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Sector Transformation: Driving Sustainability Performance in Smallholder-Dominated Agricultural Sectors

Addressing sustainability issues in agro-commodity sectors is challenging, especially in those sectors that are dominated by smallholders. The International Finance Corporation (IFC) tasked Aidenvironment, NewForesight and IIED to explore how sustainability can be mainstreamed in sectors dominated by smallholders. The research took place in two phases, both of which are now complete.

Phase 1 of the project reviewed the scope and impact of Voluntary Sustainability Standards (VSS) to date and asked how VSS are best scaled up, given that most agricultural sectors in developing countries are dominated by small-scale farmers who are typically unorganized and lack access to inputs, credit, and technical assistance. The research conducted in Phase 1 found that despite considerable growth in VSS in some sectors, their direct economic, environmental, and social impacts are mixed. And despite a number of positive indirect impacts which may be significant in the long-term, no agricultural sector has reached the desired levels of sustainability, or seems likely to reach them soon. In fact, in many sectors systemic change has proven elusive and current transformation models, whether public or market driven, have had limited success.

Phase 2 of our research took a more comprehensive look at how to scale up sustainability in smallholder-dominated agricultural sectors by developing a model for sustainable sector transformation. The model was developed and tested using a number of country-sector case studies: cocoa in Ivory Coast and Ghana; coffee in Vietnam; cotton in Mali; and palm oil in Indonesia. The model consists of five building blocks: sector alignment and accountability, strengthening of market demand, public sector governance, organization of the production base, and organization of the service sector. The extent to which the building blocks need to be strengthened is context specific, but a focus on only one or two dimensions is bound to lead to a failure to completely transform sectors where there are many smallholders.

This model is intended as a framework for policy-makers, donors and the private sector to develop roadmaps for sustainability for specific countries and sectors.

For more information on the details of each of these building blocks and case studies, see http://sectortransformation.com or for answers to your questions send an e-mail to Jan Willem Molenaar.

For more information contact Jan Willem Molenaar.