Post on 31-Oct-2021
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PERU CACAO ALLIANCE
PHASE II QUARTERLY PROGRESS REPORT: SEPTEMBER - DECEMBER 2016 (YEAR 1, QUARTER 1)
COOPERATIVE AGREEMENT NO: AID-527-A-16-00002
Implementing Partner:
Palladium
Agreement Officer’s Representative:
Fernando De Villena
Submission:
DISCLAIMER
The views expressed in this publication do not necessarily reflect the views of the United States
Agency for International Development or the United States Government.
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Table of Contents
ACRONYMS .......................................................................................................................................... 4
EXECUTIVE SUMMARY ....................................................................................................................... 6
RESULT 1: FACILITATE MARKET ACCESS ....................................................................................... 8
RESULT 2: INCREASE CACAO FARMER PRODUCIVITY AND QUALITY OF POST-HARVEST
PRODUCTS ......................................................................................................................................... 14
RESULT 3: INCREASE ACCESS TO FINANCE ................................................................................ 20
RESULT 4: FACILITATING PRIVATE INVESTMENT ........................................................................ 25
COMMUNICATIONS ........................................................................................................................... 29
LEVERAGE .......................................................................................................................................... 34
OPERATIONS ...................................................................................................................................... 37
MONITORING AND EVALUATION ..................................................................................................... 38
SUCCESS STORIES ........................................................................................................................... 44
ACRONYMS
AOR Agreement Officer’s Representative
APPCACAO Asociación Peruana de Productores de Cacao
BAS Business Advisory Services
COP Chief of Party
DCOP Deputy Chief of Party
DEVIDA National Commission for Development and Life without Drugs
FONDAM Fund for the Americas
INTP Integrated Nutrition and Timely Pruning
IPM Integrated Pest Management
LOP Life of Project
M&E Monitoring and Evaluation
MFI Microfinance Institution
MINAGRI MInistry of Agriculture and Irrigation
NGO Non-Government Organization
PCA Peru Cacao Alliance
PMP Performance Monitoring Plan
PM Program Manager
PD Project Director
PIRS Performance Indicator Review Sheets
PRODUCE Ministry of Production
PROMPERU Exports and Tourism Promotion Board of Peru
SOE Schools of Excellence
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STTA Short Term Technical Assistance
USAID United States Agency for International Development
EXECUTIVE SUMMARY
Key actions undertaken during the first quarter of the Peru Cacao Alliance’s second phase were
geared toward hiring key personnel, opening the Lima and field offices, building our library of
communications tools, building confidence and alignment among critical Alliance partners towards
project objectives, and developing joint strategies with these partners to implement the project. We
also finalized strategies to provide technical assistance on a massive scale to farmers aligned with
the project, began efforts to seal commercial relationships and new marketing channels, and started
our work to expand access to finance among our Alliance partners, namely cacao farmers and firms.
This quarter, the project team shared the Peru Cacao Alliance’s (PCA) strategy in meetings with all
of the pre-identified supply chain partners, agricultural technology supplier partners and potential
financial institution partners. In each of these meetings, we outlined our principal objectives for this
phase of the Alliance, namely:
a. Increase cocoa productivity and improve quality through post-harvest processes;
b. Facilitate access to differentiated markets;
c. Increase access to financing;
d. Facilitate private investment in the agroforestry value chain.
Through these discussions, we agreed upon a number of activities to meet the above objectives.
The initiative to develop “Schools of Excellence” to improve Cocoa Productivity and Quality was one
activity that stood out as critical. At these schools, and through training elite trainers and technology
agents who will then train Alliance farmers, we will undertake a large-scale technical assistance
effort across the three target regions. The effort is sustainable given that Alliance partners are co-
sponsoring these schools. For example, Yara and Husqvarna developed training sessions for PCA's
technicians. They also participated in the schools' initial sessions, training technicians and lead
producers from participating institutions.
PCA designed the themes for the initial training sessions together with our Alliance partners. Topics
identified and requested by these partners included plant nutrition, timely pruning (INTP) and
integrated pest management (IPM). Nine hundred and fifty-seven male and female growers from
target regions participated in the first training sessions and field activities.
To facilitate access to differentiated markets, during this quarter PCA strengthened its ties with
international buyers, including ICAM, Casa Franceschi and COLCACAO. We organized field visits
for these companies to showcase the quality of Peruvian cacao, specifically how it is dried and
processed following harvest. We also introduced these buyers to other Alliance partners with whom
they can form commercial relationships. Facilitating these sorts of purchase agreements is the
principal strategy we employ to assist producers access differentiated cacao markets. Employing
this strategy requires that we proactively define, expand and put in place on a wider scale proper
harvest and post-harvest protocols among Alliance members to ensure the high level of product
quality required by these sorts of exigent buyers. In response to this challenge, the Alliance, along
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with the Peruvian Association of Cacao Framers (APPCACAO), will develop a cacao quality
management program starting in February 2017.
To expand financing access, this quarter we undertook a number of activities. First, we began a
research effort to refine our strategy and activities to expand finance and investment along the entire
cacao value chain, which we completed in January, the content and results of which will be included
in the next quarterly report. While we refined our finance strategy, PCA team members began to
coordinate pre-planned activities with financial entities. For example, PCA staff met with Agrobanco
to begin planning to expand the pilot program it began with Agrobanco under the first phase. Under
this pilot, we co-financed credit promoters in all three regions to identify new clients in need of
financing, and packaged loan applications for submission to Agrobanco. Under phase II, we intend
to engage nine credit promoters to expand credit to farmers from Agrobanco who are seeking yield
and production increases of cacao and banana. These credit promoters will work in concert with the
Schools of Excellence, and will provide financial education to increase the appetite for credit among
PCA farmers. AGROBANCO has already developed a financial literacy curriculum, which will be
adapted and provided via three workshops (one per region) to train financial literacy facilitators,
planned for February 2017.
To expand investment in target value chains, Alliance team members held meetings in Peru and in
Europe with several potential investors, including Barry Callebaut and Lindt. These meetings
focused on the status of Peru’s cacao sector, as well as the importance of developing stockpiling
schemes to aggregate sufficient cacao, and investing in post-harvest processing systems for wet
beans to ensure proper quality control. A number of investors followed up with visits to Peru to
conduct preliminary due diligence on their investment concepts, and others are conducting the final
financial analysis required to finalize their investment proposals.
The Alliance also spent the first quarter sharing PCAII’s proposal and strategy with a range of
strategic partners and co-investors from the public and private sectors to ensure alignment and
acceptance, including regional and local authorities, regional governments, local governments,
DEVIDA, Fondo Empleo (employment fund), FONDAM, Agrorural, among others. PCA’s proposal
and strategy were positively received by these entities. One outcome worth mentioning as a result of
these coordination meetings is a request we received from the Ucayali regional government, asking
if we could include their extension agents into our training programs, and that we jointly implement
the technical assistance program in that region.
Last, but not least, we also spent last quarter ensuring acceptance and alignment with our private
sector partners through a series of meetings, and are pleased with the overwhelmingly positive
response that these actors have with the PCAII proposal and strategy. These private sector actors
include supply chain actors, technology suppliers, financial institutions, and producer organizations,
cooperatives and associations. The predominant opinion is that the second phase of the Alliance is
an innovative proposal that addresses relevant issues that remain barriers to improving growers'
incomes and increasing the competitiveness of the overall supply chain. This response was captured
in our first meeting of private sector partners held in Lima, and attended by 15 of PCA’s private
sector partners (and leverage partners), who reaffirmed their commitment to the program, and to
offer access to technology, financing and differentiated markets for members of the cacao, banana
and wood supply chains. We also established a private sector steering committee this quarter, with
José San Martín, General Manager of the exporter ROMEX, as its President.
RESULT 1: FACILITATE MARKET
ACCESS
TABLE 1: CALENDAR OF ACTIVITIES R1: FAMILIES FROM CONSOLIDATED RURAL AREAS OF ALTERNATIVE DEVELOPMENT ARE PUT INTO DIRECT CONTACT
WITH END BUYERS IN HIGH VALUE MARKETS THROUGH "SUPPLY CHAIN MANAGERS (SCM)" BY THE END OF THE
PROJECT IN 2021
DESCRIPTION OF ACTIVITIES AND SUB-ACTIVITIES
PERIOD (September-December 2016)
September October November December
A.1.1 Facilitate purchase agreements between end users and supply chain managers (SCM)
A.1.2 Consolidate and increase professionalism of farmer organizations by providing tools to improve their processes and member services, including a gender focus.
