Cocoa value chain


Actors in the Central American cocoa value chain improve their productivity, establish public-private alliances, respect economic, social and cultural rights, and reduce their environmental impact. Thanks to the program 4,500 producer families will increase their net annual income by at least 10%, while 4,000 young adults and 2,000 women gain access to sustainable jobs. This will boost the local economy in the poor and peripheral areas in which cocoa is grown.  

RegionCountry Topic Period Budget
Central America
Honduras
Nicaragua
Employment & economic development
Agriculture & food security
Climate change and environment
Business support & economic inclusion
Agricultural development
Environmental policy
01.01.2018 - 31.12.2022
CHF 14'700'000
Background

Central America has optimal agro-ecological conditions for the production of fine cocoa. An expansion of the agroforestry systems which grow cocoa is currently underway. The cocoa chain can rely on a relatively safe market, due to a steady increase in world demand over the last years.

As much as 97% of the cocoa in Honduras and Nicaragua, the two main focus countries of this regional intervention, is produced by small farmers with scarce economic resources. Families earn an income not only from the production of cocoa beans, but also from their agroforestry systems (plantains, timber trees), which enhances their economic resilience.

The small farmers are organized in cooperatives and solidary groups and have though increased access to acceptable cocoa fermentation, drying and storage facilities.

However there are still weaknesses in the value chain regarding productivity, competitiveness, business diversification, product quantity and quality, the use of technologies and entrepreneurial organization. Furthermore, in some areas, the small cocoa producers carry out their activity in a context of violence and social conflict that undermines individual and family well-being, as well as entrepreneurial development.

Target To sustainably improve family incomes and generate employment along the different levels of the cocoa value chain. 
Target group
  • Local: Twenty-two (22) cooperatives and 120 solidary groups (4,500 small farmer families).
  • State institutions mandated with research, transfers and agricultural outreach.
  • Public and private Central American organizations.
  • National and regional support organizations with long-standing experience in the cocoa sector.
  • Cocoa associations
Outcomes

Outcome 1: Cocoa cooperatives hire young adults, improve their competitive capacities, protect the environment and respect the economic, social and cultural rights of their employees and partners.

Outcome 2: Actors in the cocoa value chain promote changes in the business climate and facilitate inclusive public-private investments, while respecting the chain’s governance system as a means of contributing to national cocoa strategies. 

Outcome 3: Regional quality standards and policies which contribute to position fine cocoa from Central America on the world market take into account the challenges and potentials of smallholders.

Results

Expected Results:  

  • The actors in the cocoa chain have exerted their influence to improve the business climate in the sector.
  • The actors in the cocoa chain have developed a competitiveness strategy and promote public-private investment.
  • The actors in the cocoa chain have organized and promote the production of certified organic cocoa, as per market demand.
  • Twenty-two (22) cocoa cooperatives have prepared a competitiveness strategy that reflects the demand of the market.
  • Twenty-two (22) cocoa cooperatives have established a system for innovation, research and transfers, in consensus with the cocoa chain committee.
  • Twenty-two (22) cocoa cooperatives have implemented environmental conservation strategies.
  • Twenty-two (22) cocoa cooperatives have implemented standards that respect ILO Convention 169 as regards the economic, social and cultural rights of their employees and partners, as well as the UN principles on business and human rights.


Results from previous phase:  

  • The gross family income of the target population increased on average 15% between 2015 y 2017. This allowed producers to improve their quality of life and invest in expanding their cocoa parcels.
  • In Honduras a public-private partnership with Chocolat Halba has been established. The Switzerland based enterprise made substantial investments in infrastructure and committed itself to paying fair prices for Honduran cacao. The product of this collaboration can be bought in all Coop stores.
  • With support from SDC, the financial sector has designed and implemented six financial products (micro-credits) so that small farmers and cooperatives can procure quality plants and invest in infrastructure for the post-harvest process of fermentation and drying of the cocoa beans.
  • In Nicaragua the cocoa bean harvest in the area of intervention went from 90 metric tons MT in 2016 to 152 MT in 2017 (40%+).
  • The dialogue between the government and the private sector led to the establishment of a value chain committee which brings together all the important actors of the cocoa value chain and which represents 22 cooperatives and 3,700 small cocoa producers.  
  • At regional level support has been provided to the establishment of cocoa platforms for public-private dialogue in Guatemala, El Salvador and Nicaragua.


Agency SDC
Credit Development cooperation
Project Partners Contract Partner
International or foreign Non-Governmental Organization
Private sector
Foreign state institution
United Nations Organization (UNO)
  • Central State of South East
  • Foreign private sector South/East
  • Industrial Development Organization


Projects Coordination

SDC programmes : Our Goascorán Basin, PROJOVEN, FDHAS, DEIT RGF, DEIT Mosquitia

Government initiatives: Plan 20/20 and COMRURAL in Honduras

Other cooperation agencies that provide support to the cocoa sector: World Bank, IFAD, government of Canada.

Budget Current Phase Swiss Budget CHF   14'700'000 Swiss Disbursement Till Know CHF   4'814'382
Project Phases Phase 2 01.01.2018 - 31.12.2022   (Current Phase) Phase 1 01.05.2013 - 30.06.2019   (Completed)