There’s no sustainability without traceability. This mantra is repeated time and time again by almost all palm oil stakeholders, to the point of almost making it sound too tedious.
Being a central prerequisite in the industry’s journey towards sustainability, much effort has been devoted to seeking ways to assure traceability throughout the entire supply chain in the palm oil industry.
One of the players in Traceability in Palm Oil is an agri-tech company that helps companies in reaching their goal in sustainability. Founded in 2013, Koltiva now services several palm oil companies and has digitized more than 24,000 Oil Palm Smallholder farming household profiles and pioneered 100% traceability from plantations to participating agents and mills.
The Palm Scribe interviewed Koltiva’s CEO, Manfred Borer to see what are the idea and vision behind this “software ecosystem” company.
“There is no sustainability without traceability, therefore, getting agents and middleman collaborating transparently is as hard as to convince brands producing products with palm oil to share its cost,” Manfred Borer told The Palm Scribe.
Interesting, but what else? Here’s our interview with him:
How did your company help change the business in the palm oil industry?
By end of 2017, Koltiva developed the PalmOilTrace software ecosystem with mobile applications and a web platform to digitize smallholder farmer profiles and map their oil palm plantations. Mapping smallholder plantations and identify the farmer families managing them, is the key starting point for a traceable and sustainable palm oil industry.
Working with key industry players, Koltiva mapped more than 39,000 hectares of Oil Palm Plantations and piloted 100 percent traceability from plantations to participating agents and mills. The case has been made, that Koltiva Software as a Service Applications combined with a dedicated force of Field Agents, we think it is possible to link smallholders to supply chains that are aimed to be transformative, getting traceability established and ultimately become sustainable.
Providing additional benefits to the supply chain is key in an inclusive supply chain. Every actor from farmers to the mills must become profitable and create added value. Transforming a volume-based supply chain in service and quality-based value chain was and is the most challenging part of the sustainability journey with Koltiva …. There is no sustainability without traceability, therefore, getting agents and middlemen collaborating transparently is as hard as to convince brand producers of products with palm oil to share its cost. Long-term at (big) scale and not just pilot projects based on small samples of success.
I understand that you previously did this with Cocoa, and it was considered as quite successful. How are these two commodities different on the field, in terms of challenges on traceability and sustainability?
Personally, I am working more than 10 years in cocoa and established a “sustainable network” to scale up the CocoaTrace ecosystem, throughout Indonesia, and now as well in other cocoa producing countries. In cocoa, the cost of sustainability and traceability is borne by the buyers of sustainably produced cocoa, where every actor in the value chain – from farmer to the processing industry – is accordingly paid for the additional efforts needed.
In palm oil, unfortunately, this is not yet the case on a large scale. There are a few companies and public donor drove efforts to establish certified supply chains, but premium payments covering the additional cost to companies, farmers, and service providers aren’t part of the establishment yet.
Manfred Borer was born in 1974 in Switzerland. He graduated as a Business Process Manager with an Engineer Degree from the University of Applied Sciences North-Western Switzerland, majoring in Plant Management.
He started his career in 1994 as owner-manager of a construction company in his home region. In 2005, Borer joined Swisscontact, the Swiss Foundation for Technical Cooperation in Albania, three Western African countries, and Indonesia as Program Director and Indonesia Country Director. In 2017, he joined PT Koltiva in Indonesia and founded Koltiva AG in Switzerland. He leads business development and global expansion of products and services in both companies.
How do you think Koltiva is helping eradicate/tackle critical issues in the palm oil industry, for example, deforestation, etc?
Koltiva with its Software Ecosystems connects a multitude of mobile and web applications. Combined with its experience and track record in managing hundreds of Field Agents, it is working at the core issue of sustainable supply chains – supporting the individual smallholders to establish profitable farm enterprises, operating at scale and without social and environmental exploitation.
However, I think there’s no technology and artificial intelligence that can replace the human to human interaction needed to integrate farmers in sustainable value chains. Our technologies are evolving as we are as a company, innovating continuously on our agri-tech applications and services from our agronomist. Reaching out to all Oil Palm smallholders is key, providing access to premium markets for sustainably produced palm oil, verifying its source to be eligible for services, will eventually stop deforestation caused by palm oil expansion.
How is this company directly affecting smallholder farmers?
Our services are paid by companies sourcing from smallholders. Our staff is in direct contact with the farmers, using our latest technologies and industry knowledge to support farmers in their decision- making the process to become sustainable and profitable farm enterprises.
Koltiva is applying the learnings from cocoa not only to palm oil but also to rubber, seaweed, and natural Ingredients sectors for multinational clients concerned about supply chain sustainability and transparency. Currently, we are managing more than 215,000 independent smallholder farmer data for our clients to establish better services and enable farm certification and traceability.
What have you learned so far, and what do you expect in the next five years?
We have learned that the Palm Oil industry definitively knows what is at stake, but due to the multitude of opportunities for farmers and agents to sell to non-committed buyers, only a few risk direct investment in traceability and sustainability. Large scale initiatives are needed to map the smallholder landscape against Government approved land use maps, and supporting agents and collectors of FFB (Fresh Fruit Bunch) to the only source from sustainable and verified plantations.
With several hundred trained Field Agents and committed mills, off-takers and donors, I am sure that Indonesian Palm Oil can become a success story, transforming from an unregulated expansion strategy to a premium value chain is driven intensification strategy, benefiting smallholders and end consumers alike.
“Are there any other companies offering similar to Koltiva’s services in Indonesia? and what are your advantages compare to those companies?”
Agriculture attracts a lot of attention of established and new Software companies, globally, not only in Indonesia. There are a few companies with advanced software applications, to map and trace palm oil, but none has the “on the ground” capacities and local experience of Koltiva. PalmOilTrace has been adopted from established systems like CocoaTrace, together with the industry and smallholders, to provide the most advanced software package to the whole supply chain.