Supporting promotion of the private sector (PPP fund)
Project description
Title: Supporting promotion of the private sector (PPP fund)
Commissioned by: Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Côte d’Ivoire
Lead executing agency: Ministry of Agriculture
Overall term: 2007 to 2013
Context
Côte d’Ivoire’s agriculture is diversified. It is the world’s leading cocoa producer (40% share of the world market), leading exporter of cashews, and one of the major producers of rubber (Hevea brasiliensis) and palm oil. It also has other value chains in place (cotton, sugar, bananas, pineapples, timber). This economic policy has produced a well developed processing industry, and many important international agribusinesses have operations in Côte d’Ivoire.
In this situation there is potential for development partnerships with the private sector. As there is not enough available land for companies to expand their own industrial plantations, they rely on family farms for their supplies of raw materials. The farmers are also very keen to supply the companies because it gives them long-term security of income.
Collaboration with the private sector is interesting for development cooperation because the adoption of innovation ensures the sustainability of agricultural projects. The German private sector has virtually no presence now in Côte d’Ivoire. Currently, German companies obtain the raw materials they need for chocolate production by purchasing semi-finished products on European markets, but they are becoming increasingly interested in establishing direct contact with producers as a way of guaranteeing quality and compliance with ecological and social standards (especially child labour) and ensuring fair prices are paid to producers. They would welcome the introduction of certification under internationally recognised criteria, such as UTZ, Rainforest Alliance, and, to a lesser extent, Fairtrade. The confusing complexity of local value chains involving a large number of actors makes it difficult for German companies to establish themselves in Côte d’Ivoire.
Objective
The private sector shows greater interest in investing in development measures in partnership with the public sector.
Approach
As a rule, the private partners contribute 50% of the total funding for the agreed development partnerships. Their input consists of supplying sundry materials and technical advice, covering the costs of certification, and guaranteeing to purchase the produce.
As the public sector partner, GIZ’s input consists of facilitating access to producers’ groups and cooperatives, supplying high-quality seed and propagating materials, identifying partners in the target groups, training them and facilitating organisational development through various service providers.
The famers, who lack the know-how and capital needed to set up plantations, provide land and labour.
Results achieved so far
To date, nine development partnerships are being implemented with private businesses that have bases in Côte d’Ivoire, in the most important agricultural value chains: cocoa (Kraft Foods, CEMOI, CARGILL, Barry Callebaut, Touton), rubber/latex (SAPH, SOGB, CHC), palm oil, (PALMCI, CHC) and jatropha (Ewa). All these companies belong to multinationals with headquarters in Europe, the USA or Asia. The existing partnerships with Cargill and Kraft Foods are being continued by the private sector partners, without any further support from GIZ. This outcome confirms the value of the project concept and it increases the sustainability of the agricultural innovations.
The first partnership agreements with German companies will be signed before the end of 2010.