FairMatch Support is proud to be part of this. Within the African Cashew initiative, FairMatch Support was dedicated to organize the farmers, get them certified and link them to the markets. In cooperation with ICCO, FairMatch Support worked on a total range of sustainable nuts. The peanuts and walnuts from Jack Klijn, are results from FairMatch Support programs in Latin America, cashew and macadamia’s come from our programs in Africa and the almonds from the Middle East. At least 20,000 farmers in more than 9 countries are involved.

These are the first full traceable and sustainable nuts produced on this scale. We are working on expanding the supply. Dutch companies, including TDG, Intersnack and Albert Heijn, play an important role in the sustainability of the nut sector. This is done in close cooperation with and support of organizations like OLAM and IDH.

Last week FairMatch Support handed Boudo August, director of Anatrans / Genese in Burkina Faso, the first Jack Klijn cashew nuts.

Good news, because Lidl in Germany will start selling Fairtrade cashew as well.  The cashew is produced in Burkina Faso, Benin, Mali and Mozambique. Initially this is a Lidl pilot. Intentions are to sell Fairtrade cashew in all German Lidl stores soon.

Link to Lidl website 

The consortium wants to ensure improvement of income for about 375,000 African farmers. In 2015 at least 20% of European cashew  imports should be produced and marketed sustainable. To achieve this, the chain partners started an innovative project where sustainability, improving product quality, quantity and efficiency go hand in hand throughout the entire supply chain.

The cashew consortium consists of the following partners:

• Olam International: www.olamonline.com

• Trade & Development Group (TDG): www.tradedevelopment.nl

• Intersnack: www.intersnack.com

• Ahold: www.ahold.com

• Food Chain: www.chainfood.com

• IDH: www.idhsustainabletrade.com

• Fair Match Support

For more information about the sustainable cashew supply chain, visit: www.idhsustainabletrade.com /cashew

In the past 25 years a range of certification systems were developed to stimulate the supply of sustainable goods. Early movers like Organic and Fairtrade were followed by other, more mainstream oriented initiatives like Rainforest Alliance, UTZ and many more. These systems created a lot of improvements especially with regard to social and environmental issues. Consumer demands for these products are still growing.

All these certification systems were set up in a so called buyers market in which buyers set the rules. If you want to supply your product, you will have to fulfil the buyers’ requirements. Meanwhile a code and certification industry has been established. External, often expensive, inspection systems control whether every actor complies.

But the market is changing rapidly from a buyers’ to a seller’s market. Emerging economies (BRIC and others) have a growing middle class with increasing buying power. As a result the pressure on current resources is growing. With a growing demand, producers now have a choice whom to sell to. And why comply with rigorous requirements and extra costs if you can sell your produce elsewhere for the same price?

This creates a complete new situation. Instead of social and environmental issues, productivity becomes the first key issue to take care of. Buyers become interested to co-invest in production to allow increase of production and quality to safe guard their future supply ánd meet the growing demand. The first steps to achieve those goals can be done with relatively low investments. This is a huge opportunity for producers, especially in developing countries.

So, the legitimate question is whether the certification systems that were set up in a buyers’ market are suitable to address needs and opportunities in a sellers’ market? The rules en regulations of these systems do not primarily focus on quality and quantity. In a buyers’ market certification is creating opportunities for those who can comply. But in a sellers’ market they add costs and deteriorate the competitiveness of the western buyers.

Considering all this, new systems need to be developed in which traceability and management information systems are first of all focused on productivity. This should become an internal system of the supply chain actors themselves. It creates options for joint investments within the sector and therefore creating strong alliances with huge opportunities to move towards production improvement and captive supply. These new systems could be supplemented with key requirements on sustainability. In fact, systems like this already operate in a range of settings, but need to be adjusted to commodity markets as well.

In the cashew sector key actors made the analysis to set up a different system with support of IDH (the Sustainable Trade Initiative). Instead of at random buying of producers, buying is organized, structured and data are collected: what is bought from whom, at what quality? etc. Incentive systems are set up to stimulate the farmers and create a competitive atmosphere to improve productivity. At the end of the season those data are shared and discussed with farmers, and farmer training are adjusted to needs.

