A group consisting of some of the world’s largest chemical and consumer goods producers has formed a development partnership to establish sustainable and transparent coconut oil supply chains in Southeast Asia.
Including global agribusiness giant Cargill, chemical manufacturer BASF, consumer goods firm Procter & Gamble (P&G) and the German sustainability agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the group intends to tackle a number of challenges faced by small-scale farmers in the world’s two largest coconut producers, Indonesia and the Philippines.
These challenges included little to no economies of scale, lack of financing and training and a rigid supply scale, according to a joint statement by the participating companies on 27 June,
The partnership, formed under the develoPPP.de programme by the German Federal Ministry for Economic Cooperation and Development, aimed to train the farmers on good agricultural practices, intercropping and enhanced farm management skills.
Out of the 3,300 enrolled farmers in Southern Mindanao and Southern Leyte in the Philippines and Amurang in North Sulawesi, Indonesia, 800 would also receive additional training on sustainability standards in order to apply for the Rainforest Alliance certification, the companies said.
Cargill would train the smallholder farmers and set up certification structures, while the produced oil would be processed by BASF and P&G for home and personal care ingredients and for the nutrition and health markets.
The project would be overseen by GIZ, which also implements good agricultural practice and sustainability standards.
“These initiatives show that there is high commitment by all partners to further promote the production of certified, sustainable coconut oil,” said BASF vice president of global procurement, natural oils and oleochemicals Harald Sauthoff.
The companies said the project continued the work begun by an earlier development partnership, titled the Nucleus of Change, which was launched by Cargill, BASF and GIZ in the Philippines in 2011.
The Nucleus of Change programme ended in 2015 and provided training to more than 1,000 smallholder farmers and produced the world’s first 300 Rainforest Alliance certified coconut farmers.