Traceable Supply Chains Reward Critical First-Mile Producers
- Tim Morch
- Sep 4
- 10 min read
Updated: Nov 3
Money doesn't grow on trees, but coffee and cacao do. The trees that yield your caffeine jolt or chocolate fix grow in distant locations and depend on smallholder farmers' labour. These first-mile producers form the backbone of global coffee and cacao production. Yet their ability to continue supplying the products we love depends on earning a fair living income.
From powerhouse coffee producers like Brazil and Vietnam to cacao leaders in Côte d'Ivoire and Ghana, plus smaller growers in Uganda and Peru, these hardworking farmers plant, nurture, and harvest the products we consume daily. Despite their essential role, they struggle to put food on the table or send their children to school.
Farmer advocates and NGOs recognise the challenges smallholder producers face. Multiple initiatives to improve their livelihoods have emerged in recent years. But older schemes, burdened with paperwork and costs that farmers bear, have become outdated. Technology now offers better solutions with less paperwork and substantially lower costs.
Increasing awareness of complex global agricultural supply chains starts with connecting producers and consumers, who often have limited knowledge about a product's origin. Building traceable supply chains rewards critical first-mile producers and provides transparency for conscious consumers.
Why Traceable Supply Chains Matter
Traceable and transparent supply chains achieve more than connecting producers and consumers. They satisfy emerging regulations, including the European Union Deforestation Regulation (EUDR), the Corporate Sustainability and Due Diligence Directive (CSDDD), the Green Claims Directive, and other national and regional regulations.
The EUDR, which took effect in June 2023 with requirements becoming binding in December 2025 for large companies and June 2026 for smaller ones, bans the import of commodities (including coffee and cacao) linked to deforestation after December 31, 2020. This regulation requires precise geolocation data for production plots, a significant challenge for many smallholder farmers who lack access to such technology. Without traceability, farmers and companies risk losing access to the lucrative European market, the world's largest coffee consumer.
The more conscious consumers become of first-mile producers and their challenges, the more likely they are to support verified agricultural products. Consumer demand for sustainability has grown substantially, pressuring the industry to respond with transparent sourcing. Studies indicate that despite rising awareness, limited transparency in supply chains hinders improving smallholder farmers’ living conditions.
When it comes to cacao and coffee, smallholder farmers – farms of 10 hectares or less – produce an overwhelming proportion of the global supply. This widespread reliance on smallholders underscores the need for systems that directly benefit them, ensuring their participation in global trade and addressing common challenges, including productivity, sustainability, and data sovereignty.
Cacao
The International Cocoa Organization says that “more than 90% of cocoa production comes from farms with only two to five hectares.”
Leading the list of challenges smallholders face is traceability. Over 55% of cocoa exports from Côte d'Ivoire remain untraceable to a specific cooperative or department, highlighting the widespread lack of first-mile transparency in critical sectors. This lack of traceability makes smallholders vulnerable to unfair pricing and excludes them from markets that demand verifiable practices.
West Africa produces the lion’s share of cacao, with Indonesia on track to catch up in the coming years. Here are the top cacao-producing countries (estimated 2023/2024 or 2024 production)
Country | Approximate Production (tonnes) | Notable Characteristics |
Côte d'Ivoire | 2,200,000 - 2,370,000 | The world's largest producer, accounting for a significant portion of global output. |
Ghana | 653,700 - 1,100,000 | Known for high-quality cacao beans. |
Indonesia | 641,741 - 667,000 | A key player in the Asian cacao market. |
Ecuador | 330,000 - 430,000 | Produces fine aroma cacao, highly valued internationally. |
Cameroon | 295,819 - 300,000 | Modernising its production ecosystem. |
Brazil | 220,000 - 296,145 | An emerging market with plans to increase production. |
Nigeria | 280,000 - 284,232 | Focused on improving quality and international market value. |
Peru | 160,000 - 171,000 | Known for fine and sustainable cacao. |
Dominican Republic | 65,930 - 80,000 | A leading producer of organic cacao. |
Colombia | 59,831 |
Smallholder farmers in cacao-producing countries:
Beyond these production figures, the prevalence of smallholder farmers across these nations is critical to understanding the sector's dynamics:
In Ghana, approximately 850,000 farming families produce cocoa on farms under 10 hectares.
Côte d'Ivoire has a vast network, including 200,000 small-scale farmers in the Cocoa Life community.
In Indonesia, smallholder farmers produce approximately 90% of the country's total cocoa production.
Brazil has advanced sustainable cocoa practices, often associated with smaller, family-run farms.
Ecuador has around 150,000 families involved in cocoa cultivation, many of whom are smallholders in rural areas.
Nigeria faces issues with limited farm productivity on smaller farms.
Cameroon's cocoa sector is growing steadily, with no indication of large-scale plantations dominating.
Peru is known for fine and sustainable cacao, often grown on smaller plots.
The Dominican Republic is a leading producer of organic cacao cultivated on smaller farms.
