Transcript CAG Master Pitchbook - Roundtable on Sustainable Palm Oil

Supporting Smallholders
Smallholder Task Force meeting
Kuala Lumpur, RSPO, RT7
November 1, 2009
Objective and Agenda
•Objective: Explain what IFC is—and
isn’t—and how we work with
smallholders
•Order of Presentation
 IFC Overview
 IFC projects with smallholders globally
 IFC Advisory Services projects related to palm oil
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IFC Overview
Who We Are, What We Do
• The only global multilateral institution focused exclusively on the private sector
— the global leader in private sector development finance
• Owned by 182 member countries
• Collaborate with other members of the World Bank Group including, IBRD and
IDA, MIGA, and the International Centre for Settlement of Investment Disputes
• Make a unique contribution to development
• Promote environmental, social, and corporate governance standards
• Create opportunities for people — improving lives in poorer countries
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Our Vision
That people should have the
opportunity to escape poverty and
improve their lives.
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IFC is a Member of the World Bank Group
IBRD
Role:
Clients:
Products:
IDA
IFC
MIGA
International
Finance
Corporation
Multilateral
Investment and
Guarantee Agency
Est. 1956
Est. 1988
International Bank
for Reconstruction
and Development
International
Development
Association
Est. 1945
Est. 1960
To promote institutional,
legal and regulatory
reform
To promote institutional,
legal and regulatory
reform
To promote private
sector development
To reduce political
investment risk
Governments of member
countries with per capita
income between $1,025
and $6,055.
Governments of
poorest countries with
per capita income of
less than $1,025
Private companies in
member countries
Foreign investors in
member countries
- Political Risk Insurance
- Technical assistance
- Loans
- Policy Advice
- Equity/Quasi-Equity
- Long-term Loans
- Risk Management
- Advisory Services
- Technical assistance
- Interest Free Loans
- Policy Advice
Shared Mission: To Promote Economic Development and Reduce Poverty
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Investments by Industry, FY09
Commitments for IFC’s Account: $10.5 Billion
Private Equity and
Investment Funds 3%
Oil, Gas, Mining
and Chemicals 7%
Subnational
Finance 3%
Agribusiness 7%
Global Financial
Markets 45%
Infrastructure 14%
Health and Education 2%
Global Manufacturing and
Services 14%
Global Information and
Communication
Technologies 5%
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Working with Smallholders
Smallholder Development Focus Areas
Client Level Offerings
1) Productivity
2) Standards
3) Finance
4) Sustainability
Sector Level Offerings
1) Sector-specific regulatory
2) Eco-Standards
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IFC Global Agribusiness: Supporting the
Entire Value Chain
Project/Corporate Finance
Inputs
Agri.
Marketing
Production
Market
Institutions
Processing
Marketing
Distribution
Market
Infrastructure
Pre-Harvest Finance
Trade Finance
Risk Sharing Facilities
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Supporting small farmers through IFC’s
Investment
• Investing in agribusiness companies and food
retailers with an extensive small farmer supplier
base
• Channeling financing through intermediaries
 Processing companies
 Traders
 Financial institutions
• Providing advisory services and technical assistance
directly to small farms
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Dairy sector: Conaprole (Uruguay)
Two expansions of dairy product facilities to
efficiently utilize global competitive advantages
of Uruguay’s largest dairy cooperative, and one
of its largest employers.
IFC Role
• Provide long-term loans not
available in local market
• Improve farmer productivity
• Institute environmental and social
best practices and guidelines
Employment Creation
1,450
Total
Direct
Jobs
250
Seasonal
Workers
Farmers Reached
SMEs Reached
60 Ind.
Distributors
Over 250
jobs
2,300
Farmers
Reached
3,300
additional
indirect
jobs
15,000
Points of
Sale
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Technical Assistance
Efforts to
improve
small farmer
productivity
and income
50-80%
Poultry sector: Suguna (India)
Project to more than double sales for India’s
pioneer and market leader in integrated poultry
production. The company’s direct purchasing
provides farmer incomes and its backbone
kiosk structure provides employment for
retailers.
