Cargill joins initiative to deliver certified coconut oil for Philippines and Indonesia

A major joint initiative between BASF, Cargill, Procter & Gamble (P&G) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) has established a certified coconut oil supply chain to assist farmers in the Philippines and Indonesia.

The move is significant given the fact that such oils are widely used within confectionery and bakery product ranges, with the aim of the scheme to drive improvements in working conditions and production standards.

Commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ), it has set out to combine the expertise of the partners helps ensure the success of the Sustainable certified coconut oil production (SCNO) programme.

The private partners share their understanding of the market mechanisms and trends, while GIZ contributes its expertise in training of farmers and promoting sustainability standards. Between October 2015 and October 2019, more than 4,100 coconut farmers have been trained in Good Agricultural and processing Practices (GAP) as well as Farm Management practices. About 1,600 farmers received additional training and have been certified against the Rainforest Alliance Sustainable Agriculture Standard. Farmers who were trained and certified, have on average a 47% higher income than farmers who didn’t participate in the programme.

The results show that trained farmers have a higher productivity than non-trained farmers, with certified farmers reaping the biggest benefits. According to an endline survey carried out by an independent provider of market research and consulting services, the joint project has proven that certified coconut oil production is making a difference in farmer’s lives. Certified coconut farmers harvest more and have a productivity which is 26% higher in comparison to non-involved farmers. Coconut oil production levels increase, and developmental benefits are achieved, contributing towards better living conditions for the coconut farmers and their families

One of the farmers, Natividad Beligolo from Sarangani Province, Philippines, said: “I earned additional income which is a big help to our family to sustain our everyday lives – more food on the plate and education for our children.”

The first certified sustainable coconut oil

The first Rainforest Alliance Certified coconut oil has been produced in 2018 with the support of this partnership. The certified coconut oil was made possible by establishing a transparent supply chain according to the Rainforest Alliance Chain of Custody standard on mass balance level that fosters the administrative flow of certified raw materials within the supply chain and supports farmers to produce more sustainably.

Rainforest Alliance Certified coconut farms must meet comprehensive requirements for sustainable agriculture that built on the three pillars of sustainability – environmental protection, social equity, and economic viability. Rainforest Alliance certified farmers have an effective planning and management system in place, conserve biodiversity and natural resources and improve livelihoods and human well-being.

Christiane Hornikel, Program Manager Coconut at Rainforest Alliance, said: “We are extremely happy that the coconut farmers have improved their income through the support of the partnership. We look forward to the collaboration continuing so that more and more farmers can benefit from Rainforest Alliance certification.’’

As the initiative members noted, the Philippines and Indonesia are the world’s two largest producers of coconuts and exporters of coconut-based products. The coconut growing regions belong to the least developed areas and host the largest number of rural poor. The farmers are mostly smallholders or tenants with less than four hectares of land and limited access to know-how and means of financing. The programme gives these smallholder farmers a way to address their main challenges which include little or no economies of scale, lack of financing and training resources as well as a rigid supply chain.

Jonathan Sumpaico, General Manager, Cargill Grain & Oilseed Supply Chain, Philippines said: “We are able to significantly improve the economic opportunities and living standards for farmers and their families through this partnership. In turn, we are lifting up their communities, which are primarily in rural and developing areas. Cargill will continue to scale our support, based on the great work already achieved with smallholder coconut farmers to increase their agricultural productivity and incomes while advancing the supply of sustainable coconut oil in the world.”

Ina Boos, Project Manager, Sustainable Certified Coconut Oil at BASF, said: “With the first Rainforest Alliance Certified™ sustainable coconut oil in place, we have reached an important milestone on the way establish certified sustainable supply chains and improve the livelihood of smallholder farmers. We are proud of the achievements we have made together with our partners over the last few years.”

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