Annual Report Common Fund for Commodities 2013

Common Fund for Commodities | Annual Report 2013

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 2013 Common Fund for Commodities

© 2014 - 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 managing.director@common-fund.org i www.common-fund.org Editor Royal Tropical Institute, Amsterdam Graphic Design Anita Simons, symsign, Amersfoort Printing High Trade, Zwolle

Cover photos: Above: A woman selling beans at a local market in Chimoio, Mozambique. Photo: ©FAO/Paballo Thekiso / FAO Below: Millet production in the Sourou Valley is aided by irrigation, Yemen. Photo: ©FAO/Jeanette Van Acker / FAO

Photo: M. Tamagnini / FAO

Annual Report 2013 Common Fund for Commodities

Copyright Š Common Fund for Commodities 2013 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 2013

Foreword

5

I CFC at a glance

Bamboo and Rattan

51

Cocoa

52

7

Coffee

53

Establishment, Membership

7

Cotton

55

Objectives, Main Activities and Structure

7

Fish 56

Financing Instruments

8

Grains/Roots and Tubers

56

Governing Bodies

8

Jute

58

Headquarters 8

Meat and Dairy

59

Member States, Institutional Members and Votes

Oilseeds/Oils/Fats

60

Olive Oil

62

9

Institutional Members of the Common Fund for Commodities

11

Rice 63

Designated International Commodity Bodies (ICBs) 11

Rubber (natural)

64

Institutions with Memorandum of Understanding

12

Sugar

65

Partner Institutions

12

Tea

65

The CFC Partnership Network

13

Tropical Fruits

67

Organizational Chart of CFC Secretariat 2013

13

Tropical Timber

68

Ii Project profiles in 2013

14

VII Regular Projects Completed in 2013

71

products in Indonesia

15

Impact at scale through investment funds

23

VIII Twenty-Fifth Annual Meeting of the Governing Council

83

31

IX Financial Reports

85

Utilizing small diameter logs from ­bio-composite

Impact assessment and the quest for the Holy Grail

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

IV Regular Projects Approved in 2013 V Fast Track Projects Approved in 2013

VI Summary of Ongoing Regular Projects 2013

Balance Sheet - First Account

85

Balance Sheet - Second Account

86

39

Income Statement - First Account

87

39

Income Statement - Second Account

88

Directly Contributed Capital

89

Voluntary Contributions

91

41

Administrative Budget 2013

91

49

Auditor’s Report 2013

92

51

Annex I Governors and Alternates Governors 2013

93

Contents | 3

Photo: ŠFAO/Thomas Hug / FAO

Photo: ©FAO/AFP/Hoang Dinh Nam / FAO

Foreword I have the honor to present the 2013 Annual Report of the

At the 25th Governing Council meeting, the Member-States

Common Fund for Commodities.

reviewed the recommendations on the Amendments to the Agreement Establishing the Common Fund for Commodities.

The year 2013 saw the commencement of implementation of

The Members, desirous of moving forward in the process of

the new Operational Guidelines of the CFC for the transition

strengthening the CFC as an effective instrument of international

period 2013-2015, with a larger emphasis on loan financing to

cooperation in commodities unanimously decided to establish

recycle scarce resources of the Fund, greater involvement of

an Open Transition Committee. The objective was to finalise the

private sector in project implementation, and project proposals

draft amendments to the Agreement Establishing the CFC for

sought through an open call. This is a very significant change

consideration by the Member States, so that the CFC could fulfil

in operational modalities of the Fund, and it resulted in direct

the expectations of Members and other stakeholders regarding

submission of different types of proposals seeking financial

the “Future Role and Mandate of the CFC”. These recommenda-

­support from the Fund, than those received earlier.

tions are expected to be considered at the 26th Meeting of the Governing Council to be held in December 2014.

The Members of the CFC, recognizing that fundamental reasons for t­ he establishment of the Common Fund for Commodities,

During the year, the CFC continued to concentrate on Project

i.e. the socio-economic development of commodity producers

implementation, its core business. In 2013, the CFC approved

and strengthening their position in the markets were as valid

19 regular projects - fourteen regular projects and five partner-

now as at time of establishment of the Fund, mandated a review

ships with Development Impact Funds and additional three

of the Agreement Establishing the CFC to formalize a modern

fast track projects. The CFCs support to the approved projects

operational framework and a corresponding structure for the

stood at USD 15.17 million, of which the Second Account con-

CFC to meet its goals more effectively. The review is intended

tribution of the Fund was USD 8.33 million. The direct project

to align the Agreement to the present context of international

related disbursements in 2013 totaled about USD 12.35 million.

cooperation in commodities, the emerging global development agenda, new financing modalities and a new vision, mandate

The collaboration between the CFC and the private sector

and work program of the CFC.

increased in 2013 as a result of the new mode of the Fund’s

Foreword | 5

Photo: CFC

Parvindar Singh, Managing Director a.i.

Mr. Suleiman J. Al-Herbish, Director General of OFID and the Managing Director a.i. of CFC at the Governing Board meeting of OFID chaired by Mr. Abdul Wahad Ahmed Al-Bader, ­Chairman of the Governing Board.

In December 2013, the Dutch Minister for Foreign Trade and Development Cooperation confirmed a USD 5.5 million support for a new program i.e. “CFC Dutch Trust Fund Commodity Partnership DTF I”, managed by the Common Fund for ­Commodities. The program facilitates increased support for enhancing commodity production and productivity, improving value chains, modernizing irrigation and strengthening the ­position of small-scale producers. The projects to be funded under the Trust Fund arrangement will align with the Dutch government’s food security priorities, including sustainable development of the agro-food business/horticulture sub-sectors.

The program will be completed by 31 December 2020. This is the second trust fund arrangement between the CFC and the operations. The CFC is now further streamlining its rules and

Dutch government. As an important member country of the

procedures for screening, approving and implementing propos-

Common ­Fund for Commodities, the Netherlands’ decision

als for speedier start-up of projects. These rules and procedures

to once again entrust substantial funding to the CFC’s manage-

are being developed in parallel with the reform of the CFC.

ment will further the shared goal of improving the livelihoods of disadvantaged stakeholders in commodity value chains.

Regarding policy advocacy matters, in 2013, the Common Fund participated in several high-level events, in line with the Fund’s

The support from OFID and the Dutch Government implicitly

mandate to articulate the need for an open and flexible strategy

acknowledges the valuable work being done by the Fund and

for the new role of commodities, as a pillar of sustainable global

we remain grateful to them for their trust and support.

growth and development cooperation.

In this year’s Report, we have special reports on the position From the start, OPEC Fund for International Development

and approaches of the CFC with regard to impact assessment,

(OFID) has been a strategic supporter of the CFC and has

impact at scale through investment funds, and a special report

sponsored memberships of 37 Least Developed Countries

on utilizing small diameter logs from sustainable sources in

(LDCs) and provided resources for co-financing of the CFC’s

Indonesia. These highlight the diversity of tasks being under-

projects targeted at smallholder farmers in LDCs worldwide.

taken by the CFC and how the CFC assesses the impact of its

In September 2013, the OFID extended the utilization of its

projects. A special report on “Impact at Scale through Invest-

voluntary contributions to the CFC’s Second Account, amount-

ment Funds” explores the possibilities of such partnerships and

ing to a maximum of USD 46.4 million under the “Framework

provides insight into their possible role and contribution to

of Financial Support from the OPEC Fund for International

development in the future, particularly for leveraging resources

Development (OFID) to the Common Fund for Commodi-

and knowledge for commodity development.

ties (CFC)” up to the end of 2018. During the extended period, instruments for financing have been broadened to include any

I am confident that with continued support of Members, ICBs,

form of financial intervention or contribution which are duly

OFID and other development partners, the CFC will continue

approved by the competent bodies of the CFC. Projects eligible

to contribute to commodity development.

for this financial support will predominantly promote technology transfer, productivity enhancement, quality improvement, enhancement of market accessibility and promotion of private sector initiatives. The extension agreement was signed by

6 | Common Fund for Commodities Annual Report 2013

Parvindar Singh

Photo: ©FAO/Peter DiCampo / FAO

I CFC at a glance 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

framework of the United Nations. The Agreement Establishing

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

the Common Fund for Commodities was negotiated in the

market-oriented approach, the Fund concentrates on com-

United Nations Conference on Trade and Development (UNCTAD)

modity development projects financed from its resources.

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

These resources consist of voluntary contributions, capital

­commodity development project was approved in 1991.

subscriptions by Member Countries transferred to the Second Account and interest earned. In partnership with other develop-

The Common Fund for Commodities forms a partnership of 103

ment institutions, the private sector and civil society, the Fund

Member States plus ten institutional members. Membership of

endeavours to achieve overall efficiency in and impact on

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

commodity development.

or any of its specialised agencies, or of the International Atomic Energy Agency, and intergovernmental organisations of regional

The CFC’s aim is to realize the potential of commodity produc-

economic integration which exercise competence in the fields

tion, processing, manufacturing, and trade for the benefit of

of activity of the Fund.

the poor. The CFC supports implementation of activities that:

I CFC at a glance | 7

a are innovative and target new opportunities in commodity

Governing Bodies

markets leading to commodity based growth, employment generation, increase in household incomes, reduction in

The governing bodies of the Fund are its Governing Council

poverty, and enhancement of food security,

and the Executive Board. The Managing Director is the Chief

b are scalable, replicable and financially sustainable,

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

c have a potential measurable positive socio-economic and

a Consultative Committee, composed of nine independent ex-

environmental impact on the stakeholders in commodity

perts, on technical and economic aspects of projects submitted

value chains as compared to the prevailing baseline situation,

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

d develop stronger connections with existing markets or

Executive Board and Consultative Committee biannually.

­create new markets along the value chain, e increase financial or other services to commodity producers and commodity based businesses,

Headquarters

f enhance knowledge generation and information dissemination, and g build effective and cost efficient collaboration between

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

producers, industry, governments, civil society organisations and other stakeholders for commodity based development.

CFC interventions use value chain approach to identify chain

Special Mentions

participants and to pinpoint opportunities and obstacles in specific commodity value chains thereby developing viable

The Common Fund’s partnership with OPEC Fund for

­solutions. Value chain analysis leads to identification of oppor-

International Development (OFID) is historic and dates

tunities for value chain development.

back to the very inception of the Fund. The OPEC Fund not only facilitated and paid capital subscription for as many as

The CFC supported interventions cover all aspects of the

37 Least Developed Countries (LDCs) but continues to make

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

contributions under ‘’Framework of Financial Support’’

to the fork”. The CFC supports commodity based activities

towards CFC’s commodity development projects for the

along the entire commodity value chain which extend across

least developed countries and poorer strata in other

local, national, regional and international markets. Specifically

developing countries.

targeted areas are: The Kingdom of Norway and the European Commission a Production, productivity and quality improvements.

have been supportive of the Fund and have sponsored

b Processing and value addition.

capital contribution of 9 and 3 countries respectively.

c Product differentiation. d Diversification.

The Kingdom of the Netherlands: A Trust Fund arrangement

e Marketing.

set up by the Netherlands Ministry for Foreign Trade and

f Technology transfer and up gradation.

Development Cooperation in the CFC that facilitates

g Introduction of measures to minimise the physical marketing

increased support for enhancing commodity production

and trading risks.

and productivity, improving value chains, modernizing

h Facilitation of trade finance.

irrigation and strengthening the position of small-scale

i Risk Management.

producers. The projects supported under the Trust Fund arrangement are aligned with the Dutch government’s food security priorities, including sustainable development of

Financing Instruments The CFC finance is mainly in form of loans. Support in form of equity, quasi equity, lines of credit and guarantees can be considered on exceptional basis. Limited amount of grants may be provided, e.g. to support specific new activities or support the loan based projects through activities such as capacity building, technical assistance etc.

8 | Common Fund for Commodities Annual Report 2013

the agro food business/horticulture sub-sectors.

Member States, Institutional Members and Votes as of 31 December 2013 Country

Region

Afghanistan

Asia 357 X

No. of votes

LDC

Algeria

Africa 395

Angola

Africa 391

Argentina

LAC 496

Austria

Europe 652

X

Bangladesh Asia 426 X Benin

Africa 347

Bhutan

Asia 343 X

Botswana

Africa 347

Brazil

LAC 1,024

Bulgaria

Europe 417

X

Burkina Faso Africa 347

X

Burundi

Africa 343

X

Cameroon

Africa 389

Cape Verde Africa 343 Central African Republic Africa

349

Chad

Africa 351

China

Asia 3,000

Colombia

LAC 490

Comoros

Africa 343

Congo

Africa 351

X X

X

Costa Rica LAC 393 Côte d’Ivoire Africa 476 Cuba

LAC 584

Democratic Rep. of Congo Africa

476

Denmark

Europe 643

Djibouti

Africa 343

Ecuador

LAC 391

Egypt

Africa 476

Equatorial Guinea Africa

347

Ethiopia

Africa 366

Finland

Europe 535

Gabon

Africa 368

Gambia

Africa 349

Germany

Europe 4,362

Ghana

Africa 426

Greece

Europe 309

X X

X X

X

Guatemala LAC 401 Guinea

Africa 357

Guinea Bissau Africa 343 Haiti

X X

LAC 353 X

Honduras LAC 372 India

Asia 621

Indonesia Asia 575 Iraq

Asia 376

Ireland

Europe 309

Italy

Europe 2,065

Jamaica

LAC 380

Kenya

Africa 387

Korea, Dem. People’s Rep. of Asia

355

Korea, Republic of Asia

490

Kuwait

Asia 351

Lao People’s Dem. Rep. Asia

345

Lesotho

Africa 343

Luxembourg

Europe 309

X X

Madagascar Africa 360

X

Malawi

Africa 351

X

Malaysia

Asia 768 I CFC at a glance | 9

Country

Region

Maldives

Asia 343

No. of votes

LDC

Mali

Africa 351

X

Mauritania

Africa 366

X

Mexico

LAC 469

Morocco

Africa 449

Mozambique Africa 360

X

Myanmar

Asia 355 X

Nepal

Asia 345 X

Netherlands

Europe 1,086

Nicaragua LAC 382 Niger

Africa 347

Nigeria

Africa 440

Norway

Europe 549

Pakistan

Asia 407

Papua New Guinea Asia Peru

X

389

LAC 445

Philippines Asia 580 Portugal

Europe 309

Russian Federation Europe

4,257

Rwanda

Africa 351

Samoa

Asia 343 X

Sao Tome and Principe Africa

345

X X

Saudi Arabia Asia 357 Senegal

Africa 382

X

Sierra Leone Africa 351

X

Singapore Asia 441 Somalia

Africa 347

Spain

Europe 1,126

Sri Lanka

Asia 413

Sudan

Africa 413

Swaziland

Africa 355

Sweden

Europe 929

Syria

Asia 382

Tanzania

Africa 380

Thailand

Asia 449

Togo

Africa 358

Trinidad & Tobago LAC

X

X X

353

Tunisia

Africa 380

Uganda

Africa 395

United Arab Emirates Asia

X

X

347

United Kingdom Europe 2,550 Venezuela LAC 401 Yemen

Asia 544 X

Zambia

Africa 505

Zimbabwe

Africa 343

X

EC

Europe 0

AU

Africa 0

COMESA

Africa 0

EAC

Africa 0

CAN

LAC 0

CARICOM LAC 0 SADC

Africa 0

ECOWAS Africa 0 EAEC

Russia 0

WAEMU/UEMOA Africa

0

TOTAL 58,325 LDC: Least Developed Country LAC: Latin America and the Caribbean Countries

10 | Common Fund for Commodities Annual Report 2013

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

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

I CFC at a glance | 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)

Partner Institutions The CFC partners public and private institutions, bilateral and multi-lateral development institutions, cooperatives, producer organisations, small and medium enterprises, processing and trading companies, and local financial institutions that: • operate in commodity value chains or provide financial services to small business operators, SMEs, cooperatives, ­producer organisations, • have a proven track record in commodity development, • have the ability to invest in the value chain to reduce transaction costs or increase revenues of producers / processors / storage / marketing, • have a clear plan focusing on developing and/or diversifying their production / services, • have a clear plan to expand their markets at local, national, regional and international level, • have the technical, managerial and financial capacity to effectively and efficiently implement its activities, • include social-, economic- and environmental aspects in their work programmes, • share CFCs values, including internationally recognized principles concerning human rights, labour, the environment and anti-corruption as reflected in the United Nations Global Compact, and • collaborate with CFC to extend their core activities in ways that create additional opportunities for commodities and the stakeholders in the commodity value chains

12 | Common Fund for Commodities Annual Report 2013

The Cfc Partnership Network

National Governments

Agricultural Development Research

International Commodity Bodies

Institutions (CGIAR)/NARS

(ICBs)

Charity Foundations/Non-profit

Consultants/Technical experts

organisations

Producer organisations/NGO’s

UN Systems

Impact Investing Funds

Private Sector

Organization Chart of the Common Fund for Commodities as at 31 December 2013

Office of the Managing Director

Legal Officer

Internal Audit

IT Outsourced

Outsourced

Accounting, HR and Administration Unit

Policy, Information and Treasury Unit

Operations Unit

I CFC at a glance | 13

Photo: Shutterstock

II Project profiles in 2013

14 | Common Fund for Commodities Annual Report 2013

Photo: Bogor Agricultural University

Utilizing small diameter logs from ­bio-composite products in Indonesia Introduction

ever, the rate of deforestation continued to increase so that by 2012 Indonesia had surpassed the rate of deforestation in Brazil,

National forest policies in the Asia-Pacific region typically stress

and become the fastest forest clearing nation in the world.

the dual goals of achieving sustainable management of forests,

In this context, CFC recently funded the four year research

and enhancing the supply of goods and services that forests are

project, ‘Utilization of Small Diameter Logs from Sustainable

able to provide. As demand for such goods and services contin-

Sources for Bio-composite Products’ in four countries; Malaysia,

ues to grow, forest management becomes more complex, with

Philippines, Papua New Guinea and Indonesia. The project was

sometimes competing interests of different stakeholders.

supported by the International Tropical Timber Organization (ITTO), and was boosted by a financial contribution from the

Indonesia is a case in point. In 1900, the estimated forest cover

Government of Indonesia. Research was carried out by the

in Indonesia was 170 million hectares which plunged to less

­Faculty of Forestry, Bogor Agricultural University in Bogor,

than 100 million hectares by the end of the 20th century. Log-

­Indonesia and supported by the Ministry of Forestry.

ging and the burning of forests to clear land for cultivation has made Indonesia the world’s third largest emitter of greenhouse

Professors Yusram Massijaya and Yusuf Sudo trace the origins of

gases, behind China and the United States. Various initiatives and

this research back to 1984, when “discussions on the sustainability

policies have attempted to reduce rates of deforestation. For ex-

of logging Indonesia’s natural forest grew serious. It was apparent

ample, in 2011 Indonesia declared a moratorium on new logging

that there needed to be a shift to supplying the industry with logs

contracts, supported by financial incentives from Norway. How-

from plantation forest in order to take pressure off natural forests”.

Utilization of small diameter logs for bio-composite products in Indonesia | 15

Photo: Bogor Agricultural University

Prof Muh. Yusram Massijaya in the field studying the growth rates of plantation forest In many ways, change has been thrust upon the forestry indus-

80% of natural forest logged in Indonesia is illegal in some

try in Indonesia. Before the turn of the century, most companies

way1.) What this all means is that small diameter logs from

in Indonesia utilized large diameter logs from natural rainforest

plantations and community forests has become a viable and

(those over 50cm in diameter). Mills were established on the

important alternative source of wood for mills. Until relatively

islands of Indonesia such as Sulawesi, Sumatra and Kalimantan,

recently, the utilization of small diameter logs has been

close to their sources of primary forest. There was a lack of in-

­constrained by insufficient technical data on log properties,

terest by the industry in small diameter logs (those under 30cm

and knowledge small diameter logging systems and process-

in diameter) because logs from the natural forest were plentiful

ing technologies.

and accessible, and small diameter logs were seen as less profitable and require different technologies to process them.

Figure 1: Source of Logs (million m3) However, a number of factors have forced mills to change natural forest stocks have dwindled, distances to primary

Year Natural Stated Independent Community Total

Forest owned plantation forest forest forest forest

forest with their large diameter trees have increased, and

2001 4.1 1.4

5.6

2002 3.2 1.6

4.2

2003 5.0 0.98

5.3

0.06 11.1

2004 5.1 0.9

7.3

0.2 13.5

2005 9.3 0.8

12.8

1.3 24.2

ment oversight of the industry, fewer forestry concessions

2006 9.0 0.3

11.5

1.0 21.8

to log, certification requirements, and more attention to

2007 9.5 0.1

20.6

1.3 31.5

illegal logging. (Illegal logging is a separate and urgent issue

2008 7.4 0.1

24.5 32.0

– several studies have estimated that anywhere from 40% -

2009 - -

their business practices or close down in recent times. As

hence have become more difficult and expensive to extract and transport. This has been exacerbated by insufficient investment in reforestation. Added to this is closer govern-

1

2010 19.7 0.1

- 18.7

- 11.1 - 9.0

- 3.9 42.4

Chatham House. (2010). Indonesia illegal logging report card. http://www.illegal-logging.info/sites/default/files/uploads/CHillegalloggingreportcardindonesia.pdf

16 | Common Fund for Commodities Annual Report 2013

Research aims of the project

Figure 2: Changes in log sources in Indonesia (1994-2006) 100% 90%

In light of these challenges, the research project aimed to

80%

generate and analyse data on the use of small diameter logs,

70%

sourced from both natural forests and plantations, for their

60%

utilization in value-added bio-composite timber products.

50%

Bio-composite is defined as materials that have been glued

40%

or bonded together. The research was focused on the present

30%

and future markets of bio-composite products, the physical

20%

and mechanical properties of small diameter logs, and the

10%

fundamental properties of bio-composite products such as plywood, laminated veneer lumber (LVL), glued laminated

0% 1994

1996

1998

Natural Forest

2000

2002

2004

2006

timber or lumber (Glulam), particleboard and medium density fiberboard (MDF). The idea is to support industry with

Source: MoF (2007)

­practical research to help it access the quantity and quality

Planted Forest

of timber it requires, and by extension, potentially alleviating Some mills made the move from islands like Kalimantan to Java,

the burden on primary natural forest.

to be closer to plantation forest and transportation hubs for export markets. Others have simply collapsed (the research-

The obvious advantage of plantation forest is that it has a much

ers estimate more than 50% ). However, there were also other

short rotation period 8 years, compared with natural forests

factors at play, such as competition from other Asian countries,

which start to mature after 80 years or so. Large plantations

particularly China, and global price fluctuations. One of the

on Java are managed by Perum Perhutani (a state owned enter-

most important factors in mills closing was that their machines

prise), and in addition many small scale farmers are also turning

could not adjust to the small diameter logs sourced from plan-

to community forestry, growing trees on small plots of their land.

tation forest, and were not able to invest in new technologies and practices. Another reported factor was that skilled labour for working with small diameter logs from plantation forest is more difficult to find in the east of Indonesia.

Logging and the burning of forests to clear land for cultivation has made Indonesia the world’s third

Photo: Shutterstock

largest emitter of greenhouse gases in the world

Utilization of small diameter logs for bio-composite products in Indonesia | 17

The most popular species of plantation forest are pine,

their own testing and research, so the project findings can be

mahogany, Rasamala/altingia, teak, and acacia and rubber

of use to advance the wider sector. For instance, the Bogor

wood. Teak plantation forest still takes at least 30 years before

Agricultural University consulted with industry about what

harvesting mature specimens, making it suitable really to

experiments they would like the university to conduct. In the

only state forests. However, other species such as acacia

lab, the researchers are more flexible to experiment, away

can be harvested after 8 years or so. Small diameter logs can

from the daily commercial pressures of the mill.

be harvested at diameters as small as 10cm, although larger logs are obviously preferred.

Small diameter logs from plantations and ­ Research was carried out on small diameter logs sourced from

community forests have become a viable and

24 species from natural forest and 14 species from plantation or

important ­alternative source of wood for mills.

community forest in Indonesia, looking at physical, mechanical, and chemical properties and considering their feasibility to be transformed into bio-composite products. The prospective

Interestingly, the researchers also chose to give attention

products according to market demands are plywood, laminated

to research on the utilization of small diameter logs from

veneer lumber (LVL), particleboard, medium density fiberboard

the natural forest, which is already logged by companies

(MDF), and glued laminated lumber (Glulam). There is a long

under government concessions. With ‘stem only harvest-

list of important issues studied, including wood species, grade,

ing’ practices trees are delimbed, leaving by-product (the

moisture content, dimensions, visual appearance, density,

‘slash’) in the forest, which could be utilized by the industry

grain, knots and extractive content.

instead of being left to rot. There are no regulations saying that the by-product (the ‘slash’) from logging large diameter

Most of the research was done under lab conditions at the

natural forest cannot be utilized, but the issue according to

Bogor Agricultural University, using the same technologies

the researchers is that “logging companies do not find this

as the industry, so they can be potentially adopted by the

interesting financially, mostly due to transportation costs

mills. At present only the largest mills have the capacity to do

from the forest”.

Photo: Roger Bymolt

Mill on Java Island, where women are repairing veneer from small diameter logs

18 | Common Fund for Commodities Annual Report 2013

Mill in Cianjur state, Java Island, pressing during the process of

Photo: Bogor Agricultural University

producing plywood

Research results

not more so. Veneer sheets and particleboard made from small diameter log for domestic market are already being produced,

The research found that it is indeed feasible for low and medium

and the research such as this can help improve the quality and

density plantation wood to be used in bio-composite products,

help producers compete with Chinese imports.

achieving standards that are acceptable for export markets.

