The PROGRESA project utilised Swisscontact’s Value Chain Management approach: The development of value chains enables smallholder farms and small businesses to take advantage of market and business opportunities to increase their income and create jobs. The project objective was to make coffee and cocoa farming more economically attractive and to increase farmers’ income to improve their livelihoods. Private sector participation was a key component in achieving this objective.
The introduction of efficient technologies ensured improved coffee harvest quality, which in turn fostered the creation of formal sales mechanisms between producer organisations and export companies. This created strong, long-lasting business relationships. At the same time, access to financing was facilitated, creating a virtuous circle that benefited all stakeholders.
Partnerships with private entities like the Honduran Coffee Institute (IHCAFE), which specialise in research and technology transfer in coffee cultivation, and the nationwide coffee exporter Molinos de Honduras (part of the Volcafe Group) ensured access to markets, and the sustainability of the initiatives.
PROGRESA enabled producers to obtain better prices for their coffee by facilitating direct contact with export companies. The coffee’s categorisation as a speciality coffee increased its value. Furthermore, the partnerships decreased transport costs and enabled lower interest rates for pre-financing or loans.
Exporters also benefited from collaborating with the private sector. Access to producer networks was facilitated for exporters, which helped them to achieve their commercial targets and secure product quality. A number of cooperatives in the region obtained organic and fair-trade certification, which positively impacted prices, increasing the incomes of farmers and their families.
Molinos de Honduras, one of the project partners, trained more than 2,000 farmers in good agricultural practices. These practices considerably improved product quality and increased crop yields. In recompense, employees of our partner Molinos de Honduras received agricultural training, and this expanded the horizon of their work approach.
Working together with fertilizer companies, formulas based on soil analyses were prepared for coffee and cacao producers. Consequently, the cost of nutrients decreased. At the same time, private companies provided interest-free loans to secure purchases of certified seedlings, allowing farmers to plant an additional 378 hectares.
PROGRESA was financed by the European Union. It was implemented through a public-private partnership, led by Swisscontact, in conjunction with IHCAFE (Institute of Honduran Coffee Producers), Molinos de Honduras, the Ministry of Agriculture and Livestock Production (SAG), and the local governments of Danlí, El Paraíso Department, and Namasigüe, Choluteca Department. In the selected regions, the competitiveness and sustainability of the coffee, premium cacao beans, and cashew nut value chains were improved. Furthermore, gender equality and social inclusion of 10,200 producers and 16,000 employees were advanced.