About 12 million people in the Philippines work in the agricultural sector, where the poverty rate is an estimated 37%. The average wage earned by an agricultural worker is approximately USD 3.50 a day, or USD 840 a year. Most farmers in the Philippines can neither access nor afford high-quality farm inputs and training in best practices to improve their agricultural productivity and gain access to global markets, resulting in low annual yields and a self-perpetuating cycle of poverty and indebtedness.
Established in 2010, the agribusiness company Kennemer Foods International, Inc., (KFI) specialises in growing, sourcing and trading high-quality agricultural crops such as fermented cacao beans produced by smallholder farmers. The farmers who supply KFI participate in a comprehensive Cacao Growership Program based on the Cacao Development Model of the global food manufacturer Mars, which has proven effective in supporting smallholder-based production systems in Indonesia and West Africa.
The programme gives farmers access to high-yielding planting materials, farm inputs and ongoing technical training and support as well as access to global markets. Seedling sales and the operation of managed farms for indigenous tribes generate additional profits. The profits fund the growth of KFI’s field team in a given location until the cacao trees mature (which takes about three years) and trading volumes reach critical mass.
GOALS AND EXPECTED IMPACT
KFI aims to support farmers who wish to start growing cacao in areas where the industry does not yet have a presence, engaging a critical mass of farmers and ultimately creating a thriving cacao-growing community. In this project, a Kennemer Cacao Centre was established in the province of Mindanao, Philippines, where agronomic conditions are ideal for cacao planting and many farmers live under difficult conditions with few opportunities to earn income.
The funds provided by the Swiss Re Foundation were used to cover the capital expenditures associated with setting up one Kennemer Cacao Center and enrolling a total of 30 ‘cacao doctors’ and 500 cacao farmers in the Growership Program. Cacao doctors are farmer entrepreneurs who receive intensive training from KFI to become bean consolidators under the KFI buying programme. They distribute planting materials and inputs and provide pruning and rehabilitation support services to participating farmers.