Among the international standard being used by Indonesian

In order to produce high quality products, several milling issues

bio-composite industries are the Japan Standard (JPIC/JAS),

and quality control concerns for raw material were identified.

British Standard (BS), United States Standard (IHPA), German

Among these was the need for publically available data on the

Standard (DIN). However, the Japan Standard is the most popu-

fundamental properties of wood, which the research produced

lar used in the Indonesian bio-composite industry. In reality,

and published. Technology-wise, spindless rotary lathes are

the domestic market is just as important as the export market, if

necessary for veneer production of small diameter logs, as

Utilization of small diameter logs for bio-composite products in Indonesia | 19

are hot press veneer driers. Market research by the university

Research of this kind is important for the forestry sector in

showed that prices for Chinese made machinery can be as

Indonesia as a whole. There are potentially a wide range of ben-

little as half that paid for higher quality machines produced

eficiaries from the research, in particular the mills and related

in Taiwan, Japan, Germany and Italy. Particular labour skills

industry actors, plantation and community forest owners, con-

are needed for veneer composing and repairs, gluing and the

sumers (who will have improved quality materials), and hopeful-

pressing process.

ly the natural rainforest will also have some respite as demand for bio-composites from small diameter exotics increases. The researchers assert that mills have showed keen interest in utiliz-

“The research found that it is indeed feasible for

ing this research to produce optimal products that can be sold

low and medium density plantation wood to be

on the global market, according to required standards.

used in bio-composite products, achieving standards that are acceptable for export markets.�

Perhaps controversially, the researchers at Bogor University are of the belief that government policy needs to be looked at to pressure those logging primary forest to use all of the tree, in-

Those interested in the technical details, such as the physical

cluding small diameter logs. They believe that if all of the waste

and mechanical properties of all the studied species (density,

is utilized, rather than being left to decompose in logging areas,

modulus of rupture (MOR) modulus of elasticity (MOE) and

that this will help to preserve the natural forest, while contribut-

strength class) should refer to the project completion report2

ing to the supply for industry. The researchers believe they have

and associated research outputs.

at least succeeded in opening this discussion, but the govern-

Photo: Bogor Agricultural University

Prof Muh. Yusram Massijaya at a mill with small diameter logs, all marked with their size

2

ogor Agricultural University, CFC/ITTO/62-PD40/00 Reev.4(i). (2012). Project Completion Report, Utilization of Small Diameter Logs from Sustainable Sources B for Bio-composite Products. Bogor, Indonesia.

20 | Common Fund for Commodities Annual Report 2013

Photo: Bogor Agricultural University

Students studying a community forest applying an intercropping method

ment has reservations because “when you open the door to the

The research team organized and convened a regional work-

cutting of small logs, unexpected consequences could happen”.

shop in Bogor, Indonesia to facilitate the transfer of technology on small diameter logs management and utilization for

The researchers say that “the process of transition from natural

bio-composite products to regional academicians, the timber

to plantation forest is continuing. In the past 10 years there was

industry sectors, and related government officers as well as

a lot was trial and error. But now the research done by industry

scientists, students, researchers, related industries representa-

and the university is formalizing knowledge on new technolo-

tives and non-governmental groups. Attendees came from as

gies, standards and market developments”.

far afield as Malaysia, Philippines, and Papua New Guinea.

Research outcomes

The research team believe that small diameter logs, especially from plantation and community forest will be the future of log supply in Indonesia and regionally.

The university claims no intellectual property rights on the research and wishes for their work to be freely available to support the industry. Eleven papers were published through course of the research, covering topics such as the current and future

The research helped to strengthen relationships between actors.

markets for bio-composite products, basic properties of some

As the researchers noted, “formal networks do exist, but are

wood species from Indonesia, Malaysia, Philippines, and Papua

weak and not so effective. Seminars, brochures and publications

New Guinea and the potential for mills to utilize small diameter

help us to build those networks and practical research like this is

logs in their bio-composite products.

imperative. If we have good inventions they [the industry] come”.

Utilization of small diameter logs for bio-composite products in Indonesia | 21

Photo: Roger Bymolt

Photo: Roger Bymolt

Gluing of veneer sheets at a mill in Cianjur, Java

Plywood, at a mill in Cianjur, Java

Research projects such as this are also of great importance to the university. Students were involved in research activities,

Author

national seminars, international symposiums and the publica-

Roger Bymolt of the Royal Tropical Institute (KIT) in Amsterdam

tion of scientific articles. As the university notes, “research

reviewed this project for CFC. Interviews were conducted with

projects such as this ensure that capacity continues to be built

the Ministry of Forestry, a certification and verification company

in the sector, with graduates very often moving to the indus-

(name withheld), Perum Perhutani (State plantation forest

try and taking this knowledge with them. Furthermore, the

­management in Cianjur, Java), plywood factories in Cianjur, and

university was able to expand its facilities, and link with industry

professors and students from the Bogor Agricultural University.

more closely. Say the researchers, “In Indonesia we don’t have so much money so we are doing simple projects and trying to make them as practical as possible. This is important because only the big companies have their own divisions of research, and this knowledge usually stays within the company”.

Since the research has been published, there is already one case of investors from Japan engaging the university to support them in their business plan and establishing a mill in Cianjur state to work with plantation forest. This highlights the practical nature of the research done at the university and through the research project.

The research team believe that small diameter logs, especially from plantation and community forest will be the future of log supply in Indonesia and regionally. The project has helped to keep small diameter logs on the policy agenda for both natural and plantation forest, hopefully contributing to more a sustainable industry, with less pressure on Indonesia’s precious rainforest.

22 | Common Fund for Commodities Annual Report 2013

Photo: Terrafertil

Impact at scale through ­investment funds The recent increase in agricultural commodity prices (reinforced

In 2012 the Common Fund for Commodities (CFC) started to

by the 2007–2008 food crisis), has caused significant growth in

participate in impact investment related to agricultural com-

public and private investment in primary agriculture. Prices are

modities, recognizing the impact they potentially carry on com-

rising as a result of a growing population and emerging middle

munities and value chains. Although still representing only a

classes requiring an adequate supply of food and industrial com-

modest share of its activities compared to its regular project fi-

modities. This, in turn, has led to increased private equity invest-

nancing mechanisms (grants and loans) of commodity projects,

ment in agri-businesses and large-scale acquisitions of farmland.1

the CFC’s participation in impact investment funds is growing.

Currently CFC is contributing to five cutting-edge investment

Although sustainability is a recurrent theme for private equity

funds (featured in Table 2).

investors in agriculture, it is clearly not given as much priority as business objectives and usually only relevant for Corporate Social Responsibility (CSR) purposes. Impact investment, another recent trend, tries to address this issue. Impact investment funds

Added value CFC to impact investment funds

aim to balance profit incentives with social and environmental sustainability as a primary condition for investment.

The added value of the CFC to the funds in which it participates, goes far beyond its financial contribution only. In the first

Emerging investment trends in primary agriculture. A review of equity funds and other foreign-led investments in the CEE and CIS region (2013) FAO Investment Centre.

1

place it contributes through the vast body knowledge of and experience in agriculture, commodity development and the

Impact at scale through investment funds | 23

relations with small-scale farmers it has developed since the

Textbox 1 - Moringa Agroforestry Fund

Fund was established in 1989. Among investors and investment funds there remains a lack of technical knowledge and experience regarding agriculture and the ­importance of a strong and trustworthy relationship with farming communities and other suppliers. Time and time again evidence shows that companies which dedicate themselves to investing in local communities

Moringa is a sustainable agroforestry investment fund which has already raised in excess of €50 million. Moringa invests between €4 and €10min in businesses located in Latin America and Sub-Saharan Africa using equity and quasi-equity instruments. With the fund only established as of recent, no deals have been finalized as of yet.

and aim for long-term relationships, easily outperform those who do not.2 Therefore it may not be a surprise that the CFC, next to being a partner investor, also runs the technical assistance facility (TAF) for the Africa Agriculture and Trade Investment Fund (AATIF) and is developing one jointly with the Moringa Fund. These facilities contribute to reaching scale with small-scale farmers and communities and to mitigate capacity gaps. This can involve setting up improved training programmes for farming communities composed of extension and business development services as well as organizing farmers and improving farm-firm relations.

Although sometimes only a small stakeholder compared to other co-investors in the fund, due to its expertise and experience, the CFC actually has leverage to contribute significantly to the investment funds through advice and feedback. Indeed, perhaps

Moringa has reviewed over 200 potential investment opportunities to date and the first transactions will be closed by the end of the year. A particular focus for Moringa, according to Clément Chenost, Investment manager and technical director, is to identify companies that need investment to scale up their agro-forestry activities, and which are able to deliver the financial, social and environmental benefits targeted by the fund as well.

The fund aligns itself with different certifications (Rainforest alliance for cocoa and coffee and FSC for timber). Moringa has developed its own methodology to carry out evaluation which relies on quantitative methods to measure the environmental and social impact of the companies it invests in. It will contract external parties to review the performance of partners.

Some indicators for measure environmental impact are the following: • rehabilitation of degraded land, • soil fertility, • climate change mitigation and adaptation, • biodiversity, etc

more than one might suspect based on its financial contribution alone.

The CFC is also represented in the investment advisory committee of the EcoEnterprises II Fund and a member of the board

For social impact: • number of small holders engaged through outgrower scheme, • income increase, • productivity increase, • fair benefit sharing, etc.

of some of the portfolio companies that receive investment through the AAF SME fund. In fact, although sometimes only a small stakeholder compared to other co-investors in the fund, due to its expertise and experience the CFC actually has leverage to contribute significantly to these investment funds through advice and feedback. Indeed, perhaps more than one

CFC is developing a technical assistance facility jointly with Moringa, with a projected size of €4-5 million. This facility will be based on a grant based mechanism, as applicants will contribute themselves, or indirectly through other funds, as well.

might suspect based on its financial contribution alone. According to Clément Chenost, investment manager and technical director of Moringa, the CFC has a “clear added value” because

Added value of impact investment to CFC and its mandate

of its well-established “expertise in working with farmers and commodities” (see Textbox 1).

For the CFC the benefits are clear as well since impact investment, if conducted in the right manner, contributes to its mission

Furthermore CFC has established an impressive and far-

(“to realize the potential of commodity production, processing,

reaching network in the past 25 years which is useful for

manufacturing, and trade for the benefit of the poor”).

tracking investment opportunities as well as specialists (ranging from agronomical to organizational) suited for specific

The CFC realized its leverage and influence would be substantive

tasks when needed.

within the funds, while the fund allocates considerable amounts of financial and other forms of resources at promising businesses.

The practice of responsible investment principles in larger-scale agricultural investments, Implications for corporate performance and impact on local communities (2014) World Bank.

2

24 | Common Fund for Commodities Annual Report 2013

compared to ‘conventional’ agro-investment funds, yet are large compared to most of the traditional grants and loans CFC provides under its mandate. As such, through impact investments, SMEs up to large-scale enterprises can be supported

Photo: Terrafertil

These investments, which can go up to €10 million, are modest

that have a significant positive impact on socio-economic and/ or environmental conditions. These effects will be augmented by the investment capital. Figure 1 shows how bundled resources by investment partners can contribute to impact at scale: Figure 1: Reaching impact at scale through impact investment Harvesting of Terrafertil’s goldenberries, one of the portfolio companies of the EcoEnterprises II Fund CFC investment (financial, knowledge

+

In addition to this, the newly won experience the CFC gains from this leads to an increased understanding and knowledge

& networks)

Partner

+ Partner

+ Partner

Impact at scale (poverty ­reduction)

+

of investments in agriculture, which is a rather complex investment portfolio. This experience is useful to properly asses the prospect of investments in promising companies, also in its regular grant and loan disbursement procedures. Finally, as a result

Partner

of all this engagement, the CFC is extending its already large network even further by expanding into these new branches (finance, private equity investment, banking, etc.).

Textbox 2 - EcoEnterprises II Fund One of the four funds in which CFC has invested is the EcoEnterprises II Fund, with a current size of USD 35 million.

The fund is specialized in providing expansion capital to sustainable businesses involved in agro-forestry, ecotourism and organic agriculture. EcoEnterprises’ first fund was under management of Fondo EcoEmpresas, S.A. It was launched in 2000 and invested in 23 sustainable businesses in 10 countries in Latin America. The fund was a pioneer of the concept of sustainable impact investment. The fund created over 3,500 jobs and generated a total of USD 281 million in sales. At the end of 2011, EcoEnterprises Fund’s second fund under management (EcoEnterprises Partners II, LP) was established, which focuses on larger companies and provides larger investments in order to reach scale.

“Our success depends on all of our stakeholders.

We need to rely on talent, skills, networks and resources of our partners like CFC.” – Tammy E. ­Newmark, President and CEO EcoEnterprises Fund Companies eligible for investment should have demonstrated they have long terms prospects, including being financially sustainable and profitable. Investment instruments include quasi-equity, structured royalty streams and warrants, convertible notes and long-term debt financing. The investment size ranges from USD 500,000 to 3 million, with an average investment of USD 2.5 million. At the time of writing 3 companies had received investment. In addition to financial support, assistance in terms of knowledge is crucial and

provided in the areas of accounting systems, strategic planning, governance, marketing, either by EcoEnterprises directly or through limited technical assistance funds.

According to Tammy E. Newmark, President and CEO, the fund is unique for several reasons. First of all EcoEnterprises provides financing to sustainable businesses that otherwise would not be available. Very creative types of equity and quasi equity are designed according to the needs and are deployed quickly.

Another reason is that many funds do not focus on biodiversity and environmental sustainability like EcoEnterprises, according to Newmark. Selected companies are committed and provide detailed metrics and background information on their environment impact. Another reason for its uniqueness, is the 15+ years of experience in a relative novel field as well as having “a deep investor base”, consisting of INGOs , international financial organizations like CFC as well as private and institutional investors.

The CFCs influence goes further than financial support only.

One of the CFC’s employees is a member of the investment committee as an observer and a member of the Limited Partners Advisory Committee, providing advice on current and future investments. Through its expertise with regard to commodities as well as outgrower schemes and small scale farmers, CFC provides valuable advice. Moreover, according to Newmark, CFC’s experience and networks in Latin-America are very useful, which is where most of the funds’ track record has been established. Newmark: “Our success depends on all of our stakeholders. We need to rely on talent, skills, networks and resources of our partners like CFC.”

Impact at scale through investment funds | 25

Textbox 3 - Runa Runa is an example of a sustainable business that recently has been supported by the EcoEnterprises impact investment fund, to which CFC is a limited partner.

Runa was founded in 2009 by two college graduates. One of them, Tyler Gage, lived with the Kichwa people in the Ecuadorian Amazon some years before that. This is where he first got to experience guayusa – a naturally caffeinated tree leaf brewed like tea, which helps to interpret dreams and provides energy and clarity while hunting in the jungle.

Together with his friend Dan MacCombie they set up a guayusa supply chain, together with local communities. Their shared vision was to establish “a business that could share energizing, rich-tasting guayusa with the world – a business that would respect cultural traditions, support small farmers, and maintain the integrity of the Amazon rainforest”. Guayusa-based tea and energy drinks are now sold in the US, after processing the leaves in Ecuador. Currently the company sources guayusa leaves from over 2,300 farmer households.3 Harvesting Guayusa leaves

Social and environmental impact Social and environmental impact of Runa is measured through indicators it has set and controls itself. Some of those indicators include: income increase, tree planting (reforestation), more women in leadership positions, etc. Some of its achievements in terms of impact this last season are the following: • over 3000 livelihoods of indigenous farmers have been improved; • over USD 50.000 per year invested in community ­development; • over 150.000 trees are planted each year; • USD 250.000 of fresh guayusa leaves are purchased from indigenous farming families However to grow further and impact more lives for the better, Runa in 2013 received investment funding from the EcoEnterprises II fund. This enabled the company to increase its operations and sales in two ways: 1) Further supply chain growth The current factory in Ecuador was expanded to increase its production capacity (which almost doubled), more technical assistance could be provided to farmer cooperatives and exchange of knowledge between cooperatives was increased.

2) Market Development Runa received marketing support and sales promotion was provided.

Photo: Runa

But Gage emphasizes that ‘soft investments’ by EcoEnterprises were significant as well. The fund assisted with questions related to the legal structure, consequences for the parent company, tax regulations, etc.

Photo: Runa

Leaves are processed in the factory

3

http://runa.org/

26 | Common Fund for Commodities Annual Report 2013

Photo: ©FAO/Swiatoslaw Wojtkowiak / FAO

Textbox 4 - AATIF: low risk long-term investments in agriculture The Africa Agriculture and Trade Investment Fund (AATIF) stands out from other funds in that they provide equity finance only in special cases and specialize in debt financing. “There are quite a number of equity funds around but virtually nobody offers long term debt financing”, says Dr. Thomas Duve, Chairman of the Board of Directors of AATIF. Although Sub-Saharan Africa is sometimes portrayed as a very risky investment climate, AATIF is confident this is not always the case. Duve: “We want to prove that it is possible to do low risk investment with reasonable returns in Africa”.

Hence, AATIF concentrates on companies that are somewhat established and have proven to be sustainable. Investments are indirect or direct: Indirect investments are banks or other intermediaries (large agribusinesses for example) which provide finance in the agricultural sector, direct investments can be agribusinesses involved in processing, large farmer cooperatives or large-scale farms. Financial support sometimes needs to be creative.

The financial support is accompanied by non-financial support.

This can lead to atypical forms of assistance. For example in

Zambia, Chobe Agrivision Company, which is involved in maize, wheat and soya bean farming, is also supported in improving education of the children of farm employees though rehabilitation of the local school and providing transport. Another company was supported through the hiring of a chief financial officer (CFO) to structure their financial management. The CFO was suggested by the CFC. Dr. Thomas Duve, Chairman of the Board of Directors of AATIF: “We want to prove that it is possible to do low risk investment with reasonable returns in Africa.”

It is an example of the contribution of the CFC to the fund, which is also both financial (as a contributing partner) and non-financial. Moreover, the CFC is the manager of the Technical Assistance Fund, with a total value of USD 6 million.

Duve: “We are happy to work with the CFC because we need technical expertise”. He gives the example of a cassava expert, who was needed to assess the possibilities of cassava processing project. Experts with such specific technical expertise are not always easy to find, yet was provided by the CFC, based on their extensive network and experience.

Impact at scale through investment funds | 27

Textbox 5- Investment in African agriculture: the AAF SME fund Although the Asian or Latin-American market might be somewhat further developed, Africa is booming. According to World Bank projections, agribusiness will become a USD 1 trillion industry in Sub Saharan Africa by 2030, compared to USD 313 billion in 2010.4 In addition to the rise in global food prices, growth in Africa’s agribusiness sector is being spurred by the emergence of the African middle class, which has led to consumers pursuing greater diversity in their food and diet.

The imminent boom in Africa’s consumer spending is set to rise from USD 860 million in 2008 to USD 1.4 trillion in 2020 according to the McKinsey Global Institute.5 Hence, Africa is increasingly becoming an attractive destination for Private Equity funds seeking to invest in emerging markets.

98 Private Equity and Venture Capital deals were completed on the continent in 2013. 16% of those deals were in the agribusiness sector, making it the second most active sector after financial services. Notably, of the USD 3.2 billion dedicated to Private Equity investments in 2013, 53% of these had deal sizes below USD 10 million, an indication that Private Equity in Africa remains largely driven by investments in SMEs.6 The agribusiness sector is the second most active sector for private equity in sub-Saharan Africa One of the investment funds active on the African continent is the AAF SME fund. Launched in 2012, The AAF SME Fund was started as a sub-fund of the African Agriculture Fund (AAF), a USD 243 million private equity investment fund, managed by Phatisa Fund Managers. The AAF SME is managed by Databank Agrifund Manager Limited (DAFML), a Pan-African Private Equity Fund Manager specializing in improving global food security by investing in food value chains across Africa.

Through its USD 36 million AAF SME Fund, DAFML provides growth capital to small and medium enterprises (SMEs). The fund invests in food production, processing, distribution and packaging at the SME level throughout Africa.

Since inception, the AAF SME Fund has invested across six African countries with investments ranging from a fast-growing bakery in Nigeria to an organic fertilizer producer in Madagascar. Such capital deployment has been made possible with backing from organizations such as the CFC, who enable the Fund to provide capital for both initial commitments and follow-on investments.

The AAF SME Fund typically invests between USD 150,000 to USD 4 million in enterprises backed by strong management teams, with up to 300 permanent employees, asset values of USD 15 million or less, and a clear vision for the business that shows significant growth potential.

DAFML’s local team comprises a group of African professionals with international work experience. Together, the team makes sure that investee companies undergo due diligence prior to deal closure. Post investment, DAFML employs a management approach that accommodates needs of its investees in order to improve the business performance and deliver financial results.

Julius Manjoh, General Manager of the West End Farms: “The funding from TAF affords us the opportunity to have a well-organized outgrower scheme and see a dream come true.”

These economic objectives are accompanied by social and environmental impact objectives. Through the NGO Technoserve, the Fund has a Technical Assistance Facility (TAF) designed to provide additional support of up to USD 500,000 per investee. TAF programs improve the capacity of the companies and provide linkages to outgrowers, farmers or micro entrepreneurs within the company and their surrounding ecosystems. The programs are designed to create sustainable economic and social benefits in the communities in which the Fund invests.

Program Director of TAF, Sarah Marchand, explains that, “the portfolio companies of the SME Fund have potential to become leading food businesses in Africa. Guanomad (a portfolio company), for instance, is a uniquely positioned organic fertiliser producer that can contribute significantly to sustainable agricultural development in Madagascar and the rest of Africa. However, these companies often need assistance and capacity building to support them as they navigate the challenges of growth. TAF plays an important role in funding high quality strategic advice and introducing operational best practices in order to help them to realize their enormous potential.”

Speaking of the technical assistance facility, Julius Manjoh, General Manager of the West End Farms (WEF) portfolio company says that “WEF has always been committed to the economic empowerment of the community that lives around our farms. It is the best way to share our good fortune as a successful business with the less fortunate. The funding from TAF affords us the opportunity to have a well-organized outgrower scheme and see a dream come true. Our deepest gratitude goes to the donors of TAF and all the partners in this lofty project.”

The table on the next page provides a summary of the AAF SME Fund’s socio-economic impact to date.

Growing Africa: Unlocking the Potential of Agribusiness (2013) World Bank, p xiv.

Lions on the move: the progress and potential of African economies (2010) McKinsey Global Institute, p7.

6 Africa Private Equity and Venture Capital Association. 2013 Deal Dashboard.

4 5

28 | Common Fund for Commodities Annual Report 2013

Table 1: Summary of the AAF SME Fund’s socio-economic impact to date Company

Country

Description

Inv. Date

Social Impact

West End Farms

Cameroon

#1 commercial maize/soya farm in Cameroon

Nov 2012

Smallholder support scheme to provide train-

and largest provider of pork products in a coun-

ing to up to 200 smallholder farmers 300%

try that imports to cover a deficit of supply.

­improvement in maize yields 240% improvement in soya yields.

Interfresh

Zimbabwe

Leading independent processor and marketer

Dec 2012

Presence of clinics and small schools on farm estate for the community use

of agricultural, horticultural and allied food products.

Guanomad

Madagascar

#1 organic fertilizer producer in Madagascar.

June 2013

Employs 70 permanent employees and 800 seasonal workers Involved in community development initiatives, such as rehabilitation of local hospitals

Matonjeni

Zambia

Leading non-carbonated, non-alcoholic bever-

Sept 2013

age company in Zambia.

Employs 91 local employees. Bottom of the pyramid growth strategy Feeds over 20,000 people daily

Photo: Colin Watson/AAF SME Fund

Source: AAF SME Fund (2014)

West End farms is a mixed farming enterprise in Cameroon. One of their activities is piggery farming. West End was supported by the AAF SME fund, of which CFC is one of the investment partners.

Impact at scale through investment funds | 29

Table 2: Contribution CFC to five cutting-edge investment funds Fund & size

Type of business targeted

Size of investment & instrument used

Moringa Agroforestry Fund

• Profitable larger scale agro­ forestry projects (forestry activities like timber, industrial tree crops or fruit trees combined with cattle, staple food crops or export crops with environmental and social impacts) • L-America and sub-Saharan Africa

• €4-10 million • Over 200 opportunities have been identified. • I nvestor (financial • Equity and quasi-equity Currently several projects have been subjectcontribution) investments •D eveloping teched to a feasibility study and one has entered nical assistance the due diligence phase. It is expected that facility jointly with one or two transactions will be closed by the Moringa end of the year

Over EUR 50 ­million raised (final targeted size of €100m)

The Africa • Small, medium and large scale Agriculture and agricultural farms as well as Trade Investment agricultural businesses in Fund (AATIF) ­Sub-Saharan Africa

USD 36 million (incl 6 million TA facility)

EcoEnterprises II Fund USD 35 million but growing

Sustainable Investment Fund Tanzania Currently at EUR 4 million, final closing expected by mid-2016.

