February 23, 2009

Gates Foundation, Partners Pledge $90 Million to Boost Incomes of Small Farmers in Africa

In addition to establishing the Mobile Money for the Unbanked program, the Bill & Melinda Gates Foundation announced on February 19, 2009, "two significant partnerships and $48 million in grants to help hundreds of thousands of small cocoa and cashew farmers in sub-Saharan Africa significantly increase their incomes so they can lift themselves out of hunger and poverty. The two grants—$23 million to the World Cocoa Foundation and $25 million to the German development organization Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH—were awarded in conjunction with $42 million in cash and in-kind contributions from private industry." (Photo courtesy of Issouf Sanogo/AFP/Getty Images)

Broadening market access for cocoa farmers is a significant outcome resulting from these partnerships. One of the challenges many farmers in developing nations encounter, in addition to having the necessary tools and equipment to maximize their yield, is having access to distribution or consumer markets. Maximizing sustainable growth success for cocoa farmers will require the collaborative efforts of governments, civil society, and the private sector. I was very pleased to read, "The grants complement financial support and in-kind contributions from the private sector, nongovernmental organizations, and local governments. Farmer associations will also play a significant role in leading training and knowledge sharing."

"Cocoa is West Africa’s largest agricultural export, accounting for 70 percent of the world’s supply. Approximately 2 million West African smallholder farming households rely on cocoa production for a significant portion of their income....The cocoa project aims to increase farming household incomes through improved farmer knowledge and productivity, better cocoa quality, crop diversification, and improved supply chain efficiencies. The five-year project will reach approximately 200,000 smallholder cocoa farming households in Cameroon, Côte d'Ivoire, Ghana, Liberia, and Nigeria and aims to help farmers double their incomes. The project will complement the broader work of the World Cocoa Foundation, which works in partnership with its industry members to ensure cocoa cultivation is sustainable and delivers greater benefits to the farmers who grow it."

With respect to Africa's cashew industry, a significant problem is the lack of processing facilities. "Africa is responsible for about one-third of the world’s cashew crop. However, a lack of cashew processing facilities in Africa has created major market inefficiencies and denies Africans the economic benefits that accompany jobs in the cashew processing sector."

Linking farmers to processing facilities will provide added-value benefits for all stakeholders. Farmers will have a scalable value chain for their products and processing facilities will provide local employment opportunities, which will help sustain economic development in some of the world's poorest economies. (Photo courtesy of Chiba Y. and UNDP Ghana)

It is important to mention Kristi Heim's blog entry "Gates Foundation responds to questions on cocoa farming and child labor." (Ms. Heim is a writer for The Seattle Times and she maintains a blog, The Business of Giving.) Her blog explains, "The non-profit World Cocoa Foundation represents 70 chocolate companies, and most have not lived up to an agreement they signed to stop the worst forms of child labor in their cocoa supply chains, according to the International Labor Rights Forum." Is the Gates Foundation supporting human right violators?

I do not have enough information to discuss the claims made by the International Labor Rights Forum and I am sure that some of those claims are valid, but Ms. Heim interviewed Richard Rogers, Gates Foundation program officer in agricultural development, and he said it is necessary to have commercial involvement for the project to succeed.

"By having the private sector directly involved, 'farmers can have a clear understanding of what the market demands,' he said. Companies will contribute technical and managerial skills and resources to help farmers develop better seed varieties and plants and post-harvest handling methods. Rogers said he chose the World Cocoa Foundation for the grant because 'they have the best network of connections with governments, NGOs and corporate partners we feel are critical to this project.'"

I agree with Mr. Rogers and with these newly established partnerships created by the Gates Foundation, we should expect and I predict we will see a high level of operational transparency, which should result in eliminating any human rights abuses perpetrated by the private sector.

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