As easy as ABC: Financial literacy key for world's women farmers

By Tensie Whelan13 March 2014

Women harvesting ground nuts at the Jepara teak forest in Indonesia. Photo by: Murdani Usman/Center for International Forestry Research / CC BY-NC-ND

In addition to celebrating International Women’s Day this month, this year also plays host to the International Year of Family Farming.

The Food and Agriculture Organization says  one of the aims of the IYFF is to “identify gaps and opportunities” that — once addressed — will help family farms thrive and fulfill their important role in global food security and sustainable development. So it therefore seems like a good time to focus on the huge gap and huge opportunity of empowering women on smallholder farms.

Women represent about half of the world’s 500 million smallholder farmers. Smallholders are a major factor in global food production — including 80 percent of what’s consumed in Asia and sub-Saharan Africa — and 2 billion people depend on them for their livelihoods. FAO has also said that if women farmers had the same access to agricultural resources and services as men, they could produce 20-30 percent more food than they do now.

That would be an enormous boon for global food security and developing economies, as well as for the global environment. Meeting the projected food demands of 9.6 billion people by 2050 will create perverse incentives to clear more land and resort to slash-and-burn, chemical-intensive farming. That would put us on a collision course with accelerating deforestation, biodiversity loss and other untenable environmental and social consequences of unsustainable farming.

But helping women raise yields on existing cropland has the potential to shift that trajectory significantly, and to feed a significant portion of the growing population sustainably.

How to level the playing field

So what would it take — in practical terms — to level the playing field for women farmers and realize that potential? Two words: financial literacy.

Understanding financial concepts, managing resources, tracking inputs and outputs, and setting and charting progress towards goals enable people to make proactive instead of reactive decisions — even in the face of seasonal incomes, volatile markets, extreme weather and other unpredictable conditions. That’s true for men and women alike, but it’s especially important where women — and especially women farmers — are concerned.

Many studies show that empowering women financially has a high social return. Investing more in women-owned businesses, or allowing women to control more household income results in better educated, better nourished children and more prosperous communities.

Realizing global-scale potential

Similarly, empowering women farmers financially is the key to realizing their global-scale potential for growing more food sustainably. The Rainforest Alliance works with farms of all sizes around the world to help them switch to sustainable best practices that protect the environment and workers, while improving efficiency and productivity. This includes protecting their soils and water, preserving pollination cover, progressively cutting chemical usage, and more. We’ve proven sustainable management techniques can make cash crops secure, boost yields on existing cropland and raise net income by 20-70 percent.

But making the necessary operational changes to realize these gains takes management acumen, costs money and requires investment — which, in turn, requires credit access.

The first — and arguably biggest — barrier to entry for women smallholder farmers is lack of financial literacy and business skills. Women are often the ones who carry out the administrative and record-keeping tasks on family farms. But if they don’t understand and can’t track financial inputs and outputs, they won’t be able expand or retool. If they don’t keep adequate records — and smallholders typically jot things down in notebooks — they can’t show lenders the financial data they need to assess creditworthiness and therefore won’t qualify for loans. Smallholder finance demand worldwide is estimated at $450 billion, but 98 percent of that demand goes unmet, keeping millions of smallholder farms from raising yields and rising out of poverty.

Promoting financial literacy and reaching out

That’s an intolerable vacuum, which we know that financial literacy training can help fill. Farmers on Rainforest Alliance CertifiedTM farms receive such training, and a 2013 study funded by the Citi Foundation showed that certified farms in Colombia and Peru accessed 3.5 times more credit than non-certified ones.

In 2014, our new financial literacy project funded by the Ford Foundation will extend access to financial literacy training to more family farms, including non-certified farms just starting on the road to implementing sustainable practices. We’ll hone the training platform on test sites, including small tea and coffee farms in Kenya, as well as coffee farms in Guatemala — where smallholders typically cultivate less than one hectare. Then we’ll work to expand the reach of the program by training trainers and using the kinds of materials and publicity that will reach smallholder farmers in rural areas.

We can train thousands of farmers that way, but the opportunity now is for development agencies, civil society, governments, food companies, technicians, service delivery organizations, commercial and social lenders, and others to work together to scale up access to financial literacy training for women farmers until it becomes the global norm. It’s one of the best, most cost-effective, most consequential ways to empower women farmers to manage upgrades and expansions, qualify for loans, implement sustainable production practices, protect their environments, raise their yields and incomes, enrich their communities and their economies, and feed millions more people sustainably.

Want to learn more? Check out She Builds and tweet us using #SheBuilds.

She Builds is a month-long conversation hosted by Devex in partnership with Chemonics, Creative Associates, JBS International as well as the Millennium Challenge Corp., United Nations Office for Project Services and U.K. Department for International Development.

About the author

Tensie whelan profile
Tensie Whelan

Tensie Whelan is the president of the Rainforest Alliance. She was previously the vice president of conservation information at the National Audubon Society, executive director of the New York League of Conservation Voters, and managing editor of Ambio, an international environmental journal based in Stockholm. Whelan also serves on the the advisory board of Social Accountability International as well as the Unilever Sustainable Sourcing Advisory Board, and she is the co-chair of the Sustainable Food Lab's steering committee.


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