Economic Prosperity Case Studies
Our main focus in setting up any of our Initiatives rests on empowering rural communities through livelihood security. We see the ability of rural farmers in emerging economies to be long-term self-sufficient as the key to tackling the poverty issues that effect these countries. Our work here, through the eight Olam Livelihood Charter Principles, looks to raise farmer incomes through increased yield and quality by offering finance, training and agricultural inputs. In addition, it is essential to provide these farmers with market access at a fair, transparent and competitive price.
Cotton revival in Mozambique
Cotton was a major cash crop in Mozambique but for many years seed cotton production has steadily decreased, dipping to an all time low of 45,000 tonnes of seed cotton production last year. This decline greatly concerned the Mozambique government who consequently developed an ambitious six year Cotton Value Chain Revival and Development Plan in 2011. This strategy seeks to improve the prosperity of cotton farmers by increasing their competitiveness through value-added cotton products.
Olam is an active partner in this programme collaborating in a number of ways – introducing new seed varieties; supporting the use of high quality inputs and bringing Better Cotton Initiative (BCI) into Mozambique. BCI certification will give the origin an immense image boost and will catapult the country into the market for premium retailers worldwide.
The first results are very encouraging with sector growth of 35% and a doubling of farmer income per hectare. We expect to reach 150,000 tonnes of seed cotton production by 2017. We are proud to be an ongoing stakeholder in this important journey undertaken by the Mozambique government.
Creating market access for cashews farms in Africa
The cashew crop is a valuable source of farmer income to communities and also creates an important employment opportunity for women through processing the cashews locally – a form of inward investment pioneered by Olam in Africa. Olam has developed a successful ‘integrated cashew model’, linking the farmers direct to our local processing units. The processing facility provides direct market access for the farmers spread across the region. As part of our capacity building effort, we have constructed four drying platforms in partnership with USAID. We are a lead partner in the African Cashew Initiative (ACi) which has made significant gains across all African producing countries through:
Training manuals produced in 3 languages
300 trainers completed certified courses
Direct training given to 130,000 farmers
Cashew tree nurseries established and 100,000 improved sapling varieties issued, giving the potential to increase yield to 30 kgs per tree from the existing 8 kgs per tree
Developing quality coffee in Peru for a growing market
We continue to develop our global network of small-scale coffee farmers, helping communities improve the quality of coffee and access niche markets. Olam and our technical implementing partner, Technoserve, were granted USAID funding for the first major Initiative to be established in South America, known as the ‘Alliance for Economic Development in the San Martin Region, Peru’. This Initiative aims to build businesses that create economic growth for the region and our programme achieves this by developing a high quality certified speciality coffee supply chain. To meet the speciality grade for the international market, farmers are trained in production, harvesting and semi-processing practices, resulting in premium value payments. The Initiative has completed its first full season, with 370 participating farmers, covering 900 hectares and there is a defined improvement in quality which has resulted in a premium of US$200 per tonne direct to the farmers (15% above market rate). A further 200 farmers covering 1,500 hectares have been added for the second year.
Certification of the specialty coffee is also being introduced to further enhance farmer incomes.
Increasing cocoa yields in Indonesia
Olam and Blommer Chocolate Company have two programmes with farmer groups in Indonesia in the Sulawesi (SAFOB) and Sumatra (SUMAFO) regions. They were initially established to reverse the fortunes of cocoa farmers because of the severe decline in cocoa farming. USAID funding enabled a major expansion of the initial programme, so that there are now over 32,500 farmers in the two regions. The programme focuses on farmer training and the supply of good quality seedlings to help improve yields. There are 18 Information Centres and a number of dedicated farmer trainers operating in the field helping to raise the average yield to 50% higher than farmers outside the scheme in the same region. All our farmer based programmes have a focus on labour practices throughout the production and harvesting cycles. Key training components include an awareness of child labour issues and agreement to our ‘no child labour policy’ and safe storage and application of crop protection products.