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Common Fund for Commodities | Annual Report 2012

 Common Fund for Commodities

Mission & Vision Statement Mission “To contribute to poverty alleviation by strengthening the income-generating capacity of commodity producers and mitigating vulnerability to their economic well being” Vision “To strengthen and diversify the commodity sector in developing countries and transform it to be a major contributor to poverty alleviation and sustained economic growth and development.”

 Annual Report 2012 Common Fund for Commodities

© 2013 - Common Fund for Commodities The contents of this report may not be reproduced, stored in a data ­retrieval system or transmitted in any form or by any means without prior written permission of the Common Fund for Commodities, except that reasonable extracts may be made for the purpose of ­comment or review provided that Common Fund for Commodities is acknowledged as the source. Common Fund for Commodities Visiting Address Stadhouderskade 55 1072 AB Amsterdam The Netherlands Postal Address P.O. Box 74656, 1070 BR Amsterdam The Netherlands t +31 (0)20 575 4949 f +31 (0)20 676 0231 tx 12331 cfc nl e i Editor Royal Tropical Institute, Amsterdam Graphic Design Anita Simons, symsign, Amersfoort Printing High Trade, Zwolle

Cover photos: Above: A farmer woman using a magnifying glass to check rice reeds for insects in Kodith, Senegal. Photo: ©FAO/Olivier Asselin / FAO Below: Bean varieties on sale at a roadside market place in Ouagadougou, Burkina Faso. Photo: ©FAO/Alessandra Benedetti / FAO

Photo: ŠFAO/Simon Maina / FAO

 Annual Report 2012 Common Fund for Commodities

Copyright Š Common Fund for Commodities 2012 The contents of this report may not be reproduced, stored in a data retrieval system or transmitted in any form or by any means without prior written permission of the Common Fund for Commodities, except that reasonable extracts may be made for the purpose of comment or review provided the Common Fund for Commodities is acknowledged as the source.

Photo: ŠFAO/Giulio Napolitano / FAO

Contents Annual Report 2012



I Overview of the Common Fund for Commodities (Cfc) 





Fish58 7

Grains/Roots & Tubers 


Establishment, Membership


Hard Fibres 


Objectives, Main Activities and Structure 




Member States, Institutional Members and Votes 


Meat and Dairy 


Designated International Commodity Bodies (ICBs)  11

Oilseeds, Oils and Fats 


Institutional Members of the Common Fund

Olive Oil 


for Commodities




Institutions with Memorandum of Understanding 




The CFC Partnership Network




Organizational Chart of CFC Secretariat 2012


Tropical Fruits


Tropical Timber




Ii Project profiles in 2012


CFC: partner of smallholder coffee farmers 15

VII Regular Projects Completed in 2012


food markets


The keys to more effective PPPs


VIII Twenty-Fourth Annual Meeting of the Governing Council


IX Financial Reports 


in Latin America Improving smallholder income from domestic

Iii  Report on progress of projects under implementation  Commitments, Financing and Disbursements

IV Regular Projects Approved in 2012  V Fast Track Projects Approved in 2012

VI  Summary of Ongoing Regular Projects 2012


Balance Sheet - First Account 



Balance Sheet - Second Account 





Bamboo and Rattan 






Income Statement - First Account


Income Statement - Second Account


Directly Contributed Capital 


Voluntary Contributions 


Administrative Budget 2012


Auditor’s Report 


Annex I Governors and Alternates Governors 2012  Annex II List of Publications

99 102

Contents | 3

Photo: ©FAO/Saeed Khan / FAO

Photo: ŠFAO/Seyllou Diallo / FAO

Foreword I have the honor to present the 2012 Annual Report of the

activities; (ii) generate and disseminate knowledge in the field of

Common Fund for Commodities.

commodities and provide information on the opportunities for introduction of new and innovative approaches in the field of

The end of year 2012 was a pivotal one, marking the successful

commodities, and (ii) operate as a paid service provider.

conclusion of the Fund’s Five-year Action Plan (2008-2012) and approval of new operating guidelines and operational plan for

The Open-ended Committee has been mandated by the

the CFC for the period 2013-2015 by the Governing Council.

­Governing Council to review the Agreement Establishing the Common Fund for Commodities and make recommendations

In 2012, Member-States, after a long period of deliberation

for aligning the Agreement to the present context of inter-

finally adopted the report of the Open-ended Committee

national cooperation in commodities, the emerging global

established to make recommendations on the reform of the

development agenda, new financing modalities and new vision,

Common Fund. The Committee after series of consultations

mandate and work program of the CFC. These recommenda-

and independent reviews by experts of the structure and staff-

tions are expected to be considered in the next meeting of

ing and investment policy made recommendations covering

the Governing Council to be held in December 2013.

mandate, mission and vision, governance and organizational structure including staffing during the transitional period,

Project implementation is the core business of the Common Fund

operations, resource mobilization and fostering development

for Commodities. In 2012, the CFC approved 15 projects - four

partnerships, and advocacy and communications.

regular projects and eleven fast track projects. The value of approved projects stood at USD 9.51 million, of which the Second

Some of the fundamental changes in the Fund relate to its

Account contribution of the Fund was USD 4.63 million or 38 per

operating principles. There will be a larger emphasis on loan

cent of the total project cost, financed as grants. The direct pro-

financing to recycle scarce resources of the Fund, greater

ject related disbursements in 2012 totalled about USD 16 million.

involvement of private sector in project implementation, and project proposals will be sought through an open call. The

These direct project related expenditures do not take into ac-

CFC will (i) establish partnerships to realize synergies through

count project related expenditures under the Dutch Trust Fund

cooperation and implementation of commodity development

nor do they incorporate the European Contribution Agreements

Foreword | 5

Photo: CFC

Parvindar Singh, Managing Director a.i.

The CFC participated in High-Level Thematic Debate in April 2012 which took place under the leadership of H.E. Leonel ­Fernandez Reyna, President of the Dominican Republic as a ­follow up to a UN resolution calling for a debate on the issues of commodity market volatility. The Common Fund for Commodities facilitated the participation of the commodity finance sector in the debate through its network of private sector commodity actors. The CFC also contributed to the “High Level Event on food price volatility and the role of speculation” organised by FAO Rome in July 2012. with the CFC. The implementation of some projects under the

To provide a platform for interaction between policy makers

Dutch Trust Fund (USD 4.7 million) continued on a limited scale

and representatives of financial institutions the CFC organised a

in 2012 culminating in two Public Private Sector Partnership

first meeting of the Public-Private Initiative (PPI) on Commodity

events one in late 2012 and other to be held in early 2013. I wish

Market Volatility in New York at UN Headquarters in September

to acknowledge the generous support provided by the EU and

2012. Public-Private Initiative (PPI) on Commodity Market Vola-

the Dutch authorities for the CFC commodity programme. I

tility is an effort to open such dialogue, and is supported by five

hope that this cooperation will continue in the years to come.

major international banks active in commodity trading as well as by the Common Fund for Commodities and UN agencies with

In this year’s Report, we have special reports on Public-Private

mandates touching on commodities and development.

partnerships, lessons learnt from OPEC Fund for International Development (OFID) co-funded projects and from coffee pro-

The Common Fund Commodities working with partners such

jects in Latin America. These highlight the contributions made

as the OFID, the European Union (EU), and International Com-

under projects co-financed by OFID and the Common Fund

modity Bodies (ICBs), continues to retain its institutional reputa-

contribution to coffee sector in Latin America. A special report

tion as the only viable advocate for commodity-dependent

on Public-Private partnerships reviews experiences of such

developing countries.

partnerships and provides insight into their possible role and contribution to development in future.

As the review of the Agreement Establishing the Common Fund continues, it is expected that the members will provide

Regarding policy advocacy matters, in 2012, the Common Fund

new directions and provide necessary guidance for the Fund to

participated and co-hosted many several high-level events, in

fulfill its mandate to the satisfaction of its members and other

line with the Fund’s mandate to articulate the need for an open


and flexible strategy for the new role of commodities, as a pillar of sustainable global growth and development cooperation. In December 2012 with the kind financial support of the Dutch Authorities, a joint AGRA-CFC-KIT event was held on “Reaching Public Goals through Private Sector Investment” to discuss how business initiatives could contribute to agricultural development in Africa.

6 | Common Fund for Commodities Annual Report 2012

Parvindar Singh

Photo: P. Johnson / FAO

I Overview of the Common Fund for Commodities (Cfc) Establishment and Membership

Objectives, Main Activities and Structure

The Common Fund for Commodities (CFC) is an autonomous

The Common Fund’s mandate is to enhance the socio-eco-

intergovernmental financial institution established within the

nomic development of commodity producers and contribute to

framework of the United Nations. The Agreement Establish-

the development of society as a whole. In line with its market-

ing the Common Fund for Commodities was negotiated in the

oriented approach, the Fund concentrates on commodity

United Nations Conference on Trade and Development (UNC-

development projects financed from its resources. These re-

TAD) from 1976 to 1980 and became effective in 1989. The first

sources consist of voluntary contributions, capital subscriptions

commodity development project was approved in 1991.

by Member Countries transferred to the Second Account and interest earned. Whereas voluntary contributions can be used

The Common Fund for Commodities forms a partnership of 105

for either grants or loans, the capital subscription transferred to

Member States plus ten institutional members. Membership of

the Second Account can only be applied for loan-financing of

the Fund is open to all States Members of the United Nations

projects. Through co-operation with other development institu-

or any of its specialised agencies, or of the International Atomic

tions, the private sector and civil society, the Fund endeavours

Energy Agency, and intergovernmental organisations of regional

to achieve overall efficiency in and impact on commodity

economic integration which exercise competence in the fields


of activity of the Fund.

I Overview of the Common Fund for Commodities | 7

The Common Fund operates under the novel approach of

The quality of the proposal and not the financial outlay is

commodity focus instead of the traditional country focus.

the overall guiding principle for assessment of suitability of

Commodity focus entails concentrating on the general prob-

the intervention for support from the CFC. The main criteria

lems of commodities The CFC’s aim is to realize the potential of

for selection are quality, potential impact, beneficiary focus,

commodity production, processing, manufacturing, and trade

replicability, sustainability, cost effectiveness, manageability

for the benefit of the poor. The CFC supports implementation

and dissemination.

of interventions that: 1 are new and innovative that will lead to commodity based

Governing Bodies

growth, generate employment, increase household incomes, reduce poverty, enhance food security, provide new oppor­

The governing bodies of the Fund are its Governing Council

tunities for systemic change in the markets and create

and the Executive Board. The Managing Director is the Chief

resilience to shocks,

Executive Officer of the Fund. The Executive Board is advised by

2  pilot new approaches to risk-sharing with other institutions in areas that will achieve significant development benefits,

a Consultative Committee, composed of thirteen independent experts, on technical and economic aspects of projects submit-

3 are scalable and financially sustainable,

ted to the Fund. The Governing Council meets once a year, and

4 have a measurable positive socio-economic impact on

the Executive Board and Consultative Committee biannually.

the stakeholders in commodity value chains, 5 develop stronger connections with existing markets or create new markets along the value chain,


6 increase financial services to commodity producers and commodity based businesses; and 7 enhance knowledge generation and information

The Headquarters of the Common Fund are located in Amsterdam, The Netherlands.

dissemination. CFC interventions use value chain approach to identify chain participants and to identify opportunities and obstacles in specific commodity value chains thereby developing viable

Special Mentions

­solutions. Value chain analysis leads to identification of opportunities for value chain development.

The Common Fund’s partnership with OPEC Fund for International Development (OFID) is historic and dates back

The CFC supported interventions cover all aspects of the value

to the very inception of the Fund. The OPEC Fund not only

chain from production to consumption i.e. from “field to the

facilitated and paid capital subscription for as many as 37

fork”. The CFC targets its support at each link in the commodity

Least Developed Countries (LDCs) but continues to make

value chain i.e. increasing production and productivity, enhanc-

contributions under ‘’Framework of Financial Support’’

ing value addition, increasing access to markets and reducing

towards CFC’s commodity development projects for the

risks by financing innovative measures and actions. Specifically

least developed countries and poorer strata in other

targeted areas are:

developing countries.

a Production, productivity and quality improvements

The Kingdom of Norway and the European Commission

b Processing and value addition

have been supportive of the Fund and have sponsored

c Product differentiation

capital contribution of 9 and 3 countries respectively.

d Diversification e Marketing

The Kingdom of the Netherlands : A Trust Fund arrangement

f Technology transfer and up gradation

set up by the Netherlands Ministry for Development

g Introduction of measures to minimise the physical marketing

Cooperation to support CFC projects with co-financing

and trading risks h Facilitation of trade finance i Risk Management

8 | Common Fund for Commodities Annual Report 2012

contributions for the Five Year Action Plan.

Member States, Institutional Members and Votes as of 31 December 2012 Country



Asia 357 X

No. of votes



Africa 395


Africa 391


LAC 496


Europe 652


Bangladesh Asia 426 X Belgium

Europe 897


Africa 347


Asia 343 X


Africa 347


LAC 1,024


Europe 417


Burkina Faso Africa 347



Africa 343



Africa 389

Cape Verde Africa 343 Central African Republic Africa



Africa 351


Asia 3,000


LAC 490


Africa 343


Africa 351



Côte d’Ivoire Africa 476 Costa Rica LAC 393 Cuba

LAC 584

Democratic Rep. of Congo Africa



Europe 643


Africa 343


LAC 391


Africa 476

Equatorial Guinea Africa



Africa 366


Europe 535


Africa 368


Africa 349


Europe 4,362


Africa 426


Europe 309




Guatemala LAC 401 Guinea

Africa 357

Guinea Bissau Africa 343 Haiti


LAC 353 X

Honduras LAC 372 India

Asia 621

Indonesia Asia 575 Iraq

Asia 376


Europe 309


Europe 2,065


LAC 380


Asia 5,502


Africa 387

Korea, Dem. People’s Rep. of Asia


Korea, Republic of




Asia 351

Lao People’s Dem. Rep. Asia



Africa 343


Europe 309

Madagascar Africa 360


I Overview of the Common Fund for Commodities | 9




Africa 351

No. of votes



Asia 768


Asia 343


Africa 351



Africa 366



LAC 469


Africa 449

Mozambique Africa 360




Asia 355 X


Asia 345 X


Europe 1,086

Nicaragua LAC 382 Niger

Africa 347


Africa 440


Europe 549


Asia 407

Papua New Guinea Asia Peru



LAC 445

Philippines Asia 580 Portugal

Europe 309

Russian Federation Europe



Africa 351


Asia 343 X

Sao Tome and Principe Africa



Saudi Arabia Asia 357 Senegal

Africa 382


Sierra Leone Africa 351


Singapore Asia 441 Somalia

Africa 347


Europe 1,126

Sri Lanka

Asia 413


Africa 413


Africa 355


Europe 929


Asia 382


Africa 380


Asia 449


Africa 358

Trinidad & Tobago LAC





Africa 380


Africa 395

United Arab Emirates Asia




United Kingdom Europe 2,550 Venezuela LAC 401 Yemen

Asia 544 X


Africa 505


Africa 343



Europe 0


Africa 0


Africa 0


Africa 0




Africa 0


Russia 0



TOTAL 65,555 LDC: Least Developed Country LAC: Latin America and the Caribbean Countries

10 | Common Fund for Commodities Annual Report 2012

Designated International Commodity Bodies (ICBs) 1

International Cocoa Organization (ICCO)

2 International Coffee Organization (ICO) 3 International Copper Study Group (ICSG) 4 International Cotton Advisory Committee (ICAC) 5 International Grains Council (IGC) 6 International Jute Study Group (IJSG) 7 International Lead and Zinc Study Group (ILZSG) 8 International Network for Bamboo and Rattan (INBAR) 9 International Nickel Study Group (INSG) 10 International Olive Council (IOC) 11 International Rubber Study Group (IRSG) 12 International Sugar Organization (ISO) 13 International Tropical Timber Organization (ITTO) 14 FAO - Intergovernmental Sub-Group on Bananas 15 FAO - Intergovernmental Sub-Group on Tropical Fruits 16 FAO - Intergovernmental Group on Citrus Fruit 17 FAO - Intergovernmental Sub-Committee on Fish Trade 18 FAO - Intergovernmental Group on Grains 19 FAO - Intergovernmental Group on Hard Fibres 20 FAO - Intergovernmental Group on Meat and Dairy Products 21 FAO - Intergovernmental Sub-Group on Hides and Skins 22 FAO - Intergovernmental Group on Oils, Oilseeds and Fats 23 FAO - Intergovernmental Group on Rice 24 FAO - Intergovernmental Group on Tea

Institutional Members of the Common Fund for Commodities African Union (AU) - Addis Ababa, Ethiopia Andean Community - Lima, Peru Caribbean Community (CARICOM) - Greater Georgetown, Guyana Common Market for Eastern & Southern Africa (COMESA) - Lusaka, Zambia East African Community (EAC) - Arusha, Tanzania Economic Community of West African States (ECOWAS) - Abuja, Nigeria Eurasian Economic Community (EAEC) - Moscow, Russia European Union (EU) - Brussels, Belgium South African Development Community (SADC) - Gaborone, Botswana West African Economic & Monetary Union (WAEMU/UEMOA) - Ouagadougou, Burkina Faso

I Overview of the Common Fund for Commodities | 11

Institutions with Memoranda of Understanding The Common Fund for Commodities has concluded Memoranda of Understanding with the following institutions: • African Development Bank (AfDB)/African Development Fund • African Export-Import Bank (AFEXIM) • Arab Organization for Agricultural Development (AOAD) • Authority for Integrated Development of the Liptako-Gourma Region (ALG)/ L’Autorité de Developpement Integré de la Region du Liptako-Gourma • Food and Agricultural Organization of the United Nations (FAO) • Grupo de Paises Latino Americanos y del Caribe Export Adores de Azucar (GEPLACEA) • Inter-American Institute for cooperation on Agriculture (IICA) • International Atomic Energy Agency (IAEA) • Islamic centre for Development of Trade (ICDT) • OXFAM • Sistema Economico Latino Americano (SELA) • United Nations Conference on Trade and Development (UNCTAD) • United Nations Convention to Combat Desertification (UNCCD) • United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) • United Nations Economic and Social Commission for Latin America and the Caribbean (ECLAC) • United Nations Human Settlements Programme (HABITAT) • United Nations Industrial Development Organization (UNIDO) • United States Agency for International Development (USAID) • West African Economic and Monetary Union (WAEMU)/Union Economique et Monétaire Ouest Africaine (UEMOA)

The Cfc Partnership Network

National Governments

Agricultural Development Research

International Commodity Bodies

Institutions (CGIAR)/NARS


Consultants/Technical experts

Producer organisations/NGO’s

Impact Investing Funds

12 | Common Fund for Commodities Annual Report 2012

Charity Foundations/Non-profit organisations

UN Systems

Private Sector

Organization Chart of the Common Fund for Commodities as at 31 December 2012

Office of the Managing Director

Internal Audit (outsourced)

Project Operations Unit

Accounting and Financial Control Unit

Legal Officer

Finance and Administration Unit

Policy, Programme Management, Evaluation Unit

Communications Officer

I Overview of the Common Fund for Commodities | 13

Photo: John Belt

II Project profiles in 2012

14 | Common Fund for Commodities Annual Report 2012

Photo: John Belt

CFC: partner of smallholder coffee farmers in Latin America 1

A quick introduction to the world of coffee

Coffee is the second most popular drink on earth: each day

Table 1: Main world coffee producers (figures for 2012)

over 2.3 billion cups of coffee are consumed worldwide. It is also one of the most traded commodities in the world, produced in more than 50 countries across Latin America, Africa and Asia and an important source of foreign exchange


Volume (in 1,000 bags)1

World total

% of world

Arabica or

total Robusta2










is dedicated to coffee, creating employment for 25 million





farmers and farm workers; a further 75 million people are



employed in the rest of the coffee value chain.



5.6 A






3.4 A 2.9 A

for many developing countries. An area of 11 million hectares

South America is the most important coffee producing region,

6.6 A R&A



accounting for around 45% of world coffee production. Brazil is



2.7 A

by far the world’s most important producer, accounting for 35% of





global production. Asia and Oceania produce around 30% of the





world’s coffee, Central America (including Mexico) about 15% and Africa 10%. Table 1. presents the main coffee producing nations.

Source: 1 The coffee industry works with bags, where one bag holds 60 kg. 2 ‘A’ stands for Arabica, ‘R’ for Robusta. When both types exist, the most important one is mentioned first.

CFC: partner of smallholder coffee farmers in Latin America | 15

Arabica and Robusta are the main species of commercial coffee.

be removed. The wet method requires more investment and

Arabica requires greater care in cultivation and its milder and more

care and is therefore generally used for higher quality coffee.

aromatic flavour is reflected in higher market prices (see graph 1).

The outer layer of the cherry pulp is removed immediately after

Robusta is higher in caffeine, more disease resistant, easier

harvesting by a pulping machine, leaving the beans undam-

to grow and provides a higher yield. Today, Arabica accounts

aged. Water is used to wash away the outer layer and to sort

for around 60% of global cultivation, but its share is steadily

the beans. The wet beans are then left in tanks to ferment in

decreasing in favour of Robusta. International coffee prices are

order to remove the slippery outer skin, known as ‘mucilage’.

very volatile, as can be seen from figure 1, presenting challenges

After washing, selection and classification, the beans are dried

to traders and consumers, and particularly to producers.

to produce ‘parchment’ coffee. Hereafter, milling or hulling and grading (by size, density, and possibly taste) completes the pro-

US $ / lb

Figure 1. World coffee prices over the last 15 years

cess. The beans are now ready to be roasted and to continue their journey to the consumer.





CFC’s commitment to Latin American coffee growers

CFC has acknowledged the crucial role of the coffee sector


in numerous developing countries, a sector which provides employment and income for many poor people. Over the


years, CFC has invested about 18% of its available resources in coffee projects. All CFC’s coffee projects have been technically


supervised and managed by its strategic partner, the International Coffee Organization (ICO) (see Box 1), and implemented

0.0 1998








by specialized organizations in the project countries. These


­projects cover the ‘bean to cup’ process, focusing on and

ICO composite price

Colombian Mild

investing in the most important elements of the coffee value

Other Mild

Brazilian Natural

chain, from improving farmers’ yields to promoting national

Robustas Source: 1 Next to Robusta, the coffee business distinguishes three types of Arabica coffee: Brazilian Naturals (around 30% of world trade) Colombian Milds (6%) and Other Milds (23%). 2 The ICO composite price is a global reference price consisting of a mix of all major origins and types of coffee.

coffee consumption by training ‘baristas’.

Box 1. ICO – the International Coffee Organization Since its establishment in 1963, ICO brings together governments from coffee exporting and importing nations

Coffee production is a laborious activity, not just in the cultiva-

to tackle challenges facing the world coffee sector. ICO

tion but also the processing. The newly-planted coffee tree

strengthens the global coffee sector and promotes its

bears fruit only after three to four years. The beans are the

sustainable expansion for the betterment of all participants

seed, enclosed in the cherry, which has a sweet outer flesh.

in the coffee chain, particularly those facing poverty in

This is coloured green when young, becoming yellow and then

coffee producing countries. ICO does this by, among other

red when mature and ready for harvesting. Typically, the bean weighs only 20% of the cherry. Most coffee is picked by hand, with the fruit either harvested in one pass through the field (for lower quality grades) or in several passes during an eight to ten day period (for high quality Arabica beans).

things: enabling governments and the private sector to exchange views on coffee matters; executing projects that benefit the world coffee economy; and providing statistics and technical information on the world coffee sector.

After harvesting, the outer layers of the cherry are removed,

By 2012, ICO had supervised almost 40 CFC coffee develop-

which may be done through the ‘dry’ or ‘wet’ method, to pro-

ment projects, of which 25 have concluded, with an aggregate

duce a stable, dry, green coffee bean. The dry method is simpler

value of around US$105 million. Of this, approximately US$55

and more cost effective and is generally used for lower quality

million was financed by CFC, US$30 million by various multi-

grades. The cherries are laid out in the sun to dry for a couple

lateral and bilateral donors and US$20 million by the project

of weeks, until the outer layer becomes a hard shell which can

beneficiaries themselves (counterpart contributions).

16 | Common Fund for Commodities Annual Report 2012

Eight projects were developed by CFC and ICO to focus specifi-

involving regional workshops that targeted specific technical

cally on Latin America, aiming to improve the competitiveness of

issues: coffee quality (Ecuador, 2001), and the Central American

small-scale coffee producers in the region. The total investment

coffee crisis (Guatemala, 2003). Other CFC/ICO projects have

in these projects was almost US$27 million, of which CFC con-

been much larger, targeting various countries in South and Cen-

tributed nearly US$12 million. Two projects were relatively small,

tral America (see table below) and running over several years.

Budget Projects

Conclusion of project

Strengthen capacity of small coffee producers




Other partners


(million US$)





















Reconversion of small coffee farms in Ecuador






Competitive coffee enterprise programme






and exporters in Mexico and Nicaragua Diversification of production in the State of Santa Cruz, Mexico Rehabilitation of coffee sectors in Honduras and Nicaragua Enhancing potential of gourmet coffee production in Central America

for Guatemala and Jamaica


How does CFC support smallholder coffee producers in Latin America?

Box 2. Key data on Ecuador Total area: more than 172,000 km2

Technical screening is undertaken by CFC and ICO to ensure

Population: almost 15 million people

that each project is designed to fit the specific context where

GDP per capita: US$4,569

it is to operate, focuses on removing the key constraints and

Coffee types: Arabica (around 30%) and Robusta (almost 70%)

unlocks opportunities with the highest potential. All projects

Processing method: dry and wet

aim to improve the lives of poor rural households, primarily

Per capita annual consumption of coffee: 0.61 kg

by generating employment and improving incomes.

Value of coffee exports as percentage of total exports: 1.2% Value of coffee as percentage of GDP: 0.4%

Valuable lessons from CFC’s Latin American coffee projects

Exports in 2012: 1,609,806 bags (of 60 kg)

have been highlighted, based on discussions at ICO, a review of project documentation and, in particular, field visits to CFC’s coffee projects in Ecuador (see Box 2) and Guatemala (see Box

Box 3. Key data on Guatemala

3). The top ten lessons are presented below: Total area: almost 109,000 km2 1 A ‘bean to cup’ perspective. Looking at the whole coffee

Population: almost 15 million people

value chain ensures investments are made where they are

GDP per capita: US$3,178

most needed, in order to create the biggest positive change

Coffee types: Arabica and some Robusta (less than 1%)

and the highest impact. This approach requires a detailed

Processing method: wet (mainly) and dry

analysis of the coffee business, from production to con-

Per capita annual consumption of coffee: 1.38 kg

sumption, including all the different links in the chain. Com-

Value of coffee exports as percentage of total exports: 11.3%

mon elements in this approach include market-orientation,

Value of coffee as percentage of GDP: 2.49%

stakeholder collaboration and practical actions to improve

Exports in 2012: 3,522,793 bags (of 60 kg)

CFC: partner of smallholder coffee farmers in Latin America | 17

to be in line with market prospects: the coffee needs to be sold at a profit in order to generate attractive financial incentives for those working in the chain. Focussing on the commercial feasibility of an intervention often leads to the active

Photo: John Belt

the chain. A chain perspective requires that a project needs

participation of private sector operators in project activities. In a project to promote gourmet coffee in Central America, for instance, an Italian roasting company had an active role. Another key element of a chain perspective is the forging of partnerships between relevant organizations in and around the chain, including the government sector, NGOs, companies, financial institutions, research agencies, training, education and extension. Specialized and reputable national coffee organizations function as lead implementing agencies in all CFC-funded coffee projects and – well positioned as they are in national coffee society – these organizations take the lead in developing broad stakeholder collaboration throughout the chain. In Ecuador and Guatemala, for example, COFENAC (the Ecuadorian National Coffee Council) and ANACAFE (the Guatemalan National Coffee Association) were the lead coffee sector agencies in their respective countries. Coffee value chain projects are never designed to only achieve analysis or collaboration; projects are rooted in practice, investing in actions that make the chain function better. Such actions often take the form of experiments, due to the complex nature of value chains, which must

Carlos Jarrin from Manta region, Ecuador:

be flexible in responding to results, challenges, market

Thanks to new varieties and the new practices I learned from

dynamics and other changing circumstances. In CFC’s

the CFC project, I have tripled my yields, and I am producing a

projects, investments are made to improve chain perfor-

much better quality now. One remarkable result I achieved was

mance and to empower poorer people within the chain.

decreasing the presence of coffee berry borer in my planta-

The coffee chain is improved through practical actions

tions to less than 10%, by using biological traps. Before, my

that, for instance, strengthen the weakest link in the chain,

coffee plantations were infested with it, sometimes up to 80%.

open up new end markets, re-design logistical processes,

With the better quality and larger volume, I no longer sell to

re-configure the governance of the chain, change policies

local traders but deal directly with the bigger traders from the

or induce new capital flows.

capital. Now, they want to do business with me and I obtain a much better price. I see that coffee growing is picking up in my

2 Increase yields. Much can be done at production level to

area and is regenerating the local economy. Being a part-time

directly improve farmers’ income. Higher quantities and

teacher at the nearby agricultural school, I take along the things

better quality strengthen farmers’ position in the market,

I learn from the project to share with my students.

particularly when overall coffee prices are under pressure, as is currently the case (see figure 1). Replacing old planta-

Agricultural support programmes, especially extension ser-

tions with new, high yielding and disease-resistant varieties

vices, have typically been criticized for focusing exclusively

is one option. Farmers can also review the design of the

on increasing yields whilst failing to consider market condi-

farm to select the best possible location to grow coffee,

tions and the commercial viability of producing a particular

a process which was actively supported by the Ecuador

crop. However, given good demand prospects leading to re-

project. Other options to improve yields include using

munerative price levels, measures to improve yields are often

better agronomic practices (e.g. pruning, shade manage-

the most appropriate and quickest means to improve farm-

ment, irrigation, intercropping or using mulch, manure or

ers’ income. Such measures are adopted rapidly by farmers

fertilizer) or applying agrochemicals or biological treatments

when proven to be successful. The projects in ­Ecuador and

to combat pests and diseases.

Guatemala have shown that yield improvements are a critical

18 | Common Fund for Commodities Annual Report 2012

step in improving the coffee chain, as increased quantities

One particular issue is environmental impact of coffee

and improved quality have allowed farmers, and others

processing: wet processing can be detrimental in terms

operating in the coffee chain, to mitigate against the effects

of abundant water use and water contamination. In

of lower coffee prices.

Ecuador and Guatemala, the CFC projects have been investing in recycling the water used in the process and

3 Improve processing. Weather and other circumstances at farm level, including agronomic practices applied by the

converting the by-products, such as pulp and mucilage, into organic fertilizer.

producer, impact on coffee quality. However, processing is also critical: a good bean loses its premium when not

4 Promote local coffee consumption. Coffee exports are a

properly processed. The way that coffee is transported,

major source of national income in many coffee producing

graded, processed, dried and stored has a direct influence on

countries but local coffee consumption is often modest (see

its quality. Moving from the dry to the wet processing method

low coffee consumption in Ecuador and Guatemala in Box 2

(see above) boosts quality but requires significant investment.

and 3) and generally limited to low quality coffee. Encourag-

Generally, individual smallholders do not have the capital for

ing a coffee drinking culture promotes a more diverse con-

such investment and processing is carried out by large-scale

sumer market and reduces dependence on export markets.

farmers, farmer groups or bigger traders. However, while

In the Central American gourmet coffee project, one way

infrastructure and equipment are key, knowledge and skills

of promoting a coffee culture was to train baristas (coffee

to operate them are also of paramount importance.

servers) in preparing the best possible cup of coffee. Other projects have invested in coffee houses, where high quality

The CFC projects in Ecuador and Guatemala supported

coffee is prepared in a pleasant atmosphere.

selected farmer groups (including cooperatives) to install or upgrade their processing infrastructure. By processing at

5 Promote and support farmer organizations. In principle, cooperatives and farmer groups have a stronger position in

thereby creating more added value for their coffee beans and

the market than individual farmers, both for buying inputs

a higher value share in the coffee chain. However, for such

and selling their produce. To decrease transaction costs,

endeavours to be successful, organizational issues are of key

governments and NGOs also prefer to undertake projects

importance, including how the technical process is organized

with these groups. Many large cooperatives also play a key

and the logistics, payments, administration and sales.

role in lobbying for better policies for farmers and the overall

Photo: John Belt

group level, additional income flows back to the farmers,

Drying facilities in Guatemala

CFC: partner of smallholder coffee farmers in Latin America | 19

Improved processing

Photo: John Belt

equipment in Guatemala

agricultural sector. Working through farmer groups is a

6 Capacity development. Providing training to producers,

typical strategy among Latin American CFC coffee projects,

cooperatives, traders, exporters, roasters, baristas, etc.

which has led to tangible results for individual farmers:

strengthens the coffee sector, with potential spin-offs to

revenues have gone up as result of increased volume and

other sectors. All CFC projects have a strong capacity

improved quality, cushioning farmers somewhat from

development component covering a wide range of coffee-

volatile end markets.

related topics, but also broader issues such as community development, administration, leadership and personal skills

Farmer organizations are also typically involved in ‘moving

development. CFC projects have, in particular, paid strong

up the chain’, where farmers engage in additional value

attention to developing entrepreneurial skills for farmers,

chain activities, such as processing or direct exportation.

and also to the management of cooperatives, to enhance

Such activities normally require collaboration and organiza-

the commercial sustainability of their ventures.

tion, although cooperatives often have difficulties in deploying the required organizational and commercial skills.

7 Access to finance. To replace old plantations with new ones requires capital, particularly as it takes three to four years

An innovative way of empowering farmers in the market

before new plantations become productive. Money is also

has taken place in Guatemala, where CFC projects assisted

needed to buy the inputs required to increase production

farmer organizations to do their own ‘cupping’ (coffee

and quality, so the period needs to be covered between

tasting). Being able to discern the different qualities of their

when the farmer needs money to cover these costs and

coffee allows organizations to differentiate their markets and

when it flows back through the sales of the coffee harvest.

negotiate a better deal with their buyers.

Other family needs also require cash. In Ecuador, a simple revolving fund has helped farming families to cover some of

In Ecuador and Guatemala, a selected group of cooperatives

their financial needs for coffee and for other family matters.

were provided with simple machinery for roasting, grinding and packaging of coffee. A few members were trained in

Cooperatives also need money, as they need working capital

putting this equipment to its best use, while also developing

to buy from their members. Farmer organizations commonly

their marketing skills. The primary aim of this approach is to

miss out on business deals because they are constrained by

move farmers up the chain, thereby enabling them to earn

working capital; they simple cannot buy more from their

more from value addition processes.

members even when it means they would make more profit.

20 | Common Fund for Commodities Annual Report 2012

Photo: John Belt

Freddy Chele from Manta region, Ecuador: When renewing my coffee plantation, I was stubborn. I didn’t listen to the extension agents when they advised me to carefully choose where to plant my trees and properly clean the terrain before planting them. Here you see what happened: a skinny tree with almost no coffee berries at all. I learned my lesson and tell others about my mistake so they learn too. Now see what the coffee that I planted recently looks like: strong trees with lots of berries.

To resolve this issue, coffee projects need to engage with financial institutions, who are the professionals in dealing with credit and savings. This is not an easy task, as the Guatemalan project has experienced, since bankers tend to be very hesitant to support agricultural activities, which they consider very risky. 8 A gender approach. It is critical to recognize the valuable role of women in the whole coffee business, but also in farm planning, dealing with finance, safeguarding household needs, and performing key roles in community organizations. Sadly, women are often ‘off the radar’ of many donor interventions. The CFC coffee projects have realized the importance of gender and have acted accordingly. In Ecuador the revolving fund is almost exclusively run by women. In Guatemala, women are engaged in coffee roasting and selling their coffee on the national market. 9 Environmental sustainability. Environmental sustainability

organic, appropriate application of agrochemicals and

is not a luxury and is a concern in coffee production,

­fertilizers not only helps the environment but also saves

processing (see lesson 3) and trade alike. In several CFC pro-

money. Most smallholder coffee in Latin America is grown

jects, organic coffee is promoted, which requires ­additional

under shade. The environmental benefits of forest coffee

investment from farmers and other chain actors, but also

are widely acknowledged, as it diminishes the impact of rain

fetches a higher price in the world market. Apart from ­going

on the soil, filters sunlight and contributes to biodiversity.

Julian Alquejay from Rabinal region, Guatemala. We were lucky the CFC project helped to sort out our administrative mess. Before, the tax office was charging us a lot of money all the time for late delivery of our tax forms. We also registered four different types of organizations, as was requested by different donors to channel their support. For all of them we received different tax claims and other legal issues and we didn’t know how to resolve them. CFC helped us to professionalize; now we have our administrative systems in place so all members know what is going on, and meanwhile we send our tax papers in time, avoiding any fines.

Photo: John Belt

CFC: partner of smallholder coffee farmers in Latin America | 21

Photo: John Belt

farmers to diversify, which also helps to counteract production and price risks related to coffee and to improve income flow throughout the year. In Ecuador, farmers have started the production and sale of honey and animal feed. In Guatemala, women’s groups make soap and cultivate mushrooms. Coffee tourism has been mentioned by them as a possible new income generation activity for the future. These lessons from the coffee project portfolio in South America may provide food for thought for continuing collaboration between CFC and ICO in the region, and hopefully inspire others outside Latin America and in other sectors, beyond coffee.

A group of Guatemalan farmers during entrepreneurship training in Rabinal

References Anacafe, 2011. Guatemalan Coffees Green Book. 2nd Edition, Guatemalan National Coffee Association, Guatemala City.

10 ‘Go beyond coffee’. The focus of CFC coffee projects is to

COFENAC, 2012. Las Estrategias utilizadas para la conversión de

obtain the best possible results from coffee. However for

pequeñas fincas cafetaleras en unidades agropecuarias autosostenibles

smallholder farmers, coffee has to be integrated in other

en el Ecuador: Sistematización de experiencias. Consejo Cafetalerio

farm activities. Coffee only provides cash during a limited period, but farmers’ expenditures must be met throughout

Nacional, Manta, Ecuador. ICO, undated. Coffee Statistics. International Coffee Organization, London

the year. In the lean season for coffee, farm labour is some-

ICO, undated. The Story of Coffee. International Coffee Organization, London.

times available to be engaged in other economic activities.

ICO, 2013. Annual Review 2011-2012. International Coffee Organization, London.

CFC projects capture opportunities outside coffee and help

This group of Guatemalan women in Santa Cruz Naranjo have improved their coffee yields thanks to the support of the CFC project. Next, they want to move into processing and explore additional income generating activities, such as mushrooms.

22 | Common Fund for Commodities Annual Report 2012

Photo: John Belt

Photo: CFC

Improving smallholder income from domestic food markets 1

A growing demand: the need to be competitive

encourage smallholder farmers to take advantage of domestic markets requires investment in their capacity and business.

Many African economies still depend heavily on export crops,

The Common Fund for Commodities (CFC), with co-funding

such as cocoa, tea and coffee. However the development impact

from the OPEC Fund for International Development (OFID),

of agricultural exports, compared to sales in domestic markets,

particularly targets commodity sectors that cannot achieve their

is subject to debate (KIT, 2012). For African farmers, the greatest

potential because of limitations in finance and other types of

opportunities seem to be found in the rapidly growing domestic

support. The Fund finances projects for smallholder farmers,

food markets. Population increase, urbanization and an expanding

as well as SMEs, involved in commodity production, process-

middle class underpin a booming demand for food. By 2050, 60%

ing and trade, to enhance their competitiveness. In this paper,

of Africans – about 1.2 billion people – will live in cities, compared

we shed light on the strategies of three CFC projects that aimed

to 28% in 1980 (FAO, 2009). These urban populations already

at enhancing the competiveness of smallholders in a domestic

demand a diverse range of higher-quality food, with processed

food market (potato, rice and dairy). The three projects used a

food becoming increasingly popular. Moreover, dietary patterns

similar strategy: increase productivity, add value at farmer level,

are changing towards foods with more calories, fats and protein

and develop marketing arrangements. We will briefly present and

(Reardon & Timmer, 2007). For farmers and small and medium

discuss the strategy for each of the projects, highlight some of

enterprises (SMEs) in Africa, the opportunities found in domes-

the innovative practices and key successes, and draw attention to

tic food markets will soon dwarf those of exports. However, to

challenges for sustaining the achievements of the projects.

Improving smallholder income from domestic food markets | 23


The projects

Wealth Creation Potato Project Commodity Potato Countries Ethiopia, Kenya and Uganda Aim Enhance the competitiveness of the East African potato sector and small-scale potato producers Key achievements:

routine use, resulting in the production

Deepa Industries Ltd, NORDA Ltd and

• 2,615 farmers are trained in seed pro-

of more than 20,000 mini-tubers in

Chirag Ltd - in Kenya and one - TomCris

Ethiopia alone, to date.

in Uganda - are assisted in improving

duction across the three countries. • 2,900 t of certified/quality seed are

• 279 (179 male/100 female) extension

produced by the seed multipliers in the

workers and farmer trainers are trained

three countries.

as facilitators of farmer-group learning

• Supported Solagrow PLC in the set-up

their supply from smallholder producers. • Nine local potato stakeholder forums are established.

on seed quality management. Competitiveness issue: potato proces-

of seed potato outgrower scheme.

• 253 farmer groups with a total of 6,600

• 127 diffused light stores constructed.

members have been trained since the

sors and wholesale buyers chose to

beginning of the project.

purchase from traders rather than more

• Aeroponics units, co-funded by the project, are established and put into

• Three crisp processing companies -

directly from smallholders.

Strengthening the productivity and competitiveness of the smallholder dairy sector in Lesotho and Zambia Commodity Milk Countries Zambia and Lesotho Aim Strengthen the position of resource-poor smallholder dairy producers in the dairy value chain Key achievements: • 901 farm households have benefitted directly. • Farmers are trained in producing improved animal feed and in milk quality management. • The price paid to the milk collection centres has increased from US$0.39 to US$0.49 in Zambia.

• In Lesotho, the only formal dairy

intake from Mapepe milk collection

processor in the country increased

centre over seven times, from 46,000

the intake of milk from Mafeteng

to 375,000 litres per year.

from 52,000 to 95,000 litres, an 83% increase. • In Zambia, Parmalat tripled its annual

Competitiveness issue: smallholder dairy farmers mainly sell their milk on

intake from smallholders from 920,000

the informal market, but the growing

in 2007 to 2.65 million liters in 2010.

formal market offers opportunities for

• Dairy King in Lusaka increased its milk

higher income.

Improving the competitiveness of rice in Central Africa Commodity Rice Countries Cameroon, Central Africa and Chad Aim Improving food security and rural incomes, and reducing dependency on rice imports Key achievements: • Seed systems are redesigned and rebuilt. • NERICA varieties are tested and adopted: 178,757 farmers are supplied with improved seed. • 56 farmer groups are established.

• 508 processors of rice-based products are trained.

and from less than 2 to more than 6 tonnes/ha for lowland rice.

• 6 rice processing centers are established. • More than 30,000 farmers improved

Competitiveness issue: rice bought by

yields by at least 50%, from less than

urban consumers is mainly imported, a

0.8 to 2 tonnes/ha for upland rice,

missed opportunity for local producers.

24 | Common Fund for Commodities Annual Report 2012


Strategies to enhance competitiveness of smallholder farming

3.1 Increasing productivity Improved starting material

Enhancing the competitiveness of smallholders requires prod-

Lack of improved starting material is one of the first obstacles

ucts (e.g. paddy rice, seed or ware potatoes, or milk) at an at-

preventing smallholder farmers from realising the full potential

tractive price, that meet the preferred characteristics as defined

of their crops. All three projects therefore introduced improved

by the buyers. Three parallel and synergistic intervention areas

starting material, for potato, rice and fodder respectively. In the

enhance smallholder competitiveness: increased productivity,

rice project, new Nerica rice varieties - were tested and selected

value addition at farmer level, and improved marketing arrange-

for upland and lowland cropping systems, and seed multipliers

ments. Each project initiated a mixed package of interventions

were trained. The potato project not only promoted new varie-

in each area (see Table 1).

ties, but also worked to improve the quality of seed potatoes

Table 1: Enhancing competitiveness Opportunity Productivity increase

Improved starting material

Potato Project

Rice Project

Dairy Project

• Testing and promoting

• Testing and promotion of

• Seed for protein rich feed

NERICA varieties

new varieties • Production of quality seed by seed farmers

production is made available

• Seed system improvement • Training of seed multipliers

• Seed multiplication by aeroponics • Seed quality management by ware farmers • Diffused light storage for seed Improved production

Training farmers in:

Training farmers in:


• Crop husbandry

• Crop husbandry

• Integrated pest and dis-

• Composting and green

ease management • Seed quality management

• Improved cattle feeding

manure • Integrated pest and disease management

Farmer value addition

Quality improvement

• Improved ware potato quality to respond to pro-

• Improved rice cleaning in processing centres

• Milk quality control system established • Cooling equipment

cessor demand

introduced Value addition

• Improved parboiling, husking, polishing and grading • Rice flour production • Promotion of rice-based by-products


Develop marketing



• Facilitate deals between farmers and crisp

• Linking producers, traders and processors

processors Organizing producers

• Local potato stakeholder

and other actors

platforms initiated

• Co-owned (traders, farmers, processors) processing

• Farmer cooperatives formed and strengthened

centres established Bulking produce

• Group marketing to processors attempted • Collection systems

• Processing centre supply system developed

• Milk collection centres established and improved • Collection system developed

developed by processors

Improving smallholder income from domestic food markets | 25

used. Aeroponics, an advanced mini-tuber production system,

rice project, yields are said to have increased from 0.8 tonnes to

was introduced. The system has a seed multiplication rate five

2 tonnes per hectare for upland rice and from less than 2 tonnes

times higher than conventional multiplication in a screen house.

to more than 6 tonnes per hectare for lowland-irrigated rice.

Additional efforts were made by the project to improve successive generations of seed multiplication, by supporting the development of seed businesses in order to improve the avail-

3.2 Value addition at farmer level

ability of affordable, high quality seed potatoes to smallholder producers. In the dairy project, seed for leguminous crops was

The projects worked to increase the margin gained by pro-

distributed, to introduce farmers to the practice of producing

ducers per unit of product, by ensuring the product was well

protein-rich feed for their livestock.

demanded in the market. Quality enhancement and farmer processing are opportunities to increase both the marketability

Good farming practices and integrated pest

and profit margin of each product.

and disease management Productivity, as well as quality, can often be enhanced through

Quality improvement

improved crop and animal husbandry, from seed selection

In domestic markets, the largest share of the surplus pro-

to postharvest practices. In the potato project, a number of

duced by farmers is often traded as a non-specified product,

techniques were promoted: correct plant spacing, seed quality

without any specific quality rating. However, in the context

maintenance through positive selection, integrated pest and

of increasing domestic market demand, smallholder farmers

disease management, and regular replenishment of seed stock

may earn more if they supply the processing industry or urban

from a reliable source. In the dairy project, farmers learned how

food markets with a specifically demanded quality of produce.

to feed their cows to obtain the highest quantity and quality of

Processing industries, but also, increasingly, urban markets

milk. And in West and Central Africa, farmers were involved in

require a quality standard that is often higher than that of

rice variety selection and received training in rice cultivation and

the bulk market. This provides an opportunity to smallholder

quality management.

producers to specialize and gain additional income. To sell their products to these higher-end markets, smallholder producers need to enhance the quality of their produce, be-

Berga Lemaga, project coordinator of the Inter­

yond the average quality supplied in the bulk market. Quality

national Potato Center (CIP): “The reason behind

enhancement is a relatively risk-free strategy for attempting

the success of the project is the fact that people

to increase margins. It is closely linked to the core business of

love to eat potatoes and are willing to pay for it.”

farmers - crop and animal production - and, other than market intelligence about the desired quality, it requires relatively little cash investment, making it affordable to cash-strapped

A reduction of losses, as a result of improved pest and disease

smallholder producers.

management, does provide opportunities for increased farmer revenues. In the case of the potato project, management

In Kenya, farmers in Bomet district became suppliers of quality

of bacterial wilt, viral disease and late blight were important

potatoes for the crisp processing industry. They produced pota-

determinants of yield. The project promoted an integrated

toes fit for crisp production by growing a specific variety (Dutch

management strategy for these diseases. Farmers were trained

Robyn) and letting the crop mature fully, which many farmers in

to combine the use of resistant varieties, proper seed quality

the country do not do. Through the project, producers learned

management, and optimum use of fungicides (both environ-

how to gain this edge in the market, and were stimulated to

mentally and economically) to minimise crop losses.

improve their production practices to respond to crisp processor demands.

The combination of high quality starting material and improved crop and livestock husbandry practices proved to be a good

In the dairy project in Lesotho and Zambia, milk quality was

recipe. In four years, the productivity per cow and yields of

a major constraint for smallholders competing in the formal

potatoes and rice have increased. Daily milk productivity of the

dairy sector. To improve milk quality to the required standard,

direct beneficiaries rose from 8.8 to 10.9 litres per cow in Lesotho

a ­collection system and cooling equipment were required.

and from 3 to 5.5 litres in Zambia. In the potato project, yield

The project equipped milk collection centres (MCCs) with

increases were realized as a result of project activities in each

cooling facilities and transportation, and facilitated quality

of the three participating countries. The project showed that

control through the involvement of a milk quality and safety

the right combination of starting material and farming practice

control laboratory. As a result, dairy processors were persuaded

could easily double yields under smallholder conditions. In the

to purchase milk originating from smallholders.

26 | Common Fund for Commodities Annual Report 2012

Roadside potato retailing,

Photo: Peter Gildemacher


3.3 Developing marketing arrangements

Farmer managed processing In the rice project in Central Africa, six rice service centres were established to simultaneously improve quality, as well as initi-

The potato, dairy and rice projects invested in actively linking

ate farmer-managed processing. The centres enhanced the

producers to buyers. In the potato project, efforts were made

quality of rice through improved cleaning, grading, husking and

to link producers directly to a processor that had previously

polishing of the rice using improved equipment. This resulted in

sourced only from the wholesale market. In the dairy project,

a higher quality product and a lower proportion of broken rice,

smallholders were linked with processors that previously only

which made locally produced rice more competitive with im-

sourced from larger producers. Producers involved in the rice

ported rice. Secondly, the service centres pioneered value add-

project were linked to traders and were even made joint share-

ing by processing the broken rice into flour, from which biscuits,

holders in the cooperatives that run the rice service centres.

cakes and other products can be made, which are being sold in

These centres organize input supply and rice marketing, and

local markets for a premium compared to the raw product.

provide rice processing services.

Improving smallholder income from domestic food markets | 27

Photos: CFC

Equipment in a rice processing center

Training of technicians on equipment maintenance

In Kenya, the potato project attempted to link farmer groups to

and this opportunity of selling to the formal market has also

a potato crisp processer, Deepa Industries Ltd. Deepa Industries

improved the power of farmers to demand higher prices in the

was seeking a more constant supply of high quality potatoes

informal market.

by engaging directly with producers. Ultimately, contracting individual farmers proved to be more efficient than working

Similarly, by buying directly from producers, the potato proces-

with group contracts, as not all group members were able to

sor in Kenya has empowered potato farmers in Bomet. The

consistently deliver the quality required. Farmers still take part

formal market outlet has also increased prices in local markets

in training and procure inputs as a group, but which processor

as a consequence of farmers’ increased bargaining power. In

they sell to is now an individual affair. This should not be

addition, the area has become even better recognized for pro-

considered a failure. Collective action is difficult to organize

ducing potatoes fit for crisp processing, resulting in competition

and even harder to maintain. Economic activity which does

between buyers. Intermediary traders previously exploited the

not require collective action is best left in the hands of the

farmers by putting potatoes in bags of up to 180 kg instead of

individual farmers.

the recommended 110 kg, with payment per bag. Standardized bags and scales provided by the company, and fixed prices,

In the case of dairy however, individual marketing was a serious

increased transparency and encouraged producers to stand up

constraint for competitive participation in the formal dairy mar-

for their rights.

ket and collective bulking was a necessity. Zambia was already equipped with a professional, private, processing industry.

In the rice project prices for processed rice are higher and

However the private processors only procured milk from large-

marketing relations between smallholders and traders have

scale farmers. Quality improvement and informing dairy proces-

been intensified by joint cooperatives. There are, however,

sors that sourcing milk from smallholder cooperatives could

substantial costs involved in maintaining the processing centers

be profitable, laid the foundations for fruitful collaboration.

and cooperatives, and the processing centers have to proof

However, in Lesotho, such a private sector was not present

to be both economic and organizationally sustainable beyond

and farmers were confined to the informal market or to selling

the project life.

to the state owned processing company that was in decline. Improved marketing arrangements, in combination with pre-


Conditions for impact at scale

ferred and quality products, have strengthened the position of farmers in the chain and led to higher prices in both the formal

The three projects have generated impressive results, reached

and informal markets. Bulking of milk by MCCs has proved to

numerous farmers and laid the foundation for improved

be an effective source for commercial dairy processors such as

incomes and livelihoods of smallholder farmers. However,

Parmalat, Dairy King and FINTA. They offered a premium price,

sustaining these achievements and even scaling up activities

28 | Common Fund for Commodities Annual Report 2012

beyond the end of the project life and in other countries will

Developing and maintaining the capacity for

face several challenges. Some essential pre-conditions for

agricultural innovation

continued and increasing impact can be deduced from the

An important strategy for continued post-project impact is

three projects, namely: an enabling environment, maintaining

the improvement of agricultural advisory services. The potato

innovation capacity and involving the private sector.

project invested in training of public extension officers and farmer trainers, who have the mandate to continue training

Enabling environment

smallholder producers in improved potato husbandry. Similarly

For commodity sector interventions to be successful, the policy

in the rice project in Central Africa, public extension officers

environment should be enabling. The dairy development pro-

trained NGO workers who were responsible for training farmer

ject, for example, has been very active in involving and guiding

groups. In the dairy project in Zambia, a public-private initiative,

different government ministries in Lesotho and Zambia. It fa-

the Golden Valley Agricultural Research Trust (GART), which is

cilitated the establishment of a dairy act and the creation of the

part of the national agricultural research and extension system,

Dairy Board of Zambia, representing dairy sector stakeholders.

was responsible for extension and advisory services, for which it

In Lesotho, advocacy based on the project’s successes paid off:

employed its own extension officers and veterinary assistants.

the government made dairy development a national priority. Trained farmer groups form an important resource for continuIn Kenya, potato sector development is high on the agenda of

ing farmer-extension collaboration. Farmers inform the exten-

the Ministry of Agriculture with regard to its strategy for food

sion officers when they are confronted with difficulties and new

security and commercial agricultural development. It is already

field experiences, and thus contribute to the development of

the second most important food crop and the major cash crop

relevant advisory services, adapted to the needs and conditions

for smallholder producers in the Kenyan highland areas. The

of farmers. This is key to continuing agricultural innovation.

Ministry of Agriculture has willingly assisted potato farmers and made its extension officers available to the project. Researchers

From a competitiveness point of view, continuous innovation is

from the Kenya Agricultural Research Institute (KARI) and the

required to be able to adapt to changing markets. The sustainabil-

International Potato Center (CIP) were also made available.

ity of development and dissemination of new practices is a chal-

Training in improved

Photo: Peter Gildemacher

farming practices

Improving smallholder income from domestic food markets | 29

lenge. In Lesotho, for example, extension officers were paid by

pre-existing private processing industry, in which case processing

the project, which cannot be sustained, while smallholder farmers

by cooperatives is one of the options to consider, as in the case

are not included to pay for training in the near future. Institution-

of the cooperative processing centres in the rice project.

alisation of activities that have been introduced by a (temporary) project is difficult. It is, however, possible. The potato project, for

Market opportunities as a pre-requisite for intervention

example, initially paid the field allowances of extension staff to

The main common denominator in the three projects is a grow-

facilitate the implementation of farmer group training. By the end

ing domestic market for the three commodities. This does

of the project, however, the respective public advisory service

provide for the most important of all incentives to innovate: the

mechanisms had integrated the farmer group training activities in

promise of improvements in income. As said, current develop-

the regular activities of the Ministry of Agriculture, thus assuring a

ments in sub-Saharan Africa, especially urbanization, create a

continued increase in impact beyond the project life.

growing demand for food crops, which is presenting itself as a major driver for change in agricultural systems. The three

Sustainable use, depreciation and replacement

projects show that, with a combination of relatively simple

of equipment

interventions to improve productivity, enhance quality and

The sustainable use, depreciation and replacement of introduced

create new market linkages, important impacts on smallholder

processing equipment require sound financial management as

livelihood can be achieved.

well as technical expertise. Having farmer cooperatives taking up activities higher up in the value chain, such as processing, sounds attractive but requires funds, management skills and specific

KIT, 2012. Domestic versus export markets: challenging the holy grail. Royal Tropical Institute Policy Brief 1.

knowledge. The collective nature of cooperatives is a disad-

FAO, 2009. The State of Food and Agriculture. Rome, FAO.

vantage for sound use, maintenance and management, both

Reardon, T. and C.P. Timmer. 2012. The Economics of the Food System

technical and financial, of processing equipment. It can be more

Revolution, Annual Review of Resource Economics, 14: 225-264.

effective to involve private companies, which have the necessary funds and skilled personnel. For example in Zambia, private processing companies are effective intermediaries between farmers

These projects were made possible thanks to a contribution

and the final markets. There are cases however, where there is no

from the OPEC Fund for International Development

Milk delivery at a milk

Photo: GART Zambia

collection center

30 | Common Fund for Commodities Annual Report 2012

Photo: CABI

The keys to more effective PPPs CFC is undertaking more initiatives to promote PPPs

do not need financial support, instead of to small and medium enterprises (SMEs); • Companies would invest in developing economies

At the end of 2012, a workshop on ’Business Driving Agri­culture Development in Africa: New Realism or Wishful Thinking?’ was organised by CFC (Common Fund for Commo­dities), together

without public funding; • Public money received by the private sector cannot be monitored.

with the Royal Tropical Institute (KIT). The aim of the event was to discuss the need for donors to fi ­ nance the private sector’s

On the other side of the debate are promoters of public ­

involvement in development. The workshop was followed up

support to private sector players. They, for instance, stress that:

in 2013 by ‘Follow the ­Money’ - a public debate on public private

• The private sector creates jobs and wealth that benefit many poor people;

partnerships (PPPs).

• Working with smallholders in developing economies is In general, the public debate on PPPs is polarised. On one side, there are those that are highly sceptical. Frequent

a risky business for which companies need support; • Traditional development aid has obviously failed - it is time for a new more business-led approach.

complaints include: • Public funding to private companies never reaches

These days everybody agrees that a thriving economy is one of

the poor; • Public money is provided to multinationals which

the core ingredients for achieving decent living standards

The keys to more effective PPPs | 31

in a country. Therefore, the question is not whether the private

as the extent to which this impact was directly linked to invest-

sector should play a role in development but how they should

ment from public finance, and otherwise would not have been

play it.

achieved. Finally, lessons and recommendations are proposed to help future CFC PPP programmes become more effective in

CFC has been forging collaboration between public and private

2013 and beyond.

organisations since its initiation, well before the term ‘PPP’ came into fashion. CFC’s long-term involvement in PPPs ­therefore

What have CFC PPPs looked like?

provides a good opportunity to provide some evidence-based input into the debate.

Over the last decade, CFC has provided grants to several In this paper, public as well as private representatives from

commodity programmes in which the private sector was a

three completed CFC programmes in Kenya, Ethiopia and

co-funder. By talking to the private companies and project

Ghana/Sierra Leone discuss whether the combination of

executing agencies (PEAs) of three PPPs funded by CFC, it

public CFC finance and private investments have contri­buted

quickly becomes clear that there is no such thing as a blueprint

to agriculture-based social and economic development, more

for a PPP. The three cases show considerable variation in

than separate public and private investment. The paper analy-

features such as the duration, the number of farmers involved,

ses the defining characteristics of PPPs and why public support

the contributions of private businesses, as well as the invest-

was required. The impact of the PPPs is also discussed as well

ments made.


Improving coffee quality in East

West African sorghum value chain

Wealth creation through integrated

and Central Africa through enhanced

development project

development of the potato production

primary processing practices (Rwanda

and marketing sector in Kenya, Uganda

and Ethiopia)

and Ethiopia

Duration of the project

4 years

5 years

4 years

Country of private


Ghana and Sierra Leone

Kenya (private sector only invested

­sector participation Budget (for that

in Bomet district) USD 1,671,360

USD 2,897,000

­country/region) Private sector

USD 1,000,000 (estimated amount for Kenya)



Ghana Guinness Brewery (GGB) and

Tropical Heat (Deepa Industries Limited)

Sierra Leone Brewery Limited (SLBL)

Private sector

USD 122,195 (only Ethiopia) (+USD

USD 531,000 GGB and USD 372,000


150,000 technical assistance)

SLBL (+investment in adapted factory

USD 73,483

equipment) Private sector contri­



bution as % of total

7% (as part of the country budget which was used in several districts, not only Bomet; for Bomet only, this percentage will be higher)

Other contributing

Ministry of Agriculture and Rural



Project Executing



CIP - International Potato Center

Type of private

Equipment: semi-washed coffee

Personnel, material costs and supplies,

Personnel (field officer and supervisor)


­processing and sun-drying systems

operational costs, dissemination and

and operational costs (office rental and



10,000 farmers

3,085 farmers (1,104 in Bomet)

EUCORD and TechnoServe

The Ministry of Agriculture and the Kenya Agricultural Research Institute (KARI)

Agency (PEA)

Total farmers involved

1,100 farmers

32 | Common Fund for Commodities Annual Report 2012


In general major investments were in personnel (project staffing) or provision of technical assistance (and training). The Ghana Guinness Brewery (GGB) and Sierra Leone Breweries

illycaffè became involved in a CFC PPP to gain access to

Limited (SLBL) also invested in a much wider range of activities

improved quality coffee from Ethiopia through introducing

than the private investors in the other two projects. illycaffè

simple but innovative processing technologies. These

was the only company that invested in processing equipment

included raised drying beds for sun dried, conventional

for suppliers.

coffee beans and hand pulpers for pulped coffee. Ethiopia was, and still is, an important supply area for illycaffè but

In the sorghum case study, apart from some subsistence farm-

the farmers were only producing low quality coffee. After

ing, the supply chain was non-existent at the start of the pro-

a small pilot, the late Ernesto Illy believed that Ethiopian

ject. GGB and SLBL started off as the only buyers - a so called

farmers could upgrade quality through support for produc-

‘buyers’ market’ in which there are only a few buyers. Logically,

tion and postharvest processes. He was already actively

this required larger investments from the private partners, who

involved in the International Coffee Organization (ICO)

were also the only commercial beneficiaries (apart from the

that was implementing a series of CFC programmes. Seeing


the CFC PPP as an opportunity, illycaffè encouraged other partners to participate in the project, including CABI, who

In relative terms Tropical Heat invested less than GGB/SLBL for

provide research consultancy. Alone, illycaffè would never

two reasons. Firstly, from the start, Tropical Heat was facing a

have started the project. As a roaster and seller of high

lot of competition in the supply market, which increased its risk

quality coffee which sources beans from exporting

in making large investments. Secondly, Tropical Heat is a much

companies, working with farmers was not a normal part

smaller business with far less resources.

of its operations within the supply chain.

illycaffe investments

Tropical Heat investments

GGB/SLBL investments






11 4 93




Materials and supplies

Technical Assistance

Operational cost





Technical assistance


Dissemination and training


Operational cost


Civil works

As an overseas importer, illycaffè does not directly deal with

for the project. This is interesting because, in the end, the

farmers but depends on supply from local agents, who also

projects (at least partly) aimed for commercial results. It is

face significant competition for supply at farm level. Invest-

also interesting to note that none of the private enterprises

ments in primary production are therefore risky and there are

contributed financially to monitoring and evaluation (M&E)

no guarantees of exclusive supply. This was underestimated at

activities with the aim of tracking and learning from progress

the beginning of the project.

made. Companies generally think that M&E is beyond their


mandate. On the other hand, the implementing organisations One of the common elements in the three PPPs was that a

also believe that M&E outcomes are more reliable when

not-for-profit entity was the implementing organisation

companies are not managing them.

The keys to more effective PPPs | 33


Why did the private sector engage in PPPs?

While EUCORD initiated the project within Heineken (a major shareholder of SLBL), it was very much personally

There are two key reasons why the companies became

driven in the beginning by a few senior managers at

involved in PPPs. The first was financial; companies needed

Heineken. They believed that local sourcing was important

financial support from CFC for investing in new and under­

for the company, as well as for local economies. Because

developed, small-scale supply markets to reduce their

relatively short-term planning is inherent to companies,

financial risks. It was only under the pre-condition of

these kind of longer term projects are not always supported

co-finance from CFC that the companies’ management

by CEOs. CFC money and technical assistance through the

agreed to participate in the PPPs.

project in setting up local supply chains enabled Heineken to make longer-term investments.

In addition, the companies needed technical assistance in setting up and organising supply chains with smallholder farmers. As the companies’ role in the supply chain is food

Tropical Heat

processing (roasting coffee, brewing beer or cutting and ­frying potato crisps), and companies were primarily buy-

Tropical Heat was approached to participate in the programme

ing in bulk, without any traceability back to the source,

by CIP (International Potato Center). The key driver for

they were not involved in agriculture and thus lacked the

Tropical Heat to collaborate in the CFC programme was

technical expertise to become directly engaged in primary

to improve yields through stabilising supply of good quality

production. To gain this expertise, the companies cooper-

ware potatoes for its factory. Tropical Heat had not previously

ated with CFC implementing partners such as TechnoServe

been involved in farm production and needed assistance.

and ministries of agriculture.

It engaged itself actively in supply chain meetings with farmers and intermediate traders which gave Tropical Heat a comparative advantage in the market.

Potato crisps processing

Photo: KIT

Tropical Heat

34 | Common Fund for Commodities Annual Report 2012

Volume purchased by



Tropical Heat


2,500 MT sorghum Ghana;

500 MT potato

companies per year Quality increase

600 MT sorghum Sierra Leone From 82% to 100% superior class for

Potato browning went down from 1.79%

both semi-washed and dried beans

in 2010 to 1.19% in 2012


Due to decreasing costs of sorghum

Conversion of raw potatoes to crisps in-

because of more efficient supply

creased from 25% in 2010, to 34% in 2013

chains, cash was saved in Sierra Leone. Break-even point was reached after 5 years. In Ghana, sorghum is not yet competitive, but this is expected in the near future as costs are still going down

Wider impact

The private sector players have been generally pleased by the above results, but what about the wider impact

So did the private investors feel they achieved their aims?

on society, which is necessary to justify the investment

The table below reveals that, by the end of the project,

of public funds in PPPs? The impact at farm level was

GGB/SLBL and Tropical Heat managed to attain higher quality

encouraging in terms of the number of farmers reached,

supply and increased efficiency, which reduced costs. illycaffè

increased productivity and extra generation of income,

was also successful in improving the quality of coffee supplied

which benefited not only the farmers, but other family

by farmers. However, since the coffee was traded through

members. For instance, in the potato project it was noticed

an open auction, illycaffè had to compete with other bidders

that, as a result of better incomes, farmers bought land,

during the course of the project and could only access a small

dairy cows and vehicles, constructed houses and invested

proportion of the upgraded coffee.

in education.

PPP projects

Improving coffee quality in East and

West African sorghum value chain

Wealth creation through integrated

Central Africa through enhanced

development project

development of the potato produc-

primary processing practices (Rwanda

tion and marketing sector in Kenya,

and Ethiopia)

Uganda and Ethiopia

Total contracted farmers

10,000 farmers (100%)

in the supply chain Gender

110 farmers in 2011 (reduced to 40 in 2013)

Men are owners, women are pickers

Most lead farmers and 46% of

(family labour)

the smaller out-grower farmers

Mostly men

in Sierra Leone were women Volume supplied by

200 MT (green coffee beans)

2,500 MT Ghana; 600 MT Sierra

500 MT (potatoes)

farmers per year

Leone (sorghum grain)

Productivity increase

0.8 MT to 1.7 MT/ha in Ghana

9 MT to 15 MT/ha

Farmers doubled their incomes

Price per bag (110 kg) rose from

Farmers’ income

Improved net income between


20% - 35% Price premiums went up 41% (approx. 200% in Sierra Leone and

Access to services


USD 24.6 to USD 35

for sundried and 78% for pulped coffee

185% in Ghana)

Extension services through the project

Credit through banks for labour, fer-

Credits through Equity Bank for seeds;

and later on, government trainers

tilisers and seeds, and medium-term

fertilisers and spraying pumps through

credits for tractors

the company

Organised and trained groups that im-

Out-growers model: smallholder farmers Organised and trained groups that

proved farm production and processing organised around larger lead farmers, who provided inputs and training


improved farm practices and postharvest activities

The keys to more effective PPPs | 35

Coffee drying

Photo: CABI


In addition, many indirect impacts have been observed. With the

to 40% (compared to 25% six years ago). The company is

significant increase in quality achieved by the illycaffè project,

procuring 2,500 MT potatoes per year now, part of which is

improved farm and processing practices were also adopted by

exported to the UK, and it is currently planning to invest in a

non-project farmers and government extension personnel in

cold storage unit in order to store potatoes for the off season.

other regions. And the positive results of replacing barley with

Tropical Heat is also planning to increase its potato share to

sorghum led Heineken to start up similar projects in Burundi

50% of its business.

and the Democratic Republic of Congo, with the intention to do so also in Ethiopia where Heineken has established its newest factory. At a corporate level, the experience in Ghana and Sierra

Henk Knipscheer (Eucord): “The likelihood that

Leone has influenced Heineken’s policy to locally source 60% of

the impact of present PPP interventions can still

its raw ingredients for products made in Africa by 2020. Guin-

be recognized in 5 years’ time is substantial.”

ness has followed suit, setting the target even higher, at 75%. A follow-up project in Sierra Leone, in which more sorghum will be purchased and processed, is currently being planned. Both

Would these results have been achieved by the companies

Heineken and Guinness have embraced the business case of

without public CFC funding? According to illycaffè, it would

sourcing from smallholders.

not have invested alone at this scale in a single source. For Heineken and Guinness, there was extensive internal resistance

Tropical Heat also underwent a significant change as a result

to the new way of organising supply at the beginning of the

of the project. Before it started, Tropical Heat was completely

project. It was seen by many as too long-term, too small-scale

unaware of farm practices, growing seasons, required inputs

and thus too risky. Without CFC support, the project would

and so on. However, the project opened its eyes to the

never have been introduced and accepted. For Tropical Heat,

importance of collaboration in the supply chain and, as a result,

the project revealed how quality and efficiency could be im-

the proportion of Tropical Heat’s turnover from potatoes grew

proved by directly sourcing raw materials locally from farmers.

