Ecuador – Proneri

Strengthening the Cocoa Value Chain

Ecuador is world-renowned for producing fine cocoa called Arriba. It’s an aromatic, floral and spicy cocoa that consumers favor. While not all Ecuadorian cocoa is Arriba, there is tremendous potential to spread its cultivation and further develop the country’s cocoa value chain.

PRONERI, the National Program for Rural Inclusive Business, sponsored by Ecuador’s Ministry of Agriculture and Livestock, encouraged productive initiatives and commercial understanding between small producers and agribusinesses. With the aim of rehabilitating national cocoa farms, PRONERI partnered with the private sector to help targeted farmers organize their business practices and develop tailored rehabilitation plans. Under this objective, PRONERI selected ACDI/VOCA to implement the productive and associative strengthening project with the anchor firm Transmar, a full service cocoa trading and product supplier identified by the government.

The PRONERI-Transmar project was implemented by ACDI/VOCA in Taura and surrounding areas in the Guayas province. The project’s objectives included

  • the rehabilitation of farms
  • improving the quality of cocoa
  • building the capacity of 500 smallholder farmers to operate and commercialize their cocoa successfully.

The targeted farmer organizations either resulted directly from or participated in ACDI/VOCA’s farmer field schools. Since 2004, ACDI/VOCA trained 21,700 Ecuadorian cocoa farmers in integrated crop management, cooperative development and cocoa marketing techniques, and this experience pointed the way to productive commercial relationships with Transmar.

The collaboration resulted in more productive and skilled farmers working together to produce more and better quality cocoa for Transmar on a consistent basis. This promoted rural development while strengthening the cocoa value chain.

Training to Ensure Sound Agricultural Practices

At the end of the project, 500 farmers learned not only good agricultural and post-harvest processing practices but also to conceive of farming as a business. Training covered commercial management and marketing skills to meet specific market needs. With training, farmers became more professional and competitive and earned more income. They also became better business partners.

ACDI/VOCA trained farmers in agricultural practices and ensured application of key techniques to improve productivity at the farm level. The production objective was an average of one MT of dried cocoa per hectare. Field extensionists met with farmers an average of four times per month. Farmer associations also implemented the “minga” system of shared labor to lower costs and improve yields as well as to solidify the association. Farmers used ledgers to monitor their costs and manage their farms as businesses, improving decision making and facilitating access to credit if justified. These ledgers also provided valuable information to the end buyer on volumes at the association level and identify the best-performing farmers. This training also allowed for traceability and to facilitate the certification process (Utz, Rainforest Alliance) to meet specific market needs. The project also promoted the continuation of farmer-led savings programs that helped capitalize the associations or assist new organizations to develop savings plans.

Organizations and Associations for Building Better Businesses

Associations developed bylaws and business plans to be followed, monitored and reported on to members. This enabled the management team to determine priorities for the association with regards to investments that bolster association finances.

The project facilitated visits between farmer organizations that led to productive exchanges on technical and commercial issues. The project also organized annual presentations of results for farmer organizations and the anchor firm to share successes and highlight plans for the coming year. This can be effective in attracting new farmers to join the association and improve the volume of cocoa that is offered.

ACDI/VOCA has existing manuals for good agricultural practices as well as materials available in Spanish to support the farming as a business approach including ledgers and bylaws templates and other governance and business procedures. ACDI/VOCA has years of experience developing and monitoring business plans, and can also call on a corps of experienced volunteers to provide technical assistance on organizational strengthening.

Transmar worked with ACDI/VOCA to select communities to work with based on their selection criteria and ACDI/VOCA input. Transmar provides farmers with a consistent market as well as feedback on quality and market needs. Adjustments to the post-harvest process identified through analysis of samples by Transmar were conveyed to farmers by ACDI/VOCA. While ACDI/VOCA could not guarantee that farmers would sell all their cocoa to Transmar, experience showed that farmers shared their concerns with ACDI/VOCA which offered Transmar the opportunity to address supply chain issues and provide a sound working relationship with their producers and suppliers.