Cocoa & Forests Initiative

Progress Report 2018 - 2019

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Contents

Foreword

Key Facts & Figures

What is the Cocoa & Forests Initiative?

What are the key commitments in the Cocoa & Forests Initiative?

UPL: Sustainable Production and Farmers’ Livelihoods

Looking Forward to 2020 and Beyond

Annex 1: Tracking Tables

Annex 2: Results Stories

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Foreword

With UPL taking over from ArystaLifeScience as the only agriculturalinputs company in the Cocoa &Forests Initiative, we are extremelyproud to be a signatory and haveenjoyed being a part of theprogramme’s initiation, growth anddevelopment in its first year.

The relevance of the initiative’s aimshas only grown in importance overthe past 12 months and we believethat it is more urgent than ever thatwe work together to deliver a visionof prosperous, respectful andsustainable agriculture that plays aleading role the fight againstdeforestation in West Africa.

Across our global business, UPL hasmade it a responsibility to prioritiseopenness and collaboration so thatour expertise in research andinnovation and around practicalagronomic solutions can be sharedas widely as possible for the benefitsof farmers and forests alike.

Our mission with OpenAg is to builda new working model that bringstogether all the different players inthe food system to generate a muchdeeper impact on society, whereagriculture is properly valued,

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food is sustainable, and smallfarmers grow and prosper.

So as we reflect on this first year withCFI and look ahead to 2020 andbeyond, we are confident that theorganic and climate-smarttechnologies we are developing formpart of the solution for intensiveagroecology farm models.

From bio-controls and bio-stimulantsto innovative water retentiontechnologies, we are working harderthan ever to facilitate smallholders’access to transformative inputswhich will allow for the sustainableco-existence of cocoa orchards,forests and thriving communitiesacross West Africa.

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Diego CasanelloGlobal COO - Crop Protection

UPL Ltd

Key Facts & Figures

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CFI Pillar 2:Sustainable Production

and Farmers’ Livelihoods

Our Integrated Offer

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What is the Cocoa & Forests Initiative?

The Governments of Côte d’Ivoire and Ghana and the world’s leading cocoa and chocolatecompanies signed landmark agreements in November 2017 to end deforestation andpromote forest restoration and protection in the cocoa supply chain.

This public-private partnership – called the Cocoa & Forests Initiative (CFI) – has beenorganized by the World Cocoa Foundation (WCF), IDH - the Sustainable Trade Initiative,and The Prince of Wales’s International Sustainability Unit (ISU), in partnership with theGovernments of Côte d’Ivoire and Ghana. The Prince of Wales launched CFI in March 2017and reviewed implementation progress in November 2018.

The Frameworks for Action for Côte d’Ivoire and Ghana define core commitments, verifiableactions, and timebound targets required for a deforestation-free and forest-positive supplychain.

The Governments of Côte d’Ivoire and Ghana establish national strategies, policyenvironments, and governance structures for CFI implementation. They ensure that CFI islinked to similar initiatives with other commodities, and fully aligned with the nationalREDD+ strategies and other relevant national strategies and plans. They provide keyoperational guidance, and baseline economic, environmental, and social data, to helpcompanies identify and plan the most effective and efficient private investment activitiesfor CFI.

The Governments have prepared comprehensive National Implementation Plans (Côted’Ivoire, Ghana) that outline public sector priorities, actions and timelines. Since 2017, bothgovernments have fulfilled commitments on the key building blocks for successful CFIimplementation, including important revisions to the legal framework for sustainableforest management, adoption of World Bank environmental and social safeguardstandards, and preparation and sharing of up-to-date boundary maps of protected areas.

In March 2019, 34 CFI signatory companies , accounting for about 85% of global cocoausage, released initial action plans for 2018-2022. These initial plans detail how the privatesector will deliver the commitments spelled out in the Frameworks for Action. Eachcompany explained how they will support the Framework objectives, based on their role inthe supply chain, their strategic priorities, and their cocoa sustainability goals. WCFpublished a summary of the initial action plans for the cocoa and chocolate industry (Côted’Ivoire, Ghana).