36 | Common Fund for Commodities Annual Report 2012

Without public support, but even more so without the knowl-

quality services and develop efficient markets, which has been

edge provided from public institutions, the company would still

a major cause for delay in achieving results in the Sierra Leone

be buying on an ad hoc basis from traders bringing potatoes to

sorghum project.

the factory. Finally, all cases have shown that for wider sector development, However, public finance was not only needed to encourage

more than one company should be involved in order to achieve

companies to source from smallholder supply chains. By invest-

healthy competition. In the illycaffè project, it would have been

ing public finance in private supply chains, public players have

more beneficial if the investment had been shared between

more say and influence in the way companies do go about in-

more than one buyer because all the buyers benefited. In the

teracting with smallholders. Without CFC, companies would not

GGB/SLBL project, if more than one buyer had been involved,

have invested so much time in setting up new supply chains,

farmers would have had more negotiation power and be less

and would never have considered including smaller farmers or

dependent on a monopoly company (although this is now

paid attention to gender equity, capacity building, organising

changing as more buyers are coming in). Finally, with Tropi-

farmers and M&E.

cal Heat, it would have been better to have shared the cost of investment for the capacity building of farmers between more than one processor, and to have worked with more than one

The other side of the coin

intermediate trader.

So what about any downsides to these PPPs? In other words,

Photo: KIT

are there lessons to be learned? In the case of illycaffè, the PPP was not particularly successful for the company. The expectation was that, through its investment, illycaffè would access good quality coffee. However, its competitors were also able to gain from the investments made. The sector therefore gained as a whole, which was good for CFC and the public stakeholders in the project, but the result is that illycaffè is unlikely to invest again in a PPP, at least not in this way and particularly not in Ethiopia, where the sale of coffee is now routed through the commodity exchange by law. Tropical Heat also faced challenges, in particular with farmers side-selling to competitors. As a result, Tropical Heat lost money. This had much to do with the competitive market environment and the role of the intermediate trader. In the project, the trader became a transporter paid by the company; as a result, farmers’ margins declined and they tried to gain money in alternative ways. Working with just one transporter who holds considerable power in the chain has led to a lack of trust between farmers and the company. This is the main reason why, in 2013, only 35% of the suppliers remain contracted within the supply chain. Another inefficiency with the Tropical Heat and GGB/SLBL projects was caused by the fact that the PPPs were run by NGOs, which often hired not-for-profit service providers, such as extension services, informal seed providers and local NGOs. These kinds of organisations lack incentives to deliver high

Quality manager Tropical Heat

The keys to more effective PPPs | 37

Left: Coffee processing Ethiopia Right: Tropical Heat

More effective PPPs

Photo: KIT

Photo: CABI

potato crisps

5 The processing industry should be actively involved in training and multi-stakeholder activities, in order to set up direct rela-

So does the combination of public CFC finance and private

tionships and enhance trust with primary producers;

­investment contribute to agriculture-based social and economic development?

6 Agri-services should be delivered by organisations that have clear incentives to deliver high quality services at

Based on the studied examples we can firmly say that is does.

a competitive price;

PPPs have the potential to create synergy between private investment and public resources. There are, however, some key

7 Monitoring, learning and evaluation are an essential

factors for maximising the added value of CFC PPPs and keep-

component of PPPs but should be independent, in order

ing expectations realistic:

to disseminate lessons learned objectively and freely. M&E should therefore be financed by public money and/or

1 The key objective of CFC PPPs should be to encourage ef-

by the industry as a whole;

ficiency in commodity supply chains in underdeveloped markets. By definition, risks in these types of markets are higher,

8 In order to guarantee the wider value of PPPs in follow-up

such that companies do not invest alone; this increases the

projects involving the same supply chains and companies, an

need and value of public grants or soft loans;

assessment should be made as to whether a company still needs public support if the initial project has achieved success.

2 PPPs should promote competition: more than one buyer should be involved, as well as more than one supplier

By taking these key factors into consideration, CFC has

(farmers and other actors such as intermediate traders),

the ability to increase its impact now and in the future.

in order to balance power and reduce risks for farmer, suppliers and the processing industries;

Author Marije Boomsma 3 Private investments in activities that benefit an entire sector (including their own competitors) are logically kept modest, as they undermine the company’s competitiveness; 4 PPPs should include policymakers, to ensure commitment and create a favourable climate for investors (e.g. in Ethiopia);

Acknowledgements The study benefitted from valuable contributions of: Charles Agwanda, Morris Akiri, Dinah Borus, Giacomo Celi, Henk Knipscheer, Berga Lemaga, Gillian Kadenyi Muriithi and Navin Shah This paper was made possible thanks to a contribution of the Ministry of Foreign Affairs of the Netherlands

38 | Common Fund for Commodities Annual Report 2012

Photo: ©FAO/Farooq Naeem / FAO

III  Report on progress of projects under ­implementation This chapter focuses on progress of projects and highlights

in kind (USD 168.4 million or about 28%), provided either by the

trends, patterns and constraints emerging during project im-

Project Executing Agencies, ­colla­borating institutions, govern-

plementation in 2012. The overview brings out salient features,

ments or International Commodity Bodies (ICBs). Common

patterns and/or trends with respect to:

Fund financing comprises USD 275.1 million in grant (90%) and USD 29.0 million (10%) in loans.

• commitments, financing and disbursements; • commodity coverage, project types and beneficiaries; and

According to the Fund’s audited statements the direct project

• project start-up, execution, monitoring and supervision.

related disbursements in 2012 totaled USD 19,134,159 all grant disbursements with no loan disbursements recorded. These direct project related expenditures do not take into account,

Commitments, financing and disbursements

project related expenditures under the Dutch Trust Fund nor do they incorporate the European Contribution Agreements with the CFC which were approved in 2007 and 2009. Disburse-

By 31 December 2012, the Fund had approved 198 regular

ments for the project commitments financed under the EU

projects plus a further 150 Fast Track projects, together 348

AAACP programme (€ 9,043,792) were completed by December

projects, with an overall cost of USD 602.9 million, of which the

2012. Some of these projects will continue with CFC co-financ-

Fund financed USD 304.1 million (about 50%). The balance of

ing in future years. It is expected that CFC disbursements and

project costs is co-financed by other institutions (USD 130.4

repayments will continue to grow as the disbursement delays

million or 22%) and by counterpart contributions in cash and/or

for projects are being reduced both for loan and grant project

III Report on progress of projects under implementation | 39

operations. For 2013 special efforts will be made to reduce the

CFC-funded projects now cover over 40 commodities 足including

delays between project approval and commencement of actual

abaca, arachis, bamboo & rattan, bananas, cashew, cassava,

implementation on the ground.

citrus, cocoa, coconut, coffee, coir, copper, cotton, fish, fonio, groundnuts, gum arabic, hides & skins, jute, lead, meat and

As at 31 December 2012, 130 projects had been operationally

livestock, medicinal herbs and plants, olive, palm oil, paprika,

completed. In several cases these projects were completed with

potatoes, rice, natural rubber, shea nut, sisal, sorghum & millet,

some savings from the CFC grants originally approved by the

cane sugar, tea, timber, tropical fruits, spices and zinc, most of

Board. The savings are returned to the pool of Second Account

which are produced almost entirely in Developing Countries.

resources or the First Account Net Earning Initiative once the project account is closed. A total of 68 regular projects are cur-

Participation of Private Sector: Private companies contribute

rently under implementation or are in various stages of start-up.

technical, commercial and financial inputs to CFC-funded projects. Moreover, in order to promote dissemination, replicability

CFC funded projects may also be classified into four broad

and sustainability of project results, within and across countries,

categories, namely (a) productivity improvement including

representatives of relevant private companies are often invited

research (pre-harvest); (b) processing, marketing and quality

to final review and evaluation workshops organised for most

improvement (post-harvest value addition); (c) expansion of

projects. Overall, more than 150 private firms have shared the

market demand; and (d) price risk management.

results of the CFC projects through technology dissemination workshops, while over 80 private sector companies are directly participating or have participated in the implementation of

Type of regular projects approved

approved projects. The interest of the private sector in techni-

by CFC as at 31 December 2012

cal cooperation with CFC projects increases by the day. Offers from the private sector to co-finance specific commodity projects are increasing. Recently, projects related to certification of commodities, organic production, cotton classing, prevention of cotton contamination, value addition and marketing with

4 24

strong support and co-financing modalities from the private


sector were approved by CFC. 23

Type of project

No. of approved projects

Pre-harvest productivity i足mprovement (including research)



Post-harvest processing, market access and quality improvement



Expansion of market demand





Price Risk Management Total

40 | Common Fund for Commodities Annual Report 2012

198 (100%)

IV  Regular Projects Approved in 2012 Cocoa ICCO/43: Integrated Management of Cocoa Pest and Pathogens in Africa: Controlling Indigenous Pests and Diseases and Preventing the Introduction of Exogenous Ones Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution Co-financing

International Cocoa Organization (ICCO) The responsible PEA will be the Ghana Cocoa Board while the duties of the PEA will be performed by Cocoa Research Institute of Ghana (CRIG) Cameroon, Cote d’Ivoire, Ghana, Nigeria and Togo USD 3,121,073 USD 1,232,102 (Grant) of which USD 615,000 will be provided from the contribution of the OPEC Fund for International Development (OFID) to the CFC USD 937,724 (cash), USD 275,205 (in kind) USD 676,043 (from the Cocoa/Chocolate private industry)

The Board approved the project in April 2012. The total project cost is USD 3,121,073 of which the Common Fund finances USD 1,232,102 as a grant. Half of this amount originates from funds of OFID (the OPEC Fund for International Development), which have been made available to CFC for specific project funding activities. Co-financing of USD 676,043 has been committed by the private confectionary industry. Counterpart contributions amount to USD 937,724 in cash and USD 275,205 in kind. This project concerns pest and disease management and prevention of major prevailing cocoa diseases which have the potential to destroy the entire cocoa economy in West and Central Africa.

exogenous pests and diseases, which constitute one of the major constraints to farm yield maximization, which in turn calls for the implementation of an effective regional strategy on Integrated Pest Management (IPM). The overall goal of the project is to implement a coordinated capacity building program among the major African cocoa growing countries so as to mitigate the negative impact of pests and pathogens on the productivity of cocoa plantation and the quality of cocoa, which every year is estimated to produce an average loss of about 35% of the total marketable cocoa production. The pests and diseases identified as being of economic importance include black pod disease, cocoa Swollen Shoot Virus Disease (CSSVD), mirids, Frosty Pod Rot, Witches’ Broom, Cocoa Pod Borer, Cocoa Die-back Disease, Sting bugs, Stem borers, Mistletoes and epiphytes. The impact that these pests and diseases is having on farmers include low yield and poor quality of beans which translates to low income, high cost of production in controlling pests and diseases, health hazards as a results of use of agrochemicals, lower morale/low invest-

In 2012 Africa produced about 70% of the world cocoa output, corresponding to 2.8 million tonnes out of a total of 4 million tonnes. The five countries participating in this project (Cameroon, Cote d’Ivoire, Ghana, Nigeria and Togo) represent 98% of the African cocoa production. These countries face the continuous challenge to protect their crop against indigenous and

ment (psychological impact). The project aims at improving the productivity of cocoa farms by reducing crop losses to indigenous cocoa pests and diseases through awareness-raising and capacity building on environmentally sustainable and cost effective IPM techniques. In addition, the project will strengthen in-country and regional capacity for improved pest surveillance for prevention, early detection, eradication and continued control of invasive pests and pathogens. Crop and pest management strategies, as an integral part of Good Agricultural Practices (GAPs) will be adopted as the main tool to reduce crop losses by indigenous pests and diseases and at the same time prevent the spread in Africa of exogenous pests and pathogens endemic to cocoa growing areas in Asia and South America. The project will be implemented by the Ghana Cocoa Board, more specifically via the Cocoa Research Institute of Ghana (CRIG). The project will be launched on 15 April 2013 in Accra, Ghana back to back with a regional workshop on Integrated Pest Management in Africa.

CFC/ICCO/44FA: Capacity Building on Price Risk Management Strategy for Cocoa Smallholder Farmers in Africa Submitting ICB International Cocoa Organization (ICCO) Project Executing Agency TWIN Ltd. (UK) Countries Directly Benefiting Cameroon, Nigeria, Sierra Leone, Togo Project Cost USD 654,217 Common Fund for Commodities USD 313,828 (Grant) Counterpart Contribution USD125,580 (cash), USD127,365 (in kind) Co-financing USD52,647 (AFD), USD34,797 (others)


IV Regular Projects Approved in 2012 | 41

The goal of the project is to equip cocoa producers in West Africa with knowledge and skills necessary to employ an appropriate mix of instruments available to mitigate price risks associated with global cocoa markets. There is a mismatch in terms of knowledge and in the availability of appropriate instruments in African cocoa producing countries to enable effective risk mitigation strategies. To address this issue, there is a need to build capacity on understanding the price formation and market information available, on adequate risk assessment, on price risk management instruments and on how to use them adequately.

Using cocoa co-operatives as aggregator of smallholders’ demands for hedging instruments, the project will address the knowledge gap in risk management by training and capacity building to develop processes and procedures to deal with cocoa price risk in project participating countries. Bridging this gap would enable cocoa smallholder farmers to use available instruments to reduce their exposure to the volatility of cocoa prices, thus improving their resilience to market shocks. This will be achieved by implementing a programme of awareness raising, training and capacity building on the costs, the negative impact and mitigation measures

relevant to intra-seasonal cocoa price volatility. This would lead to more predictable incomes, better production management and, eventually, more sustainable long-term outlook for the cocoa sector in West Africa. The specific objectives of this project are (a) to identify the impact of price volatility in the participating countries and the strategies in place to cope it as well as to develop policy recommendations aiming at improving these strategies; (b) assessment and selection of price risk management strategies and instruments followed by awareness-raising through workshops; and (c) to build capacity and to deliver training on price risk management strategies to cocoa smallholder farmers.

Olive Oil Economic Valorization of Olive Genetic Resources Creation of Pilot Demonstration Nurseries Centres (Quality Enhancement through Nurseries Development) Phase II of Project CFC/IOOC/03 Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The International Olive Oil Council (IOOC) Institut de l’Olivier (IO), Tunisia Algeria, Egypt, Morocco, Tunisia USD 1,700,000 USD 900,000 (Grant) USD 800,000 shall be equally apportioned as a counterpart contribution in kind by the four selected countries

The Board approved the project in October 2012. The total project cost is USD 1,700,000 of which USD 900,000 is requested from CFC as a grant, and USD 800,000 shall be equally apportioned as a counterpart contribution in kind by the four selected partner countries Algeria, Egypt, Morocco and Tunisia. The Project will be implemented by the Institut de l’Olivier (IO), Tunisia. The project is the second phase of the successfully completed project on “Conservation, Characterization, Collection and Utilization of Genetic Resources in Olive”, which had enabled the characterization and conservation of 310 local olive varieties specific to the climatic and environmental conditions of the Mediterranean Basin.

adding value to the commodity and raise the earnings of the olive farmers. There are four specific project outputs: a) establishing a pilot nursery centre in each selected country; b) demonstrating modern methods for the production of certified quality olive plants; c) pilot production of a significant number of top-quality olive plants and disseminating and promoting the use of local genetic material; d) training and technology dissemination in improved olive orchard management.

The main objective is to increase the productivity and quality of the olive crop,

Each pilot nursery centre, to be developed, will have a minimum production capacity of 25,000 olive plants per year. The pilot nursery will serve as a centre of excellence for the demonstration of modern propagation techniques and updated tech-

nologies in nursery based plant production. High quality, high yielding and pest free olive plants of selected local varieties adapted to specific environments, climates and soil proprieties and complying with optimal phyto-sanitary standards, will be propagated and distributed to farmers. Project benefits are derived from the increased value (volume and quality) of olive production and increased skills of farmers and nursery technicians in the four countries. The establishment of pilot nurseries will promote best practices and technologies to other existing nurseries and create a multiplier effect in terms of number of beneficiary farmers and nursery technicians. The project is expected to be launched in the second quarter of 2013 in Sfax, Tunisia.

Rice CFC/FIGR/17: East African Rice Sector Development (Tanzania and Uganda) Submitting ICB The FAO Intergovernmental Group on Rice (FIGR) Project Executing Agency EUCORD Countries Directly Benefiting Uganda, Tanzania Project Cost USD 1,967,089 Common Fund for Commodities USD 1,044,910 (Grant), (of which USD 515,000 are provided from the contribution of the OPEC Fund for International Development (OFID) Cofinancing USD 872,179 (to be identified) Counterpart Contribution USD 50,000 (EUCORD, Sasakawa Global 2000 and SNV)

42 | Common Fund for Commodities Annual Report 2012


The project intends to work with a minimum of 8,000 rice farming households on 5,000 ha in each country and seeks to increase their rice yield/ha from a current country average of around 1.5-2 MT to an average 3.0 MT paddy/ha/year in the last year of the project. Cumulative volume of paddy sold to commercial rice millers is therefore estimated to reach 12,500 MT in each country and over the life of the project.

The project rationale and activities are based on the results of two CFC workshops that were conducted in 2011 in Uganda and Tanzania in order to take stock of all previous and on-going activities in the East African rice sector and to identify the major constraints and opportunities. It became clear that numerous “upstream interventions” including research on rice varieties and agronomy (such as for example development of NERICA varieties) have been undertaken, while “downstream” activities such as the competitive commercialization of intensified rice production, has so far not been adequately addressed. This has led to suboptimal tangible impact of previous rice sector initiatives in East African countries. The project will therefore address the issue of low competitiveness of locally produced rice, vis-a-vis imported rice in terms of quality and price, that will lead

to an incentive for East African farmers to engage in surplus rice production and make the sector competitive, also for the time beyond the currently applicable 75% import tariff imposed on rice imports in the East African Community. The project will be implemented by the European Cooperative for Rural Development (EUCORD). EUCORD will engage local partners in the implementation of the project. Key partner in Tanzania will be the Netherlands Development Organization (SNV). In Uganda the partner will be the NGO Sasakawa Global 2000 (SG2000). Both organizations have a respectable track record of implementing agricultural development projects with a strong focus on commercializing smallholder agricultural systems. As of to date the identification of a suitable co-financer is still ongoing.

Photo: ©FAO/Aris Mihich / FAO

The overall goal of the project is to improve the level of food security and living standards of rice producers in East Africa. In order to become more competitive with rice imports from Asia in terms of quality and price, the project will establish demand driven pilot rice value chains in each country. Next to smallholder farmers as the primary target group, the project foresees active participation of rice millers, commercial farmers, finance institutions and input providers.

IV Regular Projects Approved in 2012 | 43

Photo: ŠFAO/Giulio Napolitano / FAO 44 | Common Fund for Commodities Annual Report 2012

V Fast Track Projects Approved in 2012 Coffee CFC/ICO/53/FT/FA: Building a Financial Literacy Toolbox to Enhance Access to Commodity Finance for Sustainable SMEs

Submitting ICB Project Executing Agency Project Cost Common Fund for Commodities

The project is a test case for the upscaling of the positive outcomes of commodity projects through financial sources external to the CFC. The project would provide practical facilities to bridge the gap between technically successful project results and their financial viability after completion of CFC project financing. Project stakeholders would be assisted in approaching private

International Coffee Organization Finance Alliance for Sustainable Trade (FAST) USD 120,000 USD 120,000 (Grant) financiers with interest in commodity sector to ­determine financial viability of the project outcomes. The project would provide a systematic framework to help project stakeholders to: • analyze and formulate the outcomes of their projects as business models, focus-

sing on their capacity to operate without donor support; • meet lenders and other value chain stakeholders (such as certification agencies, importers etc.) to present their plans and discuss their capacity to borrow and repay loans from FAST lending members; • conclude the financing agreement between successful project teams and lenders.

Grains/Roots and Tubers CFC/FIGG/48/FT: An International Workshop on “Enhancing Food Security in Egypt and Sudan through the Development of the Grains Sector”

Submitting ICB Project Executing Agency Countries directly benefiting Project Cost Common Fund for Commodities

The main goal of the project is to hold a Regional Workshop that will facilitate conduct of a full analysis of the wheat and maize value chains in Egypt and Sudan and identify collaborative actions needed to increase wheat and maize production in these countries. It is expected that the workshop will assemble practical advice, solutions and strategies to exploit opportunities to

FAO-Intergovernmental Group on Grains to be determined Egypt and Sudan USD 61,800 USD 61,800 (Grant) increase wheat production and to improve regional cooperation between Egypt and Sudan. Some of the key outputs of the project will be: • Analysis of the some key policies of government in the wheat and maize sector. • Identification of main requirements and opportunities for investment to improve

wheat and maize value chains including technical improvement, innovations and technologies. • Preparation of the ground for regional collaboration to secure sufficient wheat and maize supply to meet ­domestic demand. • Determination of appropriate future programmes and activities for increasing regional wheat and maize production.

Metals (Base) LZSG/21FT: Transfer of Technology and Promotion of Demand-Zinc Die Casting in India

Submitting ICB Project Executing Agency Country Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contributions

Project activities are focussed on conducting die cast plant process audits, benchmarking plant performance and traditional

International Lead and Zinc Study Group (ILZSG) International Zinc Association (IZA) Malawi USD 270,000 USD 110,000 (Grant) USD 160,000 industrial practices against international standards with the aim to identify areas for improvement in cost-efficiency,

productivity, quality and health, labour safety and environmental sustainability. In doing so the project contributes to >>

V Fast Track Projects Approved in 2012 | 45

the modernization of the industry and improving its international competitiveness; the first part of the project will be an overall assessment of the Indian zinc die casting industry that will include visits to all major die casting plants. The visits will help to clearly understand the technical state of the industry and also to introduce the audit program and identify potential demonstra-

tion plants. One such visit was conducted to undertake a techno-economic assessment of the Indian zinc die casting industry through visits to all major die casting plants. Five demonstration plants have been selected for the second stage audits. A technical expert from IZA India, undertook a more detailed assessment of the zinc die casting process in each of the five compa-

nies. An “Action Plan” was agreed between each company and IZA at the end of the audit. The Action Plan will be pursued over the coming months to complete the second stage, and the work done will be used for the third stage of the project which will involve a series of workshops that will be open to all zinc die casters in India. This will conclude the project.

Sugar CFC/ISO/34FT: International Workshop on “Achieving Sugar Self Sufficiency: Challenges, Problems & Issues”

Submitting ICB Project Executing Agency Country Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The main activity of the project is a 2 day international workshop with the overall objective of assessing constraints and identifying opportunities for achieving self-sufficiency in the sugarcane industry. The workshop is being convened as a regional event to share experiences and knowledge related to

International Sugar Organisation (ISO) Indonesian Sugar Research Institute Sugar producing countries in S.E Asia USD 111,110 USD 101,110 (Grant) USD 10,000 achieving sugar self sufficiency in South East Asia. The Workshop will facilitate stronger linkages between the government, scientists, sugar companies and the private sector and this will assist in increasing production towards achieving sugar self-sufficiency. One of the expected results from the proposed

project is an arrangement for collaborative research among countries in South East Asia. Representatives from successful sugar industries outside of the region, for example from South America, will be invited to share experience and facilitate future transfer of expertise and technology.

Others CFC/CFC/31/FT/FA: The Future of Producer-consumer Cooperation in Soft Commodities: redefining development challenges beyond the Integrated Programme for Commodities

Submitting ICB Project Executing Agency Project Cost Common Fund for Commodities Counterpart contribution

This project addresses the concern of international commodity policy makers about the roots of international consensus on commodities, based on the Integrated Programme for Commodities adopted in 1970-s which have not been fully re-examined since then. As the matter of relationship between commodities and development had never been fully addressed in a holistic manner since that time, current discussions on international measures in commodity markets are limited in scope, which has impact on the effectiveness of international cooperation in commodity driven development.

United Nations Conference on Trade and Development (UNCTAD) Finance Alliance for Sustainable Trade (FAST) USD 150,000 USD 120,000 (Grant) USD 30,000 (UNCTAD, in kind) The project is driven by the UN resolution on commodities adopted in November 2011, and accompanying resolution on commodity market volatility which called on the CFC to facilitate cooperation between international agencies and to organize a High Level Thematic Debate (HLTD) on commodity market volatility which would report to the UN General Assembly. The goal of the project is, therefore, to enable informed debate and to facilitate proper input to the deliberations of the UN. The conclusions of this debate will have direct implications on

the discussions on the future role and mandate of the CFC. The specific objectives of the project are as follows: • to facilitate informed debate on the current understanding of development significance of commodity dependence; • to recognize factors behind high volatility and risk relating to commo­dities; and • to present areas for international consensus action in commodities.

CFC/CFC/32/FT/FA: Addressing Impact of Commodity Derivative Trading: A Public-Private Initiative on Market Volatility

Submitting ICB Project Executing Agency Project Cost Common Fund for Commodities Counterpart contribution

n/a De Novo Agricultura Pty Ltd. USD 180,000 USD 110,000 USD 60,000 private sector, USD 10,000 UN

46 | Common Fund for Commodities Annual Report 2012


The project builds on the international attention on the matters of commodity market volatility and its impact on development to facilitate a larger public-private discussion on the impact of financial trading in commodity derivatives. The objective of the project is development of a voluntary code of behavior for derivative traders. During the UN High Level Thematic Debate on commodity market volatility a point was raised that international organizations should make an effort to engage with commodity traders and increase their awareness of the relevant development issues and concerns of global community. This will facilitate a dialogue with larger market participants who can formulate a group action to respond to the public concerns about market volatility. The concentration of commodity derivative markets in the hands of few large traders makes it possible to collect a critical mass of influential people around the issues of social responsibility of derivative traders.

The private and public sector parties essentially agree that the socioeconomic impact of commodity market volatility must be addressed. Nevertheless, the views on effective measures to mitigate the problem differ very considerably, and the lack of common understanding of key underlying issues prevents effective joint action. This gap calls for a dialogue to reach agreement on issues of common interest to mitigate commodity market volatility and its costs, as well as to channel financial capital into investments into physical production capacities for commodities of high socioeconomic significance for Commodity Dependant Developing Countries (CDDCs). The Public-Private Initiative (PPI) on Commodity Market Volatility is an effort to open such dialogue, and is supported by five major international banks active in commodity trading, with a further two banks interested to join, as well as by the Common

Fund for Commodities, and UN agencies with mandates touching on commodities and development. The project would support the emergence of a “centre of gravity� in discussions on the adverse impact of commodity derivative trading, drawing from the voluntary interest of the private sector to respond positively and transparently to the negative public perception of the rise in commodity market volatility and its negative impact on developing countries. The first meeting of the PPI on Commodity Market Volatility took place in New York at UN Headquarters on 25 September 2012, facilitated by De Novo Agricultura. The agreed outcomes of the meeting point strongly to the need for modernised agenda of action in commodity sector, including ­research on newly emerging issues, effective and feasible practical actions, and better communications.

CFC/CFC/33FT/FA: Beyond 2015: The Role of Commodities in Development

Submitting ICB Project Executing Agency Project Cost Common Fund for Commodities

The project is intended to be a collaborative effort with other international agencies, academics and development paractitioners aimed at the defining the role of commodities in the possible new framework for development policy after the completion

n/a CFC USD 120,000 USD 120,000 (Grant) of MDG process in 2015. The project would develop a framework for engagement CFC, ICBs and commodity dependent countries in the evolving global development policy, directing measures and actions and resources towards sustained economic

growth, enhancing incomes, generating employment particularly for youth, meeting needs of rapidly urbanising areas, creating gender equity, enhancing food security and creating resilience to internal and external shocks.

CFC/CFC/34/FT/FA: Bridging the Gap between International Development Banks and SMEs in Emerging Markets Submitting ICB n/a Project Executing Agency tbd Project Cost Euro 200,000 Common Fund for Commodities USD 120,000 (Recoverable Grant) Co-financing EUR 100,000 (by the Ministry of Agriculture, Germany) The project would support the implementa- of commodity value chain finance experts tion of a lending programme for SMEs by with extensive international experience the KfW and target value chain opportunities across the range of countries and comlinking SMEs to growing markets. CFC fimodities sectors. This would allow to trial nancing for this project would allow KfW and a wider range of instruments, schemes and the local financing institutions to develop mechanisms for enhancing the diversificaand provide new financing products to the tion of income opportunities available to local SMEs under the guidance and feedback SMEs through their better integration in

high-growth value chains locally and internationally. The project will enable CFC to leverage its knowledge and expertise in agricultural value chains to facilitate the emergence of new business opportunities in Russia, with a possibility of expansion to other developing countries.

CFC/CFC/35/FT/FA: Enabling Producer Organizations to Invest their way out of Poverty Submitting ICB n/a Project Executing Agency SCOPEinsight Project Cost USD 240,000 Common Fund for Commodities USD 120,000 (Recoverable Grant) Co-financing USD 120,000 


V Fast Track Projects Approved in 2012 | 47

borrowers because of their small size, and have no opportunity to grow because they unable to raise investable resources. The project aims to develop an economically feasible and reliable scheme of assessment of creditworthiness based on the successful experience of certification schemes into financing for agribusiness in developing countries. The assessment of credit risk would be based on the capacity of the borrower to generate sustained cash flow and manage their production successfully, as opposed to traditional approach of banks based on collateral. The project proposes

an innovative solution based, part, on information technology and part on lessons from volumes of data from value chain certification schemes and microcredit operations. A set of simple and observable indicators, based on past experience, have been identified, and evaluated for large number of farmer groups by independent assessors. The data is being put on a common database. The easily accessible database would reduce the costs of credit assessment of the financial institutions by a few orders of magnitude, and eliminate the due diligence barrier in accessing bank lending for large numbers of small farmers.

Photo: ŠFAO/Giulio Napolitano / FAO

The project concerns an initiative to introduce an independent rule-based evaluation framework for farmer organizations to reduce the barriers they face in accessing investment. The project addresses one of the fundamental problems of small producers in Developing Countries concerning their poor access to bank credit. Traditional approaches of lending are based on collateral as the volume of lending involved is too small and proper due diligence proves prohibitively expensive. The result is that large number of farmers with good skills, good track record and productive practices cannot get themselves recognized as good

48 | Common Fund for Commodities Annual Report 2012

VI Summary of

Ongoing Regular Projects 2012 Bamboo and Rattan CFC/INBAR/07: Development and Commoditization of the Pre-Fabricated Modular Bamboo Housing in Asia and Africa Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

International Network for Bamboo and Rattan (INBAR) The International Centre for Bamboo and Rattan (ICBR) Nepal, Ethiopia, China USD 2,617,930 USD 1,884,630(Grant) (of which USD 1 million from the OPEC Fund for International Development - OFID) USD 733,300

The project objectives are to enhance the design and technology of pre-fabricated modular bamboo housing. This would be done by establishing pre-fabricated bamboo housing production centres in Asia (Nepal) and Africa (Ethiopia) and by building local capacities and transferring the technology developed in China. Specific objectives include developing community-based production chains and establish linkages between community-owned pre-process-

ing enterprises and processing centres, in order to maximise the benefits from the projects to the poor, to build capacity of local communities to cultivate, manage, harvest and pre-process bamboo for the housing industry and to promote bamboo in the housing market in Asia and Africa as a reliable and environmentally friendly building material.

The project is making satisfactory progress. Laboratory tests of the ­selected species have been completed. Processing equipments have been shipped and installed in Nepal and Ethiopia. The processing and pre-processing facilities have become operational since May 2013. The final joint supervision is planned in 2013 to verify the trial production of bamboo panels, after which the final dissemination workshop will be held and the project will be officially closed.

CFC/INBAR/09: South-South Initiative to Develop an Integrated Bamboo based-development Alternative in Latin America Submitting ICB International Network for Bamboo and Rattan (INBAR) International Tropical Timber Organization (ITTO) Project Executing Agency International Network for Bamboo and Rattan (INBAR) Countries Directly Benefiting Ecuador and Peru Project Cost USD 2,007,300 Common Fund for Commodities USD 1,256,470 (Grant) Counterpart Contribution USD 750,830 This project is a market driven initiative targeted for poverty reduction and designed to function effectively in a rapidly evolving market place. The project’s primary investment justification is based on strong market assessment of current and medium term competitiveness which shows that poor communities which grow bamboo in the region are in potentially strong competitive positions against other global producers. It will support Ecuadorian and Peruvian smallholders to produce bamboo efficiently and competitively by training and field trials. The project will support businesses at all levels of the market chain by mobilizing start-ups,

technology and management transfer, business services and information, international and domestic business facilitation, credit lines, trade fairs. Besides, it will support government at local and national levels to create Sector Enabling Environments for business and farmers through exchange visits, training of officials, support to national and local policy development. The project is making satisfactory progress. 42 training workshops have been held with 757 people trained on silviculture, construction, processing and business management. Additionally 45 Trainers received certificate

as bamboo trainers. 6 centers of knowledge were established. A national congress was held in Lima in November 2012 and the project was presented to delegates from 5 countries, and bamboo construction code was updated. 2 bamboo tours were conducted for awareness raising among local and national government officials, and 2 national committees on sustainable bamboo management were created in two countries. A new manual on production and management of the local giant bamboo species (Dendrocalamus) was produced. The project was presented to the INBAR 15th anniversary meeting.

VI Summary of Ongoing Regular Projects 2012 | 49

Bananas CFC/FIGB/04: Reviving Banana Cultivation in Guinea

Submitting ICB Project Executing Agency Country Directly Benefiting Project Cost Common Fund for Commodities Common Fund for Commodities Counterpart Contribution

The overall objective of the project is to establish an integrated pilot production and marketing unit with modern farming and marketing capacities involving both private entrepreneurs and smallholder farmers. Production focuses on premium quality bananas for domestic and regional export markets. Investment is being promoted by demonstrating the technical and economic feasibility of modern plantations and associated post-harvest processing and marketing units. The project also links smallholder producers to the input procurement and primary processing and marketing capabilities of private

FAO Intergovernmental Group on Bananas and Tropical Fruits United Nations Office for Project Services (UNOPS) Guinea USD 2,904,900 USD 720,400 (Grant) USD 650,000 (Loan) USD 1,459,400 entrepreneurs to enable them to acquire necessary inputs and access to processing and marketing facilities. The project aims at developing a nucleus plantation of private entrepreneurs and associate smallholder plantations, producing high quality bananas through the introduction of new plant materials and high yielding varieties which are resistant to pests and diseases. The new plant material imported from France was produced in-vitro and 150,000 plants were distributed to the private enterprise (SITEB) and to smallholders. The area cultivated in banana under the project is approximately

75 hectares, comprising 50 hectares on smallholders’ plots and 25 hectares on the private plantations. Plant material produced from the imported varieties is being sold to non-project growers thus contributing to a further rehabilitation of the banana sector in Guinea. Technical assistance was provided to ensure that plantations are run on sound agricultural practices and the application of appropriate inputs. The loan repayment is overdue. Several rounds of discussion on the recovery of the loan have been held, and the beneficiary country has promised to propose a solution shortly.

