2015-06_WFO_Farmletter_ENG_web

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WFO F@rmletterCASE STUDIES & BEST PRACTICESA BEST SUSTAINABLEDEVELOPMENTPRACTICE FOREXPO MILANO 2015• Planting hazelnuts on its own plantation;• Cooperating with local growers toselect the best adapted varieties ofhazelnuts;• Making hazelnut plantlets andplanting materials available to localgrowers;• Granting free know-how and technicalsupport to growers;FerreroDocumentationPlanting trust, the story of amutual collaboration whereknowledge and passion lead toa new way of doing agriculture.TThe pursuit of fresh andhigh quality hazelnuts isat the heart of Ferrero’sinnovative practice contributingto sustainablegrowth. Global hazelnutproduction wasn’t adequateto support fresh supplies all year-round,due to its northern hemispherepredominance.In 1994 Ferrero introduced in Chilehigh quality hazelnut plantation andcreated AgriChile.Through the key involvement of localcommunities, Ferrero created a sustainable,innovative and replicable model:• Ensuring the purchase of qualityhazelnuts based on internationalmarket prices.Today, with 14.000 ha, Chile is amongthe top hazelnut producing countries.This flourishing industry provides jobsfor low and middle classes, contributingto the country’s food security.Main Innovation DevelopedThe main innovation developed is a conceptof self-sustained agricultural supplychain introduced to produce, for thefirst time, hazelnuts in South America.To achieve this, Ferrero created Agri-Chile and promoted a unique system ofknowledge transfer by bringing Italianhazelnut farming methods and expertiseof global supply chain to local agriculture.Afterwards, farmers infusedtheir own local expertise in climaticconditions, crop management as well astraditional and innovative agriculturaltechniques.This replicable two-way knowledgetransfer created enough momentum forthe project to flourish. Even after thesupply chain establishment, Ferrero isstill providing the necessary know-howand support while benefiting from localexpertise and innovations. We foundthis the most effective way to achievea long-term, efficient and independentsupply chain where to source hazelnutsand ultimately contribute towards truefood security for the region.Background and ContextFerrero was driven to implement hazelnutproduction in Chile to assure a fresh16
WFO F@rmletterCASE STUDIES & BEST PRACTICESsupply of hazelnuts year-round and toexpand an industry largely limited toTurkey in terms of volumes. Chile maximizesits productive areas producingcash crops and importing some of thestaple food crops. By nature, many cashcrops are susceptible to climatic risks,creating volatile conditions.At the regional level, hazelnut cultivationcan help diversify agricultural productionwith a secure long-term cashcrop, providing increased food securityto the country.The hazelnut crop is a low inputs treecrop: it’s still rustic, resistant to manyadversities, easier and cheaper to managethan most other crops. Moreover,with the application of good managementpractices, it enjoys stable yieldsper hectare limiting additional inputsand their ensuing degradation to theenvironment.These are key features that provide ahigher and secure income for farmersand allow nutrition diversification forthe region.% OF POPULATION LIVING IN COUNTRY REGIONSTHE TABLE SHOWS HOW THE RATIO OF PEOPLE LIVING IN THE RURAL AREAS IS PARTICULAR-LY HIGH FOR THE TWO REGIONS WHERE THE HAZELNUT PROJECT HAS BEEN IMPLEMENTED(MAULE AND ARAUCANIA). THIS MEANS A LARGE NUMBER OF POPULATIONS CAN BE INVOLVEDIN AND BENEFIT FROM THE NEWLY CREATED HAZELNUT SUPPLY CHAIN.Main Results AchievedFor Ferrero the replicable model resultedin a first reliable hazelnuts productionin the Southern Hemisphere, leadingto a fresh counter-cyclical supply.For the Chilean new hazelnut farmingcommunities, AgriChile’s model has demonstratedhigher hazelnut yields comparedto historical areas of hazelnutproduction. It ensures a stable incomeeven through poor production years,combined with low and stable input requirements.A thriving agricultural sector can providemany benefits to the impactedcommunities, and AgriChile is alreadyreaping some of them, through a securefood supply both directly and indirectly.The AgriChile project promoted sinceits start the development of many newskills among the workers and the creationof many new managerial jobs. It hasalso inspired many new science graduates,dramatically increasing the culturalniveau (not to mention the quality oflife) of the local population.CHILE’S HAZELNUT EXPORTSAS SEEN IN FIGURE, WITH THE NET MARGIN (GREEN), A.K.A. FARMER INCOME PER HECTARE,HAZELNUTS FALL SECOND AS THE MOST PROFITABLE OF THE TYPICAL CASH CROPS FROM THEREGION. MOREOVER, WHILE CHERRIES ENJOY THE HIGHEST MARGIN, THEY SUFFER FROM HI-GHER SEASONAL CLIMATIC RISKS THAN HAZELNUTS DO.17
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