FSA Supply Chain Implementation Guide

Transcription

1 FSA Supply Chain Implementation Guide Version 1 for comments Your guide on the sustainability journey

2 Preface One framework for sustainable agricultural production For any questions, remarks or suggestions of improvement, please contact Global agriculture is today facing significant challenges in balancing the needs of the planet, with protecting the environment, respecting the social aspects of farming, and ensuring sustained economic livelihood for farmers. It is only through collaboration between all actors in the supply chain that we will be able to effectively drive long term change - the SAI Platform s FSA provides a strong and enabling vehicle for this collaboration. We recently made the switch to the FSA programme. We believe this shared framework will benefit all links in the supply chains, especially the farmers! Three years ago we made a conscious choice to move away from our own company sustainability standard, and formally adopt the SAI FSA as a our sustainable agriculture tool. The vision of the SAI FSA building a tool through pre-competitive industry co-operation is an ambitious one. But we strongly believe that it is only by uniting behind a common sustainable agriculture tool (whilst of course respecting existing certifications already in place) that we can truly leverage co-operation, reduce duplication, and ensure that resource is focused in the right direction. We have experienced that the FSA can assist in assessing sustainability performance in a wide range of farming scenarios, from smallholder farms through to large commercial plantations, and a wide range of agricultural crop types. Communication clear, collaborative and lots of it is fundamental, together with investing time upfront for positive engagement with suppliers and farmers, and ensuring the why is bought into and owned by everyone. What we need now is a critical mass of support to really get momentum and start realising the true collaborative benefits of the SAI FSA. Rozanne Davis, innocent I truly believe sustainability is a key prerequisite for doing business. The trick is to find a pragmatic approach to guarantee and improve sustainable practices whilst not adding considerable costs to the supply chain. SAI Platform has succeeded in creating such an approach. At Nordzucker we have implemented the FSA in three of the seven countries in which we are active and we will continue implementation in the other countries as well. I would be lying if I said it was an easy task, but we succeeded and learned a lot along the way. These lessons have been integrated by SAI Platform in better manuals and better tools. Tools that are available for you and will help to avoid the pitfalls we encountered. One of the reasons for us to implement the FSA is that our customers, the big brands, are all demanding (proof of) sustainable practices. We are happy to be a frontrunner in implementing FSA thus finding common, pragmatic and yet credible grounds. Although our farmers were sceptical in the beginning, they are now on board. With the FSA we have found a way to demonstrate and improve what we have been doing for a long time already. I believe the companies that are now starting the process can learn a lot from the ones that went first and should not hesitate to use the tools available to them. But in the end, every journey starts with a first step. I hope this guide will help you make that step. Iver Drabaek, Nordzucker 3

3 Table of contents Preface 3 Introduction 6 Aim of this document 7 Reading and tools 7 Traceability in the supply chain 8 Articulating sustainability 8 Working towards traceability 8 Example 10 Using FSA for sustainable rice production 10 The Enablers Matrix 11 1 > Engagement 13 Initiative & responsibility 13 Checklist 13 Internal engagement 13 Supplier engagement 14 Farmer engagement 15 2 > Assessment 16 Strategy 1: Benchmarking 16 Strategy 2: Self-assessment 16 Strategy 3: A combination 18 Self-assessment tool 17 Gap analysis 19 3 > Continuous Improvement 20 Mismatch between performance levels 20 Performance levels match 21 The improvement plan 21 Glossary

4 Introduction Sustainable agricultural production has moved up on the strategic agenda of companies in the agro-food chain. It is crucial to realise that securing future supplies, guaranteeing safe and high quality agricultural material and protecting the natural resource base, are crucial elements for a company s long term success. Aware of the challenges in today s agricultural reality, a large number of leading food and drink companies, retailers, traders and farmer organisations have joined forces in the Sustainable Agriculture Initiative Platform (SAI Platform); The global food value chain initiative for sustainable agriculture. One of its main tools is the Farm Sustainability Assessment (FSA), a new, highly effective, multi-purpose tool that is helping farmers and food & drink companies to produce, sell and source sustainably produced agricultural products. FSA has 112 questions -based on SAI Platform s Principles and Practices- which food value chain partners have developed to define sustainable agriculture practices. A distinction is made between essential, basic and advanced