CFC/FIGB/10: Promotion of Exports of Organic Bananas from Ethiopia and Sudan Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contributions

FAO Intergovernmental Sub-Group on Bananas International Network for Bananas and Plantains Ethiopia and Sudan USD 3,588,113 USD 2,340,600 (Grant) (of which USD 227,500 from Dutch Trust Fund contribution and USD 1,000,000 from the OPEC Fund for International Development- OFID) USD 1,247,513

The project aims to improve rural development through the promotion of organic banana production and marketing for export in Ethiopia and Sudan. Specifically, the project aims (a) to improve the access of the banana sectors in Sudan and Ethiopia to world-wide state-of-the-art organic export banana production and post-harvest technology; (b) to establish organic banana production on 160 hectares in two pilot areas with the active participation and training of small and medium growers and their field labourers, private sector suppliers, public and university scientists, field extension workers; (c) to export certified organic bananas with the active participation of growers, field workers, grower associations, private traders, transport agents and suppliers and public sector post-harvest specialists; (d) to strengthen

grower marketing associations to capture greater value-added from export of organic bananas with the active participation of small business management specialists. After a slow start, the project has now managed to firmly establish an export supply chain of bananas between Sudan to the Middle East with simple, yet effective measures to produce export quality bananas. Today some 40 tons of bananas leave Sudan towards the Middle East on a daily basis. In addition a number of European importers of organic fruit are currently working out first test shipments to Europe. This will over time increase the number of buyers for Sudanese bananas and thus ensure sustainability of results. In Ethiopia, administrative problems led to significant delays and the

project only commenced its activities in 2009. However since then, the project was instrumental in generating a promising contact with a large multinational banana trader and test shipments for marketing in the Middle East have been made that led to further investments for preparation of Ethiopia as a major supplier for bananas for niche markets in Europe. In 2012, the first banana exports from Ehtiopia for decades went beyond Djibouti, with an initial shipment of 18.4 tons to a trader in Jeddah, Saudi Arabia. Subsequently, a second Saudi company signed an export agreement for a further five containers in April 2012 and two more in May. As a consequence the Ethiopian Government has financed a first cold storage facility to further promote this promising export sector.

CFC/FIGB/15: Promoting Production and Marketing of Organic Bananas in Asia

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

Intergovernmental Group on Bananas and Tropical Fruits Institute of Fruit Tree Research, Guangdong Academy of Agricultural Sciences, China China USD 2,280,000 USD 1,400,000 (Grant) USD 880,000

50 | Common Fund for Commodities Annual Report 2012


The general long-term objective of the project is production of organic bananas for export and for marketing in China contributing to economic, environmental and social well being in rural areas. China has excellent agro-ecological conditions for organic banana production, a policy to diversify horticultural exports and a strategic geographic location with reference to Asian and European markets. Project objectives are: Piloting and promotion for developing organic banana industry in China, increasing export and share of organic banana in domestic markets, larger benefits for national and local economy, and alleviating poverty in rural areas. Enhancing linkage

between R&D organizations, enterprises, farmers, warehouses, exporters, and other participants of the supply chain of organic banana and provide to them the latest information and most necessary services related to production, post-harvest, and market, so as to promote development of organic banana industry and increase competitive edge of the industry in global market. 100 hectare of production and test bases will be established in China, for organic cultivation and treatment, training of farmers, experiments to be carried out by fresh preservation companies, research institutes, colleges, and local promotion of organic cultivation. Pilot base of organic

banana will be established to increase people’s awareness of farm produce safety and pollution reduction. The project is fully operational since September 2011 and is making satisfactory progress. Farms from different regions were selected to participate in the project. Series of training activities on organic agriculture practices and certification were organised. Studies on domestic market for organic bananas were carried out. Organic fertilizers and pesticides were distributed. Research and test on the banana diseases control were carried out by the PEA.

Cashew CFC/FIGTF/04: Regional Cashew Improvement Network for Eastern and Southern Africa (RECINESA)

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

Cashew is a major source of income for millions of small-scale farmers worldwide with an annual production value of close to 2 billion USD. While global demand for cashew products is constantly growing in terms of volume and value, African farmers and policy makers are seeking to close the gap on competitiveness with Asian producers in order to take full advantage of this rapidly growing global market. RECINESA stands out as a large-scale project covering the following countries: Ethiopia, Kenya, Madagascar, Malawi, Mozambique, Tanzania and Uganda. The project started in 2010 and revitalized the cashew sector in these countries. The project raised the incomes and living standards of cashew growers, and enhanced the environmental well-being through the promotion of improved soil fertility through agri-inputs provided directly to farmers.

FAO Intergovernmental Group on Bananas and Tropical Fruits Naliendele Agricultural Research Institute, Tanzania Ethiopia, Kenya, Madagascar, Malawi, Mozambique, Tanzania, Uganda USD 3,194,344 USD 2,794,344 (Grant) USD 400,000 The project collaborated with the central ministry in each country, researchers, extension staff and farmers. It provided training to extension staff in participatory approaches and cashew-production techniques. These extensionists in turn helped the farmers organize into groups of about 50 farmers, with sub-groups of 10 members each. In each group of 50 farmers, one farmer leader was selected to act as a resident extension agent. The project developed easy-to-understand training materials such as flyers and handbooks to support them. During the 6 years, the project trained 300 extension officers and 17 district coordinators. In total 15,000 farmers were trained and 520 small farmer groups were formed. It set up a system to exchange improved cashew materials between countries and research institutes. Some 500 kg of seed were distributed, and germplasm materials

were imported from Brazil and Benin, and distributed to the countries. The project established 16 central nurseries to multiply and distribute seedlings to farmers. Around 340,000 new cashew trees were planted (about 5,000 ha). Five videos were prepared and distributed; and 3,000 copies of a cashew handbook were distributed in English, French and Portuguese. Farmers adopted most of the tech­nologies and improved their yields and quality of cashew. RECINESA ultimately raised the incomes and living standards of cashew growers in the target region. First ex-post impact indicators reviewed by CABI indeed confirm that household income of many cashew farmers is gradually increasing and first farmers have reached an economic level which allows them to apply for commercial credit to further expand their farming operations.

Coffee CFC/ICO/11: Pilot Rehabilitation of the Coffee Sectors in Nicaragua and Honduras Submitting ICB International Coffee Organization (ICO) Project Executing Agency PROMECAFE Countries Directly Benefiting Nicaragua and Honduras Project Cost USD 6,837,000 Common Fund for Commodities USD 1,020,000 (Grant) Common Fund for Commodities USD 3,200,000 (Loan) Co-financing USD 505,000 Counterpart Contribution USD 2,112,000


VI Summary of Ongoing Regular Projects 2012 | 51

The project includes the development of a model for the modernisation of damaged coffee processing facilities. Project activities include restoring coffee-washing facilities and enhancing the potential to improve coffee quality and increase income of farmers. The project also addressed the environmental degradation arising as a result of river

pollution emitted from old wet-processing facilities. Innovative intermediate technologies which reduce water pollution and economise on the use of water and energy were introduced to smallholder coffee farmers. The project financed the installation of almost 2,000 demonstration coffee-washing stations using improved clean technologies through

the loan facility contained in the project. The use of clean technology enabled people who live downstream to have access to clean water. The project contributed to a considerable improvement of coffee quality and value exported by Honduras and Nicaragua. Grant funded activities were successfully completed in 2011 and loan monitoring is in progress.

CFC/ICO/15: Pilot Rehabilitation of Neglected Coffee Plantations into Small Family Production Units in Angola Submitting ICB International Coffee Organization (ICO) Project Executing Agency United Nations Office for Project Services (UNOPS) in collaboration with the Instituto Nacional de Café (INCA), Angola Country Directly Benefiting Angola Project Cost USD 8,530,000 Common Fund for Commodities USD 1,990,000 (Grant) Common Fund for Commodities USD 2,760,000 (Loan) Co-financing USD 2,980,000 Counterpart Contribution USD 800,000 The key activity of this pilot project includes a demonstration of coffee rehabilitation schemes by showing how production can be increased on abandoned coffee estates and how displaced people can be resettled. The project provides support services, such as rural extension, credit facilities and marketing information services. Other aid agencies assist in support for non-commodity related resettlement activities of the farmers. Angola is highly dependent on oil revenues and wants to

diversify its economy by bringing into production abandoned coffee estates through the resettlement of displaced people and providing support services to increase the productivity of small coffee producers. Thanks to the good coffee production practices introduced by the project in the Port Amboin zone of Kwanza Sul Province in Angola, production increased three fold: from 529 MT in 2006 to 1,537 MT in 2012. The 2011 production was even higher than in 2012 because the 2012 drop was the

result of an unusual drought. One significant feature of the project is the high level of ownership of the project by the stakeholders primarily the various arms of government and the other stakeholders. The experience from the project is being disseminated to other locations of the country as a resettlement model. The project operational activities will be officially closed during the second half of 2013 while the loan repayment is scheduled to be completed by 2016.

CFC/ICO/32: Diversification of Production in Marginal Coffee Areas in the State of Veracruz, Mexico Submitting ICB International Coffee Organization (ICO) Project Executing Agency Veracruz Produce Foundation Country Directly Benefiting Mexico Project Cost USD 4,467,871 Common Fund for Commodities USD 1,020,000 (Grant) Common Fund for Commodities USD 1,532,400 (Loan) Counterpart Contributions USD 797,313 Co-financing USD 1,118,158 The project encouraged horizontal and vertical diversification in marginal rural areas for coffee producers who due to the low coffee market prices are unable to generate sufficient profits to sustain their livelihoods. The aim of the project is to establish a defined process of diversification for marginal coffee farms in the State of Veracruz, Mexico. Through technology transfer mechanisms based on the capacity and experience of the University of Veracruz, an entrepreneurial culture for small coffee growers has been promoted through the setting up of integrating enterprises. The ultimate goal to

identify and develop productive alternatives and innovative ways of production which encourage coffee farmers to stay in the region. These activities result in additional farmers income in the short and medium term and improve the quality of life of coffee growers’ in these marginal areas. Among the other results obtained the following should be mentioned: • a productive diversification program in coffee farms located in marginal areas of the State of Veracruz, covering 1,500 ha, (3.1% of such marginal farms) was established

52 | Common Fund for Commodities Annual Report 2012

with current expansion of the pilot project to the remaining areas of Veracuz which the the State Government encourages; • maintenance of selected 1,500 ha of coffee under shade so as to generate and conserve various ecological ­resources such as “water conservation”, land and regional bio-diversity; • maintenance of the local agro-forestry system generating environmental benefits. As a result of the above the security of tenure of coffee farmers in the target regions was better protected.

CFC/ICO/40: Increasing the Resilience of Coffee Production to Leaf Rust and other Diseases in India and four African Countries Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

International Coffee Organisation CABI Africa and India Office India, Kenya, Rwanda, Uganda and Zimbabwe USD 4,014,313 USD 2,918,720 (Grant) (Of which a USD 500,000 contribution from the OPEC Fund for International Development - OFID) USD 1,095,593

The overriding objective of the project is to build the capacity of institutions in order for them to share improved germplasm between participating African countries and India. Objectives of a more specific nature are: to conduct demand-led applied research for variety evaluation that generates alternative methods for control of Coffee Leaf Rust (CLR) and other diseases; to deliver new knowledge including CLR resistant germplasm and environmentally friendly chemicals/botanicals to coffee growers, particularly small holders; and to develop a long-term approach to management of coffee diseases in a sustainable manner while increasing the profit margins for small-scale coffee producers. Activities being undertaken under the project are: identification of needs and resources; rural community responses to CLR and other diseases and the sourcing and production of improved genetic material for coffee production; conservation and identification of coffee varieties and disease races; trials with new and existing materials under

a range of field conditions, on farms and on field station; developing Scientific Management Information Systems to facilitate faster dissemination; and project management and co-ordination. The project is under implementation in the participating countries of: India, Kenya, Uganda, Rwanda and Zimbabwe and is scheduled to close during the second half of 2013. Some key project outcomes are: • Diseases resistant materials are being experimented in trial farms in participating countries. • Farmers are being trained, through farm field school (FFS), in good Agricultural practices leading to reduction in the use of chemicals while improving yields. To do so, the concept of farm field school (FFS) has been developed with success throughout the countries. • Through cooperation developed by the project, planting materials from India

were given to farmers in Africa to test their resistance to diseases and yield improvement. Overall the technical progress of the project has been satisfactory and encouraging, and it is on schedule according to the 2012 project work plans and budgets. However, in Uganda the droughts of 2008 and 2009 made progress in evaluation of varieties for resistance to lag behind that of other countries, although the trials finally took off and substantial data is being collected. Very useful results are being generated in trials and FFSs. From a social and environmental perspective, the project has provided the potential for resistant varieties or sources of resistance to the main coffee diseases namely coffee leaf rust and berry diseases. This will contribute to a reduction in the use of environmentally unfriendly fungicides. In addition, this would reduce losses due to the two diseases, thus improving coffee production, and increased incomes, which in turn contributes to social benefits to coffee farmers.

CFC/ICO/42: Developing the Potential of the Gourmet Robusta Market Gabon and Togo Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

International Coffee Organization (ICO) CABI Gabon and Togo USD 2,526,694 USD 1,782,113 (Grant) (of which a USD 500,000 from the OPEC Fund for International Development- OFID) USD 709,125

The project aims to demonstrate, on a pilot basis, that farmer incomes derived from robusta quality coffee production and processing can be significantly improved. This improvement will come from the enhanced quality and yields from the coffee, as well as the production of gourmet quality robusta coffee. This will be achieved through better crop husbandry, improved sun-drying/ processing, and the introduction of some washed coffee processing. The production and processing work has been linked to a focus on quality, including liquoring training and cup quality evaluation, as well as marketing, with promotion activities aimed at finding premium buyers for the coffee produced. The project components comprise:- identifying the zones and participating farmer groups; extension training in crop

husbandry; making seedlings of improved planting material available to farmers; improved processing of sun-dried robusta coffee targeting certain specialist buyers of fine quality sun-dried robustas; installation of washing equipment to produce washed robusta coffee; and training of farmers in the production of washed coffee; liquoring training for quality evaluation, and marketing and promotion activities to ensure premium prices are obtained. Good progress has been realised in respect to improving quality and productivity enhanced by supply of superior planting materials provision of coffee drying equipment coupled with capacity building through training, supply of hand pulpers and training of coffee liquorers. Progress made by the project is especially rewarding on the production side. On the marketing side the

project participates in coffee cup tasting competitions and in marketing trials organized by the Specialty Coffee Association of America. Some of these project outputs are summarized below: • Manual on good agronomic practices finalised and distributed for use by ­various regional delegations; • Training of farmers in good agronomic practices; • Establishment and maintenance of the demonstration and pilot sites; • Installation of the dry mill; • Training and follow up on good primary processing and post-harvest handling; • Observation of the harvesting and processing of coffee among pilot farmers following training and tech­nology transfer.

VI Summary of Ongoing Regular Projects 2012 | 53

CFC/ICO/45: Building Capacity in Coffee Certification and Verification for Specialty Coffee Farmers in Eastern Africa Submitting ICB International Coffee Organization (ICO) Project Executing Agency Eastern Africa Fine Coffee Association (EAFCA) Countries Directly Benefiting Ethiopia, Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Zambia and Zimbabwe Project Cost USD 4,495,725 Common Fund for Commodities USD 2,000,000 (Grant) (of which USD1 million from the OPEC Fund for International Development - OFID) Co-financing USD 1,500,000 (EU/AAACP Commodities Programme) Counterpart Contribution USD 995,725 The rationale of the project is to build certification and verification capacity within the national coffee producing bodies of nine East African countries. Ultimately the project purpose will be to increase the quality and quantity of certified / verified coffee produced and processed within the EAFCA region through training of master trainers, trainer of trainers, certifiers / verifiers (auditors) and farmers. The process of building capacity for good agricultural practices and sustainable production will lead to socially acceptable, environmentally friendly and economically successful coffee production among producers. Since its inception, the project has made significant progress towards implementation of project activities which led to farmers who are now more equipped to produce the quantity and quality of certified coffees resulting in greater market access and better prices as well as an overall sustainability of production practices. Baseline studies have been completed in all of the countries to more clearly identify the specific needs of each country so that the training planning process can be tailored accordingly. Another precursor to the

training process was the development of the training manuals which have been completed and culminated into the training of master trainers and on-going trainer-of-trainers training. One key output was the development of the Generic Training Manual which is being used to guide the training process for the project. The 3060 farmers trained in the project so far have their coffee certified with respect to the various certification schemes being applied in the project countries. Progress in farmer training on Certification/ Verification has been attained in eight countries including Rwanda, Burundi, Malawi, Tanzania, Kenya, Zambia, Zimbabwe and Uganda. In the same vein, 1411 farmers from Kabonera Coffee Association from Uganda have been 4C verified. This entails that the said group of farmers will be able to sell their coffee as 4C verified or sustainable coffee. Other groups in other countries are progressing towards certification in Fairtrade and organic certification. Farmer training in Ethiopia has been scheduled for the upcoming phase as the project

implementation approach in Ethiopia had to be redefined following the administrative changes that occurred at the Ministry of Agriculture after signing of the Memorandum of Understanding (MoU). The project has trained eighty-eight trainer-of-trainers to date. To date eighteen (18) auditors have been trained and ultimately thirty-six (36) auditors will be trained from nine participating countries. The project participated in the exhibition of some of the coffees coming from the project farmers. The coffee from Kabonera Coffee Association from Uganda was show cased at the World of Coffee Conference and Exhibition in Nice, France in June 2013. Other coffees from the Taste-of-Harvest (TOH) competitions from the project participating countries were also show cased. A coffee cupping session for European and other International buyers was also held in order to show case the quality of coffees coming from the project participating countries. The quality of coffees was well received by coffee buyers from Europe and other regions.

CFC/ICO/46: Competitive Coffee Enterprises Programme (Guatemala and Jamaica)

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Common Fund for Commodities Co-financing Loan Counterpart Contribution

The main objective of this project is to improve the competitiveness of small coffee producers in two selected regions in Guatemala (Fraijanes and CobĂĄn) and in two selected regions in Jamaica (the Central and Northern regions in the Non-Blue Mountain- Lowland). The target of the project relates to improvement of coffee quality and productivity as well as to ensure better organizational and management capacity of coffee farmers. In addition to grant financing for capacity building, the project also has provision for lines of credit through a combination of loans from CFC, and the Dutchbased micro-finance institution Oikocredit,

International Coffee Organization (ICO) National Coffee Association of Guatemala (ANACAFE) Guatemala and Jamaica USD 4,750,000 USD 1,500,000 (Grant) USD 1,000,000 (Loan) USD 1,000,000 (Oikocredit) USD 1,250,000 to be made available to small holder coffee farmers in Guatemala through collaboration with local credit institutions. The identification of Cooperatives and Producer Organizations in Guatemala and Jamaica has been completed and activities related to institutional strengthening are underway in both countries utilising the proceeds of the CFC grant. In Guatemala and Jamaica some 40 producer groups received training on the entire process of nursery preparation i.e. from how to establish a seedbed to transplanting the seedlings to the nursery bag. In addition training in coffee plantation management, shade management, fertilizer

54 | Common Fund for Commodities Annual Report 2012

application, pruning, coffee quality control, wet processing methods and promotion of domestic consumption was also conducted by the AnacafĂŠ technicians and the Coffee Board of Jamaica. In both countries regular barista training is conducted as part of a campaign to promote domestic consumption of coffee. With reference to the loan component, Jamaica has confirmed that it is not in a position to take up the loan portion because of fiscal constraints. Work is in progress to complete the documentation towards loan disbursement for Guatemala.

CFC/ICO/48: Sustainable Credit Guarantee Scheme to Promote Scaling up of Enhanced Coffee Processing Practices in Ethiopia and Rwanda Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Common Fund for Commodities Co-financing Grant Co-financing Loan Guarantee Counterpart Contribution

International Coffee Organization (ICO) CABI and Rabobank International Advisory Services (RIAS) Rwanda and Ethiopia USD 8,147,490 USD 1,240,270 (Grant) (of which 600,000 USD from the OPEC Fund for International Development- OFID) USD 2,000,000 (Loan) USD 325,870 USD 4,250,000 (Rabobank, Banque populaire du Rwanda, Oromia Bank) USD 351,250

The project seeks to design and implement a credit guarantee scheme to enable smallholder farmers to gain access to commercial loans necessary to purchase and install improved coffee processing equipment; and to enable the cooperative societies to more effectively purchase and export the resulting high quality coffee produced through the improved processing practices. At the same time, the project responds to the emerging challenges to sustainable production of high quality coffee by providing technical assistance to promote good agronomic and processing practices. The accelerated flow of market information to all players in the coffee chain promotes good governance of the cooperative societies. The primary beneficiaries are the farmers who benefit

from technical and credit support to purchase inputs and farm equipment for coffee production. The lead role in terms of implementation of the grant is taken up by CABI. Rabobank coordinates the loan operations and also provides co-financing. ILLYCafe and UNIDO are also expected to contribute to the project. The local participating banks (Cooperative Bank of Oromia and the Banque Populaire du Rwanda) will benefit from capacity building in credit assessment and management. The co-operatives will also be able to export their coffee directly to the consuming markets. The project has so far been successful in the activities related to capacity development but less so in terms of loan disburse-

ments. Some key reasons for the slow loan disbursement have been identified as temporary liquidity issues and issues related to the credit worthiness of the cooperatives. Steps are being taken to resolve these issues to improve the disbursement rate. The project partners recognise that capacity building towards sustainable credit worthiness takes a long time and is a continuous process and this is being built into the project implementation process. The project is already showing benefits that were not identified in the design. For example Rwanda has recognised that the system of co-operative unions in Ethiopia is very effective and would like to develop a similar system in Rwanda based on the Ethiopian model.

CFC/ICO/51: Rehabilitation of Coffee Farmers in the DR Congo Submitting ICB Project Executing Agency Country Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

International Coffee Organization (ICO) CafĂŠ Africa International Democratic Republic of Congo (DRC) USD 1,611,447 USD 1,368,990 (Grant) (of which USD 700,000 from the OPEC Fund for International Development- OFID) USD 242,457

The overall goal of the project is to revive the coffee sector in the DRC and reduce the rural poverty at the national level. From a more specific perspective, the project seeks to improve sustainable livelihoods of coffee producers affected and/or displaced by war in three Eastern provinces of DRC (Orientale, North Kivu, and South Kivu) thus contributing to supporting their economic integration in their communities of origin through coffee farming. The project will contribute to a broader commodity specific goal: the revival of the coffee sector in DRC as well as the sustainable reduction of rural poverty as stated in the national coffee sector strategy (2011-2015).

The project will serve as a model for resettlement of persons displaced by war through providing a sustainable income base which will contribute to overall economic gains for the country at large. The establishment of mother gardens and seed gardens in collaboration with national research institutions will allow for the production of improved planting material (high yield and disease resistant) which will be disseminated through a network of local nurseries. The involvement of well-trained coffee extension services (ONC) will ensure that local coffee farmers are supported in the adoption of good agricultural practices which will lead to an increase in productivity. The project will also

support the creation of linkages between the various actors of the value chain so as to improve quality and marketing efficiency. This will result in improved coffee farm gate prices. Finally the sustainability of the project will be assured by supporting the enhancement of the coffee sector governance through a multi-stakeholder process. The Project implementation has been delayed because after approval of the project, the originally selected PEA, Cafe Africa indicated that it would not be in a position to act as PEA. The CFC identified VECO (Vredeseilanden) a suitable organisation to act as PEA for the project.

VI Summary of Ongoing Regular Projects 2012 | 55

Cotton CFC/ICAC/37: Improving cotton production efficiency in small-scale farming systems in East Africa (Kenya and Mozambique) through better vertical integration of the supply chain Submitting ICB International Cotton Advisory Committee (ICAC) Project Executing Agency CABI - Nairobi Countries Directly Benefiting Kenya, Mozambique Project Cost USD 2,457,000 Common Fund for Commodities USD 464,600 (Grant) (incl. USD 250,000 from the OPEC Fund for International Development – OFID) Counterpart Contribution USD 992,400 Co-financing USD 1,000,000 (EU/AAACP) The project sets out to improve the profitability and competitiveness of small-holder cotton production, making it an attractive enterprise providing a sustainable supply of seed cotton to local ginneries. It will facilitate the development and implementation of better management practices (BMP) that result in more sustainable production of cotton. The project is being implemented through direct introduction of improved practices at field level, involving farmers individually as well as through representative organizations, and it should provide operational lessons and recommendations with regard to small-holder production improvement in market-oriented production systems (Kenya) and those in concession oriented production environments (Mozambique). The project builds linkages within the value chain to ensure farmers have access to inputs, technologies and information that will enable them to produce more cotton more competitively and with greater profitability. The project forms part of the EU’s All ACP Agricultural Commodities Programme (AAACP), which provides substantive co-financing. The project purpose is

to “improve cotton production efficiency through formulation and promotion of Integrated Crop Management (ICM) options in cotton production systems in Kenya and Mozambique by involving private enterprises and public organizations”. The project will include i) Introduction of best practice ICM packages; ii) Promotion and adoption of ICM packages; iii) Building stakeholder linkages for sustaining ICM; and iv) Evaluation of the impact of ICM adoption.

on thorough field/client visits. Consultations and exchanges focusing on strengthening within-supply chain linkages are ongoing, whereby special attention is being paid to the position of the farmers therein. The project has been subject of an external expert evaluation undertaken in September 2012. The outcomes have given guidance to adjustment where deemed useful and recommendations made by the evaluation team have been incorporated in the 2013 work plan.

The project has reported satisfactory progress. Baseline studies have been undertaken in selected areas of both countries and the results thereof have been published and presented at the World Cotton Research Conference (2011) in Mumbai. Results of the survey’s and other technical cotton area assessments have been utilized to tailor-make optimum production cum crop protection packages to be used by the farmers in the project areas. Farmer Field Schools have been established and training-of-trainer programs have been initiated. Training programs and crop management practices have been developed (and are being monitored) based

Activities in 2013 will focus on continuation and expansion of training activities strengthening the position of small holders in the supply chain through regular meetings of actors in the supply chain. Main outcome of this year’s work will be transparent and operational information comparing the endof-project situation with the outcome of the base line study conducted at the start of the project, identifying key areas of progress (strengthening income security) for small holder cotton producers as well as drawing lessons at policy level resulting from the different cotton-sector structures in the two countries in the project.

CFC/ICAC/38: Prevention of Seed Cotton Contamination in West Africa (Burkina Faso, Côte d’Ivoire and Mali) Submitting ICB International Cotton Advisory Committee (ICAC) Project Executing Agency IFDC West Africa Countries Directly Benefiting Burkina Faso, Cote d’Ivoire and Mali Project Cost USD 7,045,800 Common Fund for Commodities USD 2,000,000 (Grant) (incl.USD 500,000 from the OPEC Fund for International Development – OFID) Counterpart Contribution USD 1,545,800 Co-financing USD 3,500,000 (EU/AAACP) The project aims to increase direct income accrued by small-holder cotton producers in the selected production areas through enabling them to produce and sell uncontaminated seed cotton. It is estimated that ultimately (once the system has gained credibility) income increases exceeding 5 – 10% of the current incomes can be realized. The project will facilitate producer training and provision of required harvest/collection inputs as well as building/strengthening the

required institutional arrangements between the different commercial partners involved in the early stages of the supply chain (producers and their organizations, traders, ginners, cotton companies, etc). Target is to have (at project-end, in 2012) some 27,000 farmers firmly established in the programme, who should jointly produce at least some 100,000 tons of seed cotton. The project forms part of the EU’s All ACP Agricultural Commodities Programme (AAACP), which

56 | Common Fund for Commodities Annual Report 2012

provides substantive co-financing (in the years 2010 – 2011). Parallel to the project activities, the World Bank (also AAACPfunded) initiated a programme that will focus on developing the required institutional and legislative arrangements at national level to ensure the regulatory/institutional sustainability next to the commercial sustainability resulting from the direct project activities. The project was approved in October 2009. During the first half of 2010 co-operative >>

arrangements were put in place with the lead cotton organizations (including producers, processors and marketing agents), after which the project made an effective start in the second half of 2010. During 2012 substantive progress has been reported. In preparation for the 2011/2012 crop more than 18,000 farmers have been trained, whereby it is to be noted that these were not evenly distributed over the three countries as planned. Due to the political situation in Cote d’Ivoire, fewer farmers could be reached than planned. This was “compensated” by increasing efforts in the other two countries, enabling a reach-out of some 8,500 farmers in each country. Parallel to training and awareness programmes addressing farmer groups in the project area, also the envisaged trainings to transporters, gin operators, etc was given. Improved

cotton-based harvest kits (consisting of sacks, tarpaulins and covers) have been locally produced and distributed. In that season, some 120,000 tons of seed cotton was produced by the participating farmers. Extensive sample taking has taken place to enable statistically relevant analysis for quality control/contamination detection in specialized laboratories in Mali and Burkina Faso. Although initial results look promising, more awareness training and quality control through-out the process of harvesting, collecting, storing, transportation, ginning etc seems required. These considerations have been taken into account when planning the final year’s activities. The project has been subjected to an external expert evaluation in December 2012. Overall findings regarding the project’s relevance, approach and results were positive.

Recommendations for improvement were taken into account in the planning of the final project activities. An important aspect that was noted during 2012 related to the cotton companies’ efforts to ensure realization of premium prices on the national and global markets. This aspect, which should ultimately enable higher prices to be paid to participating farmers requires further reflection and consultation with, in particular the marketing departments of, the cotton companies. This will need to be addressed in the remaining project period (up to end March 2013), and subsequently consistently discussed and monitored within the framework of the activities of the African Cotton Association (ACA) in its efforts to increase the overall quality and marketability of African cotton.

CFC/ICAC/40: ProCotton: Improving Productivity and Marketing of Cotton through Strengthening of Selected Producer Organizations in Eastern Africa Submitting ICB Project Executing Agency Project Cost Common Fund for Commodities Counterpart Contribution

International Cotton Advisory Committee (ICAC) Solidaridad (Netherlands) USD 840,000 USD 500,000 (Grant) (incl. USD 250,000 from the OPEC Fund for International Development – OFID) USD 340,000

The project intends to provide a range of services to selected producer organizations, thereby increasing producer incomes in sustainable manner. Based on self-assessments (if need be supported by project expertise) producer organizations can request support from the project in five fields: technical assistance (focus on agronomic practices); access to finance; market access; capacity building; and diversification/ value-addition. The current project is a pilot activity to assess the perspectives of using this approach to effectively access and support producer organizations in the African cotton sector, based on successful experiences with other commodities in other regions. The project has been approved by CFC in April 2011. The project has made an effective start-up in both project countries (Tanzania and Zambia) in October 2011.

aims to set-up sustainable contract farming systems with producers organized into semi-informal groups (“primary societies”). Support is provided in the form of seed supplies, extension services, services for certification of organic cotton and seed cotton purchase contracts. Biosustain is supported in providing these services to the farmer/groups through strengthening its own internal management, technical/ extension skills and its overall management, targeting the longer term commercial soundness of its operations. While overall progress is reported as being reasonably satisfactory (some 2,000 farmers have been involved in crop management/training programs), it has also shown that emphasis on a sound and focused commercial approach, structured towards consistent income generation (both at farmer as well as at Biosustain level) remains the basis for further development. Pure emphasis on organic cotton may (at least for the time

In Tanzania, the main counterpart is Biosustain, a ginning/trading company that

being) not be the most profitable way forward. This will be taken into due account in the implementation of the 2013 work plan. In Zambia, the project is working with CAZ, the Cotton Association of Zambia. Activities started slightly delayed but took off effectively early 2012. The activities focused on strengthening the internal CAZ structure and its technical capabilities to provide high quality support to member farmers, organized in so-called “study cycle” groups, This should particularly imply higher yields for the farmers (through improved production practices and better/cheaper inputs) and higher prices (partly through stronger negotiation skills of the famer representatives). The PEA reported that CAZ succeeded in reaching 13,000 farmers, strengthening their business practices, leading to higher yields and incomes. This is to be continued and documented further in planned 2013 activities.

VI Summary of Ongoing Regular Projects 2012 | 57

CFC/ICAC/44: Development of National Cotton Classing Systems in Kenya and Mozambique Submitting ICB Project Executing Agency Project Cost Common Fund for Commodities Counterpart Contribution

International Cotton Advisory Committee (ICAC) Wakefield Inspection Services Ltd. USD 3,051,430 USD 1,160,000 (Grant) (incl. USD 580,000 from the OPEC Fund for International Development – OFID) USD 1,891,430

The project assists both countries to setup effective classing structures which will enable sellers of cotton (including cotton producers selling seed cotton) to fully assess the quality and thus commercial value of their produce before offering this on the national or international market. Based on a visible government commitment, it is expected that by the end of the project, effective and operational instrument-based cotton classing will cover 100% of each country’s cotton crop, giving producers a better insight in the international and national market value of their produce.

The project has been approved by CFC in September 2011. Effective start-up in the two project countries (Kenya and Mozambique) was delayed to the second quarter of 2012, after which the identification, contracting and fielding of a key expert/consultant proofed more problematic than envisaged. When fielded, the consultant provided valuable analysis of the existing infrastructure in the field of cotton classing in both countries. This resulted in an extended “to do“ list for the national counterpart teams to bring the facilities up to the expected standards.

This process is ongoing and on track. In addition, an important study tour for key counterpart staff to the USA was set-up and undertaken, providing first hand information and training on the operation and management of 100% classing systems. Extensive consultations have taken place to assess the 2012 developments and to carefully plan to advance the 2013 activities while at the same time addressing outstanding 2012 activities.

Fish CFC/FSCFT/16: Production and Marketing of Value-Added Fishery Products in Eastern and Southern Africa Submitting ICB FAO Sub-Committee on Fish Trade (FSCFT) Project Executing Agency Common Market for Eastern and Southern Africa (COMESA) in collaboration with Lake Victoria Fishery Organization (LVFO) Countries Directly Benefiting Kenya, Tanzania and Uganda Project Cost USD 544,005 Common Fund for Commodities USD 378,525 (Grant) Co-financing USD 126,000 Counterpart Contribution USD 39,480 The key objectives of this project are threefold. First, the project establishes the parameters for improving economic benefits and financial returns on processed Nile perch, which is the main species exported by the three participating countries with access to the fishery resources of Lake Victoria. This is achieved through the development of sophisticated value-added products and using appropriate processing technologies. Market opportunities and trends in major markets are researched while the investment

requirements for commercial production are also assessed. Secondly, the project aims at improving quality assurance mechanisms, the processing environment and awareness of standards commensurate with the new range of value-added processed products. Thirdly, the project establishes feasible mechanisms for the provision of micro-finance to facilitate the production and marketing of improved products which contribute to local food security and the availability of animal protein for domestic use.

After several years of operation, the project made some progress, particularly includes National Reports on the Status Nile perch and Dagaa fishery of Lake Victoria in Kenya, Tanzania and Uganda, International Markets Reports on Nile perch, and Manual for the Production of Value-added Nile perch fishery product. Dissemination of value-added products were carried out. The project will be closed after some financial issues are settled with COMESA and LVFO.

