Growing a Southern Brand to Global Success: The Olam Story

Most people haven’t heard of Olam International, but they know the brands they work for and they more than likely eat their produce. The story of Olam (http://www.olamonline.com) – a global food supply company in ‘agri-products’ that got its start in Nigeria – shows how a Southern brand can grow and go global, and overcome the difficulties of cross-border trade.

Olam supplies well-known global food brands including Cadbury (chocolate), Nestle, Lavazza (coffee), Mars (chocolate), Tchibo and Planters (peanuts).

Olam not only survived its startup in Nigeria, it has thrived, trading around Africa and across the globe, becoming a major supplier to the world’s top food brands.

The quantity of agri-products harvested in the world is 5.2 billion metric tonnes. In that market, Olam is a significant producer of cashews, peanuts, spices, beans, coffee, cocoa, sheanuts, packaged foods, rice, wheat, barley, sugar, cotton, wood, and rubber. It is already the world’s largest supplier of cashew nuts and sesame nuts and in the top three for peanuts. Olam’s cashew business in Africa provides work for 17,000 people, 95 percent of whom are women.

Olam also uses its success to play a critical role in securing the world’s food supply and has specialized in meeting the food needs of the world’s rapidly growing population, especially in China and India. Between 2001 and 2007, annual increases in the global consumption of agricultural commodities were larger than during the 1980s and 1990s. Higher incomes are leading to higher consumption of proteins like meat. And as meat demand rises, so does the demand for grain and protein feeds to produce the meat. It takes two kilograms of grain to produce one kilogram of chicken, four kilograms of produce for one kilogram of pork, and eight kilograms of produce for one kilogram of beef.

Chris Brett, Olam’s senior vice president and head of corporate social responsibility and sustainability, said the company tries to blend business success with wider social goals.

“We are one of the few businesses investing in rural environments and am tackling the problem of urbanization,” said Brett in Olam’s London office – the company’s global headquarters is in Singapore.

In 2008, it won the World Business Development Award for its contribution to achieving the Millennium Development Goals (MDGs) (http://www.un.org/millenniumgoals/).

Olam also has been recognized for its contribution to global food security. By providing farmers with credit to help build their communities, it has also been able to revive declining rural economies and help stem the outflow of farmers to the big cities and urban slums.

“Many countries are afraid to lend to farmers,” Brett said. “We gather the farmers together in groups of 500 and Olam manages the loan while a local bank receives the money. Defaults have been low and farmers are building up a credit rating. In this way, farming becomes a business not just a subsistence existence.”

The dramatic changes taking place in African countries – especially rapid urbanization that has made the continent home to 25 of the world’s fastest growing cities (International Institute for Environment and Development) – means there is an urgent need to increase food production and stabilize rural economies to support farming.

Olam International, started in 1989 in Nigeria by its India-born CEO Sonny George Verghese has many lessons for any Southern entrepreneurs who have their sights set high.

After developing its skills in exporting cashew nuts from Nigeria, Olam moved into cotton, cocoa and sheanuts. From 1993 to 1995, the company explored ways of taking their skills into other countries and different products. It was a period of rapid expansion into other African countries including Benin, Togo, Ghana, Cote d’Ivoire, Burkina Faso and Senegal.

Olam now operates in 26 African countries.

There has been a renaissance in South-South trade in recent years before the current economic crisis, growing by an average of 13 percent per year between 1995 and 2007. By 2007, South-South trade made up 20 percent of world trade.

Olam started with one product, got its supply right, and then started looking around and seeing what other products and services it could offer, applying already-tested expertise and supply skills – what the company calls the ‘Olam DNA’.

Olam claims its success has come from building strong relationships with farmers to guarantee high standards for the food products. The company does this by tightly tracking its stock and its quality. Olam then uses the information to analyze risks to the supply network. The company also keeps both warehouses and field managers close to the farmers. Olam estimates 65 percent of its profit comes from managing the journey from farmer’s field to factory gate.

