CP Foods Showcases Social Returns of Contract Farming Scheme

Charoen Pokphand Foods Public Company Limited (SET: CPF) in collaboration with Social Value Thailand recently unveil social impact outcomes of income-guaranteed contract farming of fattening pig scheme. The result shows that the participants received the 4.28 times social return on investment (SROI) with a total social achievement value of THB 4,574 million.

Somporn Jermpong, Executive Vice President for swine business of CP Foods, said that the program has two main goals: to improve quality of life for the farmers, families and the surrounding communities and to sustainability of environment in according with UN SDGs. To asses the impact of this program, the company conducted Social Return on Investment (SROI) on the Income – Guaranteed Contract Farming of the Fattening Pigs in order to manage social achievements derived from the project implementations in terms of costs, benefits and risks, as well as compare them to investment opportunities in various fields to ensure efficient and effective resource and budget allocations.

The measurement collected data from 4 stakeholder groups, comprising farmers in the project; CP Foods Operator Community and government agencies and business partners involved in the project such as transport companies, construction contractors, banks, etc. The calculations have been verified by LRQA (Thailand) Limited.

According to the assessment, 3,093 farmers participating in the project received 4.28 times the Social Return (SROI) or a total achievement value of 4,574 million baht, divided into: 4,144 million baht in economic achievement value, 376 million baht in social achievement value, and 54 million baht in the environmental achievement value.

“The SROI result reflects the success of the contract farming project. The swine farmers and their families can enjoy financial stability and other tangible and intangible benefits outcomes. Moreover, the program also offers positive impacts for the communities and environment,” said Somporn.

Since 1975, CP Foods has operated a project to promote contract farming for small scale farmers. Somporn says that farmers in the program are deemed the company’s key stakeholders according to the concept of Farmers are Life Partners. Therefore, CP Foods aims at creating career stabilities and generate incomes and well-being for farmers, which also helps to promote the country’s economic stability and the world’s food security.

Asides stable income, Somporn added that farmers have reduced risk of damage from raising pigs compared to running their own business as entrepreneurs. The system also guarantees that there is a demand for their produce. Moreover, CP foods has continuously developed a farm model to improve efficiency and reduce risk as well as passed on to the contract farmers. As a result, CP Foods’ contract farmers have been trusted by financial institutes. They have credit to apply for loans from banks or funding sources. There is no need for them to borrow money from loan shark or other sources at high interest rates. The assessment also pointed out that CP Foods’ contract farmers are less worries about debt or unemployment during the COVID-19 pandemic.

In term of Social Achievement, the assessment shows improvement in quality of life. farmer’s children access to better education. The farmers have more time with their families and their health condition also improved. In addition, farmers have improved relationships with communities.

CP Foods has continuously developed a farm model in the project promoting fattening pig contract farming. At present, it has received the status of a green farm, which requries public hearing to obtain testimonies from communities and must be located in an area with sufficient natural water resources to avoid negative impact on the surrounding communities.

A biogas system has been installed to treat pig manure and water used for raising pigs in order to reduce odors and methane released into the atmosphere. With the goal of zero discharge of water, treated water will then be used to fertilize trees. As a result, communities and farms can coexist harmoniously.

Additionally, CP Foods Income-Guaranteed Contract Farming of the Fattening Pigs Scheme also helps strengthen the country’s economy in other areas as helping to generate stable income for business partners, Factory contractors, banks and local authorities also earn more from farm taxes.

CP Foods Contract Farming Project supports nine United Nations Sustainable Development Goals: No. 1, No Poverty; No. 2, Zero Hunger; No. 4 Quality Education; No. 7 Affording and Clean Energy; No. 8 Decent Work and Economic Growth; No. 10 Reduced Inequality; No. 12 Responsible Production and Consumption; No. 13, Climate Change; and No.15, Life on Land.