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AGRICHILE. HAZELNUTS IN SOUTHERN HEMISPHERE. A KNOWLEDGE AND KNOW-HOW CROSS-EXCHANGE INNOVATION PRACTICE

Place: chile, South America
Sustainable development of small rural communities Sustainable development of small rural communities
Total Budget: € 0,00 | Period: From January 1991 To

Summary

The pursuit of fresh and high quality hazelnuts is at the heart of Ferrero’s innovative practice contributing to sustainable growth. Global hazelnut production wasn't adequate to support fresh supplies all year-round, due to its northern hemisphere predominance. In 1994 Ferrero introduced in Chile high quality hazelnut plantation and created Agrichile. Through the key involvement of local communities, Ferrero created a sustainable, innovative and replicable model:
- Planting hazelnuts on its own plantation
- Cooperating with local growers to select the best adapted varieties of hazelnuts
- Making hazelnut plantlets and planting materials available to local growers
- Granting free know-how and technical support to growers
- Ensuring the purchase of quality hazelnuts based on international market prices
Today, with 14.000 ha, Chile is among the top hazelnut producing countries. This flourishing industry provides jobs for low and middle classes, contributing to the country’s food security

Partnership

Agrichile - Chile

Lead applicant

Fruit Agrichile SA , belonging to Ferrero group in Italy, is focused on the production of European hazelnuts, both in own plantations and outgrowers, whose final destination is the supply of raw material for their own chocolate factories

SENCE - Chile

Initiative partner

National training service

Agricultural institute Salesiani de Linares - Chile

Initiative partner

Formation of science students

SAG - Agricultural and Livestock Service - Chile

Initiative partner

SAG is the official Chilean State body responsible for supporting the development of Chile’s agriculture, forestry, and livestock industries by protecting and enhancing plant and animal health.

NATIONAL UNION FEDERATION OF FRUITS PRODUCERS S.G - Chile

Initiative partner

Entity in charge of improving the situation of agriculture in Chile. Nonprofit Association, responsible for disseminating agricultural, commercial and technical information of agricultural secotr in Chile. Defender or trade union representing horticultural producers.

Copeval Development - Chile

Initiative partner

Company limited company dedicated to the Trade of Agricultural supplies and training. Operating Agent of CORFO, nationwide.

CORFO - Chile

Initiative partner

CORFO is a public-sector organization dedicated to promoting entrepreneurship, innovation and growth in Chile. Acting in tandem with the Chilean Ministry of Economy, CORFO's programs support and finance a wide variety of initiatives in this line, with the goal of stimulating the Chilean economy and providing more opportunities for Chile's entrepreneurs, innovators and key industries to be competitive on a global stage

CHILEAN FRUITS EXPORT ASOCIATION - Chile

Initiative partner

Union association of producers and exporters of fresh fruit from Chile. Its main objective is to support and improve marketing channels of export products, prices and markets.

Italian Chamber of Commerce of Chile - Chile

Initiative partner

Intercambio comercial de productos y servicios entre empresas italianas y chilenas

Talca University - Chile

Initiative partner

Centre for higher education, research and development.

Planting trust, the story of a mutual collaboration where knowledge and passion lead to a new way of doing agriculture

The main innovation developed is a concept of self-sustained agricultural supply chain introduced to produce, for the first time, hazelnuts in South America. To achieve this, Ferrero created Agrichile and promoted a unique system of knowledge transfer by bringing Italian hazelnut farming methods and expertise of global supply chain to local agriculture. Afterwards, farmers infused their own local expertise in climatic conditions, crop management as well as traditional and innovative agricultural techniques. This replicable two-way knowledge transfer created enough momentum for the project to flourish. Even after the supply chain establishment, Ferrero is still providing the necessary know-how and support while benefiting from local expertise and innovations. We found this the most effective way to achieve a long-term, efficient and independent supply chain where to source hazelnuts and ultimately contribute towards true food security for the region.

Main innovation developed To see the video, please use the password "agrichile" - Hazelnut growers from Choroico area and Mayor of Cunco - Hazelnut growers and the mayor consider European Hazelnut as the ideal Crop option for this region, mainly because it introduced diversification in the agriculture of a territory covered by spontaneous vegetation. Family businesses learnt to know the European hazelnut and gradually became enthusiastic for the growth and development generated both in economy and human capital; agronomic knowledge and scientific know-how have been enriched too.

