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Cocoa: the white gold of Peru

The growing demand for dark chocolate on the European market is a real boon for Peru, where many small farmers produce quality cocoa beans. In view of this, the CCT has decided to support a number of cocoa cooperatives in order to improve the quality of their production, making Peru a key supplier of high-quality cocoa. 

Why the TDC supports the cocoa sector

Industry giants turn to fair and sustainable trade

The industrialists who control the sector (Mars, Mondelez, Barry Callebaut…) have for the most part announced that by 2020 they will produce cocoa in a sustainable way, for two reasons:

  • fight against the widespread child labour in the sector (350,000 children reportedly work on plantations in Côte d’Ivoire) and against which the US justice system has taken action
  • continue to obtain sufficient quality beans

Certifications (Fairtrade, Utz Certified, Rainforest Alliance, Organic) allow traceability of the beans and better remuneration for producers at an acceptable cost: the world price of cocoa is for the moment, and should remain for the long term, above the Fairtrade minimum price.

Opportunities

The demand for 70% dark chocolate on the European market continues to grow. Good news for Peru and Ecuador, two priority countries for Belgian cooperation and which produce quality beans.

The TDC seized the opportunity to support the cocoa sector in order to bring together the interests of producers, industrialists and development professionals.

And this in a sector that is important for the Belgian economy.

Main cocoa-producing countries

In thousands of tonnes.  Forecasts 2013/14

Cocoa in Peru

National cocoa production exceeds 71,000 tonnes (a fivefold increase between 1990 and 2013). Cultivation extends over 104,000 hectares and provides a living for more than 37,000 families, mainly in the lower Andean Cordillera, from 200 to 900 metres above sea level.

In the first half of 2015, the country’s cocoa exports totalled 92.2 million dollars (11 million of which went to Belgium), which represents a 10% growth compared to the same period in 2014*.

For years, the Peruvian authorities’ policies to modernise the cocoa sector have encouraged the cultivation of the CCN-51 variety, a very early and productive hybrid species with a high fat content but low aromatic qualities. Left out of these reforms, poor small-scale farmers have kept the plants and traditional crops of the old variety, known as “criollo porcelana”. These criollos make up the finest and most sought-after cocoa beans, with a sweet aroma and a delicate taste without bitterness.

And it is this white gold that the world’s chocolate makers are rediscovering and searching for in their best recipes. Peru has indeed positioned itself well in the market for premium and specialty cocoa. In fact, it is the second largest producer of organic cocoa.

*Source: Asociación de Exportadores del Perú.

Cooperatives supported by the TDC

Cepicafe

Although the Cepicafe cooperative (Central Piurana de Cafetaleros) has been in existence since 1995 (in the region of Piura, in the extreme north-west of the country), it is far today from the small group of farmers at the time who wanted a better price for their coffee.

Over the past 20 years, it has made a remarkable journey by investing in agro-ecology as well as in organic and fair trade markets.

For a very long time, cocoa had also been grown in the same region, albeit at a lower altitude. Gradually, the members of Cepicafe became aware that the traditional local variety of cocoa, Criollo Porcelana, had the potential to play in the big league.
With the support of the Trade for Development Centre (TDC) and other donors, a programme was set up to sustainably improve the quality and production of cocoa and to achieve organic and fair trade certification.

And the results have been impressive: their blanco cocoa has won price after price thanks to its refined taste. It has won over renowned chocolate makers from all over the world. In 2006, Cepicafe exported 32 tonnes of cocoa, a figure that will rise to 700 tonnes in 2014. The cooperative currently brings together more than 90 organisations from which more than 6,600 producers benefit.

A dream come true

In 2014, the TDC decides to continue supporting the Cepicafe cocoa project for one year. In addition to the 9 organisations and 850 families in the regions of Tumbes and Piura, the target group this time includes 200 families from the much poorer Amazonas region.

Despite the weak structures and poor infrastructure, the aim of this support was to optimise the harvesting, fermentation and drying process there and thus greatly improve quality.

Cepicafe also intends to further develop its network by establishing contacts with clients in the organic, fair trade and other markets, as well as with local and regional authorities.

Cepicafe is working step by step towards the realisation of a dream: to build its own chocolate factory in Piura, which will process cocoa for the local and international market, while retaining greater added value in Peru. At the beginning of 2015, this dream became even closer to reality following the creation of a joint venture with the Dutch company Chocolatemakers.

 

Key figures

  • TDC contribution: 202,718 euros
  • Project duration: 2010 – 2015
  • Beneficiaries: 1050 producers

aprocamAprocam

The Aprocam cooperative was founded in 2003 in the Amazonas region. At the time of its creation, it was composed of 42 members. Today it brings together 199 families, 120 of which belong to the Awajun ethnic group, one of the poorest in the country. More precisely, 90% of the Awajuns of Amazonas live in poverty. This people traditionally dedicated themselves to hunting, fishing and harvesting wild fruits.

