Procter & Gamble is conducting an in-field study to help small farmers improve their palm oil and palm kernel oil production as part of its goals to achieve zero deforestation in the palm oil supply chain made earlier this year.
P&G is partnering with the Malaysia Institute for Supply Chain Innovation (MISI) to field the study.
The company says it already works with larger suppliers to trace supply chains, but small farmers in places like Malaysia and Indonesia account for 35 percent to 45 percent of its palm oil production.
The complexity of the supply chain — it involves thousands of small farmers and the product changes hands between the growers, traders, millers, buyers and ultimately the purchasing company — make it nearly impossible to separate sustainable sources from non-sustainable sources, says Mahender Singh of MISI, a global leader in supply chain management and logistics. “We are targeting zero deforestation by fostering an inclusive ecosystem that supports small farmers’ challenges,” Singh says.
In April, P&G announced new goals to help ensure zero deforestation in its palm oil supply chain. The goals call for traceability of palm oil and palm kernel oil to supplier mills by Dec. 31, 2015, and to plantations by 2020.
P&G will report the findings of this new six-month study and develop an action plan to address them by the end of September. MISI is helping to facilitate this research and will work with P&G to develop the action plans.
In May, Danone committed to sourcing traceable palm oil with no links to deforestation, setting a goal to map its palm oil supply chain by the end of next year. Danone’s traceable palm oil pledge follows a series of similar commitments by companies including Colgate-Palmolive, General Mills and Mars.