The ADB and Louis Dreyfus Company B.V. on Thursday signed a $100 million loan to help smallholder farmers in five countries, including Vietnam, recover from the pandemic-induced economic challenges and improve their resilience to climate change impacts.
Over 50,000 smallholder farmers in Vietnam, India, Indonesia, Pakistan, and Thailand are to benefit from the loan, which will support Louis Dreyfus’ operations in these countries by financing coffee, cotton, and rice inventories, the bank stated when signing the financing.
"Smallholder farmers, who are already vulnerable to climate change, are facing increasing difficulties due to the pandemic, resulting in income loss, crop and food wastage, and supply chain disruptions," said Ashok Lavasa, ADB Vice-President for Private Sector Operations and Public–Private Partnerships.
“ADB’s assistance will help to ensure reliable offtake to farmers, providing a direct way to preserve their livelihoods and their assets, while enabling them to invest in climate-resilient farming practices.”
An accompanying technical assistance grant will deliver capacity building and training activities, the Manila-based bank said. The funding comprises $205,000 from ADB’s Technical Assistance Special Fund for COVID Recovery and $385,000 from the ADB-administered Strategic Climate Fund.
“As a leading merchant and processor of agricultural goods, LDC is committed to empowering smallholder farmers, whose activities are key to global food security, to use sustainable farming practices for the benefit of current and future generations,” said James Zhou, Louis Dreyfus’s Chief Commercial Officer and Head of Asia Region.
Louis Dreyfus is a leading merchant and processor of agricultural goods worldwide. It is one of the “ABCD” quartet of companies, with the other three being Archer Daniels Midland, Bunge, and Cargill. Together, they lead the world’s agricultural commodity trading.
In Vietnam, the world’s largest robusta coffee provider, the global company grows, processes, trades, stores and distributes coffee, rice, cereals and oilseeds in the domestic and export markets.
In Binh Duong province which neighbors Ho Chi Minh City, a joint venture between Louis Dreyfus and Polish group Instanta is building a freeze-dried instant coffee plant. Both partners did not disclose their investments in the project.