questions. FSA covers environmental, economic and social sustainability. There are three performance levels: bronze, silver and gold. In general FSA can be used in two ways; as a benchmark tool and as an assessment tool. Existing sustainability programmes and certification schemes can be benchmarked and assigned to one of the performance levels. Farmers can use the FSA as self-assessment and verification tool. The shared definition of agricultural practices -a common language- is an important benefit of FSA. FSA is implemented by a large and growing number of companies in more than 20 countries globally. The FSA is available in 15 languages, and more will follow soon. FSA s final goal is to accelerate and scale up sustainable farming practices and increase the volume of sustainably grown agricultural products globally. FSA is not yet another standard: there is no minimum compliance. FSA is a self-assessment tool which however can be verified by a third party. Processor Farm Group Target Audience Retailer Brand Trader Processor Farm Group This guide is written for employees of food and drink value chain companies in charge of agricultural production and sourcing, whether working for a retailer, brand manufacturer, trader or farmer cooperative. FSA can be successfully implemented in all food and drink supply chains globally, whether relatively simple or complex. And for both large as well as smallholder farmers. The aim of this document is to help all actors in the supply chain to work with FSA. Three steps can be distinguished: 1. engage, 2. assess and 3. improve. In the engagement phase, the initiator of the FSA process contacts his first tier supplier and discusses the desire to work with FSA. It is important that the owner of the supplier relationship typically the procurement department should take the lead. In the assessment phase, the agricultural practices of the supply base are assessed. FSA users to date will confirm that just throwing the FSA over the fence is not going to work. Fortunately, there are many tools and experts available to help. The third phase is focused on continuous improvement. The key message here is to maintain the dialogue and work together towards better agricultural practices, always respecting and appreciating the work farmers are already doing. buyer, supplier, farmer In this guide we use the word buyer to describe the partner that is most often initiating the FSA process. We use the word supplier for the organisation that is the first contact point of the buyer, and farmer for the producers of the agricultural raw materials. The SAI Platform has developed several tools to use along the way in the different phases. Depending on your experience and starting point, you might need to use more or less tools. You will want to select tools that are best suited for your situation and experience. Reading and tools For more information and tools please visit fsatool.com or saiplatform.org. The following items are recommended: Engagement Introducing FSA video FSA benefits for companies and farmers FAQ for companies and farmers FSA benchmarking results and planning overview FSA benchmarking methodology The farmer partnership guide Financial tool to evaluate potential financial benefits Assessment FSA manual tool (excel) FSA online tool Using FSA video Video on Online Tool FSA On-Farm User Guide FSA Implementation Framework Continuous improvement All the above mentioned documents and tools can be used for this phase. 6 7

5 Traceability in the supply chain The FSA journey starts when one of the actors in the supply chain takes the initiative to implement FSA. This desire has to be articulated via the different links in the supply chain to the parties that are in direct contact with the farmers. The process of engaging all supply chain actors in sustainability is moving upstream in the supply chain, whilst the products move downstream through the supply chain. Implementation of FSA is only possible when there is traceability. This section deals with the traceability challenge. Articulating sustainability in complex supply chains The longer the supply chain, the more important it becomes to clearly articulate the exact sustainability demands upstream and the more difficult it is to reach farmers. It may take considerable involvement, time, resources and communication to implement FSA. Fortunately, more and more intermediary parties - brokers, traders and exporters - want to play their part and are engaging with their supply base as well. FSA Implementation process: What do we mean? We will frequently refer to the FSA implementation process. When we do, this is about the process of engaging both your internal team and your suppliers to work towards achieving sustainability objectives. This in turn involves assessing the current performance of farmers using FSA, and improving farmer practices by implementing improvement programmes. Working towards traceability Without traceability, implementing FSA is impossible. You (or your suppliers) have to know your farm base. The figures below illustrate three different chain of custody models that are possible depending on the product and complexity of the chain. Mass balance In the mass balance system, the material of all farmers is