Ferrero was driven to implement hazelnut production in Chile to assure a fresh supply of hazelnuts year-round and to expand an industry largely limited to Turkey in terms of volumes. Chile maximizes its productive areas producing cash crops and importing some of the staple food crops. By nature, many cash crops are susceptible to climatic risks, creating volatile conditions. At the regional level, hazelnut cultivation can help diversify agricultural production with a secure long-term cash crop, providing increased food security to the country. The hazelnut crop is a low inputs tree crop: it’s still rustic, resistant to many adversities, easier and cheaper to manage than most other crops. Moreover, with the application of good management practices, it enjoys stable yields per hectare limiting additional inputs and their ensuing degradation to the environment. These are key features that provide a higher and secure income for farmers and allow nutrition diversification for the region.

% of population living in country regions The table shows how the ratio of people living in the rural areas is particularly high for the two regions where the hazelnut project has been implemented (Maule and Araucania). This means a large number of populations can be involved in and benefit from the newly created hazelnut supply chain.

For Ferrero the replicable model resulted in a first reliable hazelnuts production in the Southern Hemisphere, leading to a fresh counter-cyclical supply. For the Chilean new hazelnut farming communities, AgriChile’s model has demonstrated higher hazelnut yields compared to historical areas of hazelnut production. It ensures a stable income even through poor production years, combined with low and stable input requirements. A thriving agricultural sector can provide many benefits to the impacted communities, and AgriChile is already reaping some of them, through a secure food supply both directly and indirectly.The AgriChile project promoted since its start the development of many new skills among the workers and the creation of many new managerial jobs. It has also inspired many new science graduates, dramatically increasing the cultural niveau (not to mention the quality of life) of the local population.

Chile’s hazelnut exports Figure shows Chile’s hazelnut exports by volume, value and price. The graph begins around when the Chilean industry began to export its production. Over these 10 years, a significant increase in volume and an even further increase in value can be observed. A direct link to Ferrero’s innovative approach can be drawn.
Chile’s hazelnut exports As seen in Figure, with the net margin (green), a.k.a. farmer income per hectare, Hazelnuts fall second as the most profitable of the typical cash crops from the region. Moreover, while cherries enjoy the highest margin, they suffer from higher seasonal climatic risks than hazelnuts do.
AGRICHILE - THE RESULTS In order to see this video, please use the password "agrichile" - Hazelnut growers - Switching to European hazelnut was an improvement in terms of quality of life, environment and permanent job opportunities. It involved a great deal of work that is paying off: thousands of hectares in Southern Chile have been converted to non-traditional crops; technology played an important role to explore new areas once considered not productive. Now farmers play part the in the development of the country: the production is expected to grow.

Agrichile positively impacts on many people’s life, especially:
• Young workers looking for a job are able to be employed and thus reach an economic security ensuring them the possibility of planning a future, avoiding emigration
• Ambitious workers are offered career opportunities and better economic and cultural conditions
• Students can benefit from specialized training opportunities that could lead to job placement
• Farmers can diversify their activities adding a new crop that guarantees: Independence and resilience due to the hazelnut technical support service, diversification of income, accessibility to inputs for greater return, transferability of machinery, pioneering opportunity, market access.
• Local politicians can provide their communities of shock resistant local economy through hazelnut cultivation; technical elevation of the agricultural workforce, opportunities for the next generations to remain in agriculture.

Here below a list of the main professional profiles and the names of key people involved in AgriChile activities:

MECHANICAL MAINTENANCE (Carlos Melendez)
IRRIGATION SYSTEM MAINTENANCE  (Hamilton Gutierrez)
ELECTRICAL MAINTENANCE (Alvaro Ramirez)
FIELD SUPERVISORS (Claudio Castillo)
IRRIGATION SYSTEM OPERATORS (Jose Barrios)
TRACTOR DRIVERS (Patricio Nuñez)
OTHER EQUIPMENT OPERATORS (Abel Oyarce)
GENERIC OPERATORS (Manaser Ramirez)
FIELD SERVICES (Miriam Martinez)
WAREHOUSEMEN (Gustavo Pañinao)
GUARDS (Saul Saavedra)
FIELD, NURSERY, PACKING, CRACKING MANAGERS (Nelson Andrade)
BACK OFFICE (Karina Rojas)
CRACKING QUALITY MANAGERS (Cristina Moya)
MAINTENANCE MANAGERS  (Erhard Seiffert)
AGRARIAN COORDINATION MANAGERS (David Reyes)
MANAGERS (Camillo Scocco)
PURCHASING (Carlos Quintana)
CFO Cristobal Donado
HUMAN RESOURCE MANAGER (Mariela Zuñiga)
M.S .: IT (Marcelo Cornejo)
CUSTOMER SERVICE (Gabriel Aguilar)
GENERAL SERVICES (Mauruicio Perez)
 

