUA, helping them to own more of the value chain. In total, 5,000 smallholder coffee producers are set to benefit.

Banelino banana co-operative, Dominican Republic

20. The Co-operative is supporting smallholder banana producers belonging to Banelino co-operative in the Dominican Republic with capacity building and training to improve the productivity and quality of bananas and enable diversification into additional crops to help provide additional sources of income. In addition, Banelino is establishing a training school for young people to help secure the long-term sustainability of small-scale banana farming in the region.

The Global Development Co-operative

21. The Co-operative Banking Group is spearheading the Global Development Co-operative (GDC)—a development fund to help provide much needed finance to co-operatives in developing countries. Finance for co-operatives is often scarce, either because traditional lenders are not active in this market or do not sufficiently understand the co-operative business model. Additionally, co-operatives in developing countries often have limited collateral to put forward. Working with the International Co-operative Alliance, the GDC aims to support co-operative businesses in developing countries by raising £20 million to provide access to low cost loans for capital and infrastructure projects. It will target those with an interest in international development and extending the reach and benefits of the co-operative model.

28 August 2012