By ITC News

The challenge

Smallholder farmers in many developing countries struggle to connect to national, regional and international value chains even when the crops they grow are in high demand. This is evident in the Caribbean coconut sector. Over the past five years, changing consumer health and wellness preferences have spurred a boom in global demand for products like coconut water and coconut oil. The global market for coconut water alone was estimated at $1.3 billion in 2014 and is projected to more than triple by 2019.

Yet coconut farmers across the Caribbean too frequently cannot derive a sustainable livelihood from their crop. Years of low returns at the village level – in part a function of poor physical and commercial links to markets exacerbated by then-falling global prices – gave them little incentive to invest in coconut production. The result of prolonged underinvestment has been ageing plantations that are vulnerable to pests and plant disease, a recipe for weak supply capacity and an inability to compete with producers in Southeast Asia and the Pacific.

Overcoming these supply and coordination weaknesses and connecting Caribbean smallholders, small and medium-sized enterprises (SMEs) and large companies to booming markets that offer high returns on coconut products would improve livelihoods across the region.

The solution

Given the array of different factors impeding the competitiveness of the Caribbean coconut sector, rectifying the gaps demands simultaneous action across multiple fronts. ITC, in partnership with the Caribbean Agricultural Research and Development Institute (CARDI), is working with stakeholders at every step of the value chain – from farmers and micro-scale processors through to international buyers, government ministries and research institutions – in Belize, Dominica, the Dominican Republic, Jamaica, Guyana, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago to foster cooperative, mutually supportive responses to market needs. The project is part of a European Union-funded ‘intra-ACP’ programme that seeks to promote increased trade, value-addition and production across the African, Caribbean and Pacific (ACP) Group of States.

In practice, this means facilitating cooperation among value chain stakeholders to leverage the required investment as well as technical and policy support. This has involved, for example, training farmers in agricultural techniques and business skills; enhancing the capability of SME processors to meet international health and safety standards; and introducing waste-reducing, efficiency-increasing lean production methods.

The project is also working to upgrade the capacity of support institutions, from lenders to agricultural research and extension services; to build market linkages to buyers; and to other value chains in the region, such as tourism. The ultimate objective is to translate higher competitiveness and better business capabilities into more favourable terms of trade, higher value capture and increased incomes for small-scale farmers and processors.

In the nine participating countries, the project has created national coconut sector platforms to improve stakeholder coordination. In partnership with Duke University’s Center on Globalization, Governance and Competitiveness, the project partners have analysed the coconut value chain worldwide to identify market opportunities and consumer trends, as well as competitiveness gaps. Based on this analysis, stakeholders have developed national roadmaps for the development of the sector.

In addition, to supplement farmers’ incomes in the five to eight years needed to fully rehabilitate or expand coconut plantations, the project is supporting farmers to intercrop coconut trees with faster-growing plantain, banana or cocoa to diversify income streams and decrease their exposure to market and environmental risks.

Under the project’s implementation approach, dubbed Alliances for Action, ITC, CARDI and national stakeholders have built on the sector roadmaps to identify specific geographic areas where coconut farmers and the processors they work with have considerable potential to connect to international value chains. In these areas, local business alliances are being set up to link farmers to local and international buyers as well as to national institutions that can help build capacity. The project partners will deliver an integrated package of technical assistance to farmers, processors and support institutions, who are guiding the process of identifying key constraints and working together to solve problems along the value chain. In addition to facilitating the work of this multi-stakeholder platform, ITC is working with international buyers both to source from the Caribbean and to invest in the development of the region’s coconut value chain.

The future

ITC will continue to broker interactions and build networks among farmers, processors, national and international support institutions, interested buyers and potential investors with the aim of drawing in more partners to support inclusive rural development.

Through the Alliances for Action framework, ITC will work to build stakeholder capacity, secure investment and generate business to develop sustainable, inclusive and resilient value chains in the coconut sector across the Caribbean. The framework is designed to be replicated in other geographical areas and products – customized for local and product-specific needs – and is thus conducive to scaling up for broader impact.

SOURCE: http://www.intracen.org/news/Alliances-for-a-more-competitive-Caribbean-coconut-industry/