Rainforest Alliance and NYU Stern School of Business
Sustainable Cocoa Investment Challenge
It’s not easy for smallholder farmers to obtain loans by themselves, so by helping them
access the financing they need, we hope to improve their livelihoods, income potential and
encourage sustainable practices.
- Michelle Buckles, Director of Sustainable Finance, Rainforest Alliance
Smallholder cocoa farmers are the backbone of a global industry worth billions of dollars,
yet the vast majority of these farmers still live in extreme poverty, scraping a living from aging
cocoa plantations with declining productivity. In Côte d'Ivoire, supplier of 40% of the world’s
cocoa, yields are some of the lowest in the world, primarily due to aging trees, deteriorating soils
and disease. In the absence of long-term financing options to renovate and rehabilitate their
farms, many cocoa farmers are switching to other crops that provide better income opportunities.
Investing in sustainable cocoa farming is crucial to ensuring a steady cocoa supply for the
world’s chocolate industry, and to improving the livelihoods of cocoa farmers across
geographies.
Through its different programs, the Rainforest Alliance is working to revive the cocoa
industry in countries such as Côte d'Ivoire by providing capacity building services to farmers and
their cooperatives. This includes training farmers on farm renovation1and rehabilitation2
techniques (hereafter referred to as “R&R” or “rejuvenation”). In 2013, the Rainforest Alliance’s
Sustainable Finance Initiative embarked on a multi-phase project (the Cocoa Rejuvenation
Finance Project) aimed at designing and implementing a sustainable finance mechanism that
would enable smallholder cocoa farmers to access the financing and services they need to
improve and upgrade their plantations (Appendix 9).
The first phase of the Cocoa Rejuvenation Finance Project consisted of a feasibility
study conducted in Côte d'Ivoire during the summer of 2013 that demonstrated the business case
and viability for this project (Rainforest Alliance, Sustainable Finance Initiative, 2013). The
second phase of this project includes the design of a financing mechanism.
1
2
Renovation refers to the activity of replacing aging and underperforming tree stocks with new trees through replanting.
Rehabilitation refers to the activity of applying best agricultural practices on existing tree stocks with the objective to improve productivity.
1
To begin the next phase of the project, the Rainforest Alliance partnered with NYU Stern
to create the Rainforest Alliance Sustainable Cocoa Investment Challenge. The Challenge asks
students at NYU to help the Rainforest Alliance develop an innovative financing mechanism to
provide long-term "rejuvenation loan packages" to smallholder cocoa farmers in cocoa producing
countries (Appendix 15). Loan packages, which will include a holistic set of products and
services, will be used by smallholder cocoa farmers to implement multi-year farm rejuvenation
projects aimed at improving the productivity and sustainability of their cocoa plantation.
Rainforest Alliance and Sustainable Agriculture
Rainforest Alliance
Since its founding in 1987, the Rainforest Alliance has worked to conserve biodiversity
and ensure sustainable livelihoods by transforming land-use practices, business practices and
consumer behavior. At the heart of the Rainforest Alliance’s approach is the understanding that
the health of the land is inextricably connected to the well-being of those who depend on it for
their livelihoods.
The Rainforest Alliance’s approach includes training and certification to promote healthy
environments and communities in some of the world’s most vulnerable ecosystems. Training is
provided by Rainforest Alliance project staff, consultants, agronomists, extension officers, and
led-farmers through workshops, manuals, and an online platform. The Rainforest Alliance’s
training helps farmers implement sustainable practices and obtain certification.
In order for a farm or forestry enterprise to achieve Rainforest Alliance certification, or
for a tourism business to be verified, it must meet rigorous standards designed to protect
ecosystems, safeguard the well-being of local communities and improve productivity. The
Rainforest Alliance then links these farmers, foresters and tourism businesses to the growing
global community of conscientious consumers through the green frog seal. The Rainforest
Alliance Certified™ seal is an internationally recognized symbol of environmental, social and
economic sustainability.