Its selling point to customers is the ability to guarantee the entire journey from farmer’s field to factory gate, taking on all the risk and stress for ensuring the product is of the right standard and delivered on time.

Its niche is to provide the food products required by some of the world’s top food brands. The company has grown from just one product in Nigeria and two employees in 1989, to directly employing over 10,000 people worldwide and supplying 20 products in 60 countries, according to Brett. He says the company, which had a total 2008 turnover of US $5.75 billion, was “born out of Africa.”

Brett says the company is now “investing heavily in Africa in processing and distribution centres” – proof that a success story feeds back into more success and investment. It has been able to use its profits to go back and buy up failing businesses and former state-run enterprises, and modernize them. Olam now grows the food, processes it, and transports it to market.

Olam actively works with international donors, global NGOs like Technoserve (farmer business development), WWF (environmental impact of supply chain), and the Bill and Melinda Gates Foundation (cocoa and cashew farmers).

Olam, however, has received criticisms for its past practices. The global environmental group Greenpeace attacked its logging in the Democratic Republic of Congo (DRC) (http://www.greenpeace.org.uk/tags/olam), and the International Finance Corporation (IFC) divested its holdings from Olam for it trading illegally cut timber.

Olam and the Gates Foundation project are working with 200,000 cocoa farmers in West Africa to double their incomes. In Ghana, cocoa farming has become synonymous with poverty and perceived as an occupation of last resort. The work force is rapidly aging and the industry will die out if it doesn’t become more profitable and attractive to young people.

“We want the farmers to be profitable, the transporters to be profitable,” Brett said. “We believe a supply chain does not work if one player takes too much.”

And what advice does Olam have for budding food producers and growers? “Catchy, simple brands work. Our Mama Mia pasta caught the wave of the Abba revival.”

“Our Tasty Tom brand became very popular in Africa so we extended the brand into other products than just tomato paste. You reduce the cost of advertising by extending the brand name.”

“We feel SMEs (small, medium enterprises) growth is critical because it would give us more support. If more people invested in SMEs, we would have more people to do business with. We want to be able to make deals: they could be entrepreneurs.

“If you can add extra value it costs nothing but time.”

Brett advises budding SMEs: “It’s all about quality: trust and shared business ethics like formal contracts. When you have those, the bigger brands will give you support.”

By David South, Development Challenges, South-South Solutions

Published: October 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Making the World a Better Place for Southern Projects

Good ideas are plentiful, but how to fund life-improving projects has always been a thorny issue. Judging how effective a project is can also be fraught with debate and contention. Over the past two decades, the number of NGOs in the global South has exploded (http://lboro.ac.uk/gawc/rb/rb144.html). The best of them offer the local knowledge and understanding required to make development gains. But unlike NGOs in the North, many lack the powerful fundraising capabilities of the big global NGO brands.

An exciting new initiative based in Germany, but already featuring hundreds of projects from across the South, is using the power of the internet to directly connect projects and donors.

Joana Breidenbach, an anthropologist, author and co-founder of betterplace.org (www.betterplace.org), says NGOs are emerging in India and other countries of the South to challenge the big Northern global NGOs.

“Why wouldn’t you want to donate to these Southern NGOs? There are more entrepreneurs and local approaches which are better.

“Betterplace gives local institutions a platform to express themselves.”

Started in 2007, betterplace is an online marketplace for projects to raise funds. It is free, and it passes on 100 percent of the money raised on the platform to the projects. The foundation that runs betterplace supports its overheads by offering additional services that people can pay for if they wish. It works in a way similar to the online marketplace eBay (http://www.ebay.com): NGOs post their project, set up an account, blog about their achievements and successes and needs, and receive donations direct to their bank account when they come in.

Breidenbach points out up to a third of any NGO’s income is spent on fundraising. In Germany, that represents more than Euro 1.3 billion out of over Euro 4 billion in private donations – money that could have gone directly into the hands of the people needing help.

