The FINANCIAL -- IFC, a member of the World Bank Group, Barry Callebaut, one of the leading manufacturers of high-quality chocolate, and the Netherlands Sustainable Trade Initiative (IDH) on August 18 announced a $9 million risk-sharing agreement to help up to 100,000 smallholder cocoa farmers in Côte d’Ivoire access credit needed to grow their production and earnings.
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, according to IFC.
The farmers are supplying cocoa to two subsidiaries of Barry Callebaut: the Societé Africaine de Cacao, and Biopartenaire, both operating in Côte d’Ivoire.
Antoine de Saint-Affrique, Chief Executive Officer of Barry Callebaut, said, “Sustainability is at the heart of our business model and values. The start of this initiative represents an important step in promoting professional, sustainable cocoa farming, helping subsistence farmers become entrepreneurs. Barry Callebaut is proud to lead the efforts to professionalize cocoa farming, and is excited about the support of our partners in this endeavor.”
Joost Oorthuizen, Executive Director of IDH, said, “By de-risking investments, we will deepen our direct impact on farmers. Through this program, we expect farmers to increase their bankability and ultimately the quality of their livelihood by leveraging public funding with private sector contributions at a ratio of more than 1:10.”
IFC Director for Manufacturing, Agribusiness and Services, Alzabeta Klein, said, “IFC’s partnership with Barry Callebaut and the Netherlands Sustainable Trade Initiative will help farmers in Cote d’Ivoire gain access to credit and training that will enable them to upgrade their operations and join value chains linking them to cocoa buyers and global chocolate consumers. Supporting small businesses is a major focus of IFC’s strategy in Africa.”
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. This project will help thousands of small farmers improve the quality and yield of their cocoa, thereby improving incomes.