Chemistry, Materials & Packaging
BASF, Cargill Partnership Helping Filipino Farmers Achieve Sustainable Coconut Oil

For more than three years, BASF, Cargill and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH have worked together to promote sustainable coconut oil and improve the living conditions of coconut farmers in the Philippines. This week they’ve announced the establishment of the world’s first certified production of copra, the dried coconut flesh needed to process coconut oil. The project on the southern Philippine island of Mindanao is partly financed by the German Federal Ministry for Economic Cooperation and Development (BMZ) under the develoPPP.de programme.

With production of over 15 billion coconuts per year, the Philippines is one of the leading global producers. Coconut palms are grown on an area covering 3.5 million hectares, about 26 percent of the country's land use. The export earnings for coconut products were approximately 1.8 billion US dollars. Yet, coconut producing regions are among the least developed areas in the country and home to some of the largest numbers of Philippine’s rural poor. Worldwide, coconut oil is mainly used as an ingredient in food, while coconut oil derivatives are also used in the home and personal care industries.

Since the project began in September 2011, over 1,000 farmers have been trained in agricultural practices such as correct use of fertilizers, intercropping and replanting, enabling them to increase their yields in the long term. Furthermore, this group received access to a newly developed drying technology for high-quality coconut flesh and training on the standards of the Sustainable Agricultural Network (SAN).

As a result, 300 smallholder farmers from the region now produce the world's first Rainforest Alliance-certified copra meeting the standards of the SAN. The certification system helps them to improve social and environmental standards and increases their revenues, as BASF and Cargill pay a premium for high-quality and certified copra. Furthermore, these farmers were supported in forming legal producer entities – their members can now access micro-credit facilities instead of having to rely on pre-financing by middlemen, which allows them to improve their profit margin by selling directly to the mill. Farmers who are participating in all of these joint activities have been able to increase their income by at least 15 percent.

Around 2,500 small farmers and their families – up to 12,500 Filipinos – received access to healthcare through the project: Thanks to information-sharing seminars and a subsidized enrollment fee, they now receive free medical treatment.

“Together with our partners, we were able to show that it is possible to specifically promote the sustainable production of high-quality coconut oil and improve the living conditions of the coconut farmers. This success allows us to look to the future with optimism,” said Harald Sauthoff, VP of Global Procurement of Natural Oils and Oleochemicals at BASF.

“In our opinion, this pilot project was very successful in bringing together the strengths of public and private partners,” said Ulla Keppel, GIZ Project Manager DeveloPPP.de. “BASF and Cargill have brought their expertise and technology to bear. GIZ has managed the project and contributed with its experience in supporting the formation of farmers’ groups as well as implementing good agricultural practices and the sustainability standard.”

“Our ability to feed the world depends on successful farmers at every level of production, including smallholders,” said Efren Barlisan, General Manager at Cargill Philippines. “Cargill works with millions of smallholder farmers worldwide to help them increase their agricultural productivity, yield and profitability to improve their livelihood in a sustainable manner. We are proud to be part of this initiative in which we introduced new technology, provided training and set up internal management system required for the production of high-quality certified copra.”

Even beyond the project in Mindanao, all partners say they are committed to further promote the production of sustainable, certified coconut oil. The results that have been achieved to date lay the foundation for potential future cooperation in this field with extended scope and regional scale.

This isn't the first collaboration for BASF and Cargill. In September, the companies, along with Novozymes, announced another milestone in their joint development of technologies to produce acrylic acid from renewable raw materials. The team has demonstrated the successful conversion of 3-hydroxypropionic acid (3-HP) to glacial acrylic acid and superabsorbent polymers — polymers that can absorb and retain extremely large amounts of a liquid relative to their own mass, commonly found in products ranging from diapers and other hygiene products.