Investing in female smallholder farmers is smart economics

Thanks to Base Titanium’s inclusive business model working with cotton farmers in Kenya, smallholder Charity is able to earn enough money to support her family. Photograph: Business for Development

By Mark Ingram CEO, Business for Development

Empowering women not only affects them individually, but their families, communities and societies as a whole

As the sole breadwinner for her family, and a female smallholder farmer in Kenya, life is tough for Charity. She survives by harvesting crops to sell in the local market, making about $500 (£400) per annum. That is enough, just, to feed her three children and get them to school. If a disaster such as a drought were to strike, Charity and her family would find themselves in a dire situation.

Charity’s situation is not unique. As a female smallholder farmer, she is one of the most vulnerable people in the world. The market has essentially failed her. Most female smallholder farmers either work unpaid on family farms, as paid or unpaid labourers on other people’s farms, or supplement their income by working as vendors, food processors and cooks. These women have little access to strong, consistent relationships with buyers, finance and agronomic training, are often excluded from decision-making, and do not have equal access to land nor farmer extension services and inputs such as seed.

Yet, women are an essential component of agriculture in developing countries, comprising an average of 43% of the agricultural labour force. Finding solutions for these farmers means finding solutions to address food security, climate stability, biodiversity conservation and rural employment. It has been estimated by the Food and Agriculture Organization that if women globally had the same access to productive resources as men, they could increase the yields on their farms by 20-30%, thereby increasing incomes, decreasing hunger (12-17%), and raising the total agricultural output in developing countries by 2.5-4%.

From our work in creating inclusive agribusinesses in countries such as Kenya, Laos, Papua New Guinea and Indonesia, we have observed that female farmers have immense potential to play a crucial role in the food value chain. They are the repositories of agricultural knowledge and often know the best time to plant, manage and harvest a crop. Companies wanting to set up inclusive businesses with smallholder farmers are recognising that if women are provided with the right opportunities, they can become important and knowledgeable players in sustainable agriculture.

Thanks to an inclusive business formed with Base Titanium to supply Cotton On Group with ginned cotton, Charity is now economically empowered to invest in her family, and is participating in the governance structure of the inclusive business.

Investing in women like Charity, and narrowing gender equality gaps, is smart economics. Women usually play a managing role in their households, so their empowerment directly benefits those who depend upon them. Research shows that when women control additional income, they spend more of it (about 90%) than men (about 40%) on food, health, clothing and education for their family. This is called the “multiplier effect”, a term used by economists to demonstrate the impact that investing in women not only affects them individually, but also their family members, communities and societies as a whole.

It has long been recognised that in the coming years, agribusiness will face increasing market challenges with declining availability of arable land, climate change and a decreasing traditional labour force. Businesses that look to close the gender gap can open up new business opportunities and strengthen value chains. In Ghana, for example, women have passed on to their daughters the technique of manually harvesting and processing shea nuts into butter for generations. The Northern Ghana Shea company is working with 4,000 of the 90,000 shea butter farmers in Ghana. The company solidifies their buying relationship and guarantees an ethically produced product for export, while providing training in improved butter production processes and establishing an aggregation and market point for small-scale shea butter producers within their catchment area.

In rural Vietnam, mushroom social enterprise producer Fargreen works predominantly with women farmers. These women stay home and take care of the farms while their husbands typically work in the city to gain more income. Fargreen sets up a network of women farmers who collect rice straw from their own paddy fields and produce high quality edible mushrooms in an eco-friendly, closed-loop system. After the mushrooms are harvested, they are shipped to be processed, packaged and delivered to customers. Throughout the value chain women are employed. The women have increased their incomes by 50-70% and are provided with opportunities to work up the value chain and be more respected in their community.

As an inclusive business broker, I am always looking for ways to improve business outcomes and ensure the greatest development impact. It is clear to me that if food and agribusiness want to achieve this, an intentional investment to economically empower women is required. This not only contributes to a business’ labour force and value chain, but also can result in better incomes, a shift in cultural perceptions of women, economic empowerment, better health, education, security and freedom.

Content on this page is provided by Business Call to Action, sponsor of the The Guardian Business and the Sustainable Development Goals Hub