Olam depends on 4.3 million farmers, as well as wider agricultural communities, for our volumes. We need them (especially the younger generation) to view farming and rural processing as viable sources of income. We focus on catalysing economic opportunity, inclusion, and good health. We call this ‘unlocking mutual value’.
Key 2016 focus areas
- Continue to support large and small‑scale farmer suppliers, in particular through the OLC
- Promote gender equality and opportunity
- Encourage good health and wellbeing among communities and workers
Key sector collaborations and commitments
- Sector initiatives include CocoaAction, WCF Cocoa Livelihoods Programme, Sustainable Rice Platform, and Partnership for Gender Equity (Coffee)
- Over 30 partnerships to improve livelihoods
We are guided by
- Olam Livelihood Charter
- Olam Supplier Code
- Olam Environment Policy
- Olam Sustainable Palm Oil Policy
- Olam Code of Conduct
- UN Global Compact
In this section we cover:
- Understanding life for rural communities in emerging markets
- Olam Livelihood Charter (OLC) – 6 years of impact
- On the ground support strengthened by collaboration
- Helping farmers in Papua New Guinea
- Empowering women and improving coffee quality in Brazil
- Teaching cotton farmers to count
- Bypassing middle men to unlock mutual value
- Helping to link farmers to banks
- Why we encourage smallholders to form cooperatives
- Continuing to invest in processing
- Supporting economic inclusion in developed nations
- Helping to deliver good health and wellbeing in Olam operations and rural communities
- Ensuring access to safe water and sanitation
- Encouraging employees to put their health first
Understanding life for rural communities in emerging markets
Olam buys from around 36,600 large‑scale and 4.3 million small‑scale farmers. While all face many of the same issues – from climate change to financial shocks – smallholders are much more vulnerable.
Crops such as cashew, coffee and spices grow best in developing countries in Africa, Asia and South America where GDP is low and rural infrastructure, including electricity, running water and roads, is poor. These farms are small (the biggest equate to just 6 football pitches (5 hectares) but are typically much smaller) and farmers often have limited access to education and finance. All of this impacts on how much the farmer can grow and earn.
Olam Livelihood Charter (OLC) – 6 years of impact
In 2010, we identified 8 economic, social and environmental principles to help smallholder communities become commercial rather than subsistence farmers. These were enshrined in the OLC which today supports around 302,552 smallholders. Due to a change in strategy, we are no longer directly buying from 66,000 smallholders in Zambia. However, many other programmes are either on track for OLC status or operate in communities where not all support may be required. Read our full 2016 OLC report here.
On the ground support strengthened by collaboration
Around 850 field officers work year round with smallholder communities. Partnerships are crucial for harnessing expertise and achieving scale. In 2016, we had over 30 customer, NGO, certification, trade, foundation and development organisation partners helping us to deliver 44 OLC initiatives (see olamgroup.com for a full list of partners, associations and memberships). We also work with many certifying bodies and, in 2016, 24% of OLC tonnage was certified.
Helping farmers in Papua New Guinea
Since 2014 in Madang, Olam Cocoa and Rainforest Alliance have been working with cocoa farmers to improve sustainability standards, which has improved yields, quality and traceability. Challenges in 2016 included low rainfall, ongoing problems with poor transport infrastructure, and educating farmers due to low literacy levels. The implementation of Good Agricultural Practices and ecosystem restoration has helped the programme’s 1,784 farmers, who also received a premium for their certified volumes.
Empowering women and improving coffee quality in Brazil
In many communities where Olam works, women have vastly unequal decision‑making power, control over household spending, and access to education, finance, land and inputs. Yet if women participated equally in the global economy, annual global GDP would increase 26% in 10 years (McKinsey Global Institute 2015).
Coffee’s biennial cycle can mean yields vary widely from year‑to‑year, impacting farmer income. New techniques can counter this, but not everyone is open to change. Our field officers in Carlópolis, Brazil, recognised that women’s involvement in post‑harvest processing significantly improved quality. Working with the International Women’s Coffee Alliance and the Government’s Department for Family and Social Development, training with women’s groups was held in 15 locations. Three of the 77 women involved won an award from IAPAR, the Agriculture Institute of Paraná State, for the quality of their coffee.
Teaching cotton farmers to count
If farmers cannot count, it is difficult for them to manage their finances.
In Côte d’Ivoire, Olam cotton subsidiary SECO runs literacy courses in remote farming communities to teach basic reading, writing and maths to those who did not have the opportunity to attend school. Between 2012 and 2016, the courses were attended by 624 women and 1,095 men.
