Beverage giant PepsiCo on Tuesday announced a public-private partnership with Inter-American Development Bank to kickstart sunflower production in Mexico, with the intention of creating a sustainable market for the flower.
As you might suspect, PepsiCo uses sunflower oil in many of its products, including potato chips, biscuits, nuts and other snacks under the Sabritas and Gamesa-Quaker brands.
The IDB provides development financing for folks in Latin America and the Caribbean.
While the five-year effort will eventually span 26 countries in the region, it starts with sunflower production in Mexico, for which IDB will provide loans to about 850 Mexican farmers.
The idea is simple and aligns disparate interests: PepsiCo receives stability and growth in its supply chain, while the IDB (and by extension, farmers) receive the financial benefits of its corporate heft -- particularly, the promise that PepsiCo will purchase 100 percent of the crop, valued at about $52 million over seven years.
PepsiCo also says it will invest $2.6 million to support management of the Mexican sunflower crop and will provide technical training to the small farmers.
Financial firm Agrofinanzas will make $40.4 million available as microloans to provide the farmers with working capital. The IDB will provide Agrofinanzas a partial credit guarantee for up to $5 million.
The plan for the rest of the region:
Naturally, the programs fit into PepsiCo's announced sustainability goals to provide access to safe water to three million people in developing countries by the end of 2015 and to provide technical support and training to local farmers.
This post was originally published on Smartplanet.com