Impact of the living income gap 

The inability of small-scale farmers to earn a living income is a major issue for various reasons.

The need to support their families could lead to child labour, deforestation of land for additional income, the use of inexpensive environmentally damaging practices, and so on. In addition, in search of employment, many individuals migrate to urban areas, making it increasingly challenging to encourage young people to pursue farming careers.

Causes of the problem

There are several factors that contribute to the gap between a farmer's actual income and a living income. For example:


Structural (too) low prices due to:

  • Weak negotiation position in the supply chain.
  • Limited access to price and market information.
  • Low level of organisation.

Low (agricultural) productivity due to:

  • Extreme weather conditions.
  • Ageing plantations/trees (cashew nuts, cocoa, palm oil).
  • Poor-quality seeds.
  • Lack of knowledge on good agricultural practices.
  • Outdated or inadequate farming machinery.
  • Limited access to financing.

Addressing the living income gap

A living income is a fundamental human right that everyone deserves to have. Unfortunately, many farmers are not earning enough due to the low prices at which raw materials are purchased. In the final price of the product, the share that goes to the farmer is often small. In addition, the living income gap faced by farmers is influenced by gender, with female farmers experiencing a more significant gap due to unequal rights compared to men, such as land rights or the right to manage family finances. Solving this gap is a complex issue that requires collaboration in the supply chain. However, individual companies can still contribute to living incomes by performing "due diligence," which involves going through six steps.


Some specific measures to address the living income gap are provided below, and we will dive deeper into them in Module 7:

  • Research the difference between actual and living income in key supply chains. Many studies are available. For example, visit the ALIGN-tool.
  • Discuss with your supplier how you can contribute to better payment for the farmer.
  • Join coalitions of companies and civil society organisations working towards a living income, such as DISCO for cocoa, Ethical Tea Partnership for tea, and the Global Coffee Platform for coffee.
  • Assess to what extent specific certification systems are working towards a living income.

Sectoral examples

Food sector: Fair coffee and tea 

Simon Levelt, a coffee roaster and tea trader, has collaborated with Tracocca and Fairfood to launch a long-term initiative in Ethiopia aimed at bridging the income gap for coffee farmers. The project is supported by RVO and focuses on 628 small-scale coffee farmers associated with Moredocofe and Tade GG. The first step in the project involves determining the living income for these farmers - the amount they need to earn to make a decent living. Additionally, an assessment will be conducted to determine how much these farmers currently earn. Based on the identified gap, measures will be taken to address the issue. Involving local stakeholders is crucial in closing the income gap, as they can provide context about coffee production and the income gap. Collaboration across the entire supply chain will be necessary to effectively address this issue. Learn more about the project here.