Taking the environment seriously in agricultural global value chains: why it matters to the bottom b

By Aarti Krishnan, University of Manchester & the Overseas Development Institute

With the advancement of globalisation, 80% of trade flows through global value chains (GVCs). Agriculture and agro-processing GVCs are one of the largest employers for less developed countries, especially in Africa and Asia. With demand for food growing globally between 59% to 98% by 2050, and a world population estimated at 9.7 billion, there will be a severe drain on finite natural resources of land, water, materials and energy, that our economy depends on. Researchers have called for an urgent need to decouple environmental degradation from economic growth so that the economy can grow without using more resources and exacerbating environmental problems.

Some allude to the decoupling delusion, suggesting that genuine decoupling is impossible. Rather, they advocate substituting ‘intensively negative environmental practices’ with less intensive or neutral practices. This should be accompanied by shifting the environmental pressures of greening ‘ through compliance to standards’ down the value chain to lower tier suppliers like farmers and micro enterprises (MEs) in less developed and developing countries.

If indeed there is such a high dependence on ‘greening from the bottom’, then how long can farmers and MEs be squeezed to bear the burden of environmental costs for everyone else in the value chain? To understand this, we need to unpack the reciprocal relationships between the environment, farmers and MEs.

WHY do we need to take the environment seriously in global value chains?

There are only a few ‘places’ in the world where we can grow specific types of foods, for instance, there are only 9 countries where avocados can be grown, thus large retailers such as supermarkets (e.g. Walmart, Tesco, Carrefour), online grocers (e.g. Ocado, Big Basket) and processors (e.g. Del Monte, Cargill, ADM) carefully select ‘places’ based on the natural endowments and resource deposits that they can appropriate to sustain their profits. Consequently, many of these ‘places’ are in Africa and Asia. Farmers, by virtue of their livelihood, are ‘fixed’ to specific ‘places’. These ‘places’ are fixed because of two elements . The first is farmers’ land (size, soil quality) and water access on farmland and other geological and topographical factors; and the second is the vulnerability to uncertain climate change and shocks farmers face, which compounds possible degradation of a farmer’s ‘place’.

Photo by Aarti Krishnan

It is in this same ‘place’ where large Northern retailers push farmers to adhere to a variety of stringent and technical and environmental standards, such as Fairtrade, Organic, Rainforest Alliance, which thrust new and non-indigenous farming practices onto farmers. This leads to the formation of new networks, i.e. farmers now work with Northern firms, and a different set of intermediaries that cater to these firms. In most cases, the national government will sync their interest to the expectations of Northern firms, in the hope of increasing their international exports. This is turn changes the dynamics of how food is produced, distributed and sold. A plethora of research shows that farmers find adhering to standards a complex process, forcing them out of the value chain. Studies have shown very mixed impacts of standards. In some cases, standard compliance has increased farmers’ revenues and provided fairer wages while simultaneously leading to environmental degradation, which in turn prevents farmers from sustaining their livelihood in the long-term. This means that farmers are not only ‘embedded’ into certain places with natural endowments and uncertainties of climate change, but also embedded into networks which are dominated by large international supermarkets and new intermediaries. Therefore, farmers’ livelihoods and places are not separable. Farmers value their environment differently from how large firms do. My research found that farmers claimed that they valued to conserve their environment not only for commercial reasons but also to maintain stewardship, because of attachment to their land and to be able to bequest land to their children.

Are we looking at the environment the wrong way around?

The problem has been that we have been looking at the ‘environment’ from the point of view of how we (humans) need to find ‘fixes’ for an environment that we (humans) have ‘broken’. Because environmental values differ for different actors, we cannot create a ‘one size fits all’ solution.

There have been attempts to create ‘one size fits all’ kind of solutions to environmental degradation by embedding ‘green’ into products. This has been driven top-down by Northern firms and countries, through four main routes: (a) through products, by pushing for the use of greener inputs (e.g. organic fertilizers) and by increasing tariffs to tax ‘virtual pollution’ (e.g. on imports of goods that have high carbon footprint); (b) through processes, using green technologies to increase the efficiency of transactions; (c) by monitoring and evaluating environmental standards and certifications; and (d) by stimulating change in consumer behaviour (e.g. eating less meat). What all these solutions have in common is that they come from top-down perspective of how certain powerful actors ‘value the environment’, rather than considering how, for example, farmers in Africa ‘value the same environment’.

When factoring in the views from the ‘bottom’, critical paradoxes arise. Embedding green into products, raising tariffs due to virtual pollution and changing consumer behaviour will cause a significant fall in GDP and employment rates across Africa and Asia. Since many African and Asian countries depend on exports of natural resources and agricultural and mining commodities. Also, pushing the need to use highly complex green technologies raises issues of affordability, access and adaptability to low-resource farmers who lack technical know-how. This could eventually lead to their exclusion from global value chains.

Thus, delivering a carbon neutral regime, needs to begin with the bottom billion, where the impact is most felt. This requires both bottom-up and top-down strategies to synergize, through gaining a value chain-level understanding of how different actors ‘value the environment’.

#Agriculture #EnvironmentalUpgrading #GVCs #Sustainability

© 2019 by Centre for Business and Development Studies

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