Report reveals NR smallholders hit by Covid

London – Smallholder producers of natural rubber (NR) are seeing greater impacts from the Covid-19 pandemic than larger producers, according to the latest analysis by ZSL (Zoological Society of London).

“Due to their size, and lack of ability to diversify their income streams, smallholders are less able to withstand the pressures of an unreliable income than the larger producers,” the said the 17 March report, noting the sharp decline in NR markets in the immediate aftermath of the Covid outbreak.

Produced by ZSL’s SPOTT team, the report is the second annual assessment of 15 natural rubber producers and processors on their public disclosure regarding their organisation, policies and practices related to environmental, social and governance (ESG) issues.

The surveyed producers control a combined total of 1.4 million hectares of land, and each company receives a percentage score to benchmark their progress over time.

According to ZSL, the average score of all 15 companies evaluated increased from 36% to 41% in the second assessment, showing a marked increase in transparency and public commitments year-on-year. 

Three companies - Indofood Agri Resources Ltd, Kirana Megatara, and Société Internationale de Plantations d'Hévéas (SIPH) - saw their score increase by at least 20% points from the previous assessments, the survey found. 

However, the assessment also found that while 64% (nine out of 14) of the world’s most significant producers have made a clear commitment to supporting their smallholders, only 14% (two out of 14) provide comprehensive detail on the actual number of smallholders they are supporting.

In the absence of available data, the report suggested, “it is not possible to know whether major producers are fulfilling their agreements to provide technical and financial assistance to smallholder farmers.”

“Our analysis suggests the world’s most significant natural rubber producers are failing to report on how they are supporting smallholder suppliers to improve the profitability and sustainability of their farms,” explained Sam Ginger, the ZSL analyst who led on the report.

The analyst went on to say that larger companies can support vulnerable smallholders by providing financial help and technical training to diversify their income in the aftermath of the pandemic. 

For instance, smallholders can be taught agroforestry techniques - where crops are grown on the same land as rubber trees to create a more diverse farming system, Ginger added.

The ZSL survey also depicted a lack of supplier engagement on the sourcing processes of the commodity, which it said adds to the risk of habitat loss.

The survey found that 21% of companies have a clear process by which they engage and/or assess smallholders on their compliance with company sourcing policies. However, only 7% report the number of smallholder suppliers they have engaged/assessed.  

“Engagement with suppliers in the natural rubber supply chain allows a constructive, good faith dialogue about company requirements on sustainable practice,” said Ginger.

To emphasise their role in the sustainability of NR, the Global Platform for Sustainable Natural Rubber (GPSNR) dedicated a membership category for smallholders in September last year. 

“It’s vital that smallholders are provided with comprehensive technical and financial support to ensure that sustainability becomes standard practice amongst all suppliers,” said Stefano Savi, GPSNR director.

This, he said, can only be achieved “if it becomes a shared responsibility of all supply chain players, and GPSNR will continue building systems to enable this change.”