Headcount of Agrichile The graph clearly shows how Agrichile has progressively increased the number of people hired for the project. The company has noticeably replaced temporary staff with permanent and stable work opportunities

Ferrero arrived in Chile with the intention to plant Italian varieties of hazelnut trees, while also testing others. After 10 years of trials, one of the varieties on which Ferrero was hoping to see success from largely underperformed, in terms of productivity, thus putting the whole project at risk. This has led to a strategic engagement with the local farmers to identify the best performing varieties, where their expertise was fundamental. They and the research institutions we collaborated with were continuously providing detailed assessments on performance to guide towards the best selection. Even though these pioneer farmers had to undergo this difficult trial period, their involvement led to an ownership of the eventual success, a strong sense of collaboration and the creation of a robust root for the industry. This was key to creating the innovative collaborative approach between the local producers and Agrichile.

Difficulties Please use the password "agrichile" - Phd Fruit specialist and Hazelnut growers - Agrichile encourages farmers to report their problems to the Company so they can be investigated by scientific institutions. The problems, mainly related to insects and parasites, stimulate generic improvement. New varieties of hazelnuts are introduced (e.g. Barcelona, Giffoni, TGL).
../file-system/small/pdf ../file-system/small/pdf Agrichile's difficulties and solutions developed over the years The document shows Agrichile's difficulties and solutions: - soil preparation - Hazelnut variety of choice - Diseases and Pests

Hazelnut cultivation is a perennial system, which brings many environmental advantages over other crops. The project area has its own environmental characteristics in terms of climate, soil composition and water availability. By embracing them, we make sure that the ecosystem is neither being stressed nor underused. When stressed it leads to high inputs turning the system fragile; when underused its lack of performance must be offset by a greater use of land and resources. Agrichile aimed to find land where hazelnut systems worked in harmony with the local environment’s capacity. The management of the areas thus minimizes inputs (water and fertilizers) all the while producing optimal yields.
This has led to a healthier productive system where
• water is used efficiently, without overcoming the system’s natural capacity,
• more CO2 is absorbed and converted,
• full land potential is unlocked, providing constant and minimized inputs to the system,
• ever increasing quality is obtained

Environmental Impact Please use the password "agrichile" - Hazelnut growers - Hazelnut cultivations require less chemicals than fresh fruits ones (e.g. vineyards, apples, kiwis, olives). Chemicals are used sparingly and cultivation isn’t intense, with less impact in terms of treatments. Pesticides are controlled by culture methods, and some pests can be prevented by applying IPM methods. Hazelnut crops help developing new methods of cultivation that utilize less chemicals, succeeding in encountering the world increasing demand for food.

Agrichile started in 1994 and, after years of trials, the plantations became productive in 2002. Today, the Chilean infused hazelnut industry is thriving and growing in a sustainable way, as reported by the Chilean Ministry of Agriculture. Agrichile has paved the way for 6 other similar Agricompanies around the world. In 2009, Ferrero came to South Africa with the same objective and planted the continent’s very first hazelnut commercial plantation. Today, the initial results are promising and help conclude that the original model is in fact replicable: Agrisudafrica has established 450 hectares of plantations, several hectares of variety trials in various areas as well as a commercial nursery. Outside of the Hazelnut industry, this model brings success. The same steps were brought to Colombia where Ferrero together with a local partner is attempting to transfer this model to the outgrowers in the very same way, in order to help the cocoa industry reflourish in its native lands.

