While the bottom line rules in many business sectors, sustainability dictates that in agriculture, companies consider the future. Humans exert more energy than any other species on getting fed. From sowing a seed to harvesting it, then processing it, and ultimately packaging it for consumption, much effort goes into everything we eat and drink. But what’s taken out of the ground is not infinite, nor is the earth infinitely capable of growing things.
“Fundamentally, sustainability is about making sure people have the healthy food they need without disrupting the ecological balance of the earth. If we can take special care in terms of how we farm basic ingredients and how we get to market, we’ll be in a better position to continue to feed the world for years to come,” says Mike Fernandez, Corporate Vice President, Corporate Affairs for Cargill, one of the largest food suppliers in the world.
In Latin America, deforestation has critically endangered the tropical rain forests of the Amazon, home of half the world’s estimated 10 million species of plants, animals, and insects. It’s also where one-fifth of the world’s fresh water exists, and where 20 percent of the world’s oxygen is produced. In developing countries, where natural resources abound but infrastructure, as well as the funds to invest in it are lacking, a commitment to sustainability is key.
“Sustainability used to be viewed as an add-on, something done outside the scope of core business operations,” says Justin Ward, vice president for business practices at Conservation International (CI). “In dealing with companies, we’ve observed that leadership is waking up to the realization that sustainability is essential to deliver commodities and to meet the expectations of shareholders, employees, customers, and the general public.”
On a global scale, calls for sustainability began in 1992 at the Earth Summit in Brazil, attended by representatives from 170 countries. They agreed that there was a need to work together, “in global partnership for sustainable development.” This year, 17 global partner companies of the World Economic Forum launched the New Vision for Agriculture initiative to develop a shared agenda for action and foster multi-stakeholder collaboration to achieve sustainable agricultural growth.
Issues addressed by the initiative included leveraging public and private sector investment, sharing environmental best practices, and improving access to affordable and nutritious food. Some of the largest U.S. importers of commodities from Latin America have taken the lead regarding sustainable practices in agribusiness, setting an example for others of how to grow goods on a massive scale while having a positive impact on the communities they rely upon to harvest the earth’s riches. These companies include Starbucks, Cargill, and Kraft.
Percolating Partnerships
Seattle-based Starbucks imports coffee from three regions: Asia-Pacific, Africa, and Latin America. In order to assure it adheres to best practices in coffee production, the company adopted its own Coffee and Farmer Equity (Café) Practices. Café Practices looks at methods of eliminating environmental degradation in three critical areas—water, land, and energy consumption.
Growers must install water treatment systems and are not allowed to dump wastewater into natural waterways. They’re also encouraged to recycle the bean pulp, normally discarded in the processing of the coffee bean, to be used as a natural fertilizer and to reduce chemical usage. Methods to reduce the amount of energy used to process the beans, like drying them in the sun rather than by machine, are also encouraged. Café Practices supports alternative growing methods like pruning—previously considered harmful by growers—as a way of prolonging the life of a coffee tree, or using shade trees, rather than clearing them, which maintains the forest canopy and its ecosystem.
The process has not been a simple one. Instituting a program and requiring vendors to adhere to a set of guidelines in order to become a contractor is one thing, but if resources and education are lacking, the program can become ineffective. Currently, 84 percent of Starbucks coffee comes from independently verified Café Practices suppliers. Starbucks has set a goal of 100 percent by 2015.
“There were many limitations initially,” admits Carlos Rodriguez, director of agronomy at the Starbucks Farmer Support Center in Costa Rica. “The biggest limitation is the record keeping by farmers for pesticides usage and the amount of energy they consume during processing. We had to begin training famers to understand the importance of having that information. Another aspect was the living conditions. We asked farmers to process food and treat waste, but in countries where legislation was not in place, we had to invest to implement those changes. In some countries, like Costa Rica, it was not such a big deal, but in Nicaragua, it was difficult. A lot of farmers made changes in their milling process to participate in the program.”
One such investment included building the Starbucks Farmer Support Center where experts on the ground provide the training needed for local farmers who aspire to become Starbucks contractors. For farmers who lack the funds to upgrade their operations, Starbucks also supports a farmer loan fund, Verde Ventures, created by CI to help farmers access capital by offering small business loans.
Partnering with non-governmental organizations (NGOs) like CI helps corporations establish a grass-roots presence as well as verify that their programs are working. Starbucks has given just over $10 million in cash since 1998 through grant contributions, event sponsorships, and cause marketing promotions. They have also provided $4.5 million in loan funds for Verde Ventures and helped raise $2.08 million from their suppliers
“Our engagement with Starbucks, began in 1998 on a small scale pilot project in Chiapas, Mexico, in the coffee growing area of El Triunfo Biosphere Reserve,” shares Ward. “It’s known as the last significant cloud forest in Latin America, an area of great bio richness and ecological value globally, but also for high quality coffee. Lessons from field project to educate and train farmers like this one demonstrated that they work.”
