Transforming Food Systems with Smallholder Farmers 

In a world where food security remains a pressing issue, smallholder farmers play a pivotal role in feeding communities. Yet, despite their importance, many of these farmers struggle with limited resources, market access, and outdated practices, hindering their potential. This imbalance not only affects their livelihoods but also challenges the entire food system’s ability to sustainably meet growing demands.  

84% of world’s 570 million farms cover less than 2 hectares and provide one-third of the global food 

Addressing this gap is critical—not just for improving the lives of smallholder farmers but for creating resilient, sustainable food systems that can adapt to climate change and shifting market needs. How can we empower these farmers to become key drivers of change in transforming global food systems? A transformation on food production is required that includes practices of these smallholder farmers and consumption patterns of 7.7 billion people. 

Key Takeaways 

• Small holder Farmers- backbone of Agriculture 

• The Role of Smallholder Farmers in Global Food Systems 

• Challenges Facing Smallholder Farmers 

• Opportunities for Empowerment and Transformation 

• TraceX Sustainability Platform 

Small holder Farmers- backbone of Agriculture 

Agriculture forms the basis of rural economy throughout the world. About 70% of world’s poor population live in rural areas with farming as their main source of livelihood. 

According to the World Development Report, agriculture continues to be fundamental for sustainable development and reduction of poverty. The improvement in productivity, profitability and sustainability of smallholder farming is the way ahead. Though globally more than 500 million farmers support the 2 billion people, these farmers have never been a focus with policy makers. Trade liberalization has prevented information and technology transfer to farmers. Small farms can contribute to protecting ecosystems and mitigating risks due to climate changes. 

Today, $400 billion is lost in productivity every year due to degradation of 52%vof agriculture land and due to further degradation, this could reduce global productivity by 12%, thereby increasing the food prices by 30% over the next few years. 

There is a need to transform the agricultural practices not only to reduce the climate impact but also become resilient and make a transition towards nature positive and equitable food systems.

The Role of Smallholder Farmers in Global Food Systems 

Smallholder farmers are individuals or families that manage small plots of land, typically less than 2 hectares (about 5 acres). These farmers play a huge role in the world’s agricultural output, especially in developing regions like Asia, Africa, and Latin America. Unlike large-scale commercial farms, smallholders usually rely on family labor and grow a variety of crops, both for their own consumption and for local markets. They make up a significant portion of the global farming community—it’s estimated that they account for over 80% of all farms worldwide and produce about a third of the world’s food supply. 

Their Contribution to Global Food Production  

Smallholder farmers are essential for food security, especially in regions where they dominate agricultural landscapes. For example, in Africa and Asia, smallholders produce up to 70-80% of the food consumed. They grow staple crops like rice, wheat, maize, and pulses, which are critical for local diets. Additionally, they contribute to the livelihoods of millions of people by providing employment within their communities. Beyond local markets, smallholders also participate in global supply chains, producing crops like coffee, cocoa, and spices, which are integral to global trade. Their role is not only to feed their communities but also to contribute to the global food system that many of us depend on. 

Impact of Climate change on Smallholder Farmers 

Smallholder farmers are vulnerable to climate change because they depend on rain-fed agriculture, lack access to technology and finance and need help in following climate resilient agriculture.  

Many smallholder farmers cultivate coffee, an export crop that is a significant contributor to GDP and accounts for employment of estimated 4 million. The coffee growth is sensitive to rising temperatures and the vagaries of rainfall affecting flowering, fruits and bean quality. High temperatures and drought conditions have impact on biomass production and yields of maize. Farmers depending on rain-fed agriculture face extreme poverty to reduced yields and food insecurity. Hurricanes and torrential rainfall cause a significant crop damage disrupting crop harvest, processing and transportation. The changing climatic conditions also increase the incidence of pests and disease outbreaks. Reduction of crop yields due to crop failure, increased rainfall causing waterlogging of soils, increased diseases in livestock, salinization of irrigation water are few of the activities that lower farm productivity. 

Cereal crops like rice and maize have experienced heat and water stress. According to International Rice research institute (IRRI), rice yields have decreased by 10% for every 1˚C increase in mean temperature. High temperatures also favour development of fungal diseases. The heat stress in livestock results in metabolic changes leading to reduced input feeds and lowering productivity. The water shortage can create water stress in animals. 

There is an urgent need for global community to identify and  adapt measures to help the farmers to reduce the vulnerability due to climate changes and cope with the consequences. 

Challenges Facing Smallholder Farmers 

• One of the biggest hurdles smallholder farmers face is their limited access to markets. Without reliable market access, they often struggle to sell their produce at fair prices. Many smallholders must rely on local traders or middlemen who often buy their crops at lower rates, reducing their income. This lack of access to broader markets means that smallholder farmers miss out on opportunities to compete with larger producers or export their crops. It also makes it harder for them to reach consumers who are willing to pay a premium for fresh, locally produced food. 