Contribution CFC

• Usually between USD 5-15 million • Debt finance (not equity) through: • direct investments (senior debt, mezzanine and equity) • Indirect investments (“investments into local financial institutions or other intermediaries (such as large agribusinesses) which on-lend to the agricultural sector, to fund e.g. smallholders or small and medium enterprises”)

• USD 1million revolving trade finance agreement • I nvestor (financial with Balmed ltd, cocoa and coffee trading contribution) company from Sierra Leone (December 2013). • M anaging technical • Initial investment of USD 10 million into Chobe assistance facility Agrivision Company, from Zambia, involved in maize, wheat and soya bean farming (October 2011) • USD 5 million loan negotiated with the Global Agri-Development Company (GADCO), rice producer from Ghana, operating the largest commercial rice farm in West Africa (May 2012).

• USD 20m senior debt loan to Wienco (Ghana) Ltd. A Ghanaian intermediary company that provides fertilizer/agro-chemicals, training in input application methods and business skills to 50,000 smallholder farmers (October 2013) • PTA Bank, supported through a USD 30 million facility agreement • Chase Bank (Kenya) Ltd, received funding under a five year senior loan facility, totalling USD 10 million •A BC Bank, USD 25 million risk sharing agreement

• Invests in SMEs (max 300 permanent employees, total asset value of max USD 15 million) with focus on food production and processing • Focus on Sub-Saharan Africa

• Investment requirement of USD 150 k to USD 4 million • Equity

• Avison, organic and integrated fertilizer business in South Africa (July 2014) • Topcrust Bakery, consumer bakery and distributor of bread across Lagos (December 2013) • Matonjeni Marketing, food and beverage company in Zambia (October 2013) • Guanomad, guano-based organic f­ ertilizer products (July 2013) •W est End Farms, Mixed farming enterprise in Cameroon (October 2012)

• Focus on Latin-America • Small upcoming companies that can achieve scale yet are active in “unconventional s­ ectors ­eschewed by traditional finan­ ciers such as niche organic agricultural products, ecotourism, and sustainable forestry”

• Equity (growth and venture capital) • Investment size ranges from USD 500,000 to 3 million, with an average investment of USD 2.5 million

USD 140 million (by March 2013)

The African Agriculture SME Fund (AAF SME)

Companies invested in at the time of writing

•F ocus primarily on Tanzania • Investment from EUR (although other countries in East- 50.000, target average Africa are not excluded) EUR 150,000, between •T argeting small-to-middle size 6 months and 5 years enterprises engaged in commod- depending on the type ity production and trade of business •a ll investments subject to sustain- • Input Finance; Crop able impact (social, economic, Finance; Farm Investenvironmental) standards ment Finance; and Company Investment Finance

• I nvestor (financial contribution) •M ember of Investment advisory committee and a member of the Limited Partners ­Advisory Committee •A rusha Dairies Company Ltd; producers of • I nvestor (financial fermented cultured milk, fresh pasteurized contribution milk, butter yoghurt and cheese. Investment • M ember of the in establishing milk collection centres and Investor Advisory providing working capital Committee •H alisi Food Products Ltd.; food producer, mainly fortified flour, honey and spices. Investment in installation of a generator and storage capacity, working capital for input purchases •M ara Sisal Processing and Transport Company; producers of sisal fibre. Investment to install new machines and provide working capital for purchase of inputs

Author: Wouter Kleijn, advisor sustainable economic ­development Royal Tropical Institute (KIT)

30 | Common Fund for Commodities Annual Report 2013

• I nvestor (financial contribution) •M ember of board of companies that receive investment

Photo: Roger Bymolt

Impact assessment and the quest for the Holy Grail Introduction

the desire to track and report on progress towards achieving the Millennium Development Goals, The Paris Declaration on

Institutionalising evaluation in the development sector is an

Aid Effectiveness, the Evidence Based Policy movement, and

­impressive achievement. Large multilateral organisations right

generally a stronger awareness among policy makers and pro-

down to local NGOs have all come to recognise the importance

grammers as to its utility. Evaluation is far from being a project

of evaluation, both as an accountability tool, and for learn-

completion exercise for its own sake. In fact, EvalPartners, the

ing purposes. Whilst a certain degree of learning comes from

global movement to strengthen national evaluation capacities,

finding out what worked, there is a deeper desire to understand

has declared 2015 as International Year of Evaluation.

the process of change behind why and how an intervention worked. Lessons learned can be applied when scaling

Nevertheless, while we all recognise its importance, policy

up an intervention in a given area, or to enhance the chances

­makers, programming staff and academics alike have had

of ­success when broadening to other contexts. Evaluations

­trouble when it comes to judging the reliability of a study’s

contribute to the body of evidence that donors, policy makers,

­findings, and the extent to which lessons learned can be

practitioners and academics all draw on to (hopefully) inform

generalised to other contexts and put into use there. This

their decision making.

piece examines the prevailing thinking and trends in evaluation (specifically impact assessment), which is important for under-

A number of factors have led to evaluation being given in-

standing how a contest of ideas has become something of a

creased attention over the past decade or so. These include

battleground in the quest for better evidence. It is particularly

Impact assessment and the quest for the Holy Grail | 31

relevant for the many organisations, including CFC, who desire

output, outcomes and impact often become more abstract.

methodological rigour in their evaluations and yet have to be

They are both more difficult to measure and to attribute to

realistic when it comes to evaluation budgets.

an intervention.

Measuring changes in well-being and empowerment, for

From outputs to outcomes to impact

­example, require proxy indicators, since asking someone straight up if their well-being has improved does not seem

Logical models that establish indicators to measure project

very reliable and could be interpreted in all sorts of ways.

outputs have their place. But over time we have evolved and

Even measuring changes in income can be tricky - farming

loosened up these models, and have really started to look a lot

households might have several dynamic sources of income,

deeper than output level, towards outcome, and ultimately im-

self-reported income is well-known to be unreliable, yield

pact (the ‘impact chain’). ‘Achieving impact’ has a ring of the Holy

estimations range with the vagaries of the weather, and price

Grail about it - everyone wants to achieve impact, even though

fluctuations roll with the seasons.

we are not often entirely sure what it will look like until we find it.

The most widely shared definition of impact is that of the Let’s quickly move through the impact chain by way of an

OECD-DAC Glossary (2002), which defines it as: ‘positive and

example: outputs could refer to the number or farmers trained.

negative, primary and secondary long-term effects produced

Outcomes might include how the training was valued and

by a development intervention, directly or indirectly, intended

changes in farmer knowledge and practice. Impacts are about

or unintended’.

what this all means to farmers and their households, such as increased income, greater food security, and perhaps improved

This definition stresses the search for any effect, not only those

well-being and empowerment. This is obviously an oversim-

that are intended, that the effects of interest are somehow

plified scenario (and there is often debate about what exactly

caused by the intervention; that there is the possibility of all

qualifies as an outcome or impact), but the example helps to

kinds of links between the intervention and effect, and that

illustrate an important point – when you start looking beyond

long term effects are important.

How?

What do we want?

Why?

INPUTS

ACTIVITIES

OUTPUTS

OUTCOMES

IMPACT

The financial, ­human and material ­resources used for development intervention

Actions taken through which ­inputs are mobilized to produce specific outputs

The products, capital goods and services that result from development interventions

The short-term and mediumterm effects of an intervention’s outputs; change in development conditions

Actual or intended changes in human development as measured by people’s well-being; improvements in people’s lives

Resources

Results

Planning Implementation

Source: UNDP Handbook on Planning, Monitoring and Evaluation for Development Results (2009, p55) 32 | Common Fund for Commodities Annual Report 2013

Photo: Roger Bymolt

Conducting surveys in Ethiopia using digital tablets, for the CFC project ‘Wealth creation through integrated development of the Potato Production and Marketing Sector’

Context and the counterfactual

religious, private) within 10 km of even the sleepiest villages.

The point is that these may also be contributing to the same

As practitioners and policymakers have strived towards achiev-

impacts as the studied intervention. To make these visible, one

ing ‘real’ and ‘sustainable’ impact, evaluators have been right

only needs to make a serious effort to ask local people about

there with them trying to measure that impact. On first thought,

them. ­Accounting for other interventions in the same area is

one might wonder how difficult it could possibly be to show

one ­issue, but a much more difficult proposition is account-

how well an intervention performed (achieved impact) and

ing for the role played by social, economic, political, religious,

to be able to say whether or not it was the intervention that

ethnic and environmental dynamics.

caused this change.

This is important because any effort to measure impact implicBut think a little deeper and it quickly becomes apparent that

itly implies the application of counterfactual logic – in other

such simple questions become minefields, for the reason that

words, ‘what would have happened without the intervention?’

communities are socially, economically and politically complex

While this cannot be observed empirically (we cannot run a

and dynamic structures. Environmental differences between

test in an alternative universe!), most approaches attempt to

communities only add to the complexity. Put simply, develop-

­account for the counterfactual in their design. For if some or

ment interventions do not take place in a bubble - there are

all of the change (impact) would have happened regardless,

many other things going on at the same time and place as the

then impact cannot be fully attributed to the intervention

intervention, some acting as enablers and some as barriers. This

­(although it might well have contributed to it).

makes cause and effect rather difficult to isolate.

This means that any idea of measuring cause and effect as A simple illustration can be found in the work of the PADev

though it is linear is virtually impossible, because the multitude

team1, a Dutch based research team comprising academic and

of influences is so vast and processes of change are so complex

NGO organisations. In their work in northern Ghana and Burkina

and dynamic. Causality is multi-causal and non-linear and

Faso they found participants could recall a high number of in-

­systems are open to ‘external’ influences which interact with

terventions (50 to 100) by all sorts of actors (government, NGO,

each other. Context changes everything.

1

www.padev.nl

Impact assessment and the quest for the Holy Grail | 33

Sound evaluation designs must recognize the importance of

Experimental design:

context since this can be key to drawing valid lessons for other settings. Unless we understand the role of context, the research

Subjects (families, schools, communities etc.) are randomly

will have weak external validity. We might know that some in-

assigned to project and control groups (some receive the

tervention works some place, but lack the confidence that it will

project, others do not). Questionnaires or other data

work somewhere else.

collection instruments (anthropometric measures, school performance tests, etc.) are applied to both groups before

Impact assessment therefore needs to deal with contemporary

and after the project intervention. Additional observations

interventions that are often complex, multi-dimensional, indi-

may also be made during project implementation.

rectly delivered, multi-partnered and long-term. What is needed then is a rigorous approach for measuring impact - but what

Quasi-experimental design:

does this mean in practice?

Where randomization [of who receives the project] is not possible, a control group is selected which matches the

From vanilla evaluations to rigorous impact assessments

characteristics of the project group as closely as possible.

Sometimes the types of communities from which project participants were drawn will be selected. Where projects are

With an energised quest for impact, the language used by many

implemented in several phases, participants selected for

organisations has shifted from classic vanilla evaluations to

subsequent phases can be used as the control for the first

calls for ‘rigorous impact assessments’. While it is easy enough

phase project group.2

to agree that an impact assessment should look at impact, not everyone agrees on how one should go about this in a rigorous fashion. There is intense debate in academic circles around

Quasi-experimental designs are usually characterised by large

what the appropriate methodologies for impact evaluation are.

sample sizes of survey data (often upwards of 1000 surveys).

Practitioners too have their own strong views, even if they often

Proponents argue such methods are best for measuring what

have less time to write papers on the matter.

changed in complex contexts, due to their statistical power, but also because randomization is the only means to ensure

On one side of the debate are proponents of experimental and

unobservable selection bias is accounted for. Some develop-

quasi-experimental research designs who argue that theirs

ment interventions naturally lend themselves to (quasi)experi-

is the rigorous approach, employing quantitative methods

mental designs, whereas others do not. For example, changes

(usually large scale surveys). On the other side are proponents

in infant mortality rates from investments in an immunisa-

of more general methodologies, which might include some

tion campaign may be relatively straightforward using (quasi)

quantitative data collection, but is often much more qualitative

experimental methods. On the other hand, using such methods

(interviews, focus group discussions, participatory mapping,

to evaluate good governance, institutional change processes or

observations, etc.). Such is the vigour in the debate about

human security is arguably less suitable.

rigour, William Easterly has referred to this as ‘the civil war in development economics’.

Such is the vigour in the debate about rigour, There is little question that proponents of (quasi)experimental

William Easterly has referred to this as ‘the civil

designs have held the upper hand in high level debates about

war in development economics’.

what impact assessment should be, and what approaches can be deemed sufficiently rigorous to measure impact and ascertain attribution, given all of the aforementioned complexity

While quasi-experimental designs and quantitative methods

surrounding an intervention’s context. Affectionately referred to

have dominated, another loose school of thought has pas-

sometimes as ‘randomistas’, proponents of (quasi)experimental

sionately argued that impact assessment should not be defined

designs have asserted that their approach is the ‘gold standard’,

by any particular design, method or philosophy, and that it is

originating as it does from the tradition of bio-medical research

about selecting an appropriate method that can link causes

using randomised control and treatment groups. It is without

and measured effects to explain not only the ‘what’, but also

question that this school of thought has made a significant

the ‘how’ and ‘why’. This approach highlights the importance

­contribution to developing the field of impact assessment.

of theory in impact assessment. Indeed, qualitative methods

2

World Bank (2011) Impact Evaluation in Practice. World Bank: Washington D.C.

34 | Common Fund for Commodities Annual Report 2013

have a significant role to play in understanding more about

The elephant in the room

processes of change, which can then be generalised beyond a particular context. Furthermore, qualitative data from a range of

The elephant in the room is the cost of an impact assessment.

­beneficiaries and stakeholder positions brings their voices into

Cost depends to a great extent on the methods employed and

the research in terms of how an intervention was valued. It is in

the length of time required for data collection in the field. Obvi-

fact common, for different beneficiaries groups to hold differing

ously complexity affects the costs of research design and analy-

and nuanced views of an intervention. Qualitative approaches

sis too, but let’s stay with fieldwork costs here. Quasi experi-

can highlight local power relations, and the reasons for regional

mental designs often call for a baseline and endline assessment,

variance in impact. Qualitative methods can also be setup to

with treatment and control groups, surveying upwards of 1000

probe on what other interventions are occurring in the area,

respondents so that findings can be tested for their statistical

what trends have been occurring recently and their cause, and

significance (meaning there is a very low likelihood that meas-

get a better picture of the context generally. Qualitative meth-

ured impact was caused by chance, or another factor).

ods are also much more flexible to picking up on unintended and unplanned for consequences and changes that were not

A research design for an impact assessment with this level of

considered in the original research design.

sophistication will likely cost upwards of 100,000 EUR, and could be considerably more depending on the design (even

There is much more to say on the various strengths of each

when using qualified local teams of enumerators and consult-

school of thought. But the point is that qualitative methods

ants for data collection.)

have a legitimate role to play when assessing impact, and offer Many organisations, have picked up on the shifting semantics

than quantitative methods.

from evaluation to impact assessment, and have also picked up

Photo: Roger Bymolt

tools more suited to answering the hows and whys of things

Conducting surveys in Ethiopia using digital tablets, for the CFC project ‘Wealth creation through integrated development of the Potato Production and Marketing Sector’

Impact assessment and the quest for the Holy Grail | 35

Photo: Roger Bymolt

Value chain mapping in an evaluation in Transmara, Kenya

on the broad discourse around ‘best practice’ or ‘gold stand-

Sometimes a sub-set of projects under an umbrella programme

ards’. This is reflected in the growth in calls for tenders that

can be sampled and given a higher budget, but on the whole

apply the language of impact assessment, and ask for baselines,

programme managers are conscious not to misallocate scarce

endlines, control and treatment groups. They have the best of

resources, which could be used for implementation.

intentions to measure impact rigorously. However, budgets often don’t fit the scope of their ambitions.

So what to do? Some try to be creative, or take shortcuts and ask for ‘rapid’ impact assessments using quantitative meth-

There is obviously a huge range of intervention types and budg-

ods. Many only conduct ex-post evaluations at the end of the

ets, but for many projects, programmes and impact investments

project and try to use recall data as a baseline for measuring

the total allocated resources is under €1 million (US$ 1.25 mil-

change. Alter­natively, this is where a bulging toolbox of other

lion). There are no hard and fast rules about how much should

qualitative methods comes in. Let’s be clear, these are not a

be spent on monitoring and evaluation but typically this budget

perfect substitute for large scale, statistically significant studies,

might be around 5% of the budget. This would leave roughly

when these would be the best option. But they can still

€50,000 for a €1 million project – a fair chunk of money, yet

produce evidence which is sufficiently convincing to make

insufficient for an impact assessment employing a quasi-

programming and funding decisions on, provided the impact

experimental design that can withstand academic scrutiny.

is large enough.

36 | Common Fund for Commodities Annual Report 2013

Mixing methods

of the qualitative and quantitative datasets leads to the same conclusions (as they should), there is a kind of triangulation

Recently, some of the fire in the debate over designs and

which supports the case made for impact and attribution.

methods for impact assessment has cooled just enough for

Obviously this is easy to say and much more difficult to achieve

evaluators from both quantitative and qualitative traditions to

in practice, as mixed methods designs come with their own

give a little nod of acknowledgement to each other. They are,

unique challenges, particularly around logistics and the capacity

of course, searching for the same thing – knowledge on what

of researchers to be a ‘jack of all trades’.

works and why. Mixed methods can be a good approach under Happily, the growth in online resources is helping build sec-

which they can collaborate.

tor capacity, providing more options and better support to Mixed methods approaches to impact evaluation are becom-

evaluators. Well known websites such as http://mymande.org

ing more popular for several reasons. There is more demand

and http://betterevaluation.org/ are important knowledge and

from donors to understand both what worked and why, and so

resource hubs, while organisations such as 3ie have become

demands are being made for studies employing complementary

instrumental not just for funding impact evaluations, but for

quantitative and qualitative components. A fact often left un-

coordinating and promoting events, disseminating research

mentioned is that understanding processes of why an interven-

and driving debate. These are just a few cherry picked examples

tion worked lends additional credibility to claims of ­attribution

from an energised sector.

(or contribution) than ‘just’ statistical methods (which are not infrequently based on more assumptions, incomplete datasets, or

Technology, too, has also helped. For example, digital tablets

suspect quality data than researchers like to admit). Furthermore,

are becoming a more common means of collecting survey

increasing numbers of practitioners are also seeing possibilities

data, which can be pushed to a cloud server whenever there is

in the way mixed methods can be applied, and are pushing for

Wi-Fi or 3G available. Open Data Kit (ODK) is one good example

donors and clients to give them the green light to deploy these.

of a free and open-source set of tools which help organizations author, field, and manage mobile data collection solutions.

Technology such as this helps to speed up the process, saving

The point is that mixed methods is actually about

time and some costs (no transcribing from paper to digital) and

integrating methods in a way that makes sense to the

eliminates errors when transcribing.

research questions being asked, the type of intervention being studied and the resources available.

The takeaway Mixed methods sound like a great idea, and certainly can be,

The takeaway messages are that evaluation has come a long

but it again depends on what we are actually mixing. We should

way, and practitioners, policymakers and evaluators are more

be clear that mixed methods is not one thing – in fact it can

engaged than ever in both achieving and measuring impact.

be almost anything that combines quantitative and qualitative

Impact assessments are important for accountability, but even

methods. Obviously it can imply a full scale quasi experimental

more so for learning lessons that can be applied when rep-

research design with some light qualitative focus group discus-

licating or scaling up, to build up an evidence base on good

sions, or the opposite – full scale qualitative research with a

practice, and to influence policy. This naturally implies utiliza-

much smaller sample of quantitative research. So the point is that

tion of findings, if impact assessments are going to be worth the

mixed methods is actually about integrating methods in a way

investment. A topic for another day is how evidence generated

that makes sense to the research questions being asked, the type

by impact assessments should be disseminated and presented,

of intervention being studied and the resources available.

so that key findings can be easily digested without being buried in the depths of heavy reports. Separate summary briefs which

When it comes to lower cost impact assessments (in the

are clearly written with a minimum of jargon and embellished

broader definition of the term), mixed methods can be one

with rich photos or infographics are much more likely to be

approach to collecting a modest data set of several hundred

read, and shared on social media.

surveys, while at the same time running focus groups with well-designed exercises to elicit in-depth views across a strata

The final word is that ‘impact assessment’ is not a term confined

of beneficiaries. This, coupled with key informant interviews,

to a particular design or method. What is most important is to

should generate sufficient data to assess those interventions

apply a design which is appropriate to the intervention, and of

with more modest budgets. More importantly, when analysis

course, that elephant in the room, the budget.

Impact assessment and the quest for the Holy Grail | 37

References • Allmark, P., Boote, J., Chambers, E., Clarke, A., McDonnell, A., Thompson, A., Tod, A. (2009) Ethical issues in the use of i­n-depth interviews: literature review and discussion.

Research ethics review, 5 (2), 48-54.

• Baker, J. (2000). Evaluating the Impact of Development ­Projects on Poverty: A Handbook for Practitioners.

The World Bank.

• Better Evaluation (2014) Manage an Evaluation or Evaluation System: Determine and Secure Resources. Available from: http://betterevaluation.org/plan/manage_evaluation/determine_resources (22-07-2014).

• Bamberger (2009) Alternatives to the Conventional Counterfactual. Summary of Session 713 Think Tank. American Evaluation Association: Orlando.

• CDI (2013) Impact Evaluation: Taking Stock and Looking Ahead. Conference Report. Center for Development Innovation, Wageningen UR. • CGDev (2006) When Will We Ever Learn: Improving Lives Through Impact Evaluation. Report of the Evaluation

• IPEN/UNICEF (2006) New Trends in Development Evaluation.

Evaluation Working Papers Issue 5. UNICEF Regional Office for CEE/CIS and IPEN: Geneva.

• Kushner, S. (2005) How does Evaluation Create Options to Enhancce Social Justice? In: The Evaluation Exchange.

Vol. XI, No. 3, Fall 2005.

• Prowse, M. (2007) Aid Effectiveness: The Role of Qualitative Research in Impact Evaluation. Background Note. Overseas Development Institute: London.

• Ravallion, M. (2008) Evaluation in the Practice of Development. Pollicy Research Working Paper 4547. The World Bank: Washington D.C. • Ton, G. (2012) The mixing of methods: A three-step process for improving rigour in impact evaluations. ­Evaluation 2012 18:5.

• White (2009) Some Reflections on Current Debates in ­Impact Evaluation. Working Paper 1. International Initiative for Impact Evaluation (3ie): New Delhi.

• Woolcock (2009) Toward a Plurality of Methods in Project

Gap Working Group. Center for Global Development:

Evaluation: A Contextualised Approach to Understanding

­Washington D.C.

Impact Trajectories and Efficacy. Journal of Development

• DFID (2012) Broadening the Range of Designs And Methods For Impact Evaluations. Working Paper 38. Department for International Development: London.

• Garbarino & Holland (2009) Quantitative and Qualitative Methods in Impact Evaluation.

Effectiveness 1:1, 1-14.

• World Bank (2004) Monitoring & Evaluation: Some Tools, Methods and Approaches. World Bank: Washington D.C. • World Bank (2011) Impact Evaluation in Practice. World Bank: Washington D.C.

Author: Roger Bymolt, Advisor at the Royal Tropical Institute (KIT), Amsterdam. r.bymolt@kit.nl

38 | Common Fund for Commodities Annual Report 2013

Photo: ©FAO/Swiatoslaw Wojtkowiak / FAO

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

al guidelines the Fund financing comprise of USD 12.23 million

trends, patterns and constraints emerging during project im-

in loans (86%) and USD 2.14 million (14%) in grants.

plementation in 2013. The overview brings out salient features, patterns and/or trends with respect to:

Under the old guidelines until 31 December 2012, the Fund had approved 198 regular projects plus a further 150 Fast Track

• commitments, financing and disbursements;

projects, together 348 projects, with an overall cost of USD

• commodity coverage, project types and beneficiaries; and

602.9 million, of which the Fund financed USD 304.1 million

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

(about 50%). The balance of project costs is co-financed by other institutions (USD 130.4 million or 22%) and by counterpart contributions in cash and/or in kind (USD 168.4 million or about

Commitments, financing and disbursements

28%), provided either by the Project Executing Agencies, colla­ borating institutions, governments or International Commodity Bodies (ICBs). Common Fund financing comprises USD 275.1

The new operational guidelines became effective on 1 January

million in grant (90%) and USD 29.0 million (10%) in loans.

2013, and during the year 2013, the Fund approved 17 regular projects plus a further 2 Fast Track projects, together 19 projects1,

According to the Fund’s audited statements, the direct project

with an overall cost of USD 158.5 million, of which the Fund

related disbursements in 2013 totaled USD 11,831,300 as grants

­financed USD 14.37 million (about 9%). Under the new operation-

and USD 521,600 as loans. In 2014 special efforts will be made

1

Excluding three projects approved in 2013, with CFC support of USD 804,250; were withdrawn after approval.

