The Nedspice- Farmers Partnership Programme 1
Sustainable Spice Farming 2
Nedspice believes that sustainability is one of the main challenges for the food industry in the years ahead. Pulled by global market developments smallholder farmers increasingly shift to other, more valuable sources of income. In addition, many young farmers are leaving agriculture and migrate to urban areas for jobs in non-agricultural sectors. These trends are also felt in the spice sector where many, often aging, smallholder farmers move to high intensive crops. Not only does this affect the scarcity of spices, it also negatively affects the environment high intensive monoculture farm systems cause serious land degradation, pollution and erosion issues and the communities that suffer from health problems due to the use of chemicals in such systems. In order to maximize their yields small scale spice farmers are also increasingly pushed to apply high-intensive agricultural practices and chemical fertilizers, herbicides and pesticides in their farming systems. Lack of knowledge regarding sustainable agricultural practices, low quality input supply and lack of improved technologies keep yields low. Other constraints are water stress, fluctuating farmgate prices and weak supply linkages between farmers and exporters. As a result spice production could harm local communities and at consumer-level affect food safety. Since Nedspice sources from farmers these are all issues that affect Nedspice as well. The wellbeing of our suppliers and stability of supply is therefore crucial to us as well as to our customers and endconsumers. To ensure that spice farming remains financially attractive and offers a sustainable livelihood for farmers Nedspice has the ambition to develop backward integration programmes for farmers in Vietnam and India and other countries where we work. In line with this Nedspice started to establish partnerships in 2012/2013 with farmers and other supporting organizations in Vietnam and India and joined the Sustainable Spice Initiative (SSI), a sector initiative founded by various stakeholders in the spice industry. This brochure explains the approach, key principles as well as the expected results of this ambition, formulated as the Nedspice-Farmers Partnership Programme (NFPP). You can download this brochure at www.nedspice.com. 3
Nedspice and vertical integration Nedspice Sourcing BV is the commercial centre of Nedspice's operation with its headquarter in Rotterdam, the Netherlands. Most of the products sold are purchased from other Nedspice Group companies in India and Vietnam. Others are bought from preferred suppliers in various countries: Indonesia, China, Nigeria, Madagascar, Mexico and Brazil amongst others. Kerala State (India) Binh Duong Province (Vietnam) Secure supply Already in the 1990s Nedspice came to the conclusion that it needed a more secure spice supply and quality. We therefore invested in vertically integrated supply chains by establishing processing plants in India and Vietnam. The processing facilities have brought us much closer to our raw material suppliers, thousands of smallholders producing various spice products. Products are sourced in close collaboration with local trading partners. 4
traceability Raw material / Origin sourcing Cultivation / Farming Collection / Grading Procurement Processing Warehousing / Delivery Customer / Consumer supply chain 5
The Nedspice- Farmers Partnership Programme The Nedspice-Farmers Partnership Programme is built on three pillars: Nedspice supports farmers in Improving Agricultural Practices. Good agricultural practices need to be efficient and compliant with domestic and international regulations. When required farmers will have to fulfil certification standards. Nedspice currently applies both the SAN (Sustainable Agriculture Network) and SAC (Sustainable Agriculture Code) standards. Even when farmers are not certified, these standards are still Nedspice s benchmark for responsible agricultural practices. Nedspice's field officers provide regular training and on-the-farm support to committed farmers in the Partnership Programme. This may include the responsible use of pesticides, herbicides and fertilizers. Nedspice also monitors and coaches farmers on managing soil fertility and responsible water use and takes into account their social wellbeing as well as hired labour conditions. Improving Agricultural Practices Community Outreach Partnership Building Through Partnership Building Nedspice aims to set up long-term relationships between the company and its suppliers. This means Nedspice supports farmer organization building and organizes regular meetings for farmers, traders, the company and other important stakeholders such as input suppliers, NGOs and research centres. The meetings are dedicated to sharing production, market, price and quality information. Other topics include finding new business opportunities and sharing Partnership concerns. Nedspice also aims to provide continual information services concerning price, production and quality data for example by using modern communication tools. Nedspice s Community Outreach activities aim to respond to the wider needs of farmers communities. Nedspice engages with communities of spice farmers. For instance through awareness creation activities as well as investments in community needs. Investments are to be selected in close collaboration with farmer groups. 6
