Colombia is a rising star in international sustainable trade with the potential to become a world leader. The recent visit of Dutch Prime Minister Mark Rutte and Agriculture Minister Carola Schouten has highlighted Colombia’s enormous potential as a strategic partner in the global trade in sustainable agro-commodities to The Netherlands and the European Union (EU).
“I believe we can become a catalyst for global change together. We are an excellent match: your country is an important supplier of food, raw materials and basic agro-commodities,” said Schouten. “Fifty years ago, our country was dependent on imports, agricultural products and raw materials. Today it is renowned as a leading exporter of agricultural products with a highly innovative sector."
Together we can adopt sustainable practices. Through initiatives on sustainable trade such as this Platform, we hope to engage more partners on sustainability.”
Agriculture Minister Carola Schouten at the Sustainable Trade Platform Forum in Bogotá.
The presence of the Agriculture Minister and her delegation at the Forum highlights the importance of bilateral sustainable trade between Colombia and The Netherlands, which has increased in recent years. The Netherlands is the most important trading partner for Colombian exports to the Netherlands (1.5 billion dollars per year in total). There are many opportunities to increase sustainable agricultural trade between the two countries, since Dutch importers have committed to increase purchases of sustainable agricultural products until 2020.
“We already have adopted a set of rules and regulations in the European Union to ensure sustainability in palm oil imports,” said Schouten. “All imported palm oil must be produced sustainably by 2021. There is a similar commitment for food and vegetables.”
Colombia’s Deputy Minister of Agricultural Affairs Marcela Urueña highlighted the efforts of the Sustainable Trade Platform, a public-private initiative led by Solidaridad, and the Colombian government to increase sustainable production. “We work closely on water and soil management across the coffee supply chain,” she said. “One-fifth of our palm oil production already meets the requirements of the RSPO and we hope to reach 50% by 2020."
It is possible to develop the palm oil industry without deforestation."
Colombia has 1.4 million hectares suitable for planting, only 30% of which is used. "To grow Colombia’s sustainable production even more, we need to attract foreign and domestic investment.”
Left to right: Colombia’s Deputy Minister of Agricultural Affairs, Marcela Urueña; Minister of Agriculture of The Netherlands, Carola Schouten; and Joel Brounen, Solidaridad Colombia country manager.
Challenges and opportunities
According to Solidaridad, more than 80% of Colombia’s bananas, 67% of coffee, 30% of flowers, and 14% of palm oil were produced sustainably in 2017. While sales of products that comply with sustainable standards have grown, more needs to be done to close the gap. For example, of the 67% of certified coffee produced in 2017, only 28.3% was sold as certified.
“Therefore producers, unions, government and companies must work together to achieve a collective impact and improve the business case of sustainable production in Colombia,” said Joel Brounen, country manager of Solidaridad Colombia. “Colombia can learn from The Netherlands, which is a pioneer in sustainable trade. The Netherlands brings investment and advanced technology that can help to modernize the Colombian agriculture sector."
Together, Colombia and the Netherlands can be twin stars that promote sustainable global trade.”
To complete the transition to 100% sustainable production, Colombia’s agriculture sector needs more demand and investment. “Greater efforts have to be made by markets, industry and governments to improve conditions for farmers,” said Brounen.
More stable markets and investment in technology are required in order to scale sustainable agricultural production and trade. Fiscal incentives and more inclusive prices are also vital if the gap between the costs and benefits of this differentiated production is to be closed. “Only in this way we can create a win-win situation for traders and producers in Colombia,” he added.
Towards collective impact and inclusive finance
To support the Platform’s ambition to increase sustainable trade, Dane Smith, a specialist in shared valued and collective impact, encouraged company leaders who attended the Forum to address serious social and environmental challenges in their business strategies in order to increase their earnings.
Dane Smith, expert in shared value and collective impact.
Smith said shared value strategies are led by companies that create business opportunities by solving social and environmental challenges. A collective impact approach also requires collaboration by different actors (public, private, civil society, multilateral organizations) to solve challenges that they cannot overcome individually. Often a “backbone” organization plays a crucial role behind the scenes in steering the collective impact approach. The Sustainable Trade Platform, which works to strengthen sustainable production and trade in Colombia, is a good example of this approach.
One of the main challenges Colombia faces in order to increase sustainable production is the financial inclusion of smallholder farmers. Joris Timmers, Senior Program Manager: Advisory Services at Rabobank, emphasized the important role banks play in facilitating farmers’ access to credit. Echoing Smith’s ideas, Timmers indicated that banks can be a “backbone” organization that catalyses change in order to achieve collective impact in agriculture.
Patty Erkeland and Joris Timmers, of Rabobank, on the panel on financial inclusion for Colombian farmers.
Timmers talked about the importance of education in reducing risk when offering financial products to farmers. “To mitigate risks, agro-banks can create knowledge and disseminate it. Not only on productivity, but also on the innovations they need to increase productivity without using more land,” he said.
If the bankers understand the agricultural sector and the innovations required to transform the sector, it will be easier to estimate the financial risk.”