III Report on progress of projects under implementation | 39

to streamline the components of the Governing Agreements

Participation of Private Sector: Private companies contribute

between the Fund and the Recipient of resources to reduce the

technical, commercial and financial inputs to CFC-funded

delays between project approval and commencement of actual

­projects. Moreover, in order to promote dissemination, repli-

implementation on the ground.

cability and sustainability of project results, within and across countries, representatives of relevant private companies are

As at 31 December 2013, 146 regular projects had been

often invited to final review and dissemination workshops or-

­operationally completed. In several cases these projects were

ganised for most projects. Overall, more than 150 private firms

completed with some savings from the CFC grants originally

have shared the results of the CFC projects through technol-

approved by the Board. The savings are returned to the pool

ogy dissemination workshops, while over 80 private sector

of Second Account resources or the First Account Net Earning

companies are directly participating or have participated in the

Programme once the project account is closed. A total of 69

implementation of approved projects. The interest of the private

­regular projects are currently under implementation or are in

sector in technical cooperation with CFC projects increases by

various stages of start-up.

the day. Offers from the private sector to seek finance for specific commodity development activities are increasing. In 2013,

CFC-funded projects now cover over 40 commodities includ-

projects related to “Regionalising Warehouse inventory Credit

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

through a C ­ ommodity Exchange”, micro-leasing, Commercial

citrus, cocoa, coconut, coffee, coir, copper, cotton, fish, fonio,

farm ­development, Commodity branding, SME Agribusiness

groundnuts, gum arabic, hides & skins, jute, lead, meat and

development and Community production and processing of

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

Nepalese spice & herbs with strong support of private sector

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

were ­approved by CFC.

cane sugar, tea, timber, tropical fruits, spices and zinc, most of which are produced almost entirely in Developing Countries.

CFC-supported regular Projects by Type (100% is total of approved projects) In 2013, project types were reclassified as a result of the new operational guideline involving more private sector participation. The following are the new classification of projects:

Type

Number of Projects

Percentage (%)

Production

6 35

Processing

1 6

Market Access / Extension

1

Finance

2 12

Partnership

5 29

Economic Development

1

Technical Assistance Total

6

1

6

17

100

40 | Common Fund for Commodities Annual Report 2013

6

6

6 35

29 12

6

6

IV

Regular Projects Approved in 2013 – by type of financing

IV.1 Grants Revitalization of the Coffee Industry in Yemen - CFC/ICO/53

Submitting Institution International Coffee Organization (ICO) Location Yemen Commodity Coffee

Total Cost USD 4,934,900

CFC Financing USD 250,000 (Grant) incl. USD 125,000 from the OPEC Fund for International Development (OFID) The project is aimed at promoting a holistic, integrated, more demand-responsive ­approach to the strategic development of the coffee industry in Yemen concentrating on improving productivity at the farm level, improving quality of the coffee produced, promoting more efficient use of water, ­capacity building and enhancing transparency and connectivity at all stages of the coffee value chain. The aim is to enhance grower incomes, upgrade and

improve p ­ rocessing capabilities, create a more e ­ fficient internal marketing structure, and facilitate the formation of cooperatives, grower associations and other groups based around the provision of technical services to all sectors of the industry. One of the principal aims of the project is to slow down the rate of increase in qat production by demonstrating that well-managed coffee can provide farmers with significantly better returns. Qat is a plant which is used as a

soft drug principally in Kenya, Somalia and Yemen to reduce fatigue and assuage hunger. Long term abuse of the drug can result in serious health hazards.

The Executive Board approved the CFC ­support to the project on the condition that the balance co-financing fund can be secured from other sources, to be identified by the Government of Yemen and ICO.

Identifying Growth Opportunities & Supporting Measures to Facilitate Investment in Value Chains in Landlocked Countries (CFC/ILZSG/267)

Submitting Institution UN Office of the High Commissioner for LLDC’s

Location Global

Commodity Various

Total Cost USD 418,000

CFC Financing USD 335,000 (Grant) Co-financing USD 83,000 The project will contribute to the review of Almaty Programme of Action for Land Locked Developing Countries (LLDC’s) in 2014. Case studies in 6 LLDCs are to be identified from CFC members. The project targets the identification of needs and feasible development instruments suitable to the conditions of landlocked commodity dependent developing countries (LLDCs).

Commodity dependence is a widespread condition in LLDCs, which aggravates the challenges and requires special measures to achieve sustained growth and resilience

to global market volatility. The project will provide practical material for discussion on the role of commodities in overcoming development traps facing LLDCs. The CFC funds will be used to finance studies by local experts in LLDCs focusing on their development experience with regard to commodity sector. The experience recorded in local studies will be analyzed to determine common and special features of commodity driven development in different LLDCs. The outcomes will be provided to and discussed

in the review of the Almaty Programme of Action in a dedicated side event on commodity dependence.

The project will be integrated with the inter-institutional preparatory process for the review of Almaty Programme.

Collaboration is envisioned with specialist institutions participating in the I­nter-Agency Working Group (IAG) preparing the review. This includes UN OHRLLS, UNCTAD, UNDP, UNECA, the World Bank.

IV Regular Projects Approved in 2013 | 41

Commodity Branding - CFC/2012/01/0044

Submitting Institution Windward Strategic ltd.

Location Ghana, Mozambique, India, other ACP countries

Commodity Sugar/Pineapple

Total Cost USD 1,600,000

CFC Financing USD 475,000 (Grant) (incl. USD 230,000 from the OPEC Fund for International Development – OFID) Co-financing USD 562,500 (Shell Foundation)

Counterpart Contribution USD 562,500 The project will establish a portfolio of sustainable consumer brands across two commodity sectors for the benefit of commodity producers. For that, the CFC will provide funds to Windward Strategic Ltd who will create value-adding consumer brands for the commodities i.e. sugar, pineapple, coffee and chillies which will be commercially marketed under licensing agreements. The CFC investment will be limited to the sugar and pineapple value chain. Origin of the branded sugar will be mainly Mozambique and India with the target markets of USA and the EU. Pineapples will be sourced from Ghana for

export to the EU. Windward will invest in intellectual property that adds value to primary commodities (“brands”) and license these to commercial partners with existing supply chains and product expertise.

A share of the added value from branding sugar and pineapple (targeted volume is around USD 6 mln distributed over 10,000 farmers) will be channelled directly to small farmers and involved labourers. Social benefits associated with the products will be one of the key brand messages. For sugar this share will be approximately 30% and for

pineapples 50%. These figures will be externally audited by recognized and specialized auditors in order to maintain credibility of the brands.

The project is financially and technically supported by the Shell Foundation as part of their mission to establish sustainable enterprise-based solutions to development problems. While CFC funds will be provided as a grant, in return, a percentage of all ­revenues from licensing fees will be transferred to CFC during at least four years to fully recover the funds.

Improvement of production of Paprika in Burkina Faso and Niger for processing and export - CFC/2013/02/0074

Submitting Institution National Coordination Unit for CFC projects in Burkina Faso

Location Burkina Faso and Niger

Commodity Vegetables (dried paprika powder and paprika oleoresin)

Total Cost USD 4,410,000

CFC Financing USD 250,000 (Grant) Co-financing Contributions from partners still to be secured.

The project aims to establish and further develop commercial production and subsequent value addition to paprika in the two project countries, which are both LDC’s. The proposed project addresses increased agricultural production and two stages of value addition, namely grinding into powder, more precisely Spice Grade Paprika Powder, and subsequent processing into highly concentrated liquids, namely Oleoresin of Paprika.

The Consultative Committee, in its review of the funding request, noted the inherent risks

in setting up the proposed production and processing structure, while at the same time acknowledging the technical feasibility and the promising value-addition cum income earning perspectives of the undertaking.

The Committee decided to recommend a grant contribution of USD 250,000 such on the condition that the grant would be used as seed money contribution towards a full-fledged project once all funding for the project has been secured and an updated business plan is available.

The Board accepted this recommendation, with the specific observation that the approved grant would not be used for further project development. It would be released as part of the overall financing package once the fully designed and funded project proposal would be considered sufficiently developed, taking into account the observations made by the Consultative Committee.

The Board added another condition that a full-fledged project should be satisfactorily designed and funded within 18 months after Executive Board approval (October 2013).

IV.2 Loans Commercial Farm Development in Central and Northern Ethiopia - CFC/2012/01/0030

Submitting Institution

Location

Commodity

Total Cost

CFC Financing

Counterpart Contribution

Solagrow plc Ethiopia Vegetables USD 6,255,000 USD 1,100,000 (loan), USD 55,000 (as a grant provision to cover administration and legal costs) USD 5,155,000

42 | Common Fund for Commodities Annual Report 2013

>>

Solagrow plc provides seed potatoes supplemented by seeds from other crops and mechanization services to organized outgrowers and other small farmers in Ethiopia.

In addition the company produces quality food crops for local and for export markets on its own nucleus farms. For surrounding outgrowers, collective marketing of produce is offered on a voluntary basis. Solagrow’s main shareholder is the Netherlands faith based Cornerstone Foundation.

The CFC funds will be used to equip ­Solagrow’s recently allotted three additional nucleus farms with farm machinery and ­irrigation facilities. While Solagrow is currently managing 270 ha of farm land, the three additional nucleus farms will add 600 ha of farm land (total 870 ha). Around each new nucleus farm, outgrowers on around another 1000 ha will be organized.

The three nucleus farms will directly provide some 1600 new jobs for different education levels and the establishment of surrounding outgrower schemes will involve some 2,500 new farmers as outgrowers on around 3,000 ha of land who will benefit from quality input provision, mechanization services and access to markets. In addition, indirectly, Solagrow will offer its services in a 10,000 ha circle around each nucleus farm and reach another 8,300 farmers (24,900 with three farms).

SME Agribusiness Development in East Africa (CFC/2012/01/0076FA)

Submitting Institution

Location

Commodity

Total Cost

CFC Financing

Co-financing

MatchMaker Fund Management (MMFM) Burundi, Kenya, Malawi, Rwanda, Tanzania, Zambia Financing services Euro 10 mln USD 520,000 (Loan - First Account) USD 26,000 (as a grant provision to cover administration and legal costs) Balance to be sourced from other consortium partners

The SME Impact Fund (SIF) will provide ­meso-level financing to SMEs in agribusiness in East Africa. Financing will be provided as loan, ranging from USD 65,000 to USD 650,000, average loan size USD 200,000.

Four main types of loans are available: (i) input finance; (ii) crop finance; (iii) farm investment; (iv) company investment.

Through this project, the CFC enters into a partnership with other financiers participating in SIF to pilot a model of sustainable financial instrument targeting the needs of agricultural SMEs. “A” shares participation means that CFC will get a proportion of the total value of the Fund at the end of the term in 2022.

Financing will be available for SME’s in local currency, at commercial rates ~18-20%pa, up to 60 months. Target companies: (i) 2-99 employees; (ii) currently operating in agricultural value chains; (iii) registered in East Africa; (iv) have financial need within the SIF target product range. Collateral not a precondition, in any case below 125%-140% required by banks.

The SIF will open lending operations when it reaches initial size of EUR4.0 mln. The target size of the SIF is EUR10.0mln to be reached within 3 years. The SIF expects to close 15-20 loans per year, with average size USD 0.2mln. With average lifespan of a loan of 24 months, repayments will be recycled for new loans.

Submitting Institution

Location

Commodity

Total Cost

CFC Financing

Co-financing With the provision of investment capital for the PEAK I Fund, the CFC will assist the social enterprise Equity for Tanzania (EFTA) to pilot the commercial provision of lease ­finance for small entrepreneurs and cooperatives in agricultural commodity value chains in Tanzania who seek to invest in processing equipment and machinery, irrigation facilities or other movable assets.

Micro leasing is a new financial product in

Project partners are currently Dutch NGO’s like Hivos and Cordaid, private investors including MatchMaker Associates (MMA). The local banking partner will be NMB Bank of Tanzania, which will give SIF strong outreach to rural districts in in Tanzania. Technical partners include ­Financial Alliance for Sustainable Trade (FAST), MMA, and Tanzania Horticultural ­Association (TAHA) with Business Development Services (BDS) project.

It is envisaged that SIF financing will create 100 jobs per year in SMEs, which will engage 5,000 smallholder per year. This adds up to 1000 jobs, and 50,000 smallholder families working in commodity value chains.

Micro Leasing in Commodity Value Chains - CFC/2012/01/0113 Equity For Tanzania Ltd. (EFTA) Tanzania Various USD 290,000 (Loan) USD 145,000 (Loan), USD 7,250 (as a grant provision to cover administration and legal costs) USD 145,000 (CORDAID) Tanzania and provides access to medium term finance for clients with no or very little collateral, which currently make up some 95% of all Tanzanian businesses.

With a capitalization of USD 290,000 and a lifespan of 7 years, PEAK I seeks to provide financing for 75 to 85 individual enterprises which in turn will lead to the creation of some 180 new jobs. Indirectly the leases

will lead to a demand increase for agricultural produce for processing and EFTA assumes that 17,500 smallholder farming households will increase their income through supplying these enterprises with raw material. PEAK I is meant to serve as a pilot to attract further investments into EFTA and is also likely to provide impetus for other financial Institutions to provide similar ­products to this under-served market.

IV Regular Projects Approved in 2013 | 43

Integrated Food Management System – Warehouse Inventory Credit through Commodity Exchange (CFC/2012/01/0237)

Submitting Institution AMIS InterAg Ltd

Location Malawi, Zambia

Commodity Grains and other crops

Total Cost USD 900,000

CFC Financing USD 400,000 (Loan), USD 20,000 (as a grant provision to cover administration and legal costs) Co-financing USD 500,000 from consortium partners The project will connect together two segments of agricultural economy in East Africa, namely (i) smallholders farmers that live in regions beyond the electrical grid and cell phone service; and (ii) regional trading system gathered around agricultural commodity exchanges.

The project’s target is on selected rural grain collection and storage sites, accessible to smallholder farmers but remote from main centres of activity. Upgraded and registered warehouses will act as delivery point for the commodity exchange and provide ICT facilities to connect to regional commodity

exchange platform. This will draw smallholder farmers into the regional markets, providing transparent pricing and access to banking services and loans using their crop as collateral. Additional income from better prices and market information would allow warehouse to raise income through trading fees and storage services. Further income generating opportunities include marketing services and supply of goods and services required in rural areas.

The project will finance the launch of a 2,500 MT storage facility in Malawi, expanding it to 5,000 MT within 3 years, and launch a second

storage facility in Zambia. This includes all upgrading and ICT costs, as well as operating costs in the early stages of operation.

Storage operations are expected to reach over 60% capacity utilisation on 10,000 MT on 2 sites, with stock turnover of at least 1.5 time per year by year 5.

The project partners are AMIS Inter Ag (agricultural business development), ACE Malawi (stakeholder-owned commodity exchange) Connect Africa Limited (telecommunications services) and the Purchasing for Progress (P4P) programme of the WFP.

Partnership with the Africa Agriculture and Trade Investment Fund (AATIF) - CFC/2012/01/0268FA

Submitting Institution AATIF

Location Africa

Commodity Various

Total Cost USD 125 mln (current fund size)

CFC Financing USD 2,000,000 (Loan – First Account)

Co-financing Main other current investors are KfW and Deutsche Bank.

The associated grant based Technical Assistance Facility is being financed by the German Ministry for Development Cooperation and Economic Development (BMZ) AATIF, as an Impact Investing Fund, seeks to realize the potential of Africa’s agricultural production, manufacturing, service provision and trade for the benefit of the poor. The Fund provides tailored financing directly to companies and indirectly via intermediary investment companies/financial institutions who are engaged in agricultural value chains. The CFC will invest in so called Class C Shares to capitalize the Fund and finance its investment activities. Class C

Shares ­provide a risk buffer for private investors (who invest in more senior Class B or A shares) as they bear first losses. The current total fund volume of AATIF stands at USD 125 mln available for investments with anticipation of further growth. Individual investments have a target range between USD 1 mln and USD 15 mln.

The investment fund itself is complemented through a Technical Assistance

Facility that provides grant funding for projects to strengthen the developmental aspects of individual investments.

This Technical ­Assistance Facility is managed under a service agreement by the CFC. AATIF through its independent Social and Environmental Compliance Advisor (ILO) is committed to closely monitor the social and environmental impact of each investment.

YIGFAM Glove Factory - CFC/2013/02/0010

Submitting Institution Location Commodity Total Cost CFC Financing

YIGFAM Glove Factory Bahirdar, Ethiopia Hides and skins USD 1,000,000 USD 300,000 (including incl. USD 200,000 from the OPEC Fund for International Development – OFID), USD 15,000 (as a grant provision to cover administration and legal costs) >>

44 | Common Fund for Commodities Annual Report 2013

The Board approved the project in October 2013. The total project cost is USD 1,000,000 of which USD 300,000 is requested from CFC as a loan. The project has a duration of 5.5 years.

The CFC funds will be used to co-finance the start-up of the new factory (steel structure, equipment), including meeting costs of the first year working capital. The owners will contribute USD 200,000 share capital to the factory and the Development Bank of Ethiopia will provide a loan of USD 500,000.

The Hides and Skins sector is a priority development sector for the Ethiopian government, which implies access to loan funding and varying levels of tax holidays.

The pilot production unit at

>

Photo: Eva Teekens

In addition to the existing Davimpex tannery, operational since 2000, a new company will be established to add value to the different types of crust and semi-finished and finished leather. Based on in-house pilot production

and small scale marketing efforts, the new company will focus on the production and export of dressing gloves, sports gloves and working gloves to Europe and North America. A new building will be constructed to house the glove factory and initial production is targeting around 360,000 pairs of gloves after one year of operations, to be produced by around 100 employees, mainly women (with an expected increase up till 200 employees by the end of year 3).

the DAVIMPEX Tannery will be 足transformed into a new glove factory in Bahirdar, Ethiopia

A sample of gloves produced by

>

the pilot unit of the DAVIMPEX Photo: Eva Teekens

Tannery, Bahirdar, Ethiopia

IV Regular Projects Approved in 2013 | 45

Sustainable and Secure Smallholder Systems at Scale (4S@Scale) -CFC/2013/02/0041

Submitting Institution Location Commodity Total Cost CFC Financing

The purpose of this project is to create viable smallholder coffee farming systems, that will allow the coffee sector in East Africa to regain its vitality and offer long-term business opportunities for 2.4 million smallholder coffee farms and 16 million people dependent on the sector. Partners in this project are Ecom Agroindustrial Corporation (Ecom), Sustainable Management Systems Limited (SMS), Kawacom Uganda Limited (KUL), Tutunze Kahawa Limited (TKL) and the Kenya National Federation of Agricultural Producers (KENFAP).

These partners have formalised their collaboration and contributions to the project in a MoU within the 4S@scale collaboration. The Dutch Ministry of Foreign Affairs will contribute with a grant of USD 7,100,000.

Mutually reinforcing interventions will lead to higher coffee productivity, diverse income streams and reduce key recurrent costs. Overall this will strengthen individual coffee farming system viability. Large scale application will permit a viable private

HIVOS, The Netherlands Kenya, Tanzania, Uganda Coffee USD 20,820,000 USD 1,500,000 USD (Loan) (incl. USD 1,000,000 from the OPEC Fund for International Development – OFID), USD 75,000 (as a grant provision to cover administration and legal costs) sector-led farmer support system, which is built on marketing services with embedded farmer support services. Key activities are the incorporation of biogas into the whole farm system; diversification of incomes, in particular through dairy and horticulture; the provision of credit facilities; enhanced good agricultural practices including climate resilience; and women and youth targeted training and support.

The CFC loan will be used for the introduction of biodigesters amongst 22,000 households. A domestic biodigester has multiple benefits, at household and country level. The biodigester produces gas, for cooking and lighting, and slurry that can be used as fertilizer. At household level, fertilizer costs are reduced and food and cash crop production increases. Costs and time are saved when people no longer need to buy or collect charcoal and firewood for cooking and kerosene and candles for lighting. Cooking is convenient, fast and clean.

Sanitation on the farm improves. At country level it leads to reduced deforestation, reduced greenhouse gas emissions, reduced indoor air pollution related health problems and therefore reduced public health costs, and reduced manure related pollution.

For an average household with an average biodigester these savings and additional income make it possible to pay back the digester in less than 2.5 years. The direct return on investment generally is around 30%, but higher if people use charcoal for cooking. The installed capacity of a 6 m3 digester is comparable to 1.5 kWp, but only costs 10% of the same capacity installed in electricity. The producer organizations and project partners ensure that farmers have access to the required knowledge, inputs and credit to construct biogas digesters.

By the end of the programme, biodigester construction costs will have dropped such that even the poorer coffee households can afford to buy one.

The taste of Nepal - Community production and processing of Nepalese spices & herbs - CFC/PD/2013/02/0051

Submitting Institution Location Commodity Total Cost CFC Financing

With the proposed project, the Dutch company Terwel BV, together with its partner the Organic Village Nepal Ltd, intends to enlarge its existing supply system and up-scale the spices & herbs processing facility near Kathmandu, Nepal. This upgraded facility should meet the volume and quality standards requested by international wholesalers and industrial food producers, opening the doors of Asian and European markets to certified organic herb and spices grown and processed in Nepal. In the modern processing facility, raw mate-

Terwel BV Nepal Spices & Herbs USD 763,000 USD 363,000 (Loan) (incl. USD 250,000 contribution from the OPEC Fund for International Development – OFID), USD 10,890 (as a grant provision to cover administration and legal costs) rial will be washed, cleaned, dried and then processed mainly into slices and powder.

Main products will be organic ginger, turmeric, cardamom and cinnamon. The processing facility is expected to reach 100% of the total production capacity by the second year of project implementation, supplying 325 tonnes per year of premium organic herbs and spices to meet commercial orders from local and international buyers. 1500 Tons/Year of raw material will be sourced from 400 certified organic Nepalese small holder farmers organized in

46 | Common Fund for Commodities Annual Report 2013

cooperatives, which are based in agricultural areas in the regions Nepalganj and Chitwan (Mid-west region) and around the city Kathmandu. Farmers will be trained in best agricultural practices for the cultivation of organic spices and they will benefit from long term supplying contracts, receiving higher and more stable incomes, which in turn will contribute to the improvement of their livelihoods. The Loan Agreement is being negotiated with the borrower, Terwel BV. Project activities are expected to start in the 3rd quarter of 2014.

IV.3 Equity Organic Tea Marketing and Production Development for Smallholders in Shuangjiang Ethnic Minority Autonomous County of China - CFC/2012/01/0067

Submitting Institution Yunnan Shuangjiang Mengku Tea Co. Ltd (YSMT) Location China Commodity Tea

Project Cost USD 2,571,429

CFC financing USD 900,000 (direct equity investment in a Chinese JVC), USD 45,000 (as a grant provision to cover administration and legal costs)

Counterpart Contribution USD 1,671,429 The project aims at (i) strengthening the YSMT’s marketing competitiveness, increasing its organic tea market share in the profitable tea market in China; (ii) enhancing smallholders’ organic tea productivity and quality by using environmentally friendly technologies and techniques, and producing organic tea by conversion of existing tea gardens; (iii)

providing systematic capacity building activities to smallholder tea producers to improve their knowledge and practice of organic agriculture for income generation in a sustainable way.

CFC and YSMT will incorporate a joint venture company that will produce and market organic tea. CFC will participate

up to 35% of the share capital of the Joint Venture incorporated in China.

The project is at an early stage of ­development: a legal opinion from a local law firm has confirmed the project feasibility. The project financing structure needs to be discussed with the promoter YSMT.

Promotion Project for Standardized Flower Cultivation in Chongqing Flowers World - CFC/2013/02/0016

Submitting Institution Chongqing Sai-Ying-Si Industrial Co., LTD Location Chongqing Commodity Flower Cultivation Total Cost USD 3,430,000 CFC Financing USD 1,000,000 (direct equity investment in a Chinese JVC) (incl. USD 500,000 ­contribution from the OPEC Fund for International Development – OFID), + 5% grant USD 50,000 (as a grant provision to cover administration and legal costs) Counterpart Contribution USD 2,430,000

Chongqing is a metropolitan city in China with a population of about 33 mln and two digit economic growth rate. The demand for ornamental horticulture products such as flowers and trees is booming. The project will build up cultivation demonstration base, expand flower nurseries, promote adoption of appropriate technologies in the flower

sector, and establish sales network locally, domestically and internationally. The CFC will contribute USD 1 mln, and the partner will contribute USD 2.43 mln to set up a cooperative joint venture according to Chinese law.

With the establishment of facilities, equipment, a technological centre and

a team for technology promotion, the project will also build up a cultivation demonstration base of 33 ha, and seedling nursery of 3 ha. 133 ha of ­flowers and seedlings will be developed by beneficiary smallholders. The total sales volume for 7 years is estimated at USD 21.49M.

Partnership with the Africa Agriculture SME Fund (AAF-SME) - CFC/2013/02/0084FA Submitting Institution Africa Agriculture SME Fund Location Africa Commodity Various Total Cost USD 30 mln (current fund size) CFC Financing USD 2,000,000 (equity), USD 100,000 (as a grant provision to cover administration and legal costs)

Co-financing Main other current investors are the Agence Française de Dévéloppement (AFD), PROPARCO, the Spanish Government (AECID) and the African Development Bank (AfDB) The associated grant based Technical Assistance Facility is being financed by the European Union

The CFC will invest into the AAF-SME fund which supports private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing equity or quasi equity funding and strengthening their management. AAF-SME provides finance to enterprises active in the primary, second-

ary and tertiary sector along agricultural value chains in Africa on the scale of 0.15 million to 4 mln USD. The current total fund volume of AAF stands at USD 30 mln available for investments with a final target of USD 80 mln during a second (and final) closure. The fund is set up to invest in 30 to 40 individual investments.

AAF-SME will be supported by a Technical Assistance Facility (TAF) that provides grant funding for complementary projects to strengthen the developmental aspects of individual investments with an emphasis on the establishment of outgrower schemes. >>

IV Regular Projects Approved in 2013 | 47

AAF-SME Fund, is Africa’s first equity fund with a focus solely on food producing and processing SME throughout the continent.

