International ConferencE ON:
“Economics and Politics of chocolatE”
------------------------------------
Leuven, 16-18 September, 2012
“Developing sustainable cocoa value-chains
through the use of private-public partnerships :
the IFAD experience in Sao Tomé e Principe”
By: Mr. Andrea Serpagli - IFAD
CPM, STP – a.serpagli@ifad.org
Sao Tomé e Principe : 1,001 KM2 and 164,000 inhabitants
Background: how the whole story started
(bio-cocoa value chain)
•
São Tomé: largest international cocoa exporter in early 1900s : 40,000 MT in 1930
•
After independence (1975) steady drop of production till 4,000 MT in 1990
•
Land reform (WB supported) in the mid-nineties: 8,000 smallholders were created
•
In 1995, IFAD, in cooperation with France, put in place a «National support to
smallholders programme (PNAPAF)» which included extension services,
diversification, rural infrastructure and microfinance
•
Price volatility of cocoa, the major source of smallholders’ revenues in STP, was
devastating: from USD 1,300/ton in January 1998 to USD 700/MT in December 1999.
Smallholders were abandoning their lands;
•
In 2003, IFAD started funding a new programme (12 years): the “Participatory
Smallholder Agriculture & Artisanal Fisheries Development Project
(PAPAFPA)”;
•
Contact was made with KAOKA (leading enterprise in the French chocolate market).
New marketing strategy recommended, based on: aromatic and origin features +
organic certification to access niche EU markets
•
New intervention strategy based on: PPP establishment + stable price + quality
premiums + turn producers into professional market players (CECAB created)
Main value chains targeted:
– Organic Cocoa (2005)
– Organic Pepper (2007)
– Fair-Trade Cocoa (2009)
– Organic coffee (2010)
Project achievements
Organic cocoa value
chain
•
Participatory
Smallholder
Agriculture
&
Artisanal
Fisheries Development Project
(PAPAFPA):
– Starting date: Feb. 03
– Closing date : March 2015
– Total cost: USD 16.5 M
(USD 9,5 M as IFAD loan + 3 M
as IFAD grant + 4 M as local
Gov. / AFD / private sector
contributions)
Communities covered:
Fair-trade cocoa value
chain
WCA
•
Sao Tomé and Principe: Support to Organic and Fair-Trade Value Chains
PAPAFPA
Communities covered:
Producers supported:
53
1879 (599 women)
Dried beans exported: 2005 MT (since 05)
One PPP established in 2004 with French
partner/buyer (KAOKA)
17
Producers supported:
575 (123 women)
Dried beans exported:
182 MT (since 09)
One
PPP
established
partner/buyer (CaféDirect)
with
UK
4
PAPAFPA: some information on supported trade
FAIR-TRADE COCOA VALUE CHAIN
ORGANIC COCOA VALUE CHAIN
•
•
•
•
•
•
•
•
Exporter: CECAB (cooperative, created in
2005), with 53 members associations active
in 62 communities (3 in Principe)
Organic certification: 2005 (Ecocert)
Technical
(production/trade
assistance):
provided under PAPAFPA and directly by
foreign buyer – Example of PPP
CECAB: independent as from January 2012
Buyer: KAOKA (main French chocolate
manufacturer)
CECAB & KAOKA: signed 5 years trade
contract in 2005 – Further extended
Sales based on agreed price, including
organic + quality premiums (invested in
social services)
Export figures (to France):
– 2007: 67 MT (profits: +350%)
– 2008: 327 MT (+490%)
– 2009: 490 MT (+ 50%)
– 2010: 448 MT (draught)
– 2011: 472 MT (draught )
– 2012: 201 MT (as to June 2012)
•
•
•
•
•
•
•
Exporter: CECAQ-11 (cooperative, created in
2009), with 17 member associations active
in 19 communities
Fair-trade certified (FLO, June 2010)
Technical
(production/trade
assistance):
provided under PAPAFPA (through local ONG
- Zatona) and by foreign buyer (CaféDirect)
– Example of PPP
Buyer:
CaféDirect
(main
UK
drink
manufacturer)
CECAQ-11 & Café Direct: signed
trade
contract in 2008 for 18 months - Renewed
Sales based on agreed price, including fairtrade + quality premiums (to be invested in
social infrastructures/services)
Export figures (to UK, Italy and Germany):
- 2009: 12 MT
- 2010: 45 MT
- 2011: 96 MT
- 2012: 29 MT (as to June 2012)
PAPAFPA coverage (2012)
CARTE DES COMMUNAUTES IMPLIQUÉES PAR LES
COMPOSANTES DU PAPAFPA À LA FIN DE L’ANNÉE 2008

