Sustainable cocoa and coffee

In the DR Congo, we note increases in farm gate prices of USD 0.20/kg and USD 0.50/kg for high-quality cocoa. In 2019, we launched a new cocoa programme in the DR Congo. The Cacao Okapi cooperative was founded so that its 318 members (including 26 women and 36 young people) could start commercialising their high-quality cocoa themselves, without having to lean on intermediaries. The cocoa producers invest in the cooperative: they now own 416 shares, equivalent to USD 21,229.55. By the end of 2020, 4 fermentation centres had been set up, which have a production potential of 28 containers (350 tonnes) a year… if the demand side follows. In 2021, we teamed up with Zoto, Silva Cacao and cooperatives UPPCO and Cacao Okapi, in the framework of the Beyond Chocolate Initiative. We strive to create direct commercial relationships and focus on quality. This will allow farmers to recover a larger share of the price paid for the product, together with a quality premium. In this way, farmers' incomes from cocoa can substantially increase and contribute significantly to closing the living income gap of cocoa-growing families. One year after the start of the project, increases in farm gate prices of USD 0.20/kg and USD 0.50/kg were documented, depending on the type of cocoa.

Also in our coffee programme, the focus on quality and post-harvest processes has led to an increase in farmers’ incomes. We’ve supported coffee cooperatives in setting up micro-washing stations. A micro-washing station is a place managed by a group of a few hundred coffee farmers to wash their coffee: this guarantees a consistent quality. This is important, because the market price for washed coffee is up to 1.7 times higher than for non-washed coffee. Our impact evaluations have shown that the average income of coffee farmers has gone up, mainly due to the fact that the share of the coffee farmers’ income coming from quality coffee has increased significantly, from 10% in 2017 to 56% in 2021. Our impact evaluations have also shown that cooperative action and a focus on quality contributed to an increase in coffee producer participation in long-term commercial contracts, rising from 9% to 14% between 2020 and 2021, despite endemic insecurity and the Covid-19 pandemic.

In Côte d’Ivoire, farmers earned about 30% more than the farm gate price for cocoa in the 2020-2021 season. We joined forces with Colruyt Group, Entreprise Cooperative de Saint Paul (ECSP), Puratos, Access Agriculture, Agro Insight and Fairtrade Belgium. With the funding of IDH – as part of the Beyond Chocolate initiative – we are jointly developing an integrated approach towards a living income. We consider six parameters – productivity and quality improvements, income diversification, access to finance, agroforestry and a decent price for cocoa – and test which ones are crucial to achieving a viable living income model for farmers. The 102 cocoa farmers involved in this project, whose cocoa is transformed into chocolate bars for the Colruyt Group, receive premiums on top of the farm gate price fixed by the Conseil Cacao Café in Côte d’Ivoire: a fair-trade premium and Cocoa Trace premiums. Additionally, the Colruyt Group has committed to paying a premium to farmers on top of that, to ensure they earn enough to afford a decent standard of living. This premium is closing the gap between the official farm gate price and the living income reference price.

As part of the project, we have supported women in diversifying their production and producing cassava, pepper and okra for household consumption and marketing in and around their communities. Together with the farmers, we have co-invested in 2 poultry farms with a combined capacity of over 1,000 birds: farmers can now sell poultry products including eggs and produce organic manure from poultry droppings, as additional sources of income. This also contributes to increasing food and nutritional security in the area. We equally set up microfinancing schemes for farmers: about 4 million CFA was mobilised by a little over 100 smallholder cocoa farmers within a period of 4 months in 2021.

Way to Go! Food security, additional income and affordable finance for smallholder cocoa farmers. In Ghana’s Ashanti region, we work with Lidl, Kuapa Kooko Farmers Union and Fairtrade to improve the socioeconomic conditions of cocoa farmers through income diversification. We have supported over 100 smallholder cocoa farmers in the production of yam and rice to contribute to local food security as well as providing additional income to farmers. Over 70 women in the area have been supported in taking up soap production as an additional income-generating opportunity. They made a profit of over GHC 14,000 within a period of 6 months in 2021. In the course of 2021, we also supported cocoa farmers in establishing 24 Village Savings and Loans Associations (VSLAs). A total of GHC 240,000 was mobilised by 574 farmers under the scheme, providing access to affordable financing for smallholder cocoa farmers.

We have supported our partner cooperatives in adopting sustainable production practices such as agroforestry systems.

