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Kennemer Foods International

Cocoa is a risky business. Between long timelines from planting to harvest, climate vulnerability, and a volatile global market—farmers and agri-SMEs alike face myriad challenges. In the Philippines, Kennemer Foods International (KFI) manages these risks for its business and the 20,000 farmers it supports on Mindanao Island. In 2017, Alterfin provided the business its first working capital loan from a CSAF member—$700k to allow KFI to expand its purchasing. Over the past six years, Alterfin grew its financing, bringing in Rabo Rural Fund as a co-investor. Over time, Common Fund for Commodities and Fondation Grameen Crédit-Agricole have begun working with the business as well through working capital and capital expenditure loans. Together, they have helped KFI become the Philippines’ largest supplier of cocoa beans to the international market while supporting a strong social mission. Farmers working with KFI can experience an increase in yields of 400%.

However, this growth has not come without challenges for KFI along the way. It is risky for farmers to convert their farms to cocoa due to a long timeline for tree maturity—it takes nearly three years from planting a seedling until it bears fruit. To counteract this, KFI launched a subsidiary, Agronomika Finance Corporation, to provide farmers with long-term microfinance that defrays the risk of converting to cocoa or renovating old farms to ensure they are productive for years to come. KFI also helps their farmers buy microinsurance to protect against weather events, reducing risk to the farmers and ensuring they’ll be able to rebound in the event of an emergency.

Additionally, KFI is helping farmers to diversify their cocoa farms, supporting farmers to practice beneficial intercropping while providing an alternative revenue stream for the farmers and for KFI. The enterprise buys and commercializes other crops from farmers including fruits, corn, and abaca fibers—yet KFI is thinking beyond crops to grow revenue. In 2022, the business began working with Mirova Land Degradation Neutrality Fund to launch carbon credits programs linked to reforestation and forest conservation projects being undertaken by KFI. The relationship between KFI and Mirova is not only diversifying business income and contributing to conservation; the due diligence process of Mirova also helped fast track Grameen Crédit Agricole Foundation’s investment in the cocoa and banana activities extensions, showing how greater collaboration can make partnerships more efficient for everyone involved.

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