Latin America and Caribbean

Technical Update: Peru Cocoa Alliance, February 2013

USAID Public/Private Cocoa Alliance Transforming Rural Peru

The Peru Cocoa Alliance has swiftly stirred interest among local organizations in its innovative, market-driven approach to boost farm productivity and incomes. In its first four months of operation, the Peru Cocoa Alliance has (as of February 15, 2013) secured letters of intention to participate from 30 organizations within Peru, including numerous producer organizations and financial institutions. These reflect commitments to plant more than 19,855 new hectares of cocoa in the coming agricultural cycle in formerly coca-growing regions. The new model has proven to be agile in meeting the needs of farmers throughout the target regions, especially in recently eradicated zones.

With an initial $36 million co-investment from USAID, the Peru Cocoa Alliance--including founding partners CARANA, Source Trust, Armajaro Trading Ltd. and AZMJ--will contribute $49 million over four years to promote and finance the expansion and marketing of cocoa and other crops in Huanuco, Ucayali, and San Martin. The Peru Cocoa Alliance will provide more than 20,000 farmers with profitable, licit sources of income to prevent a return to coca production while increasing standards of living, by facilitating their access to markets, technology and finance. Chocolate manufacturers and other buyers will be assured of traceable, reliable and high-quality supply chains while sharing productivity and efficiency gains with the farmers.

USAID support for the Peru Cocoa Alliance began in October 2012 and is planned through October 2016. Private investment from Source Trust, Armajaro Trading and other international and local investors into the Alliance is expected to continue to incorporate Peruvian small farmers into global supply chains for decades to come. Additionally, AZMJ will facilitate $40 million in new investment from global and local investors who are committed to expanding Peru’s financial services to rural and agricultural areas. The Peru Cocoa Alliance is also working closely with regional and municipal governments, as well as national ministries such as the anti-drug agency, DEVIDA.