© Trupti Patel Doshi, 2/22/2011, Cultivation

“For Pepsi, a Business Decision with Social Benefit”

A new venture by PepsiCo enables small farmers in San Gabriel, Mexico to sell their corn directly to PepsiCo, which guarantees the price it will pay for the crops upfront. “The deal enables the small farmers to secure credit to buy seeds and fertilizers, crop insurance and equipment.”

“PepsiCo’s work with the corn farmers reflects a relatively new approach by corporations trying to maintain a business edge while helping out small communities and farmers….The company will spend roughly $52 million over the next seven years to buy crops that may eventually produce 40,000 tons of sunflower oil. That oil will begin replacing the 80,000 tons of palm oil it needs each year for products made in Mexico. The new oil will improve the nutritional quality of the foods it makes and will lower transportation costs, since palm oil must be imported from Asia and Africa. That, in turn, will have environmental benefits.”

Farmers are responding well to this new venture which is bringing an increase in income and “are applying for a government grant to buy a tractor, which they say will increase productivity and yields.”

One farmer stated, “It’s just the beginning of what we might do.”

 

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