This support is part of a much wider OLC programme, certified by Cotton Made in Africa, which in 2016 received a ‘highly commended’ recognition under the Unilever Global Development Award, supported by Business Fights Poverty. The judging panel reported the programme has “the potential to impact an entire industry andadmirably demonstrated an effective and sustainable business model”.
In February 2017, the programme was highlighted by the Business and Sustainable Development Commission1 in a film hosted on the Economist Films website2 within the Global Compass series.
Continuing to invest in processing
Setting up processing in emerging markets brings benefits to Olam and communities. Cashew processing offers significant levels of employment for women, often in regions where there is little alternative – we employ 15,000 people in 20 cashew processing units in Africa and Asia, around 80% of whom are women. In 2016, a new facility in Vizag, India, has generated direct and indirect (contract) employment for 750 women.
Investing in processing close to the farmers means they see a ready market for their crop and want to sell to Olam. It also reduces transport and environmental costs for our business. Examples include cashew processing in Côte d’Ivoire and Mozambique and our sugar and spices processing in India.
Supporting economic inclusion in developed nations
Olam recognises that large‑scale farmers can also face cash flow and crop challenges. So, for example, we support many tomato, garlic and onion growers with improved varieties that our teams have developed. We also strive to be a good counterparty.
Chuck McGlamory at the Doster Peanut Company, a buying point owned by Olam subsidiary McCleskey Mills in Georgia, USA, explains that, during the harvest season, as many as 30 peanut growers can be sending their volumes daily which need inspecting, quality testing and unloading: “We ensure that each grower is treated equally no matter what volume he supplies, otherwise we lose the right to become his buyer of choice.”
Helping to deliver good health and wellbeing in Olam operations and rural communities
Life expectancy in developing countries remains low, compounded by poor nutrition and lack of access to healthcare. This is not just unacceptable for the affected individuals and their families, but has a direct economic cost for the individual and the country.
In 2016, we continued to roll out the Olam Healthy Living Campaign. Teams in numerous countries held sensitisation sessions on how to prevent malaria, diarrhoea and other common diseases. World Malaria Day on 25 April was a focus of activity, and by the end of the year we had reached 104,000 people in Africa with sensitisation, screening and treatments:
- Republic of Congo Wood Products team, Congolaise Industrielle des Bois, distributed treated mosquito nets to personnel
- Côte d’Ivoire Cocoa and Tanzania Coffee distributed nets to cocoa cooperatives and their communities
- Ghana Cocoa donated malaria treatment drugs to local health services.
Ensuring access to safe water and sanitation
Olam is addressing water, sanitation and hygiene (WASH) access for employees in the workplace, particularly in plantations in highly rural emerging economies. Discussions with other agri‑business and forestry companies within the World Business Council for Sustainable Development (WBCSD) uncovered the need for further sector‑specific WASH guidance in agricultural settings.
To support the development of initial guidance and explore opportunities for best practice development, a member of the WBCSD’s water team undertook a 1‑week learning mission to Olam’s palm oil plantations in Gabon in June 2016.
The plantations employ more than 6,500 people, primarily from rural villages which have no running water. A baseline assessment was conducted in collaboration with local staff, mapping WASH provisions already put in place, and identifying action points. During the mission, it was revealed that a large part of absenteeism was attributed to water‑related and water‑borne diseases.
The action points are being developed into a work plan for implementation during 2017, which will provide additional focus on sanitation provision, along with employee awareness‑raising on hydration and heat stress.
Encouraging employees to put their health first
Our focus on health is not just for rural communities. Increasingly, we see the impacts of poor nutrition and sedentary lifestyles across both developed and developing nations.
In the USA, our team embraced the 2016 World Health Day theme of Beat Diabetes, inviting a nutritionist to the office to speak about diabetes, launching a walking club, and hosting a ‘Hidden Sugar Demo’ unveiling the high sugar levels in the most commonly consumed foods.
Meanwhile, in Tanzania’s Dar es Salaam head office, a nutritionist delivered a wellness talk on how to choose and keep a healthy lifestyle. Voluntary medical check‑ups were provided and a blood donation station was set up courtesy of a local blood bank.
The Zika virus also emerged in South and Central America in 2016. We immediately issued guidance to employees and we are pleased to report that nobody was impacted. In addition to personal protection, employees were advised to empty, clean or cover containers that can hold water, such as buckets, flower pots or tyres, so that places where mosquitoes could breed were removed.
The full report is available to download here.