mixed in the supply chain potentially including material from unknown sources. There is an administrative system in place recording the volumes produced by each farmer. Farmers Farmer A FSA-Gold Farmer B FSA-Bronze Farmer C Non-assessed 100 kg 100 kg 200 kg Retailers / Brands 100 KG FSA-Gold 100 KG FSA-Bronze 200 KG Non-assessed mass balance system Find the partner in the supply chain with whom you have a long working relationship and you trust and ask this partner to support you. Segregation In a segregated chain of custody, only material from sustainably managed sources can be mixed, which will then be segregated from non-sustainable material. Farmers Farmer A FSA-Bronze Farmer B FSA-Bronze Farmer C Non-assessed Farmers Farmer A FSA-Gold Farmer B FSA-Silver Farmer C Non-assessed 100 kg 100 kg 200 kg 100 kg 100 kg 200 kg Retailers / Brands 200 KG FSA-Bronze 200 KG Non-assessed segregated chain of custody Identity preserved In the identity preserved model it is possible to trace down the production to the individual farmer. So one can claim with certainty that certain raw materials are produced by a specific farmer. Retailers / Brands 100 KG FSA-Gold 100 KG FSA-Silver 200 KG Non-assessed Identity preserved 8 9

6 Example: Using FSA for sustainable rice production The enablers matrix: when to use which tools? How Ebro Foods has implemented FSA in its rice supply chain Ebro Foods is a worldwide leader in the production of rice and pasta. The Spanish company works in an agricultural supply chain where environmental and social sustainability are considered crucial. After joining the SAI Platform in 2015, Ebro Foods along with SAI members Kellogg s, Unilever, Mars, Nestlé and Migros, created a dedicated working group on rice to collaborate -in a precompetitive way- to improve the sustainability of rice production. phase and made sure the company was prepared to execute the assessments via tailor made trainings and support. The management of Mundiriso and its participating farmers received a presentation about SAI Platform and its FSA tool. In addition, one of the employees of Mundiriso was trained to conduct self-assessments and to work with the selected farmers to ensure its correct execution. After the assessment, the farmers received training and technical support based on the outcomes of the assessment, with a view to helping them improve performance and sustainability. When implementing FSA in your supply chains, you will go through three different phases: engage, assess and improve. This guide briefly describes these three phases, gives tips & tricks, and also refers to sources providing more in-depth information. The matrix below shows schematically which tools are available to you in the different phases of the process. During the engagement phase you will benefit from the videos, brochures and FAQ s that are available on both the SAI Platform homepage as well as on its dedicated FSA webpage. On this latter page you will also find information and tools that are relevant in the assessment phase. During the continuous improvement phase, all documents -on both SAI Platform s website and its FSA page- can be of help depending on your specific situation. Kellogg s, Unilever, Migros and Ebro Foods started their implementation program in Italy through the SAIRISI project. As a first step, Ebro Foods reached out to its farmers via its subsidiary Mundiriso. Mundiriso had no experience with FSA. Therefore Ebro decided to ask ControlUnion, an independent service provider on sustainable agriculture, to help them in the process. The local Control Union staff helped with the engagement FSA is proving to be a good and practical tool to evaluate farmers performance and a great way for farmers to formalize the sustainable agriculture concept. Mundiriso shared the results of their farmers FSA evaluation with the SAIRISI partners in order to do due diligence and provide content for SAIRISI training sessions in The programme s results to date: Mundiriso s participating farmers (9) have been evaluated through FSA and they all showed a good level of performance (FSA-bronze and above). Increased awareness within Mundiriso on: Sustainability and sustainable agriculture Opportunity to use FSA for sustainability claims Large farmer interest in sustainable agriculture and FSA: FSA is a good tool to demonstrate performance and identify opportunities for improvement. Sustainable Agriculture is a competitive factor influencing business profitability and continuity. Engage Assess Improve Supplier Brochures, videos, FAQ about FSA saiplatform.org Practicioner s guide sustainablesourcingguide.saiplatform.org Implementation framework fsatool.com Farmer partnership guide saiplatform.org Benchmarking results fsatool.com Farmer FSA Tool (Excel or online) fsatool.com Emmanuel Duffaut, Ebro Foods S.A

