One of the most important ways we are making progress in sourcing is working more closely with our farmers and growers, both in the UK and overseas.
Sainsbury's has announced a new £1 million fund to kick start the next wave of improvements to British farming. This grant will incentivise Sainsbury's farmers and suppliers to adopt existing leading edge technologies as well as being a catalyst for new innovations by research institutions at a time when UK farmers are facing increasing challenges from this year's adverse weather, with the associated threat of disease and rising commodity prices.
Our Development Groups and Crop Sustainability Groups are practical working partnerships where we discuss challenges and opportunities, and how we can work together to share best practice and improve. This approach will ensure that the majority of our own-label products come from supply chains that are dedicated to us, and are environmentally sustainable, ethical and fit for the future.
Sainsbury's Dairy Development Group (SDDG) was the first we set up, aiming to work with our suppliers to ensure sustainable profits for them and a sustainable source of British milk for our customers. Since 2006 we have invested over £30 million in developing these relationships and in January 2010 we pledged a further £40 million over the next three years, reflecting our long-term commitment to the scheme.
Over the past year, we have continued to help our 333 SDDG farmers reduce their on-farm costs, working with them to make practical changes to improve efficiency, environmental impact and animal welfare. Sharing best practice across the group has created financial efficiencies for our SDDG farmers. For example, dairy farmer William Goodwin saved £65,000 in eighteen months as a direct result of our structured improvement plan.
We continue to work closely with our 94 Sainsbury's Cheese Development Group (SCDG) farmers who produce the milk made into cheese by Milk Link, the UK's leading farmer-owned dairy co-operative and the largest producer of British cheese.
Our Development Groups are a long term project. With what we have learnt from the dairy group, we have gradually introduced the model to all of our agricultural supply chains, with each one now at a different stage in its experience and complexity: our pig and poultry Development Groups, for example, will undergo their first carbon footprint assessments this year.
In our Lamb Development Group (SLDG), we have already completed the first year of carbon footprint assessments, during which we audited 1,382 UK lamb farms. Here we identified a number of areas we could focus on to reduce carbon emissions and improve farm efficiency. For example, we will be working with our lamb farmers to improve grassland management.
Jake Freestone, SLDG Randall Parker Foods farmer, said: "I am delighted Sainsbury's has now launched the Development Groups for lamb, as this way of working really helps the dairy farmers. Working closely with Sainsbury's is proving very beneficial as it means we can now plan long-term."
We are also working closely with our beef farmers in Sainsbury's Beef Development Group (SBDG) to better understand how we can improve the consistency of our beef and encourage sustainable development. Having completed over 200 carbon footprint assessments, we will help farmers take practical steps to making efficient and profitable improvements.
The Development Groups have been so successful that we are seeking to use the model for our main commodities and overseas sourcing for products such as tea and coffee.
We launched our Crop Sustainability Groups at the end of 2009 as an extension to our well-established Crop Action Groups. While the Crop Action Groups focused solely on pesticides, the Crop Sustainability Groups look at a range of issues to identify both environmental and economic 'best practice' in crop production. These issues include reducing carbon through better energy use, water and soil health, biodiversity, waste management, and the welfare of people in our supply chains, in addition to wider crop protection issues.
Along with identifying best practice, the Crop Sustainability Group has also developed industry partnerships so we are able to work with our farmers and growers to tackle issues of sustainable crop production relevant to each sector. The plan of work we are now introducing to our fresh produce growers mirrors the broader Development Group remit covering all of our primary agricultural supply chains.
Our Pesticide Policy encourages our suppliers to minimise their use of pesticides and employ Integrated Crop Management (ICM) techniques. Our policy gives clear guidance as to the most appropriate choice of plant protection products for use on crops grown for Sainsbury's. While our overall goal is to decrease and eliminate pesticide residues in the fresh produce we sell, we acknowledge pesticides are often an important part of producing crops sustainably and can also help to reduce waste.
This year we have increased the focus and remit of our policy to tackle some of the wider environmental effects of pesticide use, particularly those associated with older, broad spectrum chemistry. We will always consult our Crop Action Groups on our policy, to ensure we continue to work in a practical way that encourages sustainable crop production, while also addressing the concerns of our customers and any possible environmental impact associated with pesticides.
Communication and transparency are crucial to our relationships with suppliers, making sure we listen to feedback and act accordingly.
Good communication is a vital aspect in all our supplier relationships, which means honesty and transparency on our part, as well as a willingness to listen and share ideas. Our TMAs and, in particular, our supplier workshops, are an open forum for feedback from suppliers, and we encourage questions and debate. The supplier workshops involve group exercises designed to encourage suppliers to share their experience and report back to the wider group, including our team. We then use the responses to inform our strategy.
In 2010, we held four Technical Supplier Conferences, each attended by over 320 suppliers. These conferences give suppliers the chance to share best practice, hear updates on our business strategy and share their own perspectives with our senior management team.
Our technical teams are in constant dialogue with our suppliers, but we also collate responses from the Advantage Report independent Mirror survey and our quarterly supplier 'Talkback' surveys. We are proud to be ranked as the leading supermarket overall to work with by the Advantage Report Mirror survey, as well as being number one company to do business with when compared with our competitors.
In addition, we use an independent 'hotline', Sainsbury's Right Line, for colleagues, contractors and suppliers to report issues of concern confidentially. We are investigating the possibility of introducing a similar confidential worker hotline in China this year, which will help us to identify ethical issues that are traditionally harder to pick up at audit, such as discrimination and freedom of association.
We also communicate key technical initiatives, product development success and business developments to our suppliers in our Working Together magazine, issued to own-brand suppliers every four months.
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