The depletion of the forest resources has gradually pushed this people to devote themselves to the cultivation of cocoa to meet their primary needs. Cocoa soon became a viable alternative to artisanal mining, timber exploitation, the marketing of endangered species and coca cultivation in the region.
Today, the cooperative is the leading cocoa exporting association in Amazonas. It has successfully entered the international market by selling 100,000 kilograms of Fairtrade certified Criollo cocoa to an Italian company in 2014.

Improving cocoa tree selection and drying of beans

The material currently used in the cocoa drying process is not suitable and compromises the quality of the product.

The TDC will therefore provide financial support to Aprocam to introduce new methods to optimise this last phase of the bean processing. Three solar dryers will also be built.

The cooperative also experiences large variations in the amount of cocoa harvested each year.

This phenomenon can be explained by a less rigorous selection of the best cocoa trees by the producers. In the future, the producers will therefore be encouraged to pay special attention to the cocoa trees chosen to complete the plantation.

Finally, since 2012, Aprocam has been trying to gradually abandon traditional agriculture in order to devote itself fully to certified organic agriculture. The cooperative hopes that all of its members will be able to apply organic production standards by the end of the project.

Key figures : 

  • Contribution of the TDC: 100,469 euros
  • Duration of the project: 2 years
  • Beneficiaries: 199 producers

Capema

Created in 2007, the Capema cooperative initially brought together 123 producers. The activity of each of them was then exclusively focused on coffee production.

Such a choice of agricultural specialisation is widespread in San Martín, the region where Capema is located.

In this area of northern Peru, rural communities are experiencing an unprecedented expansion of coffee monocultures.

However, the climatic conditions there are just as favourable for rice and cocoa cultivation.

Against all odds, in 2014 Capema took its business in a new direction by diversifying its coffee cultivation, which at that time covered 716 hectares.

To this end, Trinitario cocoa trees, a cross between the Forastero and Criollo cocoa trees, were planted on more than 24 hectares in the same year. Banana trees were introduced as a complement. This approach made it possible to limit attacks by pests and diseases and to reduce the use of inputs from outside the farm such as fertilisers, pesticides and water.

Increasing the space for cocoa cultivation

The TDC offered to finance Capema’s wish to expand the areas currently used for cocoa production.

The objective is to install plots of “fine” cocoa (whose flavour and colour are reputed to be exceptional), Fairtrade certified, on 74 hectares of forest from 2016. Capema thus aspires to promote agroforestry development by combining perennial cultivation with pre-existing vegetation. Training in good harvesting and post-harvest practices will also be provided to producers.

All these initiatives should enable the cooperative to achieve a production of 2,000 kilograms of cocoa per hectare by 2021, mainly sold on the North American and European markets.

Key figures

  • TDC contribution: 118,076 euros
  • Duration of the project: 2 years
  • Beneficiaries: 98 families

Pangoa Cooperativa Agraria CafeteleraPangoa

At the end of the 1960s, the Peruvian military government undertook an agrarian reform designed to redistribute land from large landowners to the peasants who cultivate it.

As part of this political initiative, the Cooperativa Agraria Cafetalera Pangoa was founded in 1977 by 50 farmers, formerly members of the neighbouring association Satipo. Pangoa quickly set up structures to ensure the economic and social well-being of the farmers and their families.

For example, a school and a savings centre were established in 1984 and 1986 respectively.

In Satipo province, the vast majority of agrarian associations have chosen to pay their producers salaries equal to or higher than those offered within Pangoa, which is a sign of the strong influence of the cooperative in the area.

Today, the cooperative brings together 650 partner producers, 110 of whom are dedicated exclusively to growing Criollo cocoa. Each of them owns about 3 hectares of plantations.

The other members have turned to the cultivation of coffee, honey, citrus and tropical fruits such as mango, carambola and passion fruit.

These products are mainly exported to the United States, the United Kingdom, France and Canada.

Increasing the quantity and quality of cocoa grown

Thanks to the TDC project, the cooperative will take steps to increase the quantity of cocoa produced and optimise its quality. To this end, new agroforestry cocoa tree nurseries will be set up, while existing plots will be rehabilitated and intensively maintained. At the same time, the producers will receive training, which will also be accessible to young people who wish to take over their parents’ land. Finally, Pangoa, which currently exports its entire production, wants to find new commercial partners to introduce its products on the national market.

Key figures

  • TDC contribution: 117,805 euros
  • Duration of the project: 2 years
  • Beneficiaries: 718 producers

Curimaná

The Curimaná cooperative was founded in 2010 within the framework of the Alternative Development Programme (ADP) of the UNODC (United Nations Office on Drugs and Crime). This instrument aims to help States to limit the cultivation of plants used to manufacture illicit drugs on their territory. Viable alternatives, including the sale of fair trade products, are offered to farmers. After learning about the assistance provided by the UNODC, small farmers in the Ucayali region have chosen to abandon their coca plots to devote themselves collectively to growing cocoa.

