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THAT MATTERS LEARNING FROM OTHER SECTORS: SUSTAINABILITY IN THE - - PowerPoint PPT Presentation
THAT MATTERS LEARNING FROM OTHER SECTORS: SUSTAINABILITY IN THE - - PowerPoint PPT Presentation
CHANGE THAT MATTERS LEARNING FROM OTHER SECTORS: SUSTAINABILITY IN THE PALM OIL AND COCOA SECTORS JAN MAARTEN DROS, SOLIDARIDAD CHOCOA CONFERENCE 2014 SECTOR TRANSFORMATION PROGRAMMES IN THIRTEEN SECTORS WORLDWIDE 4 WE OPERATE AS A WORLD
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LEARNING FROM OTHER SECTORS: SUSTAINABILITY IN THE PALM OIL AND COCOA SECTORS
JAN MAARTEN DROS, SOLIDARIDAD CHOCOA CONFERENCE 2014
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SECTOR TRANSFORMATION PROGRAMMES IN THIRTEEN SECTORS WORLDWIDE
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WE OPERATE AS A WORLD WIDE NETWORK OF REGIONAL EXPERTISE CENTRES
Guatemala City Lima Buenos Aires Utrecht New Delhi Beijing Accra Johannesburg Nairobi San Francisco
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PRESENTATION OUTLINE
COCOA & PALM OIL: A SECTOR COMPARISON THE BUSINESS CASE FOR A WEST AFRICAN FAMILY FARM TOWARDS INNOVATIVE SOLUTIONS
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THE GLOBAL COCOA SITUATION
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THERE ARE MORE COMPLICATIONS…
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A LOOK AT PALM OIL
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GLOBAL PRODUCTION MAJOR OIL CROPS 2012
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OUTPUT (M Mt)
PALM OIL SOYBEAN RAPESEED SUNFLOWER COCONUT PEANUT OLIVE OTHER
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- Tree crop in hot and
humid climates
- Manual harvesting
- Livelihood for millions of
smallholders
- Majority of production
from only three countries
- Trade highly
concentrated
SIMILARITIES
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- Most production from large
estates;
- Immediate processing by mill;
- Exponential demand growth;
- Price floor determined by
mineral oil;
- And is a liquid bulk commodity –
difficult to trace.
DIFFERENCES: PALM HAS
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10 20 30 40 50 60 70 80 90 1970 80 90 2000 05 10/11 13 20F Cocoa Palm Oil
PALM OIL & COCOA PRODUCTION OUTPUT 1970-2013 & OUTLOOK 2020
(MILLION MT/YR)
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10 20 30 40 50 60 70 80 90 100 1970 80 90 2000 05 10 13 20F Latin America Africa Other Asia Malaysia Indonesia
PALM OIL OUTPUT 1970-2013 AND OUTLOOK 2020
(MILLION MT/YR)
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COCOA PRODUCTION 1970-2011 & OUTLOOK 2020
(MILLION MT/YR)
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1 2 3 4 5 6 1970 80 90 2000 05 11 20F Rest of World Other Asia Latin America Other Africa Indonesia Ghana Côte d'Ivoire
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THE BUSINESS CASE FOR A WEST AFRICAN FAMILY FARM
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4 HA OIL PALM FARM
- 1,600 KG/HA
- 6,400 KG TOTAL YIELD
- $0.75 / KG
- REVENUE $ 4,800
- COST 2 WORKERS, LOAN
REPAYMENT, FERTILIZER ~ $ 3,200
- NET INCOME $ 1,600
- POVERTY LINE $ 5,800
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4 HA COCOA FARM
- 400 KG/HA
- 1,600 KG TOTAL YIELD
- $1.20 / KG
- REVENUE $ 2,000
- COST OF WORKERS AND
INPUTS ?
- NET INCOME ?
- POVERTY LINE $ 5,800
- OIL
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4 HA OIL PALM FARM
WITH IMPROVED PRACTICES:
- 3,000 KG/HA
- 12,000 KG TOTAL YIELD
- $0.8 / KG
- REVENUE $ 9,600
- COST WORKERS AND
INPUTS ~ $ 3,200
- NET INCOME $ 6,400
POVERTY LINE $ 5,800
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COCOA FARMER
WITH 4 HA OF LAND AND IMPROVED PRACTICES:
- 1000 KG/HA
- 2,800 KG TOTAL YIELD
- $1.50 / KG
- REVENUE $ 6,000
- COST 2 WORKERS @
$2/DAY + INPUTS ~ $ 2,400
- NET INCOME $ 3,600
POVERTY LINE $ 5,800IL
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HOUSTON, WE HAVE A PROBLEM….
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WHAT IS A VIABLE FAMILY FARM? TOWARDS INNOVATIVE SOLUTIONS
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WHAT IS A VIABLE FAMILY FARM?
- TECHNOLOGY /
VARIETIES
- BEST AGRONOMIC
PRACTICE
- LABOR AVAILABILITY
SKILLS VS COST
- SCALE
- MARKETS AND (FAIR)
PRICING / WORKING CAPITAL
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CHECK YOUR ASSUMPTIONS
- ONE WORKER PER HA. IN
COCOA?
- 400 KG / HA / YEAR
MEANS
- ~ 3 KG COCOA PODS PER
WORKER PER DAY
- IN PALM OIL ONE
WORKER HARVESTS 550 KG OIL FRUIT BUNCHES PER DAY
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WE WORK ON SOLUTIONS
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SOME EXAMPLES OF WHAT WORKS
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TOGETHER WE MUST INCREASE
SCALE SPEED INNOVATION
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INTEGRATED APPROACH
FOCUS: SMART & SUSTAINABLE LAND USE, FOOD SECURITY, NUTRITION AND FUTURE FARMERS IMPROVE THE SUSTAINABLE COCOA BUSINESS CASE DEVELOP SELF-SUSTAINING DELIVERY MODELS: INPUTS, TRAINING AND CREDIT
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JOIN US FOR CHANGE THAT MATTERS
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JOIN US FOR CHANGE THAT MATTERS
janmaarten.dros@solidaridad.nl