Employment Creation
500
Direct
Jobs
Created
3,600
Total
Employees
Farmers Reached
IFC Role
• Long-term partner for mid-tier
growth company preparing for IPO
• Sharing of poultry sector expertise
• Corporate governance best
practices in preparation for IPO
SMEs Reached
24,000
Farmers
Reached
$300 avg
monthly
income /
farmer
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Technical Assistance
600
Wholesale
Distributors
Avian
Influenza
Management
12,000
Sugunabranded
live bird
kiosks
Biosecurity
- Supply
Chain
Mgmt
IFC Supports Diverse Models of Farmer Financing
Via Traders:
Latin
America
2006
Coffee
US$25M Loan
Brazil Soybeans
2002/4 US$60M Loans
Via Financial Institutions:
Mexico Farmers & SMEs
2008
US$9M equiv.
Peso Credit Line
US$2M Equity
Mexico Farmers & SMEs
2008
US$6.8M equiv.
Peso Credit Line
Via Processors:
Ukraine
2004/6
Fruit & Veggies
US$40M Loans
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Russia
1998
Dairy
US$10M Loan
Advisory Services is a Significant Part of IFC’s
Contribution…a few examples worldwide
North Andre, China
Development of a traceability
system to enable small farmers to meet
GLOBALGAP standard in the apple sector
Mindanao Banana, Philippines
Support smallholders to access premium
markets through certification, development of
sustainable standards and improving access
to finance
Agri Sector Support, Cambodia
ECOM, Africa/Asia
Beef Working Group,
Brazil
Multi-stakeholder partnership
forming in Brazil to define
sustainable cattle standards
Establishing Farmer Training Centers
to support small farmers to increase
productivity, improve quality and meet
international standards
Promote standards and certification in
cashews and rice.
Indonesia
Partnership w/ Ecom focusing on cocoa,
GFI/PetraFoods and Armajaro focusing on
cocoa, and GarudaFoods focusing on
peanuts
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IFC Advisory Services in Oil
Palm
IFC Advisory Services in Palm Oil
• Indonesia’s oil palm industry faces numerous social and environmental
challenges
• IFC is reviewing its role within the oil palm industry and determining
how best to proceed
• IFC is increasing engagement in and support of the RSPO and associated
standard-setting process, and developing and implementing an Advisory
Services program for Indonesia
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Oil Palm Advisory
Enabling Environment, Indonesia
• Project objectives
 Identify and reduce regulatory constraints to sustainable oil palm
development, including sustainable certification by smallholders
• Project description
 Work closely with sub-national and national level governments: Central
Kalimantan, West Kalimantan, Jambi, Riau
• Project Phasing
 Component 1: Identify reform priority and proposed recommendations
> 8 months
 Component 2: Design solutions and reform implementation
 Component 3: Dissemination of reform (agenda, targets, initial
achievements)
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Oil Palm Advisory
Information available at:
www.bacp.net
•
•
•
Objective: Preserve biodiversity within agricultural landscapes through market
transformation in palm oil, soy, cocoa and sugarcane
Four oil palm projects approved so far – new RFA launched
Now in year 2 of a 10-year grant-making facility (2 phases of 5 years) funded
by GEF and several other donors with four components:
Main Outcome Indicators
10% of global trade volumes buy certified or verified products
Producers representing 25% of global trade are engaged in certification/verification systems
At least 5% of the production landscapes are positively affected
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BACP – Oil Palm Projects to Date
Fauna & Flora International
•
•
•
Work to identify HCVF and degraded areas fit for cultivation
Assist district governments in land planning
Facilitate the adoption of HCVF assessment and management
Zoological Society of London
•
•
Design, test, and implement guidelines and BMPs
Reduce or remove policy barriers to implementation of RSPO’s P&C
PanEco Foundation
•
•
Develop palm-oil plantations on fallow or degraded land with
smallholders
Close existing concessions on peat land
RSPO
•
•
Biodiversity Technical Committee
Biodiversity Coordinator
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Oil Palm Advisory
Other Inputs to RSPO
• Greenhouse Gas Working Group
 Staff time in working group
• Smallholder Task Force
 Input to guidance on scheme smallholders
• New Planting Working Group
 Staff time in working group
• Ghana National Interpretation Working Group
 Staff time & support being finalized
• Other
 Input related to HCV Assessors Qualifications and Experience Draft
Guidance
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Thank you for your time
Ernest E. Bethe III,
Program Manager, Agribusiness
[email protected]
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