Business News of Friday, 13 March 2015
Source: Christian Akorlie
The 2014 results of the Olam Livelihood Charter have shown a sharp increase in overall agricultural products sourced from countries which qualified for the company’s flagship smallholder sustainability initiative.
Olam International, the parent company of Olam Ghana Limited, launched the Olam Livelihood Charter in 2010 as a practical and measurable framework with focus on creating economic prosperity among farmers, improving social welfare and safeguarding the environment.
The 2014 achievements of the Olam Livelihood Charter (OLC) include a record four-fold increase of agricultural products sourced from OLC farmers over the past year to one million metric tonnes and a significant rise in the number of women smallholder farmers.
In the course of the year, the total number of countries which achieved OLC status also shot up from 20 to 30. Now in its fourth year, the OLC sets stringent standards for supporting smallholder communities in Olam’s networks through financing, improved yield, labour practices, market access, quality, traceability, social investment and environmental impact.
Notably, it is only by meeting all eight principles can a sustainability programme be awarded OLC status.
Since its launch in 2010, the number of farmers benefiting from the eight OLC Principles has increased to reach 350,147 small-scale producers, about a fifth of whom are women, spanning 623,150 hectares of smallholder land.
The key crops cultivated under the smallholder initiative are cashew, cocoa, coffee, cotton, chilli, pepper, sesame and sugar and countries like Ghana, Nigeria, Côte d’Ivoire, Cameroon, Vietnam, Zambia, Colombia, Mozambique and Zimbabwe are among the 30 countries in the network so far.
Results announced in London this week disclose that some 224,352 farmers, of whom 44,340 are women, have so far been trained in Good Agricultural Practices and that a total of US$183.7 million was disbursed to farmers in short and medium-term interest-free financing for smallholders, while US$ 21.2 million quality premium was paid out to farmers.
Olam invested over US$1.5 million in social investments which went mainly into community health, education and infrastructure.
Commenting on the progress of the Olam Livelihood Charter and its significance for the business, Mr. Sunny Verghese, Olam’s Co-Founder, Group MD and Chief Executive Officer, said: “Applying the Olam Livelihood Charter Principles whenever we have a direct relationship with smallholders enables us to address challenges together in a holistic way, reflecting the landscape approach we take across our operations. This is not philanthropy but a sound business model that will help us to ensure we can supply the quantity and quality of raw materials demanded by our customers on a sustainable long-term basis.”
In line with this global initiative, Olam Ghana is helping farmers with finance, infrastructure and input supply, training smallholders on Good Agricultural Practices, good social practices, good environmental practices and also offering additional livelihood support.
Olam Ghana’s Olam Livelihood Charter cocoa project covers three districts (Asawinso, Nsawora and Wiawso), 75 communities and 5,097 farmers and the company provides the farmers with interest-free loans and pre-finance for crop purchase.
As part of the Livelihood Charter initiative, Olam Ghana has constructed 50 chemical storage facilities, made available 400 sets of Personal Protective Equipments for spraying gangs, and provided good water sources for farmers by building bore-holes for some communities.
In addition to providing free fertilizer, 74,000 hybrid cocoa seedlings were distributed amongst 500 cocoa farmers, as well as 76,000 tree seedlings provided as shade trees and for fallow land project.
Olam Ghana’s cashew project – ‘Raising Cashew Farmer Livelihoods in Ghana’- has registered almost 22,000 cashew farmers and organised them into 191 farmer associations. About 60% of all cashew sourced by Olam in Ghana have come from these farmers across the Sampa and Techiman zones and almost 19,000 of the farmers – over 50% of whom are female – have been trained on how to establish new cashew farms. Olam Ghana has trained a total of about 11,000 farmers in sanitation, farm maintenance, harvest and post-harvest techniques.
Under this project, 85,000 cashew seedlings have been distributed for free to 519 farmers in the Techiman zone and 143 farmers in the Sampa zone. The quality of Raw Cashew Nuts (RCN) has also improved significantly, especially in the Techiman zone where the average RCN increased from 46 lbs in 2013 to 48 lbs in 2014 in areas where the programme was carried out.
“Most of these farmers and their families are now benefitting from better livelihoods as a result of the improved income from their businesses. They are motivated to grow more quality cashew and cocoa – food security is thereby enhanced and this in turn will create more employment,” Mr. Amit Agarwal, Head of Olam Ghana rightly observed recently.
It is worthy of note that, the livelihood charter initiative only represent one part of Olam’s social investments, with a total of 190 initiatives underway in 30 countries, supporting productivity, education, health and rural infrastructure. The OLC is aligned with the United Nation’s Millennium Development goals to maximize impact and drive inclusivity.