Better livelihoods

Our commitment

By 2020 we will engage with at least 500,000 smallholder farmers and 75,000 small-scale distributors in our supply network.

Our performance

We have revised our target on smallholder farmers to focus on improving the quality of their livelihoods. As far as small-scale distributors are concerned, we engaged with 45,000 in India in 2011.

What matters most

Engaging smallholder farmers in our supply network.

  • 0 achieved
  • 2 on-plan
  • 0 off-plan
  • 0 missed target

Our approach

Unilever generates wealth and creates jobs in the communities where it operates. Employees, governments, suppliers, investors and many others benefit economically from our activities.

The nature of our business in developing and emerging markets means that we work with millions of small-scale businesses. The majority are smallholder farmers and small-scale distributors who sell our products. Most smallholder farmers grow their crops on less than two hectares of land. They make up 85% of the world’s farmers. Often cut off from access to training and education, they lack knowledge of the techniques that would help them maximise their incomes. If we help smallholder farmers improve their practices, by giving them access to higher-quality seeds, training and fertilisers, they can often double or even triple their yields.

Unilever has been piloting a number of initiatives with smallholder farmers to scale up certification and connect new sources of raw materials from smallholders into our supply chain.

At the other end of the value chain our products reach consumers through a network of millions of small-scale retailers and distributors. This makes a significant contribution to our business. These activities provide new sources of income for people who live in areas where opportunities for work are often few and far between.

Helping smallholder farmers

7.1Our goal is to engage with at least 500,000 smallholder farmers in our supply network. We will help them improve their agricultural practices and thus enable them to become more competitive. By doing so we will improve the quality of their livelihoods. (Target revised 2012.)

  • Detailed analysis of our supply network prompted us to revise our target.

More on helping smallholder farmers

Detailed mapping of our sourcing networks shows that we have around 1.3 million smallholders linked into our supply chain. We have revised our target in the light of this information (see 7.1 above).

Instead of just ‘linking’ farmers into our supply chain, our new target commits us to improve the livelihoods of at least 500,000 of them and provide the evidence that our intervention has had a positive effect.

We recognise that it is difficult to provide evidence of improvements in livelihoods. We will invest time in 2012 to develop an appropriate methodology to do this.

Our aim is to work with our partners to raise the skills and productivity of smallholders so they increase their income while we benefit from sustainably sourced crops and security of supply.

We have made a good start. Working with others, we had helped to provide training on better agricultural practices to over 300,000 smallholders by the end of 2011. The majority were tea farmers but we also trained over 10,000 cocoa farmers. We now need to establish whether this has increased their income and improved their livelihoods.

Scaling up

general shot of field-page 11 left-218Together with Rainforest Alliance, the Kenya Tea Development Agency and The Sustainable Trade Initiative (IDH), our Lipton tea brand supports farmer field schools in Kenya. By the end of 2011, we had trained 250,000 Kenyan smallholder tea farmers – around half the total in the country.

Nearly 45,000 more have also been trained in Rwanda, Sri Lanka and Indonesia and in a separate initiative in Turkey, Lipton reached another 5,000 smallholders.

Supporting small-scale distributors

Shakti, our door-to-door selling operation in India, provides work for large numbers of people in poor rural communities.

7.2We will increase the number of Shakti entrepreneurs that we recruit, train and employ from 45,000 in 2010 to 75,000 in 2015. We operate similar schemes in Bangladesh, Sri Lanka and Vietnam which we are also committed to expanding.

  • 45,000 entrepreneurs (‘Shakti ammas’) were selling products to over 3 million households in 100,000 Indian villages in 2011.

More on supporting small-scale distributors

During 2011 we strengthened the programme, continuing to train our entrepreneurs and improve our ways of working. Following a pilot in 2010, we extended the model to men by introducing ‘Shaktimaans’. These are typically the brothers or husbands of existing female entrepreneurs (‘Shakti ammas’) who sell our products by bicycle to surrounding villages. By the end of 2011, the number of Shaktimaans supporting our Shakti ammas had risen to over 30,000.

We also partnered with the State Bank of India on a pilot project to bring banking services to low-income people. Run in Maharashtra and Karnataka in 2011, it enabled 12 Shakti ammas to help villagers open 1,000 bank accounts.

Future challenges

We have considerable experience of training smallholder farmers and know how complex the task is. But we have no easy answers on how to do this at scale.

We have learnt that three factors need to be in place for long-term success:

  • a strong business case: smallholder ventures with clear economic merit are much more likely to succeed

  • the right operating model: working with the right partners who know how to engage with smallholders

  • evidence of improvement: to sustain our effort we need to understand whether the training and support we provide is having a positive effect on livelihoods.

In 2012 we will be selecting future projects with smallholders which meet all three of these criteria.