Sustainable Agriculture
Agricultural expansion is responsible for 70% of global deforestation, and is the single
greatest threat to tropical forests. In biodiversity-rich regions around the world, farms are often
responsible for soil erosion, water pollution and wildlife habitat destruction. Rainforest Alliance
certification encourages farmers to grow crops and manage ranch lands sustainably. Through the
standards developed by the Sustainable Agriculture Network (SAN), a coalition of nonprofit
conservation organizations, the Rainforest Alliance certifies farms based on the three pillars of
sustainability: environmental protection, social equity, and economic viability and recognizes
“that the well-being of communities and ecosystems is intertwined and dependent on
development that is environmentally sound, socially equitable and economically viable”. The
SAN standards include principles for (a) efficient and productive agriculture, (b) biodiversity
conservation, and (c) sustainable community development (Sustainable Agriculture Network,
2014).
2
Rainforest Alliance and Cocoa Certification
The Rainforest Alliance has worked to strengthen the position of smallholder cocoa
farmers since 2006 by training farmers to conserve natural resources, secure a decent income,
increase productivity and gain access to the growing global market for sustainably produced
cocoa. With the support of locally based technicians and group administrators who help prepare
farmers for certification, 279,000 cocoa farms in 17 countries have achieved certification
(Appendix 2 and 3); through the Rainforest Alliance’s technical training programs, cocoa
farmers learn methods that increase efficiency, productivity and resilience. These farmers
safeguard the health of 1.3 million hectares of land and contribute to building a better economic
foundation for future generations (Sustainable Agriculture Network, 2014). As of 2013, cocoa
from Rainforest Alliance Certified™ farms accounts for 10% of the world cocoa market
(Rainforest Alliance, 2013).
Independent studies show that Rainforest Alliance training leads to increased yields and
income, along with many benefits for farmers, families and the communities that depend on
cocoa. In 2011, for example, certified farms in Côte d’Ivoire produced 576 kg of cocoa per
hectare compared with 334 kg/ha on non-certified farms (Committee on Sustainability
Assessment , 2012).
Rainforest Alliance’s Sustainable Finance Initiative
In 2012, the Rainforest Alliance sought to increase its value-add to producers and
industry by helping smallholders and small and medium sized enterprises (SMEs) increase
access to finance by establishing the Sustainable Finance Initiative. The initiative’s objectives
are three-fold: 1) to improve the economic sustainability of smallholders and producer groups
through access to financial literacy and business management education; 2) to increase access to
finance for smallholders and producer groups by promoting financial product innovation and by
linking them to social lenders and local financial institutions; 3) to increase understanding of the
economic benefits of sustainability for producers and the financial community.
While smallholder farmers in developing countries recognize the benefits of adopting
sustainable best practices involved in Rainforest Alliance certification, many find it challenging
to make the initial financial investment that certification and general productivity
improvements,require with limited access to financing. For example, SMEs may need to increase
pay to improve worker safety, build waste management systems, or install new technology to
obtain certification. “Small cooperatives rarely have that kind of money sitting in the bank, and
need to borrow the capital to make these investments,” says Michelle Buckles, Director of the
Sustainable Finance Initiative. Smallholder farmers often find it difficult to obtain loans by
themselves; the Sustainable Finance Initiative hopes to address this challenge by assisting small
and medium-sized enterprises access funding from financial institutions.
The Sustainable Finance Initiative provides support to certified producers and SMEs, and
those in the process of achieving certification, by helping to identify their financial needs,
3
developing borrower profiles, providing business and financial management technical assistance,
developing supply financing mechanisms where necessary and linking producers and SMEs to
the appropriate financial institutions. It is important to note that while the Rainforest Alliance
does not lend money or assess credit worthiness directly, it makes introductions to lenders, who
then complete their own due diligence. The Sustainable Finance Initiative also works to educate
these institutions about the investment needs of sustainable producers and to influence the design
of financial products suitable for sustainable producers.