Building the Future
Infrastructure, or the lack thereof, can be the greatest impediment to sustainability. Many countries lack the funds to support their own farmers so companies focused merely on short-term profits could easily opt out of sustainability as a business practice.
Cargill is headquartered near Minneapolis but operates in 63 countries, and its largest Latin American operations are in Brazil. They also work in Argentina, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Mexico, Nicaragua, Guatemala, Honduras, Paraguay, Peru, Uruguay, and Venezuela. The company’s operations vary from processing food, grains, oils, and meat, as well as moving food across South America to other parts of the world. For companies as large and diverse as Cargill, the choice to adopt sustainability came from a global vision that understands that an investment in infrastructure today means an investment in future opportunities.
“While it takes more work and commitment, sustainability is the right thing to strive for,” explains Fernandez. “Not only do we have to do what’s appropriate for the environment, our customers expect it.”
Cargill in recent years has begun to work more closely with important NGOs and views its work with the World Wildlife Fund as key to developing responsible supply chains. Additionally, the company recently announced a $3 million donation over the next three years to the Nature Conservancy to help develop programs to train soy farmers in Pará, Brazil, to limit deforestation in the country’s declining rain forests. The grant expands a program that has already helped 383 farmers comply with conservation laws.
The effectiveness of these programs has become evident. “We’re committed to have farmers better understand sustainable farming,” says Fernandez, “Our efforts have lead to a reduction in illegal deforestation since 2006. In Pará, specifically, we have achieved near zero deforestation.”
For Cargill, investments in infrastructure just make sense. They also lead by their own example. Employees within the company make up Cargill Care Councils, contributing time and money, more than $20 million in Latin America annually, and working on the ground with projects to help feed the needy.
“Our customers are very interested in how we perform on environmental goals,” says Fernandez. “They ask about our programs, our goals and targets to improve green house gas efficiency and the efficient use of fresh water, and how we’re cutting energy and water costs.”
Cultivating Communities
While infrastructure challenges affect a country’s ability to adhere to global initiatives concerning sustainability as well as its ability to deliver commodities via the existing supply chain, poverty affects communities on a basic level. Faced with health and education challenges, poor communities cannot support large business interests and generally suffer from the proximity and breadth of these operations.
Kraft approaches each venture by focusing on the local farms and the communities that support them. One of the largest buyers of cocoa, coffee, and cashews, Kraft also partners with groups like the Rainforest Alliance that promote sustainable food practices among local farmers. In 2010, Kraft bought coffee from Rainforest Alliance Certified Farms that helped support 430,000 farm workers in 12 countries in Africa, Central America, South America, and Southeast Asia.
Also part of the World Economic Forum, Kraft has been an active member of the World Cocoa Foundation (WCF) since 2004. Anne Alonzo, Kraft Foods Vice President of Global Public Policy in Washington, DC, currently chairs its board. A nonprofit foundation with nearly 70 members, WCF promotes a sustainable cocoa economy through socioeconomic development and environmental stewardship.
In Latin America, Kraft sources coffee from Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, and Peru. Cocoa comes from Brazil, the Dominican Republic, and Ecuador, and sugarcane from Argentina, Brazil, Colombia, Mexico and Peru. To date, they’ve committed $70 million over 10 years to cocoa communities in Ghana, India, Indonesia, and the Dominican Republic. The premiums from this commitment have funded mobile health clinics, farm equipment. and farmer skills training.
In the Dominican Republic, where Kraft acquires cocoa for two of its premium chocolate brands, the company buys Rainforest Alliance cocoa annually for the Cote d’Or brand and for Green & Black’s, another of Kraft’s premium chocolate brands.
Additionally, Green & Black’s has committed to a planned period of eight years to ensure the sustainability of the Dominican Republic’s cocoa growing communities and enable farmers to invest in improving their livelihoods and communities. The investment will be made through Fairtrade premiums, as well as direct investment from the brand. The brand will also invest in Belize to ensure the sustainability of cocoa growing communities that supply Green & Black’s.
“Our goal is to increase sustainable sourcing of agricultural commodities by 25 percent by 2015, and in doing so, support prosperous livelihoods of farming communities,” says Alonzo. “Through sustainable agriculture initiatives, farmers and their families learn the skills and are part of systems to increase productivity and quality of crops, earn decent wages, increase awareness of responsible farming practices, improve living and working conditions, have more educational opportunities, and respect and protect the environment. All of these are aimed at making farming a viable economic option for families to pursue and achieve an overall better quality of life.”
It’s one thing to reap what you sow. It’s quite another to sow sustainability.
Food For Thought