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Olam comment on the cocoa sector report from Mighty Earth NGO

September 13, 2017

Olam is absolutely clear that deforestation by cocoa smallholders must be halted which is why it is a key focus in our sustainability programmes around the world. The issue is also well recognised at an industry level with Olam being a co-founder of the Cocoa & Forests Initiative (CFI) which now encompasses 34 other companies. Together with the Governments of Côte d’Ivoire and Ghana CFI will present a detailed action plan at the UN Climate Talks (COP23) in November.

However, there is no fast answer. Deforestation by cocoa farmers is a direct result of entrenched poverty, which Olam and many of our peers, customers and NGO partners, have been tackling for several years. In Côte d’Ivoire and Ghana the Governments set the price of cocoa but farm yields are low. In these emerging markets, cocoa farmers often lack education and resources, unaware of techniques to maintain soil fertility, and unable to afford fertilisers. The solution for many is to farm on fertile forest soils.

Since 2009, Olam has been working with Ivoirian farmers to improve productivity and incomes, providing agri and environmental training, credit, as well as health and educational infrastructure. In 2011 we began working with Rainforest Alliance to produce the world’s first climate friendly cocoa with farmers in Ghana, and our programmes have increasingly included measures to protect forests. Today, over 85,000 cocoa farmers in Côte d’Ivoire and 30,000 in Ghana are in Olam Livelihood Charter programmes which include focus areas on deforestation, and the planting of shade and forestry trees.[1]

A significant issue is traceability. In Côte d’Ivoire, many thousands of farmers produce sacks of cocoa beans which are typically sold to various intermediaries. This is why Olam has long encouraged farmers to establish co-operatives from whom we buy directly. In Côte d’Ivoire we work with 185 co-ops who must sign our Supplier Code and adhere to the terms of our agreements relating to sourcing outside of classified forests, national parks and reserves. We also expect all suppliers to comply with national forestry laws and, if we find evidence of sourcing from forest areas, we will investigate and take appropriate action.

Fortunately, technology is now catching up, enabling us to reach our ambitious 2020 goal for 100% of our directly sourced volumes to be traceable and sustainable. With our bespoke platform called the Olam Farmer Information System (OFIS), we have mapped and surveyed in detail over 51,500 cocoa farms in Côte d’Ivoire. This allows us to better understand the issues relating to the productivity of the farm and in many cases the social, environmental and economic issues that exist.

In addition to our own initiatives, the actions proposed under CFI are already designed to take into account the entrenched poverty whilst embedding sustainable smallholder practices. We must also ensure that measures to protect and restore forests take into account the long-term livelihoods of farmers who depend on cocoa. There are established communities living in areas of forest cleared many years previously but which are still legally classified as forests. There is therefore an urgent need to update the official reference maps (which have not been updated for several decades) to establish an accurate picture of the current situation. This will help us to draw a line in the sand against further deforestation, protect biodiversity and support the livelihoods of people. It will also enable us to identify priority areas for forest restoration.

You can find out more information about Olam Cocoa here.

[1] In partnership with GIZ, we are recommending 100 forestry and 50 shade trees per hectare. Additionally, Olam has been working progressively with its producers towards restoration of zones adjacent to aquatic ecosystems; restoration of farmed areas of marginal productivity to natural ecosystem; and incorporation of native trees as border plantings and barriers around housing and infrastructure, and permanent cocoa agroforestry systems. This means that we are planting more trees in our supply base and building more resilience of our communities to be climate ready. In 2016, OLC co-operatives planted 193,000 leguminous shade trees covering 1.9 million high quality cocoa seedlings.