Coffee
The International Institute for Sustainable Development (IISD) reports that, “Coffee is grown on 12.5 million farms around the world, predominantly run by smallholder farmers cultivating 5 ha or less—indeed, 95% of coffee farms span 5 ha or less and 84% span less than 2 ha.”
Here's a breakdown of the top coffee producing countries based on 2024/2025 production estimates:
Country | Approximate Production (tonnes) | Notable Characteristics / Varieties |
Brazil | 3,984,000 | Known for both Arabica and Robusta varieties. |
Vietnam | 1,806,000 | Primarily known for Robusta beans. |
Colombia | 774,000 | Exclusively produces Arabica beans. |
Indonesia | 654,000 | Produces diverse coffees, including specialty types such as Kopi Luwak. |
Ethiopia | 501,600 | Known as the birthplace of coffee, with a diverse range of Arabica varieties. |
Uganda | 384,000 | Primarily produces Robusta coffee. |
India | 372,000 | Both Arabica and Robusta grow in the southern regions. |
Honduras | 318,000 | Primarily produces Arabica beans in mountainous regions. |
Peru | 261,000 | Known for balanced Arabica with diverse flavour profiles and organic production. |
Mexico | 232,200 | Predominantly produces Arabica, often from small farms. |
Smallholder Farmers in Coffee Production
Globally, most coffee farms are smallholder farms, under 10 hectares. Here’s a look at some smallholder data across coffee-producing nations:
An estimated 95% of coffee farms span 5 hectares or less, and 84% are less than 2 hectares.
Smallholder farmers account for 73%-80% of coffee farmers globally and produce a significant portion of the world's coffee.
In Mexico, approximately 70% of the more than 500,000 coffee farmers are smallholders.
In Ethiopia, coffee supports the livelihoods of over 15 million smallholder farmers.
Peru has around 223,000 family farms dedicated to coffee cultivation.
What are Some Benefits of Traceable Supply Chains for Smallholder Farmers?
Traceability offers tangible benefits that directly address the struggles first-mile producers face, enabling them to move toward a fairer and more sustainable future. Here are some examples:
Increased Income and Fairer Pricing
Traceability connects farmers to the final product, eliminating exploitative intermediaries who push down prices. When buyers can verify the origin and practices of a specific farm, they are often willing to pay a premium for ethically and sustainably sourced coffee and cacao. This direct link and verified quality enable smallholders to negotiate better prices and claim a larger share of the value chain.
Enhanced Market Access
Compliance with international regulations like the EUDR, which mandates deforestation-free and ethically sourced products, becomes a requirement for market entry. Traceability systems enable smallholder farmers to provide the necessary data, opening doors to new, higher-value markets that demand transparency and sustainability. Without this, they risk being excluded from profitable global markets.
Improved Farming Practices and Productivity
Traceability systems involve collecting data on farming methods, soil health, and yields. When this data is analysed and shared with farmers, it offers valuable insights for improving agronomic practices, increasing efficiency, and boosting productivity. Identifying which plots produce the highest quality can guide targeted interventions.
Building Trust and Recognition
When consumers can trace their coffee or chocolate back to a specific smallholder farm, it fosters connection and appreciation for the farmer's hard work. This recognition can translate into stronger brand loyalty for products that champion traceable origins, further benefiting the producers. ECOSHIFT and its partners introduced the limited edition SustainaBar, Thailand’s first fully traceable chocolate.
Access to Finance and Support
Traceable data serves as a verifiable record of a farmer's production, practices, and income, making them more attractive to financial institutions for loans and investments. It can also facilitate access to training programs and resources for sustainable agriculture, as organisations can more effectively target and monitor their impact.
Resilience to Climate Change and Market Fluctuations
By providing farm conditions and yields data, traceability helps farmers adapt to changing climate patterns and predict potential harvest shortfalls. This data informs proactive measures and empowers them to advocate for better support and fairer risk-sharing with other supply chain actors during challenging times.
Understanding Various Supply Chain Actors
Supply chains for coffee and cacao are complex and varied. As most producers are smallholders, they often face aggressive buyers pushing for discounts. Occasionally, scare tactics and threats lead farmers to sell for below-market values in fear of losing a sale.
Here’s an overview of some key supply chain actors:
First-mile aggregators: intermediaries crucial for consolidating produce, enhancing market access for smallholders, and facilitating efficient transport.
Extension workers: the educators and facilitators who disseminate best practices and technologies to improve farmer productivity and sustainability, are most often working at the ground level. They have established connections with individuals and communities, building relationships and trust.
Mature supply chain actors: entities with established infrastructure and sustainable practices, including following Voluntary Sustainability Standards (VSS) and advanced traceability systems, demonstrating robust supply chain management.
What are First-Mile Dynamics and Why are They Important?
First-mile dynamics encompass the processes, challenges, and efficiencies involved in the first stage of a supply chain. In agriculture, it’s the movement from a smallholder farm to a local aggregator or processor. This stage involves collecting products from their source, packing, labelling, and preparing goods for transport.
