Guidelines on greening agri business -material and process flow

II/MB.-RESOURCE GUIDE ON GREENING AND INCLUSIVE AGRI AND AGRO ENTERPRISES, GIZ-DA-NCI Page 1

SECTION 3: MATERIAL AND PROCESS FLOW ANALYSIS The design of products, processes, and systems in Green agribusinesses should not only seek economic benefits for shareholders and value for customers, but also manage environmental and societal impacts affecting stakeholders. As such, we have to look at how resources are allocated and activities are conducted to create value. This involves an inventory of materials and processes in the supply chain and the identification of both economic and environmental impacts. Conduct of materials and process flow analysis will assist a chain to make investments where their commercial and ecological outcomes are greatest. The analysis should lay the basis for investment proposals.


Agribusinesses use resources and services provided by the natural environment (metals, materials, fossil fuels, soil, water, and biodiversity) and discharges “by-products” (waste, emissions) into the environment. Every product has several stages in its life cycle:

Extraction of natural resources

Processing of resources

Design of products and selection of inputs

Production of goods or services

Distribution

Consumption

Reuse of wastes from production or consumption

Recycling of wastes from consumption or production

Disposal of residual wastes


Depending on the materials and the processes and systems employed by agribusinesses, each stage can create waste and environmental residuals that can become chemical or organic pollutants and can contribute to climate change and environmental deterioration. Pollutants include carbon monoxide, lead, nitrogen dioxide, particulate matter, sulphur dioxide, carbon dioxide, hazardous chemicals, and many more. The materials and process flow analysis looks at the environmental and economic impacts across the full product life cycle --- on-farm production, manufacturing and processing, and distribution, engagement with end consumers, and its eventual disposal. Using the value chain map as your guide, identify the core processes that the raw materials go through before reaching the final consumption stage, including the provision of inputs


to produce raw materials. Simultaneously, identify the products or product formats at each stage of the process as they are transformed from raw materials, to intermediate products, and to final products. This gives us both a picture of the processes and the forms of products that are handled, transformed, and transported at each process stage of the value chain. The only difference here is that in the usual value chain analysis we focus our analysis mainly on the economic contribution and implications of each of the core processes and materials used at the each function of the chain. To build a green supply chain, we need to add another lens, namely, the environmental impact and implications of each of the core activities in the chain

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Any materials and substances that go into making of products will all have an environmental impact. Key aspects to look into when doing the materials flow analysis of a supply chain: a) Intensity of use of non-renewable materials, restricted or harmful substances, and

recycled/re-used materials b) Missed opportunities for using by-products c) Consistency of quality of materials and effect of quality variances d) Efficiency of land use, effects on soil fertility, erosion, and biodiversity e) Sources of energy being used and efficiency of energy use at different levels of the chain f) Waste production and management at different levels of the chain g) Pollution potentials such as acidification, eutrophication, and others h) Greenhouse gas emission i) Identification of materials that add value to the product or service (and whether it is

functioning as envisioned), materials that are necessary but non-value adding, and materials that are not necessary and do not add value to the product


Examples Reducing Water Use (Levi’s Jeans Website) In 2007, Levi’s found that 49 percent of the water use during the lifetime of a pair of 501 jeans occurred at the very beginning, with cotton farmers. Another 45 percent of the water was used by consumers to wash their jeans, typically about 100 times. Levi’s customers were also responsible for nearly 60 percent of the energy used to make and care for a pair of jeans. It turned out that the manufacturing process, where Levi’s can exert the most control, had the least impact on water and energy use. So Levi’s joined the Better Cotton Initiative, a group of companies that work with local nongovernmental organizations in Pakistan, India, Brazil, and Mali to teach farmers how to grow cotton with less water.. Each has about 5 percent of the low-water cotton, though the members of the initiative agreed not to label products using that special cotton as such. By not touting the cotton’s provenance on labels, they hope to avoid creating too great a demand for the current limited supply. Levi’s goal is to use a 20 percent blend of the new cotton in its products by 2015.


In 2010, Levi’s also began a marketing campaign to encourage people to wash their jeans less often, in cold water only, and line-dry them. It changed the care tag to say so and even held an online contest for consumers to suggest their own air-drying ideas. It also recommended that consumers donate old jeans to Goodwill rather than throw them away. Levi’s started working on ways to use less water in the manufacturing of its jeans, too. The standard process of distressing jeans involved washing them with lots of pumice stones repeatedly, using roughly 45 liters of water per pair. By using ceramic stones and rubber balls and changing the filtration system in the washing machines, engineers came up with jeans that, on average, use only four liters of water to achieve the distressed look. Stopping the clearing of rainforest areas (from Sustainable Agriculture Initiative Platform) Coffee is traditionally grown in the shade, beneath a canopy of varied tree species. Home to bird life and pollinators, the trees protect the plant and the fruits ripen slowly out of the sun’s glare. Global demand has caused 25 million acres of rainforest around the world to be cleared to grow high-yield, fast ripening coffee in direct sunlight. In 1999 Starbucks joined a project set up by Conservation International (CI) around the El Triunfo Biosphere Reserve in Chiapas, Mexico, to encourage shade-grown coffee and prevent further deforestation. Technical assistance was given on coffee growing techniques and quality. Starbucks provided a market and offered a premium for shade-grown coffee.


