The US Department of Agriculture (USDA) has funded a three-year initiative called Maximizing Opportunities in Cocoa Activity (MOCA) to address capacity and quality-of-life challenges for smallholder farmers. It comes as part of the agency’s Food for Progress Program, which assists developing nations in advancing their agricultural productivity and trade reach.
These three groups met in Méaguy, Côte d'Ivoire, in April for a signing ceremony, following conversations with several cooperatives to discuss challenges facing the Ivorian cocoa sector.
CNFA, which started in 1985, said the partnership with MOCA and Oikocredit will give farmers the tools to pursue an ‘entrepreneurial approach’ to their business – namely through diversifying their sources of income and having access to financial services.
By nurturing farmer ‘professionalism,’ said MOCA chief of party Marc Steen, the initiative “[improves] financial management to reduce financial risks and by doing so [makes] the cooperative more attractive for money lenders like Oikocredit.”
Hans Perk, the investor’s regional director in Africa, added that “social impact finance and capacity building are among the most effective tools for reducing poverty.”
Investment that makes sense for farmers
MOCA and Oikocredit held a series of workshops in February, where farmers learned about loan access, lending products and costs, and risk management.
The cooperatives had the opportunity to assess the feasibility of taking on such loans. Oikocredit also gleaned insight into “the cooperatives’ marketing and operating challenges as well as individual smallholder funding and capacity building needs,” a spokesperson told ConfectioneryNews.
“The workshops have helped to strengthen Oikocredit’s resolve to support cocoa cooperatives in their post-harvest marketing activities. Indeed, the purpose of Oikocredit pre-export credit lines offered to cooperatives is to purchase cocoa beans from smallholders at post-harvest stage for sale to international markets.
“To that effect, supported cooperatives are in real need of the liquidity facilitated by Oikocredit and other impact investor funds as early in the season as possible. Impact investors are uniquely positioned in funding the ‘missing middle’ of the cocoa value chain and in pre-financing co-ops in that vital period.”
USDA's MOCA Program
Introduced in late 2017, MOCA was designed to provide Ivorian cocoa producers, co-ops and exporters training that improves productivity and efficiency while increasing incomes and the supply of high-quality cacao beans.
It has a budget of $14.6m.
Because smallholder farmers “have limited capacity to increase the amount of quality beans they can sell,” they struggle to bring in more money and thus improve their livelihoods. CNFA says the government of Côte d’Ivoire is highly aware of this discrepancy and has tried to address it across the country by ensuring that half of cocoa processing stays within the nation’s borders by 2020.
In addition to education and training, MOCA also aims to work with researchers on disease-resistant cocoa seeds; with banks and micro-finance groups to increase farmer access to mobile money, insurance and credit services; and with ‘reputable cocoa processors and buyers’ to connect them with less-connected farms.