Guatemalan Company Leads The Way For Sustainable Palm Oil In Central America

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By Milagro Espinoza, Sr. Manager Communications Latin America, Rainforest Alliance

Imagine for a moment you are a producer of tropical fruit in Latin America. One day, a hurricane sweeps through the region and wipes out most of your banana farms, destroying every plant in one fell swoop.  What do you do?  In the case of one producer in northeast Guatemala, they decided to grow another crop – oil palm.  And given that this was 1998, not much was known about what would become such a widely-consumed, albeit controversial, crop.

Historically, palm oil was a minor commodity in Latin America. Today only about 6 percent of the global production of palm oil comes from Latin America, compared to the 85 or 90 percent grown in Indonesia and Malaysia.  But Central America is growing fast as a producer of palm oil – between January and June 2017, Central American countries exported a reported $378 million worth of palm oil, which was a 22% increase from 2016 and almost doubling production since 2001. Of that increase, the main exporter of palm oil was Guatemala, which accounted for $166 million.

Today we know that agriculture drives 80 percent of tropical deforestation worldwide, mostly to clear land for more of three major food crops: pasture for beef, soy beans, and maize. Guatemala knows all too well the impacts of deforestation: between 1950 and 2002, the country lost half its forest cover. Mounting scientific evidences shows that forests are a key solution to reducing the effects of climate change, meaning the world cannot afford to lose any more forests. But with the global population rising faster than ever, we must also find ways to feed ourselves. The struggle is producing enough food with pre-existing agricultural land, without clearing more forests for food.

Latin American agriculture has come a long way from the slash-and-burn and widespread deforestation practices of the past—though there is still much work to do. One trend that has caused a wholesale shift in tropical agricultural practices is the advent of certification programs, such as the Rainforest Alliance, UTZ, and the Roundtable on Sustainable Palm Oil (RSPO). Large and small-scale companies have adopted these certification schemes, as well as a host of other tools, to educate consumers and change their business practices.

The Latin American palm oil industry is still developing, but there are signs that suggest Latin American producers are taking note of the explosion of sustainability and deforestation-free commitments from European and North American food companies and want very much to stay ahead of the game.

The same producer who experienced the loss of bananas farms from Hurricane Mitch 20 years ago is now working to help lead the charge on sustainable farming:  AgroAmerica is a family-owned business based in Guatemala City with operations in Guatemala, Panama, Ecuador, Peru, the United States and Europe.  The company was one of the first producers in Latin America to make the decision to make its operations sustainable.

“Admittedly there have been many examples of issues with palm oil production, historically much of it in other parts of the world, not Central America,” said Bernhard Roehrs, Corporate Director of AgroAmerica. “There are of course examples in this region as well, but we believe it can also be done right.”

Case in point; AgroAmerica became the first oil palm company in the world to achieve the top-tier level of certification through the regulations of the Rainforest Alliance Certification program.  It was also the fourth company in the world to obtain the “Preserved Identity” certification through the RSPO.

The 2017 Rainforest Alliance Sustainable Agriculture Standard consists of three levels of performance staring with Level C (good), Level B (better) and Level A (best).  To maintain certification, all farms must show continuous improvement and must achieve Level A by the sixth year of certification.  AgroAmerica’s oil palm plantations (Agrocaribe and Agrofrancia) achieved the top level in just one year’s time.

Roehrs continues, “Certification pushes you to be open and transparent.  We are a private, family-owned business, but have made the decision to be open and transparent, and that comes from the top.  We want to help educate consumers on how to make more sustainable choices in the supermarkets and palm oil is part of that conversation.  We hope to be an exemplary company, to do things right and be transparent, always.”

Determined to be a leader in sustainability and social responsibility, AgroAmerica’s CSR initiative also includes educational programs to address the climate change that is rampant in Guatemala with training programs for employees and local community leaders. And earlier this year employees of both the farms and the corporate headquarters raised nearly over $16,000 USD to provide aid to communities in Guatemala that were most affected by the Fuego volcano.

“AgroAmerica sets a great example, not only for their commitment to sustainability and the excellent conditions they provide for workers on farms, but also for their corporate social responsibility achievements,” said Ria Stout, Chief Regional Officer for the Rainforest Alliance. “The company goes the extra mile for their employees, providing programs in financial literacy and financial aid as well as supporting education programs and medical facilities for all AgroAmerica workers and their families. The wellbeing of workers and their communities is at the core of the Rainforest Alliance mission and it is inspiring to work with companies that make the same level of commitment.”

A large portion of palm oil cultivated in Central America is domestic or regional, with a large percentage going to Mexico.  Although AgroAmerica has local and Mexican buyers, a large part of its oil palm is exported to the United States and Europe.

Though agriculture is the leading cause of deforestation in Guatemala, AgroAmerica’s s oil palm plantations are not the product of deforestation. Indeed, Rainforest Alliance certification prohibits deforestation.  AgroAmerica repurposed the defunct banana farms and turned them into oil palm farms., and then realized the need for sustainably produced palm oil and made the decision to certify their operations. When companies make these kinds of impactful decisions, it is a step in the right direction.

In pursuing their zero-deforestation and sustainability goals, companies such as AgroAmerica can be an example for others and help change the reality on the ground for farmers, communities, and consumers.

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