Leveraging Private Sector Partnerships to Develop the Indonesian Cocoa Sector
The Cocoa Innovations Project (CIP), launched by ACDI/VOCA and the World Cocoa Foundation (WCF), leveraged private sector partnerships to develop the Indonesian cocoa sector. The project improved cocoa farmers’ incomes and efficiency through innovations in crop management and the application of information technology. With funding from WCF members, CIP continued activities started under a USAID initiative. Key elements of the project included improving access to microfinance for cocoa farmers; use of mobile phone-based banking and agricultural extension systems; and community-based cocoa fermentation business models to improve the quality of farmers’ cocoa.
WCF members Armajaro, The Hershey Company, Mars Inc., Mondelēz International, and Olam provided private sector financial support. CIP paired ACDI/VOCA’s development expertise with the capabilities and resources of key local businesses, engaging a wide range of stakeholders to sustainably develop the Indonesian cocoa sector. The grant from WCF, which represents cocoa value chain companies from around the world, was matched with funds from ACDI/VOCA to build on core program successes and amplify impact.
The project supported farmers through the following activities:
Microfinance to allow farmers to access needed inputs
ACDI/VOCA and partners established the efficacy of fertilizer and good agricultural practices via demonstration plots. Based on the 2012-2013 season, an additional $7.50 in output was gained for every $1.00 of project funding. Through CIP, farmers increased their financing options to acquire fertilizers through targeted savings, small loans, and an option for deferred payments to suppliers.
Mobile financial transactions: an innovation in the cocoa supply chain
CIP piloted an interest-bearing mobile bank account, allowing cocoa buyers to pay a farmer through his or her mobile phone. The model was tested with 10 farmer organizations to prove the system for wider adoption in the agriculture sector.
ICT for cocoa farmers
The project partnered with the Grameen Foundation to introduce the TaroWorks mobile extension ICT platform to the cocoa value chain. The TaroWorks platform uses mobile phone applications and human networks to provide poor farmers with relevant, timely agricultural information.
A community-based fermentation model
CIP piloted a community-based fermentation business model in two cocoa communities to train women’s groups to ferment beans for higher quality and a higher farmgate price. The pilot examined the feasibility of scaling up the fermentation model and proving if it is profitable to farmers.