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On the 2020 International Day of Forests, the Cocoa & Forests Initiative companies andgovernments of Côte d’Ivoire and Ghana reported on the first year of implementation*.Companies published individual reports on progress and outcomes related to theimplementation of their specific actions. The following is the aggregate progress report ofcompany actions.

CFI has been supported by several global development partners, including the DutchMinistry of Foreign Affairs, the German Federal Ministry of Economic Cooperation andDevelopment, the Global Environment Facility, the Green Commodities Program of theUnited Nations Development Program, the International Finance corporation, the UnitedKingdom’s Department for International Development, the United States Agency forInternational Development, and the World Bank

CFI is coordinated closely with a wide range of global and local environmentalorganizations and partnerships, including the Amsterdam Declaration Partnership, ClimateFocus, the German Initiative on Sustainable Cocoa, Partnerships for Forests, Proforest,Rainforest Alliance, Tropical Forest Alliance, World Resources Institute, World Agroforestry(ICRAF), and the World Wildlife Fund.

The industry is committed to ending deforestation and forest degradation throughout theglobal supply chain. Already in 2018, we have expanded CFI from West Africa to LatinAmerica, with the signing of a new Framework of Action in Colombia in July 2018.

*CFI Signatories:

UPL (formerly Arysta LifeScience), Barry Callebaut, Blommer Chocolate Company (1), CargillCocoa and Chocolate, Cémoi (1), Chocolats Halba (2), Cocoanect, Cococo Chocolatiers,ECOM Group (2), Fazer, Ferrero, GCB Cocoa (1), General Mills Inc., Godiva Chocolatier Inc.,Guittard Chocolate Company, The Hershey Company, Indcresa (2), Kuapa Kokoo (2), Lindt& Sprüngli Group, Marks & Spencer Food, Mars Wrigley Confectionery, Meiji Co. Ltd. (2),Mondelēz International, Nestlé, Olam Cocoa, PBC Limited (2), Sainsbury’s, SIAT (1), Sucden,Tesco, Toms Group (2), Touton, Unilever (1), Valrhona, and J.H. Whittaker & Sons (2).

(1) Côte d’Ivoire only(2) Ghana only

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What are the key commitments in the Cocoa & Forests Initiative?

Cocoa & Forests Initiative activities proceed from three priorities: (1) forest protection andrestoration, (2) sustainable production and farmers’ livelihoods, and (3) communityengagement and social inclusion.

The first priority is the protection and restoration of forests that have been degraded. Tothis end, the governments and companies have pledged no further conversion of forestland for cocoa production and have committed to the phased elimination of illegal cocoaproduction and sourcing in protected areas.

Both countries are introducing a differentiated approach for improved management offorest reserves, based on the level of degradation of forests. In 2019, the government ofCôte d’Ivoire adopted and published a new forest code which, among other things, putforth policies for the promotion of cocoa agroforestry to restore degraded land, improveforest cover, and promote sustainable livelihoods and agriculture in the classified forestsand rural zones. The Ivorian government is currently finalizing the operational decreesthat provide further guidance on the new forest policies. Both governments have sharedmaps on forest cover and land-use, and are currently updating the maps, including socio-economic data on cocoa farmers, which will further inform private sector investments.

To ensure effective implementation and monitoring of these commitments, companieshave pledged to develop verifiable monitoring systems for traceability from farm to thefirst purchase point for their own purchases of cocoa, and to work with governments toensure an effective national framework for traceability encompassing all traders in thesupply chain. The companies will similarly share information with the national satellitemonitoring platforms (in development) to effectively monitor progress on CFI, as well asproactively address threats of new deforestation.

The next critical priority is sustainable agricultural production and increased farmerincomes. These are essential pre-requisites for reducing pressure for agriculturalencroachment into forests and strengthening the resilience of cocoa farmers to climatechange.

