Olam has a network of 3.9 million smallholder farmers worldwide that it works with through its Olam Livelihood Charter program. In 2014, Olam reached a milestone of purchasing 1 million tonnes of agricultural products from 350,147 farmers participating in the program across 30 countries. The document provides details on the achievements in 2014, including increasing the number of farmers by 445% since 2010, providing various training programs, financing, and investing in social programs around health, education, and infrastructure.
1. One million tonnes of sustainable agricultural products
Olam Livelihood Charter 2014
2. Overview
Olam has an extended network of 3.9 million farmers worldwide, predominantly
smallholders working 1-3 hectare plots. Where we have a direct relationship with
these farmers, we apply the Olam Livelihood Charter Principles with the goal of
bringing as many into the Olam Livelihood Charter (OLC) as possible. Only by
fulfilling the requirements of all eight Principles, can a sustainability programme
achieve OLC status.
The OLC was launched in 2010 when we formalised the activities that we had
been carrying out for many years at remote smallholder locations. This resulting
framework means we can standardise and scale the Principles across a wider
group of products and countries consistently. This year we have gone further
and worked with a third party verifier in Côte d’Ivoire to audit our OLC cocoa
supply chain.
We have managed to increase the number of farmers that have benefited from
being part of the OLC by 445% in the last four years (from 64,290 to 350,147).
This year we reached a significant milestone by hitting the one million tonnes
mark of agricultural products purchased by Olam from these farmers.
The data set in this year’s OLC runs from July 1st 2013 to June 30th 2014.
01
sustainability
staffGPS mapped farms
for traceability
SMALLHOLDER
LAND
21% on 2013
FARMERS
12% on 2013
Sustainable
agricultural
products
400% on 2013
NEW products
Sugar, Chilli and
Black Pepper
350,147
623,150
HECTARES
YEAR
2014
15,865 Farmer
training DAYS
184% on 2013
1million
tonnes
85,000
HECTARES
Highlights 2014
3
NEW COUNTRIES
Republic of Congo,
Honduras, India, Vietnam,
& Papua New Guinea
5
10
new initiatives
(30 in total)
1,062
Financial highlights
US$183.7 million
in short and medium-term financing
57% on 2013
US$2 million in long-term financing
for supporting farm assets such
as ploughs, warehouses, and
drip irrigation
33% on 2013
US$469.8 million market access
paid to farmers
76% on 2013
US$21.2 million quality premium paid
53% on 2013
US$4.6 million invested in training
21% on 2013
Introduction
Vision
We aim to bring prosperity
to our farming communities
and build long-term relationships
based on fairness and trust,
transferring skills and knowledge
through partnerships.
3. 02
Finance
We offer farmer groups interest-free short
and long-term finance for crop production,
purchasing and asset investments.
Key activities – structuring farmers into
commercially viable groups; offering short-term
micro-financing and short-term advances for
crop purchases (less than one month); mid-term
loans for the procurement of farming inputs;
and long-term loans for asset procurement
(e.g. equipment, warehousing) that improve
farmer productivity and product quality.
Improved yield
We invest in training and support
farmers with the supply of inputs.
Key activities – implementation of Good
Agricultural Practices (GAP), structured training
modules (including farming training) through
learning centres and extension providers,
establishment of model farms and farmer field
schools, provision of seedlings, tree grafting,
fertiliser and crop protection products.
Charter Principles
Labour practices
We educate farmers on child labour,
safety, gender and financial issues.
Key activities – campaigning within communities
and educating farmer groups to adhere to a
‘no child labour policy’, facilitating the opportunity
for primary education, training in the use of
safety equipment, gender equality awareness
and promoting personal financial and business
management skills.
Market access
We offer farmers a fair and
competitive price.
Key activities – regular communication of prices
which move in line with world markets, continued
local presence through the entire crop season,
direct payments (including by mobile phone),
aggregation of produce on farm, transportation
services and constant financial liquidity for products.
Quality
We encourage farmers to produce
good quality by enhancing value
to farmers and our customers.