A.1.3 Support supply chain managers (SCM) to establish relationships with independent farming households
A.1.4 Develop guidelines and an action plan for managing cadmium use in cacao
A.1.5 Support supply chain managers (SCM) and end buyers in the development and promotion of differentiated products
A.1.6 Create supply agreements with end buyers of chocolate and other buyers of products from the Amazon
A.1.7 Design and implement a program for supply chain managers to attend specialized trade fairs in order to expand market access
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Activities
A.1.1 Facilitate purchase agreements between end users and supply
chain managers (SCM)
This quarter, the PCA team supported international cacao buyers ICAM Spa, COlCACAO, Hacienda
la Tentación and Casa Franchesci to create commercial relationships with Alliance partners/supply
chain managers (SCM) to ensure the supply of quality cacao in sufficient volumes. These
commercial relationships could potentially include investment from these buyers to ensure the
reliability of the supply chain. PCA organized in-country visits for these buyers/investors to the
Peruvian Amazon, including meetings with potential suppliers.
ICAM Spa is interested in expanding its portfolio of cacao suppliers, so PCA introduced this firm to
the Yanajanca growers’ association, the Cordillera Azul cacao cooperative from Huánuco, the Fine
Flavor and Aromatic Cacao Cooperative, and the Agroindustrial Curimana cooperative from Ucayali.
The company’s representative has confirmed that they are planning a second visit wherein they will
meet with organizations to examine their storage plans for the 2017 campaign, and consider the
possibility of entering into purchase agreements.
Three representatives of COlCACAO/Hacienda la Tentación, a Colombian company with offices in
Belgium, visited the regions of San Martín, Huánuco and Ucayali November 15-17. The visit was
arranged following several Skype calls between the PCA team and the buyer to coordinate trip
details. This buyer is specifically interested in buying and distributing Peruvian cacao in the
European market. PCA arranged for COICACAO representatives to meet with Alliance partners
MEGAMAR, AMT Agroindustrias, Cooperativa Tocache, ASPROC NBT, ACOPAGRO and Allima
Cacao towards this end. As a result of the visit, COICACAO expressed an interest in developing a
commercial relationship with these Alliance partners. The next step towards sealing this relationship
is coordinating a shipment of samples for this buyer and developing a cacao supply proposal for
COICACAO from these Peruvian firms. The PCA team will provide technical support in both
activities.
Casa Franceschi, a PCA Alliance partner firm, is interested in developing new, cacao flavor profiles
from the region. This quarter, Casa Franceschi explored the possibility of sourcing fine flavor cacao
from different areas of Peru, such as Chazuta. Towards this goal, PCA coordinated the shipment of
samples from the Allima Cacao and Casa Qoya cooperatives to Casa Franceschi, fueling the
company’s interest. Following numerous Skype meetings, PCA arranged for the company's Director
to visit Chazuta on December 13 and 14, during which he established contacts with both
cooperatives with the hope of sealing a commercial relationship in 2017. The PCA team will provide
technical assistance to these potential suppliers this quarter to follow-up on this supply lead.
A.1.2 Consolidate and increase professionalism of farmer
organizations by providing tools to improve their processes and
member services, including a gender focus
Given the positive correlation between organized producers and strong associations with the
capability of meeting buyer requirements, PCA partnered with the Ministry of Production this quarter
to expand the use of the of the MyCoop tool, designed to strengthen producer organizations. PCA
and the Ministry will apply this tool to strengthen 15 PCA producer organizations. Towards this
objective, we carried out the following activities this quarter:
• Trained two ACOPAGRO representatives, a representative of the Fine Flavor and
Aromatic Cacao Cooperative, and a representative of Agroindustrial Curimaná, as
MyCoop trainers. The week-long training course was held in Lima in November
2016.
• Scheduled MyCoop workshops for 15 organizations in the regions of San Martín,
Huánuco and Ucayali to be held in February 2016.
In addition to the above, PCA will support the partner associations/cooperatives to develop and
implement institutional strengthening plans to be put in place during the course of receiving the four
MyCoop training modules.
A.1.3 Support supply chain managers (SCM) to establish relationships
with independent farming households
PCA arranged meetings and purchase agreement discussions between Alliance partner AMT
Agroindustrias and cacao growers from Shambillo, Alto Shambillo, Selva Turística, Boquerón, Los
Olivos, Vigo, Sion, Nuevo Jaén, Santa Rosa, Huipoca, Hormiga, and Pueblo Nuevo communities
from the district of Padre Abad on November 8, 9, 10, 13, 19 and 20, respectively. AMT
Agroindustrias needs to consolidate its supply chain of wet beans and is very interested in
purchasing cacao from these geographic areas.
PCA also conducted joint visits with Chocolatería Amazónica to the areas of Sisa, Chazuta and
Naranjo in the region of San Martín in October and November 2016. Leading producers have since
delivered samples to this buyer to explore the possibility of a direct, commercial relationship based
on higher product quality. PCA will follow up to seal this relationship in January 2017.
A.1.4 Develop guidelines and an action plan for managing cadmium
use in cacao
This quarter PCA held a series of meetings with private sector representatives, including four
Peruvian and Colombian experts, on the subject of cadmium. These meetings took place on October
24, within the context of the XXI Latin American Congress of Science. These meetings led to the
suggestion that starting in 2017 Peru and other cacao-producing, Latin American countries should
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unite to define standards to measure and determine appropriate, maximum cadmium levels in soil
where cacao is grown, in cacao beans, or in cacao derivatives. To date, no maximum values have
been set, other than those mentioned in the European Union Regulation No. 488/2014. This is to
counterbalance what is considered an “overstretch”: using trace values of cadmium in chocolate
products to allege that the soil is "contaminated" or that the cacao has "too much" cadmium.
Over the next few months, the PCA team will continue to meet with and drive standardization efforts
together with the public and private sectors in Peru concerned with the issue of cadmium.
A.1.5 Support supply chain managers (SCM) and end buyers in the
development and promotion of differentiated products
Since October 2016, PCA has been coordinating with the Embassy of Italy’s commercial office in
Peru to develop a strategy to build the cacao and chocolate supply chains from Peru to Italy.
Marketing experts will form part of a group that designs a country strategy in partnership with
PROMPERU, PRODUCE and MINAGRI for the promotion of Peruvian cacao and chocolate in Italy.
This strategy includes activities like involving Italian chocolatier experts already located in Peru to
evaluate different cacao samples, and collaborating with companies to share knowledge about
cacao profiles demanded by the Italian market. As part of this strategy, Peruvian actors will
participate in two chocolate trade fairs in Italy, Euro Chocolate and Salón del Gusto during the
second half of 2017, and Italian experts will arrive in Peru in March. A second visit of Italian experts
will arrive in July for the Salón del Cacao y Chocolate event, and a third visit will take place during
the EXPOALIMENTARIA fair.
A.1.6 Create supply agreements with end buyers of chocolate and
other buyers of products from the Amazon
At the end of 2016, PCA helped two buyers connect with producer organizations in the San Martín
region, with the goal of sealing purchase agreements between the parties. Details include:
• PCA facilitated the first meetings between Chocolatería Amazónica and a leading
producer partner Oro Verde. The goal of these first meetings was to begin the
process of defining harvest and post-harvest protocols.
• PCA strengthened an existing commercial arrangement between Orquídea and
Allima Cacao. PCA intervened to finalize a purchase agreement and a price setting
system to supply cacao in 2017.
PCA also held meetings with Ecuadorean company República del Cacao (a chocolate producer and
marketer) to develop the Rincón del Emprendedor or Entrepreneur's Corner, a space within
Republica del Cacao's shops to display cacao-derived products such as jams, jellies, and beauty
products. Towards this idea, PCA coordinated multiple meetings between República del Cacao and
several companies, including Misky Cacao, Chocolate Pasión and Kreyol. Representatives from
República del Cacao's headquarters in Guayaquil evaluated cacao samples and PCA is assisting
participating companies to incorporate their product recommendations. Once the initial pilot is
underway, we expect to identify additional companies to offer their products via this marketing
channel in 2017.
A.1.7 Design and implementation of a program for supply chain
managers (SCM) to attend specialized trade fairs in order to expand
market access
See above information on supporting participation of PCA partners in relevant trade fairs (Euro
Chocolate, Salón del Gusto and EXPOALIMENTARIA).
Challenges
• PCA recognizes it must have a better value proposition to position cacao products for
international buyers. On the one hand we need a strategy to deliver improved,
uniform product quality in sufficient volume. To do this, we will motivate/facilitate
more Alliance partners (supply chain managers) to invest in stockpiling and creating
post-harvest facilities for wet cacao beans, thereby ensuring improved product
quality and quantity for international markets.
• On the other hand, PCA also needs to improve our Alliance partner’s ability to
segment flavor profiles so we can market each flavor profile to the appropriate buyer.
Our strategy to address this challenge is to create a set of cacao quality experts and
specialists within partner companies and organizations, who manage centralized
profit centers and can charge local players for their expertise. These experts can
help identify the flavor profiles offered, and match them to buyer requirements.
• State-run institutions continue to implement work in the cacao supply chain in the
zones of influence of PCA. To ensure that resources are used appropriately and that
we are not undermining each other’s efforts, improved coordination is required.
PCA’s team continues to spend time coordinating its plans with state-run partners.
Achievements
Facilitated two investor visits for Casa Franceschi and COICOCOCA to Peru to
establish commercial ties and set the groundwork for new, potential investments.
