This document summarizes a presentation on landscape approaches in agroforestry systems that reduce climate, water and community risks. It reviewed over 100 initiatives and selected three in-depth case studies, including Olam's partnership with Rainforest Alliance on a cocoa agroforestry project in Ghana. Businesses face increasing sustainability risks from climate change, resource competition, and poverty. Landscape approaches address these risks at larger scales. Case studies were analyzed to understand the business rationales, engagement modes, and value propositions of these collaborative initiatives.
Session 6.6 agribusiness reducing climate, water and community risks
1. Agri-businesses reducing
climate, water and community
risks: Landscape approaches
in agroforestry systems
Gabrielle Kissinger, Lexeme Consulting
Lee Gross, EcoAgriculture Partners
Presented at World Congress of Agroforestry 2014
New Delhi, India
Session: Policy, innovation and global issues – Successful and scalable business models for
agroforestry with quantified mitigation and adaption co-benefits
2. This investigation builds
on Reducing Risk (2013):
100+
27
3
1
initiatives reviewed
selected by criteria
in-depth case studies:
Olam: Ghana cocoa
Starbucks: Coffee
SABMiller: water
synthesis report
4. Businesses are increasingly at risk of
“sustainability megaforces”
Climate Change
Poverty and
Food Security
Competition
for resources
Increasing
demand
KPMG, 2012. Expect the Unexpected: Building business value in a changing world.
8. Objective:
Tree crops appear to be well-suited to landscape approaches for
reasons related to climate change and community/livelihood
risks. Tree-based commodities may be more exposed to risks
than other commodity types, and agronomic, commodity and
supply chain conditions magnify those risks.
Key research questions:
1. What is the value proposition of the landscape approach for
agroforestry products, based on the case examples? This will
provide insight on what rationales and modes are particular to
landscape approaches involving tree-crop commodities (could be
different from those observed more broadly in Reducing Risk)
2. To what degree do climate change and community/livelihood risks
underlie company rationales to pursue a landscape approach?
9. Analytical framework
• Business
risks/opportunities
(avoided costs?)
• Decision to pursue
landscape
approach- basis
and strategic
advantage
(consequence or
driver?)
Business
rationale
Modes of
engagement in
landscape
• Enabling
conditions
• Policy, structural,
market
considerations
• Landscape
approach
attributes
• How it sits in
relation to core
business activities
• Value of
engagement
beyond the
business unit
(farmscale, product
)
• Value of long-term
benefits
Value
proposition
10. Methodology
Case study assessment, apply analytical framework, qualitative
assessment of cases (quantitative data hard to get from businesses!)
Criteria for case study selection:
1. Meets definition of a landscape approach as per Scherr et al.
2012.
2. Includes agroforestry production models (pre-existing or as part
of intervention)
3. Is primarily driven by company/private sector motivations
(inference is that landscape approach has value to the company
and is part of the business case)
4. Provides enough information on the motivations and modes that
company interests can be discerned
11. Case study/project name
Company
1
Olam/Rainforest Alliance Climate Cocoa Partnership for REDD+
Preparation
Olam
2
Biodiversity and Cocoa farming, Ghana
Armajaro, Bioversity,
GeoTraceability
3
Applying Sustainable Cocoa Practices through Agroforestry in
Community Forest Areas as a Tool for Achieving Biodiversity
Conservation Outcomes - South Sulawesi, Indonesia
Mars
4
Mars Cocoa Sustainability Strategy and "Vision for Change"
partnership, Côte d’Ivoire
Mars
5
Ensuring Best Practices in Cocoa-Agroforestry System for improved
Livelihood and Sustainable Environment, Ghana
John Bitar Co.
LTD
6
Climate and Coffee: Mexico, Indonesia, Brazil
Starbucks and CI
7
Reforestation in the Sierra Piura
Café Direct,
Cepicafe
8
Tea and yerba mate – Atlantic forest (Argentina and Brazil)
GuayakÍ Yerba
Mate
9
Coffee and food security in East Africa
Nestlé, ECOM,
Solidaridad
10
Coffee Farmer Resilience Initiative - Latin American La Roya (leaf rust)
Root Capital
12. Case study analysis
• Discernable patterns in rationales, based on analytical
framework elements?
• What agronomic, commodity and supply chain risks or
opportunities are companies responding to?
• What modes are being applied?
• Barriers to adoption (e.g. tenure in Juabeso-Bia, Ghana)?
• Are the modes to address key risks that were part of
company motivation to engage the landscape approach? If
so, can infer there is a value proposition/return on
investment (will likely not be able to quantify this!).
• Assess the climate change and community/livelihood risks
that underlie motivations.
13. Starbucks: risks in key sourcing areas
• Operational risk in
future supply:
climate change
impacts + farmers
moving away from
coffee production
• Importance of
healthy coffee
farming
communities and
landscapes
Business
rationale
Mode of
engagement
• Partnership with
CI
• Solutions forged
with
stakeholders, com
munity and
governments
• FinancePES, strategic
loans for business
development
• Mitigating
operational risks in
supply and key
sourcing areas
• Leveraging
capacity and
expertise through
partnership with CI
Value
proposition
14. Starbucks and Conservation International:
Coffee in Mexico, Indonesia and Brazil
Operational Risks
• Price volatility due to market dynamics.
• Declining production and yields due to climate change
and aging farmer demographic
Reputational Risks
• Environmental risks related to deforestation,
greenhouse gas emissions, water use and quality
• Community risks associated with farmer income and
livelihoods, including food security
15. Starbucks and Conservation International:
Coffee in Mexico, Indonesia and Brazil
Present state of optimal areas for Arabica coffee, Sierra Madre de Chiapas
16. Starbucks and Conservation International:
Coffee in Mexico, Indonesia and Brazil
Optimal areas expected for Arabica coffee in 2050, Sierra Madre de Chiapas
Source: Chiapas
Gobierno del Estado.