Understanding and optimising first-mile dynamics is critical because it drives the success of the entire supply chain, from cost savings and agility to sustainability and customer satisfaction. It serves as the starting point that determines whether downstream operations run smoothly or face preventable issues.
Traceable and verifiable first-mile agricultural products set the foundation and influence the entire agricultural supply chain. This improves inventory accuracy and enables better tracking so downstream buyers and consumers know the product's provenance.
Optimised first-mile processes can reduce operational costs, minimise delays, and streamline resource use.
ECOSHIFT improves first-mile dynamics for smallholder farmers by ensuring product traceability, fair pricing, compliance with sustainability, and ethical sourcing standards.
ECOSHIFT’s “SCALES” farm evaluation tool generates reliable and consistent data using a standardised system to:
Observe how the smallholder farm operates
Identify areas for improving agricultural processes
Design solutions that are affordable and adoptable by farmers
Remove technical barriers to traceability
Explore additional potential solutions and value propositions, like companion crops
Assess gaps in service provision
Examine chain of custody documentation and evidence
The data can help identify key perspectives and patterns across different actor categories.
How ECOSHIFT Empowers Smallholders through Traceability
ECOSHIFT's work directly addresses the challenges faced by smallholder farmers, leveraging technology and a farmer-centric approach to ensure that traceability benefits those at the very beginning of the supply chain.
Our overarching goal is to build traceable, sustainable agricultural supply chains driven by responsible and ethical data-sharing systems, emphasising:
Interoperability
Ensuring seamless data exchange between different stakeholders is paramount. For smallholder farmers, this means that data collected at the farm level, whether through ECOSHIFT's tools or other platforms, can be shared with buyers, certification bodies, and other relevant actors without proprietary barriers.
This eliminates the need for farmers to input the same information multiple times into disaggregated systems, reducing their administrative burden and making their data more valuable and accessible across the chain. It also allows for a more comprehensive view of the supply chain, enabling better planning and resource allocation that can indirectly benefit farmers.
Data Rights
We protect the data sovereignty of first-mile actors by ensuring compliance with data privacy regulations and building trust by guaranteeing that producers understand and agree to how their personal and farm data will be used and stored. This includes assigning a unique ID to each farmer as the foundation for traceability, accountability, and linking any action, payment, or outcome to the correct individual.
Data sovereignty means smallholder farmers retain control and ownership over their invaluable agricultural data. This prevents exploitation by larger entities and ensures that the information about their land, practices, and yields benefits them, for example, to access microloans or receive tailored agricultural advice.
By assigning unique farmer IDs, ECOSHIFT ensures precise attribution, making it possible to reward specific farmers for quality and sustainable practices, thereby incentivising responsible farming and direct financial benefits.
Inclusiveness
Promoting equitable participation and benefit-sharing. ECOSHIFT prioritizes the inclusion of smallholder farmers in the design and implementation of traceability solutions. Our partnership with Orijin means technologies are user-friendly, accessible (even in areas with limited connectivity), and culturally appropriate.
By actively involving farmers in the process, ECOSHIFT ensures that the solutions meet their real-world needs and that the benefits of traceability, including increased income, improved livelihoods, and enhanced market access, are distributed equitably across the supply chain, reaching every producer using our system.
These elements are essential for building trust and credibility in first-mile traceability systems, directly empowering smallholders by giving them a voice and a stake in the digital transformation of their industry.
Why is Traceability Important in the Supply Chain?
Despite the clear benefits of traceable supply chains, widespread adoption remains limited, especially in the first mile. Supply chain traceability faces barriers to broader adoption due to challenges in data standardization, integration, and cost. The complexity of global supply chains and the human element of trust and collaboration also play a significant role.
"Implementing traceability systems can be expensive, particularly for small cooperatives and independent farmers. It also requires time and training that many under-resourced producers cannot afford without support. And companies further along the supply chain are often reluctant to share supplier data, fearing loss of competitive advantage or exposure of less-than-ethical sourcing practices.”
Linda Chevrier, EcoSHIFT Founder
While critical for fairness and compliance, transparency can also feel risky for those used to opacity. Until all actors in the supply chain are incentivised to collaborate and share value more equitably, traceability remains more of an exception than the rule.
The path to truly sustainable and equitable coffee and cacao supply chains hinges on traceability. By equipping first-mile producers with tools for data ownership, market access, and better farming practices, traceability meets growing regulatory and consumer demands and fundamentally transforms livelihoods. ECOSHIFT leads this charge, building innovative, farmer-centric solutions that champion transparency, ensure fair value, and cultivate more resilient and responsible global agricultural supply chains.
ECOSHIFT supports ethically-sourced, traceable, impact-driven agricultural production to benefit smallholder farmers. The scalable model fuses traditional farming techniques, modern practices, and technology for responsible growth. Our EUDR-compliant sustainable agricultural supply chain management model provides end-to-end verification to improve access to the EU and other markets.
by Tim Morch, Freelance Writer
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