In Honduras, small cacao farmers were not equipped to enter a more competitive international market. These farmers traditionally had limited access to technical assistance, training, financial support, and other extension services. To assist these indigenous and Afro-descendant farmers with preparing their cacao products for international markets, an exchange with the Dominican Republic was arranged. The Honduran farmers learned to work on organic and environmental production across the value chain and increased their capacity in marketing, commercialization, and fair trade.

Challenge

In Honduras, small cacao farmers from indigenous and Afro-descendant communities were not equipped to think holistically about how to increase their comparative advantage in making themselves more competitive and entrepreneurial in order to address international markets. These farmers traditionally had limited access to technical assistance, training, learning exchanges, financial support, and other extension services. Since 2012, the World Bank, with the financial support of the Japan Social Development Fund (JSDF), had been providing training, through the Environmentally Sustainable Cacao Production for Small-Scale Indigenous Peoples and Afro-descendant Farmers Project (AGROCACAO) Project, in different phases of the value chain, attempting to strengthen the farmers’ capacities in other areas essential to move from “a small farmer” to “small entrepreneur”. This included training in accounting, finances, procurement, basic management, and monitoring and evaluation, with the goal of strengthening the farmers’ capacity to produce and market quality agricultural products, particularly cocoa, in an economically and environmentally sustainable manner.  However, the farmers still lacked knowledge about preparation of business plans and how to negotiate with international buyers to get into the fair trade and market and be able to obtain better prices for Honduran cocoa beans, cacao powder, and chocolate products.

Solution

The Honduran Government requested assistance from the World Bank to arrange an exchange between indigenous and Afro-descendant farmers from Honduras and their counterparts in the Dominican Republic. The exchange was intended to facilitate learning of good practice approaches for developing business plans, fair trade, marketing, and negotiations with buyers, which would contribute to sustainability of the agricultural sector through agroforestry systems and improving the livelihoods and well-being of households in Honduras.  

Honduran participants in the exchange included 12 indigenous, Afro-descendant farmers representing community organizations of small cacao farms. Providing knowledge in the Dominican Republic were the NGO Asociación Coordinadora Indígena y Campesina de Agroforestería Comunitaria Centroamericana (ACICAFOC) and the National Confederation of Dominican Cocoa farmers (Conacado). The exchange on February 15-21, 2015, consisted of site visits to farms in the Dominican Republic. During the visits, the Honduran farmers learned about Dominican farmer’s organic production and the variations of cacao and trees. They also learned about the comparative differences in farm sizes and types and about different techniques in farming and post-harvest from their Dominican counterparts. Additionally, the Honduran farmers visited chocolate factories to learn about recipes and techniques used to make chocolate ready for international markets. Finally, they learned about business plans and developing fair trade strategies for entering Honduran cocoa beans, cacao powder, and chocolate into international markets.

Results

In addition to opening a new avenue of learning and sharing knowledge “farmer to farmer”, the South-South exchange:

• Raised awareness of the importance of working directly with the farmers to improve their livelihoods and showed that providing sustained technical assistance and small grants can empower farmers when coupled with their own in-kind contributions.
• Increase farmers’ capacity and facilitated a holistic learning process in developing environmental-friendly practices from preparing the soil, harvest, post-harvest, and processing cacao throughout the establishment of two cacao factories.
• Contributed to the establishment of in-farm organic production systems and the establishment of a plant-to-produce organic compost for other farmers. The collection centers contributed to reduce costs. 
• Contributed to building the capacities of both group of farmers. For the Hondurans, learning from marketing strategies, business plans, and fair trade was essential; and for the Dominicans, learning from the production systems in Central American was key to modify and improve their own marketing strategies.
• Increased the knowledge and skills in developing clear and detailed business and fair trade plans and strategies. It also improved Hondurans’ skills in developing indicators to better measure productivity, processing, and trade.

Lessons Learned

• Developing business plans are important for preparing and bringing products to international markets, but as equally important are regular reviews and updates of those plans to identify weaknesses and strengths that will improve effectiveness.
• Knowledge exchanges provide excellent opportunities for learning across all parties, including the knowledge recipients, providers, and the implementing and organizing agencies.

World Bank Group Contribution

The exchange was financed by the South-South Knowledge Exchange Facility.

Partner

Providing knowledge in the Dominican Republic were the NGO Asociación Coordinadora Indígena y Campesina de Agroforestería Comunitaria Centroamericana and the National Confederation of Dominican Cocoa farmers.

Moving Forward

The farmers who participated in this exchange are now better equipped to develop business plans and strategies for bringing their cacao products to international markets. Following the exchange, they participated in a workshop to disseminate more broadly the main lessons learned and describe their experiences to their respective organizations. To further the impact of this exchange, these farmers are now working more closely with the Honduran government to develop strategies for Honduras at large, to improve territorial development of the cocoa, cacao, and chocolate industries, and define strategies and targets to help the country become a larger exporter of these products.

Beneficiaries/Participants

From Honduras, beneficiaries were indigenous and Afro-descendant farmers who had previously received Bank-supported training through the JSDF Alternative Indigenous and Afro-Descendants and Agroforestry Project (COCOA-RAAN) projects for the previous two-years. Participants represented the following organizations:

• Honduran Agricultural Research Foundation
• Foundation for Rural Enterprise Development
• Agricultural Production Cooperative of Cacaoteros of Jutiapa Limited
• Pico Bonito Producers Association
• Indigenous and Peasant Coordination Association for Community Agroforestry in Central America
• Afro Business Association of Iriona
• Cooperative Cafetalera Pech de Desarrolo Limitada
• Producers Association of Pisijiire
• National Agricultural University
• Agriculture and Livestock Secretariat
• Nuestra Raices
• Chocolatier Ladies of Jutiapa
• National Agropecuary and Security Service