The 21st Century Corporation: A call to recognise the crucial role of smallholder farmers

by | Mar 27, 2023 | Personal Insights, Sustainability | 0 comments

The shifting landscape of the 21st-century corporation has brought with it an urgent need to address the inequalities and inefficiencies of supply chains involving smallholder farmers. For too long, these farmers have been on the losing end of an unbalanced system, facing exploitation and poverty while corporations reap the benefits. It’s high time for businesses to take responsibility and play a proactive role in transforming these supply chains for the betterment of all stakeholders involved, especially the smallholder farmers who form the backbone of our global food system.

Evolving corporate purpose and balancing stakeholder interests

The McKinsey & Company podcast, “The Corporation in the 21st Century“, emphasises the importance of evolving corporate purpose and balancing stakeholder interests. Sara O’Rourke, a McKinsey partner, highlights this by saying, “Businesses have a broader role to play in society, beyond just generating shareholder returns. They need to think about the broader ecosystem in which they operate and the impact they have on the environment, employees, customers, and communities.” But what does this mean for supply chains that include smallholder farmers? Let’s start with finally recognizing and rewarding the crucial role these farmers play in feeding the world and ensuring their voices are heard in corporate decision-making processes.

Leveraging intangible assets and technology

The rise of intangible assets, such as data and intellectual property, presents an opportunity for corporations to drive innovation and create value in supply chains. By investing in technology and data-driven solutions, corporations can help smallholder farmers access better inputs, enhance their productivity, and reduce post-harvest losses. Moreover, these investments can improve transparency, enabling consumers to trace the origins of their food and make more informed choices. As podcast guest Sven Smit, a senior partner at McKinsey, says, “In the 21st century, the ability to innovate and create value is increasingly linked to intangible assets, and this will have profound implications for how companies engage with their supply chains.”

Building trust with smallholder farmers

Trust is another critical factor outlined in the podcast, and it’s sorely lacking in supply chains involving smallholder farmers. Corporations must prioritize ethical behavior and transparent communication to build trust with these farmers. By ensuring fair pricing, ethical sourcing, and prompt payment, companies can cultivate long-lasting relationships with smallholder farmers, leading to mutual benefits and sustainable supply chains. Podcast guest Dame Vivian Hunt, a senior partner at McKinsey, stresses the importance of trust, saying, “The trust equation is essential for businesses in the 21st century. Companies need to build trust with all their stakeholders to succeed.”

Addressing inequality and empowering farmers

Addressing inequality is no longer a choice but a necessity for the 21st-century corporation. In the context of supply chains with smallholder farmers, this means actively promoting diversity and inclusion at all levels, from decision-making to procurement. It also involves empowering farmers through education, access to financial services, and fair labor practices, thereby enabling them to break the cycle of poverty.

Collaborating on climate change: A shared responsibility

Finally, managing climate change risks is a critical area where corporations and smallholder farmers must collaborate. By incorporating sustainable practices into their business models, companies can mitigate the impacts of climate change on supply chains, while also supporting farmers in their transition to more climate-resilient and eco-friendly practices.

Let’s embrace a more sustainable future for all

The 21st-century corporation must recognize that the wellbeing of smallholder farmers is not just a matter of social responsibility, but also a key driver of long-term business success. By embracing change, prioritizing stakeholder interests, and addressing inequalities in supply chains, corporations can ensure a brighter, more sustainable future for all.


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