Commodity living income strategy white paper
photography Jjumba Martin
In the contemporary agri-food sector, a profound challenge undermines the socio-economic stability of smallholder farmers globally: the pervasive inability to secure a living income. The primary obstacles to achieving this are multifaceted: limited arable land, suboptimal agricultural productivity, over-reliance on monocultural practices, constrained access to essential agricultural inputs, and weak integration with profitable market systems. Moreover, the inequitable distribution of value within agricultural supply chains exacerbates these issues, marginalizing farmers and curtailing their ability to influence market trends, which perpetually ensnares them below a living income threshold.
This White Paper outlines a data-first intervention strategy, designed by Heifer International and Fairfood International, aimed at achieving living incomes in commodity supply chains. It is founded on principles of fair value distribution, transparency, and data-driven decision-making. It advocates a two-pronged approach: first, assisting producers, organized producer groups (or “cooperatives”), and their supply chain partners in understanding their cost-efficiencies and living income gaps; second, leveraging this data to design holistic intervention strategies tailored to local sustainability needs. To implement this approach, Heifer International and Fairfood International have developed two key instruments: the Living Income Price (LIP) and Cost-Yield Efficiency (CYE) methodologies.