7 Engage > Assess > Improve 1 > Engagement The engagement phase is fundamental for a successful FSA implementation. Make sure you take enough time for this phase. You should always start with internal alignment in your own organization before you reach out to your suppliers. Engaging your suppliers could range from just a few meetings, to an extended time needing repeated visits. All efforts and resources spent to come to a shared objective - beneficial for both parties - will contribute to a successful outcome. Try to integrate sustainability into business as usual activities and discussions, rather than as a separate bolt-on. Initiative & responsibility It is often the downstream partner - the buyer - who starts the FSA implementation process. However, the other way around is also possible and desirable: suppliers or farmers can inform their customers about the FSA framework and the performance level they can deliver. It is crucial to realise that implementing FSA does not change the responsibility between the actors in the supply chain. The brand manufacturer is responsible to meet the agreements with the retailer, the supplier has to deliver according to the agreements with the brand manufacturer and so on. This holds for all direct relationships in the supply chain. Since many companies are currently exploring how to implement their ambitious sourcing targets, this is the moment to start and benefit from implementing FSA. Ask support from third parties where needed, but also make sure sustainability is embedded in your own organisation. Internal engagement Whether you are working for a retailer, brand manufacturer, trader or cooperative, before initiating FSA implementation and engaging with your suppliers, you need to set a number of prerequisites in your own organization. You can only start a successful FSA implementation with a clear vision on, and mandate for sustainable sourcing. Ideally, your organisation should already have embedded sustainability in the company strategy and implemented incentive structures (e.g. targets) to help realise the organisation s sustainability objectives. This is your checklist for take-off Clear vision on and strategy for sustainable sourcing. Targets that are in line with the sustainable sourcing objectives. High level commitment to and understanding of FSA implementation. Sufficient resources (e.g. dedicated people, time, appropriate management systems). Clearly defined responsibilities (e.g. assigning a programme manager) and (long term) ownership. Vast body of agronomic knowledge (the company s agronomist) or a clear idea on whom to hire for this expertise. Partnering with external partners is another possibility. Adequate support and training. Determining desired performance level In case your organisation already has a sustainable sourcing policy -maybe even a sustainable agriculture standard- it is important to determine with which performance level in FSA your current requirements are corresponding (bronze, silver, gold). In some cases, companies may choose to have no minimum requirements for a performance level. These companies may wish to focus on engagement and a process of continuous improvement rather than a predetermined performance level. Deciding on the desired performance level is not something you should do overnight. It requires a thorough insight in the specificities of the crops (and regions) you are sourcing (from). Your suppliers can of course advise you. Supplier engagement When you know your organisation s objectives and have the mandate and resources to start, it is time to reach out to your suppliers. Of course, all organisations are different but we strongly advise to always involve the owners of the supplier relationship, often the procurement department. SAI Platform members strongly believe the dialogues with the suppliers on the sustainability vision and objectives and the role of FSA are two-way conversations; listening and learning from each other s vision on responsible sourcing and finding a common ground for cooperation. Introducing the FSA framework to suppliers When introducing the FSA framework, you can make use of already existing engagement material (movies, brochures etc.). Your partners will only engage in the process when there are clear benefits for them as well, so it is important to share these benefits. Benefits for (potential) members of SAI Platform: Sharing costs with other SAI Platform members for engagement, benchmarking, verification and communication Reduced complexity via the harmonisation of concepts Possibility to aggregate farm level results and determine hotspots where action is needed Benefits for suppliers: Reduced complexity due to one reference recognised by all SAI Platform members Reduced costs as companies do not need to create their own standard Possibility to benchmark existing company standards and external standards with FSA Long term relationships with farmers and brands Continuity of the business in the long term Access to (new) markets Benefits for farmers: Less time, cost and complexity involved in completing different questionnaires for different buyers Better understanding of farm performance through data analysis Increased market access to SAI Platform members and others using FSA Easy way to present and share farm performance Long term relationships with purchasing companies Access to market 12 13