The governments and companies are accelerating investment in long-term productivity ofcocoa in order to grow “more cocoa on less land.” Key actions include provision ofimproved planting materials, training in good agricultural practices, soil fertility, landtenure reform, and capacity building of farmers’ organizations. Sustainable livelihoods andincome diversification for cocoa farmers are being accelerated through food cropdiversification, agricultural inter-cropping, and development of mixed agroforestry systemsand shade-grown cocoa.

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The final area of focus is strong community engagement and social inclusion, with aparticular focus on women and youth. The governments and companies have committedto full and effective consultation and participation of cocoa farmers in the design andimplementation of key actions, and promotion of community-based management modelsfor forest protection and restoration. The governments have adopted social andenvironmental safeguards are assessing and mitigating the social impacts and risks of anyproposed land-use changes on affected communities.

The set of public-private actions represent unprecedented commitments on forestprotection and restoration, and sustainable cocoa production and farmer livelihoods.These combined actions, which are aligned with the Paris Climate Agreement, will play acrucial role in sequestering carbon stocks and thereby addressing global and local climatechange.

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UPL Programmes & Progress

Pillar 2: Sustainable Production and Farmer’s Livelihoods

UPL has continued to play a centralrole in furthering the aims of theCocoa and Forests Initiative, actingas a technical partner of the cocoaindustry on the ground.

In Ghana and Côte d’Ivoire, we havecontinued to lead work aroundSustainable Production andFarmers’ Livelihoods through oureffort to train farmers and producerorganisations in the most recentGood Agriculture Practices (GAPs)and introduce innovativetechnologies for a more sustainablecocoa farming.

Ghana

In Ghana, we are well on our way tomeeting our 2022 target ofreaching 6,500 farmers throughdirect investment, with 3,010farmers trained in 2018 and 2,958farmers reached in 2019 by ourN’Guso Papa programme.

Côte d’Ivoire

In Côte d’Ivoire, we have madeexcellent progress in meeting our2022 target of reaching 10,000farmers through direct investment,with 3,994 farmers trained in 2018and 2,267 farmers reached in 2019.

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This work is being led through anumber of UPL’s outreach initiativesand with a number of industrypartners.

In 2018, UPL worked with 904individual farmers through ourproprietary “Applique Bien”programme, another 1,750 throughfield training days on demonstrationplots and a further 260 farmers aspart of our integrated project withexporter OCEAN, also known as our‘three step approach” for growingmore cocoa on less land.

That same year UPL also improvedthe lives and livelihoods of 60farmers with Touton and 1,020farmers with Olam using a full cocoainput package including ‘Banzai’, thefirst ever bio-stimulant createdexclusively for use with cocoa trees.We are proud to announce that wewere able to achieve +30% yieldincrease on average, thuscontributing to a significant +18%increase in farmers revenue.

TrainingPillar 2: Sustainable Production and Farmer’s Livelihoods

In 2019, Callivoire worked with 942individual farmers through our“Applique Bien” programme, 350farmers through demo days and600 farmers through our integratedprogramme with OCEAN.

Our external industry anddevelopment partners included 104farmers reached through our workwith Touton, 200 farmers withGermany’s ‘Gesellschaft fürInternationale Zusammenarbeit’(GIZ) and 71 farmers throughCocoanect.

Our 3-Step Programme

UPL believes in interventions thatbring lasting change for growers.This means our technical solutionsand refreshed agri- practices areintroduced progressively,persuasively and through aninnovative three-step approach:

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Training Campaign

Farmer Adoption + MonitoringAnd Evaluation

Demonstration Plots:GAPs + input package

TrainingPillar 2: Sustainable Production and Farmer’s Livelihoods

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Côte d’Ivoire

UPL continues to lead severalprogrammes in Côte d’Ivoire toaddress sustainable production andfarmers’ livelihoods in the past 12months.