Key activities – farmers engaged with pricing that
reflects good quality, promotion of defined quality
parameters, premiums paid relative to average quality.
1
2
3
4
Traceability
We ensure products can be tracked
to source and certified where required.
Key activities – operating close to the farmgate
enables a full chain of custody to be followed,
enhanced by technological advances and
individual farmer record keeping, all to independent
auditing standards.
Social investment
We support rural health, education
and infrastructure.
Key activities – investing in community
based assets that directly contribute to social
development, such as: building or refurbishing
primary schools; the supply of educational
equipment; building of health centres; the drilling
of boreholes and sanitation improvements.
Supporting community health awareness
through HIV/AIDS and malaria campaigns.
Environmental impact
We are improving our overall environmental
footprint across the supply chain.
Key activities – working with farmers to maximise
production on existing farms so reducing future
deforestation, water management and reinforcing
sustainable agricultural practices.
8
5
6
7
03
4. Health • One health centre constructed
• Two health centres refurbished
• One ambulance provided
• Medical equipment supplied
• Funded health specialist NGOs to deliver
community based services
• 66,000 community
members reached
Health
campaigns
• Health campaigns targeting HIV/AIDS, maternal
health and malaria at a cost of US$360,000
• 180,000 community
members reached
Education • Five new schools constructed
• Two schools rehabilitated
• Three IT centres established and equipped
• Basic school equipment and uniforms supplied
• 30,000 students
reached
Water access • 12 boreholes established
• Two water purifying units constructed
providing potable water
• 8,000 community
members reached
Infrastructure • 14 community centres constructed
to enable the delivery of health, education
and training services by a range of providers
• Roads constructed for farmer access
to agri-inputs, services and markets
• 7,000 community
members reached
• 42,000 farmers
linked to improved
productivity and
livelihoods
Social investments
We support rural health, education and
infrastructure development to contribute
to the wellbeing of thriving communities.
Our social investment projects are primarily focused on
building physical assets to enhance the standard of living
within the community, as well as those which increase
productivity, such as warehouses and solar dryers. To
broaden our impact we also contribute to education and
health campaigns that are recognised as being of high
importance to both the national governments and
the international donors.
Olam has built a large network of farmer and community
support staff, now reaching 1,062 across 30 countries,
who are delivering the Charter Principles to farmers.
Through this network we are able to collaborate directly
with our farmers, identifying their needs and designing the
community projects that meet their priorities. We can then
leverage additional funding through our partnerships with
donors and other companies to deliver improved services
to the farmers and wider community.
Overall US$1.5 million was invested in the past year
to strengthen communities through direct asset building
and supporting health and education campaigns.
Some examples of social investments made during
the year are listed to the right.
04 05
Tonnes Initiatives
Farmers Hectares
142,294
Partners: COMPACI (BMGF4
, GIZ5
and DEG6
),
Ghana Health Services, Ghana National Service,
GIZ, Personnel Association and SAVE Ghana
Certification: Cotton Made in Africa, BCI
210,170
1
Includes inputs 2
Better Cotton Initiative 3
Competitive African Cotton Initiative 4
Bill & Melinda Gates Foundation
5
Deutsche Gesellschaft für Internationale Zusammenarbeit 6
international financing subsidiary of KfW
Teressa Buana (45)
Mozambique
Teressa Buana has been a cotton farmer since the age of 18.
Today aged 45, married with five daughters and five sons, her
and her husband continue to work in their cotton field.
