Scaling up sustainable commodity production and trade. Dr. Ir. J. Oorthuizen

Transcription

1 Scaling up sustainable commodity production and trade Dr. Ir. J. Oorthuizen

2 In the next 40 years, more food will be produced than so far in the history of mankind

3 Urgency for change 9 billion people in 2050 Increasing consumption in emerging economies Finite arable land Increasing impact on environment and people Scarcity of raw materials Increasing prices of agro commodities

4 Agro commodity prices now Source IMF

5 15 high impact key commodities l5 Key threat to the 35 biodiversity rich areas globally Economic base of hundreds of millions of small farmers

6 Slide 5 l5 key commodities in beeld brengen lve;

7 Business has great leverage Top 200 multinationals 15 key commodities 35 most threatened regions

8 A business case for public-private cooperation

9 Sustainability is core business

10 Source: Michael Porter

11 Pyramid of change

12 Cooperation is vital for scale

13 Roles for the government Create sustainable demand Political commitment at scale Regulatory frameworks Endorsement of voluntary standards Fiscal incentives Public procurement Consumer awareness Create sustainable supply Large co-investments in agriculture & infrastructure Regulatory incentives Facilitate pre-competitive cooperation

14 Roles for societal organizations Create sustainable demand Create public awareness Lobby Target companies through campaigning Cooperate with companies on marketing & communication Create sustainable supply Co-create standards Help implement and facilitate farmer trainings Co-investments in in public private programs Regulatory incentives Facilitate pre-competitive cooperation

15 A business case for public-private cooperation Sustainability must be profitable Scale is important 100% commitment: Mars: 100% sustainable chocolate by 2020 Unilever: 100% sustainable tea & palm oil by 2015 IKEA: 100% sustainable cotton by 2015 Sara Lee: 100% sustainable coffee and tea

16 Value proposition of IDH

17 IDH: Mainstreaming Sustainable Trade Public Private Partnership facility Convening coalitions of business, governments and NGOs Co-investing commodity chains 70 multinational companies 10 international NGOs 600 M euro investment package until 2015

18 100 % Tipping point Impact % certified in market Accelerating 0 % Scoping Initiation First-movers Critical mass License to operate

19 IDH programs and goals Cotton 1 million MT of BCI cotton on the market in 2015

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21 Learning program

22 Three types of activity

23 Examples of cocoa and cotton programs

24 Public and private partners IDH cocoa program

25 Overview of the cocoa sector Economic driver for Cote d Ivoire, Ghana, Indonesia, Nigeria, Cameroon & the Netherlands Complex economic, social & environmental issues Key bottlenecks threaten long-term viability of sector Poor infrastructure Poor soil fertility and tree stock Poor production processes* Lack of transparency* Lack of access to markets* and credit Weak capacity of local organizations/producer groups* Demand pressures rapidly outstripping supply capacity

26 The cocoa challenge Triple production of 2 million cocoa farmers in West-Africa Aligned multi-billion donor, government and industry investment Agile and entrepreneurial coalitions of the willing A supply chain driven approach Multistakeholder convening at country and regional level Conducive enabling environment Orchestrating demand in Western markets

27 Cocoa improvement program Purpose: Address bottlenecks in cocoa production that prevent producers from implementing sustainable production practices and improving their welfare Major Targets (2012): 20% income increase and productivity increase amongst 40k producers; 64k tons certified cocoa; 150k hectares of sustainable land use; support MDGs 1, 2, 3, 6, 7 & 8 Partners: Multi-stakeholder group that includes nearly 30% of market Focus: High-leverage initiatives to unlock bottlenecks and drive progress

28 Cocoa program status Accomplishments Code of conduct developed through broad, multi-stakeholder process; certification protocol customized to cocoa Certified producers to date: ~4000 CdI, ~600 Ghana 13,000 MT certified cocoa in CdI and Ghana, 8000 MT in other countries 1 st certified cocoa sold, arrived in Amsterdam November, 2009 Producer productivity increases already visible (>11%) New company partners emerging (IKEA, Frey, Ludwig) Transition model developed to create investment for scaling up Forthcoming 1 st certified cocoa arriving for Dutch market: Heinz De Ruijter hagelslag Program expanding to Indonesia, Cameroon, Nigeria, Ecuador, Vietnam New 3-yr, 1M euro investment by Ecom for producer support

29 Cocoa learning program Build capacity amongst farmer leaders and CIP stakeholders Management development program of cooperative leaders in CdI Accelerate producer group formation, expansion, certification Innovation on two key bottlenecks: how to accelerate the formation of producer groups; how to accelerate and scale the capacity to develop certified producer groups Certification Capacity Enhancement Program (with GTZ) Design of M&E element; IDH facilitation of meetings as needed Develop innovative approach to financing cocoa farmers Value chain finance initiative (cross-sectoral) Support cross-organizational learning on field implementation Field Implementation Group workshops

30 Public and private partners IDH Cotton program Cotton 1 million MT of BCI cotton on the market in 2015

31 Overview of cotton issues No commodity is as polluting as cotton. About 10% of all agricultural chemicals worldwide is used for the growth of cotton. Negative impact on environment and farmers Heavy toll on water supply in Uzbekistan, Pakistan, China en India. Child labor, low prices and expensive agrochemicals result in heavy debts for millions of small scale farmers. Around 50% of all cotton is grown in developing countries and involves around 50 million small holders. High costs and low incomes because of low market prices. Market voor EKO and fair trade cotton will stay relatively small.

32 The cotton challenge Accelerate and upscale the BCI system Attract more funds A supply chain driven and mainstream approach Multistakeholder convening at country and regional level Conducive enabling environment Orchestrating demand in Western markets

33 Cotton program goals KPI 1: Supply of Better Cotton (IP s) 300,000 MT of Better Cotton by million MT Better Cotton by 2015 KPI 2: Increased demand for Better Cotton (Retailers) 150,000 MT (50%) bought by BCI members by ,000 MT (50%) bought by BCI members by 2015 KPI 3: Social/Ecological and Economic Improvements (IP s & BCI) Environment: Pesticide use & type, Water use for irrigation, Fertilizer use & type, Quality of fibre incl. contamination Economics: Profitability of cotton farmers (contamination) Social: Freedom of association, Collective bargaining, Forced labour, Child labour, Social security, Use of health and safety precautions, Empowerment

34 Cotton status Accomplishments Total: number of farmers trained MT seed BC tons produced (until April 2011) Fast track fund set up

35 Critical factors for succes

36 Critical factors for succes (1) Strong business case Declining productivity, threat of scarcity, sourcing competitiors from emerging economies Committed market leaders Mars, Cargill, Unilever, Ikea, Levi s, Sara Lee and others High ambitions 100% sustainable and market transformation Coalitions of the willing Implementing NGOs, frontrunning companies, facilitating governments

37 Critical factors for succes (2) Convening power IDH is supported and funded by the Dutch government Match funding Supports private investments and reduces risks Combination of public private partners Convening power plus business power plus NGO credibility. Alligning forces Alligning companies, NGOs, governments and funds, Neutral platform Credible and safe environment for public and private partners

38 Critical factors for succes (3) Transparant standards Third party certification based on ISEAL compliant standards Learning cycle Evaluation, analyses, sharing knowledges and best practices and implement them, helps to upscale and accelerate sustainable trade

39 There are two kinds of companies: Those that sell sustainable products

40 and those that will.

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