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Project for certified sustainable coconut oil production improves lives of more than 4,000 smallholder farmers in the Philippines and Indonesia

BASF cooperates with Cargill, Procter & Gamble (P&G) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in a development partnership under the develoPPP.de program commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) to establish a certified coconut oil supply chain and improve the livelihood of coconut farmers in the Philippines and Indonesia. 

low angle view of tall palm trees

The combined expertise of the partners helps ensure the success of the program. The private partners share their understanding of the market mechanisms and trends, while GIZ contributes its expertise in training of farmers and promoting sustainability standards. Between November 2015 and October 2019, more than 4,100 coconut farmers have been trained in Good Agricultural and processing Practices (GAP) as well as Farm Management practices. About 1,600 farmers received additional training and have been certified against the Rainforest Alliance Sustainable Agriculture Standard. Farmers who were trained and certified, have on average a 47% higher income than farmers who didn’t participate in the program.

Facts and Figures
  • The Philippines and Indonesia are the world‘s largest producers of coconuts and exporters of coconut-based products.
  • Most coconut farmers are smallholders and tenants who cultivate only a little bit of land.
  • They are working on a weak resource base with limited access to know-how and means of financing.
  • Farmer trainings on farm management skills, Good Agricultural Practices (GAP) and enabling certification have been developed.
  • The project partners established a certified chain of custody that allowed the tracking from refinery back to Rainforest Alliance CertifiedTM farms.
  • So far, farms with a total area of 4.915 ha are certified.
  • Trained and certified farmers could improve their annual productivity of coconuts by 26 %.
  • In 2018, the first Rainforest Alliance CertifiedTM coconut oil has been sustainably produced in the Philippines. 
  • BASF uses coconut oil to manufacture ingredients for cosmetic products, detergents and cleaning agents, as well as food applications. 

Improved income and productivity

The results show that trained farmers have a higher productivity than non-trained farmers, with certified farmers reaping the biggest benefits. According to an endline survey carried out by an independent provider of market research and consulting services, the joint project has proven that certified coconut oil production is making a difference in farmer’s lives. Certified coconut farmers harvest more and have a productivity which is 26% higher in comparison to non-involved farmers.  Coconut oil production levels increase, and developmental benefits are achieved, contributing towards better living conditions for the coconut farmers and their families 

One of the farmers, Natividad Beligolo from Sarangani Province, Philippines, said: “I earned additional income which is a big help to our family to sustain our everyday lives - more food on the plate and education for our children.”

We are extremely happy that the coconut farmers have improved their income through the support of the SCNO partnership. We look forward to the collaboration continuing so that more and more farmers can benefit from Rainforest Alliance certification.

Christiane Hornikel

Program Manager Coconut

The first certified sustainable coconut oil

The first Rainforest Alliance Certified™ coconut oil has been produced in 2018 with the support of this partnership. The certified coconut oil was made possible by establishing a transparent supply chain according to the Rainforest Alliance Chain of Custody standard on mass balance level that fosters the administrative flow of certified raw materials within the supply chain and supports farmers to produce more sustainably. Rainforest Alliance Certified coconut farms must meet comprehensive requirements for sustainable agriculture that built on the three pillars of sustainability—environmental protection, social equity, and economic viability. Rainforest Alliance certified farmers have an effective planning and management system in place, conserve biodiversity and natural resources and improve livelihoods and human well-being. 

half open coconut with green leaf in the background

The development partnership

The Philippines and Indonesia are the world’s two largest producers of coconuts and exporters of coconut-based products. The coconut growing regions belong to the least developed areas and host the largest number of rural poor. The farmers are mostly smallholders or tenants with less than four hectares of land and limited access to know-how and means of financing. The programme gives these smallholder farmers a way to address their main challenges which include little or no economies of scale, lack of financing and training resources as well as a rigid supply chain.  

Matthias Radek, GIZ Chief Advisor for Development Partnerships in Agriculture in the Philippines said: “SCNO is an outstanding public-private-partnership project. It can serve as great example on how public and private efforts can create tangible benefits for smallholder farmers, at the same time supporting a market-oriented business model, which has sustainability at its core. The initiative demonstrates how impressive results can be achieved through a strong collaboration, enhancing farming systems, alleviating poverty and ultimately contributing towards the achievement of the UN Sustainable Development Goals.”

With the first Rainforest Alliance Certified™ sustainable coconut oil in place, we have reached an important milestone on the way to establish certified sustainable supply chains and improve the livelihood of smallholder farmers. We are proud of the achievements we have made together with our partners over the last few years.
Ina Boos

Ina Boos

Project Manager, Sustainable Certified Coconut Oil at BASF