CFC/FSCFT/27: Technical assistance for the upgrading of the small-scale fisheries and their integration in the International Trade Submitting ICB FAO Sub Committee on Fish Trade Project Executing Agency The Intergovernmental Organisation for Marketing Information and Co-operation Services for Fishery Products in the Arab Region (INFOSAMAK) Countries Directly Benefiting Djibouti, Morocco and Yemen Project Cost USD 1,483,158 Common Fund for Commodities USD 860,000 (Grant) (inc. USD 500,000 from the OPEC Fund for International Development - OFID) Co-financing USD 42,368 Counterpart Contribution USD 580,790

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The project is designed to upgrade of smallscale fisheries and fish processing industry in the three benefiting countries namely Djibouti, Morocco and Yemen. The overall objectives of the project are a) Improving the competitiveness of the small-scale fisheries and increasing their contribution in the national economies of the benefiting countries; b) Development of value-added (chilled/ fresh and frozen) seafood products using vacuum packaging technology; c) Improving the domestic fish market; d) Promoting inter-

regional fish trade; e) Facilitating access to export markets which will boost investment opportunities and reduce. The project is coming to closure. One of the participating cooperatives in Morocco- Merja Zerga received the ecolabelling certification from Friend of the Sea for hake and sole. In December 2012 a regional seminar on “Fisheries cooperatives: vector of sustainable development” was held in Casablanca with the participation of 60 people from the re-

gion. Themes discussed were issues relevant to small-scale fisheries and the role of cooperatives in economic and social development of the region: responsible fishing, sustainable development, upgrading of small-scale fisheries, value-addition and integration of small-scale fisheries products in national and regional trade. In Yemen, A partner company was established within the framework of the project and the company now process and export fishery products of local cooperatives to many countries.

CFC/FSCFT/29: Promotion of Processing and Marketing of Freshwater Fish Products: Bangladesh, India, Indonesia, Pakistan and Sri Lanka Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Sub Committee on Fish Trade Centre for Marketing Information and Advisory Services for Fishery Products in Asia and Pacific (INFOFISH) Bangladesh, India, Indonesia, Pakistan and Sri Lanka USD 1,498,331.00 USD 901,574.00 (Grant) (of which USD 450,000 from the OPEC Fund for International Development - OFID) USD 596,757.00

The project is to provide support for both export and domestic marketing of freshwater fish and their products from the Asia-Pacific Region in a sustainable manner; to provide technical assistance to facilitate market development through innovative packaging/

presentation, reducing post-harvest losses and ensuring safety/ quality of freshwater fish products marketed; to encourage small/ medium scale operators in production and marketing of freshwater fish species in export processing including domestic marketing and

encourage investment in the sector. The project is making progress in beneficiary countries except Pakistan. Series of training workshops were held in countries and participating companies were proactively working on valueadded fishery products development.

Grains/ Roots and Tubers CFC/FIGG/46: Sorghum Value Chain Development, East Africa Submitting ICB FAO Intergovernmental Sub-Group on Grains Project Executing Agency European Development Co-operative (EUCORD) Countries Directly Benefiting Tanzania, Uganda, Kenya Project Cost USD 4,044,667 Common Fund for Commodities USD 5,000,000 (Grant) (of which USD 500,000 from the OPEC Fund for International Development - OFID) Counterpart Contributions USD 1,661,667 Co-financing USD 1,383,000 Main goal of the project is to improve the level of food security and living standards of sorghum farmers in Eastern Africa by a quantitative and qualitative increase in sorghum production and the simultaneous provision of a sustainable market. Among other activities, a Public Private Partnership (PPP) will be initiated in order to substantially enhance the sorghum supply chain from primary producers to large scale agro-industrial processors. The strategic goal of the private sector partner East African Breweries Ltd. (EABL) is to substitute a considerable amount of imported grains through locally produced sorghum. As an outcome of the project, sorghum farmers will be able to improve productivity and increase their net incomes through greater access to improved inputs, processing technologies, and marketing options provided through commercial agribusinesses and producer associations.

The project would build upon substantial experiences gained within the CFC financed project “West African Sorghum Supply Chain” (FIGG/34) that has been awarded with the 2010 World Business & Development Award issued jointly by the International Chamber of Commerce, the United Nations Development Programme (UNDP) and the International Business Leaders Forum. On the basis of the successful implementation of FIGG/34, the proposed project seeks to make a decisive step forward; that is by introducing new beverage brands that are marketed on the basis of their 100% content of locally sourced raw materials. EABL’s intention is to launch such a new exclusively sorghum based beverage brand as soon as a reliable regional sorghum supply chain is established. The project is now in its second year of implementation and overall progress is good.

Data available for Kenya and Uganda shows that sorghum sales already lead to an accumulated increased income for participating farmers by more than 1.2 mln USD. While the increase in volumes of white sorghum being delivered from smallholder farmers is already significant (close to 10, 000 MT), they do not fully meet the ambitious milestones set by the private sector partner EABL. However, there are clear indications that smallholder farmers are beginning to substitute maize by white sorghum, due to its ease of cultivation, its drought resistance and its palatability. Also due to anticipated yield increases as the project continues, the PEA remains confident that the end of project targets will be reached and that many of these targets, e.g. number of families being reached, may even be surpassed. The collaboration and support of the private sector partners is reportedly very good. VI Summary of Ongoing Regular Projects 2012 | 59

CFC/FIGG/31: Potato Value Chain Development in West Africa Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Intergovernmental Group on Grains European Co-operative for Rural Development (EUCORD) Guinea and Senegal USD 3,584,026 USD 794,476 (Grant) (of which USD 100,000 from the OPEC Fund for International Development - OFID) USD 1,789,550

The overall objective of the project is to develop a competitive potato sector in West Africa. Specific objectives are to improve the efficiency of production, the volume of locally produced potatoes, secure the supply of the commodity, and to improve the income of persons and businesses along the West African potato value chain. This will be achieved by (a) increasing the productivity and production of consumption potatoes, (b) developing and strengthening local seed potato production and seed production enterprises, (c) developing and strengthening producers associations, and (d) increasing national and regional market opportuni-

ties and (e) improving national and regional policy co-ordination. The project is in its last year of operation. Seed potatoes produced in the highlands of Guinea have the same quality as European imports but come at a substantial price discount and thus lead to an efficient regionally integrated potato sector. Up to date more than 40,000 tons of potaotes and close to 6,000 tons of seed potatoes have been produced with project assistance. Informal export is also taking place now to Liberia, Sierra Leone and Mali. Farmers are increasingly adopting highly productive varieties

supplied by the private sector partner AGRICO which are being reproduced in Guinea and apply better farming techniques. This has led to an increase of yields by an average of 50% in Guinea and 25% in Senegal (to 15 to 29 tons per ha) above a profitable level for farmers Until now, the presence of Ralstonia has been a factor limiting local seed exchange between Guinea and Senegal. However, the Plant Protection agencies of both Senegal and Guinea refined all the techniques of Ralstonia detection and made them operational. At this stage it is highly likely that the project goals and objectives will be fully met.

CFC/FIGG/41: Enhanced Livelihood Opportunities of Smallholders in Asia: Linking Smallholder Sweet Sorghum Farmers with the Bio Ethanol Industry

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The project addresses an important issue: enable smallholder farmers - including those located away from major industrial settlements - to participate in the market of biofuel production. Sweet sorghum has been identified as an effective feedstock for bio-ethanol production. The project will mobilise groups of smallholder sweet sorghum farmers in order to improve crop productivity and enhance production and marketing of sweet sorghum to distilleries. The project will also engage private seed companies and input suppliers for effective input delivery mechanisms. Apart from direct delivery arrangements for neighbouring villages, the project will link marginal farmer groups with commercial distilleries through introduction of decentralised processing of sweet sorghum into syrup. Overall the project will contribute to increased incomes to farmers, without compromising food and fodder security. The project will encourage a collabora-

FAO Intergovernmental Group on Grains ICRISAT China, India and Thailand USD 3,013,601 USD 1,997,579 (Grant) USD 1,016,031 tive action to utilize the potential of sweet sorghum to the advantage of a number of countries in Asia, and other parts of the world, bringing improvements in incomes of the rural population. The participation of the private sector ensures a demand driven approach and practical results that could have a considerable demonstration effect for duplication. After a successful first year of implementation in India and China, the Indian private sector cooperating partner was forced to close operations due to imposed unfavourable policies that prevented the processing plant to operate on an economically viable level. This is in contrast to China, where the project has managed to link up with a second private sector partner (ZTE) who is purchasing sweet sorghum on a forward contract basis from surrounding farmers on a large scale with plans for further expansion.

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Quantitative indicators set for the project are well on target. ZTE currently cultivates sorghum on 1349 ha of leased land and 1435 ha under a contract farming agreement with neighbouring smallholder farmers. Average recorded stalk yield was between 61 tons and 75 tons /ha. The project continues to assist farmers to improve agronomic practises and achieve higher yields (20% increase compared to last year). While sweet sorghum is a new crop in the project area there are ex ante yields available for comparison. However, the now achieved yields of stalks per ha recorded in saline-alkaline soils of Inner Mongolia are one of the highest in the world. While the ZTE distillery is not yet operating on full capacity, the company has crushed 80,000 t of stalk and produced 4000 t of ethanol in 2012. In addition the company sold 15,000 tons of bagasse to the electricity industry at and 5000 tons of bagasse was used as fuel by ZTE.

CFC/FIGG/43: Small Scale Cassava Processing and Vertical Integration of the Cassava Subsector in Southern and Eastern Africa – Phase II Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Intergovernmental Group on Grains International institute of Tropical Agriculture (IITA) Madagascar, Tanzania and Zambia USD 4,561,153 USD 1,298,370 (Grant) (of which USD 100,000 from the OPEC Fund for International Development - OFID) USD 2,262,783

The overall objective of the project is to enable the development and commercialisation of good quality and competitive cassava products in a manner that significantly improves the economic welfare of the stakeholders, particularly the small-scale farmers and processors of the targeted countries. Phase I of the project (implemented between 2003 and 2007) successfully identified market opportunities for the development and promotion of primary cassava derivative products, especially High Quality Cassava Flour (HQCF), as tradable commodities in the region. In addition, phase I identified novel cassava processing technologies that are suitable for rural conditions. The current phase II project

aims at providing the needed catalyst to stimulate private sector investment, including credit institutions, in the sector by establishing profitable two-step HQCF pilot supply chains in each of the three project countries. The project will serve as a model for investment in HQCF enterprises by local entrepreneurs and business community across Eastern and Southern Africa. At the end of the project, it is expected that the operations of established pilot units will have reached the level of self-sufficiency and economic sustainability for all stakeholders along the cassava value chain, including producers, processors and consumers.

With technical assistance by the project, several private investors have by now invested in either commercial production of cassava or processing facilities. However, so far only in Tanzania a commercial bakery is now seriously considering in installation of equipment to process cassava flour that is marketable for urban mass markets. This bakery will also be the first licensee of a project led, commercially designed, cassava flour consumer brand for the High Quality Cassava Flour retail end market. Initial target are sales of 10 tons of HQCF per month. If successful this will be the final step towards a credible and sustainable establishment of cassava as a locally produced competitor to imported wheat flour.

CFC/FIGG/44: Increased Production of Root and Tuber Crops in the Caribbean through the Introduction of Improved Marketing and Production Technologies Submitting ICB FAO Intergovernmental Group on Grains Project Executing Agency Caribbean Agricultural Research and Development Institute (CARDI) Countries Directly Benefiting Haiti, Jamaica, Trinidad & Tobago, St. Vincent and the Grenades, Dominica and Barbados Project Cost USD 3,392,805 Common Fund for Commodities USD 2,213,850 (Grant) Co-financing USD 1,054,680 (EUAAACP) Counterpart Contribution USD 124,275 The overall goal of the project is to support the development of a commercially viable and sustainable regional root and tuber crop industry in the Caribbean Community (CARICOM) countries that facilitates the improvement of livelihoods and overall food security and sovereignty. The project purpose is to develop Caribbean root and tuber commodity value chains in several pilot areas that can serve as models for implementation elsewhere in the region. The project seeks to alleviate identified key constraints along the value chain of each crop and explore market opportunities. Interventions address production issues as a means of satisfying the market demands for quality and quantity as well as consequential marketing short-

comings and new opportunities. The project started in late 2010 and has been identified as a priority of the EU-AAACP Commodities Programme for the Caribbean. Project operations have been success­fully completed. Main result is that ­functioning network of plant multi­plication and hardening facilities has been established that will enable Caribbean islands to multiply high quality and disease free planting material for various roots and tubers on a sustainable basis. In total 8 propagation facilities and four hardening facilities have been established. Two germplasm banks, two tussie culture laboratories and one fully equipped virus testing laboratory have been

made operational for cassava, sweet potato and yam planting material propagation in the Caribbean. At the same time punctual interventions were made along identified value chains for roots and tubers that show promising results. In Haiti, implementation on the ground are on-going up to December 2013, since activities only commenced at the end of 2011 due to the difficult circumstances resulting from the earthquake. Project activities are adapted to the prevailing circumstances and focus on maximum food supply (e.g. distribution of improved planting material). In all project countries yields are observed to increase between 20 and 100% when using improved (virus free) planting material.

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Hard Fibres CFC/FIGHF/13: Cleaner Integral Utilisation of Sisal Waste for Biogas and Biofertilizers

Submitting ICB Project Executing Agency Country Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The project has established a pilot production facility to demonstrate the feasibility of producing biogas and energy from sisal processing waste. The project also set out to establish the appropriateness of using the residues as a basis for solid and liquid fertilizer production. In addition to addressing the technical requirements of sisal-based biogas and biofertilizer production, the project should determine the overall viability of the proposed process, thereby providing a substantial contribution to increasing the profitability of sisal production and processing, and to reducing environmental degra-

FAO Intergovernmental Group on Hard Fibres United Nations Industrial Development Organisation (UNIDO) Tanzania USD 1,474,812 USD 927,712 (Grant) USD 547,100 dation caused by the disposal of currently unutilised and untreated sisal waste, which is around 95% of the sisal leaf. The project succeeded in successfully establishing the biogas production facility (in Tanga, Tanzania) with a gas production that exceeds the quantities that originally had been expected. The gas production unit (including the conversion into electricity) has been operating intermittently for several years and currently the final technical reporting in combination with financial/economic feasibility studies is being undertaken as a final responsibility of the Project Executing Agency.

A mission was undertaken by an external consultant contracted by UNIDO, but the draft report was not considered acceptable by CFC. Revision of the report has taken more time than expected. CFC is, however, following up with UNIDO to have the final report published with an acceptable and informative content, in such a way that the report will be informative and useful for interested parties. The study will be placed on the CFC web site once it is received from UNIDO.

Jute CFC/IJSG/21: Development and Application of Potentially Important Jute Geo-textiles Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart contribution

International Jute Study Group (IJSG) National Jute Board (India) Bangladesh, India USD 3,962,826 USD 2,045,000 (Grant) (incl. USD 1,000,000 from the OPEC Fund for International Development – OFID) USD 1,917,826

The project investigates the commercial acceptability of potentially important jute geo-textiles suitable for use in two identified end-uses namely soil erosion control and rural road construction in the context of conditions prevalent in Bangladesh and India. It is expected that results will lend themselves to be extrapolated to conditions in other potential market countries. The project includes development of material specifications, field application/installation protocols and design methodologies for these applications in compliance with requirements and standards set by public and private sector users. Market needs assessments and compliance studies are included in the project. It is expected that this project will lead to substantial expansion of the market uptake of jute geo-textiles for use in the fields of soil erosion control and rural road construction in commercially competitive markets (both domestic or regional and international). The derived increased demand for jute is expected to be ultimately 265,000 tons (based on a 10% market share of 5,300 mln m2 in 2013/14).

The five-year project has made an effective start in 2010 with the establishment of the two project management units in Bangladesh and India, under the overall leadership of the National Jute Board (India). Core of the project is establishment of extensive field trial sites where pre-selected jute geotextiles are being utilized to establish material performance. Two major subcontracts focus on analysis supply chain and marketing aspects of JGT and on undertaking corroborative laboratory trials duplicating under controlled conditions major field trial environments. In addition, national scientific agencies are undertaking research and analysis activities in support of the field trials and the understanding of their outcomes. In addition, two national high-level technical committees of non-project experts, mainly from national regulatory bodies, have been set-up to provide authoritative advice on core activities undertaken or planned to be undertaken by the project.

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While initially 16 trial sites were identified in India, work has meanwhile been completed in 12 locations with another 10 locations with work in progress. In Bangladesh, 10 locations were identified. Work has been completed in 5 locations, with another 4 with work in progress. Adding another 5 location is under consideration. For the sites where work is completed the focus is now on effectively monitoring the behavious of the area throughout the remaining project period. Monitoring methodologies have been developed and staff has been trained in their use. The project has been subjected to an external expert evaluation in November 2012. The evaluation team was generally satisfied with its findings, but has given useful recommendations to be kept in mind in the remaining project period. The project has an operational website where progress can be monitored (

CFC/IJSG/25: Increased Production Efficiency in Small-holder Kenaf Production Systems for Specific Industrial Applications Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart contribution

International Jute Study Group (IJSG) United Nations Industrial Development Organization (UNIDO), Vienna Bangladesh, China, Malaysia USD 3,204,177 USD 2,107,746 (Grant) (incl. USD 1,000,000 from the OPEC Fund for International Development – OFID) USD 1,096,431

The overall objective of the project is to demonstrate the competitiveness of the kenaf sector and to prove that it can contribute to increased incomes from kenaf production and processing for the current producers of the fibre. The project is designed to strengthen the capacity of the producers to meet the demands set by the fibre users/industry, in terms of quality of the material, at competitive cost and with an assured, reliable system of (high volume) supply. Tangible targets have been set for the agricultural components as well as the fibre extraction/processing components of the project. The industry/factory trials

will provide detailed information on the technical suitability of the material for the identified applications. Whereas no success can be ascertained beforehand, proper documentation of the trials and their results will provide insight in the perspectives for successful industrial uptake. The delays encountered during 2010, following the project start-up in 2009, have resulted in less than envisaged progress in 2011. To the delays in variety selection and subsequent seed multiplication programmes, problematic arrangements related to release and transfer of the targeted plant-

ing materials from Bangladesh and China to Malaysia contributed to overall relatively low levels of progress. Towards the end of 2011, however, effective steps had been taken and it was envisaged that during 2012 the project would get back on track. Unfortunately, progress has been less than planned and expected. The project was due for a mid-term evaluation, but this is postponed as a result of lack of substantive progress. The PEA has committed itself to submit a documented request for project extension, with a now proposed completion date of mid 2014. Planning of 2013 activities is based on this extended duration.

Meat and Dairy CFC/FIGMDP/18: Improving the Productivity and Market Access of Smallholder Cattle Farmers in Mozambique and Zambia Submitting ICB FAO Intergovernmental Group on Meat and Dairy Products Project Executing Agency Golden Valley Agricultural Research Trust (GART), Zambia Countries Directly Benefiting Mozambique and Zambia Project Cost USD 1,798,000 Common Fund for Commodities USD 999,000 (Grant) (of which USD 500,000 from the OPEC Fund for International Development) Counterpart Contribution USD 799,000 The project is aimed at improving the volume and value of the marketable off-take of live beef cattle through the enhanced productivity and quality of livestock, thereby increasing the incomes and livelihoods of traditional small and medium scale cattle farmers in the selected regions of Mozambique and Zambia. A total of 1500 cattle farmers, evenly spread between the two implementing countries are directly targeted by the project. The project undertakes numerous training courses on a broad range of topics linked to livestock productivity and marketing. Other activities include training of farmers, lead-farmers and facilitators, especially on areas of market access, improved feeds

and feeding and animal health services. The combination of training and extension services will offer small & medium scale farmers the opportunity to market their cattle to the best advantage, thus benefiting of increased incomes, as a result of improved productivity of livestock and improved access to the formal market for their live cattle. The project was effectively launched in August 2011 in Maputo, During the first year of project implementation, activities have been f­ ocusing mainly on setting up the project structure and personnel on field, acquiring the foreseen equipment, gathering base line data on the livestock sector in both implementing countries, providing training for livestock

extension and animal health personnel on cattle feeding and animal husbandry and field demonstrations for cattle farmers, producing technical extension materials in the form of fact sheets and manuals on herd management. A first steering committee meeting and field visit to the target farmers in Mongu, Western Zambia has been held in October 2012. The mission highlighted significant progress in terms of organization and management, training of extension staff and updating of training materials (posters & manuals), while some delays have been registered on farmers’ training and on market access-related activities which will be considered as a priority in the first half of Year II.

VI Summary of Ongoing Regular Projects 2012 | 63

CFC/FIGMDP/19: Smallholder Dairy Development in Bangladesh, Myanmar and Thailand: Improving the Bargaining Power and Sustainable Livelihood of Smallholder Dairy Farmers, through the Enhancement of Productivity and Market Access in Dairy Submitting ICB FAO Intergovernmental Group on Meat and Dairy Products Project Executing Agency FAO Regional Office for Asia and the Pacific Countries Directly Benefiting Bangladesh, Myanmar and Thailand Project Cost USD 7,237,229 Common Fund for Commodities USD 1,999,778 (Grant) (of which USD 1 million from the OPEC Fund for International Development - OFID) Co-financing USD 508,901 Counterpart Contribution USD 4,728,550 The project is aimed at improving the bargaining power and sustainable livelihoods of smallholder milk producers in Bangladesh, Myanmar and Thailand and enhancing the production and marketing of quality milk and dairy products. The project interventions focus on improving the quality, productivity and market access of smallholder dairy farmers in the 3 targeted countries. Organization of activities along the value chain including mechanisms for milk collection, processing, pricing, marketing and payment to farmers will vary across project locations to suit the local conditions. The value derived from dairy production will substantially improve. While the project tar-

gets specific country interventions based on nationally identified priorities, it also includes a regional element that aims at establishing the Asian Dairy Network to share knowledge and disseminate market information about smallholder dairy across the region. 5000 smallholder milk producers organized in Milk Producers’ Organisations (MPOs) in 6 selected pilot milk-shed areas are expected to directly benefit from the project in terms of improved market access and milk productivity, reduced post-harvest losses and improved quality and shelf-life of milk and dairy products, leading to higher incomes and food security through increased milk consumption and sales. The availability

of more and safer milk is also expected to benefit a further 6,000 children under pilot school milk nutrition schemes. The inception meeting was held in Bangkok and Chiang Mai in February 2011. The project has completed the 2nd year of implementation. Activities are progressing in line with the approved annual work plans.In 2012 project activities have been focusing on enhancing dairy extension services, feeding and fodder management and organizing the pilot school milk nutrition schemes in Bangladesh and Myanmar.. A Mid Term Review meeting for the assessment of the progress of project activities has been scheduled for the second half of April 2013 in Chiang Mai, Thailand.

CFC/FIGMDP/20: Diversification of the Caribbean Livestock Sector through the Production of Small Ruminants Submitting ICB FAO Intergovernmental Group on Meat and Dairy Products Project Executing Agency Caribbean Agricultural Research and Development Institute (CARDI), Trinidad & Tobago Directly Benefiting Countries Jamaica and Trinidad &Tobago Project Cost USD 4,031,000 Common Fund for Commodities USD 1,428,750 (Grant) Counterpart Contribution USD 2,443,259 Co-financing USD 159,000 The project aims at improving the production, productivity and quality of small ruminant meat and the availability of breeding stock in order to enhance the income and food security of small scale mutton & chevron farmers and meat processors in Jamaica and T&T, reducing, at the same time, the dependency from food imports into the targeted countries. The meat quality will be improved by enhancing safety and quality of livestock through the systematic training of farmers in hygiene and sanitary standards, improved animal husbandry and linkages with service providers, private meat processors and traders. The increase in livestock productivity will be accomplished as a result of strengthening feed management and veterinary services and implementing train-

ing activities on improved animal nutrition. A medium scale abattoir will be refurbished in each target country as a training tool for best practices for meat processing storage and packaging. The project was effectively launched in 2011 in the presence of the Minister of Agriculture and Fisheries of Jamaica. In T&T, 152 sheep (144 ewes and 8 rams) and 126 goats (118 does and 8 bucks) were purchased from USA and placed into the project Livestock Station, while the purchase of the remaining 10 (4%) animals (6 ewes, 2 rams and 2 bucks) is expected be finalized in the first quarter of 2013. In Jamaica, 75 ewes, 5 rams, 49 does and 3 bucks, for a total of 132 animals were purchased from USA and

64 | Common Fund for Commodities Annual Report 2012

placed into the project Livestock Station, while the purchase of the remaining 112 (46%) animals (75 ewes, 5 rams,25 does and, 7 bucks) is expected to be finalized in first quarter of 2013. With respect to the processing component, refurbishment of the abattoir at the Livestock Station in Jamaica is being completed (80%). In Trinidad & Tobago there has been some progress in pasture development and construction and refurbishment of animal housing and barns. In Jamaica, maintenance works were continued on existing pastures and animal housing and construction of the Training Facility has been completed. Priorities for the second year include the further procurement of breeding stock and the construction of animal housing.

Oilseeds/Oils/Fats CFC/FIGOOF/26: Production of Oily Plants and Commercialisation of Natural Vegetable Oils as Fuel in Replacement of Diesel for the Public Transport in Peru and Honduras Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Intergovernmental Group on Oilseeds, Oils and Fats German Service for Social and Technical Co-operation (Deutscher Entwicklungsdienst), DED Peru and Honduras USD 4,343,800 USD 2,731,800 (Grant) USD 1,612,000

Through a Public Private Partnership approach, the project meant to promote the cultivation of alternative crops like Rape and Jatropha Curcas by smallholder farmers, which will be processed and subsequently used as a substitute fuel by adapted private commuter transport vehicles in selected cities in Peru and Honduras. Progress in 2012 has been less than hoped for, although

valuable lessons were learned and useful ­experiences were gained through-out the year. Activities focused on agricultural aspects (addressing optimal production environments/requirements), processing and the marketing and use of the oil. Results pointed to the importance of proper cost/ yield assessment when determining land use for Jatropha or rape seed production. Per-

spectives for oil production within existing agricultural structures (e.g. small-scale vs larger scale/commercial operators) should be carefully assessed. Training programmes for engine conversion/adaptation have been held. The project will be completed by mid 2013 following an international dissemination meeting in February. Extensive project documentation is under preparation.

CFC/FIGOOF/27: Development of Export-oriented Sesame Production & Processing in Burkina Faso and Mali Submitting ICB FAO Intergovernmental Group on Oilseeds, Oils and Fats Project Executing Agency Royal Tropical Institute (KIT) Countries Directly Benefiting Burkina Faso and Mali Co-financiers OPEC Fund, KIT, NGO groups in both countries, Governments and the Semafo Foundation (Canada) Project Cost USD 3,889,298 Common Fund for Commodities USD 1,271,920 (Grant) (incl. USD 750,000 from the OPEC Fund for International Development – OFID) Common Fund for Commodities USD 473,025 (Loan) Co-financing Grant USD 1,146,966 Co-financing Loan USD 473,025 Counterpart Contribution Grant USD 524,362 The project has the overall goal to increase income and alleviate poverty of smallholder sesame farmers in Burkina Faso and Mali through improved production and processing of sesame seed and improvement of the position of small producers in the value chain. The main purpose of the project is the sustainable improvement of the profitability of smallholder sesame production leading to an average 50% increase in income per hectare by the participating farmers. The projects implements improved farming practices, introduction of new equipment, training of personnel and increased exports. The position of the producer in the value chain is expected to be improved, and communication and coordination between producers, public and private actors in the sector are actively encouraged. A feasibility study for the setting up of an industrial-scale processing facility will be undertaken, and the management of the supply chain will be initiated through producer-private sector collaboration, fa-

cilitated by the project. Both the quality and the quantity of sesame supply are expected to improve to better answer the demands of the processors and exporters. Activities in 2012 have shown a huge demand from farmers to participate in the Farmer Field School (FFS) training opportunities. More than 8,000 effectively participated up to end 2012, which is five times the number initially envisaged to be trained throughout the full project. Provisional results show yield increases of up to 75%. A manual for sesame FFS has been published by the project and is widely used in both countries. Experiences gained in 2011 and 2012 are further analyzed and being used in the 2013 program, aiming to lead to an additional 2,000 farmers trained. Collection centres have been established in Burkina Faso (4) and in Mali (14 established/improved) and their effective utilization and operational functioning will be assessed based upon two operational years (2012 and 2013).

The results obtained in supporting local, commercial sesame processing are less outspoken, as the ultimate progress is determined by commercial considerations of local entrepreneurs. It became clear that the project can only provide a supportive role in reply to demands from the commercial sector. Focus for 2013 is on running the FFS for another season and to document carefully the lessons, costs and benefits of such system. In addition, the relevance and longer term commercial sustainability of the collection centres and their services will be documented. In spite of the sometimes difficult operational conditions due to political unrests in both countries, project progress is considered to be satisfactory. It is expected that tangible results will be reported by the end of the project in December 2013.

VI Summary of Ongoing Regular Projects 2012 | 65

CFC/FIGOOF/28: Improving the Income Generation Potential of the Oil Palm in Nigeria and Cameroon Submitting ICB FAO Intergovernmental Group on Oilseeds, Oils and Fats Project Executing Agency United Nations Industrial Development Organization (UNIDO) Countries Directly Benefiting Cameroon and Nigeria Project Cost USD 4,656,040 Common Fund for Commodities USD 2,886,040 (Grant) Counterpart Contribution USD 1,300,000 Co-financing USD 470,000 The long-term objective of the project is to promote the development of the sustainable production and utilisation of the oil palm in West and Central African countries, with a focus on markets as the driving force behind such sectoral development. The project will contribute to the reduction of poverty in rural areas where palm oil is widely cultivated creating rural and urban employment and value-addition to ultimately improve the economy of the target countries. The project strategy has been developed utilising the value chain approach with interventions formulated to target critical areas along the value chain from production of the raw material at the farm level to processing at the enterprise level and marketing. Emphasis has been laid

on value addition with focus on small scale palm oil processing enterprises.In addition, the project will be focusing its interventions on three areas as follows: improving the technological and skills inputs in palm oil processing through technology transfer; developing capacity for the sustainable development and supply of fresh palm fruit bunches; improving market access and competitiveness for palm oil produced in the region. The project activities have been initiated in 2010.

also leading to delays in training on operation and effective maintenance programs. Likewise, introduction of new and improved varieties and improved farm management/ agricultural practices have been delayed in both project countries. Although in some fields successful training activities have been undertaken, they have not yet been documented for wider dissemination. Important aspects like national/regional oil palm sector planning and strategy development have not yet been effectively addressed.

Progress in 2012 has been less than expected, although in the later part of the year the project has been catching up. Key problem was that the establishment of the pilot processing units had been delayed, thereby

In view of 2013 being the last project year, there is an increasing pressure on effectively implementing all remaining scheduled activities, in order to avoid last minute complications with an ad-hoc project extension.

CFC/FIGOOF/30: Improving the Competitiveness of Small Scale Oil Palm Farmers and Production in Latin America and the Caribbean: Bridging the Yield Gap Submitting ICB FAO Intergovernmental Group of Oilseeds, Oils, and Fats Project Executing Agency Latin American and Caribbean Fund for Oil Palm Innovations (FLIPA) Countries Directly Benefiting Colombia, Ecuador Project Cost USD 3,847,314 Common Fund for Commodities USD1,840,794 (Grant) (incl. USD 678,755 from the OPEC Fund for International Development – OFID) Co-financing USD 2,006,520 Yield of oil palm varies significantly both within and across production regions in the project countries, with differences estimated between 5 and 15 t/ha of fresh fruit per hectare. Most of it can be bridged through improved crop management practices and appropriate programs for technology transfer. The project goal is therefore to prioritise the most promising crop practices for high yields in oil palm and design, implement and execute an appropriate program of technology transfer for small growers in order to (a) bridge yield gaps; (b) enhance the Latin American and Caribbean competitiveness in oil palm production through improving current on-farm yields; (c) increase and sustain the profitability of investments of small growers specially the low-income farmers who are

last in the bridge often the weakest link in the value-chain. The project activities have been initiated in 2010. Both the Project Executing Agency and the Supervisory Body report that project activities are being implemented as planned and that the project is likely to be successful. Since it became visible that lead farmers achieve more than 30% in yield increases when adopting newly introduced management techniques, relevant national institutions in the palm oil sector and commercial extractors (as central links in the value chain) take ownership of the project which is important for future further “snowball” dissemination. In Ecuador the number of participating extractors has increased from initially 2 to 22. These extractors employ

66 | Common Fund for Commodities Annual Report 2012

technicians for dissemination of technology to increase raw material supply. Similar achievements are to be noted in Colombia. The project is now reaching the stage where project staff-induced developments are slowly reduced, placing more emphasis on project beneficiary/partner induced expansion developments, supported by trained staff from national organizations. One constraint in that respect is the noted departure of trained staff of national collaborating institutions and the PEA. It is important to ensure a commitment of both national partners to maintain staff after the project has been closed in order to ensure further dissemination of results. This will be specifically addressed during monitoring/supervision activities throughout 2013.

CFC/FIGOOF/32: Integration of Small Scale Farmers into the Market Economy Through Soybean Value Chains in Malawi and Mozambique Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Intergovernmental Group on Oilseeds, Oils and Fats International Institute of Tropical Agriculture (IITA), Nigeria Malawi and Mozambique USD 2,790,562 USD 1,756,830 (Grant) (incl. USD 800,000 from the OPEC Fund for International Development – OFID) USD 1,033,732 Out of which: USD 704,655 (IITA), USD 243,817 (National Institutions) and USD 85,260 (Private Sector)

The project will promote the integration of subsistence farmers into the market economy by linking them to end user industries. Soybean production is expected to increase and the project targets to establish pilot demonstration plants for processing of soybean into products of high nutritional and industrial value, and the introduction of processed products. These products are to be marketed to the industry and to other emerging markets for import substitution. It is expected that increased demand for soybean and its products, in two of the most poor counties in Africa, would stimulate

demand for improved soy products, and consequently, increase the competitiveness of local production. The project launching meeting was held in Nampula, Mozambique in September 2011. The project has made a fairly satisfactory start-up into 2012, in particular in the activities focusing on training on, and introduction of, improved seed varieties and crop management practices. First year experience revealed that close oversight and monitoring of field activities is required in order to ensure reliable results from the efforts

undertaken, in particular with regard to the important seed production activities. The project involves a fair number of participating institutions and organziations, each providing important inputs and institutional contributions to the project. It was noted that specific attention needs to be given to effectively facilitate and coordinate the respective needs for support and the diverse capabilities of each entity to contribute to substantive project activities. This will be an important point for the Project Executing Agency to address when implementing the 2013 work plan.

