Expertise on agricultural commodities

Natural rubber

Natural rubber is a component of many everyday products, for example tyres, latex gloves, mattresses, and condoms. Natural Rubber is of a strategic importance for industrial societies and the only regenerative raw material that is listed as ‘Critical Raw Material’ by the EU.  

Nearly 90 per cent of the cultivation still takes place in Southeast Asia, mostly in Thailand and Indonesia. But Africa, namely the Ivory Coast, is gaining ground. The farming of rubber is highly labour intensive and is mainly accomplished by 6 million smallholders, responsible for about 80 per cent of the world production.  

Natural rubber is subject to highly fluctuating world market prices, significantly impacting the income of smallholders. At the beginning of this century, high natural rubber prices let to considerable land expansion, resulting in  deforestation, destruction of peat soils and land right conflicts. Consequently, natural rubber has been included in the list of commodities covered by the EU Regulation on Deforestation-free products (EUDR), affecting the entire natural rubber supply chain. 

Since 2011, we have been experiencing a steadily falling rubber price, which is currently fluctuating at a low level. This is prompting many farmers to switch to other commodities such as oil palm. However, as natural rubber consumption and demand are correlated with global industrial growth, a sustained increase in demand is predicted. This expected increase in demand requires either an improvement in the productivity of existing plantations or the establishment of new plantations, which represents a potential risk for future deforestation. 

To tackle these challenges and achieve an ecologically sustainable and socio-economically fair and viable supply chain for natural rubber, we are involved in several projects with the public and private sector in Colombia, the Ivory Coast and, for example, in Indonesia with Continental Reifen GmbH. 

Our initiatives tackle the technical challenges of efficient, environmentally sound and better yield rubber production, as well as supporting farmers to become EUDR-ready and promote (gender) equity and fair incomes.  

Soy

Over 80% of the world's soybean production of 366 million tons (2020/21) is produced in the USA, Brazil and Argentina. In the EU, only 2.8 million tons of soy (soybeans, soybean meal and soybean oil) were produced in 2020/21, with imports of just under 32 million tons. As a legume, soy beans are well suited for cultivation in a crop rotation with other crops due to their ability to fix nitrogen and thus reduce the need for mineral nitrogen fertiliser.

Nevertheless, commercial cultivation is mainly carried out in large-scale monocultures with the corresponding use of mineral fertilisers and pesticides. The use of genetically modified seeds to maximise yields is also a common practice in global soya cultivation. 

Especially in Latin America, tropical rainforests and dry forests of the Cerrado and Gran Chaco are being cleared to gain new cultivation areas. This often leads to the displacement of traditional land users. From 1990 to 2008 alone, soy cultivation contributed to a deforestation of 13 million hectares. Soy was responsible for almost one third of the EU's imported deforestation in the period 2005-2017. In the main producing countries, soybeans are grown in large-scale monocultures with significant use of herbicides, pesticides and mineral fertilisers. The reason for the increase in production is, among other things, the increase of meat consumption with rising prosperity, because the protein-rich soybean meal is mainly used as feed for chickens, pigs and cattle. In the form of tofu, soy milk or soy sauce, we humans consume only about 6 per cent of the soy beans worldwide.

Palm Oil

Palm oil is contained in many products of our daily consumption and the global demand is constantly increasing. In Germany, palm oil can be found in products in all sectors: the food industry and the animal feed sector the chemical industry and even in the energy sector. Indonesia and Malaysia produce 84 per cent of the world's palm oil. The oil palm plantations are largely managed by companies, but oil palm cultivation is also a relevant source of income for millions of smallholder farmers. 

The business is lucrative for the producing countries, which is why primary forests are also cleared for new cultivation areas. This is connected with the loss of ecosystems and biodiversity and the release of climate gases through forest clearing and cultivation on peat soils. In addition to the ecological challenges, social aspects also play a role, such as human rights violations on oil palm plantations and poor living and working conditions for smallholder farmers families. That is why more and more companies in Europe are moving toward certified palm oil with the aim of promoting sustainable agricultural supply chains. 