Trained four representatives of producer organizations as MyCoop facilitators. Plans
in place to conduct institutional building workshops for 15 cooperatives in San Martín,
Huánuco and Ucayali regions.
Connected a number of buyers with producers to establish new, direct commercial
relationships.
Kicked off work to address issues related to cadmium in partnership with the public
and private sectors in Peru.
Launched a strategy together with the Commercial Office of the Italian Embassy in
Peru to strengthen the supply chain of fine flavored cacao from Peru to Italy.
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Scheduled the first mission to Peru in March 2017 to evaluate cacao samples from
PCA's member organizations and companies.
TABLE 2: PMP INDICATOR RESULTS
OBJECTIVE / RESULTS INDICATORS GOAL YEAR 1 PROGRESS OF
INDICATORS
RESULT 1.
Families from consolidated
rural areas of alternative
development are put into
direct contact with end
buyers in high value
markets through "Supply
Chain Managers (SCM)" by
the end of the project in
2021
% of families organized
centrally through a SCM
2,800 families TBD1
Number of families
accessing new market
opportunities
1,000 families TBD2
Sales generated
11,232 metric tons US$ 25.8 million
TBD3
Cadmium-related
agricultural policies
introduced
0 0
1 Potential farmers haven been identified, as well as the supply chain managers present in the production area. Based on this information we have been developing strategies with said supply chain managers, a process which shall continue throughout the Alliance’s implementation. 2 We have begun making the necessary arrangements since the cocoa campaign begins in April 2017. 3 This is an annual indicator. We are on target to meet this progress indicator by the end of the fiscal year.
RESULT 2: INCREASE CACAO
FARMER PRODUCIVITY AND
QUALITY OF POST-HARVEST
PRODUCTS
TABLE 3: CALENDAR OF ACTIVITIES R2: RURAL HOUSEHOLDS IMPROVE THEIR FAMILY ECONOMY BY INCREASING AGRICULTURAL YIELDS AND THE NUMBER OF NEW
AREAS OF THE AGROFORESTRY SYSTEM AREAS IN DEGRADED ZONES
DESCRIPTION OF ACTIVITIES AND SUB-ACTIVITIES
PERIOD (September-December 2016)
September October November December
A.2.1 Develop and implement a methodology for mass adoption among small farm owners of new technology packages for agroforestry system products (AFS)
A.2.2 Develop a strategy to expand the distribution network of agricultural inputs, fertilizers, equipment and post-sales technical services by our technology supplier partners
A.2.3. Develop and implement an online technical support system for crop management and integrated pest management, among others
A.2.5. Develop agricultural extension services together with supply chain managers (SCM)
Activities
A.2.1 Develop and implement a methodology for mass adoption
among small farm owners of new technology packages for
agroforestry system products (AFS)
To improve rural households’ crop performance and increase the areas under production, we
designed the "Schools of Excellence" concept this quarter and began implementation of this
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methodology. The Schools of Excellence represent the principal methodology of technology transfer
we will utilize to improve and disseminate farmer “best practices” on a large scale. To take the
Schools of Excellence from concept to reality, we undertook the following activities this quarter:
a. Prioritization of key issues
PCA’s technical team, in close coordination with the Alliance's supply chain managers and partners,
spent this quarter prioritizing key technical assistance activities considering the cacao crop
agricultural calendar and methods to deepen and expand proven agricultural practices.
Following consultations, the priority themes identified for the Schools of Excellence training
programs were defined as:
• Integrated nutrition and timely pruning (INTP)
• Integrated pest and disease management (IPM)
• Soil conservation and management
• Plantation density management
• Irrigation.
b. Selection of the “elite technicians"
The Alliance also selected 12 “Elite Technicians” to participate in the Schools of Excellence, and to
provide technical assistance and extension to PCA farmers. The selection criteria required that these
elite technicians have sufficient knowledge of good agricultural practice managing cacao crops, as
well as be familiar with training tools for small producers within the micro-corridors.
c. Training of elite technicians
To refresh, improve and strengthen the skills of PCA's elite technicians to ensure production quality
and yields, and in partnership with Alliance partners Yara and Husqvarna, the following training
sessions were held this quarter:
Between October 16 and 28, 2016, nine elite technicians (8 men and 1 woman)
received training in INTP and IPM by recognized experts. The theoretical and
practical training helped standardize messages to be imparted to farmers, as well as
farmer evaluation criteria and how to apply corrective measures.
November 10-11, 2016, 3 elite technicians from the San Martín region (2 men and 1
women) received training from a Husqvarna representative in the use of pruning
tools to ensure proper crop management tools. This training also included the
regional director and business manager of the Alliance, a Casa Qoya technician, 3
Allimacacao technicians and 2 ROMEX technicians.
On November 21 and 22, 2016, in the city of Lima, the technical management team
at Yara, a fertilizer supplier, trained all of PCA's elite technicians and technical staff in
aspects of cacao fertilization, including soil analysis interpretation, nutritional
deficiencies, soil types and physical and chemical characteristics of soil.
d. Development of training tools.
The Alliance created two training modules this quarter related to INTP and IPM, as
mentioned previously.
e. "Specialized technicians" take over training responsibilities
Through Alliance staff and PCA partners Yara and Husqvarna, we also provided training to
technical facilitators and farm leaders this quarter, including:
On November 26, the first INTP training session took place in the Chazuta micro-
corridor. The session was attended by 20 technicians and farm leaders (19 men and
1 woman). Training was provided by Yara and Husqvarna's technical staff.
On December 2, we held an INTP training session for 18 technicians (12 men and 6
women) in the Saposoa micro-corridor (San Regis), also with participation of Yara
and Husqvarna trainers.
Two IPM training sessions were held in the Huánuco regional office this quarter,
training 43 technicians (of which 38 of the participants were men and 5 were
women). Training sessions were carried out in the Naranjillo and Yurimaguas
communities.
f. Production training sessions in farming micro-corridors.
• The farming cooperative ACOPAGRO conducted a technical training in IPM for
cacao farmers in 16 base communities, including 730 producers, 73 of which were
women.
• Several organizations—Allima Cacao, Casa Qoya, Coopalgsa—also conducted
training sessions in IPM and INTP targeting 60 producers, of which 10 were women.
• Seventeen farmers also participated in two IPM field days, of which 15 were men and
2 were women.
• The Huánuco regional office also gave a master training class on IPM this quarter, in
which 150 farmers participated, 48 of whom were women.
In addition, coordination meetings were held with:
• Inka Crops, with whom we discussed the status of the supply chain. The purpose of
the meeting was to design a technology package for bananas to increase both yields
and fruit quality.
• Reforestadora Amazónica S.A. (RAMSA), with whom we have been working on
designing a technology package aimed at proper management of forest species (of
Bolaina and Capirona) which are in high demand on both the local (regional) and
national markets.
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A.2.2 Develop a strategy to expand the distribution network of
agricultural inputs, fertilizers, equipment and post-sales technical
services by our technology supplier partners
PCA's technical team, through the schools of excellence, worked this quarter to identify lead farmers
who we can appoint to take responsibility for expanding the use of inputs, equipment and technical
services among neighbor farmers. Identifying and empowering lead farmers is a second strategy we
will undertake to meet our goals of increasing yields and production levels. The PCA team undertook
the following actions this quarter towards this goal:
• Identified 120 leaders (48 in the San Martín region, 56 in the Ucayali region and 16 in
the Huánuco region) of which 96 are men and 24 are women.
• Shared the lead farmer strategy with Alliance partners, and identified farmer leaders
to test out the idea.
• Planned for the roll out of “lead farmer” trainings via the Schools of Excellence.
On December 1-2, in preparation for the trade show EXPOTOCACHE 2016, the PCA team
connected Alliance partners Yara, Husqvarna and San Fernando with approximately 1,200 cacao
producers. The purpose of this linkage was to introduce producers to the advantages and benefits of
the Alliance partners’ products and equipment.
A.2.3 Develop and implement an online technical support system for
crop management and integrated pest management, among others
To design a technological platform that provides “real time” answers to crop management queries
coming from producers, we conducted the following actions:
• Improved the efficiency of the system to send mass text messages from the Alliance
to participating producers. To such end, we hired the services of a telephone
company and developed a guide on how to write messages.
• Evaluated Yara's online technical assistance system called CHECKIT. Through this
system, the company provides direct, real-time technical support for farmers that use
Yara’s products. PCA is currently evaluating the applicability, functionality and
practical use of this system by project technicians, as well as for producers.
A.2.5 Develop agricultural extension services together with supply
chain managers (SCM)
The Schools of Excellence described previously are our principal tool to provide agricultural advisory
services in partnership with Alliance partners to PCA farmers. In addition, this quarter we conducted
the following activities:
• Tested, in partnership with TABASC, a biological pest agent supplier, the application
of entomopathogenic fungi like Beauveria sp and Trichoderma sp in collaboration
with our field offices. The application of biocontrol agents is under evaluation in 13
plots, seven of which are located in the Ucayali region and six in the Huánuco region.