2011. Estrategia del
Sector Cafetaleropara
la
adaptación, mitigación
y reducción de la
vulnerabilidad ante el
cambio climático en la
Sierra Madre de
Chiapas. Analysis and
maps above by
CIAT, 2011.
17. Starbucks and Conservation International
Modes:
•
Supply Chain Interventions
C.A.F.E. Practices
• Regional Producer Support Interventions
• Payments for Ecosystem Services
Chiapas voluntary forest carbon: 5,042
tCO2 sold at an average price of
$9/tCO2e
19. Starbucks and Conservation International:
Coffee in Mexico, Indonesia and Brazil
VALUE:
• Increased understanding of critical issues facing coffee supply currently and in the
future.
• Fewer surprises to undermine investments in supply chain development and
regional producer support.
• Ability to achieve and report on results at a concentrated scale.
CHALLENGES:
• Different language than that used by companies.
• Timelines for investment in landscape approaches is years (8-15 yrs in Mexico and
Indonesia), yet business planning is < 5 yrs.
• Lengthy and non-integrated commodity supply chains do not lend themselves to
landscape thinking.
• Requires looking at multiple commodities to maximize resiliency of the landscape
and communities.
• Difficulty calculating a direct ROI to the company on the investment due to
external factors.
• Requires long-term commitment to sourcing area to justify investment.
23. Mars: modes to address risk
• Climate, yields, inputs and farm gate prices
are all important determinants of supply and
price risk.
Solutions:
• Competitiveness (price, productivity)
• Intensification (germplasm, fertility)
• Crop diversification (farmers cultivate multiple
crops-- agroforestry) BIGGEST AREA OF NEED
24. Climate Cocoa Partnership for REDD+ Preparation, Ghana
Description: Olam, in partnership with Rainforest Alliance, is piloting a
landscape approach to mitigate business risk in their cocoa value chain
through a novel program in Ghana emphasizing cocoa agro-forestry
production systems, certification and REDD+
Goal: to ensure that the climate-friendly farm level practices are escalated
and replicated to a landscape and forest management level
Hypothesis: that the resilience of the cocoa production systems increases
with increasing forest cover of the surrounding lands and within the cocoa
farms themselves
Partners: Olam International Ltd., Rainforest Alliance, Ghana Forestry
Commission …..Timeline: 2011 - 2013
Timeline: 2011-2013
25. Olam: Rationale for intervention
• Reputation: opportunity to be a first-mover company to bring climate
friendly cocoa to the market;
• Community concerns: income opportunities from carbon markets for
farmers by increasing carbon stocks;
• Value chain efficiencies:
1. option to build resilient supply chains when farmer communities
sensitized and starting to understand the concept of managing a
landscape as opposed to managing farms in a sustainable way.
2. opportunity to break the link between cocoa production and
deforestation ;
• Reduce operational risks due to climate concerns and resource
security;
• A learning exercise to change and improve corporate programs.
26. Olam: modes of intervention
• GAP training based on SAN
Standards
• Forest and Landscape
Governance
• REDD+ activities
• Sustainable Forest
Management including
Agroforestry Systems
• Small and Medium Scale
Forest Enterprise
Development
Businesses are increasingly at risk of “sustainability megaforces” – interconnected risks that will have unprecedented effects on business performance and profitability in the futureThese mega-forces include: climate change; competition for energy, land, water and material resources; population growth and migration; poverty and food insecurity; and ecosystem degradation. Food and beverage businesses will be directly and indirectly affected by a range of global trajectoriesKPMG, 2012. Expect the Unexpected: Building business value in a changing world.-------------------Based on our research findings, agribusinesses find water, climate, and community risks to be urgent, and best suited to piloting landscape approaches. Agribusinesses and food sector brand manufacturers are increasingly aware of sustainability risks. The interconnectedness of the water-food-energy-climate nexus is increasingly being recognized by business as requiring integrated solutions. In some cases, stability in key sourcing and operational regions may be at stake. World Economic Forum, 2011. Water Security: The Water-Food-Energy-Climate Nexus. Island Press.---------------
Out of the >100 cases surveyed, 27 were selected based on meeting the criteria identified above. From these 27 examples, we identify 9 general rationales for business engagement and 6 modes or tools to put these rationales into practice (see figure 1). Though our data gathering faced some limitations,6 as mentioned above, some general trends could be identified. As data table 1 (see appendix) shows, most cases have more than one rationale for business engagement. The most common identified rationales are: local community and operational risks, value chain efficiency and voluntary standards compliance. The first two refer to business concerns about supplies and sourcing areas. The latter two are generally more focused on supply chain and demand-side or market preference concerns. Businesses view these rationales as risks, and find ways to mitigate those risks through landscape approaches. These risk mitiga- tion activities (modes) tend to follow a pattern, based on the entry point for engagement, the risks and available options to mitigate those. In section III. we explore in greater detail the entry points for businesses to engage a landscape approach. Though we characterize ‘partnerships, multi-stakeholder dialogue, planning and management’ as a mode, it can also be considered as an enabling condition to a landscape approach, as it occurs to varying degrees in all modes we reviewed.
Replication in 3 additional geographiesConservation Coffee in priority landscapes for conservation in Peru, Colombia, Costa Rica & Panama
Engaged 23 communities, representing 236 farmers in coffee and carbon projectConserved 307.5 hectares and planted 210,258 treesProvided average of $100 / year in supplemental income to farmers via carbon market (average of nearly 27% of a participating farmer’s income)Developed Coffee and Climate Strategy for the Sierra Madre of Chiapas