Balancing Nature and Livelihoods: How Smallholder Farmers Can Turn Biodiversity into a Business Case
Biodiversity – the variety of all living organisms on Earth – is under threat. Climate change, deforestation, pollution and the overuse of natural resources are causing a rapid decline in species, and consequently in the vital services they provide to people and the planet. For smallholder farmers, this global challenge is felt in practical ways: Declining soil fertility and pollination, irregular rainfall, and new pests directly affect their yields and incomes.
Against this background, Hanns R. Neumann Stiftung hosted an event during the Hamburg Sustainability Week 2025, held alongside the Hamburg Sustainability Conference, to address one of the most pressing questions for the future of coffee farming: How can smallholder farmers strengthen their livelihoods while adopting practices that preserve biodiversity? The event titled “The Smallholder Dilemma: Balancing Nature and Livelihoods” brought together experts and practitioners to discuss both the challenges and opportunities of aligning biodiversity conservation with economic realities.
A recording of the event is available here.
Understanding the Smallholder Dilemma
“Smallholder farmers face the dilemma of meeting their daily needs while also protecting the natural resources that their farms depend on”, said Michael Opitz, Director of HRNS, as he opened the event. Modern agriculture largely relies on monocultural systems that deliver short-term gains but deplete soils, reduce biodiversity, and make farms more vulnerable to pests and climate change. "This is the result of the fact that, in recent decades, priority has been given to the mechanization and commodization of large-scale agriculture", explained Martin Frick, Head of the World Food Programme’s Berlin office.
Coffee has not been immune to these trends. Monocropping and dependence on chemical inputs make farms increasingly vulnerable. Rising temperatures, shifting rainfall, and spreading pests reveal the limits of these practices. If coffee is to remain a viable source of income, there needs to be a shift in agricultural thinking – one that incorporates biodiversity into farm and landscape management while ensuring that smallholder livelihoods remain secure. “If we understand smallholder farmers not only as producers of food, but actually as the mechanics who keep our life-support system working, we would treat them in a completely different way”, Frick emphasized.
Implementing Biodiversity in Coffee Regions
HRNS’s work in East Africa, Latin America, and Asia show how biodiversity can be successfully integrated into smallholder coffee systems.
“One key way is through agroforestry”, said Morgan Mkonyi, HRNS’s Co-Country Manager for Tanzania, when presenting the organization’s current projects in the country. By combining coffee with shade trees such as banana or avocado, farmers can improve soil quality, reduce water evaporation, and diversify their income. Shade trees also provide habitats for pollinators and other species essential to healthy ecosystems (read Navigating the Transition from Monoculture in the Coffee Sector to learn more about agroforestry).
Other effective interventions include soil and water conservation through composting, mulching, and the use of biofertilizers, as well as integrated pest and disease management (IPDM) – using natural predators and biopesticides instead of synthetic pesticides while also ensuring the safe handling of chemicals. “Tree planting campaigns in schools and community-based water protection also help to promote biodiversity at the landscape level”, Mkonyi added.
Find out more about projects that HRNS is carrying out in Honduras, Tanzania, Ethiopia and Indonesia, and learn about different ways in which biodiversity can be integrated into coffee-growing regions.
Making Biodiversity a Business Case
For smallholder farmers, adopting biodiversity-friendly practices depends on their economic viability. “Before smallholders can consider biodiversity, their basic needs must be met”, reported Pablo von Waldenfels, Director of Corporate Responsibility at Tchibo.
Von Waldenfels illustrated this reality with a story from a visit to Honduras:
“One of the farmers said to me, ‘It’s very easy. As long as we don’t have our basic needs fulfilled, the monkey that comes to my farm and eats the fruit from the trees is my enemy. But when my family’s bellies are full, he becomes my friend, and I enjoy watching him eat the fruit grown on my farm.’”
“This is a nice picture of how farmers see biodiversity”, von Waldenfels reflected – a reminder that harmony with nature is possible when livelihoods are secure.
