One milliOn tOnnes Of sustainable agricultural prOducts

Olam livelihOOd charter 2014

OverviewOlam has an extended network of 3.9 million farmers worldwide, predominantly smallholders working 1-3 hectare plots. Where we have a direct relationship with these farmers, we apply the Olam Livelihood Charter Principles with the goal of bringing as many into the Olam Livelihood Charter (OLC) as possible. Only by fulfilling the requirements of all eight Principles, can a sustainability programme achieve OLC status.

The OLC was launched in 2010 when we formalised the activities that we had been carrying out for many years at remote smallholder locations. This resulting framework means we can standardise and scale the Principles across a wider group of products and countries consistently. This year we have gone further and worked with a third party verifier in Cte dIvoire to audit our OLC cocoa supply chain.

We have managed to increase the number of farmers that have benefited from being part of the OLC by 445% in the last four years (from 64,290 to 350,147). This year we reached a significant milestone by hitting the one million tonnes mark of agricultural products purchased by Olam from these farmers.

The data set in this years OLC runs from July 1st 2013 to June 30th 2014.

01

sustainability staff

gps mapped farms fOr traceability

smallhOlder land

21% on 2013

farmers

12% on 2013

sustainable agricultural

prOducts

400% on 2013

neW prOductssugar, chilli and

black pepper

350,147

623,150 hectares

year2014

15,865 farmer training days

184% on 2013

1milliOn tOnnes

85,000 hectares

highlights 2014

3

neW cOuntriesrepublic of congo,

honduras, india, vietnam, & papua new guinea

5

10

neW initiatives(30 in total)

1,062

financial highlights

us$183.7 million in short and medium-term financing

57% on 2013

us$2 million in long-term financing for supporting farm assets such as ploughs, warehouses, and drip irrigation

33% on 2013

us$469.8 million market access paid to farmers

76% on 2013

us$21.2 million quality premium paid

53% on 2013

us$4.6 million invested in training

21% on 2013

introduction

vision

We aim to bring prosperity to our farming communities and build long-term relationships based on fairness and trust, transferring skills and knowledge through partnerships.

02

financeWe offer farmer groups interest-free short and long-term finance for crop production, purchasing and asset investments.

Key activities structuring farmers into commercially viable groups; offering short-term micro-financing and short-term advances for crop purchases (less than one month); mid-term loans for the procurement of farming inputs; and long-term loans for asset procurement (e.g. equipment, warehousing) that improve farmer productivity and product quality.

improved yieldWe invest in training and support farmers with the supply of inputs.

Key activities implementation of Good Agricultural Practices (GAP), structured training modules (including farming training) through learning centres and extension providers, establishment of model farms and farmer field schools, provision of seedlings, tree grafting, fertiliser and crop protection products.

charter principles

labour practicesWe educate farmers on child labour, safety, gender and financial issues.

Key activities campaigning within communities and educating farmer groups to adhere to a no child labour policy, facilitating the opportunity for primary education, training in the use of safety equipment, gender equality awareness and promoting personal financial and business management skills.

market accessWe offer farmers a fair and competitive price.

Key activities regular communication of prices which move in line with world markets, continued local presence through the entire crop season, direct payments (including by mobile phone), aggregation of produce on farm, transportation services and constant financial liquidity for products.

QualityWe encourage farmers to produce good quality by enhancing value to farmers and our customers.

Key activities farmers engaged with pricing that reflects good quality, promotion of defined quality parameters, premiums paid relative to average quality.

1

2

3

4

traceabilityWe ensure products can be tracked to source and certified where required.

Key activities operating close to the farmgate enables a full chain of custody to be followed, enhanced by technological advances and individual farmer record keeping, all to independent auditing standards.

social investmentWe support rural health, education and infrastructure.

Key activities investing in community based assets that directly contribute to social development, such as: building or refurbishing primary schools; the supply of educational equipment; building of health centres; the drilling of boreholes and sanitation improvements. Supporting community health awareness through HIV/AIDS and malaria campaigns.

environmental impactWe are improving our overall environmental footprint across the supply chain.

Key activities working with farmers to maximise production on existing farms so reducing future deforestation, water management and reinforcing sustainable agricultural practices.

8

5

6

7

03

health Onehealthcentreconstructed Twohealthcentresrefurbished OneambulanceprovidedMedicalequipmentsupplied FundedhealthspecialistNGOstodeliver

community based services

66,000communitymembers reached

health campaigns

HealthcampaignstargetingHIV/AIDS,maternalhealth and malaria at a cost of US$360,000

180,000communitymembers reached

education Fivenewschoolsconstructed Twoschoolsrehabilitated ThreeITcentresestablishedandequipped Basicschoolequipmentanduniformssupplied

30,000studentsreached

Water access 12boreholesestablished Twowaterpurifyingunitsconstructed

providing potable water

8,000communitymembers reached

infrastructure 14communitycentresconstructed to enable the delivery of health, education and training services by a range of providers

Roadsconstructedforfarmeraccess to agri-inputs, services and markets

7,000communitymembers reached

42,000farmerslinked to improved productivity and livelihoods

social investments

We support rural health, education and infrastructure development to contribute to the wellbeing of thriving communities.