With a focus on palm oil, the Forum for Sustainable Palm Oil (FONAP e.V.) was founded. Since its foundation in 2015, FONAP has been committed to more sustainable palm oil cultivation in the countries of origin. The aim is to increase the purchase of certified sustainable palm oil for food, animal feed and chemical products and to take human rights into account along the entire supply chain.  

To the website of the Forum for Sustainable Palm Oil

Banana

Bananas are the second most popular fruit among Germans after apples. Mostly the Bananas consumed in the EU are imported from Latin America, where 80 per cent are grown on medium-large plantations. The most important producer countries for the world market are Ecuador, Costa Rica, Guatemala and Colombia. Germany is one of the largest importers of bananas and thus contributes significantly to the problems in the producing countries. 

Producer organisations are facing the effects of climate change and have to deal with biodiversity loss, soil degradation, the TR4 fungus and increasing production costs. In addition to the ecological challenges, there are also serious social grievances, such as the low pay of workers on the plantations or the health risks posed by the pesticides used. 

Aggressive price negotiations by food retailers with traders and banana producers' organisations keep prices low. This further reduces the scope for improving growing conditions. 

Coffee

Coffee is produced by around 12.5 million farming households in over 50 countries around the equator and constitutes an important contributor to their economic livelihoods. Millions of smallholder farmers often cannot cover their production costs with their income. 
 

The main challenges are the highly fluctuating prices for green coffee, rising production costs and the consequences of climate change. Extreme weather conditions caused by climate change threaten coffee cultivation. They lead to crop failures and a shift of cultivation areas to higher, often forested, locations.  
The further processing of coffee, which generates the highest profit, takes place to a large extent in the consumer countries. In Germany, for example, the second largest importer of coffee, some of it is re-exported after processing. But a lot of coffee is also consumed here. The per capita consumption of coffee in 2022 was 167 liter per year, which is higher than the consumption of mineral water (130l). 

Cocoa

The global cocoa sector is crucial to the livelihoods of approximately 5,5 million producers, 95% of whom are smallholder farmers. However, the sector faces significant challenges, including persistent poverty of cocoa farmers, which, among other factors, leads to child labor. In Côte d'Ivoire, the world's largest cocoa exporting country, 90% of cocoa farmers earn less than a living income, with households earning only 36% of what is needed. Fluctuating market prices and power imbalances in value chains worsen their income situation. Environmental challenges such as deforestation, crop failures, soil degradation, and biodiversity loss are compounded by climate change, further threatening cocoa production. The EU, as the largest cocoa importer, and Germany, as a leading producer of cocoa-based products, have a critical responsibility in addressing these challenges in collaboration with the many stakeholders involved in the cocoa sector. 

The German Initiative on Sustainable Cocoa (GISCO), a multi-stakeholder platform including the German government, the confectionery industry, and civil society, aims to contribute to the fulfillment of this responsibility, and is committed to improving the livelihoods of cocoa farmers, conserving natural resources, and increasing cultivation and commercialization of sustainably produced cocoa. Additionally, projects like PRO-PLANTEURS, funded by GISCO, aim to ensure a sustainable income and better living conditions and to professionalize cocoa farming families, particularly focusing on women and youth.

To the website of the German Initiative on Sustainable Cocoa 

Efforts like these are as well supported through international collaborations, such as the EU Sustainable Cocoa Initiative, to strengthen sustainability in cocoa production and support compliance with new regulations such as the EU Directive on Deforestation-free products (EUDR). 

Cotton

Around 25 million households in approximately 75 countries around the world produce cotton. From seed grain to cotton bale, it is estimated that the cotton sector provides a livelihood for 150 million people worldwide. In most countries of the Global South, such as India, Pakistan, Burkina Faso, Mali, Benin, Côte d’Ivoire, Cameroon, Tanzania, but also in parts of China, cotton is farmed predominantly by smallholders. In Africa, it is cultivated largely by families performing manual labour and fieldwork. Yields are very low by global standards and cannot guarantee an adequate and living wage. Cheaper synthetic fibres are in direct competition with cotton and threaten the competitiveness of small farmers in particular. 