B.Monte

Paciencia
S.Rita

Sundy

Azeitona
Picão

P.Inhame

P.Sol


O.Gaspar
Pincaté
 

Montalegre
P.Real 
S.Joaquim

Fundão


Praia Lapa
S.Cristo
N.Estrela
B.Vista


T.Velho

PRÍNCIPE

F.Dias
P.Conchas P.
Canavial


Conde
V.Braga
P.Nazaré
P.Conchas



 Plancas
Laranjeira
R.Funda
II
Uba Cabra
Plancas
R.Douro P.
Saltado
R.Palma Praia

NEVES
S.Luzia

P.Figo P.
Sta Teresa
S.Clara
B.Sucesso R.Palma 
A.Sampaio

Caldeiras
B.Entrada
P.Figo S. Rosema


M.Macaco
Maianço


A.Coimbra
 M.Forte
P.Maria
S.Teresa

Santarém

Queluz A.Telha
V.Fernanda
M.Carmo

Generosa


F.Mantero
Gratidão
B.Esperança
 C.Santos
Cadão
P.Alto

 M.Leite Fortunato
Bénfica S.Margarida
Formosa 
Blu-Blu
M.Morais
S.F.Mongo
 V.Alegre Amparo2
S.Carlos

R.Lima


J.Luis
Saudades
Margão Q.Palmeiras
 Filipina

Vanguarda

A.Morais
S.José M.Café


Mulundo
Piedade
D.Vaz M.Luiza
Cascata

Q.Flores
S.José S.Clotilde

Rebordelo

Pinheira
Milagrosa
S.Jenny 
M.Alegre
Guegue
J.Paulo
P.Pian
S.Adelaide
M.Estoril
Plateau

S.Manuel  P.Fogo
U.B.Velho U.B.Praia

U.Budo S.
C.Dias
S.Catarina
Rio Ave
Abade
Quimpo M.António

S.Clotilde
A.Belas
S.João
R.Nova

Praia M. Alves

D.Amélia
Lemba
S.Januário
V.Formoso
P.Palmeiras
N.Olinda
C.Faro
A.Andrade
 
 S.António
B.Faro
  
P.Furada

M.Cana
O.Marim
S.Manuel
M.Silva M.Belo


À.Izé

Castelo
Beira A.Vouga 
S.Paulo
S.Lourenço
A.Douro

S.Francisco
ZONE CENTRE
ZONE NORD


ZONE SUD
Caridade
Amparo1 C.Açoreana 
S.Cecilia
A.João
 Micondo
A.Toldo
S.João

S.J.dos Angolares
Soledade


M.Carroça
N.Oliveira
D.Augusta


P.Alegre S. 
Malanza

Alphabétisation
Cacao Biologique
Cacao Qualité
 Poivre Vanille
 FIC
Poisson frais sous glace



