Rural communities are at the heart of our operations, both for our plantations and farms, and our third party sourcing. We also rely on a huge team of people from these communities to work in our processing facilities, warehousing and logistics operations. Economic inclusion is critical if we want these communities to continue farming and thrive into the future.
We source from approximately 4.7 million farmers across the world but only around 6,000 can be considered large-scale farms in developed nations like Australia or USA. The vast majority are small-scale in developing countries such as Nigeria, Tanzania, India, Vietnam, Colombia and Peru. They grow crops such as cocoa, coffee, cotton and cashew on smallholdings, on just 1 or 2 hectares.
Due to stretched government resources, these smallholder farmers usually have limited access to education and healthcare, little agri-training, and no access to banks and credit to allow them to invest in their farms. As a result, their yields are often much lower than they should be, impacting on family income. Women farmers face even greater barriers.
This limitation is not just a missed opportunity, it is a business risk. The lower their production, the greater the risk of Olam not being able to procure the supply our customers expect. If smallholder production and profits are low, there is a risk they or their children will choose to give up on farming altogether and look for an alternative livelihood. It is therefore in our best interest to help lift as many smallholders as we can out of poverty and empower them for the future.
Olam has both direct sourcing from farmer groups and co-operatives but also indirect sourcing via intermediaries.
Olam’s tech platform Olam Direct (OD) was developed and launched in 2017 based on feedback from smallholder farmers who saw pricing and transparency of their existing trade as their single largest concern, owing to the presence of many intermediaries and speculative players. Bypassing these players in supply chain increases efficiency and reduces speculative play which enables Olam to provide a higher price to the farmers, compared to what they get now.
The OLC is Olam’s award-winning sustainability programme following a holistic approach to provide economic, social, and environmental
support to smallholder farmers, and reassurance to customers. Since 2011, we have gradually increased the number of farmers embraced in Africa, Asia and South America to just under 363,000.
In Africa, smallholders do not tend to have bank accounts, so payment has typically been in cash which makes saving and transaction traceability harder. In Côte d’Ivoire and Ghana, Olam is working
with the Consultative Group to Assist the Poor (CGAP) housed at the World Bank to help improve the take-up of Digital Financial Services.
Large-scale farmers in developed nations also face many challenges. Often 3rd or 4th generation family farms, they have grown their businesses through hard work, perseverance and sacrifice. While Olam’s extensive farm-gate experience means we are well-placed to support farmers from America to Zimbabwe, we must work in partnership to achieve the scale of transformational change required in the multi-faceted environment that is our global agricultural sector..