• Supported Alliance partners ROMEX and the Agroindustrial Tocache cooperative
develop and submit funding proposals to the INNOVATE fund in Peru. This fund is
managed by PRODUCE, and the goal of the fund is to promote technological
advances in production with added value. The projects include: “Developing a fine
flavor cacao fermentation prototype and establishing cacao flavor profiles in
Cooperativa Tocache’s area,” and “Extraction and characterization of the pectin
obtained from cacao husk at different stages of maturity at a pilot plant level and
under the conditions of the San Martin region.”
Challenges
• There is a shortage of qualified personnel to assume the elite trainer role in the
cacao growing areas of Ucayali and San Martín. Given this shortage, we have
decided to identify trainers with potential, and train these to get them up to speed on
best practices in cacao crop management. PCA held open calls this quarter to recruit
and select qualified trainers, and designed and put in place a training program to
improve the knowledge gap among those identified to play the elite trainer role.
• PCA's public and private partner institutions have limited staff. Private sector staff
tend to prioritize activities from existing strategic plans, which sometimes include
issues or activities that stray from PCA's objectives. To overcome this challenge, we
have asked Alliance partners to appoint coordinators for our joint activities, and we
have held meetings with these project coordinators to conduct joint work planning,
prioritize common efforts, and to train personnel who will interact most closely with
PCA’s elite technicians.
• The effects of climate change have led to the increased incidence of the mazorquero
worm, the scientific name of which is Carmenta sp. This pest has become
increasingly widespread, infecting the inside of the cacao pod, rendering it useless.
In response, PCA, in close collaboration with the ACOPAGRO cooperative, has
developed integrated pest management strategies for cacao farmers in the regions of
San Martín. PCA's technical personnel in each of these regions continues to identify
and evaluate the pest's behavior (Carmenta sp) to refine these pest management
strategies. Our strategies to manage the worm are based principally on improved
crop management (pruning), identifying infected cacao pods and immediately
separating these from the rest, protecting the infected pods with tarps and other
covering underneath to avoid their spread beneath the soil or in their evolved form of
moths. The IPM trainings scheduled for the end of the next quarter will contribute
greatly to combatting this pest. PCA has also developed a number of
communications strategies to reinforce the pest management strategy, including
creating flyers, holding interviews with the press, and creating a cumbia song on how
to deal with the moth that will be played on the radio in rural areas.
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Achievements
Twelve elite technicians trained to work via the Schools of Excellence.
Curriculum developed for the Schools of Excellence on the subjects of INTP, IPM,
irrigation, plantation density management, and soil conservation and management.
Nine hundred and fifty seven producers trained in INTP and IPM.
Co-development and sponsorship from three, private sector Alliance partners (Yara,
Husqvarna and TABASC) in the design and launch of the Schools of Excellence.
TABLE 4: PMP INDICATOR RESULTS
OBJECTIVE / RESULTS INDICATORS GOAL YEAR 1 PROGRESS OF
INDICATORS
RESULT 2.
Families from rural
consolidated areas will
improve their family
economy by increasing the
productivity of their plots
and by increasing new
areas of agroforestry
systems in degraded areas
by the end of the project in
2021
Increase in cacao
productivity
650 kg/ha TBD4
Assisted hectares
43,200 ha
1,435 ha
Average no. of hectares
per family
2.4 ha of cacao
TBD5
Families assisted by
various outreach programs
18,000 families
957 producers
Women who participate in
various outreach programs
1,500 women
108 women
4 This is an annual indicator. We are on target to meet this progress indicator by the end of the fiscal year. It will also require a baseline. 5 This is an annual indicator. We are on target to meet this progress indicator by the end of the fiscal year. It will also require a baseline.
RESULT 3: INCREASE ACCESS
TO FINANCE
TABLE 5: CALENDAR OF ACTIVITIES R3: CONSOLIDATED RURAL FAMILIES AND OTHER STAKEHOLDERS IN THE VALUE CHAIN TO IMPROVE THEIR ACCESS TO SHORT
AND LONG-TERM FINANCING AIMED AT IMPROVING THEIR LEVELS OF EFFICIENCY AND PRODUCTIVE EFFICIENCY IN ORDER TO
OPERATE AT FULL CAPACITY.
DESCRIPTION OF ACTIVITIES AND SUB-ACTIVITIES
PERIOD (September-December 2016)
September October November December
A.3.1 Hire financial facilitators to negotiate short and long-term financing for the supply chain managers (SCM) and farmers from different financial institutions
A.3.2 Ensure women’s priority access to financing
A.3.3 Sign (MOU) agreements with financial institutions to finance producers directly
A.3.4 Expand the use of mobile money services (eWallet)
Activities
A.3.1 Hire financial facilitators to negotiate short and long-term
financing for the supply chain managers (SCM) and farmers from
different financial institutions
During this quarter, the PCA team held preliminary meetings with numerous financial entities,
including Agrobanco, Cooperatives Abaco and ACOPAGRO and insurance company La Positiva to
discuss the project’s financial services strategies. The PCA team also met with numerous supply
chain managers and firms to determine how they are providing/receiving financing now, and whether
financial facilitators would be a useful intervention. The findings from these meetings and research
conducted this quarter to refine the project’s broader financial services strategy confirmed the utility
of financial facilitators deployed at the farmer level as well as at the SCM level to channel more
financing towards these actors.
21
Alliance partner Agrobanco is one of the most prominent lenders to the agribusiness community
nationally, and offers under-market interest rates. This entity is highly interested in continuing a pilot
begun with PCA in March 2016 PCA’s that relies on financial facilitators to identify new clients and
package loan applications for these among PCA farmers. Agrobanco has offered to begin this work
starting in early 2017, so preparations are underway to identify financial facilitators, train these and
put them on performance-based contracts during the first quarter of calendar year 2017.
However, this activity is just one of a series of interventions that PCA would like to put in place to
facilitate more finance along the cacao and agroforestry value chains via a wider range of financial
institution partners and tools. PCA’s Program Director/Access to Finance Manager conducted a
research assignment this quarter to develop a broader financial services strategy for the project, and
will submit this to the team and USAID during the first quarter of 2017. Following a meeting with
USAID, a detailed implementation plan will be designed and agreed upon activities can be rolled out
throughout 2017.
A.3.2 Ensure women’s priority access to financing
PCA collected baseline data this quarter to determine the extent to which women are under-
represented in receiving and utilizing financing for agroforestry activities. Alliance subcontractor
Uniterra is concurrently conducting research to determine the specific barriers to expanding
women’s access to finance within the project, and specifically for women in the target regions.
Once this research is developed, PCA will finalize its sub-strategy and activities to ensure that
women are appropriately represented in terms of accessing finance given their level of participation
in the value chain as their male counterparts, and are using finance to improve yields and income.
A.3.3 Sign (MOU) agreements with financial institutions to finance
producers directly.
In November and December 2016, numerous meetings were held with Agrobanco to firm up details
of the co-financed plan to expand financing to thousands of PCA producer partners. The terms of
this arrangement will be included in an MOU with Agrobanco and will be signed in the first quarter of
2017. Based on preliminary research results, we also believe that significant work is required to
stimulate demand for credit, as very few producers actually apply for credit. Therefore, we intend to
include financial education as a component of our MOU with Agrobanco, which has already
developed modules we can easily adapt for use with lead trainers who can then impart information to
PCA farmers. As a first step, the Bank has committed to provide three financial education workshops
in February and March in San Martín, Huánuco and Ucayali and in collaboration with our Schools of
Excellence in these regions to train instructors on themes of financial education with the goal of
encouraging more farmers to agree to apply for credit.
A.3.4 Expand the use of mobile money services (eWallet)
PCA also held meetings with the
technical and management teams
of electronic payment company
Pagos Digitales del Perú (PDP).
PDP is interested in expanding the
use of their electronic payment
product among PCA cacao
farmers, in a pilot called eWallet
(or BIM, for its acronym in
Spanish). The cooperative
Acopagro is interested in piloting
this product, and has already
begun promotion of the BIM
among its members. We have
jointly selected the location of
Juanjui as the location of the PDP-
PCA BIM pilot. Greenhouse for forestry seedlings in Aucayacu, Huánuco, July 2016
Challenges
• The existence of an eWallet product does not mean it can be rolled out immediately
in the pilot location. “Best practices” in digital finance requires that we build an
ecosystem of actors who will use the eWallet/BIM tool so that farmers can receive
digital money through cacao sales and spend digital money prior to initiating the pilot.
We also need to design an incentives system to stimulate use of the product among
the various actors, especially among reluctant farmers, who may fear their money is
lost if they cannot hold it in their hands. In other words, further analysis of the market
is required prior to launching this eWallet tool among the PCA farmer population.
o As a first step, initial information was gathered from Acopagro members this
quarter about their use of cash received for sales of cacao. Some of this
information will serve to inform the more detailed survey and mapping of how
cash is utilized among the population in Juanjui. Baseline information will
complement this data gathering exercise. In other words, creating a “value chain
map of cash” is the first step in identifying which vendors and actors should
participate in the eWallet/BIM system and how.