• In Nicaragua, the average cocoa farmer we have worked with in the past five years has seen its productivity grow to 516.35 kg of cocoa per hectare, while the national average is 304.7 kg. This is thanks to capacity building that Rikolto has facilitated, related to good agricultural practices such as pruning, grafting and agroforestry systems.
• In Peru, 120 coffee and cocoa farmers members of our partner cooperatives now adopt agroforestry systems. Combining cocoa or coffee with other food crops has proven particularly important this year, as an additional source of income, but also for farmers to foresee in their own nutritional needs. The increased biodiversity brought about in agroforestry systems has led to reduced production costs: 4.76 Peruvian soles per kg in a monoculture versus 3.6 soles per kg in a diversified system. This way, producers can better deal with risks related to fluctuating coffee prices. And through the “Sembrando Prosperidad” (Sowing Prosperity) programme, 183 women from the Women Coffee Farmer Committee led an effort to start organic gardens at home: 1,376 coffee farmer families started their own gardens to foresee in their own nutrition needs.
• In Ecuador we support farmers in overcoming the barriers that limit their capacity to effectively rehabilitate and renovate their coffee and cacao plantations. We are an implementing partner of  Maximizing Opportunities in Coffee and Cocoa in the Americas (MOCCA), an initiative led by Technoserve in consortium with Lutheran World Relief (LWR) in 6 Latin American countries. With our partners, we have been co-creating the Cocoa Competitiveness Improvement Plan and bringing the cocoa sector in Ecuador into line with the new European Union regulations on cadmium. A Toolkit on Cadmium was created, which is a powerful tool to support cocoa producers in ensuring their cocoa does not surpass the cadmium limits imposed by the US and European markets.
• In Honduras, we organised 4 cocoa agroforestry production systems courses for over 150 young cocoa farmers from Central America. They took place between 2017 and 2021, at CURLA university. Productivity increased by 10% in the La Campesina cooperative, whose young farmers participated in the course.

We have helped facilitate access to markets and provided training on cocoa and coffee quality for cooperatives. Over the past years, we have facilitated several inclusive business relationships.

• In Peru, we strategically accompanied the relationship between Óbolo and CAC Pangoa, jointly developing the first quality process manual for fine flavour cocoa and training cocoa farmers in biodynamic farm management. Thanks to the quality CAC Pangoa offers, they have managed to agree on a price with Óbolo that is more than double that quoted on the stock exchange, i.e. USD 5 compared to USD 2.3 per kilo of cocoa beans. Farmers’ incomes have risen by 15% due to the quality of the product and Óbolo’s commitment, based on the idea that market prices do not necessarily reflect whether a deal is fair to the community or any negative environmental consequences of production.
• In Ecuador, in 2021, 85 Ecuadorian producer families members of the farmer organisation UROCAL obtained a fair payment of USD 4,100 per MT of organic cocoa, a price 39% above that offered by the markets. The sale to the international brand Ethiquable rewards the good practices of the organisation, as well as the quality and productivity standards achieved with the support of the MOCCA programme of Technoserve and Lutheran World Relief, implemented by Rikolto and funded by USDA.

We have also supported the creation of different regional and national platforms and policies aimed at improving the sustainability and inclusiveness of the cocoa and coffee sectors. Collectively constructing solutions to complex challenges is crucial for food system transformation.