In the first year of operation of the cooperative, 15,000 kilograms of dry cocoa were produced. By 2014, this figure had risen to 251,950 kilograms, more than half of which was Fairtrade certified. Despite a boom in production, Curimaná still faces a major challenge. In the Ucayali region, the soil contains a low proportion of nutrients that are essential for the growth of cocoa trees. The soil is also rich in cadmium, a toxic metal that plants also absorb. Above a certain limit, which is regularly reviewed by the Scientific Technical Commission on Pollutants in the Food Chain (CONTAM), cadmium presents risks to consumer health.

In the Ucayali region, 1 kilogram of cocoa beans contains 0.5 milligrams of cadmium. This same content was the limit that CONTAM had hitherto defined. However, the organization promulgated a new regulation (488/2014) setting this limit at 0.2 milligram per kg of cocoa. It has already been announced that the European Union will apply this standard from 2019.

In order to be able to continue selling its production, Curimaná must therefore reduce the cadmium content in the fruits of its cocoa trees as soon as possible.

Using special fertilisers

To overcome this difficulty, the organisation intends to use plant cover and organic fertilisers (ashes, vermicomposting, etc.) prepared by itself. These inputs should enrich the soil and limit the absorption of cadmium by the roots of cocoa trees. The TDC is financially supporting this project.

The cooperative, which until now has sold its production to a single buyer, will also be supported in order to find new partners and develop optimal marketing methods.

Key figures

  • TDC contribution: 120,421 euros
  • Duration of the project: 2 years
  • Beneficiaries: 128 producers

Cuencas de Huallaga

Increasing production and determining the organoleptic characteristics of cocoa

Cuencas de Huallaga has sealed a commercial alliance with the Peruvian agrarian association Norandino to sell its entire production. While the cooperative had estimated that it would be able to sell around 300,000 kilograms of cocoa in 2014, it has only sold 125,000 kilograms.

The TDC will therefore support Cuencas de Huallaga in its efforts to increase its production volume to meet the demands of its trading partner. It also aims to identify new outlets so as not to depend on a single customer.

The TDC will strengthen the communication component of the cooperative through the creation of a website. An analysis to identify the range of organoleptic properties of cocoa grown on the producers’ land will also be implemented. This review will identify good practices to be followed at the harvesting, fermentation, drying and storage stages to optimise cocoa quality. In Peru, such an initiative has never before been carried out by a cooperative.

Key figures

  • TDC contribution: 127,754 euros
  • Duration of the project: 2 years
  • Beneficiaries: 110 producers

CLAC

In Latin America and the Caribbean region, more than 300 cooperatives of small producers and rural workers’ associations working for fair trade are affiliated to CLAC. This regional organisation brings together 200,000 families growing a wide variety of products such as coffee, cocoa, honey and fruit.

Founded in 2004 following the merger of two organisations of small beekeepers (PAUAL) and small coffee producers (CLA), CLAC has therefore endeavoured to promote collaboration and information exchange between member cooperatives.

Improving the visibility of Latin American producers in the international arena is also one of its main objectives, as is ensuring that the values and principles of fair trade are respected within the member associations.

CLAC has quickly established itself as a key player in fair trade on a global scale, as evidenced by its place on the Board of Directors of Fairtrade International (FLO) and the international committee of WFTO (the World Fair Trade Organisation). This key status comes as no surprise: CLAC represents 23% of all small producers participating in the international Fairtrade system.

Two CLAC member cooperatives have requested financial support from the TDC to address their difficulties.

  1. The first, Cooperativa agraria cafelera Satipo, founded in 1965 in Peru, has mainly developed its activity around the cultivation of coffee and cocoa. Much more recently, the cooperative has started renting real estate. Most of the 700 member producers belong to the Ashaninka ethnic group, one of the largest Indian groups in Latin America.
  2. The second, the Ecuadorian cooperative Corporación Fortaleza del Valle, is itself made up of four agricultural cooperatives in the Carrizal Chone region, with a total of 920 producer families.

Strengthening financial and communication capacities

The TDC and the two cooperatives agreed on the need to implement an elaborate communication strategy. The creation of a website and a commercial catalogue is part of this strategy. The managers will also have to familiarise themselves with the basics of financial analysis (profitability analysis, margin analysis, etc.) which are still insufficiently mastered. In addition, with the help of the TDC, the cooperatives will carry out a series of comparative tests between different organic fertilisers to optimise soil fertility and sustainability. Eventually, new crops will be introduced to increase production volume and maximise economic returns.

Key figures

  • TDC contribution: 139,170 euros
  • Duration of the project: 2 years
  • Beneficiaries: 1620 producers
Photo Credits
Cepicafe: Peruvian cocoa producer © Shared Interest
Aprocam : © Rajko Knobloch / © Aprocam
Capema : © Pangoa / © Aimé Henry
Pangoa : © Pangoa
Curimaná : © Bonnat
Cuencas de Huallaga : © Aaron Peterson
CLAC : © Andina 
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