SME’s active in the African agricultural sector offer significant growth opportunities and have an important impact on eco-

nomic development and job creation, and are therefore widely regarded as the key for the economic development of Africa.

AAF-SME investments will demonstrate that (equity) investment in the African agricultural SME sector is a commercially

viable proposition with manageable associated risks. AAF and AAF-SME are considered as flag ship Impact Investing Funds in Africa. Success could lead to widespread recognition and replication.

Partnership with the EcoEnterprises II Fund (EcoE II) - CFC/2013/02/0085FA

Submitting Institution EcoEnterprises Partners II L.P. Location Latin America Commodity Various Total Cost USD 27 mln (current fund size) CFC Financing USD 500,000 (equity), USD 25,000 (as a grant provision to cover administration and legal costs) Co-financing Main other current investors are the Dutch Development Financial Institution FMO, the Interamerican Development Bank (IDB) and the European Investment Bank (EIB)

EcoE II seeks to invest mezzanine capital in small companies with a proven business model at expansion stage which are active in the sustainable agriculture and forestry (products) sector. The targeted investee companies supply into a continuously growing market for organic food products and certified wood predominantly in the US (through main stream retail channels such as Walmart/Home Depot and similar dominant food retailers and home improvement stores).

The CFC will provide funds to capitalize EcoE II and finance its investment ­activities.

Adding value to primary products that are cultivated and/or processed in an environmentally sustainable way can have a significant development impact when commercial viability can be proven for all value chain stakeholders.

The vast and globally appreciated natural resource base of Latin America can be seen as a comparative advantage that presents a widely untapped opportunity for sustainable food and timber products out of the region.

As of date a similar fund focusing on sustainable food and timber production with a clear commercial focus does not exist.

The existing investment pipeline is an outcome of the most successful (predecessor)

EcoE I Fund investments in start-up enterprises and informal businesses since the year 2000, which have in the meantime graduated into companies with a proven business model that are ready to expand. EcoE II seeks to consolidate the promising results of EcoE I and bring 12 to 15 successful individual investments to a level that will make enterprises interesting for purely commercial investors and banks. Investments will demonstrate that the sustainable use of natural resources can be commercially viable and indeed can prove to be a competitive advantage. Success could lead to widespread recognition and replication by commercial funds and to a more receptive regional banking sector.

Partnership with the Moringa Agroforestry Fund - CFC/2013/02/0086FA Submitting Institution Moringa Agroforestry Fund S.C.R. Location Latin America/Africa Commodity Various Total Cost EUR 50 mln (current fund size) CFC Financing USD 1,500,000 (equity), USD 75,000 (as a grant provision to cover administration and legal costs) Co-financing Main other current investors are FMO, PROPARCO, the Spanish Government (AECID) and the Latin American Development Bank (CAF)

The CFC will provide funds to the Moringa Agroforestry Fund which seeks to invest in African and Latin American agroforestry projects that are able to commercially compete with deforestation drivers (like cattle ranching, crop farming and timber harvesting) while generating a clear positive impact on local populations and the environment.

Moringa will invest in manageable scale agroforestry projects (between 3-15,000 ha/project) which usually have an industrial nucleus (being the investee company of Moringa) and a wider circle of integrated smallholder farms/value chain partners in its vicinity. The fund seeks to invest in 12 to 15 individual investments.

Land degradation and the necessity for further intensification of agricultural production on a sustainable basis are two key issues for development of many countries in Latin America and Africa. Commercially viable agroforestry systems allow for intensified land use with diversified (risk mitigating) income streams, while at the same time rehabilitating or even improving degraded land. Marginal land is frequently occupied by the poorer strata of the population, which makes investment in commercial agroforestry systems a very powerful tool to alleviate poverty.

All Moringa investments are required to have a demonstrable positive impact on the environment and the livelihoods of local populations. Through its investments, Morgina

48 | Common Fund for Commodities Annual Report 2013

targets a total of 8,000 new jobs created with an income effect on 35,000 dependants. In addition, some 60,000 outgrowers are expected to be associated to commercial investments of Moringa, with a development impact on 340,000 dependants. As an indicator for environmental impact Moringa targets to reforest at least 40,000 ha with 10 mln tons of carbon sequestrated. Impact will be monitored and measured through an internal E&S System Framework.

Moringa investments will be complemented through a Technical Assistance Facility (TAF) that will provide grant funding for projects to strengthen the developmental aspects of individual investments. The CFC has been asked to provide management services for this Facility.

V Fast Track Projects Approved in 2013 Livestock Commercial meat processing/marketing in Lagos -(CFC/2013/2/0042FT)

Submitting Institution ESOSA Investments Ltd Location Nigeria Commodity Livestock Total Cost USD 250,000 CFC Financing USD 120,000 (Returnable Grant) Co-financing

This fast track project supports Esosa LTD, a small scale meat processor operating in Lagos, Nigeria, in restructuring and upscaling its meat processing factory with the setting up of a pastry line for snacks & cakes and the value-adding expansion of the product range to include sausage snacks. The CFC grant will enable Esosa

to acquire additional equipment, optimizing via up scaling its market growth, profit and diversification potentials associated with its main-line of business. In addition the company would strengthen its local supply chains assisting 100 pig farmers in enhancing their farm yields with the introduction of improved breeds, the setting

up of pig growing schemes and training in improved animal husbandry. The Fulani nomadic cattle herdsmen will also benefit from the advantages of an enhanced commercial beef production. Following the signing of the Project Agreement, project activities are expected to start in the second half of 2014.

Various Africa Agriculture and Trade Investment Fund (AATIF) Technical Assistance Facility CFC/2012/01/0268FT

Submitting Institution AATIF Technical Assistance Facility Location Africa Commodity Various Total Cost EUR 6 million (current size of Technical Assistance Facility) CFC Financing USD 100,000 (grant) Co-financing Currently the only other co-financer is the German Ministry for Economic Cooperation and Development (BMZ)

The AATIF Technical Assistance (TA) Facility is complementary to the AATIF Impact Investing Fund which seeks to realize the potential of Africa’s agricultural production, manufacturing, service provision and trade for the benefit of the poor, and in which the CFC is invested with 2 mln USD. The TA Facility provides grant funding for projects to strengthen the developmental aspects of individual AATIF investments.

The associated grant based TA Facility is being financed by the German Ministry for Development Cooperation and Economic Development (BMZ), through a share of the financial profits generated with AATIF investments, and other future potential donors.

The CFC has been invited to act as a Fund Manager for the AATIF TA Facility.

In order to become formally eligible for the position of the Fund Manager of the TA Facility, the CFC’s financial contribution and partnership in the facility is required.

V Fast Track Projects Approved in 2013 | 49

Photo: ŠFAO/Ishara Kodikara / FAO 50 | Common Fund for Commodities Annual Report 2013

VI Summary of

Ongoing Regular Projects 2013 Bamboo and Rattan

CFC/INBAR/07: Development and Commoditization of the Pre-Fabricated Modular Bamboo Housing in Asia and Africa

Submitting ICB International Network for Bamboo and Rattan (INBAR) Project Executing Agency The International Centre for Bamboo and Rattan (ICBR) Countries Directly Benefiting Nepal, Ethiopia, China Project Cost USD 2,617,930 Common Fund for Commodities USD 1,884,630(Grant) (of which USD 1 million from the OPEC Fund for International Development - OFID) Counterpart Contribution 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-processing 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 installed in Nepal and Ethiopia.

The processing and pre-processing facilities have become operational since May 2013.

The final dissemination workshop will be held in China in 2014 and subsequently 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

Project Executing Agency

Countries Directly Benefiting

Project Cost

Common Fund for Commodities

Counterpart Contribution

International Network for Bamboo and Rattan (INBAR) International Tropical Timber Organization (ITTO) International Network for Bamboo and Rattan (INBAR) Ecuador and Peru USD 2,007,300 USD 1,256,470 (Grant) 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.

far. Additionally 45 trainers received certificates for bamboo trainers. Six knowledge centres were established. A new manual on production, management and harvesting of Dendrocalamus was produced by a working group (producers, technicians) and will be printed.

The project is making satisfactory progress.

Four platforms were created to promote links between private enterprises and ­producers.

An initiative of knowledge and experiences exchange was organized among artisans from Ecuador and Peru successfully, resulting in a set of new bamboo products and learning of new techniques. The project has trained 3,703 people in total (2,490 men and 1,213 women) through 168 workshops so

Bamboo has now been included in local agendas of the governments and the private sector as an opportunity for business development. In Ecuador and Peru bamboo was included in Public Investment Projects.

VI Summary of Ongoing Regular Projects 2013 | 51

Cocoa

Submitting ICB Project Executing Agency

Countries Directly Benefiting Project Cost Common Fund for Commodities

Counterpart Contribution Co-financing

The project was approved in April 2012. 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.

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, Côte 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 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 planta-

ICCO/43: Integrated Management of Cocoa Pest and Pathogens in Africa: Controlling Indigenous Pests and Diseases and Preventing the Introduction of Exogenous Ones

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, Côte 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) tion 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 investment (psychological impact).

The project, implemented by the Ghana Cocoa Board, more specifically via the Cocoa Research Institute of Ghana (CRIG), 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 was launched on 15 April 2013 in Accra, Ghana back to back with a regional workshop on Integrated Pest Management in Africa. It is currently operational in all the targeted countries except Côte d’Ivoire, where it is expected to start activities in the second half of 2014. Though each country is at a different level of implementation of project activities, there are common approaches to implementation strategies.

During the first 6 months of implementation, special emphasis has been laid on training of extension agents and farmers on Integrated Pest Management.

CFC/ICCO/44FA: Capacity Building on Price Risk Management Strategy for Cocoa Smallholder Farmers in Africa

Submitting ICB

Project Executing Agency

Countries Directly Benefiting

Project Cost

Common Fund for Commodities

Counterpart Contribution

Co-financing

International Cocoa Organization (ICCO) TWIN Ltd. (UK) Cameroon, Nigeria, Sierra Leone, Togo USD 654,217 USD 313,828 (Grant) USD125,580 (cash) USD127,365 (in kind) USD52,647 (AFD) USD34,797 (others)

Commodity market volatility has increasingly become a challenge for governments of developing countries which have progressively withdrawn their price stabilization programmes from the agricultural sector as part of trade liberalization and reform programmes. However, while advanced economies can mitigate their risks via financial markets, developing countries have been

struggling to adopt similar strategies. The project will equip cocoa producers in West Africa with knowledge and skills necessary to implement a risk mitigation strategies with a mix of instruments to reduce the costs of volatility in the global cocoa markets.

The knowledge and use of instruments necessary to mitigate the effects of global price vola-

52 | Common Fund for Commodities Annual Report 2013

tility are, generally, the greatest impediment.

In their earlier activities, the CFC and ICCO concluded that local cocoa sector stakeholders needed adequate and practical training in the implementation of hedging transactions in the countries. Based on this understanding, the project would seek to (i) focus on segments of the value chain vulnerable to risk; and (ii) develop the local capacity to apply >>

specially designed set of integrated risk mitigation techniques to improve the producer situation and the overall efficiency of the value chain. To understand the effects of price volatility, cocoa cooperatives will be trained to pay attention to factors affecting price formation and to take advantage of market information available in the country to form an adequate risk assessment in terms of its costs and the need for mitigation.

The projects aims to achieve more predictable incomes for cocoa farmers, leading to 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 with 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.

Coffee CFC/ICO/45: Building Capacity in Coffee Certification and Verification for Specialty Coffee Farmers in Eastern Africa International Coffee Organization (ICO) African Fine Coffee Association (EAFCA) Ethiopia, Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Zambia and Zimbabwe USD 4,495,725 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

Submitting ICB

Project Executing Agency

Countries Directly Benefiting

Project Cost

Common Fund for Commodities

The rationale of the project is to build certification and verification capacity within the national institutions. Ultimately the project purpose will be to increase the quality and quantity of certified / verified coffee produced and processed within the AFCA 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.

The project is tailored to enhance coffee productivity and quality in order to have

viable access to premium markets upstream.

The farmers trained in the project have their coffee certified with respect to the various certification schemes being applied in the project countries. To this end, a multiple certification approach is being employed to provide the beneficiary farmers with access to market options and better terms of trade. Multiple certification capabilities provide farmers with leverage to switch market options for better terms of trade. The concept does not emphasize better prices but market options. In addition existing new and emerging coffee sustainability initiatives will improve market efficiency, raise value addition in production and processing and

ensure improved coordination between ­coffee producers and final coffee market.

The implementation of project activities has been quite successful. Most countries have completed the Farmer training phase and are assessing the impact of the training on production of certified coffees.

This has resulted in the training of 8,029 farmers; 45 Master Trainers; 111 trainerof-trainers; and 36 auditors. In addition, 2,500 farmers have been certified/verified 4C. The project is scheduled to end in November 2014 with a stakeholders’ meeting which will bring together all participating countries in the project.

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 Cobán) and in two selected regions in Jamaica (the Central and Northern regions in the NonBlue Mountain- Lowland). This objective will be achieved through improving quality and productivity as well as organizational and management capabilities. In addition to grant financing for capacity

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 building, which is being pursued in both countries, the project also envisaged the provision of lines of credit through a combination of loans from CFC and the Dutch-based micro-finance institution Oikocredit. In Guatemala the loan funds would be made available to small holder coffee farmers through collaboration with Banco Rural (Rural Bank) of Guatemala.

Positive developments within the countries enabled provision of local loans as

required. This resulted in both countries not effectively pursing the loan facility offered by the project. The identification of Cooperatives and Producer Organizations/ Federations 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. The project operational activities are set to end in the second half of 2014.

VI Summary of Ongoing Regular Projects 2013 | 53

CFC/ICO/48: Sustainable Credit Guarantee Scheme to Promote Scaling up of Enhanced Coffee Processing Practices in Ethiopia and Rwanda

International Coffee Organization (ICO) CABI and Rabobank International Advisory Services (RIAS) Rwanda and Ethiopia USD 8,013,240 USD 1,240,210 (Grant) (of which 600,000 USD from the OPEC Fund for International Development- OFID) Common Fund for Commodities USD 2,000,000 (Loan Guarantee) Co-financing Loan Guarantee USD 4,421,780 (Rabobank, Banque populaire du Rwanda, Oromia Bank) Counterpart Contribution USD 351,250

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

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. The project addresses the emerging challenges to sustainable production of high quality coffee by promoting good agronomic and processing practices. The accelerated flow of market information to all players in the coffee chain promotes good governance of the cooperatives. Primary beneficiaries are the farmers who benefit from technical and credit support to purchase inputs and farm equipment for coffee production. CABI coordinates grant based activities while Rabobank coordinates the loan operations and also provides co-financing. ILLYCafe is

also expected to provide co-financing 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 cooperatives will also be able to export their coffee directly to the consuming markets.

Key project outputs/results to date are summarised as follows: i) The process of identifying the cooperatives in both Ethiopia and Rwanda is completed. This exercise was undertaken in a participatory manner based on criteria agreed between the key stakeholders in the project including the participating banks. ii) Capacity building of banks- Training of the bank officers in at the Cooperative Bank of Oromia (CBO) in Ethiopia and the Banque Populaire du Rwanda (BPR) has been completed and an evaluation report prepared. Final hands-on

support will be provided by Rabo Development once the banks start processing loan application by the cooperatives. iii) Capacity building in agronomy-The agronomic training has been initiated in Ethiopia. This involved the Training of Trainers (ToT) in both the Oromia and the SNNP regions of Ethiopia. In total, 105 participants drawn from eight Zones and 11 Woredas of Oromia and SNNP were in attendance.

The participants included coffee agronomists, coffee marketing and cooperative promotion experts at zonal and woreda levels, supervisors/development agents and cooperative promotion agents at field level.

The trainers were drawn from CABI, MoA, Regional Cooperative Promotion Bureau and Agricultural Development Bureau.

Similar training was organised in 2012 for Rwanda in collaboration with NAEB and NGOs involved in capacity building of ­coffee cooperatives.

CFC/ICO/51: Rehabilitation of Coffee Farmers in the DR Congo

Submitting ICB International Coffee Organization (ICO) Project Executing Agency Vredeseilanden Country Office (VECO) Country Directly Benefiting Democratic Republic of Congo (DRC) Project Cost USD 1,611,447 Common Fund for Commodities USD 1,368,990 (Grant) (of which USD 700,000 from the OPEC Fund for International Development- OFID) Counterpart Contribution 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 (Office National du CafĂŠ (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 sup-

54 | Common Fund for Commodities Annual Report 2013

port 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 promoted by enhancing of the coffee sector in the DRC through a multi-stakeholder consultative process.

The project start was delayed due to problems related to the selection of a suitable Project Execution Agency for the project. In consultation with the ICO, this was finally concluded in 2013 with the signature of the Project Agreement.

The project has now made an effective start-up.

Cotton CFC/ICAC/40: ProCotton: Improving Productivity and Marketing of Cotton through Strengthening of Selected Producer Organizations in Eastern Africa

Submitting ICB International Cotton Advisory Committee (ICAC) Project Executing Agency Solidaridad (Netherlands) Project Cost USD 840,000 Common Fund for Commodities USD 500,000 (Grant) (incl. USD 250,000 from the OPEC Fund for International Development – OFID) Counterpart Contribution USD 340,000

The ProCotton program 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.

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

During 2013, the project continued to support Biosustain in strengthening its capacity to provide 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 being) not be the most profitable way forward. This has been 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 throughout 2013 continued to focus 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.

The project has been extended to be concluded in early 2014, following an external evaluation to be undertaken at project-end.

The final project completion report and the outcome of the evaluation in 2014 will be placed on the CFC website in due course.

CFC/ICAC/44: Development of National Cotton Classing Systems in Kenya and Mozambique

Submitting ICB International Cotton Advisory Committee (ICAC) Project Executing Agency Wakefield Inspection Services Ltd. Project Cost USD 3,051,430 Common Fund for Commodities USD 1,160,000 (Grant) (incl. USD 580,000 from the OPEC Fund for International Development – OFID) Counterpart Contribution 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 is fully operational, but is facing from time to time delays as it is dependent for its technical advisory and training activities on the progress of the availability of counterpart-provided infrastructure and other facilities.

Activities focus on analyzing and technically addressing issues related to quality control

and quality management, skills improvement and upgrading of experts as well as facilities.

Improved procedures are being documented, which will be embedded in formal regulations.

Overall progress is considered reasonable although due attention needs to be given to the timely planning of the availability of crucial inputs required for project activities.

The project is due for a mid-term (external) evaluation in the course of 2014.

VI Summary of Ongoing Regular Projects 2013 | 55

Fish CFC/FSCFT/29: Promotion of Processing and Marketing of Freshwater Fish Products: Bangladesh, India, Indonesia, Pakistan and Sri Lanka

Submitting ICB FAO Sub Committee on Fish Trade Project Executing Agency Centre for Marketing Information and Advisory Services for Fishery Products in Asia and Pacific (INFOFISH) Countries Directly Benefiting Bangladesh, India, Indonesia, Pakistan and Sri Lanka Project Cost USD 1,498,331.00 Common Fund for Commodities USD 901,574.00 (Grant) (of which USD 450,000 from the OPEC Fund for International Development - OFID) Counterpart Contribution USD 596,757.00

The project aims at providing support to 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 all beneficiary countries except for Pakistan and Sri Lanka. There has been substantial progress in the assessment of value added freshwater fishery products markets both domestically and internationally, in the assessment of beneficiary companies, the development of value added products, and in pilot production, trade matching, capacity building for

beneficiary companies, and investment ­promotion. Although project implementation in the beginning was delayed, this has for a large part been compensated by a faster pace at subsequent stages.

The dissemination of technology through the capacity building and trial product ­development of freshwater fish products ­using innovative packaging will come next, and will be followed by the trial marketing in domestic and international markets.

Grains/Roots and Tubers 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.

It is also envisaged to 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 collaborative action to utilize the potential of sweet sorghum to the advantage of a number of countries in Asia, and other

FAO Intergovernmental Group on Grains ICRISAT China, India and Thailand USD 3,013,601 USD 1,997,579 (Grant) USD 1,016,031 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 closed operations due to unfavourable policies adopted 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) which is purchasing sweet sorghum on a forward contract basis from surrounding farmers on a large scale with plans for further expansion.

Cooperation with ZTE is progressing well, even though latest figures available show a 50% decrease in overall production area (on marginal land in Inner Mongolia not suitable for other crops) from 3000 ha to 1,500 ha.

56 | Common Fund for Commodities Annual Report 2013

This however can be explained with the license approval process for commercial ethanol production for blended car fuel. During a mandatory fuel “test” phase of two years, ZTE reduced its planting efforts until they actually obtain final approval and procure the license from the Government of China for production of ethanol on commercial scale. This test phase will terminate in June 2014 after which ZTE will commence commercial production and marketing of ethanol for blending into fuel. This can be regarded a milestone for Chinese ethanol production as it is the first license issued for this purpose in China and possibly only the second one officially issued worldwide.

The second (small) private sector partner Fuxin Green Bio-Energy Corporation has planted 20 ha of sweet sorghum for demonstration purposes in 2013. The company has in the meantime changed their business model and will produce sweet sorghum wine at the same location with the existing infrastructure.

CFC/FIGG/43: Small Scale Cassava Processing and Vertical Integration of the Cassava Subsector in Southern and Eastern Africa – Phase II

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

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

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.

By the end of 2013 the installation of flash driers was accomplished in Tanzania and Zambia and testing and training for the use of the flash drier for drying cassava grits was ongoing. In Madagascar the flash drier was allocated to a commercial final processor that was already engaging in cassava farming and starch production and installation is ongoing. Processing centres are being supplied with cassava from local farming communities that have been organized as outgrowers and which have received training on cassava cultivation as well as improved planting material. These communities or emerging specialized small entrepreneurs process cassava into wet grits before delivering them to the central final processor for HQCF production. Next to this value chain established by the project,

a wide number of other adapted chains have been developed for traditional products alongside. In all three countries marketing does not pose an obstacle. While in Madagascar a large commercial bakery is awaiting the first delivery of HQCF for blending into their baguette and cakes, in Tanzania the flour is sold in retails shops and in Zambia HQCF goes directly from the final processor to a supermarket chain owned by the same company holding.

The commercial branding for HQCF to increase its value and price in the industry in Tanzania achieved most of its outputs. However, the exercise showed that smallholder processors have challenges in meeting the rigid quality standards by the Tanzania Bureaus of Standards which has so far impeded the market introduction of the product through the local partner Coast Millers.

This project, in conjunction with the preceding Phase I will undergo an impact evaluation after completion in 2014.

CFC/FIGG/46: Sorghum Value Chain Development, East Africa

FAO Intergovernmental Sub-Group on Grains European Development Co-operative (EUCORD) Tanzania, Uganda, Kenya USD 4,044,667 USD 1,000,000 (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

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

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 agroindustrial 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 builds 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 Lead-

ers 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.

Overall progress of the project is very ­satisfactory. Data available for Kenya and Uganda shows that sorghum sales already led to an accumulated increased income >>

VI Summary of Ongoing Regular Projects 2013 | 57

for the participating farmers by more than 9 mln USD. While the increase in volumes of white sorghum delivered from smallholder farmers has been less than set targets in the past two years, the recent year showed a significant increase to more than 25,000 MT in 2013 delivered to the

brewery by more than 50,000 farmers.

The higher than expected participation of smallholder farmers is thereby compensating the lack of large-scale commercial farmers so far engaging in sorghum production. Due to anticipated yield increases on smallholder farms as the project

continues, the PEA is confident that the ambitious 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 remains very good.

Jute CFC/IJSG/21: Development and Application of Potentially Important Jute Geo-textiles

Submitting ICB International Jute Study Group (IJSG) Project Executing Agency National Jute Board (India) Countries Directly Benefiting Bangladesh, India Project Cost USD 3,962,826 Common Fund for Commodities USD 2,045,000 (Grant) (incl. USD 1,000,000 from the OPEC Fund for International Development – OFID) Counterpart contribution 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 2014).

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 geo-textiles are being utilized to establish material performance. Two major subcontracts focus on analysis of the supply chain and the marketing aspects of JGT and on undertaking corroborative laboratory trials duplicating under controlled conditions major field trial environments. 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.

The project has been subjected to an external expert evaluation in November 2012. The evaluation team was generally satisfied with its findings, but has also given useful recommendations to be kept in mind in the remaining project period. Extensive field trials expanding in some cases up to over several hundreds of meters in length have been established mostly as part of larger scale, ongoing public works activities. These include in India, eight for rural road construction, six for river bank protection and eight for hill slope protection. In Bangladesh activities comprise six sites for rural road construction, five for river bank protection and three for hill slope protection. The project is reporting sound progress in the field of setting up adequate monitoring systems, undertaking of corroborative trials/tests under controlled simulation conditions and of extensive material testing in participating research centers in both countries. Longer term market needs and supply chain analysis is ongoing. The project has an operational website where progress can be monitored (www.jutegeotech.com).

CFC/IJSG/25: Increased Production Efficiency in Small-holder Kenaf Production Systems for Specific Industrial Applications

Submitting ICB International Jute Study Group (IJSG) Project Executing Agency United Nations Industrial Development Organization (UNIDO), Vienna Countries Directly Benefiting Bangladesh, China, Malaysia, Project Cost USD 3,204,177 Common Fund for Commodities USD 2,107,746 (Grant) (incl. USD 1,000,000 from the OPEC Fund for International Development – OFID) Counterpart contribution 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

58 | Common Fund for Commodities Annual Report 2013

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.