The benefits Better Cotton Initiative (BCI) has brought to her life include:
• Safeguarding her health by learning how to work with protective equipment during
pesticide application
• Saving money by reducing the amount of pesticides applied
• Ensuring the future of her field by caring for the soil when planting cotton seed
• Training on Integrated Pest Management, better harvesting and storage techniques has
resulted in a better cotton price
• Staying within the Certification guidelines by not using child labour, or letting pregnant/
nursing mothers spray pesticides
Côte d’Ivoire
Ghana
Mozambique
Zimbabwe
Zambia
172,409
5
Cotton
Achievements
• US$26 million in no interest crop financing1
• The principles of Better Cotton production applied in Côte d’Ivoire, Ghana and
Mozambique, under the BCI2
and COMPACI3
partnerships
• 8,275 farmer training days
• 315 farmer field schools established
• 6,500 farmers in Côte d’Ivoire and Ghana trained in Integrated Pest Management
techniques to reduce chemical application
• 7,890 tonnes of cotton seeds distributed on a no cost basis
• US$150k invested in rural roads and bridges, serving 30,000 villagers in Côte d’Ivoire,
Mozambique and Ghana
• Six multi-use community centres built in Mozambique
• 7,000 villagers reached with HIV/AIDS testing, basic medical check-ups
and general health awareness in Côte d’Ivoire, Mozambique and Ghana
Key facts
Participating countries
5. Key facts
Participating countries
Cocoa
Tonnes Initiatives
Farmers Hectares
122,200
Achievements
• US$17.5 million paid in premiums
• 24% increase in participating farmers and 50% increase in hectares over previous year
• 593,000 cocoa seedlings distributed7
• World’s first climate-smart verified cocoa (Ghana) – aimed at stopping deforestation, protecting
and improving the existing ecosystem and reducing greenhouse gases through the application
of climate-smart land use practices in partnership with Rainforest Alliance.
• OLC cocoa initiatives in Côte d’Ivoire are now third party audited by Intertek
• Olam Farmer Information System (OFIS) now being rolled out to develop a database and
map all cocoa farmers within the initiatives
• 454 farmer field schools established to support farmer training
• 4,061 farmer training days provided
• Trained over 300 farmer trainers from 132 cooperatives reaching 47,800 members
through a Fair Labor Association collaboration in Côte d’Ivoire focused on improving
labour standards and rolling out the Olam Supplier Code8
• Rural investment examples include supporting the construction of five schools in
Côte d’Ivoire9
, five boreholes in Ghana, and 243 solar dryers for Indonesian farmer
groups to improve cocoa quality
“ Thanks Outspan for bringing this World Bank
Project to our doorstep! I can pay my kids’
school fees and put a little something aside
for family needs with the money I make at the
nursery. The clonal seedlings we produce are also
interesting farmers to get back to cocoa farming.”
Mrs Rosewitha Madiat (48)
Papua New Guinea
Partners: Costco, Hershey, Mars, Meade Johnson,
Mondelez, Nestlé, Rainforest Alliance, The Blommer
Chocolate Co., World Bank
Independent verification: Intertek
Certification: Fairtrade, Rainforest Alliance, UTZ
Key facts
Participating countries
Cashew
Tonnes Initiatives
Farmers Hectares
42,626
Achievements
• US$260,560 paid in premiums for organic cashew in Côte d’Ivoire
• 9,261 female farmers, 61% increase over last year
• 12,840 cashew seedlings distributed
• 91 farmer field schools established
• Built three community warehouses and invested in community drying yards
in Côte d’Ivoire, Ghana and Mozambique
• Reached 10,000 community members with HIV/AIDS testing and general
health campaigns in Côte d’Ivoire, Ghana, Nigeria and Mozambique
“ Olam’s training programmes for cashew farmers
have helped us improve our yield. Olam has
helped me to become a leader in my community
by naming me the head of my farmer association.
I educate my fellow cashew farmers and share
with them information from Olam on how to take
care of their farms and how to do good business
with cashew.”
Mr Alhaji Siaka (54)
Ghana
Partners: African Cashew Alliance, Ghana Health Services,
Hygiea, Mission of Hope, Sustainable Trade Initiative (IDH)
Certification: Fairtrade, Organic
0706
Côte d’Ivoire
Nigeria
Ghana
Mozambique
122,880
41,604
241,160
103,768
5 9
7
some free, some financed 8
for more information visit www.olamgroup.com/sustainability
9
funded with contributing partners: Costco, Nestlé and The Blommer Chocolate Co.
Indonesia
Papua New
Guinea
Côte d’Ivoire
Nigeria
Congo
Ghana
6. Tonnes Initiatives
Farmers Hectares
700,694
Partners: Belgaum, HUL10
, IFC11
, KLE Society12
,
Solidaridad, WWF13
Certification: Bonsucro
“ Through the different workshops we have
learned how to efficiently control the different
plagues and diseases that affect coffee trees.
