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Top ag companies face 'huge brand risk'

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Top agriculture companies face "huge brand risk" if they ignore the growing campaign for health, sustainability and human rights improvements in food supply, Jonathan Kingsman told the Agrimoney Investment Forum.

"Health, sustainability and human rights - if you do not respect those, do not even think about it [operating in the food industry]," said Mr Kingsman, founder of the Kingsman sugar house, sold to Platts three years ago, and now a commentator on broader agriculture.

While there are many millions of farmers and consumers, there are about 50-100 companies who are the main buyers and processors in the middle of the supply chain which faced "incredible brand risk" if they ignored the environmental and social campaigns being promoted by non-governmental organisations (NGOs).

'NGOs can damage your business'

He warned, for example, over companies found selling sugar from a source ignoring land rights, or palm oil produced in plantations not covered by the sustainable palm oil certification scheme.

"You will be all over the papers. NGOs can damage your business," he told the Agrimoney Investment Forum in London.

Ag trading giants Bunge and Cargill have come under scrutiny this week for buying palm oil from IOI, which lost its sustainable palm oil certification in March.

While many consumers "don't really care", about environmental and social factors, and may be swayed by pricing factors, traders and suppliers, and in particular the top 50-100 companies, needed to take a responsible attitude.

"That's where the NGOs concentrate" their campaigns, he said.

"They can really damage your business."

'Problem and solution'

Mr Kingsman also highlighted that local knowledge was essential when contemplating business in new countries, citing a large Dreyfus investment in Brazil which "didn't quite work".

"You need local knowledge on the best seed, the land and the government.

"I was involved in an Indian company which was very successful in India, but it had a complete disaster in Brazil."

Keeping government "onside" was essential, he said.

"It can be a problem and a solution at the same time. There are numerous ways they [officials] can interfere with your business, and they can be very fickle.

"They can ruin your business if they are against you. You need them on your side."

By Emma Penny

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