• In Central America, Rikolto and the Executive Secretariat of the Central American Agricultural Council coordinated the development of the regional cocoa strategy. Since 2016, through the project "Knowledge Management in the Cocoa Value Chain", funded by the Swiss Agency for Development Cooperation (COSUDE), Rikolto has been bringing together actors in the chain to facilitate the development of a common vision that promotes the sustainability and competitiveness of the Central American cocoa sector. This led to the foundation of the Cocoa Committee of Central America and the Dominican Republic (SICACAO) in 2019. SICACAO is made up of representatives of seven countries in the region. The Committee contributes to strengthening the cocoa sector through advocacy on public policies, knowledge and information management and the creation of alliances for the sustainable development of the cocoa value chain in Central America. Rikolto and the Executive Secretariat of the Central American Agricultural Council (SECAC) coordinated the development of the strategy together with all stakeholders that are part of SICACAO.
• Rikolto was closely involved in the creation of NICAFES, an innovative platform for coffee sustainability in Nicaragua in 2017, together with UTZ/Rainforest and the Alianza Nacional de Caficultores de Nicaragua. 33 organisations active in the country’s coffee sector, including farmer cooperatives and associations, service providers, research institutes and development organisations set out to define a joint vision on how to make Nicaragua’s coffee sector more competitive and resilient. Meanwhile, the platform actors are working to propose national policies and strategies that would stimulate sustainable production and tackle climate challenges. Next, they will be deciding on and undertaking concrete actions that are directed at improving the productivity and resilience of the coffee sector as a whole. The joint vision, strategies and concrete actions ensuing from them will benefit over 56,250 Nicaraguans: coffee producers, their families and those working in other parts of the coffee sector.
• In 2021, Honduras became the first country to adopt a policy on gender equality for its coffee sector. To develop this sectoral policy, the Platform for Sustainable Coffee in Honduras (PCSH) and the National Coffee Board (CONACAFE), which includes a wide range of stakeholders from the Honduran coffee industry, partnered with Rikolto and Solidaridad Network. The process started by analysing the coffee and agricultural context and the existing regulatory framework, and continued with a consultation process with all those involved in the coffee chain to formulate the strategy. It aims to support organisations in the sector in addressing social and gender inclusion, improving women's access to services and resources, developing the leadership capacity of women working in the sector and coordinating actions to promote change. The gender policy and action plan will impact about 19,000 female coffee farmers active in Honduras. We are now continuing our work translate this policy into actions.
• In Cajamarca, one of Peru’s main coffee exporting regions, Rikolto convened the Cajamarca Multistakeholder Coffee Platform in 2020, together with the Coffee Technical Commission in Cajamarca and the Northern Technical Network. It brings together 14 public and private actors in the value chain in the region, and aligns with the National Coffee Action Plan. The platform's work focuses on productive and quality management, social and economic management, environmental management, institutional strengthening and advocacy. As a collective, they want to turn Cajamarca's coffee sector into a national reference.

In Indonesia, we have elevated climate-smart practices to the enabling environment to reach 200,000 cocoa farmers. We facilitate inclusive trade relationships between cooperatives and buyers, such as Valrhona, Rainforest Alliance and Kalimajari. In partnership, we are working towards sustainable markets for Indonesian cocoa that reward improvements of cocoa bean quality. In 2021, we trained 685 farmers on climate-smart agriculture, post-harvest practices and farming as a business. Two demo plots covering a total of 1.25 ha have been installed, in which climate-smart agricultural practices are applied. We also elevate this to the enabling environment through our involvement in the Cocoa Sustainability Platform (CSP), which reaches over 200,000 cocoa farmers. It established, with Rikolto’s support, a national cocoa curriculum for farmers so as to give standardised technical recommendations concerning cocoa cultivation and subsidies for fertiliser at a national level. The recommendation to subsidise fertiliser formulated specifically for cocoa was approved by the government. As a result, production costs decreased and cocoa productivity increased in 2021.

Together with the Indonesian government, we have co-created a Payment for Ecosystems Services business model aimed at restoring the rainforest, between Koperasi Kerinci Barokah Bersama (KKBB) and Sucafina. Payment for Ecosystem Services is a cost-effective way to compensate indigenous communities, landowners and farmers for their environmental maintenance and provision of ecosystem services. For instance, a farmer who looks after agroforestry systems on a mountain range helps to diminish the potential of natural disasters such as forest fire, landslides or soil erosion. The payment can be monetary or in-kind through the provision of services such as training, investments in infrastructure etc. For the programme to work, we need committed buyers with a long-term business perspective.

KKBB is a youth-led cooperative with a solid business and marketing perspective. Koperasi Kerinci Barokah Bersama (KKBB), Rikolto's partner in Kerinci, is led by young people who aspire to create jobs and produce the best coffee from Kerinci. As a result of our collaboration, KKBB has grown its marketing capacity and is now exporting its Kerinci coffee to various countries around the world. Its exports have increased, from 15 tonnes in 2019 to 72 tonnes in 2022. We brokered an inclusive business relationship between KKBB and buyer Sucafina: the buyer’s professional contracts, feedback and open communication has empowered KKBB to grow. In addition, with the support of Rikolto, KKBB built a network of cooperation with both the government and financial institutions, to support the organisation’s production and marketing. Meanwhile, KKBB’s membership base has increased from around 100 farmers in 2018 to 390 in 2022. KKBB’s journey to a more professional organisation brings increasing benefits to its members. The organisation’s ability to see market demand for other types of coffee processing products clearly shows this. With the support of Rikolto and other stakeholders, KKBB is able to produce different types of coffee green beans from various processes. In 2022, the sale price (per kg) of coffee green bean with the anaerobic process was 30% higher than beans with a standard washing process, which is also the most common processing practice in Indonesia. This better price will certainly provide more benefits for KKBB, as well as for its member farmers.