8 Engage > Assess > Improve Determining joint strategy In order to determine the most suitable approach for you and your supplier, it is important to understand the current state of affairs of the supply base. For instance, are farmers already certified against a certification scheme? Or is there an internal supplier program with sustainability demands? In the figure below, three different scenarios are described leading to three different strategies. These three strategies are discussed in the next chapter. It is possible that the supply chain requires several complementary strategies to be used, e.g. some farms may comply with a standard, while in another region there is no existing standard in place. Focus on the full supply base instead of the advanced farmers only. It is much more powerful to start at a lower entrance level and work together with the full farmer base (of your suppliers) to improve farmer practices gradually. That is true (positive) impact! Formalising joint commitment Once you have gone through the above mentioned steps, it is time to formalise the joint commitment. This is crucial to avoid delays. The first concrete steps for the supplier towards implementation include: obtaining mutual agreement on the desired sustainability performance level and the commitment to start with the assessment phase. In the assessment phase we distinguish three different strategies: strategy 1 (benchmark of existing certification against FSA), strategy 2 (FSA self-assessment), strategy 3 (hybrid model between self-assessment and benchmark). When using strategy 2 or 3, the supplier can already sign up to the online FSA tool, if it is a member of SAI Platform or if it is invited by a SAI Platform member company. When using strategy 1, the standard must be bencmarked against the FSA. The engagement phase is executed only once, but might take a few months up to more than one year. This depends on the relationship you have with your suppliers and the gap between current farm sustainability level and your shared objective. Farmer engagement In the next chapter, we will further explore the three different strategies. To implement your chosen strategy as efficiently as possible, it is a good idea to first build in an additional step: farmer engagement. Farmers are the ones who in the end see themselves confronted with a self-assessment or an internal or external auditor. It is therefore very important that they understand and appreciate what is going to happen. Sustainability asks for strong, long term supply chain relationships based on trust and respect. Be open to the ideas of your suppliers and look for common grounds for cooperation. How to best engage with farmers, depends on systems that are already in place to manage farmer relations, for example a cooperative, extension services or direct contacts with individual farmers. The engagement approach could encompass communication, training and pre-assessments, amongst other activities. Although not always necessary, we do suggest to conduct a pre-assessment on a few farmers to analyse their current performance against the FSA requirements. This most likely will save time, effort, and resources later on. The pre-assessment helps suppliers to become familiar with FSA and establish a suitable approach for engaging farmers. For example the pre-assessment may show that farmers are very well able to fill in the self-assessment themselves, or that a training is a good idea

9 Engage > Assess > Improve 2 > Assessment Once all parties are engaged, the joint strategy is determined and the pre-assessment is finished, you can start with the actual implementation of FSA. In the next section we will describe the three different implementation strategies. There are several tools and experts that can help you in this phase. Strategy 1 > Benchmarking existing certification In case all farmers are certified and comply with the requirements of an existing standard, this standard will need to be benchmarked against FSA. Many existing standards are already benchmarked and assigned a performance level (bronze, silver or gold). This performance level automatically applies to all certified farmers. If there is a mismatch between the desired performance level and the performance level of the certification scheme, the supplier needs to roll out strategy 3 (hybrid between 1 and 2 see for more information the Implementation Framework). Check online on fsatool.com for the list of already benchmarked standards and schemes. If yours is not on the list, please contact the SAI Platform secretariat. Strategy 2 > Rolling out the self-assessment If no farmers are (sufficiently) certified, you can decided to conduct self-assessments to identify their FSA performance levels. The supplier should decide on the number of farmers it wants to involve in the sustainable sourcing process. Not all farmers need to complete the self-assessment or be assessed; a representative sample may be sufficient. The FSA Implementation Framework will help you make the right decisions. The trustworthiness of the outcomes of the assessments depends on harmonisation of practices and proper implementation. Make sure those responsible for the assessment receive proper training to ensure they fully understand the FSA-system and know how to conduct the assessment in a uniform way. Different players (or combinations of them) can execute the assessment: Farmer The supplier can send out the FSA questionnaire to its farmers, but non-response is often high when the burden is placed on farmers without giving