With a mission to promote economic, social, and environmental development, Swisscontact has been fostering better practices in global industries since 1959. The organization, which employs more than 1,100 team members in 33 countries, works to the guiding principle that employment and income forge pathways out of poverty into a future with real opportunities.
In 2010, Swisscontact initiated the Sustainable Cocoa Production Program (SCPP) in Aceh, Indonesia. Its aim: to improve the competitiveness of the Indonesian cocoa value chain. In 2012, SCPP evolved into a large public-private partnership development project, initiated and financed by the Swiss State Secretariat for Economic Affairs (SECO) and implemented by Swisscontact. The partnership was one of the first to meet chocolate-company demand for sustainability in the Indonesian cocoa sector, as well as increasing supply to the significant processing capacity available locally.
With many visiting cocoa companies in 2012 seeing the effectiveness of the approach and understanding its potential for scale, IDH joined SCPP as a second funding partner. The funds available through CPQP leveraged investment from within the industry, enabling the program to expand into Sulawesi. The SCPP and CPQP projects merged: Swisscontact took over the coordination of CPQP projects with its associated partners in Indonesia (ADM, Armajaro, Nestlé, and Mars), under the umbrella of SCPP, in January 2012.
The coordination role played by Swisscontact has enabled the productivity package to be introduced to several international agribusiness companies across Sulawesi, reaching 30,000 farmers within CPQP and an additional 30,000 outside of the program directly under SCPP. While this is a significant achievement over the last 4 years, this comprises only 10 % of cocoa farmers in Indonesia. The challenge now is for industry to scale up and apply the approach beyond the SCPP. Several companies are doing this already.
Discover the stories behind five years of partnership with CPQP
- A benchmark training approach: tiered GAP delivery in Indonesia
- Cocoa Producer Groups: building enterprise in cocoa-producing areas
- The value of knowledge: financing the Sustainable Cocoa Production Program farmer
- Rehabilitation, regeneration, and replanting: demonstrating positive impact
- Data-powered prototyping: CocoaTrace and impact at farmer level
- Cocoa forums: discussing the future of the Indonesian cocoa sector
A benchmark training approach: tiered GAP delivery in Indonesia
With some slight modification, the Sustainable Cocoa Production Program (SCPP) implemented the successful training approach developed under the Economic Development Financing Facility (PEKA) project (Aceh province, 2010–2012). A tiered system ensured access to efficient training by selected smallholder farmers at village level: Master Trainers (private sector and SCPP field staff) were trained in each area of implementation, and passed on knowledge and skills in GAP to Lead Farmers who in turn trained Village Lead Farmers from farmer groups.
In order to cover a very large geographical area—over 5,000 km from Aceh to Sulawesi—only one-third of farmers were selected for training from each village (using criteria provided by both public- and private-sector stakeholders). The Master Trainers also guaranteed the quality of the new Farmer Field Schools (FFS), identifying Key Farmers who could encourage other farmers to join the training and to follow up on the practices trained. The Key Farmers were themselves trained on GAP and farmer group development.
The training offered to cocoa farmers was innovative because it was demand driven and adapted to farmers’ needs (rather than the supply chain determining the type of training farmers were offered). Training topics were identified during discussions and meetings with farmers. In addition to refined GAP training (featuring nursery management, top grafting techniques, farm rehabilitation for unproductive trees, replanting, post-harvest processing, quality control, and fermentation), modules were added on topics beyond agricultural practices. These included training on finance, nutrition, and business. Adoption rates were increased through the introduction of a participatory approach to training at group demo plots, where groups or individuals could make farm management decisions before applying them to their own farms. This gave farmers a better understanding of new farming techniques, circumstances in which those techniques could be used, and priorities.
The FFS approach is seen as highly successful in Indonesia and has provided the basis for scaling up across the country. Best-practice GAP training materials were developed together with all partners, drawing on learning from manuals previously developed by Mars and other stakeholders, and incorporating lessons from the PEKA project. The resultant training manual has become a benchmark in good practice for the Indonesian cocoa sector.
See also: Training
Cocoa Producer Groups: building enterprise in cocoa-producing areas
Farmer groups are the first step to building farmer capacity but also play a key role in the sustainability of the Sustainable Cocoa Production Program (SCPP) approach. Through the Farmer Field Schools process, Cocoa Producer Groups (CPG) were formed or strengthened. Each group was designed to establish a training unit delivering knowledge on GAP, nutrition, and finance. The training staff were financed through cocoa premiums and assisted by field facilitators. By passing vital knowledge into the farming community, the CPG ensure that bedrock skills are locally available once the program has ended.
CPGs able to meet a set of selection criteria are developed into Smallholder Cocoa Enterprises (SCE), which serve as business incubators. The SCEs are run by entrepreneurial Lead Farmers: one SCE manages a number of CPGs at sub-district level. Each SCE also operates as a buying station (which generates immediate income) and gradually develops the capacity to provide services such as fertilizer, pesticides, and nursery seedlings.
SCEs function most effectively when embedded into a co-op, where the co-op is the main partner to the industry and the SCE provides the services at sub-district/village level.
