Honey and chocolate are made to satisfy the sweet tooth, but these treats aren’t always a sweet deal for the smallholder farmers that produce them.
Producing honey and cocoa has its advantages for small-scale farmers. Honey requires relatively little land and can be produced in a variety of natural environments, so it’s relatively easy for farmers to produce honey in addition to the crops they grow. And cocoa has two peak harvests but can effectively be harvested throughout the year, allowing farmers to earn money more consistently—even during the “lean months” between harvests.
Cocoa pods, just picked from trees at a cooperative in Nicaragua.
But while these products might have advantages for farmers, a truly sustainable income isn’t always one of them. High demand and relatively limited global supply for both honey and chocolate should spell big profit margins for producers, but in Central America and Mexico they often struggle to reap the full benefits of their work.
Throughout the region, many honey and cocoa producers have formed farmer-run cooperatives, so they can use their collective power to access global markets that producers can’t reach alone. But these businesses often lack access to critical resources that they—and their farmers—need to thrive.
One primary constraint is a lack of access to credit, which cooperatives use to make upfront farm-level investments and timely payments to producers during the harvest. These businesses are too big for microfinance, and commercial banks consider them too small or risky to serve. Chronically under-resourced, these cooperatives often have weak spots in financial and accounting practices, and struggle to provide adequate training for their farmers to keep up with buyers’ demand for high-quality products, or diversify into new products like honey.
But it doesn’t have to be this way.
Frutalico Antonio Piedrasanta, producer-member of Guatemalan cooperative COPIASURO, among his 59 beehives.
By extending essential financial and agronomic training to honey and cocoa cooperatives, we can build their capacity to manage credit and empower them to create opportunities for thousands of farming families across rural Mexico and Central America. Thanks to a new partnership with the Puma Energy Foundation and the Trafigura Foundation, we are providing this support to 12 high-impact cocoa and honey businesses in Mexico, Guatemala, Nicaragua, and Honduras—helping to boost incomes for 2,500 producers.
With support from these foundations, Root Capital will offer financial management training designed to increase cooperative staff’s performance in financial literacy, planning and analysis, accounting, internal controls, pricing, and profitability. We will complement this enterprise-level training with a series of centralized workshops designed to address common issues experienced across all 12 businesses. Finally, we will train each enterprise’s agronomic team in the skills they need to maximize crop quality and farmer productivity.
Getting ready to make delicious chocolate in Nicaragua.
Over a three-year period, our team of advisors will strengthen these businesses’ financial and accounting practices so they become increasingly credit-worthy, and build their capacity to produce high-quality cocoa and honey. With strong management, these cooperatives can serve as anchor institutions in their communities, helping farming families navigate risks such as climate change and fluctuating prices.
Root Capital, the Puma Energy Foundation, and the Trafigura Foundation are determined to help these businesses thrive—and support them in creating opportunities for thousands of farming families.
Making a living from cocoa and honey isn’t easy. But if we work together, we can make it a sweet deal for everyone involved.
All photos © Sean Hawkey