The Asian Development Bank (ADB) and global agribusiness company Olam International Limited (Olam) have signed a $93.75 million loan agreement to support the livelihoods of thousands of smallholder farmers in Viet Nam, Indonesia, and Papua New Guinea by helping them cope with supply chain disruptions caused by the coronavirus disease (COVID-19) pandemic.
The support will provide Olam with the working capital to increase the purchase of coffee, cocoa, and other high-value crops from at least 100,000 smallholder farmers, helping to secure the inventory needed to build buffers for possible disruptions and increase advance payments to farmers. The project will also complement other ADB-supported initiatives with Olam, including training for farmers, especially women, on climate-smart agricultural practices and improving crop quality and productivity.
“Smallholder farmers across the region are acutely vulnerable to worsening poverty as their incomes were below average even before the pandemic,” said ADB Deputy Director General for Private Sector Operations Department Christopher Thieme. “Local market closures and declining demand from small traders during COVID-19 has reduced the earnings of smallholder farmers and increased food wastage. ADB will support the livelihoods of these farmers by providing financing to Olam, which procures directly from smallholder farmers.”
“We believe it is important to continue to support smallholder farming communities in the various countries that we operate in,” said Olam International Limited Managing Director and Group CFO N. Muthukumar. “Covid-19 has disproportionately impacted livelihoods in emerging markets and this special financing arrangement is aligned with our goals in ensuring prosperous farmers and thriving communities.”
Olam is a global agribusiness company, headquartered in Singapore, that focuses on buying directly from growers and agents at the farm gate. Since 2017, ADB has supported Olam through loans and grants. ADB has also provided a technical assistance to train 20,000 smallholder coffee farmers and support the rollout of the Olam Farmer Information System, which uses mobile technology to collect information about farmers, helping Olam to provide tailored interventions and support.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.