California must choose between 'almonds and people'

California needs to reconsider whether it is the best place for almonds to be grown in the face of the state's water crisis, said the head of one of the world's largest agricultural businesses.

"It's almonds versus people," said David MacLennan, the chief executive of Cargill, when asked at the FT Commodities Global Summit in Lausanne whether almonds would still be produced in California by 2020.

The US state accounts for 80 per cent of global almond supplies and the industry is facing a backlash amid the worst drought in decades.

Cargill, a leading US agribusiness, does not have an almond business. However, Mr MacLennan said while he thought almonds would still be produced in the state in five years' time, California needed to have a debate about its agricultural business, which is the main consumer of water.

"[California] needs to have that public debate about where almonds are best grown," he said.

Mr MacLennan's comments came as he spoke about the need for the commodities industry's need for a greater focus on sustainability.

The prolonged drought in California and the threat of global water crises were some of the signposts that sustainability needed to become the "new normal" for commodities businesses.

While concerns about where and how crops and metals, minerals and energy are sourced, traded and processed were not new, there "becoming louder, more persistent and more intense," said Mr MacLennan.

His comments echo that of his predecessor Greg Page, who called for greater transparency at the FT Commodities Conference in 2013. At the time, Mr Page warned that trading houses needed to embrace ethical and transparent business practices or risk being vilified by the public and regulators as the banking sector had been.

Growing worries about the impact of raw-material production and trade on the environment and the wellbeing of smallholder farmers have meant greater demands for higher transparency from traders and traceability of commodities in the supply chain.

It has also led to a proliferation of new sourcing standards and certification schemes and lists of "bad actors" created by NGOs and governments. As a result, a growing number of companies have needed to reassure consumers that their supply chains are free of conflict minerals, tropical deforestation or abusive labour practices.

Sustainability cannot become little more than a box-ticking exercise, said Mr MacLennan. "We can't afford it to be a trend or a fad. The impact is too significant and the stakes are too high," he said.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation