Sustainability Efforts in Agricultural Commodities



Market-driven change

In order to define and implement better management practices and voluntary environmental and social standards in commodity sectors, major market players—brands, traders, retailers—have become increasingly engaged in supply chain initiatives, niche food and safety certification programmes (e.g., Fair Trade, Rainforest Alliance, Utz Certified, GLOBAL G.A.P.), and various round table initiatives.

This increasing market demand for responsible agricultural products has already brought significant change on the ground and benefits for agricultural communities. At the same time, it has brought new market opportunities for global brands and retailers.

 

However, there are limitations of market demand and there is a need for national institutionalization of best practices

Market-driven demand and development work are not structural alternatives for good local governance, well-functioning legal systems, effective local extension service systems, accessible formal credit structures, national tax and incentive schemes or other public services.

UNDP's extensive experience in rural development and natural resource management indicates that efforts must go beyond certification in order to systemize and scale up commodity programmes and initiatives to mainstream levels. It is necessary to institutionalize the conditions for sustainable production on a national level.

This requires national-level programmes that build capacities, increase market access to sustainable product and provide support for financial mechanisms and policies. Together with national governments, UNDP can link brands and retailers with national programmes to benefit businesses, rural farmers and supply chain actors.

The role of producer country governments

Efforts to date by companies and NGOs to change agricultural production have tended to operate independently of national governments. However, agriculture ministries are the main source of national funds to support farmers and promote productivity, and are the main force behind national farm standards setting. For example, the Ministry of Agriculture in Thailand has an annual budget of $2.1 billion, in Indonesia, $950 million and in Mexico, $5.7 billion. Additionally, national export boards invest heavily in commodity trade and export promotion. These resources are not always effectively used for promoting environmentally sustainable production. However, with increased collaboration and planning, these could be leveraged to promote sustainable commodity production and trade.

The development and implementation of this vision and approach requires new thinking, new structures and new leadership. UNDP, with its unique global structure, mandate and track record can fulfill this role.