We are now saving money, know exactly
what inputs to use and understand their
environmental impact.”
Mr Gober Trujillo (41)
Honduras
0908
Shri is connected to an OLC initiative that has recently applied all eight Principles. The goal
is to increase the sugarcane yield of farmers by at least 15% within three years, in order
to achieve certification under the Bonsucro standard. The programme will include training,
capacity building to enhance productivity and rural entrepreneurship development.
Shri Vaiju Laxman Kinikar (67)
India
“ Timely cane payment and extension activities
implemented by Olam have helped us attain
financial security and social stability. Now I
understand crop physiology more easily, and
better nutrients, pest and disease management
have helped me reduce the cost of inputs and
get the maximum out of them.”
India
Tonnes Initiatives
Farmers Hectares
71,526
Partners: DE Foundation, Starbucks, Sustainable
Trade Initiative (IDH)
Certification: 4C, Rainforest Alliance, Starbucks
C.A.F.E. Practices, UTZ
Côte d’Ivoire
Colombia
Honduras
Indonesia
Vietnam
Cameroon
33,650
14,258
12,623
15,394
6
*New to OLC
2*
10
Hindustan Unilever Limited 11
International Finance Corporation, World Bank Group 12
Karnatak Lingayat Education Society
13
World Wildlife Fund
14
2009 baseline data 15
prices are factored to be equal for direct comparison
Sugar
Achievements
• 263,686 tonnes of certified sugarcane produced to Bonsucro standards across
an area of 5,744 hectares of certified sugarcane
• 80 model farms established as training locations
• A dedicated team of 15 qualified agricultural technicians and 80 trained extension
workers who are exclusively engaged in training activities with farmers
• Capital finance of over US$22,000 to help farmers install drip irrigation
• US$371,000 invested in rural roads serving 30,000 farmers to enable them access
to agri-inputs, services and for rapid delivery to the mill to maintain quality through
prompt processing
• Community access to the primary school established for the children of the
mill’s employees
Coffee
Achievements
• Farmer numbers have increased by three times and hectarage by five times
in the last year
• New initiatives in Vietnam, Honduras and Côte d’Ivoire
• 2,609 farmer training days provided
• 6,822 farmers trained on safe handling/application/use of pesticides and fertilisers
in Cameroon, Colombia, Honduras and Vietnam
• 685,300 coffee seedlings distributed to rehabilitate farms
• Olam Cameroon and DE Foundation completed the first five year phase:
– Average yields increased from 480 kg green bean per farm14
, to 660 kg
– Incomes improved from US$755 per year in 2009 to US$1,084 per year in 201315
– The project has also focused on farm rehabilitation with the establishment of
36 village-based nurseries run by farmers on a commercially viable basis and have
produced and distributed 242,000 seedlings, enough to replant 242 hectares
– 35% of registered farmers are female
– Due to the success of the project, a second three year phase of the partnership
has started that also now includes the Sustainable Trade Initiative (IDH)
Key facts
Participating country
Key facts
Participating countries
7. “ Olam Nigeria is the only company that has come
to our village to conduct a workshop in training
farmers. Not only that, they introduced improved
sesame seeds which they distributed to farmers
free of charge. More than 95% of my fellow
villagers are benefiting from Olam Nigeria.”
Adamu Sani (35)
Nigeria
1110
Kota is connected to an OLC initiative that has recently applied all eight Principles.
The initiative’s focus is on Integrated Pest Management. This environmentally sensitive
approach to eliminate pesticide residues and Aflatoxin opens up EU and US markets
to these farmers by meeting all major food safety norms through a reduction in pesticide
usage of 30%.
Kota China Bollaiah (63)
India
“ Olam’s transparent way of procurement
at farmgate made me feel really proud
by realising the remunerative price and
timely payments had helped to elevate
my social status and give me recognition
in my village.‘Dhanyavadamulu’ (‘Thanks’)
to the Olam Team.”
