Summary report dialogues 2016

September 19 and 21, 2016

Dialogues: Opportunities of Green Agribusiness with Europe Coffee and Cacao Sectors:

Carbon and Environmental Footprints and Markets

Executive Summary of discussions, recommendations and opportunities identified by coffee and cacao sector representatives

Table of Contents Contents 1. Acknowledgments

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2.1 Green agro-export products from Latin America and the

Caribbean (LAC) to Europe

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2. Preface 4 3. Dialogues

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3.1 Background

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3.2 Concept

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3.3 Objectives

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3.4 Methodology

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3.5 Speakers

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4. Representation in the dialogues 4.1 Dialogue in Tegucigalpa – September 19, 2016

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4.2 Dialogue in San Pedro Sula – September 21, 2016

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5. Key discussions, recommendations and identified opportunities

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5.1 Session 1: Climate change

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5.2 Session 2: Product environmental footprint

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5.3 Session 3: Sustainable products in the European market.

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6. General conclusions about the dialogues

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7. Recommendations to enhance the results of the dialogues

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8. Proposed next steps

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9. Collaborators 40 10. About LAC Footprint Initiative and CICOMER

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Acknowledgments The dialogues would not have been possible without the support of the following people and institutions: Gabriela Jiménez, Coordinator of the Agroforestry Program | Honduran Coffee Institute (IHCAFE) Leslie Salgado, Technical Advisor of the National Cacao Value Chain | Secretariat of Agriculture and Livestock (SAG) Orlando Cáceres, Coordinator of PRONAGRO | SAG Vicente Aguilar, Coordinator of the Climate Change Unit | SAG Nelson Ulloa, Ministry Advisor | Secretariat for Energy, Natural Resources, Environment and Mines (MiAmbiente+) Sergio Palacios, Coordinator of the Climate Change Office | MiAmbiente+ Aníbal Ayala, General Manager | National Association of Cacao Producers of Honduras (APROCACAHO).

Geraldine Zelaya, President | Center for Investment and Commerce (CICOMER) Humberto Chávez, Climate Change Specialist | CICOMER Karina Zelaya, Communications Specialist | CICOMER Svetlana Samayoa, Director | LAC Footprint Initiative, CICOMER Fredy Rodríguez, Manager | EFI Solutions Thomas Mitschke, Manager | EFI Solutions Adolfo Peña, Director | Honduran-German Chamber of Industry and Commerce (AHK)

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Preface 2.1 Green agro-export products from Latin America and the Caribbean (LAC) to Europe The negative impact on the environment during the life cycle of a product - from production to its final disposal - is a rising concern for consumers in developed countries, and therefore an important criterion for them when purchasing. As a result, the environmental sustainability of exports from LAC to Europe is becoming a requirement to meet the growing demand for sustainable agro products.

To measure and communicate the contribution of products to climate change, the first methodologies began to emerge in Europe in 2008. These methodologies quantify the Greenhouse Gas (GHG) emissions of goods and services (their carbon footprint).

Currently, the broader approach of the environmental footprint of products is taking lead, as it considers climate change and other impact categories such as ozone depletion, ecotoxicity of aquatic fresh water, human toxicity and acidification, among others. An example is the Product Environmental Footprint Method (PEF Method), developed by the European Commission.

But beyond the possible environmental requirements for products to be sold in Europe by the year 2020, the management of the environmental footprint and the adoption of green business models have other benefits, including: soil improvement, efficient waste disposal, carbon sequestration and human health.

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In addition, it opens up the opportunity for companies to improve their energy efficiency and reduce their costs.

In order to socialize the importance of environmental sustainability for the coffee and cacao exports of Honduras, the dialogues “Opportunities of Green Agribusiness with Europe - Coffee and Cacao Sectors: Carbon and Environmental Footprints and Markets”, were developed in September 2016. They correspond to the first step to create a “Network for awareness and exchange of knowledge on the reduction of the carbon / environmental footprint of products exported from Honduras to Germany”.

It is our intention that the information in this report serves as a reference to the introductory discussions held with coffee and cacao sector representatives during the dialogues in Honduras. The report also presents the recommended actions and opportunities identified by them. We hope it inspires the readers to take action and contribute to the discussion on viable strategies to achieve environmentally sustainable export value chains in the country.

Port of Hamburg, Germany

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Dialogues

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“Green Agribusiness Opportunities with Europe - Coffee and Cacao Sectors: Carbon and Environmental Footprints and Markets”

3.1 Background With the sponsorship of the Honduran Center for Investment and Foreign Trade (CICOMER) and the Alexander von Humboldt Foundation of Germany, the Latin American and the Caribbean Initiative (LAC Footprint Initiative) was created in 2015 in Hamburg, Germany.

In 2016, CICOMER and LAC Footprint Initiative developed the dialogues “Green Opportunities for Agribusiness with Europe - Coffee and Cacao Sectors: Carbon and Environmental Footprints and Markets”.

The Federal Ministry of Foreign Affairs of Germany sponsored the dialogues, support channeled through their Embassy in Tegucigalpa, Honduras.

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The dialogues are the basis for the development of a “Network for awareness and exchange of knowledge on the reduction of the carbon/ environmental footprint of products exported from Honduras to Germany”.

3.2 Concept

3.4 Methodology

Two dialogues were developed to raise awareness and discuss the relevance of reducing the environmental impact of export products.

