For the last five years, the United Nations Development Programme has worked with some of the world’s biggest producers of commodities like beef, soy, palm oil, and cocoa to protect livelihoods and the planet.
Cocoa farmers in Padre Abad in Ucayali, Peru, benefitted from UNDP support to produce sustainable cocoa. Credit: UNDP
– In 2015, just over 30 cocoa farmers from Padre Abad in Ucayali, a province in the lush and ecologically diverse Peruvian Amazon, formed an alliance to tackle long-standing concerns such as soil quality, access to markets, fair prices for their produce and a growing number of illegal plantations. The result was the Colpa de Loros Cooperative, and from the start, the goal was to produce the finest quality, export-ready cocoa.
Membership would grow to over 500 partners covering 200 hectares of land today.
For almost four years, the cooperative’s small producers worked tirelessly on the transition of the area from traditional but environmentally taxing cocoa harvesting to growing premium cocoa that could meet export demand in the chocolate industry. This was no easy feat, as fine-flavor cocoa production demanded significant investment in technical training for members, initiatives to monitor deforestation, and data systems to ensure cocoa traceability, production, and sales. On the education side, it demanded a change from centuries-long cocoa farming practices to the principles of agroecology.
Then in April 2023, as the farmers worked to meet demanding international certifications, the European Parliament passed a new law introducing rigorous, wide-ranging requirements on commodities such as palm oil, soy, beef, and cocoa. Now the United Nations Development Programme (UNDP) is researching how it should step up its assistance to producers to meet the new criteria.
New EU Requirements
Colpa de Loros sells 100 percent of its cocoa to a European buyer, the French company Kaoka. When word of the new European regulations hit, the cooperative had already achieved organic production and fair-trade certification. It had also attained ‘fair for life’ certification, a Kaoka-led initiative.
Attaining these credentials meant that members had been working on a blueprint for environmentally friendly agriculture systems. However, for Peru, the world’s third largest cocoa supplier to Europe, the new regulations triggered frenetic action to maintain contracts with buyers and protect the almost 100,000 small producers who depend on cocoa exports to sustain their households.
“The law affects not only Colpa de Loros, but all producers,’ said Ernesto Parra, Manager of Colpa de Loros Cooperative.
“We already have laws which require analysis of pesticides, which makes costs higher. To ensure compliance with this rule, they implement measures like regular audits. Every grain must be free of contamination. There are organizations bigger than Colpa that are experiencing difficulties to respond, and no actions have been taken by the government to support them,” he said.
The European Commission has now also introduced new forest conservation and restoration rules. The Commission said the deforestation regulation would promote EU consumption of deforestation-free supply chain products, encourage international cooperation to tackle forest degradation, reroute finance to aid sustainable land-use practices, and support the collection and availability of quality data on forests and commodity supply chains.
Parra says this commitment to the environment complements the cooperative’s core values.
“The cooperative aligns with this green pact signed by all actors in Europe to not buy chocolate from deforested areas or involving child or forced work. They not only promote the protection of the environment, but reforestation, land protection, recycling programmes, and biogas from cacao liquid. We agree that cocoa can’t come from deforested areas or make new plantations in protected areas.”
While the cooperative is firm in its environmental consciousness, Parra says the investment is needed in educational activities and technical support for rural farmers who are struggling to accept the realities of land degradation and climate change.
“Some of them are still burning forests. Organizations need to convince the base of producers and farmers to change. Not only their partners but all people in the communities. Incentives can help. For example, I can be carbon neutral, but I’m going to have a higher cost, and if the market does not recognize it, if I don’t have an incentive, the standard will be difficult to maintain. Our cooperative gives its own incentives: those who commit to the organic certification receive fertilizer produced by Colpa de Loros to increase production.
“It is a start, but this is not enough. The state or the market needs to offer incentives as well.”
UNDP Support – and Good Growth Partnership Scoping
The United Nations Development Programme (UNDP) has been working with the world’s commodity-producing countries to put sustainability at the center of supply chains.
For the past five years, its Good Growth Partnership (GGP), based on the tenets of the Sustainable Development Goals and funded by the Global Environment Facility, has struck a balance between livelihoods and environmental protection—prioritizing people and the planet.