Our social investment projects are primarily focused on building physical assets to enhance the standard of living within the community, as well as those which increase productivity, such as warehouses and solar dryers. To broaden our impact we also contribute to education and health campaigns that are recognised as being of high importance to both the national governments and the international donors.

Olam has built a large network of farmer and community support staff, now reaching 1,062 across 30 countries, who are delivering the Charter Principles to farmers. Through this network we are able to collaborate directly with our farmers, identifying their needs and designing the community projects that meet their priorities. We can then leverage additional funding through our partnerships with donors and other companies to deliver improved services to the farmers and wider community.

Overall US$1.5 million was invested in the past year to strengthen communities through direct asset building and supporting health and education campaigns. Some examples of social investments made during the year are listed to the right.

04 05

tonnes initiatives

farmers hectares

142,294

partners:COMPACI (BMGF4, GIZ5 and DEG6), GhanaHealthServices,GhanaNationalService, GIZ, Personnel Association and SAVE Ghana

certification:CottonMadeinAfrica,BCI

210,170

1 Includes inputs 2 BetterCottonInitiative3 Competitive African Cotton Initiative 4 Bill&MelindaGatesFoundation 5 Deutsche Gesellschaft fr Internationale Zusammenarbeit 6 international financing subsidiary of KfW

teressa buana (45)mozambique

TeressaBuanahasbeenacottonfarmersincetheageof18. Today aged 45, married with five daughters and five sons, her and her husband continue to work in their cotton field.

ThebenefitsBetterCottonInitiative(BCI)hasbroughttoherlifeinclude: Safeguardingherhealthbylearninghowtoworkwithprotectiveequipmentduring

pesticide application

Savingmoneybyreducingtheamountofpesticidesapplied Ensuringthefutureofherfieldbycaringforthesoilwhenplantingcottonseed TrainingonIntegratedPestManagement,betterharvestingandstoragetechniqueshas

resulted in a better cotton price

StayingwithintheCertificationguidelinesbynotusingchildlabour,orlettingpregnant/nursing mothers spray pesticides

cte divoire ghana

mozambique

Zimbabwe

Zambia

172,409

5

cotton

achievements US$26 million in no interest crop financing1 TheprinciplesofBetterCottonproductionappliedinCtedIvoire,Ghanaand Mozambique,undertheBCI2 and COMPACI3 partnerships

8,275 farmer training days 315 farmer field schools established 6,500farmersinCtedIvoireandGhanatrainedinIntegratedPestManagement

techniques to reduce chemical application

7,890 tonnes of cotton seeds distributed on a no cost basis US$150k invested in rural roads and bridges, serving 30,000 villagers in Cte dIvoire, MozambiqueandGhana

Sixmulti-usecommunitycentresbuiltinMozambique 7,000 villagers reached with HIV/AIDS testing, basic medical check-ups andgeneralhealthawarenessinCtedIvoire,MozambiqueandGhana

Key facts

participating countries

Key facts

participating countries

cocoa

tonnes initiatives

farmers hectares

122,200

achievements US$17.5 million paid in premiums 24% increase in participating farmers and 50% increase in hectares over previous year 593,000 cocoa seedlings distributed7

Worlds first climate-smart verified cocoa (Ghana) aimed at stopping deforestation, protecting and improving the existing ecosystem and reducing greenhouse gases through the application ofclimate-smartlandusepracticesinpartnershipwithRainforestAlliance.

OLC cocoa initiatives in Cte dIvoire are now third party audited by IntertekOlamFarmerInformationSystem(OFIS)nowbeingrolledouttodevelopadatabaseand

map all cocoa farmers within the initiatives

454 farmer field schools established to support farmer training 4,061 farmer training days provided Trained over 300 farmer trainers from 132 cooperatives reaching 47,800 members throughaFairLaborAssociationcollaborationinCtedIvoirefocusedonimproving labour standards and rolling out the Olam Supplier Code8

Ruralinvestmentexamplesincludesupportingtheconstructionoffiveschoolsin Cte dIvoire9, five boreholes in Ghana, and 243 solar dryers for Indonesian farmer groups to improve cocoa quality

ThanksOutspanforbringingthisWorldBankProject to our doorstep! I can pay my kids school fees and put a little something aside for family needs with the money I make at the nursery. The clonal seedlings we produce are also interesting farmers to get back to cocoa farming.

mrs rosewitha madiat (48)papua new guinea

partners:Costco,Hershey,Mars,MeadeJohnson,Mondelez,Nestl,RainforestAlliance,TheBlommerChocolateCo.,WorldBank

independent verification: Intertek

certification:Fairtrade,RainforestAlliance,UTZ

Key facts

participating countries

cashew

tonnes initiatives

farmers hectares

42,626

achievements US$260,560 paid in premiums for organic cashew in Cte dIvoire 9,261 female farmers, 61% increase over last year 12,840 cashew seedlings distributed 91 farmer field schools established Builtthreecommunitywarehousesandinvestedincommunitydryingyards inCtedIvoire,GhanaandMozambique

Reached10,000communitymemberswithHIV/AIDStestingandgeneral healthcampaignsinCtedIvoire,Ghana,NigeriaandMozambique

Olams training programmes for cashew farmers have helped us improve our yield. Olam has helped me to become a leader in my community by naming me the head of my farmer association. I educate my fellow cashew farmers and share with them information from Olam on how to take care of their farms and how to do good business with cashew.

mr alhaji siaka (54) ghana

partners: African Cashew Alliance, Ghana Health Services, Hygiea,MissionofHope,SustainableTradeInitiative(IDH)

certification: Fairtrade,Organic0706

cte divoire

nigeria

ghana

mozambique

122,880 41,604

241,160103,768

5 9

7 some free, some financed 8 for more information visit www.olamgroup.com/sustainability 9 fundedwithcontributingpartners:Costco,NestlandTheBlommerChocolateCo.

indonesia

papua new guinea

cte divoire

nigeria

congo

ghana

tonnes initiatives

farmers hectares

700,694

partners:Belgaum,HUL10,IFC11, KLE Society12, Solidaridad,WWF13

certification:Bonsucro

Through the different workshops we have learned how to efficiently control the different plagues and diseases that affect coffee trees. We are now saving money, know exactly what inputs to use and understand their environmental impact.

mr gober trujillo (41) honduras

0908

Shri is connected to an OLC initiative that has recently applied all eight Principles. The goal is to increase the sugarcane yield of farmers by at least 15% within three years, in order toachievecertificationundertheBonsucrostandard.Theprogrammewillincludetraining,capacity building to enhance productivity and rural entrepreneurship development.

shri vaiju laxman Kinikar (67)india

Timely cane payment and extension activities implemented by Olam have helped us attain financialsecurityandsocialstability.NowIunderstand crop physiology more easily, and better nutrients, pest and disease management have helped me reduce the cost of inputs and get the maximum out of them.

india

tonnes initiatives

farmers hectares

71,526

partners: DEFoundation,Starbucks,Sustainable Trade Initiative (IDH)

certification: 4C,RainforestAlliance,Starbucks C.A.F.E.Practices,UTZ

cte divoire

colombia

honduras

indonesia

vietnam

cameroon

33,65014,258

12,62315,394

6

*NewtoOLC

2*

10Hindustan Unilever Limited 11 InternationalFinanceCorporation,WorldBankGroup12 Karnatak Lingayat Education Society 13 WorldWildlifeFund

14 2009 baseline data 15 prices are factored to be equal for direct comparison

sugar

achievements263,686tonnesofcertifiedsugarcaneproducedtoBonsucrostandardsacross

an area of 5,744 hectares of certified sugarcane

80 model farms established as training locations A dedicated team of 15 qualified agricultural technicians and 80 trained extension

workers who are exclusively engaged in training activities with farmers

Capital finance of over US$22,000 to help farmers install drip irrigation US$371,000 invested in rural roads serving 30,000 farmers to enable them access

to agri-inputs, services and for rapid delivery to the mill to maintain quality through prompt processing

Community access to the primary school established for the children of the mills employees

coffee

achievements Farmernumbershaveincreasedbythreetimesandhectaragebyfivetimes

in the last year

NewinitiativesinVietnam,HondurasandCtedIvoire 2,609 farmer training days provided 6,822 farmers trained on safe handling/application/use of pesticides and fertilisers

in Cameroon, Colombia, Honduras and Vietnam

685,300 coffee seedlings distributed to rehabilitate farms OlamCameroonandDEFoundationcompletedthefirstfiveyearphase:

Average yields increased from 480 kg green bean per farm14, to 660 kg

Incomes improved from US$755 per year in 2009 to US$1,084 per year in 201315

The project has also focused on farm rehabilitation with the establishment of 36 village-based nurseries run by farmers on a commercially viable basis and have produced and distributed 242,000 seedlings, enough to replant 242 hectares

35% of registered farmers are female

Due to the success of the project, a second three year phase of the partnership has started that also now includes the Sustainable Trade Initiative (IDH)

Key facts

participating country

Key facts

participating countries

OlamNigeriaistheonlycompanythathascome to our village to conduct a workshop in training farmers.Notonlythat,theyintroducedimprovedsesame seeds which they distributed to farmers freeofcharge.Morethan95%ofmyfellow villagersarebenefitingfromOlamNigeria.

adamu sani (35) nigeria

1110

Kota is connected to an OLC initiative that has recently applied all eight Principles. TheinitiativesfocusisonIntegratedPestManagement.Thisenvironmentallysensitiveapproach to eliminate pesticide residues and Aflatoxin opens up EU and US markets to these farmers by meeting all major food safety norms through a reduction in pesticide usage of 30%.

Kota china bollaiah (63) india

Olams transparent way of procurement at farmgate made me feel really proud by realising the remunerative price and timely payments had helped to elevate my social status and give me recognition in my village.Dhanyavadamulu (Thanks) to the Olam Team.

tonnes initiatives

farmers hectares

3,300

partner/certifier:RainforestAlliance

india

tonnes initiatives

farmers hectares

450

nigeria

1,6192,000

1,048622

*NewtoOLC

11*

chilli

achievementsTraining in Good Agricultural Practices has improved average yields by 10% within

the first year

Six farmer field schools establishedFarmertrainingisnowbasedontheRainforestAllianceSustainableAgriculturalStandards

(SAS) to enable farmers to become certified

US$113,197 paid in premiums in the first yearConstruction of two water purifying plants serving 3,000 residents in two communities,

enabling access to potable water (with fluoride added to support the national governments campaign to reduce tooth decay)

sesame

achievements Farmernumbersincreasedfrom561to2,000,representinga400%increaseand

an area increase of 300%

Ten farmer field schools established in the communities, enabling access to training and development

US$112,500 premiums paid to farmers 762 participating women farmers, representing 38% of the total number Fourboreholesconstructedtoprovideaccesstocleandrinkingwater Current impact:

Average gross income per farmer: US$422

Average gross income per hectare: US$521

Average production: 802 kg per farmer

Average yield: 278 kg per hectare

Key facts

participating country

Key facts

participating country

12

NguyenisconnectedtoanOLCinitiativethathasrecentlyappliedalleightPrinciples. The initiative is assisting the pilot group of 98 farmers to produce one of the worlds first RainforestAlliancecertifiedblackpepperproducts.Duringtheproject,farmershavebeensupported in establishing sustainable cultivation practices by complying with the SAS.

mr nguyen van chinhvietnam

The project is giving a real benefit and an active effect on our farmers lives. Economically, Olam has committed to buy all this sustainable pepper, with some premium over the normal pepper prices. Therefore, I can see that our income will increase. Moreover,weusewater,fertiliser,andpesticidesina more suitable way, which will decrease our input cost. Socially, I together with other farmers, have got to know how to conserve the water and other resources, without destroying or doing harm to it.

In short, I believe that our lives will be better and income will be more with this project.

about Olam

Olam is a leading agri-business operating from seed to shelf across the world. Our team of 23,000 people has achieved global leadership positions in many businesses such as cocoa, coffee, cotton, edible nuts, rice, spices and vegetable ingredients.

The company began its life trading cashews inNigeriain1989,makingthisour25thanniversary year. Olam means transcending boundaries describing fittingly our journey from one product platform to 16, one country to 65 and from a private company to a public one through our listing on the Singapore Exchange in 2005.

Another translation for Olam is everlasting. OurCommonPurposetoGrowResponsiblyfocuses the whole team on building a company that is enduring with a sustainable future.

tonnes initiatives

farmers hectares

295

partners: DepartmentofAgricultureandRuralDevelopmentofBaRia-VungTauProvince,SNV16

certification: RainforestAlliance

vietnam

Formoreinformationvisit: www.olamgroup.com

10298

*NewtoOLC

1*

16 SNVNetherlandsDevelopmentOrganisation

pepper

achievements Workingwithapilotgroupof98farmerstoproduceoneoftheworldsfirstRainforest

Alliance certified black pepper supply chains

FarmersweresupportedtoapplySustainableAgricultureStandards(SAS),developed bytheSustainableAgricultureNetwork(SAN)togenerateecological,socialandeconomicbenefits and market access

The project has been working with one farmer cooperative and seven farmer groups have been created

FourfarmerVillageSocietiesinBaRia-VungTauProvincehavebeenprovidedwithcomputer equipment and furniture

Key facts

participating country

Olam international limited9TemasekBoulevard11-02 Suntec Tower TwoSingapore 038989

Telephone (+65) 6339 4100Facsimile (+65)63399755www.olamgroup.com

corporate responsibility and sustainabilityNewZealandHouse80 HaymarketLondon SW1Y 4TQ

Telephone (+44) 20 7389 6464Facsimile (+44)2073896465crs@olamnet.com