The concept of the dialogues was developed by an interdisciplinary group of thematic and technical experts. Three sessions were created with the following topics:

The events were held in Honduras the 19th and 21st of September 2016, in the cities of Tegucigalpa and San Pedro Sula respectively. The focus was on two of the country’s export value chains: coffee and cacao. Coffee is one of the main export products to Germany, and cacao is projecting an increasing demand in Europe.

This report is based on the participants’ discussion topics, recommendations and identified opportunities. The best effort has been made to maintain the essence of the conversations between participants and thematic experts. The word “producers” is used to refer to men and women who grow coffee and cacao. “Participants” and “representatives” refer to the individuals who attended the dialogues.

3.3 Objectives The dialogues aim to create a community of informed, fully aware and connected local stakeholders, with respect to climate and environmental sustainability (carbon / environmental footprint) of products being exported to the German / European market.

This with the purpose of promoting in the long term:

• Climate change and trade.

• Environmental footprint of products.

• Sustainable products in the European market.

The relationship between climate change and trade was socialized. Also the most recent advances in methods and initiatives on the environmental footprint in Europe were shared. In addition, the trend on sustainable markets in Germany and the rest of Europe was presented.

Each session was composed by presentations given by experts or thematic speakers. The presentations focused on the relevance of each topic for Honduran coffee and cacao exports. Specific examples of activities in the country made sure to link theory with practice.

Thematic discussion groups were opened after each session. This led to a two-way discussion between experts and the participants. The sessions allowed the exchange of ideas, definition of discussion points, recommendations and the identification of opportunities.

i. The transition towards low carbon products. ii. Sustainable commercial relations. iii. The competitiveness of Honduran producers and export organizations. iv. The improvement of the positioning and image of Honduran products in international markets.

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3.5 Speakers The invited specialists for the dialogues were:

Special guests for their experience in the coffee or cacao sectors:

Fredy Rodríguez. Manager and specialist in agriculture and climate change | EFI Solutions (German-Honduran company), Honduras.

Nelson Ulloa. Ministry advisor | Secretary of Energy, Natural Resources, Environment and Mines (MiAmbiente+), Honduras.

Enrique Abril. International trade specialist | Guatemala.

Svetlana Samayoa. Director and specialist in sustainable consumption and production | LAC Footprint Initiative, Germany.

Liliana Sánchez. Business and international markets specialist | Honduras.

Jan Christian Polania Giese. Environmental sustainability specialist | Germany.

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Fredy Menéndez. Trinational Coordinator for the PROTCAFES Program | Hanns R. Neumann Foundation, Germany.

Rubén Gallozzi. Carbon footprint consultant | Honduras.

Gabriela Jiménez. Coordinator of the Agroforestry Program | Honduran Coffee Institute (IHCAFE), Honduras.

Moderator: Humberto Chávez. Climate change specialist | Center for Investment and Commerce (CICOMER), Honduras.

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Representation in the dialogues 4.1 Dialogue in Tegucigalpa – September 19, 2016

Graphic No. 1 Participants of the dialogue in Tegucigalpa

Source: LAC Footprint Initiative / CICOMER, 2016

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Graphic No. 2 Representation during the dialogue in Tegucigalpa

Source: LAC Footprint Initiative / CICOMER, 2016

From both graphs, it can be seen that the producing and exporting cooperatives are the most represented ones during the event (13 participants, representing 21% of the total attendees).

Participants of the dialogue in Tegucigalpa, Honduras

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4.2 Dialogue in San Pedro Sula – September 21, 2016

Graphic No. 3 Participants of the dialogue in San Pedro Sula

Source: LAC Footprint Initiative / CICOMER, 2016

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Graphic No. 4 Representation during the dialogue in San Pedro Sula

Source: LAC Footprint Initiative / CICOMER, 2016

Both graphs show that the producing and exporting cooperatives are the most represented ones during the event (13 participants, representing 27% of the total attendees).

Participants of the dialogue in San Pedro Sula, Honduras

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Key discussions, recommendations and identified opportunities 5.1 Session 1: Climate change

Discussion 1: Impacts of climate change and identified solutions.

Producers discussed about what they consider to be the negative impacts of climate change on their crops. There was limited conversation about solutions to be adopted for both mitigation and adaptation, as they are unknown.

Recommendations • For future conversations to focus on solutions to the impacts of climate change, continuous support is required from experts to identify them.

• Identify and socialize success cases in the country, which show good practices and lessons learned on adaptation and mitigation actions. Contact information about each case should be included.

• Success stories of actions taken to mitigate climate change should be identified with

local actors, as there is no knowledge among participants about any program that is gathering these experiences.

• There is limited knowledge of the costs to adapt to climate change. Therefore, when identifying adaptation options, estimates of costs are to be included.

• Collect practices that may be applicable in the country and that have worked well elsewhere.

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Opportunities • The Climate and Coffee Initiative (C&C) of the Hanns R. Neumann Foundation (Germany), has a toolbox which contains case studies and best practices on adaptation to climate change, which are implemented in the Trifinio region (Comprehends departments in Honduras, Nicaragua and El Salvador).

This toolbox is unknown by several of the participants of the dialogues, being relevant to promote its existence.

Discussion 2: Limited availability of technical - thematic professionals.

Participants of the dialogues expressed the need for experts on the subject of climate change in the National Cacao Committee, APROCACAHO, IHCAFE and SAG, as well as in export cooperatives / companies.

Recommendations

Opportunities

• Prepare a survey to create an inventory of existing climate change experts in the country and in the specific areas of interest of the representatives of the cacao and coffee export value chains.