Olive Oil CFC/IOOC/06: Programme for the Development and Dissemination of Sustainable Irrigation Management in Olive Growing Submitting ICB Project Executing Agency Countries Directly Benefitting Project Cost Common Fund for Commodities Counterpart Contribution

International Olive Council (IOC) International Centre for Agricultural Research in the Dry Areas, (ICARDA), Aleppo, Syria Morocco and Syria USD 1,431 300.00 USD 799,460.00 (Grant) (of which USD 399,730 from the OPEC Fund for International Development - OFID) USD 631,840.00 in kind

The main objective of this project is to enhance crop yields of the smallholder olive farmers in Morocco and Syria, through the optimisation of water management practices applied to olive cultivation. Improved and more stable olive yields will then turn in to improved earnings and livelihood for the small holder olive farmers targeted by the project. The project demonstrates sustainable irrigation technologies and water management practices adding value to the commodity in terms of the productivity of olives and the quality of olive oil.

transfers best practices and know how in the four locations via systematic training sessions and distribution of technical manuals. A minimum of 400 farmers will be targeted during field days. Extension officers will be trained in rational irrigation management practices in order to tutor the farmers in the adoption and replication on field of the proposed water management practices. Project operations have started in May 2010. While in Morocco project activities are been implemented as per the approved work plan, in Syria they have been delayed by the political unrest which is affecting the country since April 2011. The project conducted a Mid Term Review in June 2012: in Morocco the irrigations systems are installed and functioning along with the weather stations (Component 1), enabling both data

Four pilot demonstration fields have been set up in both countries in significant olivegrowing areas of differing soil and climatic conditions, where rainfed or traditional irrigation methods now prevail. The project

analysis (Component 3) and farmers’ field days (Component 4) to be implemented on schedule. In Syria, the purchasing and installing of the required irrigation equipment for both field plots (Component 1) were finalized together with most of the planned activities for Component 2 (Irrigation and Field Management). The Syrian project team was able to accomplish all the research objectives at the project sites by planting, managing and harvesting the olive crop on time during both the completed implementing years. However field research in Aleppo Province has been interrupted since July 2012, but continues in Dara’a Province at both - agricultural research station and farmers field. Dissemination and extension activities (Component 4) are the most affected by the prolonged unsafe conditions that prevail in the country.

VI Summary of Ongoing Regular Projects 2012 | 67

CFC/IOOC/08: Creation of a Pilot Demonstration Plants and Training to Improve Olive Oil Quality in Latin America Submitting ICB Project Executing Agency Country Directly Benefitting Project Cost Common Fund for Commodities Counterpart Contribution

International Olive Council (IOC) BERCI INTERNATIONAL (with technical collaboration of IVALSA – Istituto per la Valorizzazione del Legno e delle Specie Arboree) Argentina USD 2,137,077.68 USD 1,653,950.00 (Grant) USD 483,127.68 (in kind)

The main objective of this project is to enhance the cost-effective and environmentally sustainable production of high quality olive oil in the region of Catamarca, Argentina and increase the revenues of small holder olive farmers and boost the overall economic development of the region. The setting up of a modern & innovative olive oil Pilot Processing Plant, together with the implementation of training activities for the dissemination of improved olive oil processing techniques and the intensive management of olive orchards, will certainly add value to olive oil as commodity.

processing plant, three permanent staff, two operators and the plant manager, has been recruited and technical trainings have been organized together with training for olive farmers on the adoption of good agricultural practices and good orchards management. The modern olive oil pilot processing plant set up by the project is located in the industrial area of Catamarca, known as the “pantanillo”, 7 Km from the city center. With its processing capacity of 2000 Kg/Hr provides s state-of-theart crushing, testing, storing and bottling facilities for the production of high quality olive oil to be promoted and sold under the brand “Olivares del Valle” owned by the project. The Logo was created, bottle labels designed and promotional materials were

Project activities are implemented within a 48 months life cycle. Following the procurement and setting up of the pilot olive

designed and printed (posters, brochures), an ad-hoc web site (www.olivaresdelvalle. com) have been developed. During the 2012 crop season, an exceptionally limited harvest did not allow engaging in a full production scale of olive oil, which is postponed to crop season 2013, but it enabled the production of 5,900 Kg olive oil of which 350 Kg were retained at the plant to be used for the chemical tests and the marketing & promotion campaign.Upon completion of activities in the third quarter of 2013, the CFC pilot project in Catamarca will be a Center of excellence and knowhow and dissemination for olive oil development in Latin America.

Rubber (natural) CFC/IRSG/17: Enhancing Incomes of Smallholder Rubber Farmers in West and Central Africa

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The overall objective of the project is to increase the incomes of rubber smallholders in Africa through a process of transfer of technology. To achieve this broader objective the project aims at improving cultivation, harvesting and post harvest handling of raw material; diversification of income base through inter-cropping using the best available technologies; and improvement of the supply chain for natural rubber by developing a network of certified nurseries and introducing the appropriate standards and treatment that would guarantee a better income to the smallholders while meeting the requirements of processors.

International Rubber Study Group (IRSG) International Rubber Research and Development Board Cameroon, Côte d’Ivoire and Ghana USD 2,980,134 USD 1,936,701 (Grant) USD 1,043,433 To date the project has completed a series of exposure visits to several rubber producing countries in Asia on a “Training of Trainers” basis. Follow up in-country workshops have been concluded and there is evidence on farmers’ holdings of adoption of technology and systems observed in Asia. These exposure visits included familiarization with new systems and technology for rubber production and have tangibly demonstrated that African farmers are gradually adopting the new techniques following their visit. Some areas that they highlighted included the system of nurseries for new planting

68 | Common Fund for Commodities Annual Report 2012

material, the cultivation practices, tapping and collection systems and the farmer organisations. Smallholder baseline studies have been completed and work has started on establishing primary and secondary nurseries and distribution of elite varieties. The project has been extended to February 2014 on a budget neutral basis, to complete all activities satisfactorily taking into consideration the initial time delays and the crop cycles.

CFC/IRSG/21: Promoting Development of Economically Viable Rubber Smallholdings in West Africa

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Co-financing

This is a demonstration project designed to enhance economically viable rubber cultivation in smallholdings through:- planting of good quality planting materials of high yielding clones; reduction of immaturity period; successful integration of high value arable crops with rubber thus providing sustainable income for the smallholder during the immature phase; and diversification of income base and integrating high value agro-forestry tree crops and medicinal plants in rubber based farming systems during the mature phase. The project was launched in August 2009. Progress to date include initiation of work to upgrade the central nursery for provision of elite rubber planting material; identification of farmers and initiation of work to

International Rubber Study Group (IRSG) International Centre for research Agroforestry (ICRAF) Nigeria USD 2,956,000 USD 1,941,000 (Grant) USD 1,015,000 establish model farms on farmers’ holdings; collection of germplasm and production of planting material of domesticated high value crops for inclusion in agroforestry systems. Some key project outputs/achievements are summarised as: • Planting materials have been distributed to participating farmers since the inception of the project in 2009. • A total number of 93 ha of model farms have been established in Edo, Delta, Ogun, Akwa Ibom and Kaduna states. • Farm inputs such planting materials, agro-chemicals, bags of fertilizer, Bee hives, Rabbit hutches and snail hutches have been given to selected farmers in the

selected states. • Priority will be given to component 5 (Training and extension activities) of the project in 2013. • Soil samples have been collected and analyzed for the five states selected for the project • Fertilizer recommendation have been explained to farmers using simple measurement materials such as empty tins tomato paste and milk • Studies of fertilizer rate for companion crops is ongoing • Fertilizer management in mature plantation has commenced with ­studies on the impact of rubber in soil environment • Some 20 farmers were trained on pest and disease control.

Sugar CFC/ISO/29: East African Sugar Development

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The Project aims to improve the productivity of cane production in the East African Community (EAC) through a five-year variety importation programme. The project has selected, imported and tested a statistically meaningful number of new cane varieties from cane industries that share similar cane growing conditions to those in the EAC. It is being supported by a clean seedcane initiative, aimed at growing and distributing treated seedcane (and new

International Sugar Organization (ISO) Sugar Board of Tanzania Kenya, Tanzania and Uganda USD 4,193,104 USD 2,358,540 (Grant) USD 1,834,564 varieties as they are commercialised) to the smallholder cane growers (outgrowers) in the region. An important objective is the acquisition and transfer of technology and international best practice to the EAC cane research staff and from there to the mill personnel (agricultural and outgrower managers and agronomists) and the outgrower community.

Outputs to date include the establishment of: the East African Cane Improvement Network; establishment of regional quarantine protocols between the participating countries; ongoing importation of improved varieties; development of a training manual and training programme for extension and outgrowers’ officers. The project is scheduled to close during the second half of 2013 following a budget neutral extension of one year.

CFC/ISO/32: Development of Sugarcane Variety Improvement and Seed Multiplication Programme for Nigeria and Cote d’Ivoire

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The overall objective of the project is to enhance incomes and livelihoods in the sugar sector through the establishment of a sugar cane variety improvement programme.

International Sugar Organization (ISO) National Sugar Development Council of Nigeria Nigeria and Côte d’Ivoire USD 2,112,175 USD 1,609,803 (Grant) USD 502,372 The programme involves the importation, evaluation and selection of adaptable high yielding cane varieties to replace the pool of poorly performing varieties currently in

use in both Nigeria and Cote d’Ivoire. This initiative will contribute to a reliable supply of improved sugarcane raw materials to existing and new sugar projects which >>

VI Summary of Ongoing Regular Projects 2012 | 69

will in turn generate rural employment and generally enhance the socioeconomic circumstances in the cane growing communities of the participating countries. The project will focus on the provision of improved varieties of sugarcane for farmers. This will ensure the realization of more cane and sugar tonnage per hectare which will in turn lead to enhanced incomes for the farmers. The versatility of the crop makes it very useful for the production of not only sugar but also ethanol and electricity generation which are added advantages of the adoption of this commodity approach. The problem of poorly performing sugarcane varieties affects the whole of the West Africa sub-region. Each country has attempted to

solve this problem individually. The project will facilitate regional collaboration in addressing this problem. Some noted project achievements to date are: 1 Capacity Development/Skills Acquisition -21 Trainees drawn from all 3 CIs and PEA were trained in two batches at Mauritius Sugar Industry Research Institute (MSIRI), Reduit between 21st October and 7th December 2010. The training covered disciplines such as Breeding, Agronomy, Extension, Laboratory Technology and Field Techniques. A sensitization workshop was also convened for

project laerers and accountants at each collaborating institution. 2 Identification and Acquisition of Improved Cane Varieties - 20 newly imported sugarcane varieties from Barbados, India and Sudan have been acquired by the PEA. Importation of the remaining 20 from Brazil and Mauritius respectively are still being processed. 3 Acquisition/Establishment of Grandmother Nursery - Twenty (20) cane varieties (10 from Barbados, 5 each from Sudan and India) have been acquired. The materials were planted at the PEA pre- nursery at Kadawa Irrigation Scheme, Kano.

Tea CFC/FIGT 04: Development, Production and Trade of Organic Tea

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Common Fund Loan Counterpart Contribution

The project aims at developing the technology, skills and systems of organic tea production. This includes the development of appropriate technology for the establishment of new, and the conversion of existing, tea areas to organic tea farms. The project also aims at the development of acceptable international standards for the export of organic tea and the establishment of an internationally accepted certification mechanism in both countries. The project includes an assessment of the demand for organic tea exports and the development of appropriate export strategies. The project activities in China have been completed and the following results were obtained: 1 Production: • Project Sites were successfully identified and Model Farms were established. • Research and Development was completed and technology and skills necessary to produce organic tea were developed suc-

FAO Intergovernmental Group on Tea The International Federation of Organic Agriculture Movements (IFOAM) China and India USD 7,128,284 USD 1,778,387 (Grant) USD 1,739,714 USD 3,610,183 cessfully converting conventional farm to organic farms and developing composting methods of organic matter. • Good agricultural practices were developed and brought into practice including soil, pest and disease management; organic fertilizers; weed control; biological control of pests and diseases; and development of processing technology and packaging materials and methods for processing organic tea products. • Dissemination of technology through manuals, newsletters etc. and development of skills for farmers and processors, through training which included: regularly scheduled organic farming workshops; on-farm technical services; training of trainers in organic farming methods; and development and/or strengthening of national counterpart organic farming extension services. 2  Organic tea certification standards developed

3 Market Analysis and Strategy ­including: • Assessment of selected international organic tea markets: Japan, EU and United States. • Demand analysis of international organic tea markets, including pricing policies and international trade considerations, was only partially addressed, as was the development of a global promotional strategy. The strong demand at the domestic level has underpinned the success of the project and at a later stage the development of a global strategy will be required. China has fully reimbursed the loan while India is complying with the reimbursement schedule. The Indian project’ segment started in September 2008. Activities in India started later and all the set targets have been met including experiments; domestic market development and a final evaluation will be undertaken in 2014.

CFC/FIGT/05: Capacity Building and Re-Juvenation of Tea Smallholdings in Indonesia and Bangladesh

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Co-financing

FAO Intergovernmental Group on Tea Indonesian Tea Board Indonesia and Bangladesh USD 1,994,630 USD 1,843,030 (Grant) USD 151,600

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The aim of the project is to strengthen the knowledge-base of tea small-holders and rejuvenate smallholdings in Indonesia and Bangladesh for enhanced productivity and quality improvement by producing high quality leaf that is free of extraneous chemical residues. The project also aims to strengthen the bargaining position of the low income small holder tea farmers in the value chain for higher remuneration and will therefore have consequent impact on alleviation of poverty and unemployment, bringing about a social upliftment in the life style of the poor farmers in the two countries.

The project has become fully operational in Indonesia since early 2010 but in Bangladesh the activities have not started. The baseline study in both countries was completed and series of trainings were conducted. Self Help Groups (SHGs) were organized and fertilizer for participating farmers was distributed. In Indonesia, soil conservation measures, environmentally friendly and integrated good agricultural practices are intensively practiced. SHG unions are introduced in each region. All the SHG unions have

established partnership linkages with green tea processing factories. Revolving fund has been established in all 3 project regions and some funds have been collected by the SHG unions. Trainings, workshops and onfarm advisory visits have been extensively conducted. Up to now 47 trainings and workshops with 1485 participants in project areas have been carried out on all aspects of tea cultivation. About 40 mobile and 20 fixed leaf collection centers and 3 transport vehicles have been set up.

Tropical Fruits CFC/FIGTF/24FA: Production of Certified Fruits and Vegetables in the Greater Mekong Sub-Region Submitting ICB FAO Intergovernmental Group on Tropical Fruits and Vegetables Project Executing Agency FAO, Regional Office in Thailand Countries Directly Benefiting Laos, Myanmar, Thailand and China Indonesia and Bangladesh Project Cost USD 1,800,616 Common Fund for Commodities USD 1,664,866 (Grant) (First Account) Co-financing USD 135,750 Parallel Financing USD 709,620 The project objective is to upgrade production, handling and transport technologies to improve product safety and enhanced quality as well as output volume. The project will also aim to help farmers organise themselves into effective producer-marketing group and clusters; and integrate the supply chain participants with the purpose of extending distribution ranges, improve feedback on market requirements, reduce product wastage, consolidate income levels

among producers and share inherent risks. The project is mainly operating in two LDC countries (Laos and Myanmar). Over the course of 2012, the project continued to introduce new ideas and business processes to ensure the ongoing success of Myanmar’s mango producers. In collaboration with the government of Myanmar, the project helped establish a new packing house in Mandalay. Land and construction

costs were covered by the government, while the project financed the majority of the equipment. Facilities included a machine for grading fruit by weight, a tank for hot water treatments (to kill fruit fly eggs), a tank for cooling and fungicide treatment, a packing line and a cold storage unit. The facility and treatments will enable the fruits to be certified (similar to ASEAN GAP), furthering the potential for facilitating sales in China, Thailand, Malaysia and Singapore.

CFC/FIGTF/25: Pilot Project on Production of Fruit and Vegetable Chips Using Vacuum Oil-bath Dehydration Technology Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Subgroup on Tropical Fruits of the Intergovernmental Group on Bananas and Tropical Fruits All China Federation of Marketing and Supply Cooperatives (ACFMSC) China with dissemination to African countries USD 1,608,014 USD 868,595 (Grant) USD 739,419

The project introduces an innovative approach by integrating capacity building, market developments and an institutional set-up to adopt the Vacuum Oil-bath Dehydration Technology (VODT) to transform fresh fruits and vegetables into chips for the urban convenience food markets. This technique will reduce rural poverty and ensure farmers’ fair and sustainable economic

benefit, which can be disseminated to other developing countries. The facility established under the project in China will become a technological training center, new product development center and integrated VODT adoption dissemination center. The project became fully operational in 2010. The construction of process-

ing plant in Anhui Province has been completed and the processing equipment has been procured and installed. Cooperatives were organized and two trainings were provided. The PEA started the marketing strategy and activities. The knowledge centre has been established. The PEA has launched some initiative marketing activities.

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Tropical Timber CFC/ITTO/80: Marketing Eucalyptus Citriodora Essential Oil

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

Essential oils are a high value-added byproduct of eucalyptus. The project goal is to put this resource to use for poverty alleviation in rural areas. This will be achieved by reaching out to forest communities and disseminating techniques to extract essential oils from planted Eucalyptus citriodora. Specifically, the project provides village community members with the technologies and expertise to extract essential oils and implements measures to create a marketing chain for essential oils. Members of rural communities in Congo and Democratic Republic of Congo are trained on the techniques of essential oil extraction and marketing, as well as planting and maintenance of Eucalyptus citriodora species. With SNR acting as a facilitator, the pilot project aims to develop models which could be followed by village communities in developing the extraction and marketing of essential oils.

International Tropical Timber Organisation (ITTO) Service National De Reboisement (Snr) – National Reforestation Service Congo and Democratic Republic of Congo USD 622,261 USD 480,511 (Grant) USD 141,750 The project activities started in 2010. By the end of 2012, the following has been achieved: • The surface of plantations of Eucalyptus citriodora by the project partners in Congo and DRC stand at 63 ha, which represent 63% of the surface envisaged in the project document. It is important to notice that the rainy season started in October, therefore the local partners will have in a few months a good supply of biomass for the production of essential oils. A map identifying with GPS coordinates the location of these sites has been already submitted to CFC. • In order to assure more establishment of future plantations and supply of raw material for essential oils, the PEA a national forestation and reforestation programme, called PRONAR. • Training in the extraction of essential

oils by local actors has been carried out in the localities of Loudima, d’Odzibe and Gamboma. The PEA is expecting to extend training in 4 additional localities. The quality of essential oils extracted so far is good enough for non-food uses. Reports of the training have already been submitted to CFC. • Based on the work carried out by the International Consultant, the PEA recently requested the no-objection for the acquisition of 5 semi-industrial extractors with a production capacity of 1,000 liters each. The project term has been extended to 2013 to allow the completion of a market study and the identification of a suitable laboratory for the analysis of the products to ensure consistent quality and marketability of essential oils produced by forest communities.

CFC/ITTO/81: Promoting Timber Processing in Congo Basin Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

International Tropical Timber Organisation (ITTO) Economic Community of Central African States (ECCAS) Cameroon, Gabon and Central African Republic (LDC) with dissemination to the Democratic Republic of Congo (LDC) and the Republic of Congo USD 1,887,714 USD 1,253,345 (Grant) (of which a contribution of USD 600,000.00 from the OPEC Fund for International Development) USD 634,369

The specific project objective is the implementation of a support system for the promotion of further timber processing for stakeholders in member countries of the Cenral African Forests Commission (COMIFAC) and ITTO member countries (Cameroon, Gabon and the Central African Republic) and piloting and dissemination of the approach in the Democratic Republic of the Congo and Congo.

ists (suppliers of consumables, glue, varnish material); forest managers; member states; decision-makers who will have relevant indicators made available to them for guiding the development of the industrial and craft segments of the sector; and consumers within each country and the region as a whole who will have a broader range of products derived from locally-processed timber offered to them, and international consumers who will have access to new products manufactured from African timber. In terms of employment generation in rural and urban areas, if the countries are benchmarking with Western Africa, additional 37,000 jobs can be created.

(number of processing plants, operational procedures, stakeholders needs); its economic weight will be assessed and from the identification the various stakeholders needs, its potential for growth will be known, the missions of the supporting structures will be refined, and the supportive structures will be operational. The intended mission of the supportive structure is to enable a favourable environment for the further processing of timber by acting as a coordination entity among the relevant stakeholders (private and public sectors, financial sector, academy and training institutions, forest owners, regional and international community, etc.).

At the end of the project, the sector of further timber processing will be identified

The project started operations in 2011 and is expected to complete by 2015.

The project intends to directly assist the artisans, SMIs/SMEs whose methods of operations are intermediary between those of artisans and the industrialists involved in the value-added processing of timber in the form of sawn wood and veneer. The project furthermore indirectly benefits trade partners of the crafts, SMIs/SMEs, and industrial-

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Vegetables CFC/FIGTF/26: Increased Production of Vegetables and Herbs through the use of Protected Agriculture in the Caribbean Submitting ICB FAO Intergovernmental Group on Tropical Fruits Project Executing Agency Caribbean Agricultural Research and Development Institute (CARDI) Countries Directly Benefiting Haiti, Jamaica and Trinidad & Tobago Project Cost USD 2,814,638 Common Fund for Commodities USD 2,010,023 (Grant) Co-financing USD 634,830 (EU/AAACP) Counterpart Contribution USD 169,785 The goal of the project is to strengthen the competitiveness of vegetable farmers in the Caribbean engaged in the production and later the export of fresh vegetables and herbs through the use PA. The central objective of the project is to pilot and expand the use of protected agriculture PA systems through capacity building and infrastructure enhancement. Through the strategy of adapting and transferring PA technologies to vegetable farmers and other stakeholders in Haiti, Jamaica, and Trinidad and Tobago, the project will develop and intensify food production and security on the limited land available. This should increase the regularity of supplies and at the same time enhance the capacity to manage the quality and regulatory (both public and private) requirements of the markets, which

are becoming more stringent, particularly with regard to Sanitary and Phytosanitary (SPS) requirements, including traceability. A complementary goal is to develop improved production and marketing tools, including more integrated PA production and marketing information systems and database, accessible to all stakeholders. The project started in late 2010 and has been identified as a priority of the EU-AAACP commodities programme for the Caribbean. Project activities have been successfully completed, All demonstration infrastructure (greenhouses) have been constructed and are operational (i.e. 8 greenhouses have been newly contructed and another 6 were fully refurbished). Four greenhouses have been equipped to serve as training cernters

for complex greenhouse management. Up to now some 800 farmers have received such training which focusses on issues like crop establishment, crop care, growth media and plant nutrition, as well as postharvest operations, marketing and business management. The project has initiated direct market linkages with hotels/resorts fast food chains etc, which are willing to pay premium prices for fresh local vegetables in order to demonstrate the economic viability of investment into greenhouses. In Haiti, implementation on the ground only commenced at the end of 2011 due to the difficult circumstances resulting from the earthquake. Project activities will continue up to December 2013.

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Photo: ŠFAO/Rodger Bosch / FAO 74 | Common Fund for Commodities Annual Report 2012

VII  Regular Projects Completed in 2012 Cocoa CFC/ICCO/26: Cocoa Productivity and Quality Improvement: A Participatory Approach Submitting ICB International Cocoa Organization (ICCO) Project Executing Agency International Plant Genetic Resources Institute (IPGRI) (Bioversity) Countries Directly Benefiting Four African, Five Latin American and Two Asian countries Project Cost USD 10,504,533 Common Fund for Commodities USD 3,916,120 (Grant) Counterpart Contribution USD 3,249,990 Co-financing USD 3,338,443 The project aims to improve the welfare of the large number of smallholders growing cocoa through sustainable higher productivity of good quality cocoa at lower production cost. This global project contributes to this objective through the selection, distribution and use of new cocoa varieties with improved yield capacity, resistance and quality traits. Use of improved cocoa plant materials will make cocoa cultivation more competitive. It should also facilitate diversification of cocoa-based farming systems by reducing the land, labour and cash requirements for cocoa cultivation. The project specific objectives are: (a) to disseminate and validate promising cocoa varieties in farmers’ fields through participatory approaches, involving farmers directly in evaluation and selection processes; (b) to increase sustainability in cocoa improvement programmes through validation and dissemination of select cocoa varieties between partners, enhanced regional and international collaborative research and development activities, and capacity development; (c) to exchange information and disseminate results between pro-

ject partners and other cocoa producing countries not directly participating in the project; and (d) to establish and maintain functional linkages between national cocoa breeding programmes, international cocoa gene-banks and quarantine centres and international cocoa research and development efforts. At present all activities have been completed. Promising cocoa varieties have been validated, R&D collaboration enhanced, information generated and exchanged, and networks established. At all project sites, numerous clone and ­hybrid varieties have been selected for further use in breeding. Major project achievements are: • Reinforcement of existing cocoa breeding programmes in 11 countries. • Selection and distribution of improved cocoa varieties with higher yield capacity, resistance to pests and pathogens to be used in further breeding. • A selection of 55 new candidate varieties for distribution to farmers in Brazil, Ecuador, Nigeria, Papua New Guinea and Trinidad and Tobago.

• A total of 1500 promising trees identified by using a farmers’ participatory approach. • More than 100 selected genotypes were quarantined and distributed to user countries. Establishment of two Regional Variety Trials in six countries in the Americas and in four countries in Africa, aiming at sharing of varieties with disease resistance: • Initiation of distribution of germplasm selected in the project through quarantine at the Reading University to user countries, especially African countries. • Unprecedented cooperation was achieved among research institutions in the cocoa producing countries, regional and international institutions, and the private sector. • Human capacity building was achieved through the organization of four regional workshops and exchange of results (publications, project reports). The final publication is available on the CFC website as Technical Paper 59.

Coffee CFC/ICO/30: Access to Finance for the Development of Diversification Crops in Coffee Producing Areas (Burundi and Cote d’Ivoire)

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

International Coffee Organization (ICO) Fonds de Garantie des Cooperatives Café – Cacao (FGCCC) – Côte d’Ivoire Burundi and Côte d’Ivoire USD 3,006,570 USD 2,692,725 (Grant) USD 313,845


VII Regular Projects Completed in 2012 | 75

The project is designed to demonstrate, on a pilot project basis, how crop diversification, if implemented with proper means and caution, brings profit both to the smallholder producers and to the financial institutions which underwrite their funding. Through this process food security will also be promoted, as essential staple crops such as rice, cassava, yam and plantain which can substitute imports, can be selected under the diversification process. The project is seeking to set up a credit scheme that enables targeted farmers to diversify their income base through the development of additional crops or livestock activities thereby reducing their dependence on coffee production. It also assists in enhancing the willingness and capacity of existing institutions’ to provide micro finance to farmers for crop diversification. In both countries, the project strengthened the agricultural credit system and expanded the credit schemes to integrate the credit activities relating to diversification of crops. The project builded up a more sustainable scheme with a direct link

between farmers and financial institutions. Strengthening the capabilities of coffeegrowers’ co-operatives, providing them with improved access to credit and encouraging diversification in their agricultural activities helps in reducing the impact of the coffee crisis on the economies of coffee-exporting developing countries and their rural populations. The project implementation period was been extended to make up for lost time due to some civil unrest in the participating countries with all activities successfully concluded by the end of 2012. There was remarkable enthusiasm among project participants for the diversification activities introduced by the project which included production, and marketing in combination with coffee, of crops such onions, tomatoes, cabbage, rice, cassava, potatoes and the rearing of small livestock. Despite some deficiencies noticed in the supply of certain inputs, particularly seeds and pesticides, improved yields were observed for most crops. Under the project

all selected farmers benefited from access to warehouses and other equipment to facilitate their post harvest activities including storage, processing and transport. Overall the project was successful in contributing to food security as well as improvement in farmers’ income. The project was equally successful in training and sensitizing farmers in the use of credit for their diversification activities. In both countries loan recovery rates in excess of 70% were observed. It was noted that prior to implementation of the project, many producers, particularly in Cote d’Ivoire, did not belong to cooperatives. For those who were members their cooperatives were located at some distance in the main city of the zone. The project provided an opportunity for farmers to have closer contact with their cooperatives allowing them to organize group purchases and sales as well as undertaking activities relating to processing and commercialization. These cooperatives have the potential to create important business centres for multiplication of economic activities. in the rural areas.

CFC/ICO/31: Reconversion of Small Coffee Farms into Self-Sustainable Agricultural Family Units in Ecuador Submitting ICB International Coffee Organization (ICO) Project Executing Agency Consejo Cafetalero Nacional (COFENAC) Country Directly Benefiting Ecuador Project Cost USD 3,198,635 Common Fund for Commodities USD 1,117,640 (Grant) Counterpart Contributions USD 1,222,830 Co-financing USD 858,165 The project seeks to strengthen the management capacity of producer organisations and related agencies involved in the project areas in Ecuador. The project reconverts coffee farms into self-sustaining agricultural units through diversification of their agricultural production systems. The project also promotes processing of primary commodities and the development of co-operative marketing channels for the local market. Given the declining income of small farmers exclusively producing coffee, it is proposed to diversify the income sources of farmers through redesigning the farms into diversified product farms. The project objectives are (a) to strengthen the management capacity of producer organization and bodies involved in the project areas; (b) to reconvert 1,200 coffee farms into self-sustainable agricultural units through diversification of their agricultural production systems; (c) to promote processing of primary production and the development of co-operative marketing channels for the local sale of the surplus agricultural

production. The project has been successful in terms of diversification of the coffee based rural economy of Ecuador. Some specific projects results are summarised below: Organizational strengthening - The direct participation of 1,244 small coffee family units (including 101 female heads of households), organized into 31 producer organizations Diversification of agricultural production on farms - The main diversification activities carried out for the reconversion of coffee farms were: • Training for coffee producers on technical aspects of agricultural and livestock production through on-farm demonstration. • Diversification initiatives also included replacement of 2,122 hectares of old or damaged coffee trees affected by El Niño with new improved varieties. • Quality improvement of coffee for export included the establishment of coffee processing units in various locations.

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• Development of family farms and agricultural production has improved food availability for the 1,200 participating family units. • Promotion of husbandry production to increase, at family level, the availability of protein sources for the diet and additional sources of income from the sale of surpluses. • Reforestation for environmental maintenance and commercial purposes. Agro-industrial development and cooperative marketing - The project promoted processing of primary products and joint marketing as a strategic means of improving the use of agricultural and livestock surpluses while adding value to primary production. The project activities ended during July 2011 and the project was officially closed during August 2012. Results of the project have been disseminated to other countries in the region through workshops and more extensively through various publications and reports.

CFC/ICO/39: Enhancing the Potential of Gourmet Coffee Production in Central American Countries Submitting ICB International Coffee Organization (ICO) Project Executing Agency Istituto Agronomico per l’Oltremare (IAO), Italian Ministry of Foreign Affairs (MAE) Florence, Italy Countries Directly Benefiting Honduras and Nicaragua Project Cost USD 1,874,146 Common Fund for Commodities USD 617,560 (Grant) Co-financing USD 1,256,586 The main objective of the initiative is to improve the standard of living of small coffee producers in rural mountain communities by increasing their income through efficient production and marketing of gourmet coffee. The project seeks to organise and train farmers in the production of gourmet coffee and assist them to export their coffee directly. The specific objectives of the project are: to select potential gourmet coffee producing areas; to reorganise the coffee production chain with special attention to cultivation and harvesting; to identify and transfer new techniques for coffee processing and quality control; to set up a new production system and promote quality coffee. The project was successful in the participating countries of Guatemala, Honduras

and Nicaragua to implement strategies to develop sustainable gourmet quality coffee with accompanying tourism strategies. Some noted project outputs were: • A total of 12 small coffee producers’ organizations benefited reaching a total of 1159 members (24% women) in 3 Central American countries. • Three (3) ecological wet mills were set up in 2 participating countries. • A total of 78 solar drying units were built on the premises of 11 organisations of small coffee producers in 3 Central American countries. The introduction of solar dryers has greatly improved bean quality by avoiding heterogenous drying in an environmentally friendly manner. • A total of 33 mushroom production units

were constructed and are currently operating in all of the participating countries. Mushroom production was successful in introducing the communities to nutrient rich, high protein oyster mushrooms. The research showed that the production of mushroom could be increased by using coffee pulp as a substrate. • The project demonstrated that the quality of small producers’ coffee can be improved be significantly by applying the appropriate techniques and facilities but the biggest obstacle is financial. Overall there was increased income as a result of better coffee quality. Also new jobs were created as a result of the introduction of new coffee processing techniques and alternative income ideas.

CFC/ICO/49FA: Economic Crises and Commodity Dependent LDCs: Mapping the Exposure to Market Volatility and Building Resilience to Future Crises

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The fallout from the financial crisis in the industrialized world has brought to the fore the issue of exposure of commodity dependent LDCs to the volatility of the global markets, the transmission of crisis effects and its long-term adverse consequences on development. Before the global economic and financial crisis, the LDCs exhibited impressive economic performance with real GDP growth averaging 6 per cent per annum for the last 5 consecutive years. The crisis has brought this to an end, with several countries recording negative per capita income growth for the first time in over a decade. This demonstrated that growth achieved so far was highly dependent on boom in commodity prices, increased external finance and continued expansion of demand for primary commodities. The central development challenge facing commodity dependent LDCs is to use

International Coffee Organization (ICO) United Nations Conference on Trade and Development (UNCTAD) project implementation locations in Tanzania, Zambia, Benin, Burundi, Nepal and Lao PDR USD 532,250 USD 429,250 (Grant) USD 50,000 (UN OHRLLS), USD 53,000 (UNCTAD trust fund TXB/2136/X77J/2411) incomes generated in commodity sector to create additional jobs and livelihoods for a rapidly growing labour force. The experience of the last decade and current global crisis indicate that in practice LDCs need to develop their resilience as a pre-requisite to effective re-investment of their commodity incomes. The project examined the experiences of National Governments of participating institutions and development partners in applying different to building such resilience which include greater economic diversification and moving away from dependence on exports of narrow range of commodities, and dependency on food imports. The experts carrying out case studies of crisis response by LDCs looked at imported food and energy prices, and the vulnerability of the general population to price induced food

shortages. The first outcomes of these studies have been presented to the UN LDC IV Conference in Istanbul and the lessons have been reflected in the Istanbul Plan of Action (IPoA) deliverables. Following the feedback received in UN LDC IV, the analysis and recommendations have been further refined and included in the preparatory process for UNCTAD XIII conference. Immediately preceding the Conference, the LDC Ministerial Meeting was held to discuss the views on priorities for development activities in commodity dependent LDCs. Ministers of the world’s 48 least developed countries (LDCs), met in Doha in advance of the UNCTAD XIII quadrennial conference and adopted a declaration calling for strengthening of the organization and for bolstering its research, technical-cooperation, and consensus-building work.

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Cotton CFC/ICAC/33: Commercial Standardization of Instrument Testing of Cotton for the Cotton Producing Developing Countries in Africa Submitting ICB International Cotton Advisory Committee (ICAC) Project Executing Agency Faserinstitut Bremen (FIBRE), Germany Countries Directly Benefiting Mali, Burkina Faso and Tanzania Project Cost USD 7,788,052 Common Fund for Commodities USD 2,034,697 (Grant) Counterpart Contribution USD 2,753,355 Co-financing USD 3,000,000 (EU/AAACP) The main objective of the project was to support the development of a globally accepted system of quality assessment of cotton which is based on instrument testing, including the setting of testing rules, certification criteria, instrument calibration standards, etc. A second focus of the project was to develop a programme of initial support for the establishment of two regional centres in Africa that will be capable of providing all required services to national quality control institutions (in particular in the field of laboratory certification, instrument calibration, equipment and facility maintenance, etc) to enable African cotton producing countries to fully participate in the global system of cotton trade on the basis of instrumenttested quality parameters. The project was a component of the EU’s All ACP Agricultural Commodities Programme (AAACP), which provided substantive co-financing.

