Tracing food supply chains in challenging times (and places)

This blog post was originally published by Food System Stories and was co-written by Dr. Janina Grabs and Dr. Federico Cammelli.

The expansion of commodity production is one of the largest drivers of tropical deforestation across the globe. In response, buying companies have adopted zero-deforestation commitments and other forest focused supply chain policies (FSPs). Such policies hold the potential to reduce deforestation by excluding deforestation-linked products from the market and thereby reducing the incentives to expand production in forested areas. However, in practice, these policies are hard to implement. When they are successful, they may leave behind poorer producers who are less able to comply with no-deforestation restrictions or take advantage of policy loopholes. ETH’s Environmental Policy Lab, led by Prof. Dr. Rachael Garrett, a member of the World Food System Center (WFSC), seeks to understand the effects of these policies at achieving conservation goals and altering human wellbeing in the targeted regions. To understand different perspectives about these policies and how they may affect producers on the ground, we (Federico Cammelli, Sam Levy and Janina Grabs from the Environmental Policy Lab) conducted semi-structured interviews with representatives of groups involved at all stages along the beef cattle and palm oil supply chains in the Brazilian Amazon and Indonesia with the aid of funding from the WFSC.

Getting our feet dirty in Brazil

We conducted our fieldwork in the Brazilian Amazon entirely on the ground before the pandemic began. In Brazil, our goal was to understand the complexities of FSPs in the Brazilian cattle sector, where supply chains are often long and complex – cows usually travel between several farms before they are sent to a slaughterhouse. This required the identification, mapping and interviewing of all formal slaughterhouses sourcing from our study area, as well as tracing producers selling to these slaughterhouses all the way back to their farms (and the farms of the producers they buy from) – making our way across challenging terrain.

Whenever possible we interviewed suppliers and buyers that traded with each other in order to gain different perspectives on the same supply chain relationship. This method allowed for surprising insights. For example, in the remote town of Ulianópolis, many smallholder farmers used to sell for slaughter to a local butcher. More recently, they had switched to a fattener who was laundering (the process of making deforestation-linked production appear to be deforestation free) the smallholders’ cattle on his property pretending it was born and raised there, and then selling it for slaughter on the market regulated by FSPs. The local butcher lamented that he was going to be outcompeted by supermarkets because many other smallholder farmers had largely abandoned cattle ranching and had rented or sold their land (reportedly because they were forced to) to larger cattle and soy operations, the latter seeking arable land on which they could expand production in compliance with FSPs requirement for soy and cattle.

By interviewing many individuals at different stages in the cattle supply chain we were able to capture the different ways farmers can be affected by (and try to avoid) FSPs, indicating that the livelihood impacts of these policies will potentially be affected by where you are in the supply chain. During fieldwork we also collected a large farm-level dataset that we are using to test this and many other potential channels in which FSPs may affect farmers’ livelihood.

Conducting ‘field’-work in Indonesia under Covid-19 conditions

As luck would have it, our fieldwork in Indonesia was planned for March to May 2020 – just when Covid-19 became a global concern that shut down international flights and imposed strict stay-at-home orders. While I was lucky enough to meet with my collaborators, make first connections and venture out into the field in East Kalimantan (on the island of Borneo) to meet with palm oil farmers, after 3 weeks my in-country adventure came to an abrupt end as borders started closing and all foreign residents were called home.

This meant that my interviews, like so much else, moved into the virtual realm. Still, thanks to the relationships built in the field, remote-based interviews worked surprisingly well and allowed to capture the truly global nature of supply chains, with interviewees’ home bases covering the United States, Europe, Malaysia, Singapore, as well as Indonesia. Of course, it needs to be said that such methods have a bias against interviewees who can’t be easily reached electronically – which means we are itching to return to fieldwork in order to hear more from smallholders directly, rather than only via their representatives and advocacy groups.

One central insight from these interviews is that FSPs in Indonesia coincided with a period of low palm oil prices and little expansion pressure by large growing companies, which meant that interviewees acknowledged a general trend toward lower deforestation rates that may have been influenced by the supply chain commitments. Still, many plantation companies felt that such policies are unfairly imposed on them, and likened this pressure (much of which comes from European companies) to past experiences of colonialism. As one representative argued, “We are seen as the loser and victim of neo-imperialism, neo-colonialism. In the past they used weapons, now they are using trade”. This is a common view in forest-rich countries of the Global South that also contributes to diplomatic tensions. New framings, such as ‘forest-positive’ commitments and initiatives, currently aim to change this narrative to identify greater common ground between environmental and economic development objectives.

Comparing insights across continents

As different as these supply chains and contexts are, we also found that both are struggling to successfully integrate smallholder farmers. In Brazil the FSPs for soy and cattle were potentially weakening the smallholder farmers’ position in two ways: forcing them to launder their cattle before slaughter and lowering their bargaining power and increasing pressure for land concentration. Many smallholder farmers had left, potentially increasing deforestation pressure at the forest frontier and reducing the overall FSP effectiveness. In Indonesia, smallholder farmers often lack both the resources and knowledge to identify the areas on their land that international buyers require to set aside for conservation. This has limited the reach of palm oil FSPs, as the question of who will pay for the capacity building of thousands of mills and millions of smallholder farmers – who account for 40% of Indonesia’s production area – remains unanswered.