additional guidance and support. Instead, you may want to invite farmers and jointly run through relevant questions, while giving support. National legislation, regional All farmers no matter which farm size, location or crop can conduct a FSA self-assessment to analyse the overall performance of the farm and if so desired share the result with (potential) purchasing companies to increase their market access. characteristics or existing certifications may already answer a number of questions - in which case they may not need to be checked with the farmers. Supplier One possible way to go about assessments is for a supplier to train an internal company expert to visit farmers and execute the assessment. The internal assessor needs to check things properly at the farms just as an external auditor would. However, based on the findings of the internal auditor no formal FSA claims can be made. Third party It is also possible to hire an independent (SAI Platform approved) external service provider to do the assessments. The main advantage of this approach is that you can make verified claims directly afterwards. If you want to make a verified claim about the FSA performance level related to your agricultural raw materials, verification by a third party is required on both the supplier management system as well as (a sample of) the farmers self-assessments. You will find further guidance and information on third party verification in section 5 of the FSA Implementation Framework. If the assessment s results are only used internally, third party verification is not required. When farmers fill in the selfassessment, it can be very helpful to ask your internal auditor or a third party to carry out a pilot assessment on a small number of farms. This will provide you with a better under standing of the farm practices and an opportunity to compare the self-assessments submitted by farmers with your original analysis. Farmers can use the FSA-tool in excel or a free online tool to do the self-assessment. The ITC Self-Assessment tool SAI Platform members and invited suppliers can use the online FSA tool on standardsmap.org/fsa. The tool is developed by the International Trade Centre (ITC), a subsidiary organisation of WTO and the UN. Privacy is secured and considered top-priority. The online tool has some additional features that the excel sheet does not provide such as aggregation of scores at supplier level, the option for farmers to upload their assessments automatically to their customers, and filtering of questions based on legislation and other standards. The Excel tool The Excel tool can be used by everyone also non-sai Platform members or non-invited supplierswho want to assess farmer practices. It has fewer options than the online tool, but works well. The free excel tool can be found via fsatool.com. Although not all farmers will be assessed, make sure to engage and communicate with all farmers, so that they are all aware of the FSA implementation process and the potential benefits

10 Engage > Assess > Improve Strategy 3 > Combination of selfassessment and benchmark There are several scenarios where a combination between benchmarking and self-assessment is required - for example when some farmers are certified and others are not. In general, a combination of strategy 1 and strategy 2 will need to be executed. Other situations are also possible: 1) Farmers already comply with a standard (for instance a food safety standard), but this standard does not cover all sustainability topics. Farmers can then select their standard in the online self-assessment tool and only answer the questions not yet covered by this standard. 2) Farmers already comply with a benchmarked standard. However, the benchmark points out that the verification of the standard (for instance the verification audits) is not considered equivalent to FSA verification requirements. In this scenario, Strategy 1 would be used with additional third party verification. 3) Some farmers comply with a (company) standard. However, the farm management group does not wish to source via this standard. Farmers who comply with the standard can then select their standard in the online selfassessment tool - thereby already answering most questions. In this strategy, third party verification would still be necessary to verify the results. Full FSA implementation Supplier Xan works with 100 tomato farmers who are delivering their tomatoes to one small processing plant. Vrez, an important customer of Xan, asks Xan to implement the FSA. Since Xan has already been involved with the farmers for a long time and knows they are doing well, the company is enthusiastic about implementing FSA. Xan decides to randomly select 23 farmers as a representative sample of all 100 farmers and hires an independent certification body to assess the farmers, of which 13 farms are audited. It appears that 10 perform at FSA-gold, 10 at FSA-silver and 3 at FSA-bronze performance level. Since Vrez required the FSA-bronze performance level, all material meets the desired performance level. Xan can now claim 100 % Sustainably sourced FSA-bronze. Since a substantial number of farmers performs at a higher level, it would be interesting to look for opportunities to commercialise