Coconut oil: P&G, Cargill and BASF join for sustainable certified, transparent supply chain

By Lucy Whitehouse contact

- Last updated on GMT

Coconut oil: P&G, Cargill and BASF join for sustainable certified, transparent supply chain
BASF, Cargill, Procter & Gamble (P&G) have entered a partnership by which they aim to help establish a sustainable certified and transparent supply chain of coconut oil in the Philippines and Indonesia.

The personal care players have joined the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in a development partnership under the programme by the German Federal Ministry for Economic Cooperation and Development (BMZ).

The companies say that by working with the smallholder farmers and teaching them better practices, the main goal of the development partnership is to increase their incomes and economic self-sufficiency by improving the productivity of the farms.

Like the predecessor project ‘Nucleus of Change’, this joint initiative is not only a chance for the industry to make an important supply chain more sustainable, but it also creates new opportunities for local smallholder coconut farmers to increase their incomes,​” explains Matthias Radek, chief advisor for Partnership Projects in Agriculture, GIZ Philippines.

Thereby, the project partners will jointly contribute to poverty alleviation in rural areas in the Philippines and in Indonesia​.”

How will it work?

The partnership’s target regions are Southern Mindanao and Southern Leyte in the Philippines and Amurang in North Sulawesi, a province of Indonesia. This focus is because the Philippines and Indonesia are the world’s two largest producers of coconuts and exporters of coconut-based products, the companies explain.

“The majority of the coconut farmers are smallholders and tenants cultivating less than four hectares of land who are seldom organized in functioning farmer groups and cooperatives,”​ they note in a joint statement.

“This gives rise to a number of challenges: Little or no economies of scale, lack of financing and training resources, and a rigid supply chain, which increase the farmers’ dependence on middlemen and perpetuates inefficient and unsustainable agricultural practices​.”

The partnership looks to address these core issues, with a central focus on improving the livelihoods of the smallholder farmers and developing these farm’s capabilities and practices.

“This will be achieved through trainings on Good Agricultural Practices (GAP), intercropping and enhanced farm management skills, and the strengthening of farmer groups,​” the companies state.

Around 3,000 smallholder farmers in the Philippines and 300 in Indonesia are expected to benefit from the program.

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