• The other challenge related to rolling out this eWallet/BIM tool is a resource
challenge. Conducting detailed mapping and analysis is costly (PDP estimates the
cost of this study at $100,000). In addition, PDP recommends that we develop a set
of financial incentives for actors to use the BIM tool, which could also be costly
depending on what would be appropriate. To address this resource challenge, PCA
will ask PDP to cost-share or entirely finance the development of this mapping and
23
analysis study, and to source the incentives resources during the first half of 2017, so
we can roll out the digital payments tool during the second half of the calendar year. 6
• Agrobanco cannot be the only actor the Alliance works with to meet the financing
needs across the entire cacao, banana or wood sectors, as it does not have the
resources or capacity to meet the demand presented. Therefore, PCA must establish
relationships with multiple financial institutions to stimulate finance across the entire
value chain. A strategy to broaden and deepen our financial services strategy to
incorporate new actors and risk mitigating tools will be submitted to USAID in
January of 2017, and approved strategies will be rolled out during the remainder of
the year.
Achievements
Agreed with Agrobanco on the terms of a relationship to co-finance the expansion of
financing and financial education to PCA producers. This pilot will begin in February
2017.
Finalized a relationship with Pagos Digitales (PDP) to jointly roll-out an eWallet tool
in a pilot region over 2017.
PCA conducted research and developed a refined financial services strategy for the
program. This updated financial services strategy will be presented to USAID in
January 2017, a detailed implementation plan will be put in place, and agreed upon
activities will be rolled out over the remainder of 2017.
TABLE 6: PMP INDICATOR RESULTS
OBJECTIVE / RESULTS INDICATORS GOAL FOR
INDICATORS
PROGRESS OF
INDICATORS
RESULT 3
Consolidated rural families
and other stakeholders in
the value chain to improve
their access to short and
long-term financing aimed
at improving their levels of
efficiency and productive
Value of rural-agricultural
loans
US$ 0.5 million
TBD7
Number of families to
access credit
500 families
TBD8
Number of beneficiaries
using eWallet
500 beneficiaries TBD9
6 If PDP fails to cover the costs of this initial study, PCA will find a lower cost alternative to gather this data. 7 We estimate that the Agrobanco pilot alone will easily release at least this amount of loans to members of the cacao and other agroforestry product value chains before the end of the 2017 fiscal year. 8 We believe we will easily meet this progress indicator via our pilot with Agrobanco. 9 We are on target to meet this progress indicator by the end of the fiscal year.
OBJECTIVE / RESULTS INDICATORS GOAL FOR
INDICATORS
PROGRESS OF
INDICATORS
efficiency in order to
operate at full capacity.
25
RESULT 4: FACILITATING
PRIVATE INVESTMENT
TABLE 7: CALENDAR OF ACTIVITIES
R4: INCREASED PRIVATE INVESTMENT IN PRODUCTIVE CHAINS PROMOTED BY THE PERU CACAO ALLIANCE private investment increases in the productive chains promoted by the Peru Cacao Alliance
DESCRIPTION OF ACTIVITIES AND SUB-ACTIVITIES
PERIOD (September-December 2016)
September October November December
A.4.3 Drafting proposals for interested investment funds and investors
Activities
A.4.3 Drafting proposals for interested investment funds and
investors
In preparation for this activity,
during this quarter, PCA met with a
wide range of Alliance partners to,
among other issues, discuss their
investment needs. We found that
many of the Alliance’s partners of
the small and medium enterprise
(SME) size struggle to find the
appropriate combination of finance
and investment to continue
growing their enterprises to meet
international and domestic market
demand. For example, many firms
are unclear of the opportunities for
equity investment, and have few
connections with finance and
investment entities. The details of
these conversations and specific
investment needs identified are
CEO of Q'uma Chocolates visiting fine flavor cacao plots in
Chazuta. Q'uma is making investments in "bean to bar"
chocolates. San Martín, August 2015.
outlined in the Trip Report conducted by Palladium’s Program and Finance Manager as well as a
Partner in Palladium’s U.S. Business Unit during their visit to Peru in October 2016. These meetings
solidified the need to conduct a more detailed assessment of a range of investment proposals that
can be appropriately packaged and presented to potential investors and investment funds
domestically and internationally. A Scope of Work to conduct this assessment of potential
investment “deals” will be drafted during the first quarter of 2017, and a short-term consultant will be
sourced to conduct this assignment. The packaging of deals is an activity that Palladium has
previously conducted in a number of countries, so we will use an existing design for an investment
booklet, and make these available in paper and electronic form, and will utilize a variety of
communication channels to market these deals appropriately among potential investors. Once the
investment deals are identified and packaged, PCA will then assign consultants or financial
facilitators to these deals to ensure that investment proposals are developed and presented to a
range of equity, debt and other investors. These follow-on activities will take place in 2017.
The first meeting of private, PCA Alliance partners was held on December 15 in ROMEX’s
auditorium. This meeting was attended by more than 15 private companies involved in activities
such as the Schools of Excellence, the eWallet initiative and the upcoming Agrobanco financial
education program. The event allowed PCA to ensure that its partners are equally familiar with the
Alliance's objectives, results and indicators, in order to align all participating parties' interests
towards mutual ends. PCA used this meeting to create a steering committee of PCA partners, and
Alliance members elected ROMEX's general manager as the Committee's Chairman.
Also during this quarter, one of Palladium’s PCA team members met with potential, global investors
Barry Callebaut, Cargill and Lindt on the subject of supporting development of Latin American origins
on a large scale. The results of these conversations are as follows:
• Barry Callebaut’s Gourmet division would like to connect with PCA to arrange large
scale purchase of Peruvian cacao, in part due to their new, corporate strategy to
sustainably source 100% of their cacao by 2020. Towards this end, Barry Callebaut
is also considering developing large, nucleus farms in combination with outgrowers in
Latin America (right now they are considering Ecuador and Brazil for this investment)
to ensure sourcing more cacao at scale. PCA team members are trying to steer this
investment towards Peru instead, with the hope that PCA could connect smallholder
farmers with this anchor investor. PCA’s Eduardo Tugendhat will continue
discussions with these investors to move these potential investments forward in
2017. These interventions are considered part of Palladium’s cost-share to PCA, as
Mr. Tugendhat’s time and travel costs are not reimbursed by the project.
• Lindt is interested as a buyer only, and they are interested in working with a supplier
that can provide a minimum of 1,000 tons of product. PCA is working to arrange joint
sourcing of cacao to meet this key buyer’s minimum requirements.
• A few other investors have expressed interest in visiting Peru to witness the PCA
model in action (e.g. Nestle and Mondelez). Mr. Tugendhat will continue to follow up
on these leads in 2017.
Also this quarter, the PCA team began to recognize the value of its traceability system and geo-
traceable mapping capability to motivate potential investors to make new investments along the
cacao value chain. Whereas the traceability system was developed principally to calm buyer nerves
27
about sustainable sourcing, we now realize that data in this system is a powerful tool to mitigate
investor risk and to support due diligence when seeking new investment opportunities. For example,
the PCA team routinely meets with local investors to generate demand-driven data calls, create
maps and suggest locations for new investments in infrastructure (such as post-harvest warehouse
facilities, and areas to create cacao plantations). The team will continue to use the traceability
system to support investors in their data collection and due diligence exercises, and will also include
these investment opportunities in the packaging exercise in the case these potential investors are
also seeking co-investment.
On November 28-30, the company Bazo, Bosa, and Buse visited PCA's three regional offices,
including visits to business and organizational models such as ACOPAGRO, APAHUI. MEGAMAR,
among others. The goal of this potential investor’s visit was to invest in the development of
centralized storage systems that will enable them to control the quality of the cacao to be purchased.
Next steps to finalize this investment include an analysis of the best areas in which to set up the
centralized processing center, as well as a financial analysis of the investment.
PCA also addressed the overall enabling environment to facilitate new investment in the cacao chain
this quarter. Along these lines, the PCA team organized a meeting between the regional government
of Ucayali (GOREU) and Alliance partner Megamar on December 9. The regional Governor and
three regional advisers attended the meeting along with Megamar and PCA representatives. Topics
covered during this meeting included improved security in the region, the theft suffered by the
company, as well as recommendations for improvements in road infrastructure. The regional
authority responded favorably to these issues, committed to addressing them, and took swift
measures to strengthen security through expanding police presence near Megamar operations and
to expedite its efforts to allocate machinery towards improving existing roads in the Curimana area.
In terms of new investments made by SCMs this quarter, AMT Agroindustry completed an
improvement to their drying area as well as civil works at their facility to function at 100% post-
harvest processing capacity. Also this quarter, as previously mentioned, this Alliance partner sought
PCA’s assistance to connect with cacao-producing communities to ensure supply of sufficient wet
beans to run their post-harvest facility at 100% capacity. As a result, a more direct relationship was
created between producers and a buyer, as well as a stronger, mutual commitment from both
parties.
