Author: Meredith Husar

While Guatemala is best known for its coffee, farmers from the Indigenous Q’eqchi Maya community have grown cocoa for millennia. Despite cocoa’s celebrated history and cultural importance across Central America, producers in the region grow a small fraction of global production. In 2003, 48 farmers on the edge of the Sierra de las Minas Biosphere Reserve founded the Asociación de Productores Orgánicos para el Desarrollo Integral del Polochic (APODIP) to market coffee from the local community. Upon realizing the risks of focusing on just one crop, in 2008 the association expanded its focus to include marketing the region’s cocoa as well. A calculated gamble, the strategy has paid off for the cooperative.

Since 2018, APODIP has sold its product to Ethiquable, a French cooperative food brand with a social mission. Long-term, direct relationships such as these enable businesses like APODIP to participate in sustainable supply chains where they often earn higher prices for their products. Steady partners are also critical to facilitate the three-party agreements used by CSAF lenders in cases where agri-SMEs lack sufficient assets to use as leverage against their credit needs. These tripartite agreements often offer one of the only ways for agri-SMEs to access finance. Since 2023, SIDI has partnered with Ethiquable to support seven small suppliers across its supply chain, ensuring that agri-SMEs have the working capital needed to pay farmers on time, meet contract specifications, and ensure continuity of buyer relationships. As part of this partnership, APODIP receives trade credit to expand its liquidity and ensure it can pay farmers on time for their cocoa. Such partnerships with buyers offer a significant opportunity to de-risk loans with borrowers. They have become increasingly important in the shifting aid environment as funding for guarantees and other derisking mechanisms have proven to disappear with little advance notice.

With a capital expenditure loan from Oikocredit, APODIP has grown its financing and expanded its processing plant. The association is now able to process cocoa from throughout the region, beyond just its farmer-members. APODIP has also started to import cocoa from three Nicaraguan cooperatives to process and sell to Ethiquable and other international cocoa buyers. While climate shocks have depressed APODIP farmer production in recent years, the additional revenue from processing Nicaraguan cocoa has enabled APODIP to cushion their business in periods of lower production and remain well-positioned to deliver better livelihoods for farmers in the years to come.

Côte d’Ivoire is the world’s largest cocoa producer and is well-known for its dominant role in cocoa production. Forty percent of the country’s agricultural exports are cocoa, predominantly grown by smallholder farmers. In recent years, the industry has faced significant challenges, including catastrophic weather events, an outbreak of cacao swollen shoot virus, rampant price volatility, and new compliance requirements from emerging regulations, such as the EUDR. Many of these risks are highly variable throughout the year, which magnifies their impact on smallholder farmers, who rely on the once-per-year harvest of cocoa beans. Agri-SMEs that process cocoa must also navigate these risks, as is the case with Ecookim, the country’s largest cocoa cooperative union and a business that borrows from six CSAF lenders. In the face of persistent threats to the cocoa sector, Ecookim identified the need to diversify for the benefit of its farmers and its business.

In 2020, Ecookim launched EcoCajou, a subsidiary focused on processing and marketing cashew for smallholders across southern Côte d’Ivoire. This new business unit allows Ecookim to diversify its income, protecting against losses concentrated in one crop while also enabling year-round activity, as the cashew harvest occurs in a different season than peak cocoa harvest. For farmers already affiliated with Ecookim, the new venture ensures a reliable offtaker for cashew. Many smallholders have already been growing cashew alongside cocoa, while others are beginning to convert parts of their farms to cashew to ensure year-round income generation. In the Odienné region, where the local climate makes farming cocoa more challenging, diversification into cashew has enabled EcoCajou to extend its reach to farmers who have otherwise struggled to access markets.

Since 2023, EcoCajou has worked with SIDI through its European Solidarity Financing Fund for Africa (FEFISOL). Starting with a line of working credit, SIDI has renewed the initial credit line and expanded to a capital expenditure investment to improve the cooperative’s processing capacity. In less than a year, this financing has enabled EcoCajou to increase the amount of cashew it processes per day from eight tons to over 60 tons. Previously, EcoCajou had to export most of its cashew to Asia for processing, but the new facility can ensure value addition closer to the smallholder farmers. Through the establishment of EcoCajou, Ecookim has been able to diversify its revenue streams, decrease enterprise risk, and reach thousands of additional farmers.