• Request the support of the organizations that work in the coffee and cacao sectors and the representatives of MiAmbiente+ and the SAG, to identify national professionals that have experience in climate change and to circulate the survey.

• Identify the lacking local capacities that need to be developed in the cacao and coffee sector.

Discussion 3: Encourage research.

Actors in the cacao sector emphasized there is not enough research or information on climate change in the country.

Recommendations • Stimulate investigation through awardwinning contests.

• To increase participatory research, match the need of information of IHCAFE, APROCACAHO and the National Cacao Committee, with the research studies of universities and investigation centers.

Approach the Honduran Agricultural Research Foundation (FHIA), the Zamorano University and the National Autonomous University of Honduras (UNAH).

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• Establish monitoring systems and agroclimatic parameters. Identify the national actor to whom this role corresponds.

Suggestions of institutions to assume this role are the SAG or the Permanent Council of Contingencies (COPECO).

Discussion 4: The need for a structured framework for knowledge development on climate change.

Recommendations • Develop a structured and specific training plan for all actors in the coffee and cacao value chain, based on their knowledge needs.

• For the training plan, consider the themes of relevance and interest identified by participants of the dialogues: i. The impact of climate change in the economy of the producers. ii. The real effects of climate change in the crops of Honduras. iii. Techniques for the adoption mitigation and adaptation practices.

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• Provide training to technicians, so that they transmit the knowledge to the producers.

In particular the technicians of IHCAFE and APROCACAHO. • Development of spaces and platforms for the exchange of knowledge and experiences among producers.

• Develop reports on climate change (Newsletters) and calendars with the phenomena of La Niña and El Niño.

• Encourage synergies between the different actors and existing climate change initiatives.

Opportunities • Some of the participants have offered the required venues for the development of the trainings.

• The Hanns R. Neumann Foundation’s Coffee and Climate Initiative will open dialogues with the cacao sector in 2017.

This will enable the sharing of experiences between the cacao and coffee sectors, regarding adaptation to climate change.

The cacao sector, through the National Cacao Committee or APROCACAHO, could follow-up directly on this activity.

Discussion 5: Enforcement of national environmental laws.

Participants wants to encourage environmental responsibility.

Recommendations • Develop meetings between the actors of the different productive sectors and MiAmbiente+ representatives, to identify how the first can support the enforcement of the existing laws and not depend solely on the government authorities to perform this task.

• The actors of the productive sectors must define rules of compliance. For this, it is necessary to study the existing laws and policies in the country.

• Producers are encouraged to identify the national policies and sectorial rules that exist.

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Discussion 6: Limited knowledge of national information on climate change.

Recommendations • Designate a governing body to collect and sort data, and centralize existing information.

The governing body should be in charge of managing the communication between all actors in the coffee and cacao export value chains, so that they can interact.

• Develop follow-up dialogues to communicate about existing information.

• Create a technical working group, which builds accessible communication tools for producers to use.

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• Improve the efficiency of existing information platforms in the country, particularly those that address the topic of climate change.

• Collect existing experiences on climate resilience management and disseminate them, as little is known about this topic in the country.

Discussion 7: Limited knowledge of existing financial products.

More information is needed on financial products that target: production issues related to climate change, the improvement of cooperatives’ competitiveness and the access to green markets.

Recommendations • Identify or develop studies of the local financing options to mitigate and adapt to climate change in production crops.

• Establish programs in rural and national banks, to increase the capacity for advise and analysis of agriculture loans that attend climate change mitigation and adaptation activities.

• Identify the existing level of knowledge on climate change in national banks. Propose a series of awareness-raising events for them.

to discuss the creation of financial products that target climate change.

Opportunities • Representatives of three banks participated in the dialogues. Timely followup is recommended once a concrete proposal has been created for them. This proposal should focus on identifying the potential to develop financial products oriented to export sectors that require financing to implement climate change adaptation and mitigation measures.

• Strengthen the relationship between producers and financial institutions, in order

Discussion 8: REDD+ and NAMA activities*.

These activities are in the agenda of the government of Honduras. International funds will be available by 2020, if the Paris Agreement comes into force. *REDD+: Reduce emissions from deforestation and forest degradation, and foster conservation, sustainable management of forests, and enhancement of forest carbon stocks.

NAMA: Nationally Appropriate Mitigation Actions.

Recommendations • Increase the leadership of cooperatives and companies to participate in REDD+ and NAMA projects. This can be achieved through negotiation meetings that allow them to generate inputs for those projects.

• Capacity building on REDD+ and NAMA. • Promote the link between the practical knowledge about REDD+ and NAMA in the

sectoral institutions and research at the universities.

Opportunities • The disposition of MiAmbiente+ to follow up on NAMA and REDD+ topics through dialogues with the productive sectors.

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Discussion 9: Concern about agricultural activities in protected areas.

There are no incentives to produce under environmentally friendly standards.

In addition, it is necessary to prepare the farmers on new events caused by climate change so that timely attention is given to these problems without neglecting other activities.

Recommendations

Opportunities

• The Forest Conservation Institute (ICF) has developed a national certification that is awarded to trained personnel to attend emergencies in protected areas. The curriculum should be revised, and a module on climate change should be integrated.

• There is a network for agricultural products in the protected forest of the Agalta Mountain, Rio Plátano Biosphere and Guajiquiro Reserve. Representatives of the network participated in the dialogues and are willing to join efforts to protect the forest.

• Identify the motivations and incentives that producers consider necessary for them to protect the forest.

• Reduce costs and facilitate access of inputs (e.g. fertilizers) to small producers.

This is one incentive for producers to be environmentally responsible in protected areas.

Discussion 10: Limited knowledge of national policy related to climate change.

Recommendations • The government must engage with producers to share about new policy proposals, being an opportunity for the productive sectors to participate in its development and future implementation.

• In future dialogues, more representatives of the National Agricultural Institute (INA), MiAmbiente+, SAG, ICF, APROCACAHO and IHCAFE should be encouraged to attend.

This should be done to have conversations around the existing policies.

• Review policies related to climate change to understand how these affect or include the productive sectors.

Opportunities

• Participants believe that there must be more laws supporting the producers.

• The national policy on Promotion of Agroforestry Systems, has to be reviewed to learn if and how it addresses climate change.

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Discussion 11: Certificates and climate change.

Adopting volunteer certificates that include climate change as an evaluation criteria, could add value to products sold in the international market. There is concern about the implications of certificates in terms of costs to the producers.

Recommendations • Identify certificates that consider climate change as one of their criteria, especially for cacao.

• Determine if producers are able to economically maintain a certificate, and select those that will actually have a positive impact on their income.

• Identify and apply other models to achieve environmental sustainability of products and not necessarily via certificates. This other options should be adapted to the reality of producers and not imply unsustainable expenses.

• Develop sustainable national production differentiate Honduran international market.

and verifiable schemes that cacao in the

• Position coffee and cacao of Honduras as organic.

Opportunities • UTZ and Rainforest Alliance labels will include climate change within their assessment criteria. These and other certificates that are considering climate change as one of their evaluation criteria can be tracked and socialized with producers.

• Through the SAG, the government of Honduras is interested in supporting the differentiation of Honduran cacao. They are also seeking support for the trade of cacao, cocoa and coffee that is produced under climate responsible actions.

• Promote a national brand for sustainable cacao that eliminates the need to adopt a foreign certification program.

Discussion 12: Improve the communication between MiAmbiente+ and the productive sectors.

Recommendations

Opportunities

• Develop dialogues between the productive sectors and MiAmbiente+ every three months.

• Send a letter of request to MiAmbiente+ to schedule follow-up meetings with the indicated personnel of the aforementioned secretariat.

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Discussion 13: Scattered information about how climate change impacts the access to international markets.

It is perceived that there is lack of coordination among the organizations responsible of the generation and dissemination of information.

Recommendations • Identify available information about markets and climate change, and work from a national network in which all this information is organized and shared.

• Identify the actions taken in the country regarding the marketing of products that communicate about their contribution to climate change mitigation and the implemented adaptation actions.

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• Seek for a mechanism to socialize the national experiences of export products that are marketed as sustainable.

• Establish standards, conditions and mechanisms per each sector, to sell at better prices in the international market.

This work corresponds to sectorial organizations.

Discussion 14: Interest of the productive sectors to participate at the COPs. Coffee and cacao sectors representatives want to participate in the UNFCCC’s* Conference of the Parties (COPs). *UNFCCC: United Nations Framework Convention on Climate Change.

Recommendations

Opportunities

• Develop trainings for sectorial negotiators and key decision makers of the coffee and cacao sectors, so that they can participate at the COPs.

• Training sessions are held each year for delegates from each country to attend the COPs. The government selects those who participate as delegates. MiAmbiente+ has been receptive in identifying the possibility for representatives of the productive sectors to become delegates.

• Socialize negotiation issues that directly affect producers, for example, the impact of climate change on agricultural products to be traded internationally.

• The Honduran MDL Foundation is delegated to participate at the COPs. Through this organization, there may be an opening for those interested in participating in such meetings.

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5.2 Session 2: Product environmental footprint

Discussion 1: The economic viability of companies to adopt environmental initiatives.

Some cooperatives implement environmental management actions, but it is difficult to sustain them over time as they require substantial resources.

Recommendations

Opportunities

• The cacao sector requires support for the development of thematic knowledge and timely technical advice to identify the costs to measure the environmental footprint.

• The National Cacao Program in Honduras (PROCACAO) of Helvetas – a Swiss organization -, intends to prepare an Act on environmental footprint. Technical assistance and thematic advisory services are required.

• Measuring the environmental footprint represents an investment and a cost to producers. Therefore, it must be identified if the government can provide the necessary legislative support to ensure that such investment is not in vain.

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Discussion 2: Novelty of the topic “product environmental footprint”.

For most of the participants, it was the first time they heard and learned about product environmental footprint and life cycle assessment.

Recommendations • Improve political support (at the regional and national level) for the topic.

MiAmbiente+ should coordinate an agenda that integrates the environmental footprint in processes that are already being promoted, as for example, the NAMA in the coffee sector.

• When socializing the Product Environmental Footprint Method of the European Commission (PEF Method): i. Share benefits.

about

its

implications

and

ii. Identify the consequences of not measuring the environmental footprint. iii. Present what other countries are doing so far. iv. Monitor progress and report periodically. v. Seek complementarities with other measures already being implemented.

• Create a network to harmonize ideas on how to efficiently address the product environmental footprint. It should also allow its members to learn about international initiatives and to identify training opportunities.

• Socialize the topic of product environmental footprint through the existing coffee field schools.

• Develop a pilot program for the cacao sector. There is no previous experience.

• The representatives of the institutions present in the dialogues, request guidance to socialize the topic. They consider that their knowledge must be strengthened to convey the appropriate message and obtain the support of its members.