With betterplace, donators can surf through the projects and pick the one they want. Already, more than 100 large corporations trawl through betterplace seeking projects to fund to meet their corporate social responsibility (CSR) obligations (http://en.wikipedia.org/wiki/Corporate_social_responsibility).

“I find it very exciting to introduce a good and innovative NGO to a corporate sponsor,” Breidenbach said.

Breidenbach says betterplace’s ultimate goal is “to transfer the donation market online.” It hopes to change the rules in donation and charity in the same way blogs and the search engine Google changed the way people publish and search for information.

“This provides better transparency, feedback,” Breidenbach said. “Now (with betterplace) donors and organizations can cut out the middlemen. A lot of established organizations do not like this too much.”

Over the past decade, new concepts like social entrepreneurs and venture philanthropy have emerged to straddle the delicate line between social good and private profit. Betterplace joins this wave of new thinking about how to do development better.

In the 20 months since betterplace went online more than 1,500 projects have joined. They are now averaging between 20 to 35 new projects joining every week.

Betterplace is a simple open-plan office on the top floor of a Berlin warehouse beside the city’s Spree river. The small team (http://www.betterplace.org/about_us/team) work on laptop computers. A blackboard on the wall details in bright colours a running tally of the projects that have joined.

Breidenbach gives the example of a mother in Cameroon who is using betterplace to raise the school fees for her children. The mother blogs about the children’s progress and has been able to raise the fees for a year and a half.

“People are now directly connected to somebody in need.”

“Right now the functionality (of the website) does not allow people getting in contact publicly and we want to enable this knowledge transfer in 2010. If you want to build a well in Cameroon then you could search for the best technology and to contact other people who are doing similar projects to learn from them.”

Success on betterplace is by no means certain. “The experience of the project managers has been as varied as development work is – some have done really well, raising thousands of Euros over the website – others have received no funding at all,” Breidenbach said.

But betterplace provides tools to give the projects the best chance possible. “Projects can present their work, breaking it down in a transparent way (in order to let supporters know exactly what is needed for their realization), there are sound payment processes in place and project managers can give feedback through their project blog, supporters can download project widgets etc., all supplied free of charge.”

Breidenbach has other tips for making betterplace work for a project: post details in English when creating a profile, break down the project into much smaller, low-cost goals (few people are willing to make large donations) – this also has the advantage of receiving payments straight away when they are small. Tell a good story about the project, and try and use actual testimonials from the people affected. Blog and update regularly with photos and videos to keep people engaged. Also avoid copying and pasting text from a previous grant application.

“We have the numbers to show that projects which give regular feedback and have a lively web of trust receive more donations than others, which are not very active.”

“Don’t think you can just go on to betterplace and the money starts rolling in,” said Breidenbach.

The betterplace platform places all projects seeking funds on the same level, allowing individuals and small NGOs to compete equally with the big, branded global NGOs with their websites and sophisticated fundraising operations.

“All the big NGOs have their own websites,” continues Breidenbach. “But it is the small initiatives that often don’t have a website or know how to use Pay Pal etc. (http://www.paypal.com). We are very useful for smaller NGOs.”

“Another big advantage is that we are a real marketplace: whatever your interests (as a potential donor), you will find a project tackling this issue on the platform.”

But what about fraud and people seeing betterplace as a coin-making machine rather than a way to make the world a better place?

“We have a feeling for dodgy projects. We check the IP address. We have a number of trust mechanisms in place (and are currently working on enlarging them). Thus projects on betterplace can create trust through their good name … But we also include something which I would call network-trust: In our web of trust different kinds of stakeholders of an organization or a project have a voice and can publicly state what they think of it. Thus beneficiaries of a project can say if the project has done them good or has been counterproductive, people who have visited the project on the ground can describe what they have seen etc. … we hope to give a much denser and more varied impression of social work and give donors (a terribly badly informed group of people), the basis for a much more informed choice.

“If a contributor to a project is dissatisfied with the project’s outcome … she can either directly contact the project manager via betterplace, or openly voice her concern on the project page for other potential donors to see her views.”

