Corporate social responsibility

KeyReadings in the native potato value chain METHODOLOGIES

TO FOSTER PRO-POOR
I N N O VAT I O N

How is it used? • Native Potato Market The participation of large companies in the native potato value
Chain and Poverty
A pilot partnership was established in
Reduction: Innovation chain boosts the demand and the potential to increase incomes for
2007 in Peru between the Pepsico around Corporate
company, non-governmental Social Responsibility. producers. However, it also represents a threat for small farmers,
organizations and small farmers for Article presented at the
the production of colored native ISTRC Symposium, Lima, who have low negotiation power and limited competitiveness.
potato chips (Lay’s Andinas). Papa Peru. 2009. Thomann A.
Andina and its research partner et al. Papa Andina and its partners promote a business model that
INCOPA provided support to integrates corporate social responsibility (CSR) into the native
• Agro-industry and
develop the business model
Poverty Reduction in
integrating CSR and served as the Andes: Innovation potato value chain.
facilitators to develop a around Corporate
labelling initative. Social Responsibility
(CSR) in the Native What is CSR?
Potato Market Chain. CSR is commonly defined as a company’s philosophy and ethical form of management
Poster presented at the
Results World Potato Congress,
that takes into account the expectations of its stakeholders in order to achieve
• The price negotiated between the company and the farmers has set a new Christchurch, New sustainable development.
benchmark for native potatoes. It represents a 100% increase over prices Zealand. 2008. Thomann
obtained in local markets, and means an average profitability of 30 % for A. et al. CSR is not just about marketing. And it should not be confused with philanthropy,
farmers. understood as short-term donations corresponding more to the company’s values than to
its stakeholders’ interest. CSR should be strategically linked to a company’s core business and
0.7 —
aim at strengthening a long-term relationship between the company and its stakeholders,
0.6 — resulting in economic, environmental and social benefits for both in the long run.
0.5 —
0.4 —
USD

“There is no successful enterprise in a failed society,

0.3 —
nor successful society with failed enterprises”
0.2 —
Stephan Schmidheiny
0.1 —
0— How does it work?
Traditional market T’ikapapa Chips industry A way for an agri-food company to implement its CSR, in the context of a high
value chain such as the native potato one, is to establish an innovative, long-term,
• More than 200 farming families have benefitted from a secure demand and and mutually-beneficial relationship with small farmers as suppliers. Such a
price for their production over the past 3 years. partnership lets the company take advantage of market opportunities for native
potatoes while contributing to reduce poverty.
• The Andean Potatoes Initiative has been established. This
public-private workgroup promotes a native potato trade It requires corporate investment in:
that integrates CSR. The Initiative has created a certification • Developing a market segment willing to pay a high price for a high-quality,
label, which highlights commercial products that respect environmentally and socially sustainable product.
CSR standards. • Developing supplier competitiveness and reducing the asymmetry in
bargaining power between the suppliers and the company by ensuring
fair buying conditions and investing in farmers’ capacity building.

Labelling initatives and public awareness campaigns driven by

independent parties can further strengthen this model. They provide
consumers with a guarantee and the company with credibility regarding
its efforts to invest in small-scale farmers in an impact-oriented way.

To implement such a business model, innovation and capacity

building are required both at the company and farmer levels.
Contact Research and development organizations can provide valuable
support to meet these needs.
Papa Andina
cip-pandina@cgiar.org
P A P A A N D I N A w w w. p a p a n d i n a . o rg
 Corporate social responsibility
KeyReadings in the native potato value chain METHODOLOGIES
TO FOSTER PRO-POOR
I N N O VAT I O N

How is it used? • Native Potato Market The participation of large companies in the native potato value
Chain and Poverty
A pilot partnership was established in
Reduction: Innovation chain boosts the demand and the potential to increase incomes for
2007 in Peru between the Pepsico around Corporate
company, non-governmental Social Responsibility. producers. However, it also represents a threat for small farmers,
organizations and small farmers for Article presented at the
the production of colored native ISTRC Symposium, Lima, who have low negotiation power and limited competitiveness.
potato chips (Lay’s Andinas). Papa Peru. 2009. Thomann A.
Andina and its research partner et al. Papa Andina and its partners promote a business model that
INCOPA provided support to integrates corporate social responsibility (CSR) into the native
develop the business model • Agro-industry and “Horizontal Evalua
Poverty Reduction in
integrating CSR and served as the Andes: Innovation potato value chain. learning, not o
facilitators to develop a around Corporate
labelling initative. Social Responsibility
(CSR) in the Native What is CSR?
Potato Market Chain. CSR is commonly defined as a company’s philosophy and ethical form of management
Poster presented at the
Results World Potato Congress,
that takes into account the expectations of its stakeholders in order to achieve
• The price negotiated between the company and the farmers has set a new Christchurch, New sustainable development.
benchmark for native potatoes. It represents a 100% increase over prices Zealand. 2008. Thomann
obtained in local markets, and means an average profitability of 30 % for A. et al. CSR is not just about marketing. And it should not be confused with philanthropy,
farmers. understood as short-term donations corresponding more to the company’s values than to
its stakeholders’ interest. CSR should be strategically linked to a company’s core business and
0.7 —
aim at strengthening a long-term relationship between the company and its stakeholders,
0.6 — resulting in economic, environmental and social benefits for both in the long run.
0.5 —
0.4 —
USD

“There is no successful enterprise in a failed society,

0.3 —
nor successful society with failed enterprises”
0.2 —
Stephan Schmidheiny
0.1 —
0— How does it work?
Traditional market T’ikapapa Chips industry A way for an agri-food company to implement its CSR, in the context of a high
value chain such as the native potato one, is to establish an innovative, long-term,
• More than 200 farming families have benefitted from a secure demand and and mutually-beneficial relationship with small farmers as suppliers. Such a
price for their production over the past 3 years. partnership lets the company take advantage of market opportunities for native
potatoes while contributing to reduce poverty.
• The Andean Potatoes Initiative has been established. This
public-private workgroup promotes a native potato trade It requires corporate investment in:
that integrates CSR. The Initiative has created a certification • Developing a market segment willing to pay a high price for a high-quality,
label, which highlights commercial products that respect environmentally and socially sustainable product.
CSR standards. • Developing supplier competitiveness and reducing the asymmetry in
bargaining power between the suppliers and the company by ensuring
fair buying conditions and investing in farmers’ capacity building.

Labelling initatives and public awareness campaigns driven by

independent parties can further strengthen this model. They provide
consumers with a guarantee and the company with credibility regarding
its efforts to invest in small-scale farmers in an impact-oriented way.

To implement such a business model, innovation and capacity

building are required both at the company and farmer levels.
Contact Research and development organizations can provide valuable
support to meet these needs.
Papa Andina
cip-pandina@cgiar.org
P A P A A N D I N A w w w. p a p a n d i n a . o rg