Wal-Mart to boost buying from small and local farms

CHICAGO (Reuters) - Wal-Mart Stores Inc is planning to double the sales of fresh produce from local farms in its U.S. stores by the end of 2015, part of a strategy to revamp its global produce supply chain.

A Wal-Mart sign is seen in Miami, Florida May 18, 2010. REUTERS/Carlos Barria

The world’s largest retailer said it would also sell more than $1 billion each year in food from 1 million small and medium-sized farms in emerging markets by the end of 2015. That would help increase income for those farmers 10 percent to 15 percent in the same time frame, Wal-Mart said.

In the United States, Wal-Mart said its plans for supporting local agriculture would lift local produce to 9 percent of total produce sales in the country. Wal-Mart does not give a dollar figure for total produce sales.

Wal-Mart also said it will require that palm oil from sustainable sources be used in all of its private-label products by the end of 2015. The company sells hundreds of products that use palm oil. Environmentalists argue some producers add to global warming by felling forests.

Using locally sourced agriculture and supporting small farms is one way to preserve local jobs and prevent dwindling farmland from being lost, according to environmentalists and other groups. It can also help reduce the use of resources such as fuel to transport food over long distances.

Wal-Mart joins a growing list of corporate and charitable organizations lending support to sustainable agriculture programs and small and local farmers.

Backers of such programs include the U.S. Agency for International Development, the Bill and Melinda Gates Foundation and a host of corporations, including DuPont and Archer Daniels Midland.

The focus comes as the United Nations warns that the global population is estimated to jump roughly 50 percent to 9.2 billion by 2050, which will require broad public and private initiatives to boost agricultural productivity and nutrition without use of additional environmental resources.

“Wal-Mart, they are a very big outfit. If they require their suppliers to meet sustainability requirements, that will have significant implications,” said Bill Lesher, executive director of the Global Harvest Initiative consortium of corporations focused on increasing agricultural production.

“It will benefit large farmers, small farmers, it will be helpful to everyone,” Lesher said.

Wal-Mart has sought to reduce the environmental harm posed by its business by pushing suppliers to cut package sizes and encouraging consumers to buy energy-efficient light bulbs. It has also cut down on fossil fuels in its supply chain.

The moves have helped Wal-Mart improve an image tarnished by accusations of unfair treatment of employees and the threat its stores pose to small local retail businesses.

As part of the plan announced on Thursday, Wal-Mart said it will spend more than $1 billion on improvements in its global fresh supply chain to move fresh food to stores more quickly.

Wal-Mart aims to reduce food waste in emerging market stores by 15 percent and in stores in other markets 10 percent by 2015.

The company is also looking to help protect the Amazon rainforest by only buying beef from producers that do not contribute to deforestation, Wal-Mart said.

The Brazilian government, at the prompting of conservationists, has cracked down in recent years on slaughterhouses that buy cattle raised on illegally deforested pasture in the Amazon. The industry has been slowly moving toward ear-tag chips to expand traceability to most of the country’s roughly 200 million head of cattle.

The plans were announced by Wal-Mart CEO Mike Duke at the company’s sustainability milestone meeting.

Additional reporting by Carey Gillam in Kansas City; editing by Michele Gershberg and Maureen Bavdek