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By Clarissa Baldin & Zachary Bleicher

“The private sector increasingly is the engine of growth in rural areas. And growth in the agricultural sector is twice as effective in reducing poverty as growth in other sectors.” – IFAD President Kanayo F. Nwanze, 18 June 2012, Rio de Janeiro, Brazil

IFAD President Kanayo F. Nwanze and UN Global Compact
spokesperson Tim Wall at the forum in Rio.

The United Nations Global Compact hosted the Rio+20 Corporate Sustainability Forum from 15-18 June 2012 in Rio de Janeiro. Under the theme, ‘Innovation and Collaboration for the Future We Want,’ the event brought together representatives from the private sector, governments, the UN system and civil society to discuss how to strengthen the private sector’s contribution to global sustainable development.

On 18 June, IFAD held a side event – ‘The Sweet Spot: Cocoa’s Promise of Sustainability, Equity and Profitability for Smallholders and Businesses’ – which explored the dynamics of partnerships between the private sector and smallholder farmers. To jumpstart the conversation, IFAD shared its experience with supporting small-scale cocoa producers in São Tomé and Principe, and linking them up with high-value global markets for organic and fair trade cocoa. 

Uon Sophal, Asian Farmers
Asociation for Sustainable
Development, at the Rio forum.
Smallholders and the private sector
IFAD President Kanayo F. Nwanze opened the event. “Our experience has shown us that every farm, no matter how small, is a business,” he said, “and that smallholder farmers are already part of the private sector. In Africa, for example, small farmers are the most important actors and investors in agriculture.”

A fruitful panel discussion followed. IFAD’s Edward Heinemann said a key factor in the cocoa project’s success was the decision to bring in the private sector very early in the process. The project linked some 5,000 to 6,000 smallholders with high-value markets, even though the farmers had little market experience.

The challenge, said Heinemann, is to change agriculture from being “what people do when they can’t do anything else” into a business activity that allows smallholders to live with dignity and get a fair price for their products. IFAD has been working toward this changed reality for the past 35 years.

Communities transforming
The cocoa experience in São Tomé and Principe showed IFAD – and all of us in the audience – that once the value chain is set and working, communities start transforming. Children are no longer pulled out of school, for instance, and youth stop migrating out from rural areas.

The discussion at the side event included representatives of PepsiCo, the Fair Trade Foundation and the Asian Farmers Association for Sustainable Development. It reflected the idea that success in a business should be defined by its sustainability, which, in turn, should be understood in three dimensions: social, environmental and economic. This means economic benefits for smallholder farmers, environmental benefits to the land under production, and social returns through strengthened communities and empowered individuals.

Such approaches and new partnerships can transform rural communities into the dynamic and vibrant business centres they are ready to become.

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