African Testing Centres, capable of providing all required technical services and training activities. The centres, hosted by the Tanzania Bureau of Standards in Tanzania and the CERFITEX in Mali (operating jointly with SOFITEX of Burkina Faso) are state-of-the-art technological development centres with the capacity to assist cotton companies in their respective sub-regions to further effectively support the The detailed final report (including technical high quality of African cotton and to secure Annexes) has been published on the project’s web site ( A downloadable ver- premium prices for their farmers when selling sion of the final report (without Annexes) is also the cotton on the national and international markets. available through a link on the CFC web site. An extensive summary article on the project has been included in the September 2012 issue Effective utilization of the established caof the ICAC Recorder (Vol. XXX, No.3), available pacities and capabilities within the Regional in three languages, English, French and Spanish. Technical Centres, which are available for the cotton producing countries in the service The project contributed to the further develop- regions, should enable cotton exporting counment of instrument-based cotton testing in the tries to access market premiums of around $50/ton of lint. world and enabled the establishment of two The project was operationally completed in March 2012 after slightly more than four years of implementation. A successful dissemination workshop has been held in Arusha (Tanzania) in January 2012 where project results from the regional activities as well as from the global activities have been presented.

Fish CFC/FSCFT/22: Diversification and Marketing of Value-Added Fishery Products Submitting ICB FAO Sub-Committee on Fish Trade Project Executing Agency Intergovernmental Organisation for Marketing Information and Advisory Services for Fishery Products (INFOPECHE) Countries Directly Benefiting Guinea and Mauritania Project Cost USD 1,117,800 Common Fund for Commodities USD 621,300 (Grant) (of which USD 500,000 from the OPEC Fund for International Development - OFID) Counterpart Contributions USD 202,000 Co-financing USD 294,500 This is a pilot project on production of value-added fishery products through transfer of appropriate technology and knowhow; improve product quality; develop new market opportunities and assess the longer term investment needs for increased processing in Guinea and Mauritania. The specific objectives are: (a) product specific market investigations; (b) pilot production of value-added products; (c) training in quality control and marketing; (d) development of new market opportunities including

non-traditional markets and conducting market trials; (e) assessment of longer term investment needs and investment promotion; and (f) dissemination of project results to other countries in the sub-region. The project is operationally closed. Due to the political unrest in Mauritania and Guinea in 2008 and 2009 and the security situation of Côte d’Ivoire where the PEA is headquartered, the project encountered some delay, after which it made progress. Progress

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made so far includes: market studies, audit for selection of participating companies, several training workshops on development of fresh and frozen value added products, etc. The project in Guinea has been extended to mid-2013. An important output in terms of exports of fish products from Guinea to the European Union has been the audit of four establishments for fish processing in Guinea. Out of the four enterprises three were confirmed to be compliant with the standards.

CFC/FSCFT/28: Enhancing Market Access of Amazonian Aquaculture and Fisheries Products Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Sub Committee on Fish Trade Centre for Marketing Information and Advisory Services for Fishery Products in Latin America and the Caribbean (INFOPESCA) Brazil, Peru and Colombia USD 3,060,705 USD 1,643,055 (Grant) USD 1,417,650

The project introduces quality Amazonian fish products to the regional markets in order to encourage the development of a large scale sustainable aquaculture in the Amazon region. The main purpose of the project is to achieve the sale of a

regular flow of Amazonian fish products outside the Amazon basin, on the regional South American market, with a quality standard considered acceptable by the sanitary authorities, meeting the demands of quality and regularity of the buyers and

being economically rewarding. After three years of operation, all the set objectives have been met. The final dissemination workshop was held in November 2012, and project outcomes have been widely disseminated.

Grains/ Roots and Tubers CFC/FIGG/37: Cassava Value Chain Development by Supporting Processing and Value Addition by Small and Medium Enterprises in West Africa

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution Dutch Trust Fund

The project developed new market opportunities and supply lines for cassava farmers and small and medium scale processors in West Africa by upgrading traditional cassava products for consumption as a convenience food in urban markets, and the development of industrial marketing channels for processed cassava products as a low cost substitute for bakery flour (instead of wheat). In both market segments, good regional examples of successful supply chains that apply efficient technologies and management structures for improved small and mediumscale processing plants are currently almost non-existent. The project was based on the premise that the identified strong open or latent market demand is the best incentive for farmers to adopt productivity-enhancing and resource-conserving technologies. To retain a maximum proportion of the extra value accumulated from processing, the project introduced processing methods adapted to small groups of women or farmers, or small rural entrepreneurs.

FAO - Intergovernmental Group on Grains International Institute of Tropical Agriculture (IITA) Benin, Nicaragua and Sierra Leone USD 2,091,556 USD 800,000 (Grant) USD 491,556 USD 800,000 The project has achieved all goals and objectives in a very satisfactory manner. During project implementation thirteen cassava processing centers were upgraded, commissioned and made operational. Processors, other key stakeholders, and some NGO partners at the centers were trained at different capacities on value chain; equipment operation and maintenance, good processing practices, product development, record keeping, and business plans implementation. The established processing centers recorded production and sales of 4800 tons of processed cassava products such as gari, odorless fufu and High Quality Cassava Flour under guidance of developed business plans that ensured profitable work processes. This is an increase of more than 400% compared to sales volumes recorded before the project. The project introduced modern processing techniques to all the sites, which has led to the drastic reduction in cost of production and processing drudgery (with traditional technology, it takes about two hours to roast about 40 kg of gari - with

innovative technology introduced, the same amount is now produced within an average of 30 minutes). The technology introduced by CFC in the production of odorless fufu flour and HQCF has made those products to be a quality benchmark within the region with a noticeable consumer preference. Two products from the Nigerian SME (instant fufu flour and gari) were formally registered with the National Agency for Food and Drug Administration and Control (NAFDAC); thus, improving the products’ commercial competitiveness and marketability. In connection with project training on agronomic practices for cassava production, there was an overall recorded increase of yields for participating farmers from an average below 10 tons/ha to 13-18 t/ha in Nigeria, 20-25 t/ha in Sierra Leone, and 15-20 t/ha in Benin. Overall a total of some 2000 farmers, processors and traders have directly benefitted from the project through various training measures, dissemination of improved panting material and sales increases of processed cassava.

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CFC/FIGG/38/FA: Grain Farmers’ Access to Warehouse Inventory Credit in Ethiopia and Tanzania

Submitting ICB Project Executing Agency Countries Directly Benefitting Project Cost Common Fund for Commodities Counterpart contribution

This project focused on the opportunities created by warehouse receipts and inventory credit in East Africa to improve financing of smallholder farmers and increase their incomes. Greater financial flexibility was expected to strengthen the farmers’ position in marketing their crop and contributed to improved quality control and marketability of the produce. The specific project objective was to improve farmers’ access to bank financing by developing the use of warehouse receipts as collateral. Further benefits from wider use of warehouse receipts include standardisation and certification of grain, improvement of information management systems and general improvements to standards of storage. Specific outcomes produced by the project include: • The development of Warehouse Inventory Credit (WIC) supports the country in the design and implemen­tation of commodity chain strategies by facilitating the financing of commodity sector • By supporting the development of WIC the project promotes functioning of ­ markets (input, output & financial). Through improved access to finance,

FAO Intergovernmental Group on Grains (FIGG) AMIS International Ag. Consulting Inc. Ethiopia, Tanzania, Malawi USD 4,282,086 USD 2,014,530 (Grant) USD 172,000 WIC also enhances marketing and vertical integration capacities in the countries commodity sector. • A functioning WIC system in instrumental in creating enabling environment for the introduction of Commodity Risk Management (CRM) instruments. The use of WIC provides has been seen to provide the basic level of price risk management by effectively offering farmers an option to sell at a date of their choosing.

• The normal bid/offer matching ­functionality • The Bid Volume Only (BVO) auction system; and • The warehouse receipt system

Today a Warehouse Receipts Board is operating in Tanzania and is fully embedded in the national regulatory framework. The Board staff are now housed in permanent offices paid for out of the Ministry of Industry and Trade general operating budget. There’s considerable volume of warehouse receipts issued, and financed by participating banks, but the preference of commercial players is with high value crops such as cashews, rather than paddy or maize.

Licensing system for public warehouses had been set up, and 5 core warehouses assisted to reach a certifiable standard in Tanzania, 4 in Malawi.

In Malawi, the Agricultural Commodity Exchange (ACE) has introduced a fully integrated electronic system for managing Warehouse Receipt (WR) and Warehouse Inventory Credit (WIC) The ACE trade system has three components:

Malawi and Tanzania components exchanged specialists to share the experience on setting up the electronic registry and market information management systems, based on the Malawi work, in Tanzania.

One of the key findings of the project is that smallholder farmers need further technical support in marketing their crops. Failure to address this constraint results in lost opportunities, missed markets, financial losses, etc. Project staff has developed a Marketing Training Program that is effective in addressing marketing issues for smallholder farmers. Follow-up activities are pursued in collaboration with USAID’s COMPETE programme and with private sector companies working on market information infrastructure.

CFC/FIGG/39: Wealth Creation through Integrated Development of the Potato Production and Marketing Sector in Kenya, Uganda and Ethiopia Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Intergovernmental Group on Grains International Potato Center (CIP) Ethiopia, Kenya and Uganda USD 3,857,018 USD 1,551,123 (Grant) (of which USD 500,000 from the OPEC Fund for International Development - OFID) USD 1,805,895

The overall goal of the project was to improve the livelihoods of smallholder potato producers in Ethiopia, Uganda and Kenya through integrated development of the seed and ware potato production and marketing chain. The purpose of the project was to demonstrate the effectiveness of poverty reduction through integrated potato sector development in the pilot intervention areas and to disseminate the approach for country wide and regional implementation. The project pursued four specific objectives: to increase

the availability of high quality seed potatoes at an affordable price; to increase smallholder potato farmers’ income by boosting ­potato yields through improved seed potato quality management and crop husbandry; to improve market linkages and communication between potato value chain stakeholders; and to translate project results into national potato sector development plans and share project ­lessons with international partners. At completion the project has fully met or even surpassed the set objective goals.

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Major outcome of the project is that in total, about 4000 framers that were trained on potato cultivation increased their yield from less than 8t/ha to an average of nearly 30 t/ ha (up to as high as 50 t/ha in Ethiopia). Due to the value chain approach and linkages established through the project these farmers were able to sell their seed at farm gate or at predetermined prices. Three potato processors and one seed company were connected to about 500 smallholder farmers who engaged in contract farming. >>

To decrease storage losses and maintain quality, more than 160 so called Diffused Light Stores were constructed with a seed storage capacity of about 800 tons, of which more than 60 were established with own funds of farming communities. In collaboration with USAID, the CFC also supported the construction of three innovative “aeroponics” units which sub-

stantially improved the ability of national research stations to produce disease free basic potato seed - a prerequisite for high potato yields. The project has shown that that the approach of integrated potato subsector development can have a significant and immediate impact on poverty alleviation. Some

participating farmers, especially in Ethiopia, have a disposable cash income through potato sales for the first time in their lives. It is apparent that there is a huge unexploited market for both quality seed and ware potatoes. This forms the basis for evidencebased policy advice to extrapolate project lessons to the larger potato sector for future national level sector development.

Hard Fibres CFC/FIGHF/15: Sisal Development: Sisal Fibres Replacing Asbestos in Cement Composites

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The project was designed to establish at a pilot level the technical and economic viability of the use of sisal fibre in the production of construction materials for the building industry. The emphasis would be on assessing the potential for the replacement of asbestos fibres thus far frequently used in the building materials industry in Brazil. The project had made

FAO Intergovernmental Group on Hard Fibres Brazilian Micro and Small business Support Service (SEBRAE) Brazil USD 1,362,500 USD 672,500 (Grant) USD 690,000 a cumbersome start and the completion of two key studies (on the “state-ofthe-art” of international developments/ experiences related to the use of sisal in composites, and on the internal market structure/potential in Brazil, outlining provisional competitiveness of the new to develop materials) were delivered after considerable delays. The project was

subjected to an external independent evaluation in 2009. Follow-up by the PEA on CFC’s substantive recommendations for the possible start-up of Phase II have not been addressed to the satisfaction of the Fund. The project was closed in 2012 and the unused funds earmarked for this project have been returned to the Fund’s general project resources.

Herbs and Medical Plants CFC/FISGTF/16: Medicinal Plants and Herbs: Developing Sustainable Supply Chain and Enhancing Rural Livelihoods in Eastern Himalayas Submitting ICB FAO Intergovernmental Sub-Group on Tropical Fruits Project Executing Agency International Centre for Integrated Mountain Development (ICIMOD) Countries Directly Benefiting Bangladesh, Bhutan and Nepal Project Cost USD 2,306,689 Common Fund for Commodities USD 1,618,515 (Grant) (of which USD 1 million from the OPEC Fund for International Development - OFID) Counterpart Contributions USD 91,514 Co-financing USD 533,660 The project was designed with the overall goal of improving livelihoods of mountain communities in three countries of eastern Himalayas: Bangladesh, Bhutan and Nepal. Project activities aimed to increase incomes of medicinal and aromatic plants (MAP) producers by designing local, national and regional interventions through assessment of community needs, information, knowledge and resource base of medicinal herbs sector in the three countries and to strengthen supply chains of herbal commodity, involving collectors, cultivators, and producers to better access national, regional and international markets. At the same time enabling policies, institutions and market infrastructures and private sector investment

have been promoted. Specific components included i) situation analysis and baseline assessments; ii) improved supply chain management to enable a) production enhancement and producer-market linkages and b) processing and marketing through value addition, and iii) policy, legal and administrative reforms and to facilitate policy and institutional support for strengthening the sector. The project has been implemented in Bangladesh by the Development of Biotechnology and Environmental Conservation Centre (DEBTEC) and the Bangladesh Neem Foundation (BNF), in Bhutan by the Ministry of Agriculture (MoA) and in Nepal by the Herbs and NTFP Coordination Committee (HNCC) under the Ministry of Forests and Soil Conservation (MFSC).The support

and ownership of the project by the national governments facilitated the achievement of the project objectives in terms of improving the processing, capacity development and marketing of MAPs as premium price products, successfully linking the producers of medicinal plants to formal markets with positive spillovers on farmers’ income. The project was successful in introducing the concept of supply chain management of MAPs in line with the national Governments long term vision for poverty reduction and sustainable mountain development. Altogether 600 farmer households from 24 community forest users groups were mobilised as direct beneficiaries in Nepal. In Bhutan 290 farmer households were mobilised for the project. The beneficiary >>

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households in Nepal and Bhutan initiated cultivation of MAPs in 27 hectare and 30 acres of land respectively. Developing farmers’capacities to produce the target species in plantations, introducing primary processing at the producers level and developing market linkages were major thrusts. Activities related to primary processing like cleaning, drying, grading, and packaging were further consolidated and used as the strategy for successful marketing. Institutional development such as producer’s cooperatives and strategies for their efficient management were supported. Business linkages for the cooperatives were developed with the private sector in Nepal and a contract for buy back has been signed with the private sector agency ‘Bio Bhutan’ in Bhutan. Common facility centres (CFC) were constructed in both countries, which functions as a platform for marketing, value added processing and forward and backward linkages that are being managed by the cooperatives. Policy issues were identified in Nepal together with the 1 2

stakeholders and the recommendations concerning revising royalty for cultivated MAPs, transparency in transport of herbs and facilitation for the development of MAPs based enterprise development have been ­approved by the Secretary, MFSC and is currently with the Ministry of Finance for approval. The Government of Nepal through the MFSC has formed a panel to upgrade the Herbs and NTFP Coordination Committee (HNCC) to a National Medicinal Plants Board, the process for which was supported by the PEA. In Bhutan, the project was linked to the Government’s policy of One Geog Three Products (OGTP) and the Government to Community (G2C) linkage development programmes. Farmer’s income from five targeted MAPs species in Nepal increased to NRs 15,442 (USD 1821) from an average income of NRs 3000 (USD 42) from the same before intervention. The farmers’ cooperative in Nepal traded 196 tons of raw MAPs with a value of USD 11,200 in end of 2012. Average household income of the sample households from

MAPs increased to NRs 79,450 (USD 934) from NRs 19,272 (USD 267) before intervention. This huge increase is also attributed to the increase in incomes from yarsa gumba from NRs 49,381 (USD 685) to NRs 325,844 (USD 3833) in one of the project districts. However, even without the income from yarsa gumba the farmers in Nepal achieved more than four times increase in income from MAPs post intervention. The farmer’s cooperative in Bhutan sold 8.8 tons of 3 species of MAPs worth Nu 2,472,542 (USD 49,450) in 2012. In Bhutan the interventions have enabled the farmers to earn cash income of Nu 5000-8000 (USD 96-1532) from MAPs on an average per household. This is the first time that farmers in the project sites in Bhutan have earned additional cash income from new crops that helped them increase their household incomes. In both the countries processing of value added products will be initiated once a secured market for such products is identified and processing technologies are perfected. This project was completed in October 2012.

1 USD = NRs 85 in October 2012 and NRs 72 in November 2007. 1 USD = NU 52 in 2012 and NU 45 in December 2007.

Oilseeds/Oils/Fats CFC/FIGOOF/22: Sustainable Coconut Production through Control of the Lethal Yellowing Disease

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The project was directed at maintaining and improving coconut production, in particular by small-holders, in a sustainable manner. It aimed to provide urgently needed technical assistance to research efforts in that region aiming to identify and deploy disease-resistant coconut germplasm. It also targeted the development of detection methods for the suspected resistance-breaking new pathotype of the disease which are needed for phytosanitary and research purposes. In addition, it addressed development and promotion of possible control options by advancing and applying knowledge on disease epidemiology, spread/transmission, and on possible phytosanitary measures. Coconut farmers in outbreak areas have participated

FAO Intergovernmental Group on Oilseeds, Oils and Fats Coconut Industry Board of Jamaica Honduras, Jamaica and Mexico USD 4,773,000 USD 2,457,000 (Grant) USD 2,316,000 in efforts to find sources of resistance and cultural control methods and knowledge gained, are being disseminated and promoted by means of participatory approaches to those threatened by the disease. The project strengthened international collaboration, in particular within the Caribbean and Central America, among countries affected by coconut lethal yellowing and related diseases. Activities in 2012 focused on winding up the project as per the scheduled program. Targeted progress in scientific achievements is not reported to be fully realized, while substantive results are reported in the field of introducing novel and improved practical disease containment measures through

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effective training and support at field level. The regional cooperation between the three countries has developed well. Jamaica had taken the lead by advocating good farm management practices as one method for controlling the disease. All the findings through implementation of this project have been disseminated through Famer Field Schools. The project was operationally completed by mid 2012. Full documentation and reporting on project activities, findings and achievements is currently ongoing to ensure an as wide as possible dissemination of practical and scientific results. When finalized, the report will be published at the Fund’s web site. A technical peer review cum dissemination meeting is under consideration.

Rice CFC/FIGR/14: Improving the Competitiveness of Rice in Central Africa Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

FAO Intergovernmental Group on Rice Africa Rice Center (WARDA) Cameroon, Central African Republic and Chad USD 4,672,571 USD 2,000,961 (Grant) (of which USD 500,000 from the OPEC Fund for International Development - OFID) USD 2,171,610

The project goal was to reduce dependency on rice imports, and to improve food security and rural incomes in CEMAC countries through innovative interventions that promote competitive domestic rice production and marketing. To achieve this goal, the project introduces improved rice varieties - particularly newly developed rice hybrids (“NERICA”) that are especially well adapted and available for various African agro-ecological zones - as well as simple market-oriented post-harvest technologies to smallholder-farmers and farmer groups, allowing them to integrate production with market development activities. The development objectives of the project were to: improve on-farm rice productivity and quality through the deployment of NERICAs and other improved production and post-harvest technologies; to develop pilot-scale quality rice processing

and milling centres at community-level for the supply of quality rice to wholesale/ retail markets; to improve the capacity of male and female farmers to participate in integrated production, processing and marketing operations, and to strengthen the human and institutional capacity in the region for promoting profitable rice production, processing and marketing. The project even surpassed its ambitious goal, i.e. to reach a total of 60,000 farming households and enable them to selfreproduce NERICA seeds on a permanent basis: Latest (2012) figures collected from extension agencies and NGOs amount to over 180,000 farmers in the three countris which now have access to project introduced high yielding rice varieties. Recorded figures from shareholders of the established six processing centers indicate that

the use of these varieties lead to a substantial increase in productivity from less than 0.8 tonnes per hectare to 2 t/ha for upland rice, and from less than 2 t/ha to more than 6 t/ha for lowland varieties. The construction of the village based rice processing centers (a ‘one-stop-shop’ for quality along the whole value chain from seed through milling, sorting and packaging, to marketing) with an innovative business model on a pilot basis has been completed and an innovative joint private sector/farmer management model has been successfully applied in practice. First indicative figures available suggest that these processing centers are highly profitable. This will increase the quality competitiveness of locally produced rice vis-a-vis imports and will trigger economic activity in remote rural areas.

CFC/FIGR/15: Transformation of Upland to Irrigated Rice Through Use of Water Harvesting in Costa Rica, Mexico and Nicaragua Submitting ICB FAO Intergovernmental Group on Rice Project Executing Agency International Centre for Tropical Agriculture (CIAT) / Latin American Fund for Irrigated Rice (FLAR) Countries Directly Benefiting Costa Rica, Mexico and Nicaragua Project Cost USD 2,405,300 Common Fund for Commodities USD 1,409,700 (Grant) Co-financing USD 995,600 The project introduced and disseminated water harvesting technologies to increase food production and income generated from a diversified rice-based production system under small-scale irrigation. Farmers and technical staff are being trained in site selection for water catchments, construction of water harvesting facilities and improved crop management practices under irrigation. Fish cultivation in the water catchments was demonstrated and aquaculture technology disseminated. The established pilot water harvesting facilities provide a visible blueprint to regional gov-

ernments and the international development community for further expansion of irrigation to small upland rice growers in the region. The project successfully met its objective of demonstrating the feasibility of water harvesting for capturing water for irrigation on small farms. The project established low cost reservoirs at 12 sites in Nicaragua and 4 in Mexico. The availability of irrigation combined with high productive agronomic practices resulted in large increases in production of various crops and milk, stimulat-

ing farmers’ income by 5 to 10-fold (e.g. net profits in Nicaragua from maize farming increased from 100 USD to 1,500 USD per hectare). Project staff also made significant strides in developing proposals for sustaining and expanding activities in Nicaragua and in Mexico. Due to the demonstration effect of the CFC project, Government authorities, foremost in Mexico, have taken up the technology and expanded water harvesting to the citrus and sugarcane sector. 27 additional reservoirs were constructed during 2012 and another 100 are under evaluation for approval.

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Tropical Fruits CFC/FIGTF/19: Development and Piloting of Horticulture Out-Grower Schemes for Export Markets in Eastern and Southern Africa Submitting ICB FAO Intergovernmental Sub-Group on Tropical Fruits Project Executing Agency TZI and other institutions Countries Directly Benefiting Tanzania and Zimbabwe Project Cost USD 5,600,000 Common Fund for Commodities USD 1,740,000 (Grant) (of which USD 1,000,000 from the OPEC Fund for International Development - OFID) CFC Loan USD 1,200,000 Counterpart Contributions USD 720,000 Co-financing USD 4,385,000 The objective of the project is to strengthen capacity of smallholder outgrower farmers so that they will be able to participate and produce vegetables and fruits for export markets and enhance their incomes and standard of living. These export markets will result in increased foreign currency earnings for Zimbabwe and Tanzania. The project aims to pilot the outgrower scheme for vegetable and fruits. It is focusing on: encouraging local

farmers to participate in outgrower schemes for vegetables and fruits; improving the hectarage and volumes of exports from local smallholder farmers; improving the quality of produce from small scale farms; enhance the market base for the produce and support initiatives to seek market opportunities. Project activities in Zimbabwe mainly concentrated on vegetable production

and marketing while in Tanzania attention was given to mango development. Some progress was made. In Tanzania mango seedlings were distributed and extension services were provided to selected participating farmers. Since there were some changes in the project management structure so the project was extended in both countries. The project is closed and the loan has been recovered.

Tropical Timber CFC/ITTO/42: Research & Development (R&D) for Energy Alternatives

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The objectives of the project are to utilise timber and agricultural waste to generate energy which is usable in various industries by: a) Improving the technologies for the sustainable use of bio-mass resources and promoting their use in agro-business and in rural communities for family energy supply; b) Testing the technologies under semicommercial conditions to demonstrate their technical and financial viability; c) Establishing strategies for the introduction and

International Tropical Timber Organization (ITTO) Forest Research Institute Malaysia (FRIM) Cameroon and Malaysia USD 1,704,376 USD 1,284,868 (Grant) USD 419,508 replication of appropriate bio-mass energy technologies on a commercial basis. In Malaysia the testing of a briquetting technology system and a direct combustion (suspension burner) technology was a success on a pilot basis within the premises of FRIM. Activities in Cameroon started in 2010 with a new identified counterpart institution. The Steering Committee held in March 2012 concluded that instead of adapting equip-

ment designs developed in Malaysia, a cycle of design and development of the system by local experts will be required with the assistance from FRIM. Since apart from a visit from Cameroonian experts to FRIM, no major progress was made, CFC concluded that the project will need to be closed in 2012, inviting the proponents to reformulate their ideas in the context of the new operational guidelines of the CFC.

CFC/ITTO/60: Genetic Resistance of Iroko to Phytolyma Lata Submitting ICB International Tropical Timber Organization (ITTO) Project Executing Agency Société de Developpement des Forest (SODEFOR), Côte d’Ivoire Countries Directly Benefiting Côte d’Ivoire Project Cost USD 472,152 Common Fund for Commodities USD 258,584 (Grant) Co-financing USD 120,000 Counterpart Contribution USD 93,568 Iroko (Milicia regia and Milicia excelsa) are African forest species with high commercial value due to their natural longevity and technical properties. The project addresses the problem of the Iroko species falling prey to insect attacks which stunt growth, affect stem shape and size and

jeopardise the future of the timber species. The project focuses on broadening the genetic pool of collected plant stock, propagating the selected clones on a large scale and establishing pilot-scale industrial plantations based on the silvicultural techniques developed.

84 | Common Fund for Commodities Annual Report 2012

The main outputs are the availability of more resistant genotypes, improved cuttings, 100 ha of Iroko plantations mixed with other species and expanded cooperation and exchange between the three countries involved. The project team carried out transfer of plant ­materials, from Iroko clones resistant to >>

Phytolyma lata, which had been selected in Kani area during the first phase of the project, to secured sites located in the Sangoue Gazetted Forest; SODEFOR staff have been trained in FORIG-Ghana in Kumasi on the cuttings propagation techniques of Iroko; 2560 seedlings of Iroko have been produced

using the cuttings propagation techniques based on the experiences learned from FORIG-Ghana. A nursery has been established in Sangoue, near two water reservoirs fed by a permanent river, for the cuttings propagation work for the production of seedlings of Iroko clones resistant to the attacks of Phytolyma

lata. 65 ha of experimental mixed plantations, composed of Iroko and Khaya anthoteca, Tectona grandis and Acacia mangium, have been established in the Sangoue Gazetted Forest; and fringe communities have been involved in the project implementation (nursery and plantations).

CFC/ITTO/62: Utilisation of Small Diameter Logs from Sustainable Sources for Bio-Composite Products

Submitting ICB Project Executing Agency Countries Directly Benefiting Project Cost Common Fund for Commodities Counterpart Contribution

The project, under implementation in Indonesia, Malaysia, Papua New Guinea and the Philippines, uses small-diameter logs, normally waste products in logging and lumber production, to enable manufacture of biocomposite products. Use of smalldiameter logs (SDLs) for the production of biocomposite products represents an untapped resource. Timber species in native forests that never reach merchantable size as established by market regulations and the gradual thinning of the plantations, have not been significant as timber r­ esources. Small-diameter logs are a sustainable

International Tropical Timber Organization (ITTO) Faculty of Forestry, Bogor Agricultural University, Indonesia Indonesia, Malaysia, Papua New Guinea and the Philippines USD 865,163 USD 600,000 (Grant) USD 265,163 source of raw material enabling an increase in production of value-added biocomposite products to meet the growing demand for construction products in the timberproducing countries as well as in developed countries. The final project workshop was held in December 2011 in Bogor, Indonesia to disseminate research conducted through the project.

The results of the project are: • Increased supply of biocomposte products such as plywood, laminated veneer lumber, glued laminated lumber (glulam), particleboard, medium density fiberboard, and also cement board. All the boards can meet the standard requirements by regulating the factors in processing variables. • Market operators now realize that SDL based timber products have an added advantage in facing to global market orientation, as logs from sustainable forest management are required.

VII Regular Projects Completed in 2012 | 85

Photo: ŠFAO/Simon Maina / FAO 86 | Common Fund for Commodities Annual Report 2012

Photo: CFC

Viii Twenty-Fourth Annual Meeting of the Governing Council Summary of address by the Chairperson

The Chairperson stressed the importance of investment in commodities as the global population had doubled between

The Governing Council of the Common Fund for Commodi-

1970 and 2000, global economic output had increased tenfold

ties held its 24th Annual Meeting in The Hague, Netherlands,

but the global agriculture production had lagged behind and

from 11 to 12 December 2012. H.E. Mr. Sirajuddin Hamid Yousif,

only increased by a factor of three. Thus it was not surprising

Ambassador of Sudan, opened the 24th Meeting of the Govern-

that issues of raw materials supplies and food availability were

ing Council in his capacity as the Chairperson.

of rising concern.

The Chairperson welcomed the delegates, representatives, and

He stated that there was an almost-universal consensus

invited guests. He acknowledged the presence of H.R.H. Prince

that greater investment in commodity sectors was required

Jaime de Bourbon de Parme of The Netherlands representing

to recover global stability and enhance food security. It was

the host Government.

estimated that in the coming years, up to 80% of increase in food production in developing countries would have to

In his opening remarks Chairperson of the Governing Council

come from intensification and technology improvement,

referred to the historic nature of the meeting as this meeting

rather than expansion of cultivated areas. This implied need

would consider recommendations on the “Future Role and

for large volumes of investment in developing countries in

Mandate of the Common Fund for Commodities�. He stated

their commodity sector or they would face rising food

that the meeting was being held at a time of continuing global

insecurity and social tensions.

economic crisis which remained a cause for serious concern for Governments around the globe as the road to recovery was not

The Chairperson referred to the emergence of commodities as an

foreseen to be early or an easy one.

asset class and increased financialisation of commodity markets

Viii Twenty-Fourth Annual Meeting of the Governing Council | 87

Photo: CFC

Welcome address by H.R.H. Jaime de Bourbon Parme, Special Envoy Natural Resources, Ministry of Foreign Affairs of the Netherlands CFC and the CFC should pay greater attention to strengthening the positive development impact of south-south cooperation and trade. He enjoined the CFC to combine the momentum of international cooperation with innovation and result orientation of the private business that would enable the Fund to leverage its resources for greater impact and greater economic returns for all Members of the Fund.

Welcome address, on behalf of the host country Prince Parme speaking on behalf of the host Government and Minister of Trade and Development Cooperation, Ms. Lilliane Ploumen, welcomed the delegates noting that raw materials and commodity issues, central to the CFC’s mandate, will become more important in the next decade. He referred to the expected increase in the world population, from 7 to 9 billion by 2050 with increased needs food, water, housing, clothing and fuel. The rising incomes would shift conwhich had led to rising volumes of investment in derivative instru-

sumption patterns and decline of agricultural output due to lack

ments, but not in investments in physical productive capacities for

of investments and climate change would affect resources in

food and other essential products. Turning the interest of global

unpredictable ways. He expected innovation and the introduc-

investors towards investments in physical commodity sector

tion of new technologies to tackle some of the challenges but all

remained an unresolved challenge in global economic govern-

these issues would have economic and political consequences.

ance and this would have to be addressed if global sustainable economic development in the medium and long term was to be

He referred to the meeting at the World Resources Forum in

achieved. The CFC with its mandate and expertise could play a

China, where Chairman Jinghai Li announced the need for

more proactive and positive role in these discussions.

a new forum to discuss resources, similar to the IEA which demonstrated the growing concern over resources and issue of

He referred to the hope and optimism in the early years of the

resources coming at the forefront of politics in the next decade.

new millennium offered by development of financial markets, the use of market based hedging instruments as a new remedy

Prince Parme emphasised the need to optimize the use of natu-

to commodity related vulnerability, and resulting commodity

ral resources for which engagement of private sector, which in-

dependence. However, these hopes had been belied as financial

cluded farmers, was the key but at the same time governments

instruments were costly, and did not provide sufficient protec-

were responsible for resource governance to facilitate trans-

tion for vulnerable countries at the time of crisis. Advancing the

parent and responsible use of natural resources. He referred

search for new measures to address the vulnerability of com-

to important role played by CFC in commodity development.

modity dependent countries was, therefore, another challenge

Especially the contribution of the CFC’s innovative projects in

for the Common Fund.

opening opportunities to use natural rubber in the tire and car industry or the use of bamboo in sustainable building of houses

The Chairperson noted the shift in the global balance of

or increasing the price for cotton by inventing a method to

economic power. The new centres of growth and changing

improve quality of cotton production to address the issue of

patterns of global trade presented new opportunities but also

sticky cotton project and his favourite example of collaboration

posed new challenges to commodity dependent countries.

of CFC with Heineken that shifted the corporate policy from

These needed to be recognised and reflected in the work of the

central procurement of raw materials to local procurement

88 | Common Fund for Commodities Annual Report 2012

which increased the income of local farmers and gave them a

He brought to the notice of delegates that The Netherlands had

stable market for their products.

recently appointed a minister for both Trade and Development Cooperation, anticipating that there was much synergy to be

He stated that the CFC had always followed the supply chain

found between these two functions. The minister had an-

approach since its establishment while today supply chain

nounced that global food and water security would remain high

management in public-private alliances is the new way forward.

on our political agenda.