Sustainable Pepper Farming Binh Phuoc province, Vietnam In 2013 Nedspice began a two-year pilot project to help develop the sustainable pepper supply chain in the Binh Phuoc province, Vietnam. The project is implemented by SNV and Nedspice Processing Vietnam Ltd. and co-funded by IDH (Sustainable Trade Initiative) and Nedspice Group. The aim is to assist 500-700 farmers and thereby contribute to the improvement of their social and environmental impact. Farmers are being assisted in adapting their farming practices to comply with the Rainforest Alliance (SAN) standard. In this way biodiversity, ecosystem conservation and labour occupational health and safety is guaranteed. The project will also provide local producers with market access by establishing a long-term cooperation with Nedspice, and improve their income by raising production yield and the price they will receive in return for a high quality and certified product. The Nedspice-Farmers Partnership Programme benefits both the farmers and the company. Farmers receive a price premium of their products, cultivation training, access to market information and community support through the community outreach activities of the Programme. Nedspice in return secures long-term supply of traceable spices, continuous/steady deliveries and products according to international quality standards. During Q1 2014 some 250 farmers successfully completed the programme and the Rainforest Alliance Certification (SAN) was obtained. "I can learn a new way to do my farming better." 7
Implementation process The Nedspice-Farmers Partnership Programme broadly follows an ongoing four step implementation process: 1. Participative Gap Analysis Once a group of farmers has indicated it will participate in the Programme, the first step is to conduct a participative gap analysis in which farmers and the company jointly analyse farm practice issues that need to be improved in order to realize responsible spice cultivation. 2. Agreeing on interventions In a participatory meeting with spice producers and other relevant stakeholders (production input suppliers, local government organizations, development organizations, research organizations, other community representatives etc.) interventions for improving responsible cultivation are agreed upon and formalized into an action plan. 3. Implementation The interventions related to Improving Agricultural Practices, Partnership Building and Community Outreach are implemented during the growing season. 4. Evaluating and Reporting The progress towards responsible farm development will continually be monitored during implementation by field officers and discussed during regular stakeholder meetings. At the end of each growing season, year results are evaluated with the farmer groups and new action plans for the next production cycle are drafted. Nedspice will work on the development of a management system to monitor and annually report the outcomes of the NFPP. Reports will be shared with all relevant stakeholders and published on Nedspice s website. Sustainable Turmeric and Cumin Farming Andhra Pradesh and Rajasthan, India During 2013 Sustainable Turmeric Farming was taken up in two districts of Andhra Pradesh in a two-year pilot project in collaboration with Agrasia Impex. The overall aim is to encourage farmers to make cultivation practices more economically, socially and environmentally sustainable, integrate producers into long term cooperation with Nedspice s value chain, and ultimately to provide good quality turmeric to meet increasing customer demand. Sixty farmers, amounting to 120 hectares of land, will be assisted in good agricultural practices. This will improve their productivity which increases their income and thereby contributes to the improvement of their livelihoods. They are also introduced to water saving techniques and taught how to release less nitrogen into the atmosphere, which will improve their living conditions and reduce investment costs. Finally, farmers will receive a price premium from Nedspice. The project aims at cultivating and delivering 500 MT of turmeric annually. During Q3 of 2014 Sustainable Supplier status was attained under the Unilever Sustainable Agriculture Code and Scheme rules (USAC). The Sustainable Cumin programme was started under the Nedspice Farmers Partnership Programme in Rajasthan state, India. The project was taken up in 4 villages, comprising 44 farmers with 440 hectares of land with a production of 300 MT in 2013/14. This project was also successfully implemented with Nedspice sustainable agricultural principles and Sustainable Supplier status under USAC was obtained during 2014. 4. Evaluating and Reporting Monitoring 1. Participative gap analysis 3. Implementation 2. Agreeing on interventions 8
"Also for our children Nedspice is supporting the local community by school related projects." 9
Mutual benefits The Nedspice-Farmers Partnership Programme is expected to benefit both the farmers and the company. Farmers incentives include a price premium on their products, training and on-the-farm coaching, as well as access to market intelligence and community support through the Programme's community outreach activities. Nedspice in return will further secure the long-term supply of fully traceable spices, delivered in-time and according to required quality standards. provides Incentives Sustainability farming training and coaching Secured access markets Price premium Community outreach activities Market intelligence receives Nedspice Mutual benefits Farmers / Farmer Groups receives Contributions Secured supply Quality compliant products Product traceability Production intelligence provides 10