Assess production and distribution systems and processes in terms of the following: a) energy and water use b) Waste Generation c) Emissions into air and water d) Production of noise and odor e) Land use and impact to natural habitat


Examples Plot-to-Plot Rice Irrigation – No Field Channels (IRRI) The amount of water flowing in and out of a rice field cannot be controlled and field-specific water management is not possible. The water that continuously flows through rice fields may remove valuable fertilizer nutrients. Constructing separate channels to convey water to and from each field (or to a small group of fields) greatly improves the individual control of water and is the recommended practice in any type of irrigation system. Reducing Soil Permeability (IRRI) A rice field can be compared to a bathtub: the material of a bathtub is impregnable and it holds water well—however, if you have only one hole (by removing the plug), the water runs out immediately. Rice fields just need a few rat holes or leaky spots and they will rapidly lose water by seepage and percolation. Large amounts of water can be lost during soaking prior to puddling when large and deep cracks are present that favour rapid “by-pass flow” to below the root zone. Cabangon and Tuong (2000) showed the beneficial effects of additional shallow soil tillage before land soaking to close the cracks: the amount of water used in wet land preparation was reduced from about 350 mm to about 250 mm.


Turnaround time between land soaking and transplanting Minimizing the turnaround time between land soaking for wet land preparation and transplanting reduces the period when no crop is present and when outflows of water from the field do not contribute to production. Especially in large-scale irrigation systems with plot-to-plot irrigation, water losses during the turnaround time can be very high. Reliance on Chemical Fertilizer Concerns The major problem with nutrient over-use is the potential negative impact on the environment. Commercial fertilizers and organic materials have the potential to contaminate groundwater when over applied. The nitrogen applied to the garden is converted to nitrate. Nitrate is mobile in soils and can leach into the groundwater. High levels of nitrates in water collected from wells can be hazardous to human health. Over use of fertilizer can lead to acidification and loss of soil fertility. Inorganic fertilizer is generally made from non-renewable materials. Production entails high energy usage.


The way that products are packaged and transported can make a difference both in terms of economic and environmental impacts. Less is More (Sprint Packaging) Careful, innovation-driven design and production choices have enabled a 55% reduction in the environmental effect of Sprint-branded device packaging since 2009 to 2012, against a 2008 baseline. Compared to the first-generation “black box” style used in 2009, Sprint’s current packaging by Deutsch Design Works is 60% smaller in volume and 50% lighter in weight. The company’s literature packaging rate has also been reduced by 70%. Sprint achieved these reductions by developing standard sizes for its packaging, decreasing box sizes, reducing ink coverage and removing laminates. The company also reduced printed education materials and user guides — or put them on the device or online. Besides lowering material use and costs, these packaging changes mean more devices fit onto each loading palette, reducing the number of plane flights and truck runs necessary to move them.


Today, all Sprint-branded packaging is 100% recyclable, and boxes are made from unbleached kraft paper, using a minimum of 30% post-consumer recycled material. Packaging is printed with soy inks and uses eco-friendly adhesives and aqueous coatings. The greening of Sprint packaging currently saves:

The ecosystem equivalent to about two football fields of clear-cut forest

2,100 metric tons of carbon dioxide – the amount emitted by 420 passenger cars annually

8,800 megawatt hours of energy – enough to light the Statue of Liberty and Ellis Island for 12 months

8,900 kilo gallons of water – enough to fill 68 million half-liter plastic water bottles

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Example: Natural Rubber Value Chain

Common Practices Environmental Impact Business Impact

Farming

Majority of rubber trees are still of low yielding clone

Inefficient land and resource utilization; low yield compensated by increased hectarage/ establishment of plantation

Low return on investment

Poor agroforestry management practices

Reduced capacity to improve soil conditions. Rubber is an agro-reforestation tree material. It promotes an environment-friendly farming system (including being a major carbon sequestrator). Rubber plantations adopting proper agroforestry management practices (including terracing; silt pitting and bunding; and the growth of leguminous cover plants between the rows to assist with nitrogen fixation) help in the enrichment of organic matter, which consequently improved soil physical properties, such as bulk density, soil porosity, moisture retention and infiltration.

Unfavourable soil and environmental conditions and poor agronomic practices may result to low latex yield and, consequently, income. Prevalence of diseases --- higher production costs; low income

Monocropping Inefficient land utilization Reduced protection against soil orientation Reduced capacity for soil regeneration/soil nutrient enhancement

Income generation problem during the first six years/ Long gestation period which limit participation of small farmers

Tapping

Poor tapping practices/ Highly intensive tapping In the preparation of wet coagulate, some

An estimated 10 years, i.e. approximately 50%, of the productive life of the rubber tree, is lost due to harmful tapping practices. In such instances the

Low yield production and inferior quality. Proportion of raw latex is lower and quality is inferior due to premature and


Common Practices Environmental Impact Business Impact

tappers add contaminants such as sand and bark shavings intentionally to increase weight. Others use sulphuric acid (from batteries) as coagulant which is much cheaper than the recommended coagulant (formic acid). Others use coagulants known for their high water retention properties. In some cases, tappers do not use appropriate rainguards or rainskirts to protect the latex while being harvested.

provision of good planting material becomes less significant and even counter-productive due to mismanaged latex exploitation as clonal planting material is more susceptible to tapping intensity. Contamination of soil and water --- from waste thrown to ground Higher air emission. Higher energy and water use

inappropriate harvesting methods and the practice of mixing other substances Price reduction due to presence of impurities Higher processing costs. The processing of low quality raw latex entails a much longer (double) processing time, thus longer use of machinery, and higher expenses for electricity, water, labour

Latex Collection and Processing

Inadequate storage, collection, and processing technology and facilities

Environmental Pollution associated with the collection and processing of condensed latex. Smell pollution from collection points and processing plants persist even with the construction of underground ditches for waste from condensed latex processing. Waste from condensed latex is huge in volume High energy and water use

Missed opportunities for value added processing High transaction costs Inferior quality; low income