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Alianza Cacao Perú - Peru Cocoa Alliance

Client: United States Agency for International Development

2013-2016

Challenge:

The chocolate industry is faced with structural supply issues. Demand is growing rapidly and cocoa prices are at record highs.  At the same time, confectioners have pledged to source certified and sustainable cocoa, at least in part because of scandals over child labor on West African farms.  The problem is that 90% of the world cocoa comes from tiny farms of less than one hectare, with old trees and very low yields that do not allow cocoa farming households to raise incomes above extreme poverty. With low yields, inefficient intermediaries, and poor access to markets and finance, crops such as cocoa cannot compete economically with coca and other illegal activities.  As a result, Peru is experiencing rapid deforestation of the rain forest.  

Becots' roasted cocoa in Tarapoto, Peru.Becots' roasted cocoa in Tarapoto, Peru.Our Approach:

The Peru Cocoa Alliance (PCA) is an innovative public-private partnership that brings together cocoa farmers in the Ucayali, San Martín and Huánuco regions of the Amazon basin, buyers, technology providers, investors, and Peruvian government partners to propel Peru to become a market leader in the traceable, fine-flavor cocoa that is increasingly in demand by global consumers. With an initial $36 million co-investment from the Alternative Development program of USAID, the Peru Cocoa Alliance was originally founded by CARANA, USAID, the National Commission for Development and Life without Drugs of Peru (DEVIDA), ECOM Agroindustrial Corp, Romex Trading and Acopagro (a cooperative).

Through direct market linkages, commitment to fine-flavor cocoa varieties within an integrated agro-forestry system, and technology and finance to improve yields and quality and areas under cultivation, Alliance farmers now engage in an economic activity that provides them with a means to escape extreme poverty, leave behind the insecurity of coca production, and restore the forest ecosystem.

Impact:

As of June 2015, PCA had:

  • Installed over 20,500 hectares of cocoa with 16,500 farmers who choose to join the Alliance and invest their own resources into cocoa farming
  • Generated nearly 18,000 jobs
  • Facilitated over $20 million in financing for close to 9,500 farmers
  • Leveraged over $36 million in private sector investment
  • Geo-referenced over 10,000 hectares of farms that have been incorporated into the traceability system, and
  • Led farmers to abandon slash and burn and choose to cultivate cocoa in the integrated agro-forestry system because it offers clear income benefits.

By October 2016, Alliance interventions are expected to yield:

  • 28,000 hectares of new cocoa production across 3 regions of Peru
  • 23,000 households integrated into international supply chains
  • 18,000 jobs
  • 10,000 households with access to finance
  • 50% improvement in farmer yields
  • Farmer incomes reaching up to $4,000 per hectare
  • Peace and stability promoted in previous drug-trafficking regions
  • Increased gender equality
  • Increased youth participation in agriculture
  • Reforestation of secondary forest areas previously under agricultural cultivation

 

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Technical Updates: