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Global CSR versus African farmers? UNDP Initiates Program Linking Sudanese Hibiscus Farmers to International Importers

Summary

By: Maja Bott, UNDP Sudan

Sudan is renowned for producing the best quality of hibiscus, widely used as major ingredient of fruit teas. In fact, the total volume of production in 2008 was estimated at 18 thousand tons. However, the share in the total value-added of hibiscus for producers, mainly poor and rural women, is on average below 30%…

The Hibiscus Value Chain Initiative is an excellent opportunity to empower poor female farmers, particularly in the Kordofan and Darfur regions. The initiative hopes to bridge a number of gaps; build a more transparent and inclusive supply chain systems which are not only profitable to the companies, but that also meets the UN Global Compact Standards and principles; and demonstrate a true corporate leadership on developing inclusive markets.

While there is much talk about adherence to the UN Global Compact principles on Corporate Social Responsibility (CSR) among European and American retailers, importers are often ignorant about how the profit is shared along the value chain and about the situation of the primary producers and labor involved in the process. In the African agricultural sector, including hibiscus, foreign importers purchase their goods from African wholesalers who collect produce from local smallholder farmers via extended trader networks, with little transparency throughout the supply chain.

With growing demands from consumers, international brands are getting worried about bad press that might arise from a lack of transparency within their supply chains. Thus in order to ensure compliance with their CSR-policies and to preserve their reputation, these companies need to know more about the farmers and labor involved in their supply chains, including: How are their living conditions? Are children working among them? Are local companies complying with local labor laws, environmental and hygiene standards?

Moreover, increased endeavors to promote and facilitate stable contracts between farmers’ groups, local wholesalers and international importers are a top priority for poverty reduction schemes in Africa due to the risk of African smallholder farmers being replaced as suppliers by mechanized farming schemes. At present, however, international buyers often utilize a procurement system which consists of buying directly from large mechanized farming schemes that employ farm labour and provides the required certificates, even if the labor force lives in much worse conditions than most of the smallholder farmers. This strategy can go as far as switching purchases from Africa to Asia.

The approach of UNDP and its partners is to use an already functioning value chain to facilitate partnerships with farmers groups, local wholesalers and international importers as lead companies for contract farming, including microcredit and draught insurance provisions, in order to stabilize prices, volumes and quality, and thus to reduce risks for all actors within the supply chain. Advocacy for a better enabling business environment for the hibiscus industry is equally part of the overall approach.

Moreover, as a result of a joint hibiscus value chain assessment with IFAD, Practical Action, the Ahfad University for Women and government counterparts, UNDP Sudan is preparing an initiative to facilitate contract-farming, to develop better production and management capacities among female farmers and to advocate for tax reductions. Two international importers have already expressed their interest in collaborating.

This partnership connection was made using the business.un.org platform.

For more information, please contact Maja Bott, Economic Adviser, UNDP Sudan