• Identify the current practices performed in the field, which can be compared with those required for the measurement of the product environmental footprint. This can be a gateway to socialize the topic and build on what is already being done.

Opportunities • To create a product environmental footprint network, present the idea to the Interagency Committee on Agribusiness led by the Minister of the SAG. The Minister has direct communication with the President of Honduras. The Committee integrates actors of the productive sectors of the country and donors.

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Discussion 3: Financing required to develop environmentally sustainable activities.

There is doubt about the existence of loans to finance the transition to green businesses; in particular to measure the environmental footprint of products.

Recommendations

Opportunities

• Generate dialogues with banks to know about their agenda and knowledge regarding green lines of credit that address the environmental sustainability of products.

• Bank representatives showed interest in green agro businesses. The banks they work for could be the first financial institutions to approach in order to promote that they develop financial options to measure the environmental footprint of export products.

• Approach banks and share with them about the advantages of generating financial products to support the measurement of the environmental footprint of export products.

Discussion 4: The challenge of producers to adopt new practices.

Concern was expressed about how to encourage producers to make changes in their current practices and incorporate new ones.

Recommendations • Develop training sessions on how to encourage a change in attitude to adopt new environmental practices.

• Do not rely solely on technical staff to inform or train producers. With the support of a professional with another profile, it can be the solution to motivate the producers to collaborate in the adoption of new practices and regulations.

• Empower the producers’ groups, so they can adopt new practices.

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• The lack of socialization of regulations during its development, may be one of the reasons why producers don’t adopt them.

Involving producers since the inception of a new legislation provides a better chance of being implemented. It can increase their willingness to make changes, since they know why they should do things differently.

• Explain to members of the cooperatives about the implications of not preparing for the PEF Method or any environmental requirement to produce and export; and why their support is key.

Discussion 5: The importance of data for the measurement of the environmental footprint of cacao and coffee.

Recommendations

Opportunities

• To generate reliable national data for the measurement of the environmental footprint, producers should be stimulated to collect field data.

• Staff at the department of Development and Environment of the Zamorano University, is exploring to replicate the pilot exercise of data collection implemented by IHCAFE.

• The Zamorano University representatives propose to collect data to measure the environmental footprint of the production of coffee in a cooperative.

• IHCAFE is willing to share and socialize the methodological tool used to collect data for their pilot exercise. The inputs can be useful to develop accurate and more detailed data.

Discussion 6: Friendly methodology to measure the product ‘s environmental footprint.

Develop a friendly and less technical version of the PEF Method to be assimilated and implemented by producers.

Recommendations • Create a working group to develop a friendly version regarding the different environmental indicators considered by the PEF Method.

• Identify specific roles for the academy. For example on research and adaptation of methodological tools for producers.

• Develop a product environmental footprint measurement experience in Honduras that tests the friendly version of the methodology.

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Discussion 7: Encourage the adoption of international environmental methodologies in the country.

Recommendations • Reach consensus among sectors, on the methodology to measure the environmental footprint of products and how to implement it in the country.

• Be aware of international environmental processes that affect Honduran exports.

Reach a consensus between the coffee and cacao sectors stakeholders on suggestions for change or adaptation of such processes. Then present the consensus to whom it corresponds internationally.

• Current environmental certificates are becoming a norm and will no longer be incentives to obtain better prices in international markets. For this reason, plan for future sector strategies where

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the measurement and reduction of the environmental footprint is required.

• Encourage exporting companies to share what buyers in the international markets are looking for in terms of environmental sustainability. Based on this, identify what needs to be done to complement the current efforts, in order to measure the environmental footprint of export products.

• Identify a knowledgeable person who can socialize the benefits of sustainability activities or the PEF Method, with the decision makers (Boards of Directors of exporting cooperatives and companies), in order to obtain their support.

• Identify funds and / or technical assistance to continue the PEF Method implementation pilot project of IHCAFE. Identify the availability of resources and projects of the European Commision (EC) and other regional / national actors that are interested in supporting the continuation of the pilot. Take under consideration that the mentioned method is in its pilot phase, which means funds or partners for its implementation might not be available until it is officially adopted in Europe.

Opportunities

proposed at meetings of the National Cacao Committee and at Board of Directors meetings of IHCAFE. Through these meetings, reach a sector commitment for one pilot proposal to be presented to the EC delegation in Honduras or a German buyer.

• The IHCAFE is the organization that can have an impact at the political level in the country. It can be the communication channel with government officials and decision makers in the coffee sector.

APROCACAHO and the National Cacao Committee can play a similar role for their sector.

• Identify and select a lead organization that can coordinate a project proposal to measure the environmental footprint of export products. The idea can be

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5.3 Session 3: Sustainable products in the European market.

Discussion 1: Research on market opportunities for sustainable agricultural products.

Lead by academia and research institutions.

Recommendations

Opportunities

• Develop a brainstorming session with academia and research institutions, to select topics relevant to the export sectors. Among them, the analysis of market opportunities for environmentally sustainable products.

• The Zamorano University desires to create a network of contacts with institutions working on the subject of green business.

The representative of the University is interested in elaborating project proposals and investigation on the subjects of agronomy and markets.

• Present a proposal to the Ministry of Education to incorporate in the national education curriculum, the topic of international trade of sustainable products.

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Discussion 2: Lack of knowledge and access to market information represents a limitation for decision making.

Recommendations • Provide periodic briefings to producers, managers and technicians regarding the situation in international markets.