The value of knowledge: financing the Sustainable Cocoa Production Program farmer
The Sustainable Cocoa Production Program (SCPP) runs an Access to Finance component, which includes training on financial literacy and encourages farmers to save for purchase of inputs. By educating farmers on good financial practices, SCPP reduces their exposure to inadvisable loan commitments and helps them to avoid being blacklisted for non-payment. Savings have now become an important part of the SCPP strategy: farmers can save through co-ops, and 40 % of SCPP farmers have bank accounts into which they can save directly (opening a bank account is a prerequisite of certification by SCPP). The financial literacy training delivered by SCPP also acts as a selection tool for farmers ready to have a bank account: information on whether farmers meet the required criteria to open an account is collected at the same time. Bank-account-ready farmers are streamed to the banks, creating a system that reduces risk without the need for funding banks directly.
See also: Finance
Rehabilitation, regeneration, and replanting: demonstrating positive impact
To combat the effects of aging, unproductive trees, the Sustainable Cocoa Production Program (SCPP) promoted rehabilitation, regeneration, and replanting. Rehabilitation is included in GAP training modules and farmers are encouraged to carry out frequent harvesting, pruning, and sanitizing as well as organic and inorganic fertilizing practices.
SCPP advised side-grafting with higher-yielding and pest- and disease-tolerant/resistant material. Uptake of side-grafting was low because of the potential loss of income until the side-grafted trunk started yielding.
Replanting using top-grafted seedlings was recommended for the replacement of unproductive trees. To minimize loss of income, farmers can replant gradually—for example covering 20 % of the farm every year to achieve a five-year goal of 100 % new trees. By staggering the replanting, farmers do not have to finance an entire rejuvenation in one go: and have the opportunity to harvest from the first-planted trees while the last-planted are still growing.
In any replanting model, some reduction in income will occur. The gains made as a result of the investment will only materialize when the new trees begin to produce at full volume. The reduced income must be compensated through other income sources, sufficient savings, or access to long-term loans.
Using clonal gardens, SCPP has managed to demonstrate the positive impact of replanting on long-term productivity. The challenge now is to manage replanting in a way that both supports the farmer through the income-loss period and does not impact on the sustainability of Smallholder Cocoa Enterprises.
In 2015, the Indonesian Government began distributing free cocoa seedlings and multi-year free support of agrochemical inputs. To counter the impact on the commercial channels set up under SCPP, an agreement was reached whereby the government program purchased planting material from SCPP-supported and established nurseries: creating new markets for farmers and farmer groups.
Data-powered prototyping: CocoaTrace and impact at farmer level
A monitoring and evaluation system was set up at the start of the SCPP. Baseline data (for 60,000 farmers) was collected at individual farmer level and entered into the SCPP’s Management Information System (MIS). It has been used to design the program’s activities: informing impact at farmer level by directing the focus of funding and innovation. For instance, the baseline showed 13 % of the cocoa tree population to be unproductive. As a result, partners worked to develop solutions that supported the rehabilitation of more than 3 million trees.
The MIS was developed by Swisscontact in 2010 and outsourced to CocoaTrace (an Indonesian company) in 2013. It is a software-based model that captures data on all farmers under SCPP and provides access to all program stakeholders. It creates transparency on all levels, as individual farmer details can be tracked (e.g. GPS data or training attendance). New modules can be added as required, allowing the MIS to grow with the demands of the SCPP’s partners. Real-time data can be provided to all relevant partners, as the system uses tablets for all recording (avoiding the use of traditional paper methods).
In addition to baseline data collection, ‘post-line surveys’ are carried out to flesh out the picture. At least 10 % of SCPP’s farmers are surveyed annually to measure the impact of the program’s overall activities. The survey results indicate that all farmers have increased production. Evaluation of increases in income from cocoa production shows that 47 % of farmers (involved in CPQP projects that were part of SCPP) have increased their annual income at least by 75 % from cocoa farming activities, based on constant market prices from 2012.
Non-SCPP companies are using the MIS for their own programs. This provides an exit strategy for Swisscontact, as the software is available for purchase directly from CocoaTrace. Work is currently being carried out to expand the MIS to other commodities (e.g. palm oil and coffee). The vision is for a highly innovative approach that would bring together data collection on a range of sustainable crops through a single registry system paid for directly by industry.
See also: Good Data
Cocoa forums: discussing the future of the Indonesian cocoa sector
The SCPP has unified the Indonesian cocoa sector on methods for facilitating access to the productivity package. By establishing ‘cocoa forums’, the project enhanced collaboration and cooperation among key private and public stakeholders, who have since agreed on common strategies for a more coherent and unified approach to cocoa development in the country.
Forums invite local government and all supply-chain actors to discuss cocoa-sector issues both commercially and for the public good. In 2015, these provincial-level forums were linked to the Cocoa Sustainability Partnership at national level to inform government policy (e.g. on import/export taxes) and planning in the cocoa sector. The aim is for sustainability to be coordinated by a national platform and align with government initiatives. Task forces have been set up to develop best practices and consultations have been held on a new government fertilizer program and on adjustments of KUR, a government loan program. There is a clear exit strategy in place for the Cocoa Sustainability Partnership, with the aim of creating a sustainable national forum that will serve the private and public sectors by 2020 without additional donor funding.