For now, betterplace is still only useful to people who have access to the internet and have a bank account (necessary for the money transfers). But in the future betterplace hopes to have mobile phone interactivity and more features to expand who they can reach.

“We are also re-working our site to make it more intuitive and easier to use for people without computer skills,” Breidenbach said. “In the pipeline is also a knowledge backbone, enabling people to access knowhow about development and social innovation issues and exchange views and experiences. This will be very useful for projects in the South as so many people are working on the same issues without knowing about it. They could learn a lot from each other, without the “help” of the north.”

With internet broadband in Africa set to take off, according to the report Africa Connect: Undersea Cables to Drive an African Broadband Boom (http://www.pyr.com/downloads.htm?id=5&sc=PR090309_INSAME1.6), even more people will soon be able to make the most of initiatives like betterplace.

By David South, Development Challenges, South-South Solutions

Published: September 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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New Weapon Against Crime in the South

 

Crime in the South’s fast-growing cities has a negative affect on economic development and social and community harmony. In Africa, with one fifth of the world’s population, for example, data is very poor on crime and its victims. The absence of good data means prevention and detection of crime is poor, and resources to fight it can’t be allocated effectively.

Over 900 million people – almost a sixth of the world’s population – now live in urban slums (UN) – high-tension places that offer a fertile environment for crime to flourish. In developing countries 43 per cent of urban dwellers live in slums – and in the least-developed countries the figure is 78 per cent. Keeping these areas safe is a serious challenge, especially when trust in police and local authorities is low. People are often afraid of how police will react to reporting of crime. Many rightly believe they will be asked for a bribe, or that reporting a crime somehow singles them out as a troublemaker.

Harnessing the power of people organizing together offers one way of fighting back against crime, and combating the paralysis of feeling there is nothing that can be done. An initiative in Brazil is turning to the powerful collaborative potential of Web 2.0 to track crime and help to solve it. And for the first time in history, Brazilians can now see in more or less real time what crime there is and where it is happening in their country.

Wikicrimes, the brainchild of Professor Vasco Furtado of the University of Fortaleza’s Knowledge Engineering Research Group, is inspired by the very popular user-contributed encyclopaedia Wikipedia, and germinated in his mind while on an academic sabbatical at Stanford University in California in 2006.

Victims of crime can simply map and report crimes using the website, which uses brightly coloured drawing pins to indicate where a cluster of crimes has taken place. Site users answer a series of questions on suspects and witnesses. Anyone planning a journey can then easily zoom in on the places where they will go, and see the crime profile of that area – and perhaps be more cautious and aware to avoid becoming victims themselves.

Brazil’s crime problem is huge: Films like City of God – where gangs fight deadly battles in the slums or favelas – shows how vicious it is.

Wikicrimes, whose motto is “Share crime information, Keep safe!”, began development in April 2006, and went ‘live’ with a launch at the end of 2007. Starting with just two employees, it has now grown to a team of 10.

Furtado was frustrated with police hoarding crime statistics in Brazil, and not letting people know where crimes were taking place: he also believes the police, as in many other countries, manipulate statistics for various political purposes. “The traditional mechanism of data-gathering for which police are responsible ends up giving them a monopoly over the handling of information on criminal occurrences,” Furtado said. And that “is not always in keeping with the precept of transparency and public availability of information required by a democratic system.”

Furtado believes transparent crime statistics are vital to a well-functioning democracy.

“We are still facing very big challenges,” he said. “Cultural change is one of them. We don’t have in Brazil the culture of sharing information for benefiting others. People need to realize that when they register a crime they are helping others, and that should be the reason others will act in the same fashion.”

He tried to get the police involved in the project, by contributing data, but with no luck. Brazil’s police argue their monopoly over crime statistics exists for some very serious reasons. “We are very worried about revealing police data which may restrict the work of the police,” Antenor Martins of Rio’s Civil Police Department told the BBC. “Also we don’t want a feeling of insecurity for the people – they don’t deserve that here or anywhere else in the world.”

