Fairmatch Support

Blog Herman uit de Bosch – managing director FairMatch Support

‘Sellers markets and sustainability; the need for new instruments

Four and a half years ago we started FairMatch Support to create access to markets for producers in developing countries, as well as to create sustainable supply chains. We used codes and certification schemes to organise farmers and linked them to those markets that were interested in sustainable certified supply. So far we have been quite successful. Quite a number of farmers got certified and got access to specific markets in European retail.

Now a silent revolution is taking place.  The market is changing rapidly from a buyers market into a sellers market  in a range of commodities. Due to the upcoming middleclass in BRIC countries, more people can afford good food. In Brazil for instance, an upcoming new middle class of 65 million people has been counted.  Demand is increasing rapidly.

There for,  our work is changing from getting farmers to markets,  into getting buyers well connected to farmers. This is creating new opportunities for farmers. Now there is a more genuine interest in their product with prices levels  in which investing becomes interesting again.

What does that mean for sustainability? In fact there are huge opportunities for sustainable production systems, but the systems we have used so far to promote it have limited use in this changing environment.  So far we used codes and certification systems based on requirements to fulfil external audits to get access to consumers. In an upcoming competitive sellers market this is deteriorating the already declining buyers position of the western hemisphere even more; why sell your product  to the over demanding west if you can get same prices at less demanding markets?

We have to re-invent tools to stimulate sustainability, and combine it with the current necessities: productivity and quality improvement. Productivity has been low in developing countries due to decades of low food prices so investment in farming was not interesting. Due to that, low income, no access to schools, child labor etc. a lot of “non sustainable issues” were a logic consequence and part of the system.

We have to adjust the current certification systems into productivity improvement and quality improvement systems. Only  that way we will stimulate sustainable production systems, increase the farmers income,  so he/she  can pay for school fees etc.

The companies that invest in those settings in relation to their supply chains, will probably be in a better position to compete. Because:  at buyers level they create links that are interesting for both suppliers as well for themselves. ‘

Herman uit de Bosch, 21/10/2011

African Cashew Alliance Conference
On Tuesday, September 20^th, the sixth African Cashew Alliance conference started in Banjul (Gambia). What once began as a small meeting with 23 stakeholders,  6 years later is one of the leading events in cashew. About 350 people from the industry, from Vietnam, India, Brazil, Europe and Africa, are meeting to talk about the present, the future, to learn from each other, inspire each other and seek for partnerships.

Local processing
The cashew sector in Africa has changed dramatically in recent years and is about to make some major steps forward. This is one of the first conclusions we can draw, after the first meetings during the conference this week. Until recently, only 10% of cashew production from Africa, was actually processed in Africa. Local processing took place in factories with an average production of 1,000 tons, almost entirely manually. The remaining 90% of processing cashew went to Asia.

Large African factories
With rising wages in Asia, Africa recently invested in mechanical processing. The coming years large factory plants will start, with capacities of 15-30 thousand tons per factory. Expectation are  that Africa will be exporting processed cashews to Asia and Brasil within five years.

New chances for African farmers

Larger plants will affect the need for constant supply and good relationships with farmers.  Also, increased productivity is essential due to increasing demand. Higher revenues at constant prices will result in a more income for farmers. A unique opportunity to work wíth the industry to improve incomes. Not out of a moral point of view, but out of economic necessity. Africa is increasingly important for global food production, which means new opportunities for Africans. The 20,000 cashewfarmers FairMatch Support works with, are ready for this challenge.

Our cashew- supplychain: from producers to retailpartners together with team FMS at ACA 2011 conference

Recently FairMatch Support was involved in Sierra Leone with setting up “Jula Consultancy Ltd ‘. This organization focuses on establishing sustainable local cocoa and coffee supply chains. Jula gives advice to traders, and training and organizing of farmers.

Jula thus contributes to the increase of traceability in agri-chains. The company is working on increasing sales and quality of production and processing of agricultural products. It generates employment in Sierra Leone in two ways. First, the agricultural sector becomes more interesting as a source of income for young people, through increased and affordable products. In addition: Previously consultants from other countries where needed, Jula now offers local specialists. On the short term this will lead to cost-reductions and building capacity in organizational development, for example certification processes, in Sierra Leone.

FairMatch Support assists Jula with training and coaching in various fields, including day-to-day management and content of the consultancy services.