The Global Cocoa Market
Farmed on over 18 million acres (7.5 million hectares) of tropical land, cocoa provides a
means of livelihood for some five million farmers – 90% of whom are smallholders (<5 ha)
(Mars, Inc.). Cocoa is primarily grown in Africa, Asia and the Americas; however, Côte d’Ivoire
and Ghana account for 60% of the world’s cocoa supply (Green America, 2014). In 2013, Côte
d’Ivoire produced 1,449 thousand tons of cocoa and Ghana produced 835 thousand tons (ICCO,
2014).
Consumption of cocoa dates back 4,000 years to the pre-Olmec people of Mesoamerica,
and was historically used to create a ceremonial beverage. Introduced by the Spaniards,
chocolate gained widespread popularity throughout Europe by the mid-1600s (World Cocoa
Foundation, 2014). People around the world now consume over three million tons of cocoa beans
per year in thousands of different forms, creating an $83 billion global industry (Green America,
2014). The United States is the biggest importer of cocoa beans, and the second biggest exporter
of chocolate candy, after the European Union.
Currently, over 3.5 million tons of cocoa are produced annually (Fairtrade Foundation,
2013). While the World Cocoa Foundation cites a 3.1% annual production increase between
2008 and 2012, many predict supply growth will slow due to climate change and cocoa farm
deterioration, particularly in West Africa. At the same time, industry forecasts predict a 30%
growth in demand to more than 4.5 million tons by 2020, owing in part to the growing middle
class in emerging markets in China, Brazil, India, and Eastern Europe (Fairtrade Foundation,
2013). The supply gap may force prices to rise; in fact, many already predict cocoa prices to rise
close to 50% in ten years. In sum, productivity will have to increase in order to meet the world’s
growing demand for chocolate (Josephs, A Race to Satisfy World's Hunger for Chocolate, 2012)
(Appendix 6).
Historically, cocoa prices have been less volatile than large scale grains, such as wheat
and corn, and more stable relative to palm oil and rubber. Since 2013, however, cocoa futures
prices have been on a steady upward trend, increasing by 37% between 2013 and 2014 (World
Cocoa Foundation, 2014) (Appendix 4). The ICCO Daily Price closed around $2,900 per metric
ton on November 28th, 2014 (ICCO, 2014).
Cocoa Value Chain
Cocoa is an important export and cash crop for cocoa producing countries and it is also a
significant import for cocoa consuming countries, which generally do not have climates suitable
4
for producing cocoa. To get from producers to consumers, cocoa beans travel along a complex
global value chain through farmers, cooperatives, buyers, shipping organizations, processors,
manufacturers, chocolatiers and distributers (World Cocoa Foundation, 2014).
The cocoa value chain also includes a wide range of value-add service providers, such as
certifiers, technical assistance providers, government services extension and financing partners
who support both growers and buyers in their daily activities (Appendix 6).
From the pod to the bar
Cocoa trees grow in hot, rainy, tropical climates, and they are generally located within
15-20 degrees latitude from the equator, ideally with lush vegetation to provide shade for the
trees. Farms tend to be two to four hectares and produce between 300 and 600 kilograms of
cocoa beans per hectare, depending on the country and region (World Cocoa Foundation, 2014).
The trees begin producing pods at peak production levels after five years and continue for about
ten years. A cacao tree typically produces 40 pods annually, and each pod contains between 20
and 60 beans—it takes approximately 400 beans to make one pound of chocolate (Rainforest
Alliance, 2014).
Most countries have two harvests per year, one peak harvest during the high season and
one second harvest during the low season. Once the cocoa beans have been harvested, farmers
pack the beans into boxes or leave them in piles to ferment and dry. After drying, farmers packs
the beans into sacks and sell them directly to local buyers or bring them to a cooperative. By
pooling the cocoa of many farmers, cooperatives act as an intermediary between farmers and
buyers and help farmers receive better prices. After cooperatives sell their cocoa to a buyer, the
cocoa is transported to an exporter.
The exporter inspects the cocoa and brings it to a port. The beans are then shipped to a
processing location, where they are checked by a buyer and then remain until needed by the
processor. Upon request, the manufacturer receives the beans, inspects and cleans them, then
roasts and grinds them into cocoa liquor. The processor then presses the cocoa liquor to divide it
into cocoa butter and cocoa cakes (cocoa cakes can be sold as is or ground into a powder). To
make chocolate, cocoa liquor is mixed with sugar, cocoa butter, and sometimes milk, and poured
into a conch that stirs the mixture under heat.
Challenges in the Cocoa Value Chain
The cocoa value chain faces a number of significant challenges that affect both growing
and selling the crop. Factors such as education, regulations and access to market information
significantly affect the price farmers receive for their crop (World Cocoa Foundation, 2014).
While smallholder cocoa farmers produce up to 90% of cocoa supplied to the global market, the
majority live in extreme poverty—which is partially attributable to smallholder farmers’ lack of
5
market information and ability to negotiate. In Côte d’Ivoire, for example, 60% of cocoa farmers
live below the poverty line (Barry Callebaut, 2014). Other challenges include aging farmers—the
average age of farmers in West Africa is 51 years old—and child labor. An estimated 1.8 million
children work in cocoa production in West Africa (Green America, 2014).
Of greatest concern to the cocoa industry, however, is low productivity, attributable to
aging trees that are past peak productivity, pests and disease, and depleted soil fertility. In West
Africa, for example, 30-40% of crops are lost every year due to disease, and 30% of soils are
somewhat or highly degraded, resulting in weak trees and meager harvests (Barry Callebaut,
2014). Without access to adequate training and financing, smallholder farmers are unable to
curb tree stocks from deteriorating and to prevent yields from declining.
Landscape of Technical Assistance Provided to Farmers
Improving Agronomic Techniques through Farmer Field School
Recognizing the challenges farmers face and the impact their management decisions have
on the environment, Farmer Field Schools (FFS) were created in the 1980s to teach better crop
management practices. Since then, FFS have been established throughout Asia and Africa and
address a variety of commodities and topics, including cocoa, vegetables, rice, livestock, natural
resource management, climate change and social issues (David S et al, 2006).
Farmer Field Schools are a participatory training and adult education program that, on
average, consist of 20-30 participants that meet regularly during the cropping cycle. Taught by
trained facilitators, FFS aim to provide farmers with knowledge of the agro-ecosystem to help
them make better crop management decisions (David S et al, 2006). Agronomic techniques are
often passed down through generations of families and tend to be outdated. FFS teach best
management techniques for weeding, pruning, grafting, harvesting and fermenting, and
encourage farmers to experiment on their farms. The application of new techniques learned at
FFS has resulted in significant productivity increases for many farmers (IDH, 2013).
The Rainforest Alliance works in Côte d’Ivoire, Ghana, and various cocoa producing
countries in South America to help smallholder farmers improve their land management and
maximize yields through Farmer Field Schools. After FFS, many farmers often time go on to
seek Rainforest Alliance certification.
Improving Financial Literacy and Farm Management Skills
In addition to Farmer Field Schools, many firms and nongovernmental organizations
have developed training materials to increase financial literacy and management skills for
smallholder farmers. In cocoa, as well in other crops, smallholder farmers lack basic literacy and
numeracy skills that prevent them from properly managing their farms’ resources; quantitative
analysis is required to calculate yields, costs, and revenues, for example. Training materials that
address these issues teach basic financial concepts, such as budgeting, investment, and
management skills, like recordkeeping and land-use planning. Training often involves exercises,
6
simulations and presentations that aim to teach farmers the value of implementing better
management practices on their farms (International Finance Corporation, 2013).
An example of a “farmer business school” in the cocoa sector can be found in Côte
d’Ivoire and Indonesia administered by GrowCocoa, and independently-run joint venture project
between Olam and Blommer Chocolate. The school addresses a number of topics, such as the
economics of food and cash crops and basic nutrition, and aims to help farmers understand and
anticipate yields (Nieburg, 2013).
Improving Access to Finance
Beyond improving smallholders’ agronomic techniques and farm management skills,
there is an increasing need to unlock smallholders’ access to finance to improve productivity. In
cocoa, this means unlocking farmers’ access to both short-term and long-term financing to revive
cocoa plantations through paying for inputs, planting materials, small equipment and additional
working capital.
Across crops and geographies, smallholders have a difficult time accessing finance. They
often lack credit history and collateral, and are therefore not ideal candidates for traditional
loans. In addition, financial institutions see investing in agriculture as risky, because crops are
unreliable, weather is unpredictable, and prices often fluctuate. For these reasons, smallholders’
access to finance has been fairly limited and even nonexistent.
In some cases, cocoa farmers and their cooperatives receive short-term financing from
buyers who are primarily motivated by their need to secure cocoa supply during harvest seasons.
These capital injections—in the form of trade finance, input finance or investment in capital over
a 6 to 9 month period—have created strong dependencies between the farmers and the buyers
providing these lines of financing. The key reasons cocoa farmers would sell to a specific buyer
are 1) the immediate availability of cash (even if this means selling at a price below market) and
2) the availability of credit for inputs (or subsidized inputs). In the latter case, inputs are provided
upfront by buyers, obligating farmers to deliver their harvest to these same buyers in order to
repay their debt. It happens, however that, farmers in need of liquidity—or of finding more
attractive prices elsewhere—sell their cocoa through other channels. This creates a constant
tension between cocoa farmers and cocoa buyers. On one hand, farmers are seen as “unloyal” to
the buyer providing the pre-harvest inputs; on the other hand, buyers are seen as “predatory,”
exhibiting a sense of ownership of their supply chain.
Industry stakeholders, development finance institutions, and socially-minded investors
are increasingly aware of the financing gap that exists in the cocoa sector and are increasingly
interested in finding financial solutions. Since 2009, access to finance has been on the agenda of
the World Cocoa Foundation’s (WCF) various programs as a tool to improve smallholders’
access to fertilizers and crop-protection inputs. Under its Cocoa Livelihood Program (CLP), two
microfinance institutions, Advans in Côte d’Ivoire and Opportunity International Savings &
Loan in Ghana, have provided short-term crop-protection and fertilizer loans to cocoa farmers
since 2012. They now reach several thousand farmers each year (World Cooca Foundation,
2012) (Appendix 5). Additionally, some social lenders, such as Alterfin and Root Capital in Côte
d’Ivoire, have made successful investments into large cocoa cooperatives in the form of
7
investment loans to acquire or maintain equipment, and of trade finance, for cooperatives to
purchase the farmer’s cocoa at harvest.
Rainforest Alliance Cocoa Rejuvenation Finance Project
In 2013, the Rainforest Alliance’s Sustainable Finance Initiative embarked on a multiphase project, the Cocoa Rejuvenation Finance Project (CRFP), aimed at designing
and implementing a sustainable finance mechanism (hereafter “CRFP mechanism”) that
would enable smallholder cocoa farmers to access the financing and services they need to
upgrade their plantations and improve their productivity in a sustainable manner (Appendix 10).
The first phase of the project consisted of a feasibility study conducted in Côte d'Ivoire
during the summer 2013 that demonstrated the business case and viability of the project
(Appendix 1).
Results of the Feasibility Study
During the feasibility analysis phase, the Sustainable Finance Initiative produced a
flexible and robust investment decision-making tool3 based on farm-level economics that shows
the costs and benefits of implementing cocoa farm rejuvenation practices (Rainforest Alliance,
2013). The analysis derived from using this tool showed that long-term loans for cocoa farm
rejuvenation are theoretically possible with no loss of income to the farmers and can be repaid
through the resulting increase in productivity and farm revenue.
Building on the positive results of the study, the Sustainable Finance Initiative worked
closely with Dalberg Development Advisors’ Initiative for Smallholder Finance to assess the
amount of financing needed to implement cocoa farm rejuvenation at scale and to provide
thousands of “rejuvenation loan packages” to smallholder cocoa farmers in Côte d’Ivoire. The
portfolio level analysis showed significant potential impact of large-scale cocoa farm
rejuvenation on the Ivorian cocoa industry and economy at large. The analysis also demonstrated
the need for a large-scale financing program to deploy "rejuvenation loan packages” to a large
number of farmers. Assuming “rejuvenation loan packages” can successfully be deployed to
100,000 smallholder cocoa farmers in Côte d’Ivoire only, an estimated $200 million in capital is
required (Appendix 19). Such a widespread investment could lead to nearly $3.7 billion longterm added value to the Ivorian cocoa industry over 10 years, according to Dalberg.
Next Steps
Based on the results of the feasibility study, the Rainforest Alliance is engaging with a
wide range of cocoa industry players, development finance organizations and technical
assistance providers. The Rainforest Alliance now seeks the help of NYU students participating
in the Sustainable Cocoa Investment Challenge to develop a practical mechanism to provide
long-term "rejuvenation loan packages” to smallholder cocoa farmers in Côte d’Ivoire and other
cocoa producing countries.
3
The framework of this tools is extensively described into the Feasibility Study Report published by the Sustainable Finance Initiative in 2013.
8
The Rainforest Alliance envisions the CRFP mechanism to be an innovative and precompetitive4 financing mechanism through which debt and capital providers would work closely
with cocoa value chain participants to facilitate smallholder cocoa farmers’ access to
"rejuvenation loan packages.” These packages will contain a holistic set of goods and services
necessary to successfully implement multi-year rejuvenation plans. To mitigate repayment risk
and address the structural barriers5 inherent in the cocoa industry, these packages will be
designed as innovative blends of cash and in-kind loans to be repaid in cash and in crop delivery
by the farmers over one or several harvest seasons (Appendices 12 to 18).
Ultimately, the right CRFP mechanism will allow large scale debt and capital providers
to connect with smallholder cocoa farmers across geographies, providing them access to the
products and services they need to implement rejuvenation practices. The mechanism will also
provide a source of funding for all capacity building and technical assistance activities required
to implement long-term lending activities to smallholder cocoa farmers; it will offer an
innovative financing solution in a sector where many structural barriers have, until now, kept
smallholders from accessing rejuvenation finance.
4
Meaning that the mechanism will not give preference to one-buyer or the other and will benefit the industry at large. This also implies that the
cost of setting up such a mechanism and its risk will be shared across the industry without penalizing one particular player.
5
Example of structural barriers are i) the specific structure of the national cocoa markets and their economics, ii) the remote location of cocoa
farms from the markets, iii) the fact that famers do not necessarily have bank accounts or access to established mobile banking systems, iv) social
and/or cultural barriers in understanding borrower-lender relationship, etc.
9
Appendices:
Appendix 1: Feasibility Study
Rainforest Alliance, Sustainable Finance
Initiative. (2013). Investing in Sustainability
and Productivity Improvements to
Transform Cocoa Production and
Livelihoods in Côte d’Ivoire. Available at
http://www.rainforestalliance.org/publications/sustainablitycocoa-production-cote-divoire
Appendix 2: Breakdown of Rainforest
Alliance Certified™ Cocoa Operations
Source: Rainforest Alliance, Oct 2014
Appendix 3: Cocoa Producing Countries
where the Rainforest Alliance works
Source: Rainforest Alliance, 2014
Appendix 4: Cocoa Price, London Cocoa
Terminal Market, in GDP/ton
Source: Rainforest Alliance, Oct 2014
Source: Barry Callebaut Annual Report 2013/14
10
Appendix 5: Global cocoa production
(000 metric tons, 2011-2012)
Appendix 6: Forecasted global cocoa
production in millions metric tons
Source: Dalberg Development Advisors,
2011
Source: Dalberg Development Advisors, 2013
Appendix 7: Cocoa stakeholders and their primary activities
Source: Dalberg Development Advisors, 2013
11
Appendix 8: Example of short-term input finance mechanism implemented in Cote
d’Ivoire under the WCF’s CLP Program
Please refer to p.7 of the IDH Growth Fund Presentation, available at:
http://www.idhsustainabletrade.com/cacao-growth-fundwcf
Appendix 9: Rainforest Alliance R&R Logic Framework
Source: Rainforest Alliance Sustainable Finance Initiative
Appendix 10: CRFP Project Phases
Source: Rainforest Alliance Sustainable Finance Initiative
12
Appendix 11: Potential impact of rejuvenation on a farm (kg/ha cocoa yielded and year
after intervention)
Source: Rainforest Alliance Sustainable Finance Initiative, 2014
Appendix 12: Expected necessary steps to disburse “rejuvenation loan packages” to
farmers as part of the CRFP
Source: Rainforest Alliance Sustainable Finance Initiative, 2014
13
Appendix 13: Example of a farm-level rejuvenation plan (Illustrating Step 2 in Appendix
12)
The following tables were extracted from the investment decision making tool developed by the
Rainforest Alliance as part of the CRFP Feasibility Study. Numbers given as example only.
14
15
Appendix 14: Example of a farm-level rejuvenation loan structure (Illustrating Step 3 and
4 in Appendix 12)
The following tables were extracted from the investment decision making tool developed by the
Rainforest Alliance as part of the CRFP Feasibility Study. Numbers given as example only.
Inputs
Training
Appendix 15: Expected composition of “rejuvenation loan packages” financed by
“rejuvenation loans” (Illustrating Step 5 Above)
Farmer training on best
agricultural practices and
rejuvenation techniques
Farmer financial literacy and
credit management training
Before loan is disbursed to the farmer.
To be paid through financing mechanism directly to
service providers.
Planting Materials
When cocoa tree replanting is happening – based on
individual project plans.
To be paid through financing mechanism directly to
providers or by farmers at delivery using cash loan.
Fertilizers
Pesticides
Fungicides
Other inputs
Every year – volumes vary annually depending on
individual project plans.
To be paid through financing mechanism directly to
input providers or by farmers at delivery using cash
loan.
16
Services
Every year – as needed.
Agronomic services related to the
To be paid through financing mechanism directly to
utilization of inputs (e.g. spraying
service providers or by farmers at delivery using cash
of inputs)
loan.
When cocoa tree replanting is happening.
Agronomic services related to
To be paid through financing mechanism directly to
rejuvenation practices
service providers or by farmers at delivery using cash
loan.
Others
Additional labor
As needed.
Source: Rainforest Alliance Sustainable Finance Initiative, 2014
Appendix 16: Cocoa Cultivation Calendar
Activities
Nursery setting
Planting
Pesticides
Fungicides
Fertilizers
Weeding Pruning
Main harvest
Small harvest
Jan
Feb
Mar Apr
May Jun
Jul
Aug Sept Oct
Nov Dec
Source: Rainforest Alliance, 2014
Appendix 17: Scope of Technical Assistance (TA) expected to implement CRFP mechanism
Source: Rainforest Alliance Sustainable Finance Initiative, 2014
17
Appendix 18: Farmer-Cooperative-Buyer traditional scheme and suggested options for
farmer loan repayment
Appendix 19: Estimated amount of capital needed to provide “rejuvenation loan packages”
to 102,500 farmers in Côte d’Ivoire
Source: Rainforest Alliance Sustainable Finance Initiative
18
Appendix 20: Examples of portfolio level analysis
Example 1
19
Example 2
20
References:
Barry Callebaut. (2014). Cocoa Sustainability
Report 2013-2014. Retrieved from
http://www.barry-callebaut.com/documentation
2112fdbba2fff494779b2ad/Handbook++Working+with+Smallholders.pdf?MOD=AJPE
RES
Committee on Sustainability Assessment . (2012).
Rainforest Alliance Certification on Cocoa
Farms in Côte d’Ivoire. Retrieved from
http://www.rainforestalliance.org/publications/evaluating-rainforestalliance-certification-on-cocoa-farms-in-cotedivoire
Josephs, L. (2012, March 29). A Race to Satisfy
World’s Hunger for Chocolate. Wall Street
Journal. Retrieved from
http://online.wsj.com/articles/SB1000142405270
2304177104577310160997655178
David S et al. (2006). A guide for conducting
farmer field schools. International Institute of
Tropical Agriculture.
Fairtrade Foundation. (2013, March 28). The future
of chocolate: why cocoa production is at risk.
Retrieved from The Guardian:
http://www.theguardian.com/sustainablebusiness/fairtrade-partner-zone/chocolate-cocoaproduction-risk
Green America. (2014, October 15). “Big
Chocolate” brings in $83 billion per year. Where
does all this money end up? Green America.
Retrieved from
http://blog.greenamerica.org/2014/10/15/bigchocolate-brings-in-83-million-per-year-wheredoes-all-this-money-end-up/
Gro Intelligence, BBC & CDI. (n.d.). The
Distribution of Chocolate Profits.
ICCO. (2014, December 1). ICCO Daily Prices of
Cocoa Beans . Retrieved from International
Cocoa Organization:
http://www.icco.org/statistics/cocoa-prices/dailyprices.html
ICCO. (2014). International Cocoa Organization.
Retrieved from http://www.icco.org/
Josephs, L. (2012, March 29). A Race to Satisfy
World's Hunger for Chocolate. Wall Street
Journal. Retrieved from
http://online.wsj.com/articles/SB1000142405270
2304177104577310160997655178
Mars, Inc. (n.d.). Cocoa Sustainability at Mars.
Nieburg, O. (2013). The farmer is a businessman
and we need to approach him as such.
Confectionarynews.com. Retrieved from
http://www.confectionerynews.com/Commodities
/The-farmer-is-a-businessman-and-we-need-toapproach-him-as-such-GrowCocoasustainability-director
Rainforest Alliance. (2013). 2013 Annual Report.
Retrieved from http://www.rainforestalliance.org/about/annual-report
Rainforest Alliance. (2013). Investing in
Sustainability and Productivity Improvements to
Transform Cocoa Production and Livelihoods in
Côte d’Ivoire. Retrieved from
http://www.rainforestalliance.org/publications/sustainablity-cocoaproduction-cote-divoire
Rainforest Alliance. (2014). Cocoa: The Food of
the Gods. Retrieved from http://www.rainforestalliance.org/work/agriculture/cocoa/food-of-thegods-infographic
IDH. (2013). Cocoa Farmer Field School in Cote
d'Ivoire. Retrieved from
https://www.youtube.com/watch?v=f3NHWiKlJ
MQ
Rainforest Alliance, Sustainable Finance Initiative.
(2013). Investing in Sustainability and
Productivity Improvements to Transform Cocoa
Production and Livelihoods in Côte d’Ivoire.
Retrieved from http://www.rainforestInternational Finance Corporation. (2013). Working
alliance.org/publications/sustainablity-cocoawith Smallholders: A Handbook for Firms
production-cote-divoire
Building Sustainable Supply Chains. Retrieved
from
http://www.ifc.org/wps/wcm/connect/8dc562804
21
Sustainable Agriculture Network. (2014, October
31st). List of Rainforest Alliance Certified Farms
and Operations.
Sustainable Agriculture Network. (2014,
December). SAN Home Page. Retrieved from
http://san.ag/web/
World Cocoa Foundation. (2014). Challenges.
Retrieved from World Cocoa Foundation:
http://worldcocoafoundation.org/aboutcocoa/challenges/
World Cocoa Foundation. (2014, April). Cocoa
Market Update. Retrieved from World Cocoa
Foundation: http://worldcocoafoundation.org/wpcontent/uploads/Cocoa-Market-Update-as-of-4-12014.pdf
World Cocoa Foundation. (2014). History of
Cocoa. Retrieved from World Cocoa Foundation:
http://worldcocoafoundation.org/aboutcocoa/history-of-cocoa/
World Cooca Foundation. (2012, September 28).
WCF Cocoa Livelihoods Program Improving
Access to Credit. Retrieved from
http://worldcocoafoundation.org/wcf-cocoalivelihoods-program-improving-access-to-credit/
22