In addition, the global cotton industry is facing a wide range of challenges, such as climate change and forced or child labour. The effects of climate change mean that cultivation regions tend to shift, making production conditions more difficult, while exploitative labour in the cotton fields frequently endangers long-term local development. 

Recently, the COVID-19 pandemic has caused a worldwide slump in the cotton and textile supply chain. Sales of raw cotton have slowed as a result of the global restrictions, which has led, among other things, to significant price fluctuations. At this point there is no way to predict the long-term consequences for the global cotton industry. Outside of crises-induced short-term fluctuations, both price and global production volume have remained stagnant for the past 20 years, indicating lack of investment and economic opportunities.  

Labels from standards organisations remain an important lever for improving the social, ecological and economic sustainability of cotton. Around 25% of global cotton production now comes from sustainably certified cultivation. The most important standard systems that certify sustainable cotton production are Better Cotton , Cotton Made in Africa (CmiA) and Fairtrade Cotton, as well as a range of organic certification labels. Better Cotton, which recognizes large national standards such as ABRAPA in Brazil or myBMP in Australia, is by far the largest certification scheme. 

However, sustainable cotton still does not reach the trade as such enough, so that smallholder families struggle to benefit enough from sustainable cultivation methods. Therefore, another important lever is to increase the active demand for sustainable cotton. However, this can only be achieved in cooperation and collaboration with the private sector.

Tea

Tea is the most widely consumed beverage in the world after water, and its popularity is constantly growing: since 2006, the demand for tea has increased by 50%. Nevertheless, the approximately 13 million producers who cultivate tea, mainly in China, India and Kenya, hardly benefit from this trend: At 1.73 to 2.14 euros per day, the wages of plantation workers are not even half of a living wage and amount to just 1.4% of the selling price of a tea package in German supermarkets. Moreover, the working and living conditions on the plantations are poor and there is a lack of health care, food supply and education. Many workers and their children suffer from a shortage of food and drinking water, which in some cases leads to malnutrition and disease. Another health risk is the use of pesticides due to the lack of protective clothing: many plantation workers report allergic reactions, respiratory and eye irritations.

As well as plantation workers, also smallholder farmers suffer from low profit margins resulting from their poor bargaining position: Without further processing, harvested tea leaves perish within 5-7 hours of harvest, which creates pressure for a fast sale. Environmental difficulties lie in deforestation and monoculture cultivation, which lead to insufficient shade and lack of biodiversity. The effects of climate change are increasingly causing crop loss or failure.  Germany ranks fifth among the main tea importing countries with 2.9% of all tea imports while purchasing most of its tea from India. India is the leader in tea cultivation behind China with 21% of global tea cultivation. The Roundtable on Tea and Spices India, established by INA, brings together key tea importers who collectively account for over 70% of the German market and facilitates exchange with public and civil society stakeholders. In addition, the Roundtable acts as a platform for the identification and development of joint projects. 

Spices

According to the definition of the International Standards Organization (ISO), spices are plant products or mixtures thereof used for seasoning and flavoring food. However, due to a lack of uniform classification, statistical data on the production and trade of spices can vary significantly. As a result of a rising world population, higher culinary demands and the increase in processed foods, the spice market is growing strongly. After the U.S., Germany is the world's second largest spice importer, accounting for 6% of global import value. India, followed by China, is the largest spice producer, consumer and exporter, accounting for 18% of the global export value.

Despite the high export volume, 85% of all spice producers in India are smallholder farmers. Frequently, the crop harvest is not sufficient to generate a living wage, which increasingly leads to an uncontrolled use of chemical fertilizers, pesticides and herbicides. Consequences are health problems for the producers, water pollution and soil degradation. At the same time, high pesticide residues reduce the product quality and thus the export value of spices. Many men are therefore drawn to the better-paid wage labor, which results in an increasing number of women working in spice cultivation. Women today make up 40% of the labor force in India’s spice production. Another common issue are conflicts over resources and land use between large landowners, industry and small farmers.