In an age of Black Lives Matter and #MeToo, it is no longer possible for institutional investors to avoid their stakeholders’ views and feelings about diversity, equity and inclusion. As investors target more positive social impact through their allocations, asset managers are incorporating measures and practices that aim to resolve some of the agriculture industry’s longstanding imbalances.
It is not just investor pressure, though. There is a growing awareness that only through improved DE&I practices can a more sustainable world emerge. The incorporation of environmental, social and governance concerns into corporate strategies is also becoming increasingly important for customers of agribusinesses.
The Principles for Responsible Investment, a United Nations-backed organization promoting responsible investment and representing a large number of investors, says companies should carry out traceability reviews of their supply chains to ensure fair labor practices at their suppliers.
This includes disaggregating information on labor by gender “as a minimum”, and the organization says companies should consider including other metrics such as nationality, socioeconomic background, race and ethnicity, disability and age. “This will allow [businesses] to better understand working conditions for different groups in society and adapt interventions depending on those most affected,” the PRI notes.
The agriculture sector is crucial to several of the UN’s 17 Sustainable Development Goals for 2030 and their 169 underlying indicators and targets. SDG 2 (zero hunger) and SDG 15 (life on land) are the most obvious in this regard. However, SDG 5 (gender equality) specifically cites female ownership of agricultural land as a key indicator of equality, under its target of giving women equal rights to resources where they currently remain underrepresented.
Although many of the efforts directly linked to the SDGs are focused on emerging economies, it would be wrong to suggest that this is a purely developing world issue. Indeed, even in markets as established and developed as the US, there is much room for improvement in terms of agricultural equality.
The US Department of Agriculture most recent census of the sector, in 2017, found that 95 percent of the country’s farmers – some 3.2 million people – were white, while just 1.3 percent, or 45,508, were Black. Furthermore, just 36 percent of farmers were women – though this was a significant improvement on the survey’s 2012 findings.
Tackling the under-representation of women in agriculture remains a difficult issue, particularly during the covid-19 pandemic, which has seen some revert to perceived ‘traditional’ roles as caregivers.
According to a global survey by Women in Food & Agriculture in 2020, 26 percent of respondents acted as the primary caregivers for children while working from home during the pandemic, compared with 8 percent of men. Meanwhile, awareness of DE&I issues remains at a low level in farming businesses, with just 19 percent of those surveyed having a dedicated policy, compared with 49 percent of non-farmers.
According to research published in February by the Federal Reserve Bank of New York, across the wider economy, women and people from minority communities have been particularly affected by job cuts during the pandemic.
So, what are big farmland investors doing to address these issues?
Martin Davies, president and CEO of global farmland investment manager Westchester Global Investment Management, says the agriculture industry is facing two key issues: an aging demographic and a lack of interest from potential new farmers.
“The nature of agriculture work being outdoors, perceived as being unsophisticated, monotonous and invariably in isolated rural locations has low appeal to younger generations,” he explains. “Compounding the decreasing pool of talent entering the industry is the challenge of creating an inclusive environment when many employees are in rural areas.”
In an effort to address these problems, Westchester has partnered with Nuffield, a charity that supports the development of future leaders in the agricultural industry by sending them overseas to learn about global agricultural practices.
Cecilia Fialho, a 2015 Nuffield Scholar and Westchester employee in São Paulo, Brazil, says a two-year program sends scholars to countries heavily involved in agriculture, combining a practical MBA class with on-the-ground research.
“In my experience, I sought to understand what Brazil has to learn from countries in North America, Europe and Asia in terms of regulatory frameworks that encompass new technologies in agriculture, focused on the adoption of genetically modified organisms in soybeans,” she says.
Fialho adds that the program opened her eyes to “the endless possibilities of working within the agricultural sector” and inspired her to seek new challenges, eventually leading to her current position at Westchester three years after completing the scholarship.
“We firmly believe in the merits of creating a diverse, equitable and inclusive workforce at Westchester and in the broader industry,” she adds. “While we have made progress on diversity, equity and inclusion, we also recognize that this is a journey that we have begun, but we still have more work to do.”
While bringing on the next generation of agribusiness workers is key, employers need to think differently about attracting and retaining staff.
Mayka van Acht, vice-president of human resources for Europe, the Middle East and Africa at multinational agribusiness ADM, says that it has put DE&I at the center of its recruitment strategy.
“A key part of our DE&I strategy is through the way we manage our recruitment,” she explains. “Through our inclusive hiring initiatives, we have not only established strategic partnerships with external agencies to help recruit talented candidates, but we have also used technology to help ensure inclusive candidate slots for positions at ADM, as well as software to mitigate unconscious human bias in the hiring process.”
While the hiring process is key to attracting new talent, agribusinesses also need to ensure that they can retain a diverse workforce, according to van Acht.
She says ADM is “well on the way” to meeting its pledge to reach senior leadership gender parity by 2030, with women making up 44 percent of its professional EMEA workforce.
Finally, there are ways that farmland investors can encourage new entrants to the industry, particularly for those without access to capital.
In India, where more than half the workforce is employed in agriculture, smallholder farmers are often exploited by middlemen and are at the mercy of volatile commodity prices and extreme weather. Westchester’s parent company Nuveen led a financing round for specialist non-bank lender Samunnati – founded by agricultural lending veteran Anil Kumar SG – and raised $20 million in May 2019.
“Samunnati has studied and tailored its solutions to India’s critical agricultural value chains, impacting significant numbers of smallholder farmers,” says Nuveen’s co-head of impact investing, Rekha Unnithan. “And as it increases its reach, we’re seeing Samunnati truly fulfill its mission to make markets work for smallholder farmers.”
As investor support for greater diversity in the agriculture industry continues, a more joined-up approach to DE&I is likely to emerge, but as the data shows, there is still room for more progress to be made.
Westchester launched its Fruits of Employment initiative in 2009 to give individuals with disabilities access to competitive employment across custom-farmed properties in California, Oregon and Washington.
Fruits of Employment trains and employs workers with disabilities in the same job functions as other employees, promoting inclusive employment and decent work for all. Disability experts train farm managers on how to source, hire, train and support people with disabilities in performing a range of farming tasks.
Applicants are pre-screened for job compatibility and must be able to perform essential job functions. They are then trained to perform standard tasks such as pruning, harvesting and hoeing. Afterwards, they are able to learn advanced skills, such as tractor driving and irrigation maintenance.
“People with disabilities are the largest minority in the US, [making up] 19 percent of citizens,” says André Chaves, a sustainability director at Westchester. “This is an important effort considering that in the US only 41 percent of people with disabilities are employed, according to the US Census Bureau.
“Not only does the program provide employment to people with disabilities, it also attracts new people to enter the agricultural industry who might not otherwise consider it.”
Since its inception, 150 workers have found a job within the program.