Progress during 2012 has been less than envisaged and the overall delay in >>

achievements has led the PEA to request a budget neutral extension of the project implementation period. Based on the provided status report and the revised implementation program for the year 2013, such extension was supported by the IJSG, the project’s Supervisory Body, and subsequently granted by the Fund, up to end June 2014. Unfortunately progress in the second half of 2013 did not visibly materialize due to

insufficient reporting on activities. Concerns were expressed towards the PEA, but thus far without results. In spite of the realistic and jointly accepted 2013 operational plan, addressing the required mixture of varietal research, optimization of agronomic practices, fine-tuning of effective fibre extraction techniques and effective start-up of industrial/utilization trials, it appeared that overall progress during the year was far less

than expected. In addition to the perceived limited progress in the field, it emerged that the management and guidance by the PEA proved insufficient to get the project on the right track.

The project was due for a mid-term evaluation, but this is postponed as a result of lack of substantive progress. The project remains a source of concern for the CFC.

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 launched in August 2011 in Maputo. Following the first 2 years of project implementation, a Mid Term Review meeting was held in November 2013, together with a field visit to the target farmers in Mongu and Senanga, Western Zambia. The mission highlighted the progress made on training of farmers and extension staff & dissemination activities, demonstrations, farmer exchange

visits and provision of seeds, while some delays are recorded on market access-related activities. In Zambia, the new sites supported

by Zambeef have shown to be good venues for field days, training and demonstration of improved farming technologies, including feeding, feed production and conservation.

The project could have an important role in stimulating the dialogue taking place at Government level on strengthening the position of the traditional cattle producers in the value chain through the introduction of a transparent cattle grading system. In Mozambique, progress has been made with the setting up of demonstration sites in the project target area for feed production, largely making use of various seed types from GART.

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 targets 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 >>

VI Summary of Ongoing Regular Projects 2013 | 59

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 of the project was held in Bangkok and Chiang Mai in February 2011. A Mid-Term Review meeting has been held in April 2013 in Chiang Mai, Thailand. Initial results indicate that replacing expensive concentrates with high quality / lower cost green forage in cow feeding can produce a sizeable milk productivity gain.

Milk yield in Thailand are showing average gains of 10-15% from the beginning of the project to date, indicating that the 20% sustainable increase milk productivity should

be achievable. In Myanmar, the excellent results of the Pilot School Milk Schemes far exceed expectations reaching more than 20,000 primary school students. In Bangladesh, activities present a general delay due to numerous nation-wide strikes that limited the number of work days. However, due to the commitment and close cooperation and coordination of partners, several of the project activities have moved forward, among others: the school milk pilot was launched in Srajganj district of Bangladesh in August 2013 with the participation of various government officials. The pilot targeted 2000 children and provides 200 ml locally procured pasteurized fresh milk to primary grade children on all school days.

Arrangements have been made to ensure

a cold chain that extends up to the school and appropriate testing, quality control and monitoring procedures to ensure quality and safety of milk served to children. For this purpose, the quality control lab of Dhaka dairy plant was upgraded and a guideline document prepared outlining procedures for milk testing, processing and distribution.

Within activities of the regional component, the Asian Dairy Network (www.dairyasia.org) has been launched and currently has approximately 200 members. The Dairy Training Centre in Chiang Mai has been upgraded to regional training center with the capacity to offer training in (i) milk pasteurization, (ii) milk packaging, (iii) drinking yoghurt, ice cream, butter and cheese making, and (iv) milk quality testing and management.

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 Trinidad &Tobago, 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 training 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 launched in December 2011 in Kingston, Jamaica and since then it is fully operative in the 2 implementing countries.

Some delays have been recorded in the completion of the animal breeding nucleus, mainly due to the complexity and the bureaucratic hurdles of international procurement in Jamaica and to an ORF (Contagious Ecthyma) outbreak in Trinidad &Tobago that required the isolation and the replacement

of several animals. The delays in the buildup of the breeding stock led to subsequent delays in the implementation of the over-all program distribution of animals to farmers.

Activities related to the breeding programme will receive priority in 2014. The construction of the Training Facility, Farm Office and related facilities has been completed, while training of trainers and training of farmers hase started in both countries. 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.

Oilseeds/Oils/Fats 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 >>

60 | Common Fund for Commodities Annual Report 2013

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 their position in the value chain. The project targets a sustainable improvement of the profitability of smallholder sesame production leading to an average 50% increase in income per hectare by the participating farmers.

In total, 5,800 farmers participated in Farmer Field Schools in Burkina Faso (30% women)

and 6,900 in Mali (39% women) to improve sesame production. Yield increases were realized up to 75%. A manual for sesame Farmer Field Schools has been published (see http://www.common-fund.org/document-centre/technical-papers/oilseedsoils-and-fats/) and 2,000 copies have been distributed. In Mali, the manual was translated into the national language Bambara.

Collection centres have been established in Burkina Faso (4) and in Mali (13 established/ improved). Planned activities to encourage local commercial sesame storage and

processing facilities turned out not to be commercially attractive during the project period, as prices for crude sesame were continuously rising and all sesame could be sold for export as a crude cleaned product with remunerative margins for producers, collectors and exporters.

Tests have been conducted to quantify the yield effects of use of fertilizer and quality seeds.

These data will be included in the end-of-project technical report which will become available in 2014 when the project will be completed.

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 sustainable production and utilisation of oil palm in West and Central African countries.

The project will contribute to poverty reduction 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 focus is on developing small scale palm oil process-

ing enterprises. The project activities have been initiated in 2010.

Cameroon has four approved sites (Sombo, Green Valley, Mkpot and Teze) and Nigeria two approved sites (Okitipupa, Uyo). At each site, a small-to-medium scale processing capacity will be developed. Progress in 2013 has been less than expected, because of a delay in the establishment of the processing units, also lead-

ing 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. Once the processing units are operational, training activities will intensify both for operators and farmers. At the request of the PEA, the project duration has been extended. The project will be completed in December 2014.

CFC/FIGOOF/30: Improving the Competitiveness of Small Scale Oil Palm Farmers and Production in Latin America and the Caribbean: Bridging the Yield Gap

FAO Intergovernmental Group of Oilseeds, Oils, and Fats Latin American and Caribbean Fund for Oil Palm Innovations (FLIPA) Colombia, Ecuador USD 3,847,314 USD1,840,794 (Grant) (incl. USD 678,755 from the OPEC Fund for International Development – OFID) Co-financing USD 2,006,520

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

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. The project’s objective is to make Latin American palm oil production more competitive and sustainably increase yields, thereby reducing costs per unit production and processing, thus increasing the incomes of small scale farmers and processors. The project started in 2010.

Project activities are being implemented as planned. Lead farmers achieved more than a 30% yield increase on demonstration plots, within less than 24 months, as a result of improved measures focusing on water management, mulching and balanced fertilization.

The new technology transfer system, with training of lead farmers and farmer-to-farmer extension, yielded good results. In Colombia, 37 lead farmers applied the improved crop management practices on 5,460 ha and made 579 other farmers to adopt these practices on 31,500 ha. In Ecuador, 45 lead farmers with an area of 1,725 ha made 2,163 other farmers to adopt these practices on 54,000 ha. In Ecuador the number of participating extractors has increased from initially 2 to 22. These extractors started to employ new technical staff for training of farmers to increase raw material supply. Similar achievements are noted in Colombia. The project is progressively phasing out, strengthening strategic alliances with national oil palm organizations (ANCUPA in

Ecuador and FEDEPALMA and CENIPALMA in Colombia) and with processors, who are increasingly assuming responsibility for this new system of technology transfer. This will allow farmers to increase productivity, offering processors more and better products for oil extraction. The processors’ interests in farmers ’performance will ensure sustained technical assistance to small growers. The number of adopting farmers is likely to increase the coming years. The project also successfully used various local media to promote the programme and its results (http://www. common-fund.org/projects/video-gallery/).

Various technical documents are available as well as extension materials. The project will be completed in 2014.

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CFC/FIGOOF/32: Integration of Small Scale Farmers into the Market Economy Through Soybean Value Chains in Malawi and Mozambique

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

To project aims to improve soybean productivity and marketing, contributing to the economic welfare of small farmers and processors in Malawi and Mozambique where the small holder sector commands more than 90% of soybean production. The project targets a 100% increase in soybean productivity to meet the demands for the food and feed processing industry and to stimulate use of soybean at household level to combat malnutrition. The project was initiated in September 2011.

In Malawi, four soybean varieties were evaluated. A total of 38 ton of soybean seed was produced, nearly doubling the projects’ target of 20 ton for 2013. In total 164 lead farmers (including 64 women) were trained to enhance capacity building in soybean grain production. Around 135 nutrition

change agents were trained in nutrition and household soybean processing, reaching out to more than 1,200 farmer club members. Sixteen soy-based recipes were introduced. Two medium scale pilot processing plants were established for food and feed.

Various training sessions were organized for participants along the value chain. Commercial links between farmers, processors and the private sector are being fostered and an innovation platform was organized in august 2013 to discuss achievements, challenges and the way forward.

In Mozambique, five soybean varieties were evaluated. Farmers’ yields for soybean, either as seed or grain, are still lower than expected requiring continuous training on good agricultural practices. Nevertheless, 90 ton of seeds were produced exceeding the 2013

target of 40 ton of seed. A nutrition baseline survey, among lactating mothers and their children under the age of 2 years, indicated high levels of protein-energy malnutrition.

More than 9,000 child caregivers (m/w) attended nutrition education activities demonstrating the utilization of soybean in ten local recipes. Although soybean is considered as a male cash crop in Mozambique, more than 300 women started to grow soybean for home consumption. The project contributed to the establishment of 87 home processing units with profits ranging from USD 100-360 per month. Five threshing units have been established by farmers, earning an average of USD 1,000 per month. A business plan was developed for a cooperative for baking of soybean- based food products. An innovation platform has been formed to involve all players in the soybean value chain.

Olive Oil CFC/IOOC/06: Programme for the Development and Dissemination of Sustainable Irrigation Management in Olive Growing

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) Counterpart Contribution USD 631,840.00 in kind

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

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.

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

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. In general, project activities are been implemented as per the approved work plan in both Countries; only the dissemination and extension activities (Component 4) in Syria have been affected by the prolonged unsafe conditions that prevail in the country.

The project conducted an Annual Coordination Meeting and fields visit in Marrakesh, Morocco, in June 2013: in Morocco the irri-

62 | Common Fund for Commodities Annual Report 2013

gation systems are installed and functioning along with the weather stations (Component 1), enabling both data 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).

Both national teams measured soil physical and chemical properties. They recorded different phenological stages and growth parameters of olive trees such as diameter and height of trees, diameter of trunk and branch length. Foliar diagnosis of nutrients and pruning were conducted at all sites in both countries. 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. The introduction of drip irrigation system under mature olive trees has demonstrated improved crop yields compared

to the trees of the same age irrigated with traditional irrigation systems, while at the Saada pilot plot in Morocco after less than 3 years since planting, the olive trees under recommended drip irrigation treatment have started producing olive fruits, whereas, trees under conventional flood irrigation are still in vegetative stages. Income opportunities of the farmers switching to the recommended irrigation techniques are very promising: in

Syria, at Dara’a research station, there was an income increase of US$ 1,786/ha for Jilutt variety and US$ 2,330/ha for Sorani variety with the application of 100% irrigation treatment compared to rainfed treatment. The project is expected to complete its 4 year life cycle in October 2014 with a regional dissemination workshop to be held in Marrakech, Morocco, with participants from both implementing countries.

CFC/IOOC/09: 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 The International Olive Oil Council (IOOC) Project Executing Agency Institut de l’Olivier (IO), Tunisia Countries Directly Benefiting Algeria, Egypt, Morocco, Tunisia Project Cost USD 1,700,000 Common Fund for Commodities USD 900,000 (Grant) Counterpart Contribution 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.

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

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.

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 technologies 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 has been launched in September 2013 in Tunis, Tunisia, and it is since then operational in all the four targeted Countries. Detailed information and photos are available on the project website: www.olive-pilot-nurs.com.

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)

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.

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 was approved in 2012, subject to the availability of confirmed co-financing as reflected in the design of the project.

No confirmed sources have been secured yet. Various potential options are currently being pursued.

VI Summary of Ongoing Regular Projects 2013 | 63

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

Submitting ICB International Rubber Study Group (IRSG) Project Executing Agency International Rubber Research and Development Board Countries Directly Benefiting Cameroon, Côte d’Ivoire and Ghana Project Cost USD 2,980,134 Common Fund for Commodities USD 1,936,701 (Grant) of which USD 1,000,000 from the OPEC Fund for International Development – OFID) Counterpart Contribution USD 1,043,433

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.

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 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.

Due to a delay in the replenishment of the project account pending the approval of the Audit report for the period 2007 – 2012, the field activities during 2013 have been hampered by the lack of funding.

Nevertheless, four out of the eight planned bud wood nurseries were established in the first half of the year in Cote d’Ivoire and two have been set up in Ghana.

The project has been extended to November 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.

A supervision mission was convened in

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 August 2013. Some key project outputs to date include: • 1035 smallholder farmers across 5 states (Edo, Delta, Akwa-Ibom, Ogun and Kaduna) of Nigeria were trained in nursery and propagation management, pest control, budding techniques, handling of latex, effluent management, rubber processing using sheeting machines for production of standard rubber, rubber intercropping and mixed farming with indigenous fruit (mango) and medicinal trees • 16 ha of rubber stock nursery and 3 ha bud wood garden with improved Nigerian and exotic clones were completed • 380,000 certified rubber budded stump of

64 | Common Fund for Commodities Annual Report 2013

high yielding clones were produced and distributed to farmers • 89 model farms covering about 159 ha of land were established for dissemination of best practices in Agroforestry, Mixedfarming and Intercropping to increase farmers’ income during both the mature and immature phase of rubber • A rubber sheeting facility using modern machines and a farmers’ marketing network are being finalized following an exposure visit to India.

Project activities will be completed in July 2014 with a final dissemination workshop in Benin City, Nigeria.

Sugar 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.

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 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

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 are growing well. These 40 varieties are newly imported sugarcane varieties from ­Barbados, India, Sudan, Brazil and Mauritius.

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 subregion. 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: • The full complement of 40 varieties imported are being multiplied by the various collaborating institutions (CIs) and

• The project has been progressing significantly but not as planned with respect to establishment of some trial sites. Some sites that are rain-fed based had to be delayed to coincide with rainfalls. Two sites one in Nigeria (Hadejia) and one in Cote d’Ivoire (Zuenoula) are still to be replanted due to poor initial establishment. The other 5 sites are doing well and all performance data are being recorded by the Collaborating Institutions. All the activities at this stage are completely to be implemented by the Collaborating Institutions, with general supervision by the PEA and Project Consultant.

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: a) Production:

• Research and Development was completed and technology and skills necessary

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 to produce organic tea were developed successfully 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. b) Organic tea certification standards developed c) 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.

After a delayed start-up, activities in India developed satisfactory. The project has showed a pathway that can be adopted for large scale organic tea cultivation in an economically sustainable manner.

Farming practices were developed to ­minimize the dependability on external >>

VI Summary of Ongoing Regular Projects 2013 | 65

inputs and restore the natural pest and predator relationship.

China has fully reimbursed the loan and completed operations. In India the project has been extended to 31st March 2014 since the Indian project’ segment started later than in China (September 2008). All the set targets have been met including experiments; the loan repayment for the Indian loan is on schedule and the last repayment is due in June 2016.

Photo: P. Johnson / FAO

• Capacity building for organic tea production was successfully created with the establishment of capacity building and resource centers, human resources development through workshops and seminars • Exchange visits were organized in different

stations of the South, North and NorthEast India • Three Model farms were established in locations in Assam, Darjeeling and Kerala for a total of 320 hectares • Dissemination of technology though packages of best practice for tea nursery management, young tea management, and mature tea management.

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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

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

FAO Intergovernmental Group on Tea Indonesian Tea Board Indonesia and Bangladesh USD 1,994,630 USD 1,843,030 (Grant) USD 151,600 uplift in the life style of the poor farmers in the two countries.

The project has become fully operational in Indonesia in January 2011 and operationally completed in 2013.The baseline study had been finished and series of trainings were conducted. Self Help Groups (SHGs) were organized and production inputs were distributed to participating farmers within the framework training programs on Good Agricultural Practices (GAP). 47 trainings and workshops with 1,485 participants in

project areas have been carried out on all aspects of tea cultivation. About 40 mobile and 20 fixed leaf collection centers and have been set up.

In 2012 Bangladesh Tea Board (BTB) cleared all the legal documents and from October 2013 the BTB started implementation of the project in Bangladesh.

The project will be extended until June 2015, in order to allow sufficient time to Bangladesh for project implementation.

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) (of which a contribution of USD 100,000 from the OPEC Fund for International Development) 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 at helping 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).

The project is now approaching its completion. In Myanmar, the project implemented a wide-ranging programme of fruit fly control, including testing and implementation of cost-effective Integrated Pest Manage-

ment Packages. In other crops, the project provided support for the introduction of new varies targeting export markets (e.g. sweet peppers, watermenlons) and supported the introduction of integrated supply chain management for organic vegetables.

Furthermore, the project supported the establishment and implementation of Good Agricultural Practices system and Sanitary and Phytosanitary Standards for fresh fruits.

As the result of this work, SPS and GAP certifications are now available to local producers of fresh fruits and vegetables through the Ministry of Agriculture.

To secure availability of financial services for the primary producers to adopt improved production practices, the project also facilitate the creating of local Savings and Loan Funds serving as vehicles for small-scale onfarm investments by the farmers. In 2013, it

was reported that the membership of these schemes had exceeded 200 households.

In Lao PDR the project maintained the same integrated approach, focussing on the crops with export and development potential. The project trained farmers and started implementing an integrated Pest Management system for production of certified cabbage for export, aiming for the requirements of specific markets, such as Thailand. Green mustard had been introduced as a promising high income crop, taking advantage of the interest from private sector buying companies identified in the earlier years of the project. As part of the project’s ongoing efforts to support integrated supply chain management by the participants of the project, a model small-scale packing house has also been planned at the Lao-China Agricultural Research Centre in Lao PDR.

VI Summary of Ongoing Regular Projects 2013 | 67

CFC/FIGTF/25: Pilot Project on Production of Fruit and Vegetable Chips Using Vacuum Oil-bath Dehydration Technology

Submitting ICB F AO Subgroup on Tropical Fruits of the Intergovernmental Group on Bananas and Tropical Fruits Project Executing Agency All China Federation of Marketing and Supply Cooperatives (ACFMSC) Countries Directly Benefiting China with dissemination to African countries Project Cost USD 1,608,014 Common Fund for Commodities USD 868,595 (Grant) Counterpart Contribution 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 processing 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 related activities. All market-

ing efforts have moved the production and sales of the technology on the right track, and established and extended the marketing network.

The knowledge centre has been established. Since the end of 2012 sales volumes increased. Part of the funds for technology dissemination were transferred into the market promotion in China. The project dissemination workshop is foreseen for October 2014.

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. Having started in 2010, the project will be completed in 2014, and many of the goals envisioned in the project have already been achieved.

The yield when using artisanal extractors is quite low, below 2%. The project aimed to transform artisanal production of essential oils into a more organized and semi-industrial process, guaranteeing a more stable level of production, better yield and better and more uniform quality of the oil, resulting in better income for the villagers.

Members of rural communities in Congo and Democratic Republic of Congo have been trained on the techniques of essential oil extraction and marketing, as well as planting

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 and maintenance of Eucalyptus citriodora species. Training in the villages was conducted by the trainers formed at PER, and a total of 56 villagers in the Republic of Congo and 42 in RDC have been trained so far.

As of date, there are 60 ha of village plantations of Eucalyptus citriodora available thanks to the project in the Republic of Congo, while plants and land have been prepared to add another 37 ha.

Five artisanal extractors were placed in the selected sites of Ossio, Odziba, Loudima, Loandjili in the Republic of Congo, and Kinzono in RDC, having each a capacity of 1 m3 or 1,000 liters for the boiler and the tank.

These can provide a yield of approximately 6%, translating into the production of some 200 liters of essential oils per village by the end of 2013. Additional advantages of the semi-industrial extractors are the reduction of the time consumed in the extraction process to about 8 hours versus 12-14 hours with the artisanal extractors. The market immediately available for essential oils in Africa is estimated to be 8 times larger than the current levels of production, which gives ample scope for the replication of experience.

68 | Common Fund for Commodities Annual Report 2013

During the 3 years implementation of the project, some immediate impacts can be highlighted as follows: • Promoted rural employment, in particular for women, who are involved in the harvesting of biomass and bottling the essential oil; • Increased the area of private and village plantations of Eucalyptus citriodora; • Has the potential to substantially increase the income to the rural areas of Congo; • Training the villagers not only in better use of their natural resources, but also shifting the way of production of essential oils, from artisanal to a more semi-industrial process; • Easy replication to other rural areas of Congo.

The Congolese government has expressed its commitment towards the sustainability of the project after the financial support provided by CFC, by further promoting the establishment of plantations through its National Afforestation and Reforestation Programme (ProNAR). The main incentive will be the additional income that the village communities will receive from the sale of the essential oil.

CFC/ITTO/81: Promoting Timber Processing in Congo Basin

Submitting ICB International Tropical Timber Organisation (ITTO) Project Executing Agency Economic Community of Central African States (ECCAS) Countries Directly Benefiting Cameroon, Gabon and Central African Republic (LDC) with dissemination to the Democratic Republic of Congo (LDC) and the Republic of Congo Project Cost USD 1,887,714 Common Fund for Commodities USD 1,253,345 (Grant) (of which a contribution of USD 600,000 from the OPEC Fund for International Development) Counterpart Contribution 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.

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-

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.

The project effectively started operations in 2013 and is expected to complete by 2015.

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

VI Summary of Ongoing Regular Projects 2013 | 69

Photo: ŠFAO/Dan White / FAO 70 | Common Fund for Commodities Annual Report 2013

VII

Regular Projects Completed in 2013 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

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 marketing capabilities of private 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. Recovery of the loan to Guinea has been delayed, but is expected to be effected during 2014.

CFC/FIGB/10: Promotion of Exports of Organic Bananas from Ethiopia and Sudan

Submitting ICB FAO Intergovernmental Sub-Group on Bananas Project Executing Agency International Network for Bananas and Plantains Countries Directly Benefiting Ethiopia and Sudan Project Cost USD 3,588,113 Common Fund for Commodities 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) Counterpart Contributions USD 1,247,513

The project aimed to improve rural development through the promotion of organic banana production and marketing for export in Ethiopia and Sudan. Specifically, the project aimed (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; and (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.

While the original project design focused on the production side of the supply chain, it was realized at an early stage of project implementation that it is not possible to develop an export chain without the close involvement of importers. The project therefore underwent a strategic redesign: The project continued to introduce and test new banana clones suitable for export and

introduced simple, low cost and portable equipment to improve the efficiency and quality of the packing process, but at the same time, considerable effort was put into the establishment of sustainable export market linkages, anticipating that, with the involvement of potential importers, problems at different levels of the value chain could be addressed with a clear market perspective. As a result, after a relatively slow start, the project managed to firmly establish an export supply chain of bananas between Sudan and the Middle East with simple, yet effective measures to produce export quality bananas. Today some 40 MT of bananas leave Sudan towards the Middle East on a daily basis. >>

VII Regular Projects Completed in 2013 | 71

Banana exports increased by an average 53% per annum over the period 2009-2012.

In 2012 almost 6,000 tons were exported, worth over USD 1.8 million. The amounts are still relatively small, but exports appear to have reached levels of regularity and consistency that suggest they will continue.

New markets (i.e. Lebanon, Egypt) were starting to be served in 2013 and Sudan may already be supplying about 15% of the Jordanian market – a very good rate of penetration within four years. In addition to the Arab market, a number of European importers of organic fruit are currently working out first test shipments to Europe.

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 (Chiquita Brands) 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 Ethiopia for decades went beyond Djibouti, with an initial shipment of 18 tons to a trader in Jeddah, Saudi Arabia.

Subsequently, a second Saudi company signed an export agreement for a further four containers in April and two more in May 2012. As a consequence of the momentum observed in the banana sector, the Ethiopian Government has financed a first cold stor-

age facility to further promote this promising export sector.

In summary the project managed to assist Sudan in becoming a banana exporting country for the first time ever, and Ethiopia to revive its banana export sector with the first banana exports since the fall of the monarchy. There are still a number of challenges to be addressed (like logistics and packaging), but both countries can now be regarded as being “on the map” as far as international markets are concerned and their challenge going forward is to build on the initial momentum that has been gained. A Project Completion Report and a “Technical Guide for the Production of Export Bananas in Sudan” are available on the CFC website.

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

Submitting ICB Intergovernmental Group on Bananas and Tropical Fruits Project Executing Agency Institute of Fruit Tree Research, Guangdong Academy of Agricultural Sciences, China Countries Directly Benefiting China Project Cost USD 2,280,000 Common Fund for Commodities USD 1,400,000 (Grant) Counterpart Contribution USD 880,000

The overall objective was to improve the quality and output of organic bananas in the rural areas of China in order to generate employment, improve farm household income levels, as well as achieve environmental and social sustainability through: • Strengthening the capacity of private and public sector players in the production and marketing of organic bananas thereby improving rural and urban livelihoods in banana areas through transfer of ­appropriate technologies; • Creating an enabling environment by establishing organic banana models for organic certification; and • Improving accessibility of organic bananas in the domestic markets.