We are committed to powering newlevels of sustainable growth, and tohelp generate a deeper impact onsociety, and where agriculture isproperly valued, so much of whichrelies on farmers growing andprospering. Our work in promotingfarm-level crop diversification isaimed at creating greater economicand climate resilience for smallgrowers so that increasedprofitability doesn’t rely on morehectares under cultivation.

We have made significant progresswith farmers applying cropdiversification through directinvestment, with 288 farmersapplying crop diversification (maize)in 2019. This work is being led withour industry partners Cargill, withwhom we reached 38 farmers, andwith Barry-Callebaut with whom 250farmers have applied cropdiversification.

In 2020, programmes will also bescaled to include rice and veggies.

UPL is also contributing tosustainable production and farmers’livelihoods through financialinclusion practices via our financialproduct offering to growers in Côted’Ivoire. Our financial products havecreated a new route for farmers toaccess to sustainable inputpackages and bio-solutions,enhancing yield and quality ofcocoa crops, contributing toimproved farmer health andlessening environmental impact.

288Farmers applyingcrop diversification in 2019.

Crop DiversificationPillar 2: Sustainable Production and Farmer’s Livelihoods

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The objective of UPL’s services is tomove towards a more responsiblecocoa farming, through greaterrespect for producers and theirenvironment.

This relies on appreciating thewider societal needs of cocoagrowing communities andrecognising how and where UPLcan provide assistance. In the last12 months, one of our mostsuccessful programmes addressingSustainable Production andFarmers’ Livelihoods has been topromote greater financial educationand resilience through farmersavings accounts.

We have made significant progressin meeting out 2022 target of10,000 farmers with savingsaccounts through directinvestment, with 3,808 farmershaving savings accounts in 2019.

This work is being led with ourmicrofinance institution partnerAdvans and has been delivered in47 cooperatives in Côte d’Ivoire. Asof 2019, more than 100 millionFCFA worth of input credits havebeen granted.

3,808Farmers with savings accounts in 2019.

Financial InclusionPillar 2: Sustainable Production and Farmer’s Livelihoods

In 2019, 11,500 farmers wereoffered a UPL financial product(input credit) with Advans in pursuitof our 2022 target of 57,700farmers being offered a UPLfinancial product through directinvestment.

Looking Forward to 2020 and Beyond

Since 2018, signatory companieshave been working to fulfil theircommitments to end deforestationand restore degraded forests in thecocoa sector.

In 2019, the governments of Côted’Ivoire and Ghana delivered onnumerous commitments whichhave informed company planning.Companies will now be able tofurther develop their activities,moving from planning toimplementation. As thegovernments continue to providecritical information (e.g. socio-economic assessments, updatedland-use maps, operational decreesfor implementation of the newforest code), companies willcontinue to ramp up their deliveryof CFI activities in alignment withgovernment priorities. This willinclude identifying opportunities forlandscape level collective action, aswell as building partnerships withglobal development partners todrive forest positive impact on theground.

UPL: Looking Ahead

First initiated by Arysta Life Science,UPL’s W&C Africa team has led acommitment to collaborations forthe last 30 years and is developing

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a new initiative to scale thisapproach with the wider UPL teamand across the African continent.

Success in providing state-of-the-art agricultural inputs andinnovative technologies tosmallholder farmers, particularly inWest and Central Africa, relies onovercoming the barrier of reachingthem where they are - often in verydispersed rural areas with poortransport connections, investing inintensive extension techniques tomake change happen, providefinancial support to make thesechanges easier to attain and easierto preserve.

UPL has always relied on its long-term relationships in the region,with partners throughout the valuechains of each product, withdevelopment institutions and withmicro-finance organisations.

The P4S concept will work withUPL’s relationships in West Africaand across the African continent toidentify areas of shared interest,opportunity and concernthroughout the value chain andalign with the efforts of governmentand development organisations.