A farmer s perspective For Nedspice, the perspective of its suppliers matters. To get a better idea of their needs and views, Nedspice is involved in a continuous dialogue with farmers and other stakeholders. In 2013, in order to gain a more in depth understanding, Nedspice participated in a study conducted by the Sustainable Spice Initiative (SSI) and the Royal Tropical Institute (KIT), interviewing stakeholders in the Vietnamese spice sector. Farmers interviewed made clear that they were not aware of opportunities for pepper certification. When discussing such possibilities, they expressed a need for help in complying with the standard's requirements and in improving the quality of their spice products. Last but not least, they expressed an interest in establishing a long term relationship with a buyer, to secure a market and be less vulnerable to shocks. The income as well as other environmental, health and social benefits they receive directly contributes to their lives in a positive manner. 11
Commitment to sustainable spice production The Nedspice-Farmers Partnership Programme was developed to show Nedspice s commitment to sustainable spice production. Nedspice s overall mission is to ensure that our customers can produce their products according to their specifications. Secured supply is only feasible if spice production offers a financially attractive and sustainable livelihood for farmers. The Programme will expand in the future and more importantly, is a continuous process that will be adapted when deemed necessary. This is in line with Nedspice s vision which states that we aim to initiate and innovate through sustainable partnerships. Nedspice warmly welcomes all our stakeholders to join us on this exciting journey. 12
The Partnership s sustainability principles The Nedspice-Farmers Partnership Programme is based on generic sustainability principles of environmental integrity, social wellbeing and economic resilience including existing applied sustainability standards. Economic resilience Environmental integrity Social wellbeing Profitable farming Responsible use of seeds Safe and healthy on-farm working conditions Optimized yields Responsible use of fertilizers Fair wages Producing food safe products Responsible use of pesticides No discrimination Joint action through group formation Responsible water use No child labour Sharing information Sustainable soil use Freely chosen labour Traceability Managing waste Community involvement Maintaining biodiversity Profitable farming One of the key objectives of the Nedspice-Farmers Partnership Programme is sustaining the profitability of spice farming for farmers. A first step in the Programme, profitability forms part of the analysis. Farmers committed to the Partnership receive market prices plus a price premium. Optimized yields The Nedspice-Farmers Partnership Programme invests in partnerships that can help develop farm practice knowledge in order to optimize yields. These practices need to obey conditions essential for producing high quality and safe products using sustainable input. Farmers participating in the Partnership are trained and coached in applying responsible best practices. 13
Producing food safe products Nedspice aims to deliver to its customers carefree semi-finished single spices in a trustworthy manner. Producing safe food products is therefore extremely important. Farmers in the Programme receive help in optimizing the quality of their produce in a responsible manner. This happens by investing in knowledge development on producing quality and safe products, and in disseminating this knowledge through training and coaching. Traceability For Nedspice and its customers, being able to trace a product s source is increasingly important. This is not only important for food safety but also for controlling other sustainability risks such as labour conditions and the environmental impact of products. The Partnership through which the company and the suppliers are in constant communication enhances the traceability of Nedspice s products. In some supply chains certification is needed to make products traceable. Joint action through group formation The majority of spice farmers are small scale. To put the Programme into practice in an efficient and effective way for both farmers and the company, farmers are requested to form groups. Groups are needed for providing training, group contracting and auditing, and also have a function in exchanging knowledge. The Programme aims to provide support in group formation and will seek to establish partnerships with local support organizations that provide capacity building. Sharing information In building up relationships, it is important to be transparent and share required information. Nedspice will provide farmers in the Programme with market, price, quality, weather etc. information. In return they will provide production planning data and crop development information. Information can be shared through physical meetings, training, on-farm coaching, as well as by sharing publications such