Partnerships with the local private sector were key for the success of the PROGRESA project. The competitive, inclusive and sustainable development project for coffee and high-quality aromatic cacao chains in Honduras was implemented through a public-private partnership, led by Swisscontact. It generated positive and sustainable impact in the long-term through developing inclusive business models, which mobilised the innovative power and networks of the private sector, creating a virtuous circle of win-win results.
The PROGRESA project utilised Swisscontact’s Value Chain Management approach for transforming a productive value chain into a competitive and inclusive value chain. The development of value chains enables smallholder farms and small businesses to take advantage of market and business opportunities to increase their income and create jobs. The participation of the private sector was a key component in achieving the project goals of making coffee and cocoa farming more economically attractive and increasing farmers’ income to improve their livelihoods.
New technologies and partnerships
The introduction of efficient technologies ensured an improved quality of coffee and supported the creation of formal sales mechanisms between producer organisations and export companies. This created strong, long-lasting business relationships. At the same time, access to financing was facilitated, creating a virtuous circle that benefited all stakeholders.
Partnerships with private entities like the Honduran Coffee Institute (IHCAFE), specialising in research and the transfer of technology in coffee cultivation, and the nationwide coffee export company Molinos de Honduras (belonging to the Volcafe Group) guaranteed access to markets, and the sustainability of the actions.
Facilitated market access improves competitiveness
PROGRESA enabled producers to obtain better prices for their coffee, since it facilitated direct contact with export companies that bought the beans directly from producer organisations. This process cut out intermediaries and took into account the profile of the coffee being sold. Such recognition increased the value of the product, situating it in the category of specialty coffees. These partnerships also meant a reduction in transportation costs, and advance payments in, and loans with lower interest rates.
Working together with the private sector in value chains generates competitive advantages for the export companies, allowing them easy access to producer networks. This permits them to fulfill their commercial goals and assure the quality of the product. A number of cooperatives in the region obtained organic and fair-trade certification – which had a positive impact on prices, increasing the income of farmers and their families.
Investment in technical support from the private sector and access to credit
Molinos de Honduras, one of the project partners, trained more than 2,000 farmers in the technological package. These practices considerably improved the quality of the product, and supported crop resilience. As a counterpart, the PROGRESA project trained technical teams from the companies in the Farm School methodology, expanding the focus of its work.
Working together with fertilizer companies, formulas based on soil analyses were prepared for coffee and cacao producers, thereby reducing the cost of additional nutrients, which farmers often cannot afford. Regarding access to financing, private companies offered credit without interest for acquiring certified, high-quality aromatic cacao seedlings. This allowed farmers to plant an additional 378 hectares with cacao.