Challenges
• International investors are intrigued with how PCA has been able to plant so much
fine flavor cacao in a short period of time, in collaboration with smallholder farmers in
a traceable fashion. Most would love to purchase cacao from Peru now, but the
amounts of cacao available via PCA Alliance partners still remain relatively modest to
be seriously considered by these large, global buyers. The Alliance therefore must
continue its efforts to promote investment in improved post-harvest infrastructure,
standardized harvest and post-harvest protocols, and new flavor profiles from
supplier producers' territories.
• Security will continue to be a problem for investors in remote areas. To ensure safety
of investments, PCA will continue to facilitate the involvement of local and regional
governments in cacao productive chain activities.
Achievements
Met with potential investors in Europe to identify (and encourage) potential
investment deals and new commercial relationships in Peru.
Encouraged GOREU to strengthen security for cacao investors and other private
sector partners in the Ucayali region, and to allocate machinery to ensure
maintenance of rural roadways, facilitating the transfer of cacao from farms to
buyers/post-harvest processors.
Established PCA's private sector steering committee
TABLE 8: PMP INDICATOR RESULTS
OBJECTIVE / RESULTS INDICATORS GOAL FOR
INDICATORS
PROGRESS OF
INDICATORS
RESULT 4:
Direct private investment
increases in the productive
chains promoted by the
Peru Cacao Alliance
Facilitated Investment
$5 million
TBD10
10 We are confident we can meet the investment indicator this year based on the activities outlined in this section of the report.
29
COMMUNICATIONS
Activities
During this reporting period, communications activities were undertaken nationally, and focused on
presenting phase II of the Alliance to our public and private partners and communities of interest in
each region. Presentations were given to target audiences via interpersonal communication
methods, including meetings, group lectures and video-conferencing. The message provided
focused on presenting the
Alliance's model, and delivering
positioning messages of improved
yields, quality, access to finance
and access to differentiated
markets, as key elements to
improve the incomes of 20,000
families in the target regions.
Our objective in terms of promoting
our image is to position the
Alliance as a facilitator of private
investment in the target
agroforestry value chains of the
Peruvian Amazon with the goal of
improving the income of 20,000
families.
PCA communication activities
were designed this quarter to
stimulate the following behavior changes:
• For cacao, banana and wood male and female producers to invest in agricultural
technology (in nutrition, pruning, irrigation) to increase yields on their parcels.
• For these same producers to apply for financing, thereby promoting an investment
culture in their agricultural businesses.
Following meetings with private sector partners, PCA’s communications team contacted the
communications teams within each private entity to request relevant branding materials, access to
logos and corporate identity kits. These actions were designed to position the Alliance as an active
collaborator with private sector actors involved in disseminating technology and financing to PCA
producers, and to ensure appropriate brand positioning of each one of our co-investors/leverage
partners.
Launch of the "Aromines", characters that play the roles of the
different varieties of fine flavored cacao which are used in
producer trainings on clonal arrangements. Las Mercedes,
Curimaná. Ucayali, 2015.
In addition, PCA’s communications team developed event materials and handled logistics to manage
the launch of the Schools of Excellence this quarter. PCA hosted seven public events in November
and December (two in Huánuco, two in Ucayali and three in San Martín). PCA's private partners
Yara, Naandanjain, Husqvarna, Agrobanco and San Fernando (through its sub-brand Mallki)—
attended were actively involved in planning and implementing these events. Due to the strength of
PCA and our partners, more than 700 people attended these launch events, which also represented
another method to announce the re-initiation of Alliance’s work in the regions in benefit of small
farmers.
Messages disseminated at these events included the importance of increasing cacao yields, the
need for continued transformation of the cacao value chain, and the importance of creating shared
value through new private investment (from firms and producers), and the fact that cacao farming is
a profitable business.
In the case of Huánuco, PCA organized a roundtable with regional media during the last week of
November to reinforce the Alliance's new messages and initiate new partnerships with regional
actors during this new phase.
In San Martín and Huánuco, we developed the slogan, "Mazorquero, en mi parcela no te quiero”
(Spanish for "Mazorquero, I don't want you on my plot," which will be used to support the integrated
pest management (IPM) strategy designed by the PCA technical team. The communications team
developed a set of informational tools and public service announcements based on this slogan,
including radio spots featuring a cumbia musical number, a text messaging plan (SMS), information
pamphlets and newsletters targeting producers and community activists (who will create a small
theater production to disseminate the slogan more widely).
In addition to designing these tools and an initial graphic package, PCA’s communications team
designed templates and products for social media platforms, and activated the Alliance’s Facebook,
YouTube, Flickr and Issuu accounts, assuming approval of the Alliance's social media and outreach
plan.
Challenges
• Positioning the Alliance as a facilitator of private investment requires a shift in the
mindset of a number of our public and private partners, who perceived the Alliance
differently during our first phase. Therefore, we must work in close partnership with
our private sector partners to reinforce and communicate the message that the
Alliance represents a model of shared value investment, in which all partners win.
Achievements
The PCA team produced two new videos covering our work in San Martín. The first
video covers a training workshop PCA sponsored together with Alliance partner
Husqvarna to improve use of agricultural machinery for pruning in Tarapoto. The
31
second video covers the first session of the Schools of Excellence in Chazuta which
was held in November.
PCA created a new communications strategy and designed multiple tools to support
technical implementation, such as the mazorquero slogan and tools.
PCA was featured 28 times in the national press this quarter in print, digital, radio
and television media. The majority of coverage was related to launch events and
highlighted regional government commitments (from San Martín and Ucayali) to
improve cacao productivity and quality.
This quarter PCA received approval from USAID Washington on its request to create
an institutional website for the Alliance. The final website design and site map will be
presented for final approval in early 2017.
Below is a table representing the communications events supported by the PCA team this past
quarter:
TABLE 9: EVENTS SUPPORTED BY THE PCA
EVENTS SUPPORTED BY
THE PCA COMMUNICATION
TEAM Q1
SEP 2016 OCT 2016 NOV 2016 DEC 2016
TARGET AUDIENCE PARTNERS / ALLIES
S 1
S 2
S 3
S 4
S 1
S 2
S 3
S 4
S 1
S 2
S 3
S 4
S 1
S 2
S 3
S 4
LAUNCH OF THE SCHOOLS OF EXCELLENCE IN JUANJUI
x
Cacao producers from the province of Marisca Cáceres, ACOPAGRO technicians, private partners, ally institutions, potential partners and allies, potential supply chain managers, the broader public
Cooperative Agraria Cacaotera ACOPAGRO, YARA, Husqvarna, San Fernando, Naandanjain, Agrobanco, DEVIDA, regional government of San Martín
SIGNING OF MOU WITH REGIONAL GOVERNMENT OF UCAYALI
x
Peruvian government representatives in the Ucayali region linked to the development of the cacao value chain, the Office of Economic Development, private partners and the broader public
Regional government of Ucayali, Husqvarna, Naandanjain, Agrobanco, DEVIDA
LAUNCH OF THE SCHOOLS OF EXCELLENCE IN NESHUYA
x
Producers in the province from Neshuya, Aguaytía and Curimaná, MEGAMAR representatives, technicians from the cooperative Alto Huallaga, private partners and the broader public
AMT Agroindustrias, Husqvarna, Naandanjain, Agrobanco, DEVIDA, YARA, San Fernando
LAUNCH OF THE SCHOOLS OF EXCELLENCE IN TINGO MARIA
x
Cacao producers in the province of Leoncio Prado. Private partners, ally institutions and potential partners and allies Potential supply chain managers and the broader public
Cacao cooperative Alto Huallaga, cooperative Naranjillo. Husqvarna, Yara, Agrobanco, San Fernando
33
LAUNCH OF THE SCHOOLS OF EXCELLENCE IN TOCACHE
x Cacao producers in the province of Tocache. Private partners, ally institutions and potential partners and allies
Central of Aromatic Cacao, CAT Tocache Husqvarna, Yara, Agrobanco, San Fernando
LAUNCH OF THE SCHOOLS OF EXCELLENCE IN CHAZUTA
x
Cacao producers from the province of Chazuta, Allima Cacao technicians, private partners, ally institutions, potential partners and allies, potential supply chain managers, the broader public
Cooperative Agraria Cacaotera ACOPAGRO, YARA, Husqvarna, San Fernando, Naandanjain, Agrobanco, DEVIDA, regional government of San Martín
PARTICIPATION IN THE LAUNCH OF EXPO TOCACHE IN TINGO MARIA
x
Regional government of San Martín - zonal offices of Tocache, municipality of Tocache, municipality of Leoncio Prado, public opinion leaders in Tingo María and Tocache
Regional government of San Martín - zonal offices of Tocache
PARTICIPATION IN THE EXPO TOCACHE - TOCACHE
x Regional government of San Martín - zonal offices of Tocache, municipality of Tocache, public opinion leaders in Tocache
Central of Aromatic Cacao, Husqvarna, Yara, Agrobanco, San Fernando
ROUND TABLE WITH LOCAL JOURNALISTS-TINGO MARIA
x Journalists and media of Leoncio Prado / Tingo Maria, broader public
PARTICIPATION IN THE I FESTIVAL OF CACAO IN AUCAYACU-TINGO MARIA
x
Cacao cooperatives and associations of Aucayacu Cacao farmers of Aucayacu Broader population of Aucayacu
Municipality of José Crespo and Castillo Husqvarna Agrobanco
FIRST MEETING OF THE ALLIANCE'S PRIVATE SECTOR PARTNERS
X Private partners of the Alliance with whom a relationship had already been established
Husqvarna, Yara, Agrobanco, Pagos Digitales, Uniterra, Naandanjain, Reforestadora Amazónica, Inka Crops, Romex, San Fernando, La Positiva Seguros, Casa Franceschi, Acopagro, MEGAMAR
LEVERAGE
Activities
This quarter, PCA held meetings with Alliance partners to orient these actors on rules and
procedures surrounding their leverage contributions to the Alliance, such as:
• Definition of what constitutes leverage
• Leverage characteristics
• Cash contributions
• In-kind contributions
• Contribution categories
• Procedures and processes to report leverage to PCA
The PCA team designed and shared the forms with partners that we will use to collect information on
partner leverage throughout project implementation. We explained the reporting procedures and
the breakdown of each type of leverage contribution (in kind and cash) required to conduct adequate
monitoring of partner co-investment. Leverage contributions are linked to the commitments
established in Alliance partner letters of commitment.