• Smallholder farmers often face significant challenges when it comes to accessing resources like financing, agricultural inputs (seeds, fertilizers), and modern technology. Without access to affordable loans or credit, many cannot invest in better seeds, fertilizers, or equipment, limiting their productivity. This can create a cycle of low yields and low income, making it hard for them to improve their operations. Additionally, technological advancements like farm management apps or precision agriculture tools are often out of reach due to cost or lack of internet access, further limiting their ability to optimize their production. 

• Climate change has a profound impact on smallholder farmers. Because their livelihoods depend directly on weather conditions, they are highly vulnerable to changes like unpredictable rainfall, prolonged droughts, and extreme weather events. Even small shifts in climate patterns can reduce crop yields and threaten food security for entire communities. For example, a delayed monsoon or unexpected frost can ruin a season’s worth of crops. While they have the local knowledge to adapt to some degree, they often lack the resources or support needed to adopt more resilient farming practices, like drought-resistant seeds or better irrigation systems. 

• Inadequate infrastructure is another significant challenge for smallholder farmers. Without proper storage facilities, farmers often have to sell their produce immediately after harvest, even if market prices are low, because they have nowhere to store it. Poor transportation infrastructure, like unpaved roads, makes it difficult for them to get their goods to market, increasing post-harvest losses. Additionally, limited access to digital tools and platforms means that many smallholders miss out on opportunities to connect directly with buyers or access valuable information about market prices and weather forecasts. 

Opportunities for Empowerment and Transformation 

Improving Market Access 

One of the most significant opportunities for smallholder farmers lies in improving their access to markets. Digital platforms and direct-to-market models have made it easier for farmers to connect with buyers directly, cutting out intermediaries who often take a large share of the profits. Through online marketplaces or mobile apps, farmers can sell their produce at better prices and reach consumers who value fresh, locally grown food. This direct connection not only ensures fairer pricing but also creates more transparency in the supply chain. For example, smallholders can now list their products on platforms that connect them with buyers in cities or even abroad, helping them expand their reach and increase their income. 

Access to Finance and Inputs 

For many smallholder farmers, a lack of funds is a major barrier to improving their productivity. Access to micro-loans, subsidies, and cooperative models can make a world of difference. Microfinance institutions and farmer cooperatives can provide small loans at low interest rates, allowing farmers to invest in better seeds, fertilizers, and equipment. Governments and NGOs also play a crucial role by offering subsidies on inputs like seeds or irrigation tools, making these more affordable. Cooperative models can help farmers pool resources, share costs, and collectively access inputs and services that might be too expensive individually. This kind of support helps farmers overcome financial barriers and unlock their potential for growth. 

Leveraging Technology 

Technology is a game changer for smallholder farmers. Data-driven tools and precision farming techniques allow farmers to use resources more efficiently and boost their yields. For instance, satellite imagery and remote sensing can help monitor crop health and soil moisture levels, enabling farmers to make informed decisions about irrigation and fertilizer use. Farm management platforms can simplify tasks like record-keeping, crop planning, and even tracking market prices, making it easier for farmers to run their operations. By adopting these tools, farmers can improve their productivity, reduce waste, and become more resilient to climate variations. 

Sustainable Practices 

Adopting sustainable practices is crucial for the long-term success of smallholder farmers. Regenerative agriculture practices, such as crop rotation, agroforestry, and organic farming, help restore soil health and increase biodiversity. These methods can also make farms more resilient to climate change. Climate-smart farming techniques, like water-saving irrigation systems or planting drought-resistant crops, help farmers adapt to changing weather patterns while maintaining or even increasing their yields. Not only do these practices benefit the environment, but they also improve the quality of produce, which can open doors to premium markets that are willing to pay more for sustainably sourced products. 

These opportunities highlight the potential for smallholder farmers to transform their livelihoods. With the right support, access to markets, and adoption of modern technologies and sustainable practices, smallholders can thrive, contributing to a more equitable and sustainable global food system. 

The World Economic Forum has recently launched its 100 million farmers platform to facilitate stakeholders globally to transform food systems. The collaboration of all the public and private stakeholders along with the farmers on a common platform across the food supply chain should help to scale the efforts to achieve the desired goals. 

 The silos among the nature, food and climate agendas has to be broken. The farm transitions need to be incentivized to promote prevention of harmful practices like use of pesticides and chemical fertilizers. Farmers need to adopt regenerative and climate smart agriculture. This will also build a trust ecosystem between players in the value chain and the consumers will be convinced about a safe product. As the organizations around the world are racing towards the achievement of the Sustainable Development Goals (SDGs) and their commitments to net-zero, smallholder farmers will represent the custodians of our food basket. 

