Wal-Mart sets sights on sustainable agriculture

by Keith Nunes
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BENTONVILLE, ARK. — Wal-Mart Stores, Inc. plans to extend its sustainability efforts to improve agriculture production practices around the world. The effort includes three broad components, including supporting farmers and their communities; producing more food with fewer resources and less waste; and sustainably sourcing key agricultural products.

“More than 1 billion people around the world rely on farming and hundreds of millions of them live on less than $2 a day,” said Mike Duke, president and chief executive officer of Wal-Mart. “Globally, with a booming population, food production must increase roughly 70% to feed 9 billion people in 2050. Through sustainable agriculture, Wal-Mart is uniquely positioned to make a positive difference in food production — for farmers, communities and customers. Our efforts will help increase farmer incomes, lead to more efficient use of pesticides, fertilizer and water, and provide fresher produce for our customers.”

To support farmers and their communities, Wal-Mart outlined several initiatives such as a commitment to sell $1 billion in food sourced from 1 million small and medium farmers. Within the United States, the company said it intends to double its sale of locally sourced produce and increase its purchase of select U.S. crops. The company defined the term local as crops grown within a state and sold within a state.

The world’s largest retailer is focusing on the agriculture supply chain in the same manner in which it approached its own supply chain. When the company announced its initial sustainability initiative five years ago it focused on removing waste from its supply chain to improve efficiencies. In its effort to produce more food with fewer resources and less waste the company plans to follow a similar pattern.

By 2011 the company expects its largest growers to provide it with detailed analyses of their production practices, drilling down to specifics such as how much fertilizer and water are used to produce a specific crop.

“We will do this through our Sustainability Index by asking our top growers for the first time to provide detailed information on their agricultural practices,” Mr. Duke said. “This will lead to more efficient use of water, pesticides and fertilizer, and ultimately, more sustainable practices.”

Leslie Dach, executive vice-president of corporate affairs, added, “And as we’ve seen from our other work, this kind of transparency encourages efficiency, innovation and the optimization of resources.”

The company also said it will invest $1 billion in its global supply chain over the next five years in an effort to deliver fresher products to its customers and reduce waste.

Wal-Mart has set a goal of reducing food waste in its emerging market stores and clubs by 15% and by 10% in stores and clubs in its other markets by 2015.

In its effort to sustainably source key agricultural products, Wal-Mart will focus on two specific products initially: palm oil and beef. The company announced that by 2015 all of its private label products will only use sustainably sourced palm oil.

The retailer also plans to expand its existing practice in Wal-Mart Brazil of only sourcing beef that does not contribute to the deforestation of the Amazon to all of its companies by the end of 2015. The company said 60% of deforestation in the Brazilian Amazon is related to cattle ranching expansion.

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