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Unilever Backs Small Farmers in Azerbaijan

Unilever has announced a unique partnership with Oxfam to help farmers in developing countries including in Azerbaijan, to join the hugely-lucrative supply chain for the global consumer giant.

The move is part of Unilever's push to put a "social mission" at the centre of its business as consumer-facing brands try to rebuild following the financial crisis.

Organisations such as Oxfam believe there is now a significant number of opportunities with similar corporate/non-governmental organisation tie-ups.

The partnership with Oxfam comes after a two-year study by the NGO into supply chains in developing countries. It looked at how global corporates sourced raw materials and investigated ways of widening the pool of suppliers.

After sharing its findings with Unilever, the company agreed to buy 20pc of selected dehydrated vegetables from small farmers. The first project will begin in Azerbaijan next year with a commitment to buy onions for use in its food brands.

Unilever, which was voted Most Admired Company in this year's Management Today awards, is the maker of Knorr Soups and also owns brands such as Flora and Hellmann's.

"Historically, companies in the food and drink sector have tried to improve efficiency and minimise costs by simplifying and standardising their international supply bases," said Barbara Stocking, Oxfam chief executive.

"But now is the time for a rethink. Our ongoing work with Unilever shows that businesses are starting to consider how they source their produce to have an impact on the lives of people living in poverty. New ethical business models which incorporate marginalised farmers are an exciting step forward and a solution that can bring business benefits too. Unilever is among the first global food manufacturers to make a commitment on this scale."

Paul Polman, Unilever chief executive, has been at the forefront of efforts to move companies away from a simple short-term focus on profit margins. He said at the World Economic Forum at Davos last January that short-termism often meant that the longer-term needs of companies were ignored.

Speaking about the new deal with Oxfam, Mr Polman said: "Unilever's Sustainable Living Plan sets out our ambition to double the size of our business while halving our environmental impact.

"We want to do this in a way which maximises the positive social impact of our business. One major element of this plan is to promote better livelihoods by incorporating 500,000 smallholder farmers and small-scale distributors into our supply chain by 2020, and this new partnership with Oxfam is an important step in achieving this goal.

"Simultaneously, we have committed to sourcing 100pc of our agricultural raw materials sustainably by 2020, and this project provides the opportunity to work with Oxfam to share with them our industry-leading knowledge on sustainable agricultural practices."

Source: The Telegraph

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