Developing sustainable cocoa value-chains through the

January 23, 2018 | Author: Anonymous | Category: Social Science, Psychology, Conformity
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International ConferencE ON: “Economics and Politics of chocolatE” ------------------------------------

Leuven, 16-18 September, 2012

“Developing sustainable cocoa value-chains through the use of private-public partnerships : the IFAD experience in Sao Tomé e Principe” By: Mr. Andrea Serpagli - IFAD CPM, STP – [email protected]

Sao Tomé e Principe : 1,001 KM2 and 164,000 inhabitants

Background: how the whole story started (bio-cocoa value chain) •

São Tomé: largest international cocoa exporter in early 1900s : 40,000 MT in 1930



After independence (1975) steady drop of production till 4,000 MT in 1990



Land reform (WB supported) in the mid-nineties: 8,000 smallholders were created



In 1995, IFAD, in cooperation with France, put in place a «National support to smallholders programme (PNAPAF)» which included extension services, diversification, rural infrastructure and microfinance



Price volatility of cocoa, the major source of smallholders’ revenues in STP, was devastating: from USD 1,300/ton in January 1998 to USD 700/MT in December 1999. Smallholders were abandoning their lands;



In 2003, IFAD started funding a new programme (12 years): the “Participatory Smallholder Agriculture & Artisanal Fisheries Development Project (PAPAFPA)”;



Contact was made with KAOKA (leading enterprise in the French chocolate market). New marketing strategy recommended, based on: aromatic and origin features + organic certification to access niche EU markets



New intervention strategy based on: PPP establishment + stable price + quality premiums + turn producers into professional market players (CECAB created)

Main value chains targeted: – Organic Cocoa (2005) – Organic Pepper (2007) – Fair-Trade Cocoa (2009) – Organic coffee (2010)

Project achievements Organic cocoa value chain



Participatory Smallholder Agriculture & Artisanal Fisheries Development Project (PAPAFPA): – Starting date: Feb. 03 – Closing date : March 2015 – Total cost: USD 16.5 M (USD 9,5 M as IFAD loan + 3 M as IFAD grant + 4 M as local Gov. / AFD / private sector contributions)

Communities covered:

Fair-trade cocoa value chain

WCA •

Sao Tomé and Principe: Support to Organic and Fair-Trade Value Chains PAPAFPA

Communities covered:

Producers supported:

53 1879 (599 women)

Dried beans exported: 2005 MT (since 05) One PPP established in 2004 with French partner/buyer (KAOKA) 17

Producers supported:

575 (123 women)

Dried beans exported:

182 MT (since 09)

One PPP established partner/buyer (CaféDirect)

with

UK

4

PAPAFPA: some information on supported trade FAIR-TRADE COCOA VALUE CHAIN

ORGANIC COCOA VALUE CHAIN •

• •

• • • •



Exporter: CECAB (cooperative, created in 2005), with 53 members associations active in 62 communities (3 in Principe) Organic certification: 2005 (Ecocert) Technical (production/trade assistance): provided under PAPAFPA and directly by foreign buyer – Example of PPP CECAB: independent as from January 2012 Buyer: KAOKA (main French chocolate manufacturer) CECAB & KAOKA: signed 5 years trade contract in 2005 – Further extended Sales based on agreed price, including organic + quality premiums (invested in social services) Export figures (to France): – 2007: 67 MT (profits: +350%) – 2008: 327 MT (+490%) – 2009: 490 MT (+ 50%) – 2010: 448 MT (draught) – 2011: 472 MT (draught ) – 2012: 201 MT (as to June 2012)



• •

• • •



Exporter: CECAQ-11 (cooperative, created in 2009), with 17 member associations active in 19 communities Fair-trade certified (FLO, June 2010) Technical (production/trade assistance): provided under PAPAFPA (through local ONG - Zatona) and by foreign buyer (CaféDirect) – Example of PPP Buyer: CaféDirect (main UK drink manufacturer) CECAQ-11 & Café Direct: signed trade contract in 2008 for 18 months - Renewed Sales based on agreed price, including fairtrade + quality premiums (to be invested in social infrastructures/services) Export figures (to UK, Italy and Germany): - 2009: 12 MT - 2010: 45 MT - 2011: 96 MT - 2012: 29 MT (as to June 2012)

PAPAFPA coverage (2012) CARTE DES COMMUNAUTES IMPLIQUÉES PAR LES COMPOSANTES DU PAPAFPA À LA FIN DE L’ANNÉE 2008  B.Monte  Paciencia

S.Rita  Sundy

 Azeitona

Picão

 P.Inhame

 P.Sol 

 O.Gaspar

Pincaté    Montalegre P.Real  S.Joaquim  Fundão   Praia Lapa

S.Cristo

N.Estrela B.Vista   T.Velho 

PRÍNCIPE

 F.Dias

P.Conchas P.

