Addressing the Impact of COVID-19 on Natural Rubber Smallholders

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Many are calling these “unprecedented times”, and undeniably so. The COVID-19 pandemic has brought the world many firsts – from the closing of international borders to country-wide lockdowns and quarantines, and extreme social distancing measures applied to everyday activities such as exercising and grocery shopping. In this sense, many of the impacts of COVID-19 have been unprecedented. 

‘Unprecedented’, however, does not necessarily translate into ‘unexpected’. This is especially true for a significant link of the natural rubber value chain: the millions of smallholders and farm workers that supply the world with around 85% of its natural rubber. These smallholders, seasonal workers and their families are some of the most vulnerable people within the natural rubber sector, living in poverty and without adequate access to social services. Poor diversification of farmers’ incomes means that farmers are solely dependent on tapping rubber trees to make a living. When a pandemic occurs and global demand for natural rubber falls, it comes as no surprise that smallholders are the hardest hit. 

The Equity sub-Working Group was formed to look into the issue of equity in the natural rubber value chain and to define what GPSNR’s role will be in promoting equity along the supply chain. It is chaired by Robert Meyer (Halcyon Agri) and co-chaired by Hendrike Braun-Issa (GIZ). The sub-Group has, in its first few calls, recognized the importance of addressing the impact that COVID-19 has on the supply chain, in particular the natural rubber smallholders. In view of this, discussions have been centered around producing a set of short-term recommendations to counter the impact of the COVID-19 crisis. These recommendations are particularly aimed at supporting small-scale natural rubber farmers and their families.

The International Rubber Study Group (IRSG), represented by Secretary-General Salvatore Pinizzotto, is also participating in the sub-Group discussions to provide advice in the area of cooperation with Governments. 

Along with the short-term recommendations, the sub-Group is also looking at long-term efforts to address the underlying systemic issues, and are carrying out a study to inform the Platform on the subjects of Living Wage and Living Income.

Improving the capacity and livelihoods of smallholders is just one of the strategies undertaken by GPSNR. It is equally important for the other players in the industry to advance GPSNR’s vision of a sustainable natural rubber value chain. The Policy Toolbox Working Group continues to finalize the proposed member policy requirements and reporting requirements, with consultation from all member categories. Meanwhile, the Traceability and Transparency Working Group is focused on acquiring a better understanding of tools to achieve greater traceability and transparency within supply chains. Both groups will be aligning on key issues such as supply chain risk assessment.

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GPSNR Working Groups Update: September 2022

Strategy and Objectives Working Group

The assurance model taskforce, which sits under the umbrella of this working group, worked on establishing KPIs, GPSNR and Company targets, and tasking the KPIs to other working groups, categories and members. Its other subgroup on risk is currently working on a proposal for the definition of polygons in the EU Deforestation Regulation based on a request from GPSNR member ETRMA.

Smallholder Representation Working Group

After completing its first round of pilot agroforestry workshops in Indonesia, the working group has its next round planned in Cambodia at the end of October 2022. Subsequently, they are preparing for country-based focus group discussions on the Smallholders Policy Equivalent and for the GPSNR-HCSA Smallholder Toolkit Field Trials.

Policy Toolbox Working Group

The group is working on finalizing the TORs for the Year 1 Reporting Review to be conducted in the first quarter of next year. They are also assessing if any changes to reporting framework and its details (i.e. process, extensions, questions) are needed based on the Year 1 Reporting Review results.

Capacity Building Working Group

The group is currently evaluating proposals to appoint a software developer for the second phase of the GPSNR Knowledge Sharing Platform. They will also soon be kicking off the Disease Fighting Project with SNV-IRRI in Indonesia, after having recently completed the first milestone of the SNV-Proforest GAP coaching in the country. They continue to seek members’ funding for capacity building projects in Indonesia (second stream of disease fighting) and Cote d’Ivoire (training centres). To know more, you can find the project details here.

 

Shared Responsibility Working Group

The group is working on the deliverables discussed for each of its sub working groups during the in-person meetings, and will present findings to the membership on 15th November 2022.

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Secretariat Update – January 2020

We can draw parallels to the coffee industry, which similarly comprises small plantation owners and more profitable downstream actors. In his recent sustainability report on the coffee industry, economist Jeffrey Sachs’ proposal for a global fund to fill the financial gaps for sustainability investments in coffee producing regions garnered vivid discussion.  

Currently, low and unpredictable rubber prices are a constraint to smallholders who produce the bulk of global rubber output. Transparency is critical in the purchasing process, and this kind of disruption typically comes hand in hand with embracing new strategies. 

Under the purview of the Strategy & Objectives Working Group, capacity building and extension services have been identified as potential measures to mitigate the root causes of the social and environmental impact from the natural rubber supply market. Implementing these at scale for the whole industry will require considerable financial investment.   

With the above considerations in mind, GPSNR is exploring new approaches to funding that would not be borne by a single segment of the industry, but in a manner incorporating the spirit of our shared responsibility. 

Enterprise Singapore organized an industry meeting on 14 January 2020, and invited GPSNR and Singapore Exchange to better understand the available options of an e-trading platform that could contribute to our funds. The meeting also discussed what could be the options, through GPSNR, to increase the uptake of the e-trading platform.

Tapping the vast potential of digitalization could present an exciting avenue of possibilities for GPSNR to better advance our vision of a fair, equitable and environmentally sound rubber value chain.      

The meeting was initiated by representatives from Enterprise Singapore, and panel speakers comprised representatives from GPSNR, Singapore Exchange and HeveaConnect. Participants included GPSNR members as well as other Natural Rubber buyers, producers, processors and traders .

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