In these meetings, PCA explained how leverage contributions will be formalized in Memoranda of
Understanding (MOU) that partners will sign with the project, along with additional information and
annexes.
The procedure is that each quarter, leverage partners will submit leverage contributions developed
in coordination with Regional Office leverage specialists, establishing the nature of the contribution
(cash or in kind) and the "leverage detail" to define the category or type of contribution.
Prior to submission, leverage forms must be duly signed by a responsible party from each partner,
and consolidated to develop the Alliance’s quarterly leverage report, to be attached to quarterly
reports.
TABLE 10: SUMMARY OF THE LEVERAGE FORM REQUIRED FROM EACH ALLIANCE PARTNER
35
Challenges
N/A
TABLE 11: SUMMARY TABLE COLLECTED OF LEVERAGE AMOUNTS FROM ALLIANCE PARTNERS THIS QUARTER.
Leverage Information Collected for the October-December 2016 Reporting Period
Partner Cash US$ In Kind US$
Total US$
Leverage Contribution to Program indicator
Agaria Cacaotera ACOPAGRO LTDA.
0 754 754 R2. Increase in cacao productivity
Agraria-ALLIMACACAO-Ltda.
0 202 202 R2. Increase in cacao productivity
Agraria-ALLIMACACAO-Ltda.
0 394 394 R2. Increase in cacao productivity
El Gran Saposoa Ltda -COOPALGSA
0 483 483 R2. Increase in cacao productivity
HUSQVARNA PERU S.A.
0 4,293 4,293 R2. Increase in cacao productivity R4. Investment value provided
HUSQVARNA PERU S.A.
0 1,517 1,517 R2. Increase in cacao productivity R4. Investment value provided
HUSQVARNA PERU S.A.
0 1,395 1,395 R2. Increase in cacao productivity R4. Investment value provided
HUSQVARNA PERU S.A.
0 402 402 R2. Increase in cacao productivity R4. Investment value provided
HUSQVARNA PERU S.A.
0 434 434 R2. Increase in cacao productivity R4. Investment value provided
HUSQVARNA PERU S.A.
0 1,183 1,183 R2. Increase in cacao productivity R4. Investment value provided
Diario Voces San Martín
0 811 811 R4. Investment value provided
TOTAL 0 11,868 11,868
37
OPERATIONS
TABLE 12: PROPOSED ACTIVITIES FOR OPERATIONS AREA
Proposed Activities
2016
Sep Oct Nov Dec
Registering the local entity to legally manage PCA - Phase II
Obtaining the Tax Identification Number (RUC and SOL code)
Opening bank accounts in PEN and USD currency
Hiring Staff
Negotiating and finalizing office lease agreements for Peru Cacao Alliance - Phase II
Obtaining Operating Licenses for project offices
Implementing an occupational safety and health management for Peru Cacao Alliance - Phase II
Providing training on Palladium International Policies
Hiring phone and internet services
Implementing an accounting system and complying local tax obligations
Asking for Advanced Requests and delivering SF425 accountability formats
Implementing a financial monitoring system by programmatic areas
Activities
• In September 2017, Palladium Group Peru SAC obtained its registry under the
Peruvian Public Registers.
• On October 1, 2017, Palladium Group Peru SAC obtained its tax identification
number (RUC), as well as its SOL code.
• On October 17, 2017, Palladium Group Peru SAC opened PEN and USD-
denominated bank accounts.
• Between October and December 2017, Palladium Group Peru SAC hired 39 people.
• Between October and December 2017, Palladium Group Peru SAC negotiated and
signed the lease agreements for offices in Lima, Pucallpa, Ucayali and Tarapoto.
• The operating licenses for project offices are in process.
• The implementation of an occupational safety and health management plan for Peru
Cacao Alliance - Phase II is in process.
• In September, and again in November-December 2017, PCA’s team was trained by
staff Palladium home office staff in Palladium International Policies related to
accounting, procurement and other operational management tasks.
• Although all the Peru Cacao Alliance’s offices have telephone and internet service,
we are currently in the process of renegotiating terms and conditions of the services
in order to access improved services.
MONITORING AND EVALUATION
This quarter's monitoring and evaluation activities have focused on planning and implementing the
baseline study to determine baseline indicators for indicators defined within Palladium’s cooperative
agreement with USAID.
TABLE 13: GDA INDICATORS (PERIOD 2016-2021)
The table above shows the 16 performance indicators PCA will track during 2016-2021 as required
in Palladium’s Cooperative Agreement with USAID. Not all of these indicators require a baseline,
however PCA nevertheless conducted a baseline survey which included questions on subjects of
interest including fertilization practices, machinery use, perceptions of the eWallet tool, and
perceived risks. This information from the baseline study will greatly inform our strategies and
activities in the field.
Following the collection of baseline information, PCA will conduct periodic evaluations to measure
progress against baseline figures (at intermediate stages or at the end of the project). For these
INDICATORS
Impact indicators
Change in household income (cumulative change in income) Yes Annual Annual Survey
Number of Households Assited Yes QuarterlyMonthly /
Annual
M&E System /
Survey
% female participantes in USG-assisted programs designed to
increase access to productive economic resources (assets,
credit, income or employment)
Yes Quarterly Monthly /
Annual
M&E System /
Survey
Value of investment faciliated (GDA constributions) Quarterly Quarterly M&E System
Number of FTE jobs created Annual Annual M&E System
Activity Outcome Indicators
Productivity increased
Yield/Hectare (average) of cacao Yes Annual Annual Survey
Hectares under assitance (all crops) Yes QuarterlyMonthly /
Annual
M&E System /
Survey
Average # of hectares of agroforestry crops per beneficary Yes Annual Annual Survey
Market access increased
% of households cooperating with farmer groups (formal and
informal) to aggregate pruchases and saleYes Quarterly Monthly M&E System
#of households accessing new market opportunities Quarterly Monthly M&E System
Metric tons of sale generated AnnualAnnual /
Quarterly
Survey / M&E
System
Value of annual sales (all products collected at farm level)
attributed to program implementationAnnual
Annual /
Quarterly
Survey / M&E
System
# of policies, regulations, administrative procedures passed for
implementation, as a result of USG assistance (linked to
cadmium research)
Bi-Annual Bi-Annual M&E System
Improved access to financial services
Value of agricultural and rural loans Quarterly Quarterly M&E System
# of households receiving USG assistance with access to loans Quarterly Quarterly M&E System
# of beneficiaries using mobile money services Quarterly Quarterly M&E System
Reporting
frequency
Data
collection
frequency
Data
collection
method
Baseline?
39
evaluations, we will use a trend analysis methodology to measure changes, because the purpose is
to observe changes over time within same target population.
The following graphic11 outlines the baseline study methodology:
CHART 1: FLOW CHART FOR A BASELINE
1.1. Zone or area of intervention
We will conduct the baseline in the following regions:
• San Martín Region: Including 232 localities within the provinces of Bellavista, El
Dorado, Huallaga, Lamas, Mariscal Cáceres, Moyobamba, Picota, San Martín and
Tocache.
• Huánuco Region: Including 184 localities in the provinces of Leoncio Prado, Marañón
and Puerto Inca.
• Ucayali Region: Including 177 localities in the provinces of Coronel Portillo and
Padre Abad.