Coffee farmers in the Luya Province of Peru operate in a critical ecosystem on the edge of the Amazon rainforest, far from national ports and even farther from international markets. Many grow their crops in agroforestry systems, integrating natural shade trees and participating in economic activity that balances farmer livelihoods with ecosystem preservation. The costs of getting product to market are significant, and it can take farmers as long as a full day to bring heavy jute sacks of coffee down winding dirt roads. Research shows that, in these sensitive ecosystems, smallholder farmers without access to fair prices may be driven to deforestation as a means of survival.

In 2017, 12 farmers came together to seek an alternative to the low prices offered on the local market. The group founded the cooperative C.A.C. Laguna de los Cóndores (LDC) to connect local farmers directly to premium markets. While LDC grew its reach through domestic sales, the business struggled to sell on the international market due to the lack of liquidity necessary for advance purchases of coffee from farmers.

Four years after its founding, LDC received its first loan from a CSAF lender, Root Capital, for $250K, allowing it to directly export. The cooperative has since expanded its credit, working with Alterfin, MCE Social Capital, and NESsT to access over $3M in cumulative financing from CSAF members. Paired with technical assistance, including from Rabo Foundation and NESsT, LDC has unlocked significant growth. Expanding from just over 200 farmers in 2020, the business grew to reach more than 800 farmers by 2025. The cooperative works with its members to help farmers maintain Fairtrade, Organic, and Rainforest Alliance certifications and ensure that over 90% of its coffee supply is shade-grown.

As the business has matured, it has leveraged CSAF member support to invest in social and environmental outcomes for its farmers. In 2021, the cooperative used a $5K grant from Root Capital to train 20 women farmers in agronomic skills, which resulted in improving their coffee quality by 15%. Nearly all participants became part-time extension workers for the business; this positions LDC to support more female producers, as the presence of women field staff tends to create a safe learning environment for other women. The cooperative has also partnered with NESsT to mainstream women’s empowerment across the organization, a strategy led by LDC’s 50% women management team.

For decades, extractive mining practices and large-scale hydropower projects have dominated the local economy of the Bolaven Plateau in southern Laos. As the ore veins run dry and dam construction is completed, economic opportunity in the region has become harder to secure. This has been exacerbated by the macroeconomic conditions in Laos, where the local currency has lost nearly 60% of its value since 2020. Smallholder farmers in the community grow coffee to sustain themselves, but without access to markets and agronomic support, they struggle to thrive.

In 2007, the Bolaven Plateau Coffee Producers Cooperative (CPC) was founded to improve the quality of life among local farmers and fight poverty in the community. Now reaching over 600 farmers, CPC provides producers with technical assistance for every stage of the coffee process, from planting to processing. In addition, the cooperative advances funds to farmers based on their production forecast so that smallholders can invest in their farms and families. Above all, CPC connects producers to premium markets, ensuring that farmers receive the fairest price for their product and earning the cooperative Fairtrade premiums.

To achieve this, CPC has relied on financing, including from CSAF members. Alterfin was the first ever financier—locally or internationally—to lend to CPC, offering a lifeline to the cooperative of just over $200K a mere two years after its founding. Over the past fifteen years, CPC has leveraged upwards of $16.5M of financing from CSAF members collectively, including Alterfin, Rabo Rural Fund (following an investment by Rabo Foundation), and ResponsAbility. With this working capital, CPC has been able to deliver concrete results for its members, with 96% reporting improved economic prospects since joining the cooperative. Farmers also note that the cooperative has helped them improve farming practices, better their housing conditions, increase savings, and expand access to education for their children.