All panelists agreed that demonstrating the business case for biodiversity is the best way to promote it. “As coffee quality and yield are the most important factors for farmers, these are good points to start the transformation”, von Waldenfels added. Indeed, healthy soils and balanced ecosystems can enhance both. “In addition, shade trees and companion crops provide products for home consumption or sale, helping to diversify income and increase”, explained Theresa Ruperti, Program and Partnership Manager at HRNS. Reduced reliance on chemical inputs does not only increase the resilience to market shocks: IPDM, as well as compost and biofertilizers produced on-farm, can also be cheaper. And while income from carbon credits remains limited, it has the potential to grow in the future.
Overall, diverse farms tend to be more resilient and profitable in the long term – proving that moving away from traditional practices can benefit both people and nature.
Key Factors for Long-Term Success
A central factor for success is farmer-centered approaches that consider local and individual realities. “We collaborated with local research institutions in Tanzania to design agroforestry models that address farmers’ specific challenges. This proved to be incredibly helpful”, Mkonyi said.
Transformation also works best when introduced gradually. Planting shade trees in stages helps manage costs and allows farmers to adjust step by step. HRNS experience further shows that demonstration plots, where farmers can learn about and trial new practices, are a powerful driver of change. “Farmers are more willing to adopt new techniques, when they can see their impact”, Ruperti noted.
Combining measures – such as agroforestry, soil conservation, and beekeeping – amplifies impact and increases resilience. Equally important are strong farmer organizations, which help maintain new systems, provide access to resources, and market diversified products. Mkonyi and Ruperti therefore emphasized the importance of strengthening and collaborating with these organizations.
Shared Responsibility for Bridging Knowledge and Finance Gaps
Despite promising strategies and examples, considerable knowledge and finance gaps remain.
Many farmers still lack reliable information on biodiversity and practical guidance on its application. “In many areas, farmer field services have disappeared due to a lack of public funding, and agrochemical companies have filled this gap”, Frick explained. To close these gaps, HRNS supports the creation of regional Communities of Practice connecting farmers, local organizations, and private actors to exchange knowledge and coordinate action. “Our project experience shows that Communities of Practice are an effective way of disseminating techniques and lessons learnt”, said Mkonyi. In addition, advocacy is required to equip policymakers and local administrators with the knowledge and strategies necessary for integrating biodiversity into agricultural planning.
Financing the transition to biodiversity-friendly systems is another challenge, especially during the early years. Agroforestry and other ecological measures often require more labor and an initial investment – from tree seedlings to training. These costs are usually too high for farmers to bear alone. “As with climate change, shifting responsibilities only delays solutions”, Frick emphasized. “It is unfair to place the burden on smallholder farmers, who are the most vulnerable in the system. For transformation to succeed, all parts of the value chain must work together.” Governments can support farmers and their organizations with targeted funds or subsidies; development banks, UN organizations and non-governmental organizations such as HRNS can provide direct assistance; consumers, who can afford it, can contribute by paying more for sustainably produced coffee; and companies can integrate sustainable coffee into their portfolios, offer fair prices and, ideally, long-term purchase agreements.
In fact, farmers, companies, policymakers, and consumers all share a common interest: to continue producing, selling and enjoying coffee. This shared interest provides a basis for collective action and the opportunity to move from individual projects to systemic change. As von Waldenfels noted, companies like Tchibo already recognize their role in this transformation: “If we want to keep sourcing high-quality coffee in the future, we must ensure that the ecosystems it depends on remain intact. Investing into biodiversity is therefore also investing in the future of our business model.” Building on its long-standing field experience, HRNS is offering solutions for integrating biodiversity and livelihood goals across the coffee sector.
The transformation requires a lot of time and investment, but these costs will only be temporary and, ultimately, there is no alternative. As Martin Frick reminded the participants, “Biodiversity is not a luxury but the basis of human life on the planet.”