this higher performance level. This could potentially increase Xan s market access as he could supply to companies that require a higher performance level. Partial FSA implementation paddy farmers are supplying one mill. Ricy - the owner of the mill - is thinking about implementing FSA but does not feel comfortable starting with all farmers. Therefore, he selects 200 farmers to include in the scope of the FSA implementation program. Although only 29 farmers will be assessed and 13 audited, it is important that all 200 farmers know what is going on. Therefore, Ricy informs all 200 farmers about the assessment that is underway. It appears that 10 farmers need to make further improvements to reach FSA-bronze level and the other 19 perform at FSA-bronze performance level. The farmers that are not yet at the FSA-bronze level all happened to have problems with water management. Ricy informs all 200 farmers about the outcome and implements a program to improve water management at all farms. Only six months later all 29 farmers (a new representative sample) comply with the FSA-bronze level. Ricy can now claim 100 % sustainably sourced FSA-bronze (after undergoing 3rd party audit). Via a mass balance chain of custody the FSA-bronze performance level rice will be followed throughout the supply chain. Gap analysis Once assessments and/or benchmarking are conducted, the results can be evaluated and a gap analysis can be made. Depending on the chosen strategy and set objectives (e.g. your definition of sustainable sourcing ), the performance level of the farmers might need to be improved. This can be done by means of implementing improvement plans or, in case of farmers whose existing standard was benchmarked, adding the FSA roll out to the existing standard. In many cases, suppliers can use their internal resources (e.g. field staff) to implement improvement plans with farmers but external parties could also be involved (e.g. input providers, extension services, or NGOs). Ideally, this is a continuous improvement process as farm practices can always be improved to achieve a more sustainable performance. Suppliers might already have sustainable practices in place which just need some additional support to improve their impact. Improvement plans should be reviewed every year. Making a claim Once the assessments and/or benchmarking have been finalised, farmers scores and performance level can be reported and shared. When aggregating the data on supplier level, there might be a mixture of performance levels among farmers (e.g. 20% FSA-bronze and 80% FSA-silver). Depending on the performance level that you have defined as sustainably sourced, you can claim the volume from those farmers sustainable (e.g. 80% of the volume purchased from that supplier is considered sustainable, if you consider FSA-silver as sustainably sourced ). Before making any public claim, make sure an independent third party has verified the internal management system and a sample of the farmers

11 Engage > Assess > Improve 3 > Continuous Improvement Now you have arrived at the last step of the engage assess improve process. At this moment, it should be clear at what level your farmer base is performing and whether this performance level matches the demands of the downstream buyers. Whether or not the performance levels match, action plans are required to continue to work together towards even better farm practices. Ask the farmers, ask the farmers, ask the farmers! They know what they need to change a certain problematic practice: technical advice, technology, administrative assistance. Never talk about the farmers, talk with the farmers. Andrea Granier, Sustainable Sourcing Manager Unilever Mismatch between performance levels If there is a mismatch between the current performance level and the desired performance level, it is crucial to identify where the specific gaps are. You should consider developing and agreeing on an improvement plan with your supply chain partners to address these gaps. In order to implement effective improvement plans, it is crucial to request feedback from farmers. They may need to change practices which they have been applying for many years. Behavioural change is difficult to achieve and requires a long-term commitment from the supplier. When preparing the improvement plan, you should bear in mind that the assessments are usually performed on a representative sample of the full farmer base. Identified improvements are therefore not only applicable to these assessed farmers, but should be focussed on all the farmers which are in scope. In addition, for each gap observed, a deadline should be agreed and responsibilities assigned, in order to monitor and ensure follow up. The different supply chain actors can decide together how to improve their performance, always involving farmers. In many cases, suppliers may use their internal resources to implement improvement plans. Sometimes it is a smart idea to hire external parties such as input providers, extension services, or NGOs. Try to develop smart strategic partnerships with other companies that are working in the same region - maybe those who buy another crop from the same farmers - and develop joint improvement plans. When the improvement programmes are