Tonnes Initiatives
Farmers Hectares
3,300
Partner/Certifier: Rainforest Alliance
India
Tonnes Initiatives
Farmers Hectares
450
Nigeria
1,619
2,000
1,048
622
*New to OLC
11*
Chilli
Achievements
• Training in Good Agricultural Practices has improved average yields by 10% within
the first year
• Six farmer field schools established
• Farmer training is now based on the Rainforest Alliance Sustainable Agricultural Standards
(SAS) to enable farmers to become certified
• US$113,197 paid in premiums in the first year
• Construction of two water purifying plants serving 3,000 residents in two communities,
enabling access to potable water (with fluoride added to support the national
government’s campaign to reduce tooth decay)
Sesame
Achievements
• Farmer numbers increased from 561 to 2,000, representing a 400% increase and
an area increase of 300%
• Ten farmer field schools established in the communities, enabling access to training
and development
• US$112,500 premiums paid to farmers
• 762 participating women farmers, representing 38% of the total number
• Four boreholes constructed to provide access to clean drinking water
• Current impact:
– Average gross income per farmer: US$422
– Average gross income per hectare: US$521
– Average production: 802 kg per farmer
– Average yield: 278 kg per hectare
Key facts
Participating country
Key facts
Participating country
8. 12
Nguyen is connected to an OLC initiative that has recently applied all eight Principles.
The initiative is assisting the pilot group of 98 farmers to produce one of the world’s first
Rainforest Alliance certified black pepper products. During the project, farmers have been
supported in establishing sustainable cultivation practices by complying with the SAS.
Mr Nguyen Van Chinh
Vietnam
“ The project is giving a real benefit and an active
effect on our farmer’s lives. Economically, Olam has
committed to buy all this sustainable pepper, with
some premium over the normal pepper prices.
Therefore, I can see that our income will increase.
Moreover, we use water, fertiliser, and pesticides in
a more suitable way, which will decrease our input
cost. Socially, I together with other farmers, have
got to know how to conserve the water and other
resources, without destroying or doing harm to it.
In short, I believe that our lives will be better and
income will be more with this project.”
About Olam
Olam is a leading agri-business operating
from seed to shelf across the world. Our
team of 23,000 people has achieved global
leadership positions in many businesses
such as cocoa, coffee, cotton, edible nuts,
rice, spices and vegetable ingredients.
The company began its life trading cashews
in Nigeria in 1989, making this our 25th
anniversary year. Olam means ‘transcending
boundaries’ describing fittingly our journey
from one product platform to 16, one
country to 65 and from a private company
to a public one through our listing on the
Singapore Exchange in 2005.
Another translation for Olam is ‘everlasting’.
Our Common Purpose to Grow Responsibly
focuses the whole team on building a
company that is enduring with a
sustainable future.
Tonnes Initiatives
Farmers Hectares
295
Partners: Department of Agriculture and Rural
Development of Ba Ria-Vung Tau Province, SNV16
Certification: Rainforest Alliance
Vietnam
For more information visit:
www.olamgroup.com
102
98
*New to OLC
1*
16
SNV Netherlands Development Organisation
Pepper
Achievements
• Working with a pilot group of 98 farmers to produce one of the world’s first Rainforest
Alliance certified black pepper supply chains
• Farmers were supported to apply Sustainable Agriculture Standards (SAS), developed
by the Sustainable Agriculture Network (SAN) to generate ecological, social and economic
benefits and market access
• The project has been working with one farmer cooperative and seven farmer groups
have been created
• Four farmer Village Societies in Ba Ria-Vung Tau Province have been provided with
computer equipment and furniture
Key facts
Participating country
9. Olam International Limited
9 Temasek Boulevard
11-02 Suntec Tower Two
Singapore 038989
Telephone (+65) 6339 4100
Facsimile (+65) 6339 9755
www.olamgroup.com
Corporate Responsibility and Sustainability
New Zealand House
80 Haymarket
London SW1Y 4TQ
Telephone (+44) 20 7389 6464
Facsimile (+44) 20 7389 6465
crs@olamnet.com