Many also worry about a crime profile of an area dragging that area down, scaring people away. The police also worry about inaccurate information. “When people walk into a police station, you sign an incident report. If you give information which isn’t true, you have to respond to charges of giving false evidence,” said Martins.

But Furtado believes trust between citizens and the police is so low, it is hurting the fight against crime.

“The police suffer a lack of credibility among the populace which, in turn, contributes toward the low rate of reporting such occurrences: the so-called underreporting effect,” he said. “Research conducted with victims of crime in several Brazilian states has shown that underreporting may, in densely-populated areas, reach up to 50 per cent for certain types of crimes.”

Furtado believes a better picture of crime will lead to better public policies and policing: “The result of this can be disastrous in terms of formulation of public policies and especially in the planning of police actions, in view of the fact that the official criminal mapping may reflect a trend that is quite unlike what is actually occurring in real life.

“WikiCrimes intends to change the traditional logic of handling information on crimes that have already occurred, and considers that such a change is up to the citizens themselves. It is based on the principle that with adequate support, citizens will be capable of deciding how and when historical information on criminal occurrences can be publicized as well as for what purpose.”

Sao-Paulo-based NGO Sou de Paz works to reduce violence in Brazil, and is a big supporter of Wikicrimes. “If we develop Wikicrimes, we can look at things like domestic violence or information on drug trafficking – things that affect communities but that people don’t report either because of shame or fear,” the group’s Denis Mizne told the BBC. “If you can get access to this information or publicise it together with Wikicrimes, it could help in areas that suffer most from violent crime.”

Wisely, Wikicrimes is acting to address police concerns over accurate reporting of crimes.

“Technically the big challenge is to define mechanisms to identify false registering,” Furtado said. “We are creating fields in WikiCrimes for the user to provide further information that brings more reliability to the crime information registered — links to newspapers, for instance. We are also defining algorithms to compute the reputation of the informants.”

And Wikicrimes is not just for Brazil: they want people from around the world to add to the site and help build up the crime profile of all countries.

Furtado said responses from the general public have largely been positive. “The best I could ever hope,” he said. “The project is for the citizen and I feel that they realize this. Every day, I receive messages from people offering support and giving congratulations.”

“I had no idea of similar projects before doing Wikicrimes, but, recently, I have received some messages of similar initiatives even though with a local scope in Brazil, Argentina and USA,” he added.

“In terms of crime it would be nice if this would show that it’s necessary to publish the crime data that we have in law authorities and institutions,” he said. “If this is a success, I am sure that all the crime data will be available for people, because they will realize there is no way that the authorities can keep it all to themselves.”

Furtado keeps a rolling report on progress with Wikicrimes on his blog.

By David South, Development Challenges, South-South Solutions

Published: May 2008

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Illiterate Get Internet at Touch of a Button

Quick access to information is crucial for development. The remarkable spread of information around the world via the Internet has been one of the greatest achievements of the 21st century. The astounding take-up of mobile phones is another. For those who can afford it or get access to a computer and electricity, the new technology is a powerful tool for economic and social advancement. But what about people who are caught in the technology gap, or who are illiterate?

What about those who have a mobile phone, but are too poor to own a computer – or live in a village without electricity? Or those who can’t read or write? In India, there are 42 million Internet users, 3.7 per cent of the population. But the country is also home to the largest number of illiterate people in the world: 304.11 million (Human Development Report).

A unique solution in rural India is developing a way to connect the illiterate to the Internet. The Open Mind Programme’s Question Box Project, opened its first Box in the village of Phoolpur in September 2007.

The idea is brilliantly simple. An intercom-like white tin box with a phone inside is placed in a village’s public areas. Using the existing phone networks, the user just has to hit a simple button to get an operator at the other end. The operator sits in front of an Internet-enabled computer. The user just asks their question, and the operator turns these questions into search queries. When the computer’s search engine gives back answers, the operator selects the best one and then replies in the user’s native language and in layman’s terms.

