<p></p><p>In a recent live chat, experts in the nut industry took questions on the biggest challenges facing the supply chain – here’s what they said <br></p> <p>Our guest panel highlighted five key challenges; labour standards, climate change, low yields, transparency and environmental and social accounting.</p><p>Challenge: labour standards <br></p> <p>One of the nut industry’s biggest concerns over the years has been labour standards. One issue in areas of Vietnam and India is home working – where employees process nuts at home – which is difficult to monitor for safety and hours worked. Even in factories women working in cashew production in India earn 30p a day and are exposed to smoke and the nut’s corrosive oil, according to a 2007 <a target="_blank" rel="nofollow" href="http://www.actionaid.org.uk/sites/default/files/doc_lib/actionaid_who_pays_report.pdf">Action Aid report</a> .</p><p>Any business should assume there are issues with labour, says Daan de Vries, UTZ Certified. “As a general rule, farming all over the world is a low-margin business, with pressure on cost and therefore on labour conditions.”Though the scale and nature of labour abuses can be difficult to identify, Sabrina Bosson, Fair Labor Association (FLA), suggests businesses start by assessing conditions in their supply chains against an established code of conduct, with identifiable performance benchmarks. Monitoring has its limits though, and communicating directly with workers is key. The FLA expects companies to ensure multiple functioning channels for workers to report grievances, with at least one ensuring confidentiality.Ryan Shenk, Sunshine Nut Company, points that often branded nuts do not ‘own’ the value chain and are instead buying from suppliers. This makes it hard for ethical consumers to award the positive efforts of processors addressing poor labour conditions, because the two are disconnected. <br></p> <h1>Challenge: climate change</h1> <p>Unpredictable seasons, increased temperatures, frost, and extended drought periods are problems for the whole agricultural industry – key to mitigating its impacts is preparing farmers.Dan Binks, Liberation Foods CIC, says the impact of climate change on nuts is most severe in the southern hemisphere, and that companies buying nuts from small farmers there should work with them to improve their understanding of the climate.While De Vries says there are ad hoc solutions – such as lighting torches to protect crops from frost – the long-term sustainability of farming depends on the professionalism of farmers. In Turkey, the world’s biggest producer of hazelnuts, climate change is expected to create water shortages while the population will grow from 76 million to 93 million by 2050. De Vries says overcoming this will require an attitudinal change among ‘go with the flow’ hazelnut farmers.Along with improving farmer’s knowledge, Technoserve’s Shakti Pal, adds that improved infrastructure is also important, like the availability of dry yards and warehouses at a community level. <br></p> <h1>Challenge: low yields <br></h1> <p>Olam’s Chris Brett says that one of the main problems for cashew nuts in Africa is very low yields at farm level.Mozambique, for example, was the worlds largest exporter of cashews in 1975, but investments were withdrawn after independence, resulting in a steep decline. Shenk argues that with renewed investment into training and resources, smallholder farmers could increase their yields and income.Binks states that the problem with Africa’s low cashew yields is mainly down to the lack of collective organisation of farmers to get their product to market at a reasonable price. This would provide incentives to increase volume and quality. <br></p> <h1>Challenge: accounting for environmental and social costs</h1> <p>According to Pal, the private sector does tend to account for the environmental and social costs in the final price of nuts but “due to heavy fluctuations in the market – over 30-35% in the recent past – these costs dilute quite easily, which is the main problem for African processors.”Binks adds that certifications, such as FLO, offering premium payments back to the producers go some way to address environmental and social concerns, but that the industry needs to promote this more with the consumer base. <br></p> <h1>Challenge: transparency</h1> <p>“In the traditional supply chain, processors buy their cashews from middlemen (who often in turn buy from middlemen), who buy the cashews from small holders,” explains Bernd Isenberg, The Sustainable Trade Initiative.It’s easy to see how visibility can be lost, especially with cashews where the nuts are grown on one continent and processed on another. One way of reducing the complexity of the supply chain is processing locally. Pal says: “Transparency will come only with traceability ... Promoting local processing at origin is the only solution, but who will pay the learning costs?”Brett says investing in processing capacity in producing countries is a triple win: for Olam, for the producers and communities as it increases local employment, and for the environment as it reduces the supply chain’s footprint.Improving technology to link farmers to the market, or directly to processing units is another way to improve transparency, says Brett, with Shenk pointing out that the internet has allowed global connectivity across global supply chains. <br></p> <p>The know your nuts series is funded by Olam. All content is editorially independent except for pieces labelled ‘brought to you by’<em> <a target="_blank" rel="nofollow" href="http://www.theguardian.com/sponsored-content">here</a></em>.<br></p><p></p>