• Evaluate what is being done in each productive sector to meet the demands of the market. Determine what remains to be done to develop a comprehensive program of actions to be taken.

• Create a national platform to disseminate and communicate the behavior of international markets for sustainable products.

• Identify tools on markets analysis available in Spanish, which producers can use.

Create capacity on the use of these market tools.

Opportunities • The LAC Footprint Initiative has a workshop package for the development of market analysis skills that can be adapted for the different actors in the coffee and cacao sectors.

• Create a toolbox on best practices that can serve as guidance to perform in international market.

Discussion 3: Market information for cacao producers.

More information is available on exports and certificates for coffee.

Obtaining market information for the cacao sector is necessary for producers, since it allows them to identify their potential, challenges, and tangible alternatives for the short, medium and long term.

Recommendations • Provide a timely follow-up on the subject of markets so that producers can evaluate opportunities, constraints, challenges and concrete actions in the short term.

• Promote the inclusion of international market research in existing national initiatives and sector strategies.

• Cacao producers are extremely interested in dialogues that are oriented exclusively to them, since they intend to export to various markets.

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Discussion 4: Funding for green export products.

Representatives of financial institutions that attended the dialogues are convinced that financing green export activities of business is profitable for all the involved.

Recommendations • Start with awareness-raising in banks. This activity should focus on the benefits and profitability of creating financial products with favorable terms for potential clients.

• The actors of the productive value chains must be aware of existing opportunities to access green funds. This should be done through meetings with national banks.

• Identify green finance experiences from abroad that should be explored to be adopted in the country.

• Motivate national banks to develop green financing products and identify customers’ interest in accessing these funds.

Opportunities • Representatives of three banking institutions were present in the dialogues.

They showed an interest in innovative proposals to promote “green” lines of credit in their institutions.

Discussion 5: Communication between producers and international buyers is necessary to address climate change and other environmental concerns.

Exporters are closer to the international buyers.

Recommendations • Identify and strengthen existing platforms so that producers and exporters can interact directly to exchange ideas or issues of common interest. Such ideas or issue should then be communicated to international buyers.

• Develop spaces for exchange between producers and importers from developed countries if they do not exist. This is the case of the cacao sector, where no spaces of this type have been identified.

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Opportunities • Half of the members of the Hanns R. Neumann Foundation’s Coffee and Climate Initiative are coffee buyers. Therefore, this initiative represents a channel of communication with buyers to establish a dialogue and propose concrete actions, mainly on climate change adaptation.

Discussion 6: Improvement or development of marketing strategies.

It is key to improve the image of export products. Adequate marketing strategies are lacking due to the absence of knowledge of European consumers’ demands.

Recommendations • Identify markets where there is a Latin community to promote products. There is a significant Honduran population in Spain.

• Use attractive branding for products.

Current branding uses names and logos of cooperatives for marketing purposes.

• Develop or identify studies on European consumption to create appropriate marketing strategies.

• In the case of chocolate producing organizations, the role of women should be emphasized since they are fully involved in its elaboration.

• Hire individuals or companies that are based in Europe, to develop the marketing strategies.

• Identify the actions that Honduran companies have implemented to market sustainable products. Select best practices to communicate with German consumers.

It is highly probable that their interest in acquiring Honduran products would increase if they know about the efforts made by producers to be sustainable.

• Create a sustainable marketing network.

This network should promote national knowledge and the identification of synergies.

It should also be useful to share lessons learned and seek for the development of sector strategies.

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Discussion 7: Promotion abroad of sustainable products.

Time investment is required to develop trustworthy relationships with international buyers.

Recommendations • Participating in international fairs demands between 3-5 years of preparation.

Time is required for learning about the target market and for crop adaptations.

• Identify strategic allies (such as baristas) who can accompany producers to their meetings with importers / roasters, to promote products in the target market.

• Experience dictates that participating for 3 consecutive years in the same fair and with a stand in the same spot, is a strategy for positioning a product in international markets.

• Have a sponsor or ambassador who is already positioned in the market of interest to promote Honduran products. These type of connections are very relevant when a product is not positioned in a new market.

• If the budget is limited, select one product to focus on, as marketing is expensive.

• Identify counterpart companies that value a close relationship with producers and that are open to receive visits. This helps generate more sustainable and balanced relationships.

• When attending an international fair, begin preparing with a minimum of one year in advance to avoid excessive traveling costs, among others.

• Have a story behind each product and be original about it.

• Identify niche markets. This approach has been used for cacao, which has less experience in international fairs. Recently, Honduras has participated in international fairs with fine and aromatic cacao and specialty coffees.

• Create a national chocolate event and invite international chocolatiers. However, it would be counterproductive to do so unprepared. The producers need to be ready in terms of quantity and quality.

• Follow-up is necessary, especially to know the reasons why an importer or potential buyers did not purchase a product.

Opportunities

• Plan exploration missions abroad and visit coffee shops, supermarkets, intermediaries, roasters or companies that manufacture end products. Try to get as close as possible to the final consumer by planning focus groups. Attend trainings and participate in fairs as observers or speakers.

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• Share the challenge of improving the competitiveness of Honduran products in international markets to the Agribusiness Committee led by the SAG. Seek for commitment and support to develop a national strategy.

Discussion 8: Added-value products and market diversification.

Most initiatives in Honduras focus on training in good agricultural practices and do not go beyond supporting the production of low value goods.

Producers prefer to sell finished products with added value, or to develop an offer that combines products to differentiate themselves in international markets.

