Much of the work to improve the performance of commodity sectors with large numbers of smallholders like coffee, tea and cocoa has been anchored in specific supply chains with voluntary standards. Meanwhile, the performance of the sector as a whole
– measured in global reputation for quality, farmer share of end value, or capacity to withstand shocks – may actually worsen. What would it look like to take a “sector transformation” approach? How can sector changes complement work done through supply chains? Bill Vorley of the International Institute of Environment and Development and Jan Willem Molenaar of Aidenvironment shared recent research into 5 sectors and a framework that developed for guiding a sector wide approach.
The sector transformation question was seen as very critical – could we be more effective in changing the way a whole sector operates. Desired outcomes of sector transformation may include:
- Capacity of the sector to generate and retain a surplus, to reinvest in quality, productivity [and social rograms], and in order to be independent of sporadic CSR and donor funding
- National reputation for product quality on world markets, with associated preference and premium
- Some buffer/risk management against price volatility and other shocks such as drought
- Capacity for product differentiation eg on premium quality or sustainability
- Market power with producers, reflected in retention of a fair share of end value
- Market access and reasonable terms of trade for remote and unorganized farmers
- Resistance to political interference and rent-seeking
The audience did wonder how this really different from a roundtable or landscape approach. Of course there is commonality, but the key differentiating factor to a sector approach is the focus on addressing country wide structures and polices for a crop. Some key questions:
- Does a single crop focus miss the need to support framers in a whole farm approach? Does it reinforce vulnerability?
- This involves significant engagement of government – who is going to take that on?
- Who has the influence to convene actors at this level?
- How do certifications interact with a sector approach?
Finally though was that this is a very helpful framework and orientation. Next would be to think and learn more together about what specific mechanisms could be drawn from existing good sector governance examples and about process approaches to work on sector issues in new sectors.
