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How public-private partnerships can hit a sweet spot

A project to grow sugarcane sustainably in India demonstrates how public-private partnerships can successfully meet profit and sustainability goals. In 2013, Olam approached the IFC with a proposal aimed at increasing sustainable sugar production in India’s Madhya Pradesh province. The IFC suggested also bringing on board Solidaridad, and the “Madhu Shree” PPP was born.

Objective

As the world’s largest consumer and second largest producer of sugar, India is an increasingly important market for Olam’s international sugar business. However, as with other crops, growing sugarcane demands water; with water scarcity becoming a global issue, ensuring its efficient use across agriculture is vital to the creation of long term sustainable supply chains.

Approach

The three-year Madhu Shree initiative was conceptualised and designed by the three parties with three core objectives:

• Enhancing farm productivity by adopting a sustainable package of best agronomy practices
• Promoting water-use efficiency in sugarcane cultivation
• Promoting the rural economy

The partnership also aims to develop the market for sustainable sugarcane, to train and support the mills and producers for certification for the Bonsucro standard – the first global metric standard for sugarcane.

Results

To date, the project has improved the livelihood of more than 15,000 sugarcane farmers while allowing all the partners involved in the PPP to achieve business and development objectives.

Over the year 2012-2013, farmer yields improved by 10-15%, more smallholders took up intercropping which improves soil health and earnings, and more than 10 billion litres of water were saved from the implementation of the farmer support programme. The average income of a sugarcane grower supplying Olam’s Barwani mill was US$2,148 per hectare compared with US$1,488 per hectare in Madhya Pradesh generally. This has led to greater interest in growing sugarcane and sugar crush volumes have increased fourfold for Olam over the last few years.

Click here to view the Olam Sugar page.