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Do transnational companies respond to the needs of poor farmers?

Can the principles and values of Corporate Social Responsibility (CSR) be ‘mainstreamed’ into the core operations of major companies? A case-study of a smallholder agricultural extension project, implemented by Monsanto, raises questions about how far poor farmers can hold such companies to account.

Research from the Institute of Development Studies in the UK examines the Small Holder Programme (SHP) run by Monsanto, a leading agricultural biotechnology transnational. The SHP aimed to provide smallholder farmers with a package of extension services, including chemicals and seeds with genetically modified (GM) traits and other support. The programme was implemented in several developing countries between 1999 and 2002. This research focused on India.

The SHP was created partly in response to criticism from consumers and activists about GM crops in the late 1990s. It had several purposes, including representing Monsanto’s commitment to social responsibility, helping the company to respond to the sustainable development agenda, expanding the market for the company’s agricultural technologies, and promoting GM crops.

CSR describes what large companies do to address the social or environmental costs of their operations. Many people criticise CSR as an exercise in public relations, which can involve heavy publicity for activities that follow good practice, without addressing the impact of other activities. This has led to calls for the values and principles of CSR to be ‘mainstreamed’ - introduced across all of a company’s operations, in order to make them more socially and environmentally sustainable.

The research shows:

The SHP was more than just a philanthropic gesture or a public relations exercise. To a limited degree, it represented a real attempt to integrate socially responsible, developmental goals into Monsanto’s sales and marketing operations.
At the local level, participating farmers were able to exercise a kind of accountability over the SHP project officers, but this was limited.
The integration of the SHP with regular operations was both a strength and a weakness. Over time, commercial pressures overcame the philanthropic, social development aspects of the SHP.
One consequence of the commercial pressures was that the programme did not specifically target the smallest-scale and poorest farmers.
The SHP was able to continue while the company had resources to sustain it. When the company faced financial problems, the programme was abandoned.

The case of the SHP raises questions about the possibility of mainstreaming CSR into the core operations of a transnational company, since it suggests that the integration of CSR values may actually undermine those values. The research made the following conclusions for agricultural policymakers to consider:

Farmers are happy to receive support and advice from various sources, including the private sector. They are capable of judging that advice on its own merits, adopting the practices they find useful and abandoning those they dislike.
As more private sector service provision in agricultural extension occurs, special attention will be required to ensure that small-scale and poor farmers in particular have access to independent, impartial and effective technical advice and support.

Source(s):
‘Monsanto and smallholder farmers: a case study of corporate accountability,’ IDS Working Paper 277, IDS: Brighton, by Dominic Glover, 2007 (PDF) Full document.

Funded by: UK Department for International Development, through the Development Research Centre on Citizenship Participation and Accountability

id21 Research Highlight: 27 April 2007

Further Information:
Dominic Glover
Knowledge, Technology and Society Team
Institute of Development Studies
University of Sussex
Brighton BN1 9RE, UK

Tel: +44 (0)1273 606261
Fax: +44 (0)1273 621202
Contact the contributor: d.glover@ids.ac.uk

Institute of Development Studies, UK

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