Project implementation began in 2010 and was completed at the end of 2013.

Evidence on the ground substantiates that the project met most of its targets:

• Post-harvest guides and videos documenting improved post-harvest practices.

• Data from the National Bureau of Statistics in China indicate that between 2010 and 2013, banana production in China expanded by nearly 40 percent annually and yield increased between 20 to 30 percent; • Comparative analysis of four typical cropping systems in Southern China, indicates that organic banana production yielded the highest return; • Technical working groups at each site trained in state of the art technology; • Training strategies established for labourers, growers and extension staff; • Improvements in post-harvest and marketing based on identification of local and regional market opportunities; and

The project confirmed the unique advantages of organic bananas over conventionally produced bananas, by having: superior nutritional content; better taste; and being considerably secure from a food safety perspective. Although the production cost is higher, due to the higher cost of adhering to ecologically sound organic practices, the premium prices received exceeds the higher cost of production. Furthermore, the farming system is socially and environmentally sustainable and fully supported

by Government policies which tend to lean towards sustainable “green” and organic production farming systems. A Project Completion Report will soon be available on the CFC website.

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

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 >>

72 | Common Fund for Commodities Annual Report 2013

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. 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. The extension staff helped the farmers organize themselves

into groups of about 50, 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 which were made available in form of flyers and handbooks to support them.

The project provided training for some 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. Seeds 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.

Moreover, the final report highlighted areas that could improve future performance such as (i) coordinated efforts between different stakeholders for a viable value added industry; (ii) promotion of use of cashew byproducts as a source of energy; (iii) encouraging local consumption of kernels; (iv) more research to produce manual handling equipment locally; (v) establishing more processing venture; (vi) introduction of contract farming; and (vii) enhanced training on postharvest handling.

The Final Report is available on the CFC website.

Photo: G. Thomas / FAO

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.

VII Regular Projects Completed in 2013 | 73

Coffee 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 included a demonstration of coffee ­rehabilitation schemes by showing how production could be increased on a ­ bandoned coffee estates and how displaced people could be resettled.

The project provided support services, such as rural extension, credit facilities and marketing information services.

Other aid agencies assisted 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 2,050 MT in 2013 and drop in production was recorded between

2011 (1,610 MT) and 2012 (1,537 MT) due to an unusual drought in 2012. One significant feature of the project was 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 was disseminated to other locations of the country as a resettlement model.

The loan repayment is scheduled to be completed by 2016 and is being monitored on a continuous basis. The final publication is available on the CFC website.

CFC/ICO/32: Diversification of Production in Marginal Coffee Areas in the State of Veracruz, Mexico

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

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 was 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 was to identify and develop productive alter-

International Coffee Organization (ICO) Veracruz Produce Foundation Mexico USD 4,467,871 USD 1,020,000 (Grant) USD 1,532,400 (Loan) USD 797,313 USD 1,118,158 natives and innovative ways of production which would encourage coffee farmers to stay in the region. These activities resulted in additional farmer’s income in the short and medium term and improved 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 with current expansion of the pilot project to the remaining areas of Veracuz

74 | Common Fund for Commodities Annual Report 2013

which the State Government encouraged; • 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; and • maintenance of the local agro-forestry system generating environmental ­benefits.

Operational activities were completed in 2013. The final publication is available on the CFC website. Monitoring of the outstanding loan, is taking place on a regular basis, to be repaid in full by 2019.

CFC/ICO/40: Increasing the Resilience of Coffee Production to Leaf Rust and other Diseases in India and four African Countries

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) Counterpart Contribution USD 1,095,593

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

The overriding objective of the project was 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 were: to conduct demand-led applied research for variety evaluation that generated 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 undertaken under the project were: 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 activities ended in 2013 in all of the participating countries with good ­scientific results. The exchange of information and cross fertilisation of expertise among the participating research institutions proceeded very well ensuring sustainability of the project results. The research was converted into dissemination and extension of the new varieties in the field.

Some key project outcomes were: • Diseases resistant materials were experimented in trial farms in participating countries.

• Farmers were 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) had 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.

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 was collected. Very useful results were generated in trials and FFSs. From a social and environmental perspective, the project increased awareness of 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. The final publication is available on the CFC website.

CFC/ICO/42: Developing the Potential of the Gourmet Robusta Market, Gabon and Togo

Submitting ICB International Coffee Organization (ICO) Project Executing Agency CABI Countries Directly Benefiting Gabon and Togo Project Cost USD 2,526,694 Common Fund for Commodities USD 1,782,113 (Grant) (of which a USD 500,000 from the OPEC Fund for International Development- OFID) Counterpart Contribution USD 709,125

The project aimed to demonstrate, on a pilot basis, that farmer incomes derived from robusta quality coffee production and processing could be significantly improved.

This improvement came from the enhanced quality and yields from the coffee, as well as the production of gourmet quality robusta coffee. This was achieved through better crop husbandry, improved sun-drying/ processing, and the introduction of some washed coffee processing. The production and processing work was 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 comprised: 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 results were realised in respect to improving quality and productivity and enhanced 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.

The activities associated with washed coffee were initially delayed but have now been implemented. Activities concluded in 2013.

Some of these project outputs are summarized below: • 1.5 hectares of existing nursery gardens were rehabilitated in Togo; • Gabon imported high yield varieties from Cameroon; • Production increased by 10 to 17% in both countries during the project period; and • Quality improved as the production of grade 1 Robusta coffee increased by 60% in both countries; The projects final report will be published on the CFC website in 2014.

VII Regular Projects Completed in 2013 | 75

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 International Cotton Advisory Committee (ICAC) CABI - Nairobi Kenya, Mozambique USD 2,457,000 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)

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

The project was designed to improve the profitability and competitiveness of smallholder cotton production, making it an attractive enterprise providing a sustainable supply of seed cotton to local ginneries. It would introduce and facilitate the development and implementation of better management practices (BMP) that result in more sustainable production of cotton. The project was being implemented through direct introduction of improved practices at field level, involving farmers individually as well as through representative organizations, and it was set out to 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 should build 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 formed part of the EU’s All ACP Agricultural Commodities Programme (AAACP), which provided substantive co-financing.

The project purpose was described as “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”. It would 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.

The project has reported satisfactory progress during its implementation. 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 on thorough field/client visits. Consultations and exchanges focusing on strengthening within-supply chain linkages were undertaken, whereby special attention was being paid to the position of the farmers therein.

The project has been subject of an external expert mid-term 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.

Activities in 2013 focused 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

the final year’s work would be transparent and operational information comparing the end-of-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.

Project activities were concluded in ­December 2013 with the holding of a final dissemination workshop hosted by the Cotton Institute of Mozambique where the Project Execution Agency (CABI) and the Kenyan counterpart institute (KARI: Kenya Agriculture Research Institute) and the Mozambican project team elaborated on the results obtained in the three year project.

The proceedings of the workshop and the final comprehensive technical report of the project are under preparation by CABI and will be made available upon finalization. In the report, production and management practices will be presented that document decreases in pesticide and other chemicals use of up to 50%, accompanied by yield increases, which jointly result (inter alia) in net cotton income increases of some 30% for the cotton farmer.

The report will contain extensive descriptions of the applied practices and producer income models. It will also be placed on the CFC website.

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, Côte 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) >>

76 | Common Fund for Commodities Annual Report 2013

The project aimed 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 was estimated that ultimately (once the system has gained credibility) income increases exceeding 5 – 10% of the current incomes could be realized. The project included facilitation of 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 was to have at project-end some 27,000 farmers firmly established in the programme, who should jointly produce at least some 100,000 tons of seed cotton. The project formed part of the EU’s All ACP Agricultural Commodities Programme (AAACP), which provided substantive co-financing (in the years 2010 – 2011). Parallel to the project activities, the World Bank (also AAACP-funded) initiated a programme that focused 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 2012 substantive progress has been reported which has enabled completion of the project early in 2013. By the end of the project, some 30,000 producers were trained, while also extension staff of cotton companies, ginners and transporters were trained (in total approximately 1,800 persons) whereby it is to be noted that these were not as evenly distributed over the three countries as planned. Due to the political situation in Côte d’Ivoire, fewer farmers could be reached than planned. This was “compensated” by increasing efforts in the other two countries, resulting in an involvement of some 11,500 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. Throughout the project, some 270,000 tons of seed cotton was produced by the participating farmers. Extensive sample taking has taken place to enable statistically relevant analysis for quality control/contami-

nation detection in specialized laboratories in Mali and Burkina Faso.

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 the cotton companies (in particular with their marketing departments).

This issue has been addressed in the final project report which is placed on the CFC website. Detailed information regarding this project beyond the level of detail provided in the final report, may be obtained from the regional office of IFDC, the agency responsible for the implementation of the project, Contact person is Dr. A. de Jager, Director, IFDC North and West Africa Division, Ghana, email: “adejager@ifdc.org”.

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 improv-

ing 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 microfinance to facilitate the production and marketing of improved products which contribute to local food security and the availability of animal protein for ­domestic use.

Among the beneficiaries of the completed project, one can identify the following groups: (i) the industrial producers of value-

added fishery products of Nile perch and small and medium-scale producers of Dagaa benefited from increased earnings and job creation; (ii) the fishers of Nile perch and Dagaa benefited from increased earnings from higher prices of the fish catch; (iii) the consumers benefited from improved trade flows of fishery products in export, regional and local markets; and (iv) the participating countries benefited through increased revenues, employment, food security and nutrition and information.

The technical studies and report of the ­project will be placed on the CFC website.

VII Regular Projects Completed in 2013 | 77

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

The project was designed to upgrade of small-scale fisheries and fish processing industry in the three benefiting countries namely Djibouti, Morocco and Yemen. The overall objectives of the project were 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) Improv-

ing 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 operationally completed.

In June 2013 the final dissemination workshop was held in Tunisia. The Project achieved positive results: the beneficiary cooperatives involved in the Project improved their

production, expanded their markets, started adopting principles of sustainable fisheries, ecological respect of basic hygiene, as well as notion of fair trade. Thanks to the dissemination conferences, more than 20 Arab countries participated and exchanged experiences and lessons, especially in Djibouti, Yemen and Morocco. Export expanded and in some cases (Djibouti) towards Europe. The project completion report is currently under revision by the Supervisory Body.

Grains/Roots and Tubers CFC/FIGG/31: Potato Value Chain Development in West Africa

Submitting ICB FAO Intergovernmental Group on Grains Project Executing Agency European Co-operative for Rural Development (EUCORD) Countries Directly Benefiting Guinea and Senegal Project Cost USD 3,584,026 Common Fund for Commodities USD 794,476 (Grant) (of which USD 100,000 from the OPEC Fund for International Development - OFID) Counterpart Contribution USD 1,789,550

The overall objective of the project was to develop a competitive potato sector in West Africa. Specific objectives were 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. 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. Project interventions therefore successfully centred on the goal to increase seed potato production in Guinea, alongside training and capacity building measures for ware potato farmers in Guinea and Senegal.

Project goals and objectives have been fully achieved. By the end of the project, more than 40,000 MT of potatoes and close to 6,500 MT of seed potatoes have been produced with project assistance on 800 ha, and production appears to have been established on a sustainable level. Farmers are increasingly adopting highly productive varieties supplied by the private sector partner AGRICO, which are being reproduced in Guinea, and apply improved 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. At the same time storage related project interventions led to a major reduction of post-harvest losses from the usual 50 to 100% down to 5%.

While an initial export of seed potatoes from Guinea to Senegal was planned, phytosanitary issues largely prevented the establishment of such a value chain due to cross border restrictions. Instead, export channels have been developed to Liberia, Sierra Leone and Mali.

Governments of Guinea and Senegal are committed to continue assisting potato producers to increase potato production, for internal demand and export. IFAD and the Belgian Development Corporation have shown interest to take on the project activities for further expansion. The Project Completion Report will be available on the CFC website shortly.

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) (of which USD 500,000 from the OPEC Fund for International Development - OFID) Co-financing USD 1,054,680 (EU/AAACP)

Counterpart Contribution USD 124,275 >>

78 | Common Fund for Commodities Annual Report 2013

The overall goal of the project was 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 was 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 sought to alleviate identified key constraints along the value chain of each crop and explore market opportunities. Interventions addressed production issues as a means of satisfying the market demands for quality and quantity as well as consequential marketing shortcomings and new opportunities. The

project started in late 2010 as a priority of the EU/AAACP Commodities Programme for the Caribbean.

Main result of project activities is a functioning interconnected network of plant multiplication and hardening facilities that has been established and now enables Caribbean islands to multiply high quality and disease free planting material for various roots and tubers on a sustainable basis. The network consists of eight propagation facilities and four hardening facilities, two germplasm banks, two tissue culture laboratories and one fully equipped virus testing laboratory, which are today operational for cassava, sweet potato and yam planting material propagation for the whole Caribbean. In all

project countries yields of root and tuber crops are observed to increase between 20 and 100% when using improved (virus free) planting material. Alongside the core activity of establishing the infrastructure and providing capacity for the multiplication facilities, punctual interventions were made along identified roots and tuber value chains that have led to market access for various stakeholder groups and the development of new markets ranging from the hygienic production of traditional artisanal root and tuber products for the tourist market in Dominica to the introduction of roots and tubers into the school meal diet in Trinidad and Tobago.

Project Completion Report and other relevant project documentation will be made available on the CFC website shortly.

Olive Oil CFC/IOOC/08: Creation of a Pilot Demonstration Plants and Training to Improve Olive Oil Quality in Latin America

Submitting ICB International Olive Council (IOC) Project Executing Agency BERCI INTERNATIONAL (with technical collaboration of IVALSA – Istituto per la Valorizzazione del Legno e delle Specie Arboree) Country Directly Benefitting Argentina Project Cost USD 2,137,077.68 Common Fund for Commodities USD 1,653,950.00 (Grant) Counterpart Contribution 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, targeted to add value to olive oil as commodity.

The Project has been completed following a Completion Review mission held in ­Catamarca, Argentina in July 2013. The modern olive processing plant set up by the project is now fully operational together with the bottling system and the showroom.

Permanent staff, two operators and the plant manager, has been recruited and trained.

With its actual processing capacity of 1600 Kg/hr, considered adequate to process olive crop from a large number of small olive farmers, the plant efficiently manages the complete process of olive oil making, from receiving and sorting the olives to extracting and bottling the end product. It provides

a state-of-the-art crushing, testing, storing and bottling facilities for the production of good quality extra virgin olive oil to be promoted and sold under the brand “Olivares del Valle”, also developed under the project.

The brand logo was created, bottle labels designed and promotional materials were designed and printed. To strengthen at the national level, the olive oil brand developed by the project “Olivares del Valle” an ad hoc web site has been developed (www. olivaresdelvalle.com), together with a FB page (www.facebook.com/OlivaresDelValle).

Training for olive farmers on the adoption of good agricultural practices and good orchards management has been undertaken as well. Regarding the destination of the ownership of the plant, the Cooperative 12 Olivos has received the plant from CFC for commercial use by its members, but will have to assure the utilization of the plant for dissemination and training purposes by the UNCa which, in exchange, will grant to the cooperative the exclusive use of the plant building. During the 2013 crop season, first commercial production & marketing campaign, the plant processed 385 tons of olives with an average oil extraction rate of 11%.

About 16,000 Lit of extra virgin olive oil were

produced and marketed under the Brand “Olivares del Valle”. In the last implementing year the project produced tangible economic gains for the members of the cooperative, assuring a higher and sustainable income from the production and sale of quality olive oil, which could obtain a premium price on the national and international market: the members of the Cooperative 12 Olivos, presently formed of 13 small holder farmers from Catamarca, tripled their sales returns per liter of olive oil from 3 USD in 2010 to 10 USD in 2013 (at the Caminos Y Sabores Fair held in Bueno Aires in July 2013, olive oil bottles of various size for a total volume over 750 Liters were sold during 4 days with a total turnover of 37,500 pesos (7000 USD). Olivares del Valle is also distributed in Canada by ATK Consulting Group. The distributor’s main clients are specialized boutiques and high end restaurants nationwide.

At full capacity, the pilot plant is expected to produce 150,000 litres of high quality olive oil per year, which at the average wholesale price of 10 USD/Lit, will result in a total gross revenue of USD 1,500,000.

The technical report will be available on the CFC website in the course of 2014.

VII Regular Projects Completed in 2013 | 79

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

Through a Public Private Partnership approach, the project aims to promote the cultivation of alternative crops like Rape and Jatropha Curcas by smallholder farmers, to be processed and subsequently used as fuel by adapted private commuter transport vehicles in selected cities in Peru and Honduras. Baseline studies were conducted, focusing on the feasibility of alternative crops to be used after processing as fuel.

Extensive applied research was undertaken regarding seed production and process-

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 ing as well as vehicle/engine adaptation, resulting in preliminary models related to the feasibility of the proposed value chain for the oily seed crops.

The outcome of this project, although promising, is not yet sufficiently conclusive for large scale commercial uptake. The project has, however, yielded important insights in required follow-up work, addressing in particular the need to establish financially viable production systems, which may not

necessarily be suitable in smallholder production environments as well as making processing arrangements more efficient, thus reducing costs. Technically, the project has shown that diesel oil replacement by rape/jatropha seed oils is feasible. However, the economies thereof require closer examination. The outcome of the project is summarized in a brief technical report, to which location-specific reports have been added. The reports can be accessed through the CFC website.

Sugar CFC/ISO/29: East African Sugar Development

Submitting ICB International Sugar Organization (ISO) Project Executing Agency Sugar Board of Tanzania Countries Directly Benefiting Kenya, Tanzania and Uganda Project Cost USD 4,193,104 Common Fund for Commodities USD 2,358,540 (Grant) (of which USD 1, 000,000 from the OPEC Fund for International Development - OFID) Counterpart Contribution USD 1,834,564

The Project aims at improving 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 seed cane (and new 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.

countries; ongoing importation of improved varieties; development of a training manual and training programme for extension and outgrowers’ officers. The project is operationally completed, and a dissemination workshop was held in Arusha (Tanzania) in October 2013.

Outputs to date include the establishment of: the East African Cane Improvement Network; establishment of regional quarantine protocols between the participating

The Project Completion Report and other relevant project documentation will be made available on the CFC ­website shortly.

80 | Common Fund for Commodities Annual Report 2013

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 was 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 of Protected Agriculture (PA). The central objective of the project was to pilot and expand the use of 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 sought to develop and intensify food production and security on the limited land available. This sought to 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 strin-

gent, particularly with regard to Sanitary and Phytosanitary (SPS) requirements, including traceability. A complementary goal was to develop improved production and marketing tools, including more integrated PA production and marketing information systems and database, accessible to all stakeholders. The project was identified as a priority of the EU-AAACP commodities programme for the Caribbean.

Project activities have been successfully completed and demonstration infrastructure (greenhouses) have been constructed and are operational (i.e. eight greenhouses have been newly constructed and another six were fully refurbished). Four of those greenhouses have been equipped to serve as training centers for complex greenhouse management. By the end of the project

some 800 farmers have received such training which focused on issues like crop establishment, and care, growth media and plant nutrition, as well as post-harvest operations, marketing and business management.

The project has initiated direct market linkages between greenhouse vegetable growers and 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.

The Project Completion Report and other relevant project documentation, including a greenhouse operations manual for the Caribbean, will be made available on the CFC website shortly.

VII Regular Projects Completed in 2013 | 81

Photo: ŠFAO/Prakash Singh / FAO

Photo: CFC

Ms Anna Tofften (Chairperson GC 25

Viii 25th Governing Council Meeting

& Executive Director, Sweden)

The 25th Annual Meeting of the Governing Council meeting

The Governing Council:

was opened by Ms. Anna Tofftén, Governor of CFC for Sweden in her capacity as the Acting Chairperson. Mr. Boubaker Ben–

Acknowledging that the Open-Ended Committee (OEC)

Belhassen, Secretary, Committee on Commodity Problems

has fulfilled its mandate to the best of its capacity;

(CCP), UN Food and Agriculture Organization (FAO) delivered the welcome address on behalf of Mr. José Graziano da Silva,

Expressing gratitude and commending the work of the

Director-General of FAO. Mr. Parvindar Singh, Managing Direc-

Chair and Vice-Chair of the Open-Ended Committee;

tor a.i. delivered a statement on the activities of the Common Fund during 2013.

Desirous of moving forward in the process of strengthening and updating the CFC as an effective instrument of international

The Governing Council considered the recommendations

cooperation in commodities

of the Open-ended Committee and the Executive Board on the “Review of the Agreement Establishing the Common

Decides:

Fund for Commodities” in the context of ongoing discussions

1 to establish a Transition Committee (OTC) open for partici-

on the “Future Role and Mandate of the Common Fund for

pation by all interested Member Countries, to be chaired

Commodities”. Taking note of the views expressed by Member

by the representative of Kenya, vice-Chair the representative

Countries, the Governing Council unanimously adopted the following resolution:

of Mexico; 2 to request all Member States to communicate their text proposal on the draft text presented to the 25th Governing Council in documents CFC/GC/25/2/Add.1 and Add.3,

VIII 25th Governing Council Meeting | 83

including all proposals made in the 25th Governing Council no later than 10 March 2014;

Chairperson and Vice-Chairpersons of the Governing Council for the year 2014

3 to direct the Secretariat to compile a document reflecting all text proposals received before the deadline, and to circu-

The Governing Council, by consensus, elected H.E. Mr. Buddhi

late such document, by a formal letter as well as via the web

K. Athauda (Sri Lanka) as Chairperson for the period up to and

site, to all Member States for consultations, no later than

including the Twenty-Sixth Annual Meeting of the Governing

19 March 2014;

Council.

4 to call for the OTC to meet on 8 April with the objective to produce a recommended agreed text of Amendments

The Chairperson and Vice-Chairpersons of the Governing

and to make a recommendation for the Executive Board

Council for the year 2014 are as follows:

on 6-7 May 2014; 5 to request the Executive Board to work towards producing an agreed clean text of the recommended Draft Amend-

Chairperson H.E. Mr. Buddhi K. Athauda (Sri Lanka)

ments to the Agreement Establishing the CFC for consideration by the Member States.

