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Sustainability in action: Living examples of a policy vital to our planet’s future

By Moray McLeish, Vice President, Corporate Responsibility & Sustainability (CRS), Asia

As a Group, we are committed to our purpose of “Re-imagining Global Agriculture: Growing Responsibly” and it is the job of the CRS function to help interpret and implement this for each of our businesses, in each of their landscapes.

“Earth Overshoot Day” – the point in the year, researched and assessed by the Global Footprint Network, at which our consumption exceeds nature’s annual capacity to regenerate carbon, food, water, fibre, land and timber, was August 1 this year. A report in the Guardian pointed out “while ever greater food production, mineral extraction, forest clearance and fossil-fuel burning bring short-term
(and unequally distributed) lifestyle gains, the long-term consequences are increasingly apparent in terms of soil erosion, water shortages and climate disruption.”

As a big user of land and water, agri-business is firmly in the spotlight. We need to produce more food for more people, with less impact. This underscores the urgency of the Olam Living Landscapes Policy which aims to create a “positive impact in the places where we source and grow our products, working across our businesses and with our partners to create and sustain Living Landscapes, where prosperous farmers, thriving rural communities, and healthy ecosystems coexist.”

Three recent examples from Southeast Asia show how the Living Landscapes Policy is guiding us towards a net positive impact on farmers, their communities and the environment – differentiating Olam and attracting partners and customers alike.

Timor-Leste: Cooperation to restore coffee industry’s former glory

In Pahata, Liquica District, an hour’s drive from the capital Dili, coffee is an integral part of Timor-Leste’s culture and economy. It is the country’s largest non-oil commodity and a quarter of the population depends on coffee for a living.

But coffee production is also fragmented, and plantations need rehabilitation after decades of neglect. Farmers need support to help them harvest more, improve quality and regenerate their farms.

Environmentally sustainable production is the only way to improve the livelihood of the local farmers in the long term so we plant and harvest the crop with farmers, training them in Good Agricultural Practices and providing financial support to acquire appropriate technology, fertiliser and seedlings as a means to renewing their farms. The farmers who choose to participate in our programmes will sell their produce to Olam and are paid fairly, often receiving premium prices for the quality they are able to produce.

However, a sustainable end-to-end supply chain requires partnership, support from host governments, finance from development institutions and expertise from NGOs.

Development of the coffee sector is now a priority for the government of Timor-Leste and as Minister of Agriculture and Fisheries Estanislau Aleixo Da Silva says, Timor-Leste’s coffee is regarded as one of the best in Asia, if not the world, so the government has developed a clear route to restore its former glory on the world coffee map.

The Asian Development Bank (ADB) is helping to catalyse the government and private sectors to increase coffee productivity, quality and partnerships. Together with Japan International Cooperation Agency (JICA), ADB has provided Olam with a long term funding facility to support our capital expenditures and permanent working capital requirements in Timor-Leste, which go towards the programmes we implement on the ground for the farmers. Building on their partnership with us, ADB is also looking to provide grants to the government to implement training and other support programmes.

Arabica farmers blend ecological and economic priorities

The role of Olam Specialty Coffee’s Indonesian conservation expert, Dadang Hendarsyah, began when, as a search and rescue volunteer, he was responding to a deadly landslide that hit his home region of Bandung Sunda Hejo in 2009 – a tragedy caused by illegal deforestation by farmers growing vegetables to sell and to feed their families. With no deep root structures to hold it back, the earth slid down the hillside taking everything in its path.

The challenge therefore, was to find a solution that would prevent smallholder farmers from cutting down more forest by creating a positive incentive – carrot rather than stick. In addition to the native trees, various tree crops have root systems deep enough to help bind the soil but it was too cool in the highlands for cocoa, and oil palm is best planted in large plantations. There was, however, some history of growing Arabica coffee in the region during the 1800s when it had been planted by the Dutch.

In 2009, Dadang and a colleague convinced a group of eight farmers in this community to start planting Arabica on the steep hillsides – and the more they learned about the opportunity, the more farmers wanted to get involved. When they started out, it was conservation first, business second. So, instead of starting with the coffee plantation, they made a home for the coffee to live in, planting the bushes in the shade of the bigger native forest trees.

The team also contacted Perhutani, a sub-division of the Forestry Department of Indonesia, which was also trying to address landslide and flooding issues. Perhutani had developed a scheme to lease up to 2.5 hectares to farmers to plant crops with strong root structures that could grow in the shady understory of existing trees.

What Perhutani could not provide, however, was expertise in achieving optimum yield and quality, nor bring reliable buyers who would pay a good price beyond the traditional domestic market.

The farmers formed a co-operative Sunda Hejo Klasik Beans, which joined Olam Specialty Coffee in 2011 to further develop the cultivation of premium coffee in West Java with Olam linking them to the international export market. In 2014 Olam was approached by a customer to develop their sustainable quality programme with the Sunda Hejo farmers.

Today, with ongoing support and training from Olam and our customer to produce high quality Arabica, farmers are getting an almost threefold income from a crop that can live in harmony with the forest – a clear example of how agriculture can be re-imagined to enable farmers to prosper, communities to thrive and landscapes to flourish.

Transforming rice value chains

Unlike specialty coffee, rice is a staple crop for roughly half the world. As the largest GHG emitting crop in the world, accounting for 10% of man-made methane, and correlating heavily with poverty in both producing and consuming regions, improved rice production is key to helping agricultural communities prosper and reducing environmental impact in Asia.

These overlapping issues of water efficiency, agricultural productivity, food health and safety are critical to ensuring global food security, and to delivering on the Sustainable Development Goals (SDGs). Finding and testing solutions has therefore become a new purpose of the Rice business.

Olam is a founding member of the Sustainable Rice Platform (SRP), a multi-stakeholder group convened by UN Environment and the International Rice Research Institute (IRRI) to define and pursue sustainability in the rice sector.

In 2015, under SRP, we partnered with GIZ, a German development agency, and the Thai Rice Department in a pilot project called the Better Rice Initiative Asia (BRIA). In 2016, this yielded the world’s first rice meeting SRP standards – Thai Hommali, fully verified by UTZ and OneCert. Olam pioneered as the exclusive corporate buyer.

In 2017 the pilot was expanded to 1,500 farmers all enrolled in OFIS – the Olam Farmer Information System, a farmer management and traceability tool originally developed for cocoa. We are now on the cusp of expanding the project to Vietnam and Indonesia. In four years, this would translate to total volumes of nearly 190,000 MT, representing more than 10% of our current annual volumes globally.