2024 Healthcare, Consumer & Wellness Magazine

10 Healthcare, Consumer &Wellness • 11 economic value chain. Most have smartphones to access better advice at each stage of the process. Prasad Jeewantha, a 33-year-old Sri Lankan smallholder, agrees. He farms okra, sesame seeds, mung beans and cucumbers during a three-month annual window on a plot his family has farmed for generations. He is the first in his family who can access knowledge beyond his village, having completed an IT course with a local NGO. However, while he searches for information on the internet, he is not confident about putting it into practice because there is no financial margin for error. He relies on a loan from a village middleman to purchase all the seeds and equipment he needs at the beginning of each sowing season. The same middleman then purchases his entire output (often discarding 20% that is not up to scratch), before selling it on at a roughly 40% markup. If the crop fails, smallholders lose the collateral secured against the loan. Jeewantha never makes enough money to re-invest. In December 2023, he also lost his father-in-law who was killed by an elephant while watching the smallholding overnight. “I work as a laborer between sowing seasons,” he explains through an interpreter. “By the beginning of the next sowing season, I’ve no money. All the farmers work together to clear each other’s land for free.” Maria Grazia Martinez, Latin America Sales Head of Healthcare, Consumer & Wellness, for Citi Treasury and Trade Solutions says that a whole- society approach is needed to drive meaningful change. This starts with governments and multilaterals at one end, through financial institutions and corporates to civil society at the other. “As end-consumers, we all have a role to play when we consider what food we buy and where from,” she comments. Both Bidakar and Martinez highlight that multilaterals are playing a growing and crucial role in enabling financial institutions to increase their exposure to the smallholder sector through credit guarantees. Citi has partnered with the International Development Finance Corporation on a $15 million working capital solution for Kenyan- based One Acre Fund, which supplies smallholder farms with everything they need to grow more food. Since 2015, participating farmers have earned, on average, nearly 50% more than their non-participating peers. Then there are multilateral research organizations like CGIAR, a global partnership dedicated to a food- secure future. Its executive managing director, Dr. Ismahane Elouafi, emphasizes that sustainable agri- food systems will only be possible by putting farmers and their families first. “At CGIAR, we work directly with communities to understand their needs,” she says. “We use this as the basis for solutions that protect natural resources and help farmers.” One example is CGIAR innovation funds, run through community-based organizations across Africa, Asia and Latin America. Villagers pool their resources to provide loans to one another and reinvest back into the community. In Kenya’s Nyando basin, the number of households involved in one such fund has quintupled over the past decade. Bidarkar is optimistic that change is possible, in large measure because of a growing awareness about the work needed to be done. “That’s always a good starting point,” he concludes. “What we need now is a massive infusion of scale in our approach.” Securing nutritional food sustainably Raising global standards requires creative thinking, innovative financing and a farmer-first approach. The phrase ‘you are what you eat’ is almost two centuries old. And for many of us, it is a lesson we have yet to heed given the world’s growing consumption of unhealthy ultra-processed foods. Then for others, there is the issue of food insecurity: the UN’s Food and Agriculture Organization reports that 29.6% are anxious about where their next meal will come from. Overcoming food insecurity and improving nutrition for all is complex and challenging. And one of the greatest challenges concerns farmers with plots below two hectares in size. These smallholders not only account for around one third of the world’s food supply but are also big contributors to global greenhouse gases. Together, agriculture, forestry and land use create almost one quarter of the total emissions. Yet only 3% of climate financing is allocated to food security. And according to UN data, just 1.7% of that goes to smallholders. As Parag Bidarkar, Asia North & Australia and Asia South Sales Head of Healthcare, Consumer & Wellness for Citi Treasury and Trade Solutions (TTS) explains, “it’s a hard circle to square. On the one hand, smallholders cannot afford to invest in better agricultural methods to improve yields, or nutritional quality because their finances are so precarious.” “On the other,” he adds, “there’s only so much that financial institutions can do on a stand-alone basis because of hurdles relating to issues like loan collateral and KYC (Know Your Client) for so many small borrowers on such a large scale.” As a result, smallholders lack access to quality inputs at every stage of the process: from understanding what crops to plant to receiving timely advice about sowing and harvest timelines, weather forecasts, effective storage and ultimately how much to charge for their output. Piecemeal solutions are often ineffective. A smallholder might be enrolled on an individual corporate program that provides them with higher quality seeds and fertilizer, for example. But the benefits will be wasted without the right information about changeable weather patterns too. There are a few agricultural commodities where advances have been made, most notably coffee and chocolate. Pressure from affluent consumers in advanced economies has improved income levels for many smallholders through certification schemes such as Fairtrade or Organic. Bidarkar highlights technology as one means to achieve a more effective ‘farmer-first’ approach, enabling smallholders to capture more of the Sustainable agri-food systems will only be possible by putting farmers and their families first” 3% Climate financing directed towards food security Corporate Finance & Treasury teams should partner with banks who understand the agri- commodities space and are in active discussions with various stakeholders in the ecosystem. At Citi, we realize that solving the challenge of building sustainable supply chains is not only crucial in terms of the environmental benefits but also provides enormous business value for our clients and helps contribute to their ESG goals. We leverage our global footprint, deep expertise and partnerships to provide customized solutions that drive success across a range of KPIs.