COLOMBIA - Hacienda La Tentacion Ferrero's local partner in Colombia: Hacienda La Tentacion
Sustainability Please use the password "agrichile" - Hazelnut grower, Mayors of San Rafael and of Cunco - Hazelnut industry involves training of the work force, impacting over social environment: it provides more work than traditional crops because some activities can’t be mechanized. From the start Agrichile has been an important employer, engaging masses of workers both permanently and temporarily (for the harvesting and the nursery, where manual labeling is necessary). This sustained and raised economic conditions of lower and middle classes.
../file-system/small/pdf ../file-system/small/pdf AGRISUDAFRICA - Chocolate maker seeks to expand hazelnut worker Farmers Weekly 04 2013 The article explains how Chile - after 20 years of Agrichile activities - is now a strong and modern hazelnut market and that the Ferrero Group is going to replicate it in South Africa.
../file-system/small/pdf ../file-system/small/pdf AGRISUDAFRICA - Eastern Cape positioned itself as hazelnut hub Metromedia SA - 9 aprile 2010. Ferrero Group and the Eastern Cape Development Corporation (ECDC) have launched a 24 hectare (ha) hazelnut pilot project in the Queenstown area. The 24 ha plantation with 16 500 trees is part of Ferrero’s new agricultural development for South Africa to create a supply of high quality nuts for their sought after products.
../file-system/small/pdf ../file-system/small/pdf AGRISUDAFRICA - Italians invested in heselnetue in SA Lanbouweekblad - 14 may 2010
../file-system/small/pdf ../file-system/small/pdf AGRISUDAFRICA - SA may grow with hazelnut Landbouweekblad - 26 February 2010 Hazelnuts, which will be mass cultivated in South Africa within the near future, could lead to the country becoming one of the most productive hazelnut cultivators within this decade in the Southern Hemisphere. The company, Agrisudafrica, an affiliate of the Ferrero Group, is in the process of conducting large scale research programs within South Africa to determine if identified sites within the provinces are suitable for cultivation and also which cultivars (varieties) would grow most effectively under these conditions. One of the objectives for the project on a long-term basis is to plant a minimum of 10 000 ha hazel trees within the identified sites in South Africa
../file-system/small/pdf ../file-system/small/pdf AGRISUDAFRICA - hazelnut production to take off in the EC Farmers Weekly - 30th 04 2010 Ferrero launched a 24ha hazelnut pilot project in the Eastern Cape in collaboration with 6 community members.
../file-system/small/pptx ../file-system/small/pptx COLOMBIA - Developing plan Hacienda La Tentacion developing plan
../file-system/small/pdf ../file-system/small/pdf COLOMBIA - Hacienda La Tentacion - Linked Prosperity in Cocoa Farming La Tentacion is a joint initiative between Ferrero and Colombian entrepreneurs to establish a model cocoa farm in Colombia. The venture envisions the production of high quality, high yield cocoa in a sustainable and linked prosperity model.
../file-system/small/pdf ../file-system/small/pdf COLOMBIA - Progress on the field Phase 1 and 2 (100Ha) and Phase 3 (100Ha) operated by Hacienda La Tentacion in order to help the cocoa industry reflourish in its native lands.

Agrichile has always been proactive in promoting and sharing its hazelnut cultivation model in the VII and IX regions of Chile. Agrichile operates with an open source approach; participates in public-private-partnerships for technology transfer and shares experience and results with investors and producers. Agrichile joined “Programa FAT Grupo de Transferencia Tecnologica - GTT (Technology Transfer Program)” promoted by Corfo (http://www.corfo.cl/), which provides assistance to producers and monitors production results. With the “Programa de Desarrollo Proveedores - PDP (Supplier Development Program, for Export)”, Agrichile and Corfo joined forces supporting agro-companies in improving productivity and quality of their plantations. Agrichile shares results and information through its own initiatives (e.g. conferences, farmer meetings, technical workshops) reaching hundreds of farmers every year. Further information on AgriChile is carried out within Ferrero’s CSR yearly publication.

8th International Congress on Hazelnut The VIII International Congress on Hazelnut was held in Temuco (Chile) from March 19 to March 22, 2012. The congress discussed the following issue: TRICHOTHECIUM ROSEUM (PERS.) LINK ASSOCIATED WITH CATKINS AND GLOMERULI (REPRODUCTIVE STRUCTURES) OF EUROPEAN HAZELNUT (CORYLUS AVELLANA L.) 'BARCELONA' AND 'TONDA DI GIFFONI', REGION OF LA ARAUCANÍA, CHILE
Agrichile - Promotional leaflet The leaflet describes the Hazelnut varieties provided by Agrichile and the benefits of hazelnut crops
Agrichile - Promotional leaflet Promotional brochure
Agrichile - promotional leaflet Informations about Agrichile
Agrichile - promotional leaflet Promotional brochure