The operator’s role goes beyond simply typing questions into Google – the operators use intelligent software that aggregates frequently asked questions (FAQs) to speed up time. FAQs include: school scores, job opportunities, football/cricket scores, and definitions and terms. Operators will also send emails for the users.

The service also has a role to play for the literate who lack Internet access. Students once had to travel to get their exam results, but now they can just ask the Question Box.

The Question Box operates in normal business hours for now. A second Question Box was put into operation at the beginning of 2008 in the village of Ethida, several hours’ drive from New Delhi, and there are plans to expand the Question Box to 30 units connected to 20 operators.

At present, organizers are looking into raising revenue for the service by advertising and sponsorship. Operators are typically homeworkers and well-educated. Mostly female, their parents are happy to have them work from home.

During this first phase, the project team analyzed the results and refined the structure of the service. They are also exploring viable business models to be able to take the service across India and keep it sustainable.

Professor of Psychology Ritu Dangwal from the NIIT Institute, is in charge of working with the villagers to monitor the project. She is also involved in a start-up called Hole in the Wall, which provides Internet kiosks to rural villagers. Dangwal’s research has starkly correlated the relationship between distance from a big city and decreasing quality of education, a graphic example of the damage done by being cut off from good information resources.

The Question Box is based on an idea from Rose Shuman, a business and international development consultant. Shuman had become frustrated that with all the clever people and vast sums of money going into information technology, few were developing low-cost ways to take the power of computers to the people.

“The best thing about this project is that it’s very tangible,” she told the Daily Telegraph newspaper. “It’s not a big infrastructure. You have a box you can see and touch, and a call log of every question.”

By David South, Development Challenges, South-South Solutions

Published: April 2008

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsapril2008issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Insects Can Help in Food Crisis

For many years it was a given that the world’s problem was not a lack of food, but that it was unfairly shared. But as the switch to biofuels gathers pace, farmland is being diverted away from growing food for people, to food for fuel. On top of this, growing prosperity in many countries in the South has boosted demand for better quality food, including grain-devouring meat diets – it takes 10 kilograms of grain to get one kilogram of meat from a cow. The crisis has deeply alarmed the UN’s World Food Programme and the World Bank. In the economic battle for food, the poor are the most vulnerable.

So-called agflation (agricultural inflation) has seen spiraling food prices, which in turn are causing food shortages, hunger and malnutrition around the world. For example, rice in Thailand has jumped from US $400 per 100 kilograms in January, to US $760. World grain stocks are at their lowest level in four decades.

But where can new sources of food be found? And what would be a more efficient use of the world’s resources to feed the growing population? One answer, surprisingly, is insects.

In February this year the UN’s Food and Agriculture Organization held a conference in Chiang Mai, Thailand to devour the dietary value of insects as food and discuss how to harvest more of them. The working group of three dozen scientists from 15 countries probed the role of edible forest insects in food security. They explored insect protein as a contributor to better nutrition, the economics of collecting edible forest insects, methods of harvesting, processing and marketing edible forest insects, and ways of promoting insect eating with snacks, dishes, condiments — even recipes.

The range of insects that can be tapped for food is huge: beetles, ants, bees, crickets, silk worms, moths, termites, larvae, spiders, tarantulas and scorpions. More than 1,400 insect species are eaten in 90 countries in the South. Known as entomophagy, insect eating is a growing industry. Entrepreneurs in the South are making insects both palatable and marketable – and in turn profitable. These innovations are adding another income source for farmers and the poor, and supplying another weapon to the battle for global food security.

Insects have one big advantage as a food source: they are efficient converters of food into protein. Based on the weight of the food required to feed them, crickets are twice as efficient as pigs and broiler chicks, four times more efficient than sheep and six times more efficient than cows. They breed at a far faster rate, and they contain essential amino acids. They are seen as an ecologically friendly alternative to traditional animal rearing.

There are downsides to insects, however. In areas where there is heavy pesticide spraying on crops, insects can retain the pesticides in their bodies. Another key issue is sustainability: insect harvesting in some places has driven species to extinction. Then there is revulsion for some: in Western diets, there is an aversion to entomophagy, although most Westerners are happy to eat honey.

