Coffee sustainability support for Olam

Coffee sustainability support for Olam

Agri-Logic supports the Olam global coffee business with designing and implementing projects to strengthen the farmer supply base that delivers to the company. We assist the Olam coffee business and the Corporate Responsibility and Sustainability function of the company in developing small- and large scale interventions with their clients, donors, banks and governments. At their core these projects are designed to help unlock growth potential of small-scale coffee farmers, such that both farmers and the Olam businesses benefit. Such benefits can be found in greater supply, improved coffee quality, premium payments, more efficient supply chains as a result of group selling by farmers and extending credit to farmers. This project has been operational since July 2014.

Logistics and food losses perishable crops

Logistics and food losses perishable crops

The Netherlands has a policy to integrate Foreign Trade and Development Cooperation. Food security and rural development are a top priority in development cooperation. Market inefficiencies in logistics cause post-harvest losses of perishable products. Food waste negatively impacts both food security for local consumers, and the income of many smallholder producers.

Identifying and addressing market opportunities in logistics can improve these issues in food security and rural development. This also provides commercial opportunities for Dutch and local entrepreneurs in developing local markets and foreign trade.

As part of a global study, we mapped the value chains for tomatoes, capsicum and pineapples in Nigeria. Contextual interviews provided an understanding of the value chains, whereas data collection and surveys provided deeper insight into volumes and food losses, prices and value distribution.

The report was submitted to the Netherlands Embassy in Lagos, Nigeria for consolidation into the global study.

The study provided insight into food losses in fruit and vegetables (30-60% depending on the product), formal and informal import and export, investment needs in processing, and export quality requirements.

The report can be shared upon request.

Farmer Field Book implementation Ghana

Farmer Field Book implementation Ghana

Sustainable Management Services Ghana (part of Ecom group), a number of its chocolate manufacturing clients and IDH, The Sustainable Trade Initiative run a large scale sustainability programme in Ghana targeting tens of thousands of cocoa farmers. The programme aims to improve their productivity, profitability and in turn enhance farmer loyalty. All parties expressed a need to gain better insight into farm and farmer performance and an enhanced understanding of the programme’s effects.

To meet the requirements, Agri-Logic is assisting Ecom and its partners to implement the Farmer Field Book. Close to 1,075 farmers across 43 districts keep daily records of all their activities, investments and outputs on their cocoa farms. This information is collected every 2 weeks and digitised in the FFB software. Every year each farmer receives a detailed agronomic and economic profit & loss statement as well as a group report that details the performance of each farmer versus that of his/her peers. Agri-Logic trains Ecom staff on implementation of the FFB and supports the implementation by analysing the collected data at different levels. At company level a sophisticated report is made each year that details the effects of Ecom-provided training and inputs to farmers on e.g. productivity, profitability and loyalty. Data from Ghana is then merged with FFB data from other cocoa-producing countries for meta analysis of the IDH cocoa programme.

Results so far:

  • 64 Ecom management and staff trained in FFB implementation
  • Same staff trained on farm level data analysis
  • 1075 farmers keep records on a daily basis
  • Collection of the third year’s data currently on-going
Impact of Common Code for the Coffee Community

Impact of Common Code for the Coffee Community

In 2009 we were contracted by the 4C Association to conduct an impact assessment of the the implementation of its code of conduct in Vietnam, Uganda and Nicaragua. In 2014, 4C asked to revisit the same farmers in Uganda and Vietnam and conduct a similar study to identify and quantify long-term effects of its programme.

We designed an impact study for this that uses a difference-in-difference approach and relies on Propensity Score Matching to create realistic counter-factual scenarios. This allows us to answer the question: what would have happened to a farmer if s/he had decided not to join the 4C programme? Two experts from Wageningen University and Research provided extensive feedback on the research design and interpretation of results.

Farmers that are part of a 4C verified supply chain have more access to training. For farmers in Uganda, we confirm that 4C verified farmers are more efficient financially. Productivity has not changed significantly, but efficiency of production as measured by the production cost per Mt green coffee, has. In Vietnam, an origin where productivity is extremely high, we did not observe additional increases in productivity as a result of being 4C verified. Of the changes in economic and agronomic performance that are observed, none correlates with application of GAP training.

On the social dimension we again see notable effects in Uganda, but less so in Vietnam. A clear link between being 4C verified and an increase in dietary quality was confirmed for Uganda. In Vietnam we only see differences in wages paid to workers, which show a stronger and significant increase over time among 4C verified farmers.

Farmers that are part of a 4C verified supply chain have more access to training. For farmers in Uganda, we confirm that 4C verified farmers are more efficient financially. Productivity has not changed significantly, but efficiency of production as measured by the production cost per Mt green coffee, has. In Vietnam, an origin where productivity is extremely high, we did not observe additional increases in productivity as a result of being 4C verified. Of the changes in economic and agronomic performance that are observed, none correlates with application of GAP training.

On the social dimension we again see notable effects in Uganda, but less so in Vietnam. A clear link between being 4C verified and an increase in dietary quality was confirmed for Uganda. In Vietnam we only see differences in wages paid to workers, which show a stronger and significant increase over time among 4C verified farmers.

Environmental performance is hardly affected by 4C. Only in Uganda did 4C verified farmers take significantly less new land into production for coffee. Other environmental aspects were not impacted in either country.

Business case certified sustainable coffee DR Congo

Business case certified sustainable coffee DR Congo

ELAN DRC is a large scale value chain programme funded by DFID and implemented by Adam Smith International. For its coffee value chain programme in the Kivu’s, Agri-Logic was contracted to conduct a business case analysis ofor growing and exporting certified sustainable coffee.

Over a two-week period we conducted interviews and focus group discussions with coffee farmers, local exporters and cooperatives. Further interviews with international traders, coffee roasters, NGOs and certification agencies were held to collect sufficient data.

Analysis showed a reasonable business case for organic certified coffee, possibly in combination with Fairtrade, but only if the latter could be marketed sufficiently well. Our modelling showed that implementing of mainstream standards like UTZ Certified, 4C and Rainforest Alliance in this sector does not yield significant economic benefits for farmers and exporters alike. This is due to low volumes of coffee per farmer  and an above average quality profile, the buyers of which usually go for more demanding standards. As a result the ELAN DRC programme is currently rethinking its coffee strategy.

Cost and benefit of certification for smallholders

Cost and benefit of certification for smallholders

Certification of agricultural products (organic certification, Fairtrade etc.) is often expected to provide a wide array of benefits for small-scale farmers. These include poverty alleviation, reduced environmental impact and food safety. Together with Wageningen Economic Research we reviewed 270 studies and present an analysis of the benefits – but also the costs – of such schemes. It demonstrates that the decision to invest must be based on sound economic principles, and the text also provides recommendations to improve the certification business case and impact on smallholders.

The Sustainable Coffee Conundrum (DE Foundation)