Recommendations • Promote the export of other products that cacao and coffee producers grow. For example honey, which is produced under sustainable forest practices. Interweaving the different products and promoting them abroad, can generate additional cash flow and greater profit for producers.

• Use the producers and exporters’ current commercial relations to promote other products.

• Promote products abroad when there is the productive capacity and the required quality is achieved. Promoting products before meeting these minimum requirements can jeopardize international business opportunities.

• Competing in international markets with a finished product, for example a chocolate bar, is not an easy task. Therefore, look for new products, such as semi-processed cocoa bars for the production of chocolate at home.

• Currently, the quality of cacao is affected during the fermentation and drying stages.

Primary focus should be to improve its quality and fulfill the requirements of the importers in Europe.

• Identify alternative uses for low quality cacao, to produce final products. The current practice is that cacao is sold to neighbor countries like Guatemala or El Salvador, whom produce cookies or other sweets and then sell the finished product in Honduras.

• Diversify cacao production. Cacao cooperatives have been trained to produce other products such as cocoa paste, cocoa powder and cocoa butter. Based on this, develop strategies for placement of products with added value in the domestic, regional and international markets.

Opportunities

• Mature the presence of products in the domestic market. Developing a national culture for the consumption of cocoa products is a long-term activity. However, in the short term, it is recommended to establish an alliance with the government’s School Meals Program to introduce a chocolate-based beverage.

• BECAMO (exporting coffee company) has developed the Micro-Batch Coffee Program. They sell the micro lots of coffee and give a percentage of the profit to the producers. Roasters in Germany were very satisfied with this experience. The problem is that there is not enough quantity of specialty coffee to offer.

• Identify existing opportunities for the development of direct trade for fine and aromatic cacao.

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Discussion 9: Communication of sustainable products in international markets.

There is interest in getting involved in the development of UNEP’s* Sustainable Communications Guide. *UNEP: United Nations Environmental Program.

Recommendations • Participate in the testing pilot of the Sustainable Communications Guide by sending a formal letter to UNEP.

• The Guide does not indicate how to measure sustainability. This is the work of those who take the Guide as a baseline.

• Identify the feasibility of a pilot experience for the use of the Guide in Honduras. For example, with cacao cooperatives.

• The usefulness of the Guide is for those producers who are selling via direct trade, since they have direct contact with the final consumer.

• The Guide should be discussed so that it applies to the interests of small producers and organizations. This is particularly the case for those selling through direct trade.

• Environmental sustainability usually receives the most attention when communicating the attributes of a product. It is necessary to identify social and economic indicators that can be communicated using the principles of the Guide.

• The Guide needs to be adopted by an institution that can give more detailed followup, and develop benchmarking indicators, such as on fair wages.

• Identify German companies that want to implement the Guide with their suppliers in Honduras. Focus on generating examples on sustainable communication, mainly for social aspects. Communicate the idea to the German Ambassador in Honduras, since it can be of her interest.

• The Guide does not specify sustainability indicators, only the principles of sustainable communication. It is required to work on this aspect at the user level.

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Opportunities • Local actors (exporters) showed interest in offering the physical space to organize meetings to analyze and provide feedback on the Guide.

• Consumers International (NGO from England) has affiliated organizations around the globe, including one in Honduras. This is an opportunity to suggest the local organization to follow-up on the development of the Guide and adapt it for its use in the country.

• The representative of 14 coffee cooperatives located in the vicinity of protected areas in Olancho, indicates they are already exporting directly to Canada and that direct communication with consumers is possible. This person identified the Guide to be useful for them to create greater trust between producers and consumers.

Discussion 10: International coffee and cacao prices.

There is a concern about the selling price of coffee and cacao.

Recommendations • Develop trainings Management.

Opportunities in

Price

Risk

• Cooperatives should work together to be able to negotiate significant volumes of product and improve the selling price.

• Improve the negotiation capacity to set better prices.

• The Zamorano University intends to develop a proposal to benefit the producer when selling their products. This proposal consists of an economic model in which the producer receives an income that corresponds to the price quoted in the stock exchange.

• Promote a national niche product.

Otherwise, the trend of supplying generic coffee and cacao will continue, which means obtaining lower prices.

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General conclusions about the dialogues

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1. The dialogues were important to the participants as their expectations were met.

Real problems and tangible solutions were presented. It is requested that the recommendations and opportunities identified during the dialogues are followed upon.

2. Several participants expressed that the topics would of been addressed in greater depth. They understood that time only allowed for topics to be touch-on in a general sense, and were aware that the purpose of the dialogues was to introduce topics and follow-up with future events.

3. The financial support of the Embassy of the Federal Republic of Germany and CICOMER was acknowledged, as well as the contribution of LAC Footprint Initiative and the support of IHCAFE, APROCACAHO and the SAG. 4. IHCAFE, APROCACAHO and the SAG appreciated being considered for the development of the dialogues’ agenda. The producers thanked for the invitation to participate in the dialogues and being able to voice their opinion, since normally they are not present at events in which the discussion is around environmental practices that can eventually be considered mandatory for them to comply with.

5. The coffee value chain is more structured than the cacao value chain. This means there is more flexibility and the need in the cacao sector to built national alliances to promote sustainable production for international markets.

CICOMER’s Virtual Office. Los Próceres, Tegucigalpa, Honduras.

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Recommendations to enhance the results of the dialogues 1. Support and collaboration needs to be secured to develop follow-up dialogues.

Participants are willing to attend.