Canavial   Conde V.Braga P.Nazaré P.Conchas     Plancas Laranjeira R.Funda II Uba Cabra Plancas R.Douro P. Saltado R.Palma Praia  NEVES S.Luzia  P.Figo P. Sta Teresa S.Clara B.Sucesso R.Palma  A.Sampaio  Caldeiras B.Entrada P.Figo S. Rosema   M.Macaco Maianço   A.Coimbra  M.Forte P.Maria S.Teresa  Santarém  Queluz A.Telha V.Fernanda M.Carmo  Generosa   F.Mantero Gratidão B.Esperança  C.Santos Cadão P.Alto   M.Leite Fortunato Bénfica S.Margarida Formosa  Blu-Blu M.Morais S.F.Mongo  V.Alegre Amparo2 S.Carlos  R.Lima   J.Luis Saudades Margão Q.Palmeiras  Filipina  Vanguarda  A.Morais S.José M.Café   Mulundo Piedade D.Vaz M.Luiza Cascata  Q.Flores S.José S.Clotilde  Rebordelo  Pinheira Milagrosa S.Jenny  M.Alegre Guegue J.Paulo P.Pian S.Adelaide M.Estoril Plateau  S.Manuel  P.Fogo U.B.Velho U.B.Praia  U.Budo S. C.Dias S.Catarina Rio Ave Abade Quimpo M.António  S.Clotilde A.Belas S.João R.Nova  Praia M. Alves  D.Amélia Lemba S.Januário V.Formoso P.Palmeiras N.Olinda C.Faro A.Andrade    S.António B.Faro    P.Furada  M.Cana O.Marim S.Manuel M.Silva M.Belo   À.Izé  Castelo Beira A.Vouga  S.Paulo S.Lourenço A.Douro  S.Francisco

ZONE CENTRE

ZONE NORD





ZONE SUD

Caridade Amparo1 C.Açoreana  S.Cecilia A.João

 Micondo

A.Toldo

S.João  S.J.dos Angolares Soledade





M.Carroça N.Oliveira

D.Augusta



 P.Alegre S.  Malanza



Alphabétisation Cacao Biologique Cacao Qualité  Poivre Vanille  FIC Poisson frais sous glace

 



Sta.Josefina

A.Douro



Ió Grande P.Pesqueira

R.Peixe Willy



M.Mário

 P.Baleia

 Abade 

Terms of the private-public partnership (PPP) IFAD • •





Sound expertise in community development and producers’ organization Facilitated access to local institutions responsible for development of rural areas Delivery of money (at very concessional terms) for infrastructural and productive investments; technical assistance and institutional building Ensuring long-term follow-up and evaluation of the intervention

LOCAL GOVERNMENT • •

Ensure institutional/financial support to intervention (as per original agreements) Provision of some further support in terms of: land for investments, TA, inputs, brokerage etc

PRIVATE Foreign Partner •

Provision of technical know-how (at a: production, processing, logistic and marketing level) very tailored on target markets and otherwise difficult and expensive to procure • Guaranteed access to niche-markets (on EU selected markets) • Certainty of purchases (in quantity terms) and of prices paid (fixed according to previously agreed price schemes) • Willingness to operate within provisions of ethical schemes (organic and fair-trade ones) • Making available financial resources as cash for investments and premiums for community’s development Local Producers (small-holders) • Making available land, labour and some capital • Commitment to operate/sell through primary/apex POs and produce/process according to “ethical” standards

Private partners’ views on outcomes of PPPs (quotations from presentations/articles etc.) •





• • • •

“Strengthens our directness with and understanding of grower communities” “Allowed us to benefit from skills and expertise outside our usual area of operations” “Opened up new partnering with local government, scientific bodies and NGOs” “Risk sharing” “High quality product developed and delivered in short time” “Builds our brand differentiation in the market place” “Allows us to deepen and widen our impact as a social enterprise business”

Producers’ views on outcomes of PPPs







• •





Producers’ organizations are now selling dried (and not fresh) cocoa beans: more value-added remains with producers Export (trade) of processed products is done directly by export cooperatives and not through intermediaries As a result, incomes have more than doubled as compared to selling through traditional marketing channels Risk sharing Trade terms (quantities, quality features, prices, dates of delivery) are negotiated (and, then, known) in advance Money is also available for community/social investments (thanks to organic/fair trade premiums) Self-esteem of producers increases: from labourers to entrepreneurs

The sustainability issue •

ECONOMIC SUSTAINABILITY: Roots: (a) Farmers=Professional market player; (b) Direct trade of dried (not wet) beans by grouped farmers/suppliers; (c) Targeting rewarding, niche markets in EU and not undifferentiated domestic market; (d) Known/agreed trade terms (quality requirements, prices, premiums -size and use); (e) Risk sharing; (f) Mutual trust and support. Effects: (a) Farmers’ value-added increased by selling dried and not wet beans; (b) Direct sales by the Co-operative (CECAB or CECAQ) and not through intermediaries; (c) > two fold increase in sale prices in just few years. *********************************************************************************** • ENVIRONMENTAL SUSTAINABILITY: Roots: (a) Use of production and processing practices environment-friendly (under organic and fair-trade standards’ norms); (b) Use of natural inputs (sun, wood, sisal etc.). Effects: (a) No harmful impact on environment from used production/processing practices (use of: compost, solar drying technology, water recycling etc.); (b) Scaling-up effects at communities’ level, on natural park conservation and tourist capture; (c) Decrease of risks for human health *********************************************************************************** • SOCIAL SUSTAINABILITY: Roots: (a) Use of “Community Driven Development” approach ensured full ownership (of business, technology, development process etc.) and fair sharing of benefits; (b) Business run according to “ethic” principles (under organic/fair-trade prescriptions) and by partners committed to sustainable development Effects: (a) Self-esteem effect: community members (farmers) from labourers to entrepreneurs; (b) New services (health centres, purchase of drugs, credit etc.) put in place to the benefit of trading communities and using trade premiums; (c) Introduced new production/processing/trading technology very simple and therefore easily and fully owned by final communities

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