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Abstract
Many food and agribusiness multinational enterprises have committed themselves to source close to 100 percent (certified) sustainable agricultural commodities -cocoa, coffee, bananas, fish and cotton- to largely be produced by smallholders in the years to come. Their aim is to secure a (long term) sustainable commodity supply in ways that improve the livelihoods/standard of living of the smallholders, while retaining competitive advantage. This inclusive sourcing strategy goes beyond the corporate social responsibility (CSR) strategies that F&A MNEs adhere to and that are often aimed at expressing corporate philanthropy in order to obtain a social license to operate. Furthermore, current widely applied sourcing strategies are based on tripartite sustainable certification schemes and applied as collective international standards . They predominantly focus on environmental aspects of production rather than on improving smallholders' livelihoods. F&A MNEs traditionally source commodities mainly through a network of selected large traders and exporters (intermediaries) on a transaction basis, making improvement of smallholders' livelihoods challenging.
The problem is that smallholders in developing and emerging economies face productivity, product quality and transactional constraints in their effort to access high value-adding food markets. To overcome these constraints, smallholders need to become more advanced. However, they often need resources, capabilities, and infrastructures to meet effective market demands and to capture value. The assumption is that food and agribusiness multinational enterprises can help improve smallholders agriculture from a business perspective. Moreover, the inclusive commitment of F&A MNEs corresponds to the increasingly call upon corporations to play a more proactive role in contributing to global sustainability challenges like, for example, the United Nation Sustainable Development Goals 2015-2030. This is why F&A MNEs need other sourcing strategies and models.
This dissertation therefore poses the following main research question: ‘How can F&A MNEs best include smallholders in their sourcing model in order to take social responsibility for a large scale sustainable and more equitable supply, while retaining competitive advantages?’ More specifically, how F&A MNEs can source from smallholders to secure sustainable supply in a way that improve smallholders’ livelihoods?