2. Similar dialogues should be carried out more frequently in the country.

3. In the short term, define new interventions to keep the momentum around the topics explained in the dialogues.

4. Replicate the dialogues with more time for each topic, given the importance of these for the export sector.

5. Regarding the PEF Method of the European Commission, wait for its adoption in Europe to consider it a requirement to fulfill. However, it is recommended to study the methodology for two main reasons: i) it is the European referent that has been developed in consensus with multiple partners, being then the most ideal starting point to measure the environmental footprint of products; and ii) if it becomes a requirement to export products to Europe, being prepared to implement it is necessary.

6. Ensure the participation of decision makers in follow-up dialogues.

7. Identify the appropriate spokespersons to communicate with the producers so that the information reaches them.

8. Support is required for the socialization of the environmental sustainability of products. Participants require guidance to convey what they have learned during the dialogues. For cultural reasons they expect to be visited after the dialogues.

This would imply meeting with the Board of Directors of the organizations.

9. Currently, there is no instance that addresses and resolves existing doubts about the topics presented in the dialogues. CICOMER is proposed to assume this role.

10. CICOMER can play a strategic role in articulating different initiatives and directing them towards the same objective, so that there is no duplication of efforts in the execution of activities and that information flows between the different actors in the production and export value chains.

11.

Creation of the Honduran Environmental Footprint Network as a platform to develop a country agenda that contributes to products’ environmental sustainability.

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12. Take advantage of the outcomes of the dialogues to present them to different actors and donors who can support in the implementation of the recommendations identified by the coffee and cacao sector representatives.

13. Economic resources are needed to socialize the issue of climate change and to focus on the real needs of producers. Many national programs are defined without consulting their beneficiaries about their needs.

14. It is required assigned to competitiveness

that through public policies, more resources are support activities aimed at strengthening the of Honduran products in international markets.

15. Many coffee and cacao producers produce other agricultural products, so they recommend addressing environmental sustainability within other value chains.

16. There must be a change in the current production model in order to develop green agribusiness. Start with a review of the current production model and make suggestions for change in the short, medium and long term.

17. Socialize the topics discussed in the dialogues at the next meeting of the National Cacao Committee (Meets every 4 months), and determine the next steps to take regarding environmental sustainability of the cacao sector.

LAC Footprint Initiative Headquarters. Eilenau 21, 22087, Hamburg, Germany.

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Proposed next steps The dialogues correspond to the first step to create a “Network for awareness and exchange of knowledge on the reduction of the carbon/ environmental footprint of products exported from Honduras to Germany�.

In order to create practical experiences and to consolidate the Network, the following steps are proposed.

Step 2: Validation of the findings of the dialogues.

As a second step, it is recommended to validate the collected information during the dialogues and summarized in this report: main discussion points, recommendations and opportunities identified by the representatives of the coffee and cacao sectors.

Step 3: Development of a strategy for green export products.

With the findings of the dialogues and their validation, the most appropriate recommendations and opportunities should be prioritized and framed in a strategy.

Step 4: Pilot projects Coordination of efforts is required to develop sectorial projects with the financial support and collaborations from various actors.

Step 5: Scaling-up experience with other productive sectors.

Coffee and cacao are the pilot sectors of this project. Other sectors can be approached, based on the lessons learned in the pilot projects that are to be implemented and the experience gathered by the Network participants.

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Collaborators The Dialogues “Green Agribusiness Opportunities with Europe - Coffee and Cacao Sectors: Carbon and Environmental Footprints and Markets� would not have been possible without the generous support of many collaborators and the financial support of the main sponsors.

Main Sponsors Local Partners

footprint

Cicomer Sponsors for the venue of the dialogues

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About LAC Footprint Initiative and CICOMER

LAC Footprint Initiative The LAC Footprint Initiative is based in Hamburg, Germany and was created in 2015 with the support of the Alexander von Humboldt Foundation of Germany and CICOMER (Center for Investment and Foreign Trade). Its purpose is to advise the agricultural export sector of the Latin American region on the development of consensus, strategies and feedback on: i. Sustainable production. ii. Market opportunities for sustainable products. iii. Sustainability methodologies and initiatives. iv. Responsible communication to the consumer.

The LAC Footprint Initiative provides support through the transfer of information, capacity building and network coordination. It also develops alliances which have a positive impact on export value chains.

For more information visit the website www.lac-footprint.com.

CICOMER The Center for Investment and Foreign Trade (CICOMER), is a Honduran organization whose vision is to promote a sustainable economy in terms of consumption, production and trade. Its role is to be the backbone organization to articulate the collaborative work between different actors in order to align actions and efforts that allow efficient and effective interventions.

CICOMER supports initiatives that promote responsible consumption, and activities to produce and export in a friendly way with the environment and society. It creates projects and develops visionary plans of action that generate sustainable businesses.

For more information visit the website www.cicomer.org.

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Credits Publisher LAC Footprint Initiative www.lac-footprint.com c/o CICOMER Geraldine Zelaya Tegucigalpa, Honduras Author and Initiative Director Svetlana Samayoa ssamayoa@lac-footprint.com Germany: +49 (0) 176 8232-1293 USA: +1 (310) 334 9274 Co-author Geraldine Zelaya gzelaya@cicomer.org Honduras: + (504) 2239-2559 Editing Dipl.-Ing. Thomas Mitschke Carmina de Alba Photography “Making a Coffee” - Jin Qin “Hamburg Landungsbrücken” - Davis/Fotolia Dialogues’ photography - Francisco Muñoz Graphic Design Junnior Escoto Fabiola Samayoa