The data are shared in the supply chain as well, through a jointly used hub and spoke system with agreements on which actor can see what (aggregated) data. The supply chain actors jointly invest in the system because improvement is a joint benefit.

In fact, the system develops rapidly. While it started with recording productivity data, after the first experiences sustainability data are incorporated as well. Step by step a complete supply chain management system is developing; from field to shelf.

Major challenge will be to look for acceptable control mechanisms for compliance.

Will this development mean the end of the current systems? Probably not, because there is a market for certified products. But the mainstream market will explore and develop new solutions in this changing setting.

Of course all this won’t happen over night, but there is a need for a new direction.

Herman uit de Bosch, founder and director of FairMatch Support

January 21, 2013

Allerhande ‘Meer Doen’ pdf file

‘Sellers markets and sustainability; the need for new instruments

Four and a half years ago we started FairMatch Support to create access to markets for producers in developing countries, as well as to create sustainable supply chains. We used codes and certification schemes to organise farmers and linked them to those markets that were interested in sustainable certified supply. So far we have been quite successful. Quite a number of farmers got certified and got access to specific markets in European retail.

Now a silent revolution is taking place.  The market is changing rapidly from a buyers market into a sellers market  in a range of commodities. Due to the upcoming middleclass in BRIC countries, more people can afford good food. In Brazil for instance, an upcoming new middle class of 65 million people has been counted.  Demand is increasing rapidly.

There for,  our work is changing from getting farmers to markets,  into getting buyers well connected to farmers. This is creating new opportunities for farmers. Now there is a more genuine interest in their product with prices levels  in which investing becomes interesting again.

What does that mean for sustainability? In fact there are huge opportunities for sustainable production systems, but the systems we have used so far to promote it have limited use in this changing environment.  So far we used codes and certification systems based on requirements to fulfil external audits to get access to consumers. In an upcoming competitive sellers market this is deteriorating the already declining buyers position of the western hemisphere even more; why sell your product  to the over demanding west if you can get same prices at less demanding markets?

We have to re-invent tools to stimulate sustainability, and combine it with the current necessities: productivity and quality improvement. Productivity has been low in developing countries due to decades of low food prices so investment in farming was not interesting. Due to that, low income, no access to schools, child labor etc. a lot of “non sustainable issues” were a logic consequence and part of the system.

We have to adjust the current certification systems into productivity improvement and quality improvement systems. Only  that way we will stimulate sustainable production systems, increase the farmers income,  so he/she  can pay for school fees etc.

The companies that invest in those settings in relation to their supply chains, will probably be in a better position to compete. Because:  at buyers level they create links that are interesting for both suppliers as well for themselves. ‘

Herman uit de Bosch, 21/10/2011

Local processing
The cashew sector in Africa has changed dramatically in recent years and is about to make some major steps forward. This is one of the first conclusions we can draw, after the first meetings during the conference this week. Until recently, only 10% of cashew production from Africa, was actually processed in Africa. Local processing took place in factories with an average production of 1,000 tons, almost entirely manually. The remaining 90% of processing cashew went to Asia.

Large African factories
With rising wages in Asia, Africa recently invested in mechanical processing. The coming years large factory plants will start, with capacities of 15-30 thousand tons per factory. Expectation are  that Africa will be exporting processed cashews to Asia and Brasil within five years.

New chances for African farmers

Larger plants will affect the need for constant supply and good relationships with farmers.  Also, increased productivity is essential due to increasing demand. Higher revenues at constant prices will result in a more income for farmers. A unique opportunity to work wíth the industry to improve incomes. Not out of a moral point of view, but out of economic necessity. Africa is increasingly important for global food production, which means new opportunities for Africans. The 20,000 cashewfarmers FairMatch Support works with, are ready for this challenge.

Our cashew- supplychain: from producers to retailpartners together with team FMS at ACA 2011 conference