Sta.Josefina
A.Douro

Ió Grande
P.Pesqueira
R.Peixe
Willy

M.Mário

P.Baleia

Abade

Terms of the private-public partnership (PPP)
IFAD
•
•
•
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Sound
expertise
in
community
development and producers’ organization
Facilitated access to local institutions
responsible for development of rural
areas
Delivery of money (at very concessional
terms) for infrastructural and productive
investments; technical assistance and
institutional building
Ensuring
long-term
follow-up
and
evaluation of the intervention
LOCAL GOVERNMENT
•
•
Ensure institutional/financial support to
intervention (as per original agreements)
Provision of some further support in
terms of: land for investments, TA,
inputs, brokerage etc
PRIVATE
Foreign Partner
•
Provision of technical know-how (at a:
production,
processing,
logistic
and
marketing level) very tailored on target
markets and otherwise difficult and
expensive to procure
•
Guaranteed access to niche-markets (on
EU selected markets)
•
Certainty of purchases (in quantity
terms) and of prices paid (fixed according
to previously agreed price schemes)
•
Willingness to operate within provisions
of ethical schemes (organic and fair-trade
ones)
•
Making available financial resources as
cash for investments and premiums for
community’s development
Local Producers (small-holders)
•
Making available land, labour and some
capital
•
Commitment to operate/sell through
primary/apex POs and produce/process
according to “ethical” standards
Private partners’ views on outcomes of PPPs
(quotations from presentations/articles etc.)
•
•
•
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•
•
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“Strengthens our directness with
and understanding of grower
communities”
“Allowed us to benefit from skills
and expertise outside our usual
area of operations”
“Opened up new partnering with
local
government,
scientific
bodies and NGOs”
“Risk sharing”
“High quality product developed
and delivered in short time”
“Builds our brand differentiation
in the market place”
“Allows us to deepen and widen
our impact as a social enterprise
business”
Producers’ views on outcomes of PPPs
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Producers’ organizations are now selling
dried (and not fresh) cocoa beans: more
value-added remains with producers
Export (trade) of processed products is done
directly by export cooperatives and not
through intermediaries
As a result, incomes have more than doubled
as compared to selling through traditional
marketing channels
Risk sharing
Trade terms (quantities, quality features,
prices, dates of delivery) are negotiated
(and, then, known) in advance
Money is also available for community/social
investments (thanks to organic/fair trade
premiums)
Self-esteem of producers increases: from
labourers to entrepreneurs
The sustainability issue
•
ECONOMIC SUSTAINABILITY:
Roots: (a) Farmers=Professional market player; (b) Direct trade of dried (not wet) beans
by grouped farmers/suppliers; (c) Targeting rewarding, niche markets in EU and not
undifferentiated domestic market; (d) Known/agreed trade terms (quality requirements,
prices, premiums -size and use); (e) Risk sharing; (f) Mutual trust and support.
Effects: (a) Farmers’ value-added increased by selling dried and not wet beans; (b)
Direct sales by the Co-operative (CECAB or CECAQ) and not through intermediaries; (c) >
two fold increase in sale prices in just few years.
***********************************************************************************
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ENVIRONMENTAL SUSTAINABILITY:
Roots: (a) Use of production and processing practices environment-friendly (under organic
and fair-trade standards’ norms); (b) Use of natural inputs (sun, wood, sisal etc.).
Effects: (a) No harmful impact on environment from used production/processing practices
(use of: compost, solar drying technology, water recycling etc.); (b) Scaling-up effects at
communities’ level, on natural park conservation and tourist capture; (c) Decrease of risks
for human health
***********************************************************************************
•
SOCIAL SUSTAINABILITY:
Roots: (a) Use of “Community Driven Development” approach ensured full ownership (of
business, technology, development process etc.) and fair sharing of benefits; (b) Business
run according to “ethic” principles (under organic/fair-trade prescriptions) and by partners
committed to sustainable development
Effects: (a) Self-esteem effect: community members (farmers) from labourers to
entrepreneurs; (b) New services (health centres, purchase of drugs, credit etc.) put in place
to the benefit of trading communities and using trade premiums; (c) Introduced
new
production/processing/trading technology very simple and therefore easily and fully owned
by final communities