The Role of Stakeholders in Transforming Food Systems 

Governments play a critical role in transforming food systems by providing policy support, subsidies, and infrastructure development. Policies that promote sustainable agricultural practices, such as incentives for using renewable energy or adopting climate-smart farming methods, can encourage farmers to adopt these practices. Subsidies can help make inputs like seeds, fertilizers, and irrigation tools more affordable for smallholder farmers.  

NGOs and international organizations contribute to food system transformation by providing training, technical support, and community development programs. These organizations often focus on capacity building, offering workshops on best agricultural practices, financial literacy, and new technologies. For example, NGOs may train farmers in soil health management, organic farming techniques, or efficient water use, helping them adapt to changing climate conditions.  

The private sector, including agribusinesses, food companies, and retailers, can play a pivotal role by investing in sustainable supply chains and promoting fair trade practices. Companies that source raw materials from smallholder farmers can implement fair trade agreements, ensuring that farmers receive a fair price for their produce. Additionally, the private sector can invest in traceability and transparency initiatives, using technology to ensure that their supply chains meet sustainability standards.  

TraceX Sustainability Platform 

TraceX’s technology platforms are designed to support smallholder farmers in building traceable and sustainable supply chains by leveraging blockchain technology and digital tools.  

Enhancing Traceability with Blockchain Technology 

TraceX uses blockchain to create a secure, tamper-proof ledger that records every step of the supply chain, from planting and harvesting to processing and distribution. For smallholder farmers, this means that the journey of their crops can be tracked and traced from farm to table. This transparency helps in building trust with buyers and consumers, as they can see the entire lifecycle of the product. It also helps smallholders meet the compliance requirements of markets like the EU, which demand transparency regarding sourcing and sustainability. 

TechnoServe partnered with TraceX through the “Sustainable Livelihoods for Smallholder Farmers” program to enhance the consistency and quality of coffee production using sustainable farming practices. This collaboration has not only improved the quality of coffee but has also positively impacted farmers’ livelihoods. By implementing TraceX’s technology, the program has helped increase farmer incomes, strengthen market connections, and provide socio-economic and environmental benefits. This approach has supported smallholder farmers in achieving better productivity and sustainable practices, ultimately contributing to a more resilient and profitable coffee supply chain. 

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Improving Access to Markets 

With data on farming practices, crop quality, and certifications stored digitally, TraceX enables smallholder farmers to access premium markets that prioritize sustainability. This is especially valuable for farmers who follow organic or regenerative practices and wish to sell their produce at higher prices. By providing a digital footprint of their sustainable practices, smallholder farmers can differentiate their products and reach buyers who are willing to pay a premium for verified, sustainable goods. 

Empowering Farmers with Data-Driven Insights 

TraceX’s platforms help smallholder farmers collect and analyze data related to crop health, soil quality, and weather patterns. These insights allow farmers to make informed decisions that can improve yield and reduce input costs. For instance, farmers can adjust irrigation schedules based on weather forecasts or monitor soil nutrients to optimize fertilizer use. This data-driven approach enhances productivity and supports sustainable farming practices by reducing waste and optimizing resource use 

Facilitating Collaboration and Trust Among Stakeholders 

TraceX’s platform connects all stakeholders in the supply chain—farmers, cooperatives, processors, and buyers—on a single digital platform. This seamless communication fosters better collaboration and coordination across the supply chain. For smallholder farmers, it means access to critical resources, timely advice from agronomists, and direct connections with buyers. Such integration ensures that everyone is working towards common goals of quality and sustainability, helping to create a more efficient and resilient supply chain. 

TraceX monitors VST’s entire tobacco supply chain, from farm to factory, ensuring sustainable procurement practices and effective farmer management. By providing transparency at every stage, TraceX enhances visibility and accountability for all stakeholders involved. 

Ensuring Compliance with Global Standards 

TraceX also assists smallholder farmers in meeting the compliance requirements of global regulations, such as the EU Deforestation Regulation (EUDR). By providing digital records of farming practices and crop origin, farmers can ensure that their products meet environmental and social standards required by international markets. This compliance not only opens doors to export markets but also helps in maintaining the sustainability standards expected by consumers today. 

Building a Better Future with Smallholder Farmers 

Empowering smallholder farmers is key to creating a more resilient and sustainable global food system. By addressing challenges such as market access, resource constraints, and climate risks, and by leveraging opportunities like digital tools and sustainable practices, smallholders can thrive. With the right support from stakeholders—including governments, NGOs, and the private sector—these farmers can continue to play a vital role in food security and environmental stewardship. It’s time to recognize and invest in their potential, ensuring a brighter future for agriculture worldwide. 

Frequently Asked Questions ( FAQ’s )

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