1.2. Research topics
To conduct the baseline survey, we will conduct an interview using a questionnaire (survey data
sheet) with a sample of producers or producers and/or heads of household. This questionnaire
consists of 18 sections and a total of 113 questions summarized in the following table:
11 David Medianero Burga’s “Baseline Study Methodology”.
Target population
Study objectives
Variables and Indicators
Definition of sampling
frame
Development of database
FieldworkPilot testingQuestionnaire
design
Data analysis Results
FIGURE 1: MODULES AND CONTENT OF THE BASELINE SURVEY
SURVEY STRUCTURE
Module I: Demographic Characteristics
Section A: Registration of Household Members
Module II: Economic Development
Section B: Characteristics of the Property Section C: Agricultural Production Section D: Livestock Production Section E: Forestry production Section F: Mining activities Section G: Other household income
Module III: Earnings
Section H: Organization Section I: Technical assistance Section J: Cacao (harvest/post harvest/sale) Section K: Cacao (soil/fertilizers/fertilization) Section L: Cacao (use of pesticides and others) Section M: Financing/credit/savings Section N: Telephony/Internet/eWallet Section O: Insights Section P: Gender Section Q: Environment Section R: Agricultural insurance/perception of risks
We have also customized an additional survey instrument (survey data sheet) for women, for use
among female heads of the household, or a woman over 18 years of age who is member of the
family being interviewed. This questionnaire, which consists of 4 modules for a total of 13 questions,
is summarized in the following table:
FIGURE 2: MODULES AND CONTENT OF THE GENDER SURVEY
DATA SHEET STRUCTURE
Module I: Role in decision making process regarding production and income generation
Module II: Access to productive capital
Module III: Access to credit
Module IV: Associative activities
1.3. Sampling frame and selected sample
To determine the sampling frame, producers that installed cacao with the Alliance's support
during2012-2016 were used as a reference. Localities with less than 10 people were excluded; as
41
were those that would not be part of the stage II of the Project because they did not meet the
expected conditions (e.g. accessibility, geographic location, etc.).
The following table shows the composition of the sampling frame:
TABLE 14: SAMPLING FRAME BY REGION
REGION
LOCALITIES (conglomerates)
PARTICIPANTS
HUANUCO 184 4,157 SAN MARTIN 232 6,288 UCAYALI 177 4,431
TOTAL 593 14,876
Source: The Alliance's M&E System
The following table illustrates the selected sample:
TABLE 15: SAMPLE BY REGION
REGION LOCALITIES
(conglomerates) Sample
HUANUCO 36 360
SAN MARTIN 37 370
UCAYALI 36 360
TOTAL 109 1,090
Source: The Alliance's M&E System
A sample of 10 producers was determined by locality, for a 95% confidence level and or margin of
error of +/- 5 percentage points.
1.4. Fieldwork and next steps
Fieldwork to conduct the baseline study was carried out December 2-17. The instruments developed
were applied to Alliance member producers. As a result, 1,135 baseline surveys and 696 baseline
surveys among women were completed. As shown in the table below, there was an oversampling of
45 surveys, which will reduce the final error margin.
TABLE 16: SAMPLE BY REGION (PLANNED AND ACTUAL)
REGION Actual sample Planned sample
HUANUCO 401 360
San Martín 364 370
UCAYALI 370 360
TOTAL 1,135 1,090
Source: The Alliance's M & E System
PCA’s M&E team will encode and digitalize the surveys collected next quarter (January 2017). Next
steps for Quarter 2 will be the development of an encoded, consistent database, data analysis and
the generation of baseline results.
The table below lists the final performance indicator table submitted to USAID in the formal
monitoring and evaluation plan this past quarter.
43
TABLE 17: PMP INDICATORS – PERU CACAO ALLIANCE PHASE II
TABLE: PMP INDICATORS - PERU CACAO ALLIANCE PHASE II
Date Actual Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual
1 1/1/2017 TBD 30% 0 5% 10% 20% 30%
2 20,000 957 18,000 957 20,000 20,000 20,000 18,000
3 30% (6,000) 108 25% 108 30% 30% 30% 30%
4 US$ 50M US$ 5MM US$ 10 MM US$ 15 MM US$ 15 MM US$ 5 MM
5 33,000 17,000 22,300 30,000 30,000 33,000
6 1/1/2017 TBD 1,000 kg/ha 650 700 800 900 1,000
7 52,000 43,200 48,000 50,000 52,000 50,400
8 1/1/2017 TBD 2.8 2.4 2.4 2.5 2.6 2.8
9 1/1/2017 TBD 70% 20% 40% 60% 70% 70%
10 20,000 1,000 5,000 7,000 6,000 1,000
Quantity (Metric Tons) 137,268 11,232 21,168 25,200 33,696 40,824
Value (US$ MM) 93.9 25,833,600 48,686,400 57,960,000 77,500,800 93,895,200
12 2 0 0 1 1 0
13 US$ 10 MM US$ 0.5MM US$ 3MM US$ 3MM US$ 3MM US$ 0.5MM
14 10,000 500 3,000 3,000 2,000 1,500
15 10,000 500 3,000 3,000 2,000 1,500
FY2019 FY2020 FY2021
11
FY2018
Source: Monitoring and Evaluation Area
FY2017Global
Household Income (US$)
Number of ass is ted fami l ies
Increase cacao yield
Number of ass is ted hectares
Average hectares per fami ly
Percentage of fami l ies connected to a
productive va lue chain system
Number of pol icies , regulations and
adminis trative procedure on cadmiun content
Farms loans
Jobs created
Number of ass is ted woman
Value of faci l i tated investment
Sales
Number of fami l ies with access to loans
Number of beneficiaries us ing mobi le money
Number of fami l ies with access to new market
opportunities
Result
No.Indicator
Baseline
SUCCESS STORIES
Hamilton Gonzáles as he applies
biocontrol agents to his cacao plot.
"I am committed to my
neighbors in San Regis. I
want to help them increase
productivity and put an end to
the mazorquero."
Hamilton Gonzáles
Partner producer
Investment and entrepreneurship: first steps of future
technological agents in the Huallaga corridor
Together with a set of private sector partners, the Peru Cacao Alliance (PCA) formally launched its
“Schools of Excellence for Cocoa Productivity and Quality” along key corridors in the San Martin
province in 2016. Key corridors have a sizeable concentration of cacao crops, an important number
of independent growers, are fortunate to have the presence of successful cooperatives such as
ACOPAGRO and COOPALGA, and also are home to public entities implementing complementary
initiatives, such as the Rapid Impact Project for Sustainable Integral Development of Huallaga (PIR-
DAIS Huallaga).
The village of San Regis in the Saposoa District of the province of Huallaga was the setting for the
first training given by the PCA and Alliance partner Schools of Excellence. The inaugural session
targeted lead producers and field technicians, and focused on sharing information related to topics
of interest, such as Integrated Nutrition and Timely Pruning (INTP). During the fieldwork designed
to complement training sessions, participants such as producer Hamilton Gonzáles showed
remarkable initiative and disposition to collaborate with PCA and its Alliance partners. Mr. Gonzáles
offered his cacao farm to hold demonstrations of machinery provided by Alliance partner Husqvarna,
as well as to demonstrate the effectiveness of Yara’s input products. He has 3.5 hectares of cacao in
production, and reached cacao yields of 800 kg per hectare in 2016.
In recognition of the presence of the mazorquero worm on his and neighboring plots, and after
receiving a training at the School of Excellence, Mr. Gonzáles contacted Husqvarna to purchase a
motorized backpack for $1,450 Peruvian soles, so he could spray his crop with biocontrol agents like
Trichoderma sp and Beauveria sp and eliminate this pest. He purchased these inputs from TAP
Laboratories. This action significantly reduced the presence of the mazorquero worm on his cacao
plot, ensuring more income from his cacao business this year. Following recommendations received
from PCA-trained elite technicians, Mr. Gonzáles invested an additional $49 Peruvian soles in inputs
per hectare for each application to ensure his production levels and yields; in a year he expects his
yields to increase from 800 kg to 1,200 kg. per hectare.
But Hamilton has taken things even further. Understanding that while he may have solved his own
problem, he recognizes that the pest threat continues in his community. He therefore has decided
to start a business offering advisory services to his neighbors, putting into practice his leadership as
a farmer. In December 2016, he supported five neighbors to fight the mazorquero worms on their
plots, eradicating a total of 12.5 ha of cacao crops owned by three COOPALGSA farmers and two
independent producers. For each hectare sprayed, Gonzáles receives a payment of $25 soles. His
consulting fee includes personalized advice on machinery use, mixing biocontrol agents and
application of these to crops.
"I want to position myself as a specialist in nutrition and fertilization, care for my cacao and [help]
my neighbors learn from what I know. I want to offer this service so that everyone in San Regis can
produce more and more on their plots," says Hamilton Gonzáles. He also promises to continue
attending the Schools of Excellence because there he can learn first-hand the best techniques to
continue to increase productivity in his cacao plot.
Hamilton Gonzáles: first actions of a leader and future
technological agent in the Huallaga corridor.