Impact measurement for companies sourcing from smallholder farmers in their value chains

01.06.2014
Just as no company would launch a new product or make a major investment without considering how to assess its effectiveness, no company should consider working with smallholder farmers without considering how to measure and monitor the financial and social performance of this activity. Most companies working with smallholder farmers do gather some information, but this information often lacks a clear focus. While these stories can help personalize the impact of a strategy, they are not sufficient to improve a company's performance or communicate to discerning external stakeholders. To demonstrate true poverty impact and returns on resources committed, companies need to measure their activities in a systematic way. Facing this gap, a number of companies have experimented with their own approaches to assessing poverty impact, and organizations have proposed a variety of different measurement and monitoring frameworks specifically designed with companies in mind. This paper gives an overview of the business value that can be created from measuring poverty impact in an agricultural value chain initiative and points to some tools, indicators, and lessons learned for how companies can go about maximizing the business and social impact of their work with smallholder farmers.