Chipping poverty away

One of the world's leading beverage and food producers, PepsiCo recently issued its China Sustainability Report, summarizing what the company has done to fulfill its corporate social responsibilities (CSR) in the emerging market.

Among issues such as social donations, community involvement, environmental protection and energy savings, research and development, as well as employee promotions, the US-headquartered company specifically elaborates on how it supports agricultural development and increases in farmers' living standards in China.

According to the report, PepsiCo considers itself to be an integral member of Chinese society, and, as such, seeks to protect and improve the country's environment and raise its living standards. It says it is exploring ways to control desertification and improve the life of the rural poor.

Since its entry into China in 1993 the company has established four plants and spent more than 200 million yuan on potato-growing projects throughout China.

The potatoes, used for the company's Lay's brand potato chips, are not only used by the company in China, but are also exported to Southeast Asia since 2003. By the beginning of 2007, more than 5,000 tons of potatoes had been exported.

These projects have improved local agricultural practices, increased the income of farmers and played an important role in controlling desertification.

PepsiCo introduced potato varieties ideal for local conditions by setting up a potato farm in Inner Mongolia and turning 1,334 hectares of desert land into farmland. Other farms based on this model have also been established around the autonomous regions.

PepsiCo has invested 6 million yuan to help set up the Agricultural Development Research Center between the company and the Chinese Academy of Agricultural Sciences. It encourages local farmers to use modern seed cultivation and farming techniques.

The beverage and food manufacturer introduced a special potato variety ideal for growing in Gansu province and the farmland around Kunming of Yunnan province. PepsiCo monitors every step of the potato cultivation right down to seed development to achieve high-yield and disease-resistant potato strains.

The company has introduced cutting edge irrigation, cool storage and bulk transportation technologies to all its farms in China.

One of its most notable farms is in Baotou in the Inner Mongolia autonomous region. This farm has become a major agricultural training center where farmers are taught to grow high-value crops.

Its practice in setting up model potato farms in economically disadvantaged areas in Gansu province and Inner Mongolia and Guangxi Zhuang autonomous regions has made an important contribution to China's development drive in the west. The farms make about 25 million yuan annually by selling their potatoes for processing into chips, benefiting more than 1,100 families.

In addition to its business activities, PepsiCo committed itself in 2007 to establishing the "PepsiCo Library" by donating library facilities and books to schools in impoverished areas in Inner Mongolia and Hebei, where PepsiCo has farms.

Using cash donated by the company as well as its employees, PepsiCo purchased new bookshelves, desks, chairs and other equipment for Zhandanzhao Primary School in Inner Mongolia's Dalate Banner Prefecture.

With its donations, the school has seen its classroom repainted, refurbished and thousands of books made available in the newly converted library.

Since 2005, PepsiCo has also been taking part in a campaign to introduce newspapers to the countryside. The China Cultural Poverty Alleviation Foundation, All-China Farmers' Newspaper Association, Farmers' Daily and other institutions work with PepsiCo on the newspaper campaign.

For over a year, also as part of PepsiCo's support for the "Water Cellar for Mothers" project and several potato farms, tens of thousands of newspapers have been distributed to the villages where PepsiCo's projects are located, thus providing opportunities to share science and technology, cultural and government policy information.

(China Daily 08/04/2008 page8)