In this spirit The Netherlands had started an Initiative for Sustainable Trade two years ago. This agency served as a neutral

Prince Parme called upon delegates, while debating the func-

broker, bringing all the actors in the chain together to improve

tioning of the CFC, not to lose sight of increasing role it could

the livelihood of farmers in sourcing countries: socially and

play in global discussions on resources, providing information on

environmentally. This in turn enabled sustainable production for

agricultural commodities at the level of producers, inspiring and

future generations. In the same spirit he had recently launched

operationalizing innovative approaches (PPP and supply chain

a conflict free supply chain of tin out of the conflict sensitive

management) and promoting new technologies and innovation

Kivus, in eastern DRC. He had brought miners, exporters, trad-

to optimize distribution, access to food and competition.

ers, smelters, soldering manufactures and end-users such as Philips, Tata Steel, Motorola Solutions, RIM Blackberry, IBM, HP and Fairphone together to promote a peace economy instead of a war economy. He emphasised the role of UN agencies and governments as neutral brokers and smart investors to make

Summary of the Statement of the Acting Managing Director on the Activities of the Fund during 2012

resources work for all and for the next generation. Mr. Parvindar Singh, Acting Managing Director welcomed the Prince Parme stated that due to the financial crisis ODA funds

delegates to the 24th Meeting of the Governing Council and

were decreasing. Governments were rethinking aid. Tax payers

thanked H.R.H. Prince Jaime de Bourbon de Parme to have

wanted to see a clearer ‘return on investment’ (or effectiveness)

taken time out from his busy schedule to deliver the welcome

in social and economic terms. Governments wanted a clearer

remarks on behalf of the host Government.

relationship with recipient countries, beyond pure development assistance. With less resources one had to invest smarter. This

The Acting Managing Director referred to the historical highs

was another reason to invest where the greatest impact could

of commodity prices in mid-2008 and the devastating effect of

be made for development. Resource rich countries often suf-

triple crisis of food, fuel and finance that erupted in 2008 had

fered from the resource curse: income increased value of cur-

on prices of most commodities which declined sharply. The

rency, import became cheaper than production, the economy

rebound in commodity prices that commenced at the begin-

becomes dependent on the one resource as the sole source

ning of 2009 had not been sustained as the sovereign debt

of income, corruption, and in worst case war was the effect.

issues, inflationary pressures, and extreme weather events had

Bending it to become a resource blessing was a good invest-

cast a dark shadow on the global growth prospects and thus on

ment: good (resource) governance. That is where part of the

commodity prices. The word economy was still not out of the

int’l aid and knowledge should be directed to.

difficult situation and it was hoped that measures collectively put forward by the world community would lead to revival and sustained recovery. He referred to the process of deliberations on the “future role and mandate of the CFC and its long-term financial sustainability” which commenced in 2009 and after three years of active consultation between members, the recommendations of the Open-ended Committee were before the Council for consideration. The recommendations covered mandate, mission and vision, governance and organizational structure including staffing during the transitional period, operations, resource mobilization and fostering development partnerships, and advocacy and communications. The deliberations and conclusions of this Statement by representative of Italy Mr. Luca Trabalza

Photo: CFC

Viii Twenty-Fourth Annual Meeting of the Governing Council | 89

meeting would determine the future direction of the CFC. He

It was recognized that private and public sector parties es-

urged the Members to put forward all their views on the future

sentially agreed that the impact of volatility must be addressed.

directions of the CFC, so that the CFC continued to reflect the

Nevertheless, there was an apparent lack of agreement and

common interests of the Members and worked towards meet-

common understanding of key underlying problems related

ing their evolving expectations.

to volatility. This prevented effective joint action by public and private sector.

He stated that 2012, 15 projects, i.e. four regular projects and eleven fast track projects worth USD 9.51 million were

Recognizing the challenge, the CFC supported the emergence

approved. In anticipation of changed procedures for 2013

of Public-Private Initiative on Commodity Market Volatility as an

onwards, the CFC had invited proposals for financing through

effort to open such a dialogue. This initiative was supported by

an open call in October 2012 to which there was an over

five major international banks active in commodity trading. The

whelming response and more than 300 proposals from small

first meeting of the PPI on Commodity Market Volatility took

and medium enterprises, producer associations, cooperatives

place in New York at UN Headquarters in September 2012. The

and NGOs were received. The response showed the unmet

outcomes provide a blueprint for greater collaboration to pro-

demand for funds for commodity development. He hoped that

mote productivity and resilience of CDDCs to market shocks.

other institutions would come forward to support commodity development measures.

Major Outcomes of the Meeting He referred to a joint AGRA-CFC-KIT event on “Reaching Public Goals through Private Sector Investment” was held in December

The Governing Council adopted the recommendations of

2012, with kind financial support of the Dutch Authorities, to

the Executive Board on the “Future Role and Mandate of the

discuss how business initiatives could contribute to agricultural

Common Fund for Commodities and its Long-term Financial

development in Africa particularly focusing on how smallholder

Sustainability” and stressed the need for early review of the

farmers could benefit from such interventions. He stated that

Agreement Establishing the Common Fund for Commodities

the conclusions of the event would be integrated in future work

to align it to the present context of international cooperation

of the CFC.

in commodities, the emerging global development agenda, new financing modalities and new vision, mandate and work

He informed the Council that the administrative budget for the

program of the CFC.

year 2013 took into account the expected restructuring of CFC for the current transitional period including savings in meeting

The Governing Council noted that the consideration of projects

costs and operational expenditure of the Fund. To align the ad-

under the new procedures and priorities would commence in

ministrative expenditure with the expected revenues, numbers

2013, and the initial results will be reported in April 2013. The im-

of measures have been initiated and he hoped to match expen-

pact of new projects would only be visible from 2014 onwards.

ditures with earnings over time. To enable operationalization of new procedures of project The volatility of commodity markets, and increasing role of

financing the Governing Council agreed to suspend selected

financing investors have come to prominence recently as one

provisions of the Agreement Establishing the Common Fund for

of the important development issues for commodity depend-

Commodities for a period of three years i.e. up to end 2015.

ent countries. This reflected financial instability following the crisis of 2008, as well as the food crisis of 2010 and forecasts of

The Governing Council adopted new “Policy towards Member

global food shortages in 2012-13. In December 2011 the United

Countries not meeting their financial obligations towards the CFC”

Nations called on international organizations to do more to address the issues of commodity market volatility. The CFC was

H.E. Mr. Sirajuddin Hamid Yousif (Sudan) was elected as Chair-

invited to join other UN bodies in the High-Level Thematic De-

person the Governing Council for 2013.

bate in April 2012 under the leadership of H.E. Leonel Fernandez Reyna, President of the Dominican Republic. The CFC was also

Following were elected as Vice-Chairpersons for 2013

invited as panel member in the “High Level Event on food price volatility and the role of speculation” held in Rome in July 2012.

African Group: Mr. Dauda Kigbu (Nigeria); Asia and Pacific

The CFC focussed its contribution on the role of private sector,

Region Group: H.E. Mr. Buddhi K. Athauda (Sri Lanka);

commodity dependence, vulnerability and resilience as key fac-

China: Mr. Fei Li; Latin American and the Caribbean Region

tors defining the impact of market volatility on the poor.

Group: to be announced; OECD Group: Ms. Anna Tofftén (Sweden); Russian Federation: to be announced.

90 | Common Fund for Commodities Annual Report 2012

IX  Financial Reports Balance Sheet - First Account, as of 31 December 2012 (expressed in USD & SDR) 2012 2011 20122011 USD USD SDRSDR ASSETS Cash and Cash equivalents Cash in Bank




Time Deposits




4,905,400 5,519,400





Investments 84,699,600





Debt Securities




Promissory Notes 58,528,700




Amounts Receivable From Members Amounts Receivable From Members





Provision For Overdue Members Capital Subscription













Prepayments Other Receivables Accrued Income on Investments





Recoverable Taxes on Goods & Services





Receivable from Dutch Trust Fund





Receivable from EC Trust Fund





Other receivables













Accrued Liabilities





Payable to EU/EC





Turkey settlement





Japan settlement





Belgium settlement










Total Assets LIABILITIES AND EQUITY Liabilities

Capital Subscriptions & Accumulated Surplus Paid-in-Shares of Directly Contributed Capital




Provision For Overdue Members Capital Subscription





Net Earnings Programme





Accumulated Surplus





Translation Reserve












Total Equity and Liabilities


iX Financial Reports | 91

Balance Sheet - Second Account, as of 31 December 2012 (expressed in USD & SDR) 2012 2011 20122011 USD USD SDRSDR ASSETS Cash and Cash equivalents Cash in bank





Time Deposits









Investments Debt Securities









Promissory Notes 6,824,500




Amounts Receivable From Members Amounts Receivable From Members





Provision For Overdue Members Capital Subscription










Loans Deferred Loan Receivable




Current Loan Receivable










Other Receivables Accrued Income on Investments




Receivable from Dutch Trust Fund





Receivable from EC Trust Fund





Other Receivables









Total Assets 97,074,600





LIABILITIES AND EQUITY Liabilities Turkey Settlement




Belgium Settlement





Payable to Dutch Ministry





Payable to EU/EC





Other Payables










Capital Subscriptions and Accumulated Surplus Paid-in-Shares of Directly Contributed Capital




Provision For Overdue Members Capital Subscription





Accumulated Surplus





Translation Reserve









Total Equity and Liabilities 97,074,600




92 | Common Fund for Commodities Annual Report 2012

Income Statement for the period 1 January to 31 December 2012 - First Account (expressed in USD & SDR) 2012 2011 20122011 USD USD SDRSDR Income Net Income from Investments




Other Income




2,672,200 270,700

Realized Exchange (loss)/gain on Operations





Unrealized Exchange (loss)/gain on translation of Balance Sheet items





Total Income 1,978,300





Expenses Staff Salaries & Benefits




Operational Expenses





Meeting Costs





Premises Costs





Project Preparation Facility










Information Dissemination





Total Expenses





NETT (LOSS)/PROFIT -2,744,700







Accumulated Surplus as at 1 January


Nett (Loss)/Profit





Transfer Unrealized Exchange (loss)/gain to Translation Reserve





Transfer to Net Earnings Program (Advocacy & Information Dissemination)





Exchange adjustment










iX Financial Reports | 93

Income Statement for the period 1 January to 31 December 2012 - Second Account (expressed in USD & SDR) 2012 2011 20122011 USD USD SDRSDR Income Net Income from Investments




Income from Loans




2,367,200 98,600

Voluntary Contribution in cash





Realized Exchange (loss)/gain on Operations





Unrealized Exchange (loss)/gain on translation of Balance Sheet items





Total Income





Expenses Project Payments





Total Expenses










Accumulated Surplus as at 1 January





Nett (loss)/profit





Transfer Unrealized Exchange (loss)/gain to Translation Reserve





Exchange adjustment










94 | Common Fund for Commodities Annual Report 2012

Directly Contributed Capital, as at 31 December 2012 (USD) First Account Second Account Outstanding Payments Constibutions*


Cash Promissory Constributions*

Payments CashPromissory















































































Burkina Faso





















Cape Verde







Central African Republic










































Dem.Republic of Congo(zaire)







Costa Rica







Cote d’Ivoire










































Equatorial Guinea













































































































































Dem. People’s Republic of Korea







Republic of Korea














Lao People’s Dem. Republic





















iX Financial Reports | 95

Directly Contributed Capital, as at 31 December 2012 (USD) First Account Second Account Outstanding Payments Constibutions*


Cash Promissory Constributions*

Payments CashPromissory






























412,123 370,910



























































































Papua New Guinea




























Russian Federation





















Sao Tome and Principe







Saudi Arabia














Sierra Leone




























Sri Lanka




























Syrian Arab Republic







United Republic of Tanzania





















Trinidad & Tobago





















United Arab Emirates







United Kingdom



































TOTAL 14,949,048 68,895,308





* As stated in Schedule B of the Agreement Establishing the Common Fund for Commodities, Members in the category of least developed countries as defined by the United Nations shall pay only 30% of the number of shares exceeding 100, over a period of three years. The remaining 70% (of shares exceeding 100) shall be paid as and when decided by the Executive Board. This remaining 70% is also included in the Outstanding Contributions.

96 | Common Fund for Commodities Annual Report 2012

Voluntary Contributions, as at 31 December 2012 (USD) Payments Cash up Payments Cash

to 31 Dec. 2011




Pledge (3rd 5YAP) USD (1)



Payments Total USD 





























1,298,906 517,260





















France (3)


























































































14,604,834 17,177,212







Papua New Guinea







Republic of Korea





















Switzerland (3)














United Kingdom (2)












(1) Amounts pledges have been converted to USD equivalent using the IMF rates of 31/12/12 (2) Payment of MOU of GBP 4,270,000 received considered as contribution under Article 18.1.(e) (3) Not a member of CFC

2012 Administrative Budget, Summary Item 

Approved Administrative Budget 2012

USD  Staff Costs 3,821,000

EUR 2,636,500

Operational Costs 1,108,100


Meeting Costs 505,700


Contingency 14,500


TOTAL 5,449,3003,759,900

iX Financial Reports | 97

98 | Common Fund for Commodities Annual Report 2012

Annex I Governors and Alternate Governors as of 31 December 2012 Chairperson of the Governing Council during 2012: H.E. Mr. Sirajuddin Hamid Yousif (Sudan)

Vice-Chairpersons: Africa: Mr. Dauda Kigbu (Nigeria) Asia and Pacific: H.E. Mr. Buddhi K. Athauda (Sri Lanka) China: Mr. Fei Li Latin America and the Caribbean: to be announced OECD: Ms. Anna Tofftén (Sweden) Russian Federation: to be announced




c/o H.E. Mr. Nanguyalai Tarzi

Alternate Governor


H.E. Ms. Nassima Baghli


Mr. Sebastião de Sousa e Santos Junior


Mr. Luis Pablo María Beltramino

Ms. Melisa Campitelli Mayor


Mr. Guenther Schoenleitner

Mr. Klaus Oehler


Mr. Mahbub Ahmed

H.E. Mr. Muhammad Ali Sorcar


Mr. Pierre Dubuisson


H.E. Mr. Charles Borromée Todjinou

Ms. Gladys Marcelle Attiogbe epouse da Silveira


H.E. Mr. Daw Penjo

Mr. Tenzin Choda


H.E. Ms. C.T. Modise

Mr. Micus Chiwasanee Chimbombi


Mr. Paulo Estivallet de Mesquita

Mr. Ricardo de Souza Monteiro


Mr. Petar Dimitrov

Burkina Faso

Ms. Salimata Some-Traoré

Mr. Amadou Sagnon


Ms. Victoire Ndikumana

Mr. Emmanuel Niyungeko


Mr. Luc Magloire Mbarga Atangana

H.E. Ms. Odette Melono

Cape Verde

c/o Minister for Foreign Affairs

Central African Republic

Mr. Fidèle Gouandjika

Mr. Ernest Gothard-Bassebe


Mr. Youssouf Abassallah

Mr. Daouda Tabanda


Mr. Wenliang Yao

Mr. Fe LI


H.E. Mr. Eduardo Pizarro Leon Gómez

Ms. Maria Alejandra Páez Gómez


Mr. Said Mohamed Ali Said

Democratic Republic of Congo

c/o Mr. Sébastien Mutomb Mujing


Mr. Juste Benjamin Lekaka

Costa Rica

H.E. Mr. Jorge A. Urbina Ortega

Mr. Jorge Sauma Aguilar

Côte d’Ivoire

Mr. Mamadou Sangafowa Coulibaly

Mr. Aly Toure


Ms. María de la Luz B’Hamel Ramírez

Ms. Alina Revilla-Alcazar

Denmark Djibouti

Mr. Ismaël Ali Abane


H.E. Mr. Miguel Calahorrano

Mr. Arturo Cabrera


H.E. Mr. Mahmoud Ahmed Samir Samy

Ms. Amany Fahmy

Equatorial Guinea

c/o H.E. Mr. Vitorino Nka Obiang Maye

c/o Director General de Comercio


H.E. Mr. Kassu Yilala Ashame


c/o Ms. Sari Laaksonen


Mr. Fidèle Mengue M’engouang

Mr. Bertrand Rubens Matteya


H.E. Mr. Mamour Jange

Ms. Fatou Mbenga Jallow


Mr. Reinhard Krause

Mr. Edgar Gansen


Mr. Joseph Samuel Annan

Mr. Kwado Owusu-Agyeman


Mr. Nikolaos Thomopoulos

Ms. Stella S. Papoutsi


H.E. Mr. Eduardo Sperisen Yurt

Ms. Mónica Guerra Garrido


Hadja Zénab Diallo

Mr. Mohamed Camara

Annex I Governors and Alternate Governors as of 31 December 2012 | 99




c/o Embassy of Guinea-Bissau


Mr. Wilson Laleau


Mr. Héctor Hernández Amador

Mr. José Adalberto Sorto


Mr. J.S. Deepak

Mr. Asit Tripathy


Amb. Hasan Kleib

Mr. Andin Hadiyanto


Mr. Hashim Mohammed Hatem

Mr. Mwafak Taha Izulddin


H.E. Ms. Mary Whelan


Ms. Giuseppina Zarra

Ms. Laura Calligaro


c/o Mr. Roger Clarke

H.E. Mr. Wayne McCook


Mr. Ryusuke Nakayama

Mr. Yutaka Kikuta


H.E. Ms. Ruthie C. Rono

Mr. George Kwanya

Democratic People’s Republic of Korea

Mr. An Myong Hun

Mr. Sok Jong Myong

the Republic of Korea

Mr. Jan-Wan Bahk

Mr. Choongsoo Kim


c/o H.E. Mr. Hafeez Mohammed Salem Al-Ajmi


Mr. Somvang Ninthavong

Mr. Thongphane Savanpheth


Mr. Mohlabi Tsekoa

H.E. Ms. Mamoruti A. Tiheli


H.E. Mr. Pierre-Louis Lorenz

Mr. Sergej Hentzig


H.E. Mr. Albert Camille Vital

Mr. Eric Beantanana


H.E. Ms. Brave R. Ndisale

Mr. Joseph Chiteyeye


Ms. Nurmala Abdul Rahim

Mr. Wan Mazlan Wan Mahmood


c/o Mr. Abdul Samad Abdulla

Mr. Abdulla Salih


H.E. Mr. Ibrahim Bocar BA

Mr. Mamadou Macki Traore


Mr. Mohamed Ould Hitt

Mr. Mohamed Moctar Alaoui


Mr. Jose Antonio Meade

Ambassador Patricia Espinosa Castellano


c/o Mr. Abdelkarim Ben Sellam

Mr. Brahim Bah


Ms. Cerina Banú Mussá

Mr. Joao José Macaringue


Mr. Tin Naing Thein

Ms. Myo Nwe


H.E. Mr. Ram Mani Pokharel

c/o Mr. Lakshuman Khanal

the Netherlands

Mr. Jaap Smit

Mr. Robert-Jan Scheer


Mr. Orlando Solórzano Delgadillo

H.E. Mr. Carlos J. Argüello Gómez


Ms. Florentine Pierrette Araoye


Mr. Dauda Kigbu

H.E. Ms. Nimota Nihinlola Akanbi


Ms. Torun Dramdal

Ms. Siri Beate Barry


Mr. Zafar Mahmood

H.E. Mr. Aizaz Ahmad Chaudhry

Papua New Guinea

Mr. Michael Maue Obe


H.E. Mr. Allan Wagner

Mr. César Talavera Silva Santisteban

the Philippines

H.E. Ms. Lourdes G. Morales

Mr. José I. Laquian


Mr. Vítor Gaspar

Mr. Helder Reis

Russian Federation

Mr. Juravlev Alexander Gennadievich

Mr. Cherevko Alexander Nikolaevich


Mr. Emmanuel Hategeka

Ms. Peace Basemera


c/o Deputy Prime Minister

Sao Tome and Principe

Minister for Foreign Affairs

Saudi Arabia

Mr. Abdulrahman A. Aloraini

Mr. Ahmed Al-Teraifi


H.E. Mr. Amadou Kebe

Mr. Amadou Dame Sall

Sierra Leone

Mr. Ibrahim Keh Turay


H.E. Mr. Kwok Fook Seng


c/o H.E. Mr. Yusuf Mohamed Ismail


Mr. Enrique Fanjul Martin

Sri Lanka

Mr. P.D. Fernando

H.E. Mr. Buddhi K. Athauda


H.E. Mr. Sirajuddin Hamid Yousif

Mr. Ali El-Sadig Ali Al-Hussien


Mr. Andreas M. Hlophe


Ms. Anna Tofftén

Syrian Arab Republic

Mr. Mohammad Ghassan Al-Habbash

the United Republic of Tanzania

H.E. Mr. Matern Y. Lumbanga

Ms. Joyce Mapunjo


c/o Mr. Apichart Jongskul

Mr. Apichart Jongskul


H.E. Mr. Kodjo Félix Sagbo

Ms. Biam Bidinabe Hodjo

Trinidad & Tobago

Mr. Vasant Bharath

Ms. Edwina Leacock


H.E. Mr. Karim Ben Becher

Ms. Chiraz Ben Abdallah


Mr. Fredrick E. Mwesigye

Ambassador Mirjam Blaak

100 | Common Fund for Commodities Annual Report 2012

Alternate Governor



United Arab Emirates

c/o Mr. Eisa Alhammadi

Alternate Governor

United Kingdom of Great Britain and Northern Ireland

c/o Mr. Jonathan Lingham


Mr. Rubén Darío Molina

H.E. Ms. Haifa Aissami Madah


Mr. Mohamed Yahya Saad-Al-Katta’a

Mr. Omar G. Al-Soufi


H.E. Ms. Grace Musonda Mutale Kabwe

Mr. Chris C. Mbewe


Ms. Abigail Shonhiwa

H.E. Ms. Mary Margaret Muchada

European Union

Mr. Jean Pierre Halkin


Mr. Sindiso Ndema Ngwenya

African Union

c/o Ms. Tarana Loumabeka

East African Community

Amb. Richard Sezibera

Ms. Flora Musonda

Caribbean Community (CARICOM)

Amb. Irwin LaRocque

Ms. Desiree Field-Ridley

Southern African Development Community (SADC)

c/o Mr. Tomaz A. Solamão

Andean Community

c/o Mr. Adalid Contreras Baspineiro

Mr. E.A. Mohammed

Union Economique et Monetaire Ouest Africaine (UEMOA)

c/o Mr. Rui Duarte Barros

Economic Community of West African States (ECOWAS)

c/o Mr. James Victor Gbeho

Eurasian Economic Community (EAEC)

Mr. Alexander Kasakov

Mr. Michael Shishatski

Annex I Governors and Alternate Governors as of 31 December 2012 | 101

Annex II List of Publications Bananas

• Cotton Facts, 2004 (CFC Technical Paper 25)

• The Banana Improvement Project (BIP), Amsterdam, 2001

•  Genome Characterization of Whitefly-transmitted Gemini-

(CFC Technical Paper No. 5) • Banana, Breeding, and Biotechnology (Commodity Advances through Banana Improvement Project Research, 1994-1998)

viruses of Cotton and Development of Virus-resistant Plants through Genetic Engineering and Conventional Breeding. Faisalabad, Pakistan, 2002 (CFC Technical Paper 22) • Improvement of the Marketability of Cotton Produced in

Cashew • Regional Meeting on Development of Cashew Nut Exporters from West Afric. (CFC Technical Paper 23) • The Cashew Sub-Sector in Eastern and Southern Africa. Proceedings of a Sub-Regional Workshop held in Maputo, Mozambique. Amsterdam, 2001 (CFC Technical Paper 19) • Cashew nut production - handbook.

Zones Affected by Stickiness. Amsterdam, 2001 (also available in French and on CD ROM) (CFC Technical Paper 17) • Integrated Pest Management of the Cotton Boll Weevil in Argentina, Brazil and Paraguay. Amsterdam, 2002 (CFC Technical Paper 16) •  Guideline Manual on Integrated Pest Management for ­Cotton with a Focus on White Fly and Aphids. Amsterdam, 2000 (also available in French) (CFC Technical Paper No. 11)

Cocoa • Collaborative and Participatory Approaches to Cocoa Variety Improvement (CFC Technical Paper 59)

• Integrated Pest Management for Cotton with a Focus on White Fly and Aphids, Amsterdam, 2000 (also available in French) (CFC Technical Paper No. 10)

• The use of molecular biology techniques in search for ­varieties resistant to witches broom disease of cocoa


(CFC Technical Paper 55)

• Improving Marketing Efficiency of Artisanal Fishermen in

• Global approaches to Cocoa germplasm utilization and conservation. (CFC Technical Paper 50)

Central America, Southern Mexico and the Caribbean (CFC Technical Paper 36) • Valorisation of Fishery Products in West Africa. Proceedings


of a Workshop held by the Common Fund for Commodities

• Rehabilitation of the Coffee Sector: Rwanda. Development of

in association with the Ministry of Fisheries and Maritime

Washed Processing of Coffee within a Framework of Private Investment, Amsterdam, 2001 (CFC Technical Paper No. 7) • Characteristics of the Demand for Robusta Coffee in Europe, Amsterdam, 2001 (CFC Technical Paper No. 4) • Study of Marketing and Trading Policies and Systems in

Economy of Mauritania (CFC Technical Paper 26) • Manual on Processing, Processing, Packaging and Presentation of Value-Added Fisherey Products (INFOFISH) • Tilapia: Production, Marketing and Technological Developments

­Selected Coffee Producing Countries, with Country Profiles on: Angola, Cameroon, Democratic Republic of Congo,


Ethiopia Ghana, Guatemala, India, Madagascar and Togo,

• Alternative Uses of Sorghum and Pearl Millet in Asia. Andhra

Amsterdam, 2000 (CFC Technical Paper No. 3) • Final report: Integrated management of coffee berry borer.

Pradersh, India, 2003 (CFC Technical Paper 34) • Utilisation of Regional Germplasm in the Improvement of Sorghum and Pearl Millet and Improved Post-harvest

Cotton •  Commercial Standardization of Instrument Testing of Cotton

Technologies, Amsterdam, 2003 (CFC Technical Paper 28) • Strengthening Potato Value Chains

with particular consideration of Africa (CFC Technical Paper 60) • Utilisation of Cotton Plant By-produce for Value Added Products (CFC Technical Paper 58) •  Regional Consultation of Genetically Modified Cotton for Risk Assessment and Opportunities For Small-Scale Cotton Growers (CFC Technical Paper 53) •  Cotton Bollworm (CFC Technical Paper 45) • Sustainable Cotton Production West & Central Africa (CFC Technical Paper 41)

102 | Common Fund for Commodities Annual Report 2012

Jute • Jute Reinforced Polyolefines for Industrial ApplicationsPhase II: Material Optimization and Process Up-scaling for Commercialization (CFC Technical Paper 54) • Jute Road Map (CFC Technical Paper 44) • Jute Geotextile: Techno-Economic Manual, Amsterdam, 1998 (CFC Technical Paper 1)

Hard Fibres

Coconut Production through Control of Lethal Yellowing

• Symposium on Natural Fibres (CFC Technical Paper 56)

Disease, held in Kingston, Jamaica. Amsterdam, 2002

•  Coir Building and Packaging Materials (CFC Technical Paper 43) •  Manual for the in Vitro Culture of Agave (CFC Technical

(CFC Technical Paper 18) • Proceedings of the Final Workshop of the Groundnut ­Germplasm Project

Paper 38) •  Comparative Advantages of Sisal, Coir and Jute Geotextiles.


Amsterdam, 2004 (CFC Technical Paper 31) • International Coir Convention. Proceedings of a Convention held by the Food and Agriculture Organization of the United Nations and the Common Fund for Commodities. Colombo, Sri Lanka, 2002 (CFC Technical Paper 20)

•  Conservation, characterization, collection & utilization of the genetic resources in olive (CFC Technical Paper 57) • Good Practice in Vegetable Water and Compost Spreading on Agricultural Land: Case of Olive Growing/Technical Manual.

• Alternative Application for Sisal and Henequen. Amsterdam,

Plants and Herbs

2001 (CFC Technical Paper 14) • Sisal: Past Research Results and Present Production Practices in East Africa, Amsterdam, 2001 (CFC Technical Paper 8)

• Medicinal Herbs & Plants Scope for Diversified and ­Sustainable Extraction (CFC Technical Paper 37)

•  Coir Processing, Amsterdam, 2001 (CFC Technical Paper 6) • Product and Market Development of High Value-added Coir Products, with Special Reference to Rubberized Coir and

Rice • Rice Sector Development in East Africa(Soft copy only)

Coir Geotextiles, Amsterdam, 1998 (CFC Technical Paper 2)

Roots and Tubers Hides and Skins

• Strengthening Potato Value Chains

•  Commercialisation of hides and skins by improving collection and quality in small holder farming systems in Botswana,


Malawi, Zambia and Zimbabwe (CFC Technical Paper 52)

• Blends of Natural Rubber (Novel Techniques for Blending

•  Pre-slaughter Defects of Hides/Skins and Intervention

with Speciality Polymers)

­Options in East Africa: Harnessing the Leather Industry to Benefit the Poor (CFC Technical Paper 47) • A Blueprint for the African Leather Industry: a Development, Investment and Trade Guide for the Leather Industry in Africa. Amsterdam, 2004 (Also available in French) (CFC Technical Paper 30)

Sugar • Proceedings of the Symposium on Challenges and Opportunities for Organic Sugar, held in Guatemala City. Amsterdam, 2001 (CFC Technical Paper 13) •  Sugar Factories Surplus Bagasse Utilisation for Co-generation Processes for Sugar Industries in Eastern Africa,

Meat and Dairy

­Amsterdam, 2001 (CFC Technical Paper 12)

• The Success story of small holder dairy in Zambia and

• Policies for Small-Scale Sugar Cane Growing in Swaziland, Amsterdam, 2001 (CFC Technical Paper 9)

­Lesotho (CFC Technical Paper 62)



• Zinc Die Casting, Amsterdam, 2002 (CFC Technical Paper 15)

• Cocowood Utilization in the Philippines: A Compilation of Abstracts (FPRDI/ITTO/CFC Project)

Oilseeds/Oils/Fats •  Shea Kernel & Shea Butter in Africa: From Product to Markets (CFC Technical Paper 46)

Others • Current trends and the new development role of commodi-

•  Coconut Hybrids for small holders (CFC Technical Paper 42) •  Groundnut seed supply systems in West Africa: Current practices, constraints and opportunities (CFC Technical Paper 40)

ties - Summary Report - Sept. 2006 (CFC Technical Paper 49) •  Tsunami Regional Consultation Meeting Proceedings (CFC Technical Paper 48) • Finance for Small-Scale Commodity Processing: From Micro

• Market prospects for groundnuts in West Africa (CFC ­Technical Paper 39)

to Meso Finance. Amsterdam, 2004 (CFC Technical Paper 32) • Pilot System of Warehouse Receipts in the Grain Sector,

• International Workshop on Processing and Marketing of Shea Products in Africa. Dakar, Sengal, 2002 (CFC Technical Paper 21)

­Samara, Russian Federation. Amsterdam, 2004 (CFC Technical Paper 27) • Proceedings of the Workshop on Enhancing Egypt’s Export-

•  Proceedings of the Expert Consultation on Sustainable

ers: Market Opportunities for Food and Agriculture-led

Annex II List of Publications | 103

Commodities. Proceedings of a Workshop held by the

Commodity Issues Series

Common Fund for Commodities in collaboration with the

• Small-scale Mining in Africa: A Case for Sustainable

International Executive Service Corps/Center for Business Support (OESC/CBS). Cairo, Egypt, 2002 (CFC Technical Paper 24) • African Dryland Commodity Atlas • Booming Commodities: Recent Market Changes and

­Livelihood, Amsterdam, November 2008 • Biofuels: Strategic Choices for Commodity Dependent ­Developing Countries, Amsterdam, November 2007 • Current Trends and the New Development Role of ­Commodities, Amsterdam, November 2006

Their Implications for Commodity Dependent Developing Countries • Certification of Commodities: Opportunities and challenges for the rural poor • Coffee - An exporter’s guide • Commodity Atlas • Commodity Markets and Excess Volatility: Sources and Strategies to Reduce Adverse Development Impacts, 2010 • Commodities and Their Common Fund • Commodity Markets and Excess Volatility: Sources and ­Strategies to Reduce Adverse Development Impacts, 2011. • Dealing with commodity price volatility in developing ­countries • Desarrollo de productos pesqueros de valor agregado • Enhancing Productive Capacities and Diversification of Commodities in LDCs and South-South Co-operation • From Sorghum to Shrimp: A journey through commodity projects • Global information system on tropical fruits with special focus on Africa

Conference Proceedings • Proceedings of the International Seminar: The Role of ­Commodities in Development, The Hague, The Netherlands, 14 December 2009 • Round Table Meeting on Commodity Development in Asia and the Pacific, Nanning, China, 17-21 August 2009 • Round Table Meeting on Commodity Development in in the Middle-East and Arab Region, Dubai, 24 & 25 August 2008 • Round Table Meeting on Commodity Development in Latin America and the Caribbean, Peru, 10 - 13 September 2007 • Round Table Meeting on Commodity Development in Africa, Cameroon 18 - 21 September 2006 • Round Table Meeting on Commodity Development in Asia and the Pacific, Kuala Limpur, Malaysia 23 - 26 November, 2004 • Proceedings on the Joint UNCTAD/CFC Workshop on ­Enhancing Productive Capacities and Diversification of Commodities in LDCs and South-South Co-operation, 22 - 23 March 2004 • Commodity Development in Latin America and the

• Three dimensional woven bamboo products

­Caribbean, Havana, Cuba, 17 - 20 November, 2003 (Available

• International Seminar on Strengthening of Collaboration for

in English & Spanish)

Jute, Kenaf and Allied Fibres Research & Development, 2012 • Linking Farmers, Extension and Research at Community Level • Manual de Manipulación y Comercialización de Productos Pesqueros de la Cuenca Amazónica • Manual for collaborative research with smallholder coffee farmers

• Commodity Development in Africa, Burkina Faso, (Available English & French), 18 - 21 November, 2002 • Commodity Development in Asia and the Pacific Region, Kochi, India, 19 - 21 November, 2001 • Proceedings on Structured Short and Medium Term Finance to Small-Scale Farmers, 4 - 6 April, 2001

• Manual on processing and presentation of value-added tuna

• En busqueda de soluciones a la crisis del café en centroamé-

products African Drylands Commodity Atlas (English/French)

rica, el caribe, México Y colombia - Guatemala (Spanish only)

• Natural enemies, natural allies • Promoting Beneficial Financial & commodity market ­synergies, Brussels, 2011 • Special edition of the ICAC Recorder. Cooperation for ­Development: Results and Impacts of Joint ICAC-CFC ­Activities. Vol. XXIX No. 4, December 2011. (English, French and Spanish) • The Gourmet Coffee Project Vol. I & 2 • UNCTAD Commodity Yearbook 2003 - Annuaire Des ­Produits de Base - Vol. 1 and 2

104 | Common Fund for Commodities Annual Report 2012

© 2013 - Common Fund for Commodities The contents of this report may not be reproduced, stored in a data ­retrieval system or transmitted in any form or by any means without prior written permission of the Common Fund for Commodities, except that reasonable extracts may be made for the purpose of ­comment or review provided that Common Fund for Commodities is acknowledged as the source. Common Fund for Commodities Visiting Address Stadhouderskade 55 1072 AB Amsterdam The Netherlands Postal Address P.O. Box 74656, 1070 BR Amsterdam The Netherlands t +31 (0)20 575 4949 f +31 (0)20 676 0231 tx 12331 cfc nl e i Editor Royal Tropical Institute, Amsterdam Graphic Design Anita Simons, symsign, Amersfoort Printing High Trade, Zwolle

Cover photos: Above: A farmer woman using a magnifying glass to check rice reeds for insects in Kodith, Senegal. Photo: ©FAO/Olivier Asselin / FAO Below: Bean varieties on sale at a roadside market place in Ouagadougou, Burkina Faso. Photo: ©FAO/Alessandra Benedetti / FAO

Common Fund for Commodities | Annual Report 2012

 Common Fund for Commodities

Mission & Vision Statement Mission “To contribute to poverty alleviation by strengthening the income-generating capacity of commodity producers and mitigating vulnerability to their economic well being” Vision “To strengthen and diversify the commodity sector in developing countries and transform it to be a major contributor to poverty alleviation and sustained economic growth and development.”

 Annual Report 2012 Common Fund for Commodities

Annual Report Common Fund for Commodities 2012