As part of AAK's commitment to sourcing sustainable palm oil, we prioritize supporting smallholder suppliers in producing responsibly and profitably. This involves considering socioeconomic aspects, adhering to zero deforestation commitments, and reducing contaminants in crude palm oil.
According to RSPO, smallholders contribute approximately 40 percent to the overall production globally. Considering that much of the Mexican supply base is comprised of smallholders, and how fast the industry expands in the country, engagement is critical to ensure that the palm oil is produced in line with our AAK’s sustainability policy commitments. From 2018 to 2020, AAK supported the Solidaridad network in its efforts to strengthen the capacity of three social agroindustries in the AAK supply chain; Aceitera Chiapaneca La Palma SPR de RL de CV, Cooperativa Unión de Palmicultores de la Costa de Chiapas SC de RL de CV, and Zitihualt SPR de RI, located in Chiapas, Mexico.
With funding from AAK, Solidaridad has strengthened and monitored the capacities of the social enterprises and their technical teams to implement good agricultural practices and mill sustainability criteria based on RSPO standards. This initiative of formalizing capacity building and knowledge sharing is key to ensure a sustainable long-term approach by supporting with targeted technical assistance, continuous training of producers, and implementation of best practice procedures. The joint efforts have allowed a significant improvement in productivity, fruit quality, processing, and mill operations. In fact, the three suppliers in Mexico collectively demonstrated impressive production growth:
• A 19.7 percent increase in fresh fruit production per hectare - from 15.5 MT Fresh Fruit Bunches (FFB)/ha/year in 2019 to 19.3 tons FFB/ha/year in 2020.
• A 65 percent increase in crude palm oil production - from 7,245 tons/year in 2018 to 11,064 tons/year in 2020.
A renewed partnership for continued success
In 2022, AAK renewed its partnership with Solidaridad with a new focus. Over the next three years, the partnership will focus on the three main areas:
Develop and measure socioeconomic indicators for AAK’s sustainability program
The first phase of the Solidaridad project was successful in increasing yields and in turn income of participating smallholders through improved agricultural practices. The new workstream aims to measure its impact on livelihoods of smallholders by collecting and measure data from a range of topics to determine key socioeconomic indicators, such as gender inclusion, generational renewal/turnover, and the economic importance of palm oil to the household.
So far in 2023 steps were taken to identify these key socioeconomic indicators. A survey has been conducted based on a representative sample from each community respecting small, medium and large producers. The interview focused on the following key themes: Producer registration, Home conditions, Public health services, Participation in Organizations, Financial decisions, Other crops and sources of income, Trainings, Migration, Gender inclusion, Generational relief.
As a next step this study will further help to develop our methodology to effectively measure relevant aspects of producer families' livelihoods, specifically considering decision-making, the role of women, the potential of generational renewal, and the economic relevance of selling palm fruit in the future.
Achieve zero deforestation commitments
Mexico is not considered a high-risk country for deforestation-linked palm production. However, sensitive, and protected ecosystems could be at risk with potential future expansions. One important area is the La Encrucijada Biosphere Reserve in Chiapas. The “Achieve zero deforestation” workstream seeks to build awareness about deforestation and degradation of regional natural resources, while building capacity and obtaining knowledge about the importance of biodiversity conservation and the demand for sustainably produced palm oil. Through engagement of the mills, smallholders, local authorities, and protected area management, the project will propose and promote a voluntary zero-deforestation agreement with the three social mills and a roadmap for compliance with those commitments.
A Memorandum of Understanding was established with the Ministry of Agriculture in México and the National Commission of Protected Natural Areas (CONANP), which are the government bodies with the greatest weight in the region and will give the final signature an official formal character. Meetings have been held with the stakeholders in Tapachula and Rosario Izapa, at INIFAP (National Institute of Research for Forestry, Agricultural and Livestock) facilities, where the objectives of the project were presented.
Measure and reduce contaminants MOSH/MOAH in crude palm oil
For AAK and our customers, it is important that palm oil is sustainable and of high quality. However, contaminants may affect palm oil quality in various stages of production, such as the harvesting of fruits on the farm, transportation, and in processing at the mill. Two common contaminants are mineral oil saturated hydrocarbons (MOSH) and mineral oil aromatic hydrocarbons (MOAH) – usually a consequence of exposure to mineral oils or exhaust fumes.
AAK support a social mill in the southeast of México, located in Chiapas named “Procesadora de Aceite de Palma” (Zitihualt) for a program in prevention of MOSH and MOAH contaminants in oil extraction.
Last year we investigated the possible contamination risk in plantations of small, medium and large producers, at all stages of the production process including the reception of the fresh fruit bunches. All the states of the production process were assessed including the reception of the FFB.
This project has already been successfully concluded in 2023 with significant reduction in MOSH and MOAH. The success could be achieved by introducing a Manual of Good Practices for the management of contaminants (the manual can be adapted to other local mills in the future, depending on the diagnoses of the mill). Furthermore, a work plan to reduce contaminants at the plant, including KPIs for monitoring MOSH/MOAH contaminants was developed and staff and key stakeholders were trained on good practices and standards for monitoring MOSH/MOAH contaminants, as well as key modules covered in the training. A continuous improvement plan is in place, and we are able to share lessons learned and best practices with other facilities in the future.