Revulsion at eating of insects is misguided. Most grains and preserved food products contain large quantities of insects or insect fragments mixed in. For example, rice usually contains rice weevil larvae – and they can be an important source of vitamins.

In Africa, 250 edible insects are eaten, from termites to grasshoppers, and have helped people through many food emergencies on the continent.

In South Africa — where edible insects are a multimillion dollar industry — Botswana and Zimbabwe, the local taste for mopane worms is being harvested for profits and nutrition. The worms, which inhabit mopane tress, require only three kilograms of feed (mopane leaves) to produce one kilogram of worms. At a rural factory in Limpopo province, South Africa, the community of Giyani is working to launch a wide range of products made from mopane worms – sustainably harvesting this larvae of the mopane emperor moth, gonimbrasia belina.

The Greater Giyani Natural Resources Development Programme in partnership with scientists at the University of Pretoria, is developing mopane worm products, including essential oils. The worms are usually par-boiled and then sun dried by locals. But at the Dzumeri Mopane Manufacturing Centre, the worms are processed and made ready for market. The local people are being trained in how to harvest the worms hygienically, and how to sort and grade the worms. The products will include deep-fried snacks and seasoning spices. It is critical the worms are harvested in a sustainable way, because in some parts of southern Africa, they have been driven to extinction.

Johnathon Mndawe, the programme manager, is organizing women and youth into co-ops to make viable commercial enterprises. “We expect the product to hit supermarket shelves in 2009,” said Morewane Mampuru, coordinator for the Centre for Scientific and Industrial Research, another partner.

One of the women, mother of four Mthavini Khosa, is excited: “For many years, we have been harvesting worms for food. We are excited because we will soon be doing it to make money.”

In Thailand, insect harvesting is a well-established business. Thais eat more than 150 insects, including crickets, silk worms and dung beetles. Canned crickets are regularly sold in supermarkets. Bugs are easily bought in the markets of Bangkok.

Online vendor Thailand Unique, based in Udon Thani, sells and markets a wide range of edible insects. They include edible scorpions, preserved giant water bugs, roasted grasshoppers, edible big crickets, bamboo worms, crushed giant bug paste, and introducing this year, Bug Snackz and Scorpion Thai Green Curry. There is even a ‘Bug Sample Pack’, containing a mix of seven edible insects and arachnids, all slow roasted for easy snacking.

Another important centre for insect harvesting is Latin America. In Venezuala, the Pemon Indians eat fire ants during the rainy season.

In Colombia, so-called “fatass ant” or “hormiga culona” is eaten like popcorn in movie theatres. Some believe it is a defence against cancer, or a natural aphrodisiac. Eating the ants or culona, has been happening right back to the ancient Guane Indians.

In Santander province, farmers are exporting the ants for sale, some being dipped in Belgian chocolate and sold as a luxury food in London’s Harrods and Fortnum and Mason department stores. The abundant ant population brings in US $11 a pound (kilogram conversion) for the farmers, a doubling in price since 2000.

Farmers in the artist colony of Barichara harvest the ants – though concerns have been raised that they have been over-harvesting the population. Restaurants in the area offer ant-based spreads for bread and an ant-flavored lamb sauce.

“It’s an age-old dilemma for the farmer — should I kill it or eat it?” said Andres Santamaria to CBS News, who was given a $40,000 grant from Santander’s government to develop an environmentally sustainable, export-oriented programme for breeding the ants.

In Tijuana, Mexico, ancient Aztec, pre-Colombian insect meals are on offer at this restaurant, joining a global trend. Cien Anios (“100 Years”), specialises in pre-Colombian, Aztec insect recipes. It is proof there is money in preparing insects for food. Typical dishes include garlicky ant eggs and cactus worms in butter.

By David South, Development Challenges, South-South Solutions

Published: April 2008

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

This work is licensed under a
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