Vice-Chairpersons for 2014 African Group: H.E. Ms. Mary M. Muchada (Zimbabwe) Asian and Pacific Region Group: Mr. Qasim M. Niaz (Pakistan) Latin American and the Caribbean Region Group: To be communicated to CFC OECD Group: Ms. Anna TofftĂŠn (Sweden) China: Mr. Fe Li Russian Federation: To be communicated to CFC

H.E. Mr. Eduardo Ibarrola NicolĂ­n Photo: CFC

84 | Common Fund for Commodities Annual Report 2013

(Temporary Alternate Governor, Mexico)

IX Financial Reports Balance Sheet - First Account, as of 31 December 2013 (expressed in USD & SDR)

2013 2012 2013 2012 USD USD SDR SDR ASSETS Cash and Cash equivalents Cash in Bank

11,103,800

20,084,200

7,210,300

Time Deposits

1,152,800

8,409,200

748,600

13,067,800 5,471,500

12,256,600

28,493,400

7,958,900

18,539,300

Investments 85,550,000

84,699,600

55,551,900

55,110,000

85,550,000

Debt Securities

84,699,600

55,551,900

55,110,000

Promissory Notes 42,710,800

58,528,700

27,734,300

38,081,800

Amounts Receivable From Members Amounts Receivable From Members

14,152,200

14,949,000

9,189,700

9,726,600

Provision For Overdue Members Capital Subscription

-13,442,500

-13,929,800

-8,728,900

-9,063,500

709,700

1,019,200

460,800

663,100

Prepayments

112,500

111,600

73,100

72,600

Loan Receivable

551,300

0

358,000

0

622,300

Other Receivables Accrued Income on Investments

983,400

956,400

638,600

Recoverable Taxes on Goods & Services

51,300

67,200

33,300

43,700

Receivable from Dutch Trust Fund

0

111,000

0

72,200

Receivable from EC Trust Fund

384,200

632,400

249,500

411,500

Other receivables

162,900

92,700

105,800

60,300

1,581,800

1,859,700

1,027,200

1,210,000

143,472,700

174,712,200

93,164,200

113,676,800

Accrued Liabilities

905,200

1,209,200

587,800

786,800

Payable to EU/EC

2,000

2,000

1,300

1,300

Turkey settlement

156,600

156,600

101,700

101,900

Japan settlement

0

30,986,100

0

20,161,200

Belgium settlement

0

1,030,300

0

670,400

1,063,800

33,384,200

690,800

21,721,600

Total Assets LIABILITIES AND EQUITY Liabilities

Capital Subscriptions & Accumulated Surplus Paid-in-Shares of Directly Contributed Capital

126,717,500

124,777,800

82,284,100

81,186,900

Provision For Overdue Members Capital Subscription

-13,442,500

-13,929,800

-8,728,900

-9,063,500

Net Earnings Programme

18,384,400

19,243,800

11,937,900

12,400,900

Accumulated Surplus

8,095,800

7,852,900

5,257,100

5,109,400

Translation Reserve

2,653,700

3,383,300

1,723,300

2,321,500

142,408,900

141,328,000

92,473,400

91,955,200

174,712,200

93,164,200

113,676,800

Total Equity and Liabilities

143,472,700

iX Financial Reports | 85

Balance Sheet - Second Account, as of 31 December 2013 (expressed in USD & SDR)

2013 2012 2013 2012 USD USD SDR SDR ASSETS Cash and Cash equivalents Cash in bank

9,271,300

5,479,700

6,020,300

Time Deposits

3,400,000

6,400,000

2,207,800

3,565,400 4,164,200

12,671,300

11,879,700

8,228,100

7,729,600

Investments Debt Securities

65,657,700

67,086,000

42,634,900

43,649,600

65,657,700

67,086,000

42,634,900

43,649,600

Promissory Notes 6,668,000

6,824,500

4,329,900

4,440,400

Amounts Receivable From Members Amounts Receivable From Members

426,600

408,000

277,000

265,500

Provision For Overdue Members Capital Subscription

-426,600

-408,000

-277,000

-265,500

0

0

0

0

Loans 6,222,400

7,961,900

4,040,500

5,180,500

6,222,400

Loan Receivable

7,961,900

4,040,500

5,180,500

842,700

Other Receivables Accrued Income on Investments

1,110,100

1,295,200

720,800

Receivable from Dutch Trust Fund

0

69,700

0

45,400

Receivable from EC Trust Fund

2,022,500

1,934,500

1,313,300

1,258,700

Other Receivables

0

23,100

0

15,000

3,132,600

3,322,500

2,034,100

2,161,800

Total Assets 94,352,000

97,074,600

61,267,500

63,161,900

LIABILITIES AND EQUITY Liabilities Turkey Settlement

234,900

234,900

152,500

152,800

Belgium Settlement

1,456,700

1,846,300

945,900

1,201,300

Payable to Dutch Ministry

2,791,800

313,700

1,812,900

204,100

Payable to EU/EC

2,583,500

10,400

1,677,600

6,800

Other Payables

166,000

92,900

107,800

60,400

7,232,900

2,498,200

4,696,700

1,625,400

17,084,100

Capital Subscriptions and Accumulated Surplus Paid-in-Shares of Directly Contributed Capital

26,565,800

26,256,900

17,250,500

Provision For Overdue Members Capital Subscription

-426,600

-408,000

-277,000

-265,500

Accumulated Surplus

57,534,200

65,084,600

37,359,900

42,347,400

Translation Reserve

3,445,700

3,642,900

2,237,400

2,370,500

87,119,100

94,576,400

56,570,800

61,536,500

Total Equity and Liabilities 94,352,000

97,074,600

61,267,500

63,161,900

86 | Common Fund for Commodities Annual Report 2013

Income Statement for the period 1 January to 31 December 2013 - First Account (expressed in USD & SDR)

2013 2012 2013 2012 USD USD SDR SDR Income Net Income from Investments

3,773,200

3,960,000

2,482,800

Other Income

52,300

44,100

34,400

2,585,300 28,800

Realized Exchange (loss)/gain on Operations

1,180,900

676,500

777,000

441,700

Unrealized Exchange (loss)/gain on translation of Balance Sheet items

-729,600

-2,702,300

-598,200

-1,783,100

Total Income 4,276,800

1,978,300

2,696,000

1,272,700

Expenses Staff Salaries & Benefits

2,768,900

3,393,800

1,821,900

2,215,600

Operational Expenses

353,700

476,200

232,700

310,900

Meeting Costs

266,700

321,900

175,500

210,200

Premises Costs

239,700

468,100

157,700

305,600

Project Preparation Facility

30,500

26,400

20,100

17,200

Advocacy

0

21,900

0

14,300 9,600

Information Dissemination

7,100

14,700

4,700

Contingency/Extra ordinary items

1,103,900

0

726,400

0

Total Expenses

4,770,500

4,723,000

3,139,000

3,083,400

NETT (LOSS)/PROFIT -493,700

-2,744,700

-443,000

-1,810,700

7,858,600

5,109,500

5,118,700

Accumulated Surplus as at 1 January

7,852,900

Nett (Loss)/Profit

-493,700

-2,744,700

-443,000

-1,810,700

Transfer Unrealized Exchange (loss)/gain to Translation Reserve

729,600

2,702,300

598,200

1,783,100

Transfer to Net Earnings Program (Advocacy & Information Dissemination)

7,100

36,700

4,700

24,000

Exchange adjustment

0

0

-12,300

-5,600

ACCUMULATED SURPLUS AT 31 DECEMBER

8,095,900

7,852,900

5,257,100

5,109,500

iX Financial Reports | 87

Income Statement for the period 1 January to 31 December 2013 - Second Account (expressed in USD & SDR)

2013 2012 2013 2012 USD USD SDR SDR Income Net Income from Investments

2,835,000

3,331,800

1,865,400

Income from Loans

34,200

60,200

22,500

2,175,200 39,300

Voluntary Contribution in cash

403,000

1,798,100

265,200

1,173,900

Realized Exchange (loss)/gain on Operations

-32,000

-218,000

-21,100

-142,300

Unrealized Exchange (loss)/gain on translation of Balance Sheet items

-197,200

-288,000

-133,000

-190,000

Total Income

3,043,000

4,684,100

1,999,000

3,056,100

Expenses Project Payments

10,790,600

17,856,100

7,051,400

11,666,900

Total Expenses

10,790,600

17,856,100

7,051,400

11,666,900

NETT (LOSS)/PROFIT

-7,747,600

-13,172,000

-5,052,400

-8,610,800

Accumulated Surplus as at 1 January

65,084,600

77,968,600

42,347,400

50,784,900

Nett (loss)/profit

-7,747,600

-13,172,000

-5,052,400

-8,610,800

Transfer Unrealized Exchange (loss)/gain to Translation Reserve

197,200

288,000

133,000

190,000

Exchange adjustment

0

0

-68,100

-16,700

ACCUMULATED SURPLUS AT 31 DECEMBER

57,534,200

65,084,600

37,359,900

42,347,400

88 | Common Fund for Commodities Annual Report 2013

Directly Contributed Capital, as at 31 December 2013 (USD)

First Account Second Account

Outstanding Payments

Constibutions*

Outstanding

Cash Promissory Constributions*

Payments Cash Promissory

Notes

Notes

Afghanistan

0

399,412

452,422

0

0

Algeria

0

862,744

0

0

0

0

Angola

0

61,786

0

0

339,823

504,127

Argentina

0

0

465,313

0

635,460

54,369

Austria

0

900,429

1,059,958

0

0

0

Bangladesh

174,936

95,062

0

0

308,154

430,877

Benin

6,032

344,491

430,877

0

0

0

Bhutan

0

3,424

4,309

0

338,969

426,569

Botswana

6,032

344,491

430,877

0

0

0

Brazil

0

1,692,815

0

0

701,208

0

Bulgaria

916,932

284,202

0

0

0

0

Burkina Faso

6,032

344,491

430,877

0

0

0

Burundi

0

34,239

43,088

0

308,154

387,790

Cameroon

0

990,853

0

0

0

0

Cape Verde

0

342,393

430,877

0

0

0

Central African Republic

12,064

346,588

430,877

0

0

0

Chad

18,097

364,254

430,877

0

0

0

China

0

3,807,113

4,787,048

0

0

0

Colombia

0

1,060,568

0

0

0

0

Comoros

0

342,393

430,877

0

0

0

Congo

1,200,194

0

0

0

0

0

Dem.Republic of Congo(zaire)

0

1,213,098

0

0

0

0

Costa Rica

0

833,938

0

0

0

0

Cote d’Ivoire

55

1,273,830

0

0

0

0

Cuba

0

291,399

366,297

0

393,960

364,153

Denmark

0

599,933

492,924

0

718,430

0

Djibouti

0

388,206

430,877

0

0

0

Ecuador

0

126,968

0

0

699,028

0

Egypt

0

616,445

633,390

0

0

0

Equatorial Guinea

0

734,443

0

0

0

0

Ethiopia

48,258

187,975

215,439

0

171,197

215,439

Finland

0

586,004

736,800

0

154,611

31,855

Gabon

376,191

455,118

0

0

0

0

Gambia

12,064

346,588

430,877

0

0

0

Germany

0

5,954,753

7,411,091

0

657,485

120,147

Ghana

0

1,085,935

0

0

0

0

Greece

0

347,901

430,877

0

0

0

Guatemala

0

423,346

0

0

408,621

0

Guinea

30,161

13,911

4,309

0

338,969

426,569

0

Guinea-Bissau

0

342,393

430,877

0

0

0

Haiti

18,097

348,685

430,877

0

0

0

Honduras

47,397

37,758

0

426,569

339,823

0

India

0

370,828

461,039

0

560,088

111,841

Indonesia

0

449,328

142,190

0

579,573

165,791

Iraq

0

878,501

0

0

0

0

Ireland

0

3,455

4,309

0

615,094

128,415

Italy

0

2,558,455

3,214,345

0

612,520

141,519

Jamaica

0

48,056

60,323

0

612,816

154,865

Kenya

0

906,469

0

0

0

0

Dem. People’s Republic of Korea

896,225

0

0

0

0

0

Republic of Korea

0

517,919

650,625

0

0

0

Kuwait

0

941,579

0

0

0

0

Lao People’s Dem. Republic

0

387,130

435,186

0

0

0

Lesotho

0

342,393

430,877

0

0

0

Luxembourg

0

647,393

0

0

55,150

25,878

iX Financial Reports | 89

Directly Contributed Capital, as at 31 December 2013 (USD)

First Account Second Account

Outstanding Payments

Constibutions*

Outstanding

Cash Promissory Constributions*

Payments Cash Promissory

Notes

Notes

Madagascar

0

48,209

0

0

703,374

0

Malawi

18,097

348,685

0

0

0

430,877

Malaysia

0

832,788

1,068,576

0

0

0

Maldives

0

34,239

0

0

308,154

430,877 387,790

Mali

18,097

40,531

43,088

0

308,154

Mauritania

48,258

395,774

430,877

0

0

0

Mexico

0

170,697

0

0

770,650

185,847

Morocco

0

471,279

4,309

0

375,021

159,075

Mozambique

0

439,549

406,361

0

0

0

Myanmar

24,129

342,665

434,324

0

0

0

Nepal

6,032

310,251

387,790

0

34,239

43,088

Netherlands

0

752,209

1,852,773

0

730,118

0

Nicaragua

0

98,166

0

0

653,459

0

Niger

6,032

344,491

0

0

0

430,877

Nigeria

0

124,171

150,807

0

624,220

116,292

Norway

0

347,901

443,804

0

608,489

122,044

Pakistan

0

871,363

0

0

0

0

Papua New Guinea

0

120,151

0

0

699,703

0

Peru

0

1,074,903

0

0

0

0

Philippines

0

614,978

0

0

785,857

0

Portugal

0

171,346

0

0

447,097

126,959

Russian Federation

8,035,863

6,368,048

0

0

0

0

Rwanda

18,097

348,685

430,877

0

0

0

Samoa

0

342,393

430,877

0

0

0

Sao Tome and Principe

0

734,443

0

0

0

0

Saudi Arabia

0

360,373

452,421

0

0

0

Senegal

0

959,157

0

0

0

0

Sierra Leone

18,097

348,685

430,877

0

0

0

Singapore

0

227,143

288,688

0

411,896

76,280

Somalia

436,910

344,491

0

0

0

0

Spain

0

2,547,890

0

0

619,883

0

Sri Lanka

0

422,309

534,288

0

0

0

Sudan

144,775

290,011

301,614

0

102,718

129,263

Swaziland

0

94,101

448,110

0

262,885

0

Sweden

0

874,180

1,137,516

0

640,618

123,130

Syrian Arab Republic

0

916,910

0

0

0

0

United Republic of Tanzania

78,420

198,462

215,439

0

171,197

215,439

Thailand

0

485,578

590,302

0

0

0

Togo

0

763,530

0

0

0

0

Trinidad & Tobago

0

680,870

0

0

0

0

Tunisia

0

959,840

0

0

0

0

Uganda

108,581

380,145

430,877

0

0

0

United Arab Emirates

1,176,889

0

0

0

0

0

United Kingdom

0

3,166,031

3,692,575

0

664,193

0

Venezuela

0

878,775

0

0

0

0

Yemen

12,065

688,981

861,755

0

0

0

Zambia

233,139

912,100

0

0

0

0

Zimbabwe

0

725,106

0

0

0

0

TOTAL 14,152,251 69,854,464

42,710,734

426,569

19,471,058

6,668,041

* 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.

90 | Common Fund for Commodities Annual Report 2013

Voluntary Contributions, as at 31 December 2013 (USD)

Payments Cash up Payments Cash

to 31 Dec. 2012

2013

Country

Currency

Pledge (3rd 5YAP) USD (1)

USD

USD

Payments Total USD

SDR

Austria

USD

2,000,000

2,000,000

0

2,000,000

1,298,701

Belgium

EUR

3,000,000

3,235,542

0

3,235,542

2,101,001

Cameroon

USD

0

7,994

0

7,994

5,191

China

USD

2,000,000

1,996,314

3,686

2,000,000

1,298,701

Denmark

DKR

2,734,309

794,987

0

794,987

516,226

Ecuador

USD

0

45,311

0

45,311

29,423

Finland

USD

2,000,000

2,011,089

0

2,011,089

1,305,902

France (3)

USD

15,000,000

2,385,648

0

2,385,648

1,549,122

Germany

USD

22,549,790

22,549,790

0

22,549,790

14,642,720

India

USD

5,000,000

4,589,023

398,673

4,987,696

3,238,764

Indonesia

USD

1,000,000

1,000,201

0

1,000,201

649,481

Ireland

USD

250,000

250,000

0

250,000

162,338

Italy

USD

15,000,000

14,999,999

0

14,999,999

9,740,259

Japan

USD

27,000,000

32,231,940

0

32,231,940

20,929,831

Luxembourg

USD

150,000

149,989

0

149,989

97,396

Madagascar

USD

8,643

8,616

0

8,616

5,595

Malaysia

USD

1,000,000

999,922

0

999,922

649,300 12,701,433

Netherlands

USD

17,000,000

19,560,207

0

19,560,207

Nigeria

USD

150,000

150,000

0

150,000

97,403

Norway

USD

22,490,000

22,446,462

0

22,446,462

14,575,625

OPEC Fund

USD

45,400,000

26,400,000

0

26,400,000

17,142,857

Papua New Guinea

USD

0

70,055

0

70,055

45,490

Republic of Korea

USD

300,000

299,335

665

300,000

194,805

Singapore

USD

250,000

250,000

0

250,000

162,338

Sweden

USD

2,345,996

2,345,996

0

2,345,996

1,523,374

Switzerland (3)

USD

6,000,000

3,000,000

0

3,000,000

1,948,052

Thailand

USD

1,000,000

1,000,000

0

1,000,000

649,351

United Kingdom (2)

STG

7,031,828

7,399,909

0

7,399,909

4,805,136

200,660,567

172,178,329

403,024

172,581,354

112,065,815

(1) Amounts pledges have been converted to USD equivalent using the IMF rates of 31/12/13 (2) Payment of MOU of GBP 4,270,000 received considered as contribution under Article 18.1.(e) (3) Not a member of CFC

2013 Administrative Budget, Summary Item

Approved Administrative Budget 2013

USD

EUR

Staff Costs

3,194,000

Operational Costs

764,200

578,900

Meeting Costs

301,900

228,600

2,419,800

Contingency

13,100

10,000

Extra Ordinary Items

52,800

40,000

TOTAL

4,326,000

3,277,300

iX Financial Reports | 91

92 | Common Fund for Commodities Annual Report 2013

Annex I Governors and Alternate Governors as of 31 December 2013 Chairperson of the Governing Council during 2013: 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 informed OECD: Ms. Anna Tofftén (Sweden) Russian Federation: Mr. Vladimir Ivanovich Tkachenko

Country

Governor

Afghanistan

c/o H.E. Mr. Nanguyalai Tarzi

Algeria

H.E. Ms. Nassima Baghli

Angola

Mr. Sebastião de Sousa e Santos Junior

Argentina

H.E. Mr. Héctor Horacio Salvador

Mr. Nicolás Francisco Vidal

Austria

Mr. Guenther Schoenleitner

Mr. Klaus Oehler

Bangladesh

Mr. Mahbub Ahmed

c/o Ms. Ishrat Jahan

Benin

H.E. Mr. Charles Borromée Todjinou

Bhutan

H.E. Mr. Daw Penjo

Mr. Tenzin Choda

Botswana

H.E. Mr. Samuel Otsile Outlule

Mr. Micus Chiwasanee Chimbombi

Brazil

Mr. Paulo Estivallet de Mesquita

Mr. Orlando Leite Ribeiro

Bulgaria

Mr. Petar Dimitrov

Burkina Faso

Ms. Salimata Some-Traoré

Mr. Amadou Sagnon

Burundi

Ms. Victoire Ndikumana

Mr. Emmanuel Niyungeko

Cameroon

Mr. Luc Magloire Mbarga Atangana

H.E. Ms. Odette Melono

Cape Verde

c/o Minister of Foreign Affairs

Central African Republic

Ms. Marie-Noëlle Koyara

Mr. Haroun Amalas-Amlas

Chad

Mr. Youssouf Abassallah

Mr. Daouda Tabanda

China

Mr. Wenliang Yao

Mr. Fe Li

Colombia

H.E. Mr. Eduardo Pizarro Leon Gómez

Ms. Maria Alejandra Páez Gómez

Comoros

Mr. Said Mohamed Ali Said

Democratic Republic of Congo

c/o Mr. Sébastien Mutomb Mujing

Congo

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

Cuba

Ms. María de la Luz B’Hamel Ramírez

Ms. Alina Revilla-Alcazar

Denmark

Djibouti

Mr. Ismaël Ali Abane

Ecuador

H.E. Mr. Miguel Calahorrano

Mr. Arturo Cabrera

Egypt

H.E. Mr. Taher Ahmed Farahat

Mr. Amany Fahmy

Equatorial Guinea

c/o H.E. Mr. Carmelo Nvonno Nca

Ethiopia

H.E. Mr. Teshome Toga

Finland

c/o Mr. Antti Piispanen

Gabon

Mr. Fidèle Mengue M’engouang

Mr. Bertrand Rubens Matteya

Gambia

H.E. Mr. Mamour Jange

Ms. Fatou Mbenga Jallow

Germany

Mr. Reinhard Krause

Mr. Edgar Gansen

Ghana

Mr. Joseph Samuel Annan

Mr. Kwado Owusu-Agyeman

Greece

Mr. Nikolaos Thomopoulos

Ms. Stella S. Papoutsi

Guatemala

H.E. Mr. Eduardo Sperisen Yurt

Ms. Mónica Guerra Garrido

Guinea

Hadja Zénab Diallo

Mr. Mohamed Camara

Guinea-Bissau

c/o Embassy of Guinea-Bissau

Alternate Governor Mr. Dalal Soltani

Mr. Nahom Girma Fikresilassie

Annex I Governors and Alternate Governors as of 31 December 2013 | 93

Country

Governor

Alternate Governor

Haiti

Mr. Wilson Laleau

c/o Mr. Jean Bony Alexandre

Honduras

Mr. Héctor Hernández Amador

Mr. José Adalberto Sorto

India

Mr. J.S. Deepak

Mr. Asit Tripathy

Indonesia

Amb. Hasan Kleib

Mr. Irfa Ampri

Iraq

Mr. Kadhim M. Jawad Hasan

Mr. Mwafak Taha Izulddin

Ireland

H.E. Ms. Mary Whelan

Italy

Ms. Giuseppina Zarra

Ms. Laura Calligaro

Jamaica

c/o Mr. Roger Clarke

H.E. Mr. Wayne McCook

Kenya

H.E. Ms. Rose M. Muchiri

Mr. J. Patrick Okoth

Democratic People’s Republic of Korea

c/o Mr. Kim Myong Hyok

Mr. Sok Jong Myong

Republic of Korea

Mr. Hyun Oh-Seok

Mr. Choongsoo Kim

Kuwait

c/o H.E. Mr. Hafeez Mohammed Salem Al-Ajmi

Laos

Mr. Manohack Rasachack

Lesotho

Mr. Mohlabi Tsekoa

H.E. Ms. Mamoruti A. Tiheli

Luxembourg

H.E. Mr. Pierre-Louis Lorenz

Mr. Patrick Arend

Madagascar

H.E. Ms. Annick H. Andriamampianina

Mr. Erik Beantanana

Malawi

H.E. Ms. Brave R. Ndisale

Mr. Joseph Chiteyeye

Malaysia

Ms. Nurmala Abdul Rahim

Mr. Mad Zaidi Mohd Karli

Maldives

c/o Mr. Abdul Samad Abdulla

Mr. Abdulla Salih

Mali

H.E. Mr. Ibrahim Bocar Ba

Mr. Mamadou Macki Traore

Mauritania

Mr. Mohamed Ould Hitt

Mr. Mohamed Moctar Alaoui

Mexico

Mr. Luis Videgaray Caso

Mr. José Antonio Meade Kuribreña

Morocco

H.E. Mr. Abdelouahab Bellouki

Mr. Brahim Bah

Mozambique

Ms. Cerina Banú Mussá

Mr. Joao José Macaringue

Myanmar

Mr. Tin Naing Thein

Ms. Myo New

Nepal

H.E. Mr. Ram Mani Pokharel

Mr. Lakshuman Khanal

the Netherlands

Mr. Jaap Smit

Mr. Robert-Jan Scheer

Nicaragua

Mr. Orlando Solórzano Delgadillo

H.E. Mr. Carlos J. Argüello Gómez

Niger

Ms. Florentine Pierrette Araoye

Nigeria

Mr. Dauda Kigbu

H.E. Ms. Nimota Nihinlola Akanbi

Norway

Ms. Torun Dramdal

Ms. Eva Termstad

Pakistan

Mr. Qasim M. Niaz

H.E. Mr. Moazzam Ahmed Khan

Papua New Guinea

Mr. William Dihm

c/o Mr. Kapi Maro

Peru

H.E. Mr. Allan Wagner

Mr. Javier Pella

the Philippines

H.E. Mr. Jaime Victor B. Ledda

Mr. José I. Laquian

Portugal

Ms. Maria Luis Albuquerque

Ms. Vanda Cunha

Russian Federation

Mr. Vladimir I. Tkachenko

Mr. Cherevko Alexander Nikolaevich

Rwanda

Mr. Emmanuel Hategeka

Ms. Peace Basemera

Samoa

c/o Deputy Prime Minister

Sao Tome and Principe

c/o Minister for Foreign Affairs

Saudi Arabia

Mr. Abdulrahman A. Aloraini

Mr. Ahmad S. Alteraifi

Senegal

H.E. Ms. Maymouna Diop Sy

Mr. Amadou Dame Sall

Sierra Leone

Mr. Ibrahim Keh Turay

Singapore

H.E. Mr. Kwok Fook Seng

Somalia

c/o H.E. Mr. Yusuf Mohamed Ismail

Spain

Mr. Enrique Fanjul Martin

Sri Lanka

Mr. R.D.S. Kumararatne

H.E. Mr. Buddhi K. Athauda

Sudan

H.E. Mr. Mohamed El Hassan Ibrahim Alawad

Mr. Nagi Iskander Awad Masoud

Swaziland

Mr. Andreas M. Hlophe

Sweden

Ms. Anna Tofftén

Syrian Arab Republic

Mr. Mohammad Ghassan Al-Habbash

the United Republic of Tanzania

H.E. Mr. Modest Jonathan Mero

Mr. Uledi Mussa

Thailand

c/o Mr. Apichart Jongskul

Mr. Apichart Jongskul

Togo

H.E. Mr. Kodjo Félix Sagbo

Ms. Biam Bidinabe Hodjo

Trinidad & Tobago

c/o Mr. Devant Maharaj

c/o Permanent Secretary

Tunisia

H.E. Mr. Karim Ben Becher

Mr. Chiraz Ben Abdallah

Uganda

Mr. Fredrick E. Mwesigye

H.E. Ms. Mirjam Blaak Sow

United Arab Emirates

c/o H.E. Mr.Abdalla Hamdan Alnaqbi

94 | Common Fund for Commodities Annual Report 2013

Country

Governor

Alternate Governor

United Kingdom of Great Britain and Northern Ireland

Mr. Jonathan Lingham

Venezuela

Mr. Rubén Darío Molina

H.E. Ms. Haifa Aissami Madah

Yemen

Mr. Abdulla Ahmed Alshariff Alshammam

Mr. Omar G. Al-Soufi

Zambia

H.E. Ms. Grace Musonda Mutale Kabwe

Mr. Musenge Mukuma

Zimbabwe

Ms. Abigail Shonhiwa

H.E. Ms. Mary Margaret Muchada

European Union

Mr. Matthew Keyes

Mr. Manfred Brandt

COMESA

Mr. Sindiso Ndema Ngwenya

Mr. E.A. Mohammed

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

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 2013 | 95

© 2014 - 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 managing.director@common-fund.org i www.common-fund.org Editor Royal Tropical Institute, Amsterdam Graphic Design Anita Simons, symsign, Amersfoort Printing High Trade, Zwolle

Cover photos: Above: A woman selling beans at a local market in Chimoio, Mozambique. Photo: ©FAO/Paballo Thekiso / FAO Below: Millet production in the Sourou Valley is aided by irrigation, Yemen. Photo: ©FAO/Jeanette Van Acker / FAO

Common Fund for Commodities | Annual Report 2013

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 2013 Common Fund for Commodities