From Brazil to Indonesia, the GGP has embraced an Integrated Approach, working with producers, traders, policymakers, financial institutions, and multinational corporations to build sustainability in soy, beef, and palm oil supply chains.
Peru has so far not been covered by GGP but is being scoped for possible assistance under a next phase of the programme.
In the meantime, the UN agency has been supporting Peru to achieve sustainable commodity production- a target that remains crucial in the face of the new EU regulation.
“The control and monitoring of all production processes had to be doubled, and UNDP is vital here. With its finance, the technical department was strengthened, agricultural technology was incorporated, and members received capacity building in sustainability and food security,” said Parra.
Each member of Colpa de Loros is responsible for 3-4 hectares of land. The GEF-financed Sustainable Productive Landscapes (SPL) in the Peruvian Amazon project, led by the Ministry of Environment with technical assistance from UNDP, has been supporting projects that enhance food production while protecting water and land resources.
“The organization’s cocoa is not conventional cocoa. It is a fine aroma cocoa. So, producers needed equipment for special analysis. Then all information needed to be organized in a digital platform. UNDP helped in these areas,’ he added.
“The GEF-financed SPL project provided US$150,000 to complement the work of the organization with maps, digital platforms, and traceability. As there is no global system of traceability, Colpa is using its own, which is expensive.”
Action Plans
The UN organization, working closely with the Ministry of Agriculture, has also been assisting the Government and industry partners to develop and implement national action plans for the cocoa and coffee sectors. The Peruvian National Plan for Cocoa and Chocolate was unveiled in November 2022. It breaks down divisions between production, demand, and finance issues in agriculture. It also contains clear strategies to increase sustainability based on science, technology, and tradition.
The plan complements the values of UNDP and represents a win for both farmers and the environment.
“It is important to recognize that many Peruvian farmers’ cooperatives and companies, regardless of the EU regulation, are concerned about the potential impacts of their production systems on the environment, and they are increasingly conscious of the impacts that climate change is having on their production systems,” said James Leslie, Technical Advisor Ecosystems and Climate Change at UNDP Peru.
“Now, the concern is the feasibility of complying with the EU regulation and in the timeframe required. This concern is directly related to the fact that the EU markets are important for Peruvian agricultural products, particularly coffee, and cocoa. There is a concern that with the new EU regulation, there can be restricted or more challenging access to the market.”
The UNDP official says meeting stringent sustainable production requirements comes at a hefty cost to owners of small and medium-sized farms.
“There is not necessarily a price premium for their products due to certification,” he said. Incentives are a key factor in GGP’s work in encouraging farmers to adopt sustainable practices.
“It’s important also to recognize that there is a difference within the farmer population. Some farmers are organized and are part of cooperatives. For example, roughly 20 percent of cocoa and coffee farmers are organized in some way, which means that 80 per cent are not. Those unorganized farmers are less likely to be certified, and they are less likely to be accessing stable markets that provide some price guarantee.”
According to the UNDP, Peru ranks 9 in the world’s top ten cocoa producers and tops the world in organic cocoa production. The majority of farmers are small-scale and medium scale. Leslie says many of these farmers are either living in poverty or vulnerable to falling below the poverty line.
“Add to that additional restrictions and costs in order to access markets, and it poses a risk for these farmers—for their wellbeing and livelihoods,” he said.
The Future of Sustainable Agriculture
Looking ahead, Leslie says access to traceability systems is important. The farmers will need to prove that their production has met the EU requirements.
He says the Government will also need to expand technical assistance, increase investment in science and technology, including the purchase of climate change-resistant crop varieties, and ensure that farmers can receive finance aligned with the EU regulation’s sustainability criteria.
Clear land use policies will also be needed to delineate land that is appropriate for agriculture and particular types of crops. Areas that must be regenerated should be clearly marked, along with those that should be conserved, such as watersheds and zones of high biodiversity value.
For Colpa de Loros, Parra says the goal must be to strike a balance between sustainable land use and livelihoods.
“For deforestation, there is a big relation to poverty. The majority of the time a producer cuts down a tree, it’s because of need.”
He says the challenge is to create a supply chain that is sustainable, competitive, and inclusive – a goal that is attainable with adequate support and buy-in from every link in the value chain.