Commodities

More than 1.5 billion people depend directly on forests for their livelihoods, but about 7.6 million ha of tropical forest are lost every year — an area roughly the size of the Czech Republic. The loss of forests, and the accompanying loss of biodiversity, puts us in a downward spiral: apart from threatening the security and livelihoods of local communities, it reduces our access to clean water, decreases soil productivity and accounts for 12 percent of global greenhouse gas emissions.  

Soy, beef, and palm oil are used in a wide range of foods and goods that are consumed by billions of people around the world. They yield about US$92 billion a year to producers, many of whom are small-scale rural farmers. These commodities are also responsible for about 80 percent of tropical deforestation.  

Managed sustainably, soy, beef, and palm oil have the potential to become engines for rural development, addressing many of the global sustainable development goals for ending poverty and protecting the planet. Transforming these three key commodity supply chains also has the potential to significantly reduce tropical deforestation and stem climate change. 

Anticipated global economic growth and changing diets will strengthen the demand for agricultural commodities and place additional pressure on forests. As demand for agricultural commodities grows, we need to develop forward-thinking business models to manage sustainable commodity production that also maintains forests and important ecosystem services.

The GEF launched the Good Growth Partnership (GGP) in 2017. Instead of treating production, demand, and investment interventions as separate tracks, the Partnership looks at where the layers of the supply chain integrate and overlap to enhance financial incentives and demand for sustainably produced agricultural commodities.  

With the demand for soy, beef and palm oil expected to double by 2030, the Good Growth Partnership works across production, financing, and demand to convene a wide range of stakeholders and initiatives to create lasting, transformative change throughout these key global commodity supply chains. This ambitious effort aims to balance the needs of a growing global population with social and environmental responsibilities.  

The program offers a wide range of support along and across entire commodity value chains. It invests at supply chain points that can address specific barriers. And it also links successful, but isolated initiatives, so they can be replicated throughout the sector. 

A number of initiatives in major producer countries promote sustainable production of commodities. The Roundtable on Sustainable Palm Oil, Tropical Forest Alliance, and Consumer Goods Forum, for example, attempt to influence supply chain actors. They work toward diverting the frontier for commodities away from primary forests and areas of high conservation value. Through its program, the GEF wants to link these efforts with the work of governments and others along the entire global supply chain for soy, beef and oil palm. We also aim to strengthen engagement with a wide range of stakeholders — from smallholder farmers to global corporations.

The Partnership has taken its integrated approach to Brazil, Paraguay, Liberia, and Indonesia. To date, we have contributed to the establishment of 13 sub-national, and national, government-led multi-stakeholder platforms, which are committed to legalizing and implementing long-term action plans for the production of sustainable palm oil, beef and soy. These plans are not UNDPs or the GEFs, but are owned and driven by the countries and their stakeholders.

• Identified 1.35 million hectares of high conservation value forest in North Sumatra, strengthened regulations to protect areas set-aside within plantation concessions, including review of EIAs, zoning regulations, and spatial plans. Approximatley 40,000 smallholder farmers will benefit from legal revisions to require enhanced support from the private sector 

• Reviewed 220,000 hectares of Sime Darby Plantation Liberia’s concession area, one of the largest slated for development in Liberia. The Partnership also helped develop a 10-point plan to protect the Zodua Community Forest through regional dialogue and mediation.  

• Helped 10 West and Central African countries, participating in the TFA 2020 Africa Palm Oil Initiative (APOI), make measurable progress toward achieving the Marrakesh Declaration for the Sustainable Development of the Palm Oil Sector in Africa.  

• Launched the Asia Learning & Exchange Program, which provides grants for innovative research and knowledge exchange between Asian governments and companies which have a strong demand influence on palm oil, beef and soy markets

In GEF-7, the Food Systems, Land Use, and Restoration Impact Program will deepen engagement on beef, palm oil, and soy supply chains, and broaden its focus to include cocoa and coffee. Maintaining natural habitat is a critical aspect of the long-term pathway toward more sustainable food systems and land use, especially in the tropical forest regions. 

The GEF will support efforts to engage global and national supply chain actors — including smallholders and other producers, buyers, traders, retailers, and financing institutions — to further stimulate both supply and demand for deforestation-free agricultural commodities. The ultimate goal is to make deforestation-free a viable and mainstream business model. 

The GEF will also support efforts to strengthen existing weaknesses in the supply-chain approach, specifically the on-the-ground operationalization of deforestation-free commitments made by corporations over the past five years. This will be done while simultaneously assisting governments that have included addressing deforestation as a key national policy priority in progressing toward this goal. Despite sharing similar objectives, corporations and governments have, to a large degree, acted in isolation regarding approaches to addressing tropical deforestation.  

One critical step in converting these aspirations into action is, therefore, to work with government and major actors from across the supply chain on multi-stakeholder platforms like the Good Growth Partnership that achieve deeper collaboration, coordination, and understanding on advancing deforestation-free commodity implementation. Promising jurisdictional approaches, where comprehensive planning on a sub-national level aligns incentives between actors and generates multiple benefits for companies, governments, and local communities, may be targeted for platform development so that key actors from jurisdictions can exchange experiences, share successes, and inspire replication across countries and commodities.