P4S will work to:

• Impact and benefit more farmers

• Introduce innovative, sustainable, climate-smart technologies

Looking Forward to 2020 and Beyond

In 2020, UPL will be launching newcollaborations in the value chain,pursuing our role as a technologycatalyser with several innovationswhich will include:

• The introduction of a new water-retention technology (called Zeba®)

• The registration of new Bio-fungicide for cocoa

• The development of a fully organic and low residue technical itinerary to answer to the most recent food chain requirements.

Partnerships for Sustainability

Our collaboration initiative hasrecently been formalised in Westand Central Africa (W&CA) underthe new ‘Partnerships forSustainability’ (P4S). In 2020 andbeyond, collaboration will be coreto UPL’s OpenAg purpose andcontribution to CFI.

Greater collaboration represents acompelling opportunity to scale-upinterventions, catalyse innovationtechnology, create new routes tomarket and ultimately reach morecocoa growers.

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Annex 1:Tracking Table

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Côte d’Ivoire

Commitments Actions Indicator2022 Target

through direct

investment

# through direct

investment in 2018

# through direct

investment in 2019

Sustainable Production and Farmer Livelihoods

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Promote investment in long-term productivity of high quality cocoa in environmentally sustainable manner and grow “more cocoa on less land.”

11.3

Train farmers and producer organizations in the latest Good Agriculture Practices (GAPs)

# farmers trained in GAPs 10,000 3,994 2,267

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Promote sustainable livelihoods and income diversification for cocoa farmers

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Promote farm-level crop diversification # farmers applying

crop diversification N/A 288

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Promote financial inclusion and innovation to deepen farmers’ access to working capital and investment funds for production andfarm renovation

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Promote farmer savings

# farmers in supply chain with a savings

account10,000 3,808

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Offer financial products to farmers

# farmers offered a financial product 57,700 11,550

Annex 1:Tracking Table

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Ghana

Commitments Actions Indicator2022 Target

through direct

investment

# through direct

investment in 2018

# through direct

investment in 2019

Sustainable Production and Farmer Livelihoods

11.

Promote investment in long-term productivity of high quality cocoa in environmentally sustainable manner and grow “more cocoa on less land.”

11.3

Train farmers and producer organizations in the latest Good Agriculture Practices (GAPs)

# farmers trained in GAPs 6,500 3010 2958

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Annex 2:Results Stories

Stephanie Koffi

Applique Bien & N’Guso Papa

Eric Ahoussou, Trainer

“I am Eric Ahoussou, I am a travellingtechnical engineer from Arysta/UPL incharge of the training unit of theApplique Bien programme.

When the producers are not trained,we often find that a lot of products arebeing wasted and the producers losemoney.

What makes this programme sospecial is that the emphasis is on thepractical side of things.

A good yield means that the producercan benefit from a sizeable incomeand in turn take care of himself and hisfamily.”

Applique Bien & N’Guso Papa

Behibro Loukou Alfred, Cocoa Farmer,Gagnoa, Ivory Coast

“I started my cocoa crop in 1988 whenI left school. I have 2.5 hectares onwhich I am growing cocoa in the oldstyle. If we don’t control pests we’lllose 40 to 50 percent of ourproduction. So if we don’t use cropprotection products we are lost.

Today we have mirids in our fields,cocoa pod borer and green bugs,that is problematic for us at certainperiods.

So now we have a programme withour partners who give us products,they bring them to us to apply themin our plots.”

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Annex 2:Results Stories

Stephanie Koffi

UPL: Integrated Approach

John Street, Ex-UPL Head ofRegulatory Affairs, Europe

“UPL/Arysta’s business model is a littlebit different to that of conventionalcompanies operating in their businessarea. We like to really understand thegrowers' need and get close to thefarmer and understand what hisproblems are and then try and find asolution based on the products wehave in our portfolio which may beconventional products or they may beBioSolutions.

Our products are thoroughly tested toensure that they can be applied safelyin these environments. We developlabels that are targeted at meetingspecific grower needs and we providesafety instructions for their use whichwill enable them to treat all the pestsand diseases the have, but mostimportantly to improve the efficiencyof products which leads to a betterincome for the grower in the longrun.”

Applique Bien & N’Guso Papa

UPL is very proud of the best-practice, safety and applicationprogrammes that have beendelivered and expanded acrossWest Africa. In Côte d’Ivoire we aredelivering the Applique Bienprogramme and in Ghana we arerolling out the N’Guso Papaprogramme, each with the sharedaim to provide small scale farmersin Africa with free training andadvice on protective equipment,sprayer use, product labels andsafety.

These programmes are the first oftheir kind in Ghana and Côted’Ivoire – having first been trialledby UPL with smallholders in Brazil –and we are fast scaling thesuccessful cocoa programmes thathave been delivered in West Africato new regions and for new cropsincluding vegetables, rice andmaize.

Our purpose-built mobile trainingunits travel to villages across WestAfrica to educate local farmers onpesticide application and operatorprotection through practical andinteractive training sessions.Applique Bien and N’Guso Papa

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have both received excellentfeedback from Lead farmers,sprayers and cooperative leaders,many of whom had never receivedsuch training before.

We will be working to ensure thatour training programmes not onlyinstil better practice in pesticide usebut also contribute towardsimproved productivity and helpsecure farmers’ income in Africa.

2019-2020 Goals

• Maintain the number of people trained ataround about 12, 000 in 2019 in W&CA.

• 1 new mobile unit and 1 new trainer in WestAfrica.

• Enhance the quality of our training andmaintain the continuous training process forour teams.

• Develop new tools and enhance PersonalProtective Equipment (PPE) use.

• Reinforce our relationship with our partners.

• To benefit from synergies with othercountries.

Annex 2:Results Stories

Farm Service Centres

Since 2019, UPL has been workingwith Cultivating New Frontiers inAgriculture (CNFA) to develop FarmService Centres in Côte d’Ivoire.

Each of the five centres will work toimprove cocoa production, enableproducers to increase theirincomes, and raise the standard ofliving for their families.

UPL’s Farm Service Centres havebeen developed under theMaximising Opportunities in CocoaActivity (MOCA) project, focused onincreasing the productivity andefficiency of actors in the cocoavalue chain in Côte d’Ivoire.

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Annex 2:Results Stories

UPL’s Farm Service Centres willimprove the professionalism ofIvorian cocoa producers andretailers, and promote access tothe highest-quality inputs andservices.

8,000 H/a of land benefiting from improvedcultivation and technology

20,000 Individuals benefiting from MOCAactivities in Côte d’Ivoire

5 Farm Service Centres established by theMOCA project

$150k In matching grants to Farm ServiceCentre franchise owners

3-Step Approach

UPL’s core mission is to cultivateprosperity through advancedagriculture, concrete agronomysolutions and a farmer-centricapproach.

The work UPL is leading with cocoafarmers in Côte d’Ivoiredemonstrates both the method andthe benefits of this approach.

UPL’s integrated BioSolutionspackage is a new initiative that hasrefreshed agri-practices with cocoagrowers, delivering quick returnson investment, new methods fordriving economic growth andreducing the amount of land used.

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Annex 2:Results Stories

32 Cooperatives involved

2,216 Farmers reached within 2 years

2,416 Ha of intensive cocoa farmsdeveloped

+30% Average yield increase

+18% Average revenue increase

UPL believes in interventions thatbring lasting change for growers.This means our technical solutionsand refreshed agri-practices areintroduced progressively,persuasively and through aninnovative three-step approach.

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André Monteiro

Marketing and Communication ManagerWest and Central AfricaAndre.Monteiro@upl-ltd.com

Florent Clair

Coordinator: Partnerships for SustainabilityWest and Central AfricaFlorent.Clair@upl-ltd.com