Dr. Ingrid Fromm

1. Linking small-scale cocoa farmers from Honduras to the Swiss Chocolate Industry through targeted partnerships Dr. Ingrid Fromm Leuven, September 17, 2012

2. Cocoa Honduras Cocoa native to Mesoamerican region 2007 scientists discovered the oldest cocoa vessels in Puerto Escondido, Honduras (1100 a 1400 AC) Thought to be cradle of cocoa Cocoa widely cultivated and consumed in this region in ancient times By the mid-90s, sector was booming Nowadays, Honduras has only a handful of cocoa producers due to numerous problems encountered in the 1990s

3. Cocoa Production in Honduras Plantations hardly hit by hurricane Mitch in 1998 Major problems with diseases (Frosty pod rot Moniliophthoraroreri) Production dropped from 2500 tons to only 500 tons/year About 1200 cocoa farmers, in estimated 2100 ha Production 2011 was 850 tons, generating US$20 million in foreign exchange

4. Main constrains for small-scale farmers Low yields due to pests, low quality of the genetic material in plantations, poor agricultural practices Low production volumes High cost of certification and difficult market access Internal organization of cooperativas: Weak social cohesion Lack of leadership Financial constrains: access to credit? Market access extremely difficult: APROCACAHO only organization capable of exporting

5. Retail Market International Manufacturers (Chocolate, Cosmetic Industry) International Market International Processors International Buyers/Traders Local Buyers/Exporters APROCACAHO Processing Plant Collection Centers Local Market Intermediaries Cooperatives Small-scale Producers The Cocoa Value Chain

6. Establishing Partnerships in Honduras Swiss consumers increasingly demand information about origin Demand for organic and Fair Trade products increasing Chocolate sector particularly under scrutiny because of issues such as child labor Thus, importance of increasing transparency in the chain Why cocoa from Honduras? Fine flavor cocoa (Criollo, Trinitario) Cocoa suitable for high-end products such as gourmet chocolates and pralines Potential for organic production in sustainable agro-forestry systems (fruit and wood trees)

7. Establishing Partnerships in Honduras Chocolats Halba, subsidiary of Coop, one of the largest retailers in Switzerland Helvetas Swiss Intercooperation working since 2007 with small-scale organic farmers in Honduras Restoration of old, destroyed cocoa agroforestry systems in northern Honduras and establishment of new systems in Olancho (south-east) Aim for 2013 is to include 1000 households producing about 500 tons of cocoa Most will be sold as specialty chocolate in Coop supermarkets

8. Establishing Partnerships in Honduras Main partner: Honduran Cocoa Producers’ Association (APROCACAHO) Main export channel for producers: Cocoa Butter, Cake, Cocoa Powder Industrial Chocolate, 50/50, 70/30, etc. 47% of production for CA market, 35% USA, 15% EU (Belgium, Spain, Italy, Switzerland) Small-scale farmers work in cooperatives with support of partners (ej. Flor de Pino cooperative with Technoserve) Well-positioned for organic and Fair Trade cocoa

9. Establishing Partnerships in Honduras Honduran Foundation for Agricultural Research (FHIA) 20 years of expertise in cocoa and agroforestry systems Generation, validation and transfer of knowledge and technology to small-scale producers FHIA promotes replacement of low-value crops with high-value cacao agroforestry systems Largest in CA CEDEC (Cocoa Research Center) and CADETH, an agroforestry research station of 145 ha Genetic material collected, used for demonstration purposes and sold Installations for trainings and events

10. Establishing Partnerships in Honduras PYMERURAL public-private program funded by Swisscontact Value chain and territorial local economic development Worked in partnership with Ministry of Agriculture, APROCACAHO, Funder, FHIA, GIZ, Ecomercados and Helvetas Aim: Improve financing mechanisms, support facilitators in development and of internal and external markets for cocoa products, and infrastructure improvements for better drying and fermenting practices Ecomercadosis a development project financed by Swiss Development Cooperation in Honduras and Nicaragua Assists about 700 cocoa farmers in organic and Fair Trade certifications, and finding new niche markets

11. Establishing Partnerships in Honduras Funder: services to strengthen the managerial skills of farmers Information platform to inform cocoa producers about current prices of cocoa on a weekly basis. Central American Cocoa Project led by the Tropical Agricultural Research and Higher Education Center (CATIE) in Costa Rica Provides targeted assistance to 6000 cocoa producers in CA, providing knowledge related to production aspects and the environment, improved organization structures, increased competitiveness, education and participation Works with APROCACAHO

12. The importance of partnerships

13. A sustainable import scheme? Positive relationship with buyers in Switzerland Benefits for farmers: New training and know-how (fermentation protocols, proper drying of bean, agricultural practices, etc.) Contracts with APROCACAHO and buyer Access to rotating funds – farmers overcome major constrain More sustainable income (from cocoa and other products) However, volume is still low Only few farmers benefit from sourcing schemes New plantations established in difficult areas

14. Thank you for your attention Dr. Ingrid Fromm Bern University of Applied Sciences School of Agriculture, Forest and Food Science Laenggasse 85 3052 Zollikofen Switzerland E-mail: ingrid.fromm@bfh.ch