Agriculture is the foundation of the global food system and the root of PepsiCo’s business. Yet, even as demand for food increases, environmental and social challenges from poor soil quality to water-scarcity and farmer poverty threaten farmers’ ability to grow the crops the world needs.
Indian farmers feel this pressure more than ever. The country’s average crop yields are still only between 30 and 60 percent of the best sustainable crop yields of other nations. For a country with a growing population, a quarter of the world’s hungry people and 50 percent of its workers employed in the agricultural sector, it’s striking that agriculture accounts for just 17-18 percent of GDP. Improving productivity in the sector must be a priority.
Indian farmers are also vulnerable to the impacts of climate change and over-exploitation of natural resources. This is especially the case when it comes to water. 80 percent of Indian water use is dedicated to agriculture and many parts of the country are struggling with worsening water scarcity.
Over nearly 30 years, PepsiCo has built close relationships with the approximately 24,000 farmers across 13 Indian states who grow, among other crops, 100 percent of the potatoes used to make the Lay’s and Uncle Chips sold in India.
We have worked with them to improve their crops and their livelihoods, from setting up a mini tuber lab for advanced processing of Frito-Lay potato varieties, to bringing the industry ecosystem together to supply pest management, machinery, insurance and loans, and offering assured buy-back of produce at pre-agreed prices to improve income certainty.
And in 2017, PepsiCo launched our Sustainable Farming Program (SFP) in India. The SFP is a global initiative focused on promoting responsible agricultural practices that can boost crop yields, improve resiliency and farmer livelihoods, while also advancing respect for human rights and protecting the local environment and natural resources.
Over four-fifths of Indian farmers are smallholders. To help adapt the SFP to their specific needs, the PepsiCo India team pioneered the use of ‘Demonstration Farms’, whereby the team identifies farmers with particularly strong local networks and a true willingness to experiment. On these farms, a portion of land is set aside to demonstrate next generation farming practices and technologies aligned with the SFP, such as water-efficient drip irrigation technology, advanced nutrient management approaches and up-to-date health and safety practices.
We measure the impact of these practices against important performance indicators, including social, environmental and economic sustainability criteria and core business metrics such as yield and quality. This helps the PepsiCo team, our partners and the farmers to learn together what works locally. Effective practices can then be scaled up and applied across more farms.
Having begun in India with just six farms, PepsiCo’s Demonstration Farm program today includes 32 farms in the country. It is also being applied internationally, with a fast-growing network of over 100 farms worldwide. And it is producing outstanding results. In the crop year 2018-19, the average net yield on our Demonstration Farms in India went up by 8 percent, leading to an increase in income for the farmers of US$107 per acre. Average greenhouse gas emissions per ton of potatoes were also reduced by 15 percent*.
To enhance this positive impact, our host farmers invite other nearby farmers for a series of ‘field days’ to allow them to see the results first-hand, and compare traditional farming against the best practices we have demonstrated. By accessing these local peer-to-peer networks, PepsiCo hopes to embed sustainable practices and drive long term behavioral change across the farming landscape.
Earlier this year, PepsiCo India launched a series of videos called #AwaazMittiKi. “Awaaz Mitti Ki” translates to “Voice of the Earth”. This campaign reflects our view that, through all our work to champion Indian agriculture, it is the farmers themselves who have the expertise to innovate and who demonstrate their hard work and resilience every day. Close collaboration with our farmers, and mutual respect between us, has been at the heart of our success for the last three decades. It is only by listening to their voice that India can build an agricultural sector that meets the country’s needs and can continue to deliver economic growth and social development.
*All results are excluding West Bengal