Cocoa fertilizer market grows in Cote d’Ivoire as financial institutions play a more proactive role

25 Aug 2016, in Cocoa - The initial approach to declining soil fertility of cocoa farms by the cocoa sector was to increase the availability of high-quality cocoa fertilizer at an affordable costs to cocoa farmers in West Africa.

The initial approach to declining soil fertility of cocoa farms by the cocoa sector was to increase the availability of high-quality cocoa fertilizer at an affordable costs to cocoa farmers in West Africa.

In 2012, IDH identified the lack of investment in soil fertility to be a system failure: the risks were too high for the fertilizer industry to enter because the volumes of sales were insufficient; banks were unable to provide financial support, fertilizer wasn’t readily available in the market for farmers to buy and farmers had low access to fertilizer because of affordability constraints as well as poor access to knowledge.

The Cocoa Fertilizer Initiative was established to overcome the systems failure, through a joint collaboration between the cocoa industry, the cocoa public sector and the fertilizer industry. The financial sector also played an important role through the development of financial solutions.

The Cocoa Fertilizer Initiative is a public-private consortium funded by the World Cocoa Foundation (WCF), Le Conseil du Café-Cacao and fertilizer suppliers, and is implemented in partnership with IDH.

Short film (in French with english subtitles) showing some of the key challenges and accomplishments of the Cocoa Fertilizer Initiative. 

Various types of collaborative arrangement between the cocoa and fertilizer industry have been initiated under the Cocoa Fertilizer Initiative. Cocoa companies have facilitated access to reliable cooperatives and farmers, and the fertilizer industry have delivered technical assistance. This collaborative work has created economies of scale, reducing the price at retail level, while at the same time providing farmers with a quality assurance.

The current enabling environment is now more suited to financial institutions playing a more proactive role in the continued development of the cocoa fertilizer market. The fertilizer industry and cocoa companies are active under the Cocoa Fertilizer Initiative and the market for cocoa fertilizer is growing rapidly. Coops are stronger, there is price stability, farmers are receiving higher prices and there is promising success from the work with Advans, a leading microfinance institution (MFI) in West Africa.

This has led to the design and launch of the IDH Farm & Coop Investment Program of CLIP, which will build on the activities of the Cocoa Fertilizer Initiative by developing the capacity of banks and MFIs to supply appropriate financial products, particularly medium (one season) and long term (1 year or more) finance. The program will also build the capacity of coops and farmers to access these products and enable them to become bankable.

An evaluation of the Cocoa Fertilizer Initiative is currently being carried out on the 3 year pilot phase. Plans for the next phase may focus on upscaling work in CDI and future plans may consider expansion to addressing soil fertility in Ghana and Nigeria.

For more detailed information on the Cocoa Fertilizer Initiative, the 2015 Annual

Report can be downloaded here in English and French.

Or contact Renske Aarnoudse, Country Manager in Cote d’Ivoire

Aarnoudse@idhsustainabletrade.com

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