How we support small-scale farmers
Of the 4 million smallholders in our supply chain, around 345,000 are embraced by the Olam Livelihood Charter.
We also have direct buying arrangements with a further 650,000 whom we support with microfinance and/or inputs such as seeds or fertiliser. We buy from the remaining 3 million via licensed buying agents.
Many of these farmers are living at subsistence levels because they do not have access to vital infrastructure such as electricity, fresh water, education, healthcare and affordable finance. Coupled with poor application of Good Agricultural Practices, these farmers are trapped in a cycle of low productivity, with African farmers tending to be the least productive (see graphic).
There is a clear business case for Olam to support these farmers. We need:
- Smallholders to keep growing their crop rather than choosing an alternative or giving up altogether and moving to the city
- To help smallholders maintain soil fertility and biodiversity to ensure long-term productivity
- Smallholders to increase their yields (some cocoa farmers in Africa have the potential to increase yields by up to 150%)
- Smallholders to improve the quality of their crop to meet international standards (which will help to reduce waste and improve incomes)
- Smallholders to sell to us rather than a competitor
- Access to niche cash crop markets such as cashew
- To maximise the processing assets that we have built in the growing regions – so even when we have our own commercial farm such as the 10,000 hectare rice farm in Nigeria with integrated mill, we can buy the tonnage from surrounding smallholders to run the mill at maximum capacity.
The Olam Livelihood Charter
Launched in 2010, the Olam Livelihood Charter (OLC) formalises our long-standing commitment to invest in the rural communities of emerging countries across the world. It is a commercial development framework that links farmers’ and customers’ needs resulting in a sustainable and reliable supply chain.
Based on the eight principles below, we aim to bring prosperity to our farming and rural communities; build long-term relationships based on fairness and trust; and transfer skills and knowledge through partnerships. At the end of 2015, the OLC embraced 344,466 smallholders. Only sustainability programmes that fulfil all 8 principles can achieve OLC status.
We offer farmer groups short, medium and long-term finance for crop production, purchasing and asset investments.
(2) Improved yield
We invest in training and support farmers by the supply of agri inputs like seeds and fertiliser.
(3) Labour practices
We train farmers on health and safety, gender inclusion, the elimination of child labour, and farming as a business.
(4) Market access
We offer farmers a fair and competitive price.
We encourage farmers to produce good quality by enhancing value to farmers and our customers through paying premiums.
We ensure products can be tracked to source and certified where required.
(7) Social investment
We support rural health, education and infrastructure.
(8) Environmental impact
We are improving our overall environmental footprint across the supply chain.
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