Centralized Organic Wet Cocoa Purchasing and Processing for Export to Developed Markets

KoKoaKamili Logo
Cocoa Tanzania

Kokoa Kamili Limited (KKL) is the first and only premium cocoa export company operating out of Tanzania with the stated aim of positioning Tanzanian cocoa among the best in the world. In September 2014, Kokoa Kamili was awarded a grant by TradeMark East Africa Research and Advocacy Challenge Fund (TRAC) to implement their project of developing and implementing a cocoa supplier service extension program through an ‘organic certification’ process which will ensure at least 3,000 smallholder cocoa farmers in Kilombero, Tanzania being trained and certified in ‘Good Agricultural Practices’ (GAP) that comply with U.S. and European organic standards.

The intended result of this initiative is farmer suppliers will see improvements in the quality and quantity of their production, whilst ensuring they can access price premiums for their organic beans and thus a greater net income for their produce. This will also facilitate access to a greater number of premium chocolate manufacturers in the market as a consequence of organic certification. The project will also establish a ‘mother’ farm that can be used to demonstrate ‘best practices’ in plant nursery care, as a provider of improved stocks of budwood to partners, and as a means of diversifying Kokoa Kamili’s sourcing modalities.

The project will benefit the household incomes of 4,000 smallholder families of whom 33% are women-led homes, totalling an estimated 1,350 female cocoa farmers. The project will also consolidate Tanzania’s reputation as a source of fine cocoa resulting hopefully in increased trade with a wider variety of new markets while showcasing Tanzania (and East Africa on a broader scale) as a source for premium quality agricultural products, instead of being simply seen as a bulk commodity grade goods supplier. The project will additionally create a total of 11 full-time jobs along with 74 part-time employees, of which 9 of the additional full-time jobs will be for young adults, aged 18 to 30 years old, while,63 of the part-time positions will be for young adults.

The project implementation was structured into 6 milestones as indicated below:

  1. distribution of at least 50,000 seedlings to smallholder farmers for expanded and/or replacement plantings

  2. Good Agricultural Practices (GAP) training materials developed, induction trainings beginning with at least 100 smallholder cocoa farmers, through Farmer Field School (FFS) groups, or other appropriate mechanisms

  3. at least 200 smallholder cocoa farmers have farm plots mapped for organic certification

  4. at least 20 MT of Cocoa supplied to the ‘premium’ international market

  5. 10% increase in Cocoa Income earned per participating cocoa farmer from the 600 farmers undergoing GAP training

  6. 10% increase in cocoa Income earned per participating cocoa farmers from an additional 200 farmers that are undergoing GAP training

Kokoa Farmers

Project Outcomes

KokoaKamili
Kokoa Tanzania
  • An increasing amount of Kokoa Kamili’s farmers (1,519 famers) earning an average of 24.4% more by selling cocoa to Kokoa Kamili than from any other buyer. To date, Kokoa Kamili has sourced 156.5 MT of wet cocoa of which 26.19 MT cocoa was exported to 8 chocolate manufacturers, 100% of which was sold above the commodity grade price leading farmers to experience an increase in their incomes.
  • Kokoa Kamili established their first nursery for cocoa seedlings at their facility in Mbingu village, Kilombero and has 30,000 seedlings currently in production. In preparation for the nursery distributions, Kokoa Kamili paid a local agronomy expert to conduct trainings on farm preparation and planting in 5 sub-villages around the catchment area. Kokoa Kamili is committed to distributing 60,000 seedlings in two batches, based around a 20% ultimate spoilage. In February 2015, the first batch of 28,676 seedlings was provided to farmers for planting. 3,082 were given away for free with the rest being sold below cost for TZS100 each. The second batch of seedlings was distributed in mid-April 2015.
  • In order to create quality budwood for nursery operations, as well as to provide a demonstration plot for best practices to local farmers, Kokoa Kamili will create a mother cocoa farm in Kilombero. The farm will have the added benefit of providing Kokoa Kamili with an increased supply of ‘quality’ raw cocoa.
  • TechnoServe shared their cocoa training materials, consisting of 14 pre-developed organic cocoa agronomy modules, with Kokoa Kamili who will coordinate the training activities in Kilombero. A Training of Trainers was carried out in May 2015 in Kilombero with Kokoa Kamili’s extension staff being inducted in the use of the new materials. Kokoa Kamili plans to recruit external consultants to increase the quality of their training.
  • Kokoa Kamili has solicited quotes from certifying agents in East Africa who will perform the necessary certifications along with a short-term team of enumerators who will also conduct a mapping exercise of farmers within the organic sourcing zone for certification. After being awarded an organic certificate, Kokoa Kamili will be able to access a larger customer base of premium chocolate manufactures. Currently, Kokoa Kamili has a total of 9 premium chocolate manufacturers using their beans. But the potential client base is much larger.

Challenges and Lessons Learned

Despite the acknowledged successes, the project’s implementation was not entirely challenge-free as there were obstacles encountered in the delivery of the agreed milestones. The main obstacles to progress included the following:
  • There was a delay in the deployment of GAP training due to a delay in the production of the training materials and the hiring of the extension service staff, so Kokoa Kamili partnered with a local NGO (TechnoServe) who already had an established cocoa training programme. Following this the training of the Kokoa Kamili extension staff was placed back on track and the service was able to commence its activities as planned. Kokoa Kamili later identified a network of farmer groups that were already receptive to training offers so the service offer could be quickly taken up. Another response to the rethink on the service offer was to restructure the delivery of the training modules to focus on high impact items with a seasonal relevance that matched with timing of the training (e.g. seeding, pruning, and weeding).
  • One of the challenges faced in increasing the factory capacity was improving the efficiency of the drying process, so Kokoa Kamili designed a stackable table system that could be moved inside quickly at the end of the day for weather or security purposes, while also utilizing the available space outdoors 100%.
  • Outsourcing the nursery development was a challenge as the recommended contractor was only available for an extremely high price, with a lower-contracting limit of seedlings that exceeded the needs of Kokoa Kamili, so the latter improvised, designed and implemented its own nursery which resulted in lower supply costs, greater control over the quality of the output and more direct contact with their cocoa seed suppliers.
Cocoa Farming

Conclusion

This project has the potential to improve the lives of smallholder farmers as there has been a notable increase in demand for premium quality cocoa and chocolate. Additionally, the acknowledged quality of Kokoa Kamili’s product compared to established wider regional suppliers will enable Kokoa Kamili to secure a higher price for its finished product, allowing Kokoa Kamili in turn to pass on improved margins to its farmer supplier; further incentivizing the latter to maintain the quality standards set and increase their production levels.