Beyond the cooperative’s members, CPC is driving deep impact across the communities where it works. With the premium earned from Fairtrade coffee sales, CPC has built 12 local schools—each equipped with clean water—to collectively support over 7,000 children. In four villages, the cooperative has built healthcare facilities, which serve 3,500 community members. With the support of CSAF members, CPC is expanding market access for hundreds of smallholder farmers and driving sustainable community development for thousands more.

The Luangwa valley of Zambia is a hotspot of African megafauna, sometimes known as the country’s “honey pot.” Despite access to fertile land, farmers growing subsistence crops such as rice, beans, or peanuts have historically lacked appropriate agronomic training or economic resources to prevent soil degradation and invest in healthy crop production. With reduced yields and limited access to quality markets for their products, communities were forced to resort to illegal wildlife poaching in order to survive.

Community Markets for Conservation (COMACO) was formed in 2003 to incentivize conservation by providing training in sustainable agricultural practices and creating a market for local farmers. Through this model, COMACO helps more than 250K farmers in the area increase their incomes and unlock sustainable livelihoods. Beyond market access, COMACO provides regenerative agricultural training and coordinates carbon credit programs for farmers, promoting practices that protect the local environment while boosting farmer incomes.

In 2020, COMACO received its first loan from a CSAF member through a line of working capital from MCE Social Capital with 40% of the loan co-financed by other lenders. Altogether, this work brought in $2M in funding for the business to enable it to buy more products from farmers and pay them on time for their crops. After the success of the initial loan, MCE extended co-financed funding again in 2022 to help COMACO continue to grow. Then, in 2023, MCE made a third loan to the business through their newly launched MESA fund.

Working through its majority-women-led, communitybased cooperatives, COMACO pays premium prices to farmers and produces a local line of nutrient-rich goods such as peanut butter, fortified grains, and dried fruit. In 2021, the enterprise’s promotion of regenerative agriculture and energy efficiency resulted in the planting of 46 million trees and the sequestration of over one million tons of carbon dioxide. With reliable, conservation-linked financing, COMACO is helping hundreds of thousands of farmers preserve nature and improve their own livelihoods.

In Ghana, cocoa farmers struggle with the volatile prices of the global cocoa market and increasing threats from climate change. As prices become evermore unsure, production is jeopardized by unpredictable rains and a rise in cocoa swollen shoot virus in the region. Farmers urgently need to diversify their revenue, but there are few options for communities oriented towards maximizing cocoa production. However, one innovative enterprise, Koa, is helping farmers make their harvest go further by converting cocoa byproducts into a new revenue stream.

The cocoa beans farmers sell to be transformed into chocolate comprise only about a quarter of the cocoa fruit that farmers harvest. For most cocoa farmers, the remaining pulp and husk are typically discarded or sometimes used as an organic fertilizer. Seeing an opportunity, Koa buys the sweet cocoa pulp from Ghanaian cocoa farmers and converts it into juice or dried flakes that can be used as ingredients in the food and beverage industry. This approach allows farmers to diversify their income while reducing waste generated in the cocoa farming process by up to 40%.

Koa meets farmers where they are, establishing solarpowered community mobile processing units (CMPUs) to separate part of the pulp from the beans in communities near farmers—or sometimes on the farm itself. Sufficient pulp is left on the beans to enable fermentation and farmers then return to their land with the cocoa beans to process and sell as a separate revenue line within the next month. Because farmers receive same-day payment for their cocoa pulp, it means that a farmer earns upfront income before they have even finished processing their main crop. More than just additional income, the timing of this cash infusion can be a critical lifeline for cashstrapped farmers who need to pay labor costs in relation to the harvest. Leftover funds in the growing season allow farmers to purchase inputs and fertilizers, building the climate resilience of their farms with the support of training by Koa on sustainable agricultural and postharvest practices.

In recent years, Koa has been working with 3,000 farmers in the Central Region of Ghana. As Koa seeks to scale its innovative solution for cocoa farmers in Ghana, the IDH Farmfit Fund is supporting that growth, most recently with a $3.5M loan in conjunction with other lenders to f inance Koa’s new processing facility. This centralized factory will enable Koa to reach 10,000 more farmers and create another 250 local jobs.