Oxfam calls on food and agriculture companies to treat living income of farmers as a human rights issue

Week of 18 October 2021

Oxfam calls on food and agriculture companies to treat living income of farmers as a human rights issue

Our key takeaway: Although paying a living income to farmers is a growing topic of conversation for food and agriculture companies, it is difficult to implement well in practice. Companies should treat living income as any other salient human rights topic, including by structuring fair procurement practices, prioritising the most vulnerable people and building space for their voices, breaking down barriers to action, and collaborating with others.  

Oxfam International published ‘Living Income: From Right to Reality – Essential Issues and Recommendations for Business’—the first of a series on Briefings for Business on Inequality in Food Value Chains—to outline and provide guidance on “essential issues companies confront” when seeking to ensure a living income for farmers in their supply chains:

    • Take a human rights-based approach to living income (LI): Companies should treat LI (defined as “the net annual income required for a household in a particular place to afford a decent standard of living for all members of that household”) as a human rights issue. What does this mean in practice? Companies should integrate LI into their human rights diligence (HRDD) approach alongside other salient issues, applying all steps of the HRDD methodology. Taking a human rights-based approach to LI also means identifying the farmers most vulnerable to adverse impacts by the company and ensuring in particular that they benefit from LI interventions (many of which, Oxfam reports, “tend not to be the ones to gain from most living income interventions.”)
    • Examine and adjust your own business practices: For example, companies should meaningfully “integrate living income in procurement practices” by addressing topics like contract length, price guarantees and premiums, and direct trading relationships that might have a negative impact on a farmer’s ability to earn a living income. To achieve this companies can analyse how their own “supply chain structure and procurement practices are affecting value distribution and farmer incomes”; “setting living income key performance indicators (KPIs) for procurement managers and include living income in procurement costs”; and “establishing more direct and long-term trading relationships with farmers.” Likewise, pricing interventions are valuable strategies to achieve a living income: “Low and volatile farm gate prices impede farmers’ ability to earn a living income. Pricing interventions can help shift value to farmers and enable higher incomes but require more industry support to succeed.”
    • Empower farmers and create space to hear their voices and perspectives: Oxfam calls on companies to “level the playing field” between smallholder farmers and major purchasers and retailers by identifying ways to bring farmer and worker voice into procurement and negotiations. One way to do this is by “making living income gender-inclusive,” e.g. by targeting women as a key beneficiary group of LI interventions, working with women’s organisations when designing strategies and conducting an analysis of gendered elements that might bar women from earning a living wage. Another recommendation by Oxfam is for companies to increase farmers’ bargaining power by supporting the strengthening of farmer organisations and cooperatives, actively bringing in farmers and their representatives into living income strategies. Oxfam also points out that this cannot rest on the shoulders of single companies and farmers alone. Rather, living income efforts need to be transparent and collaborative, and require action and partnership by multiple actors within and along the value chain ranging from farmers to companies to governments to civil society.

For more, see Oxfam International, Living Income: From Right to Reality – Essential Issues and Recommendations for Business (October 2021)