as monitoring reports found on Nedspice s website. Responsible use of seeds The majority of spice producers use local seeds and tree seedlings for renewing their plant materials. The Programme aims to build up local knowledge on suitable seeds for particular spice crops and regions. One way to do this is by supporting local research. Knowledge will be transferred through training and by field officers on-farm support to farmers in the Nedspice-Farmers Partnership Programme. Nedspice does not allow GMO plant materials. Responsible use of fertilizers The use of fertilizer is relatively new to many spice producers. Its wrong application or use of low quality production inputs can have a serious negative effect on soil conditions, in particular when used intensively over a longer period of time. Nedspice will develop and share knowledge on responsible and legal use of fertilizers including its handling and storage, with the farmers participating in The Nedspice-Farmers Partnership Programme. 14
Responsible use of pesticides Pesticides and herbicides sometimes need to be used in order to protect crops against herbs and pests. The responsible and legal use, handling and storage of chemicals in a way that does not negatively affect the environment and people, is part of training and on-farm support by The Nedspice-Farmers Partnership Programme. Responsible water use Some areas where spices are being produced suffer from water stress or run the risk of water stress in the future. Nedspice will pay special attention to the availability and efficient use of water in spice production, for instance, through gap analysis and training. The Programme will promote efficient and responsible use of water in irrigating crops, so that there is no pollution and (drinking) water is not wasted. Sustainable soil use Soil conditions are influenced by agricultural practices, such as the use of fertilizers, chemicals and water, and tree cutting. Conservation of soils is important for future production and availability of spices. Its management is an important part of Nedspice- Farmers Partnership Programme s training and support. Managing waste The Programme looks into ways on how to prevent negative effects on ecosystems and people s livelihoods when it comes to production and postharvest waste. Farmers will be trained in waste management when necessary to help them improve their agricultural practices. Maintaining biodiversity Spices are often produced in intercropping systems that support the biodiversity of a region. Biodiversity is important for protecting the flora and fauna in natural ecosystems. Farm expansion and monoculture can negatively affect biodiversity. The Programme assesses the effect of spice production on biodiversity. Safe and healthy on-farm working conditions As part of responsible farm practices the Partnership Programme will assess and promote the farmers and their workers safe and healthy working conditions, especially female farmers and workers. Safe use of chemicals and other inputs, machinery, decent working hours and freely chosen labour all fall under these practices. Nedspice s field officers monitor on-farm working conditions frequently and report on these conditions annually. Fair wages Farmer suppliers in the Nedspice- Farmers Partnership Programme will gain from their commitment to Nedspice by receiving price premiums on top of the general market price. Hired labourers need to be paid above minimum wages by their contractors. No discrimination Discrimination based on gender, religion or ethnical background is prohibited in Nedspice s supply chains. The Programme will constantly communicate this through all its Partnership activities. No child labour Nedspice does not accept child labour in its supply chains. Children do have the right to go to school. The Programme aims to address this right through its Community Outreach activities as well as in training and on-farm support activities whenever applicable. Freely chosen labour Labour should by all means be freely chosen and not enforced. Community involvement By experience Nedspice knows that business has an impact not only on farmers and workers but also on their communities. The Programme is therefore dedicated towards involving the community in its activities; for example, by saving money for community relevant investments and awareness creation activities. 15
Nedspice Sourcing BV Weena 260 3012 NJ Rotterdam The Netherlands Contact T +31 10 28 01 380 F +31 10 41 47 550 spices@nedspice.com www.nedspice.com For more information on our backward integration strategy, please see our Nedspice-Farmers Partnership Programme. For this and other inquiries you may contact us at: Nedspice Dehydrated Ingredients BV Buiten de Veerpoort 5 2871 CC Schoonhoven The Netherlands Nedspice US Inc 2411 North Oak St, Suite 105-F Myrtle Beach, SC 29577 USA T +31 182 38 26 65 F +31 182 38 35 80 dehydrates@nedspice.com www.nedspice.com T +1 843 443 4007 M +1 201 602 9301 toverby@nedspice.com www.nedspice.com Nedspice Processing Vietnam Ltd Hoa Lan Hamlet, Thuan Giao Commune Thuan An District, Binh Duong Province Socialist Republic of Vietnam T +84 650 37 18 005 F +84 650 37 47 996 order@nedspice.com www.nedspice.com Nedspice Processing India Pvt Ltd #12/597-8 Jawahar Road Koovappadam Cochin - 682 002 India T +91 484 22 23 286 F +91 484 22 23 287 orderindia@nedspice.com www.nedspice.com 16