BASF, Cargill and Procter & Gamble (P&G), all of whom have a stake in the coconut oil industry, have joined together with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to work with the develoPPP.de program of the German Federal Ministry for Economic Cooperation and Development. The goal is to help establish a sustainable certified and transparent supply chain of coconut oil in the Philippines and Indonesia.

The partners are focusing on Southern Mindanao and Southern Leyte in the Philippines and Amurang in North Sulawesi, a province of Indonesia. The two countries are the world’s two largest producers of coconuts and exporters of coconut-based products.

The plan is to work with smallholders and tenant growers of coconuts to help them improve the productivity of their farms and train them in Good Agricultural Practices (GAP), intercropping and enhanced farm management skills, as well as strengthening organized farmer groups.

Cargill, which owns and operates copra-buying stations and crushing plants, is providing training to smallholder farmers and setting up the structures for certification. The crude and refined oil produced by Cargill is then further processed by BASF and P&G for ingredients in the home and personal care and in the nutrition and health markets.

The project builds on a preceding development partnership – Nucleus of Change – implemented at General Santos in the Philippines by Cargill, BASF and GIZ from 2011 to 2015. In this partnership more than 1,000 smallholder farmers were trained, and the first 300 coconut smallholder farmers became the world’s first Rainforest Alliance Certified  coconut farms.

According to the industrial partners, the cooperation represents a step toward further advancing the supply of sustainable coconut oil in the world. “Like the predecessor project Nucleus of Change, this joint initiative is not only a chance for the industry to make an important supply chain more sustainable, but it also creates new opportunities for local smallholder coconut farmers to increase their incomes,” said  Matthias Radek, Chief Advisor for Partnership Projects in Agriculture, GIZ Philippines.