ZURICH, SWITZERLAND — Barry Callebaut has entered into a risk-sharing partnership of $9 million to cover up to 103,000 smallholder cocoa farmers in Cote d’Ivoire by 2020.
The Washington-based International Finance Corp. (I.F.C.), a member of the World Bank Group, also belongs to the partnership as does Utrecht, The Netherlands-based I.D.H., which convenes companies, governments and others in public-private partnerships.
Barry Callebaut, with support from the I.F.C. and I.D.H., will provide in-kind credit to farmers in the form of inputs and farm services. The partnership is designed to help farmers have several successful years, which would give the farmers a positive operational and financial track record, making them more likely to receive bank loans.
|Antoine de Saint-Affrique, c.e.o. of Barry Callebaut
“The start of this initiative represents an important step in promoting professional, sustainable cocoa farming and in enabling cocoa growers to develop from being subsistence farmers into small entrepreneurs,” said Antoine de Saint-Affrique, chief executive officer of Zurich-based Barry Callebaut, a manufacturer of chocolate and cocoa products. “Barry Callebaut is proud to lead the efforts to professionalize cocoa farming and is excited about the support of our partners in this endeavor.”
The partnership will provide two productivity packages directly to farmers and farmer cooperatives on a credit basis. A basic package will provide training in areas like pruning and crop protection. Another package will provide fertilizers to professional and credit-worthy famers with trees under 20 years of age. Both packages will include on-farm individualized coaching through agents accredited by Barry Callebaut.
To receive the productivity package on credit, farmers will open a bank account where they are required to save part of the package value up-front. The accounts will be opened at Advans, a microfinance institution.
“Demand for cocoa is rising, but supply has not kept pace as farmers, many of them working just two to three hectares, must cope with typical agricultural risks such as weather and limited access to credit,” said Alzbeta Klein, director for manufacturing, agribusiness and services for the I.F.C. “This partnership between I.F.C., Barry Callebaut and The Netherlands Sustainable Trade Initiative will help farmers in Cote d’Ivoire gain access to credit and training that will enable them to upgrade operations and become part of a value chain linking them to cocoa buyers and global chocolate consumers.”Barry Callebaut said the partnership is in-line with its commitment to Cocoa Action, a voluntary industrywide strategy on cocoa sustainability convened by the World Cocoa Foundation.