fully implemented and some time has passed for the measures to be effective, you can again conduct assessments. Self-assessments must be repeated at least every three years; annually if there is a substantial change in the farm management group (i.e. more than 10% change in the farmers). In this way, suppliers can work on improvements after the first self-assessment to ensure results before doing a next assessment. Suppliers can decide to have a third party verifying the new FSA outcome and make a claim on the basis of this new assessment. when developing improvement plans it is important to: Do first things first. The basis should be in order, so the first priority should be to improve the Essential questions in the FSA methodology. As a next step, focus on improving the Basic and Advanced questions where improvements can be made to ensure overall compliance, continuous improvements and continued compliance in future years. When determining priorities (after all essential questions are met): a. Prioritise the gaps where most farmers fail b. Work on priorities that are considered most material c. In addition, select those items that farmers consider very important There is a lot of wonderful and clear material available to improve farmer practices. The SAI Platform website is a good starting point. Performance levels match When the performance levels match your expectations, this is a good first step. However, creating and implementing action plans for continuous improvement are required for making claims regarding FSA performance levels. Furthermore, note that FSA implementation is a never ending process a continuous cycle of dialogue and involvement, as farm practices can always be improved to achieve a more sustainable performance. Implement a cycle of assessment, monitoring and reporting -on an annual or biannual basis- to continue to work on the best agricultural practices

12 Glossary Benchmark The process of using a standard as a point of reference to compare and evaluate the performance or level of quality of other standards or programmes. In this guide, the benchmark referred to is the assessment of sustainability standards against the Farm Sustainability Assessment. the FSA benchmark methodology can be found on as well as the benchmarking results and planning overview. Brand By brand we mean the producers of branded (recognisable) consumer products. Buyer Organisation identified as the link in the next tier in the supply chain after suppliers, sourcing (sustainable) agricultural material from individual farms, farm management groups, suppliers or other buyers. Chain of custody Documentation of the acquisition, transfer, handling and disposition of a good. For certified commodities, the chain of custody provides verification that the certified material is identified or kept segregated from non-certified or non-controlled material through the supply chain. Consultant Third party available to help implement the Farm Sustainability Assessment. Consultants can for instance be agronomists, certification bodies or organisation advisors. Documented internal management system Structured, well-managed approach to collect and store sustainability data of the farmers that are part of a farm management group. Enablers Committee The group within SAI Platform that is responsible for creating support material for the roll out of FSA in supply chains globally. Farm management group A group of farmers who together apply for the self-assessment, on their own initiative (e.g. as a cooperative) or as part of the supply base of a trader, processor or company. Farmer Person producing raw agricultural material, varying from a large scale commodity producer to a small scale grower. Farm Sustainability Assessment Name of the SAI Platform tool to assess, imporve and communicate social, environmental, economic and (good) agricultural practices. FSA is a list of essential, basic and advanced questions. Depending on the coverage of these questions, the farmer can see at which sustainability level he performs. International Trade Centre Subsidiary organization of the United Nations and the World Trade Organisation. One of their programs is the Trade for Sustainable Development (T4SD) program in which the Standards Map is developed. ITC developed the FSA online tool for SAI Platform, using Standards Map as the starting point. Identity preserved A chain of custody system in which the agricultural material can be traced back to the individual farmer. Mass balance A system in which sustainably-produced and conventional material are mixed physically, but kept separate via an administrative trail to ensure there is no double counting of volumes produced sustainably. Supplier Provider of goods and services with whom the buyer has a verifiable trading relationship. In this document we use the term supplier for the first tier contact point of the buyer. SAI Platform Sustainable Agriculture Initiative Platform (SAI Platform); The global food value chain initiative for sustainable agriculture. Segregation System in which agricultural material is kept separate from other material produced in a different manner. This system is often used for organic and non-gmo crops

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