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Smallholder farmers in Côte d’Ivoire benefit from investments by ABC Fund

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Brussels, 28 January 2021/OACPS: The Agri-Business Capital (ABC Fund) has provided loans to two Ivorian cooperatives, ahead of the 2020/21 cocoa production season. The Fund provided a first-time loan of €800,000 to the Enterprise Cooperative Kimbe (‘Ecookim’) and a follow-up loan to Socak Katana. The financing is crucial to ensure that smallholder farmers do not lose the valuable benefits of being part of a cooperative. 

The ABC Fund is being implemented in the Framework of the Organisation of Africa, Caribbean and Pacific States (OACPS) and the European Union Development Cooperation. Initiated by the International Fund for Agricultural Development (IFAD), the ABC Fund is financed through the 11th European Development Funds (EDF). Additional project financing is also provided by the Government of Luxembourg and the Alliance for a Green Revolution in Africa (AGRA).

The ABC Fund is a blended-finance impact fund, which provides catalytic financing to underserved yet profitable segments of agribusiness value chains in developing countries. It deploys loans and equity investments in farmer organizations, rural SMEs and financial institutions.

In Côte d’Ivoire, cooperatives need to provide smallholder farmers with advance financing before they start to harvest and produce cocoa. Without advance financing, smallholder farmers may sell the cocoa they produce to local traders at a cheaper price for instant payment. However, by selling through local traders, smallholder farmers miss out on the benefits of selling through a cooperative, such as qualification for certification premiums, including Fairtrade, Rainforest Alliance and UTZ, which provides a higher income.

Established in 2004, Ecookim is a union of 29 cooperatives located in rural communities across 12 different provinces in Côte d’Ivoire. Ecookim’s members have a total cocoa production capacity of 62,900 tons and operate on 85,770 hectares. Ecookim procures raw cocoa from its members, before processing, transporting, storing and exporting cocoa beans.

The ABC Fund’s investment will enable Ecookim to finance its members ahead of the 2020/21 cocoa season. This will help secure revenue and market access for the smallholder farmers responsible for the cocoa production. The Fund’s loan offers a lower interest rate under more favorable collateral terms than traditional financial institutions. Moreover, local banks typically only disburse loans to cooperatives once the cocoa beans have been delivered into the warehouse at port, leaving a financing gap to cover the cost of cocoa beans collection and purchase, storage and transport from villages to warehouse.

In addition to the investment in Ecookim, the ABC Fund provided a follow-up loan to Socak Katana, a separate cocoa cooperative in Côte d’Ivoire. The previous loan provided for the 2019/20 cocoa season positively impacted over 3,000 farmers and created four new permanent positions in the cooperative, which employed 12 persons, representing a 30% increase. The loan also contributed to Socak Katana being able to double turnover, achieving a 40% increase in volume of sales, and a 36% increase in surface area cultivated during the period.

In commending the performance of the Fund and the impact of the projects, Secretary-General of the OACPS, H.E. Mr Georges Rebelo Pinto Chikoti, said, “Agricultural production within our Member States has been under stress from a number of factors, including the COVID-19 pandemic. Investments which aid small-holder farmers, such as this, are extremely important to build resilient markets and directly affect the lives and livelihoods of thousands of farmers and their families. The OACPS is pleased to be able to contribute, in such a tangible manner, to these projects on the ground.”

Photo: Africa Inc.


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