Yulex to Share Profits with Smallholder Natural Rubber Farmers

Natural rubber producer Yulex is reinvesting in the smallholder farmers that power its supply chain.

The American input company with operations in the U.S. and Southeast Asia announced Thursday that it has decided to share profits with its rubber farming partners in Vietnam and Thailand through its new Equitable Ag program.

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The company, which has developed patented proprietary technology surrounding rubber products like foams and fibers used across the apparel, footwear, medical and automotive sectors, said 85 percent of the natural rubber produced globally is grown and harvested by smallholder farmers managing plots of land that measure just a handful of acres. The work brings in just $3,000 per year on average, making it difficult for farmers to sustain themselves while meeting new standards for environmental compliance. Their limited incomes leave little leftover for investment into the education, new materials and certification programs instrumental to expanding production, it said.

To address the growing issue, the Equitable Ag program will create a profit-sharing structure that benefits smallholders and traders, improving their quality of life while contributing to the development of their communities and businesses. Furthermore, the company said it plans to work with farmers to introduce regenerative agriculture to increase biodiversity, addressing rubber sustainability concerns and keeping farmers up-to-date with best-in-class cultivation practices.

Yulex was the first Forest Stewardship Council (FSC) certified supply chain for natural rubber, serving the sporting goods and apparel sectors in a partnership with Patagonia, it said. It has now also engaged with the Program for the Endorsement of Forest Certification (PEFC), partnering with its Southeast Asia arm to create community between smallholder farmers as well as private organizations managing forests, traders and rubber processors.

"Smallholder communities encounter significant challenges when it comes to establishing connections in the market," PEFC Southeast Asia manager Richard Laity said. Yulex’ move to aid farmers in Vietnam and Thailand in creating these bonds "will have a profound impact on the natural rubber community and consumer brands in various industries will benefit tremendously," he added. PEFC is now urging other organizations to join in.

Yulex chief business officer Dr. Liz Bui said the company hopes to inspire both consumers and brands to engage and contribute to smallholder farmers in Southeast Asia through the Equitable Ag program. "We were the first company to introduce certified deforestation-free supply chains to consumer brands and now, with another first, we are working directly with PEFC and small holders to solve social inequity issues in the supply chain," she added.

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