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Promoting professional and sustainable cocoa farming

Challenge

The agricultural sector in Côte d’Ivoire accounts for around 20% of GDP and nearly 70% of the workforce, most of whom are small farmers. While the country is one of the leading agribusiness producers in the West Africa region, Côte d’Ivoire is emerging from a fragile post conflict state, with political stability reached in 2011 following legislative elections. 

In 2008, a World Development Report on Côte d’Ivoire concluded that agricultural growth is the key to achieving overall growth, reducing poverty and increasing food security for the rural poor. A new joint implementation plan by the World Bank and IFC identified cocoa as a key strategic sector owing to its economic importance to Côte d’Ivoire and the rest of the globe. As the world’s top cocoa producer, Côte d’Ivoire provides more than 40% of global production.  Currently the country has approximately 900,000 smallholder cocoa farmers and nearly four million Ivoirians depend on cocoa for their income. However, during the 2014/2015 cocoas season, Côte d’Ivoire’s total cocoa yield was estimated at 1.7 metric tons  – well below optimum yields and below those of other cocoa producing countries in Africa These low yields were contributed to aging trees, and a lack of use of agricultural inputs. 

Solution

To further support the cocoa sector, IFC and GAFSP invested in a $9 million risk-sharing agreement alongside Barry Callebaut, a leading manufacturer of high-quality chocolate, to help up to 100,000 smallholder cocoa farmers in Côte d’Ivoire access credit needed to grow their production and earnings. 

The risk sharing facility is also supported by the Netherlands Sustainable Trade Initiative (IDH), a Dutch development organization. Under the agreement, IFC and Barry Callebaut will equally share the risk in the $9 million local currency-equivalent credit facility, which will help farmers purchase fertilizers and lease large equipment, such as tractors. 

As farmers increase production and formalize their operations, they will establish the track records required to borrow directly from local financial institutions. The farmers are supplying cocoa to two subsidiaries of Barry Callebaut: the Societé  Africaine de Cacao and Biopartenaire, both operating in Côte d’Ivoire.

While Côte d’Ivoire leads the world in the production and export of cocoa, the country’s farmers could vastly increase their yields with improved training and access to credit. The risk sharing facility will also have significant small farmer reach and contribute to improving farmer incomes by increasing the quality and yield of cocoa collected over time. The project is also expected to have an appreciable impact on the agricultural value chain in Côte d’Ivoire. 

Country

Côte d’Ivoire

Funding

Private

Focus area

  • Access to Finance

Supervising entity

IFC

Results

Improved incomes for 100,000 smallholder farmers in Côte d’Ivoire

Through this project, up to 100,000 smallholder farmers will receive access to credit by the 2020/21 season, and an expected $24 million in benefits will be generated to smallholders as a result of this investment. By year two, participating farmers are expected to receive and income increase of 23%. 

500,000 tons of cocoa to be sourced from Côte d’Ivoire

Through scaled up access to inputs and services, Barry Callebaut expects to source 500,000 tons of cocoa from Côte d’Ivoire.

Contact

Mr Niraj Shah

Head, GAFSP Private Sector Window 

nshah1@ifc.org

Washington, DC 

Tel: 202 473 3743


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Work with Us

Launched in 2010, the Global Agriculture & Food Security Program (GAFSP) represents a transformative approach to development aid that pools donor funds to make lasting improvements by supporting technically sound, country-led plans and sustainable, inclusive small- and medium-sized enterprises. The inaugural donors—Bill & Melinda Gates Foundation, Canada, the Republic of Korea, Spain, and the United States—were soon joined by Australia, Germany, Ireland, Japan, the Netherlands, and the United Kingdom. GAFSP’s donors work in partnership with recipients, civil society organizations, and other stakeholders to improve the lives of smallholder farmers and their families. Millions of poor and vulnerable people around the world will directly benefit from GAFSP’s continued commitment and support. GAFSP looks to engage other donors and stakeholders in this important initiative.

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