Promotion ofsustainable coffee industry by improvingproductivitywith a particular emphasison the involvement ofyouth and womeninthe value chainin Cameroon andCentral African Republic

Aground coffee saleswomanin Bangui market(Kilometer5), Central African Republic

Project proposal submittedto the Common FundforCommoditiesfor Funding

March 2013

Contents

LOGICAL FRAMEWORK

ACRONYMS AND ABBREVIATIONS:

SUMMARY OF THE projeCt

1. Introduction

1.1. Project Background

1.2. General Overview of the Coffee Global Market

1.2.1. Price Trends

1.2.2. Changes in the Global Production

1.2.3. Exports

1.2.4. Global Consumption

1.3. Opportunities andChallenges of the Coffee Economy in Cameroon and Central African Republic

1.3.1. The Place ofCoffeein the Economyof Cameroon

1.3.2. The Place of Coffee in the EconomyCentral African Republic

1.3.3. Challenges of the Coffee Economy in Cameroon and Central African Republic

1.3.4. Challenges related to theplace of womenin the Coffee Economy in Cameroon and Central African Republic

1.4. Relevance of the projectin the context ofICO strategy

1.5. Relevance of the projectin the context thenew funding policyof the Common FundforCommodities

1.6. Involved Institutionsand Responsibilities

1.6.1. Supervisory Body: International CoffeeOrganisation (ICO)

1.6.2. Project Execution Agency (PEA): InterAfrican CoffeeOrganisation (IACO)

1.6.3. Collaborating Institutions

1.7. Objectives andProject Rationale

1.8. Related Projectsand previous Works

2. projeCtCompoNEnts

2.1. Summary of the components

2.2. Detailed Description the Project Components

Component 1:Improving the level ofcoffee production

Sub-component 1.1: Development of adatabase on theproducers andproduction areasof coffee

Sub-component 1.2: Rehabilitation of over-aged coffee farms potentially productive(maintenance andcoppicing)

Sub-component 1.3: Rejuvenationof the orchardwith the involvement ofyouth and womencoffee producers

Sub-component e 1.4: Coffee producers Capacity building(technical supervision)

Component 2: Developmentof agricultural practicesrespectful of theenvironment andcapacity buildingforverificationandcertification

Sub-component 2.1: Improvingcoffee farming practiceincludingoptimal use ofenvironmental resources

Sub-component 2.2: Capacity buildingfor coffee certificationand verification

Component 3: Capacity buildingof the producer organizationsin thedomestic marketing

Component 4: Capacity buildingforlocal processing anddevelopmentof domestic consumption

Sub-component 4.1: Capacity buildingforlocal processing

Sub-component 4.2: Developmentof domestic consumption

Component 5: Coordination, supervision, monitoring and evaluation of the project anddissemination of results

3. ADvantages ANDbénéficiarIes

4. environmentaLAspects

5. intellectuAL propERTY RIGHTS

6. PROJECTCOSTS AND FUNDING

7. WORK PLAN

8.SUPERVISION,MANAGEMENT, MONITORING AND EVALUATION OF THE PROJECT

8.1. Project Execution Agency (PEA)

8.2. National Structure forthe Project Management

8.3. Monitoring and Evaluation

8.4. Steering Committee

9. PROJECT RISKS

10. Annexes

Annex 1: Work Plan

Annex 2: Project Detailed Cost

Logical FRAMEWORK

Project Title:Promotion ofsustainable coffee industry by improvingproductivitywith a particular emphasison the involvement ofyouth and womeninthe value chainin Cameroon

andCentral African Republic (CAR)

Estimated Project Starting Date:October 2013 Estimated Project Completion Date:September 2017 Date of this Summary: 13March 2013

Date of this Summary / Observed Verifiable Indicators (OVI) / Means of Verification / Assumptions
Objectiveof the Programme:
Theoverall objective of theproject is to promotesustainable coffeethrough the revitalizationof the entirevalue chainfrom production toconsumption andthus reducepoverty in rural areas. /
  • Increasing productivity;
  • Increasingthe number of producersattractedby coffee growing;
  • Gradual improvement ofcoffee qualityinbothcountries
  • Increasingthe income ofcoffee producers
  • Increasingdomestic consumption
/
  1. Analysis reportof project impact.
  2. Coffee Marketing Statistics.
  3. National Agricultural Statistics.
  4. UNDP report on Human Development
  5. ICO Statistics
/
  1. Afavorablemacroeconomic environmentis created.
  2. Thatgovernment policyaimed at reducingpoverty incoffee growing communitiesis maintained.
  3. Thatrebel activitiesinthe Central African Republicdo not spreadto disruptthe implementationof the project inselected areas;
  4. Continued commitmentof the Governmentto reduce povertyin rural areas

Objectivesof the projects:
  1. Build adatabase onproducers
  2. Sustainably improvecoffee productivity andquality.
  3. Build the capacity ofproducersfor verification andcertification
  4. Support tocoffee marketingfor anactive involvement of producersinthe value chain
  5. Support tolocal processing anddevelopment of domestic consumption.
  6. Supportthe effective involvement ofyouth and womeninthe revitalization of thecoffee economyin both countries
/
  1. Precise knowledge ofproducers andproject areas;
  2. Increases of at least30%of the performance ofrehabilitated aged orchards;
  3. Achieving ayield of at least1 tone /hain newclonal plantationsdeveloped;
  4. Increases in theincomes of Coffee producers;
  5. Number ofyouth and womenselectedby the project;
  6. Increasing the number ofyoung people attracted bycoffee production.
  7. Farmgate priceactually paidto producers
  8. Multiplication ofcoffeesales outletsmanaged byyouth and women
  9. Coffee Research activityagainrelaunched inRCA.
  10. Results of projectsaccepted bybeneficiary governmentsand the national budgetcommitted tothe expansionof the project.
/
  1. Agricultural Statistics.
  2. ProjectMonitoring Report.
  3. Mid-term andproject completion Reports.
  4. ICO Statistics
  5. Trade Statistics.
/
  1. Coffee producershave the capacityand are happy toparticipate in the project.
  2. Governments public and private institutionseffectively participatein the project;
  3. The Common Fundaccepts regulartransfersof donationto fundproject activities;
  4. Adequate support measuresproposed by the projectfor youth andwomento bring them toparticipate in the project.
  5. Localcoffeepricescompetitive enoughcompared toother beverages
Appropriate regulatory provisionsto organize theprofessionroaster andguarantee public health
Outcomes:
  1. Database andinformationon areas andcoffee producers;
  2. Productivity ofimprovedold plantations.
  3. CuttingsrehabilitatedCentersin CAR.
  4. Creation of nurseries.
  5. Development of newhigh yieldingclonal plantations/improved production.
  6. Preferential pricepaid forquality coffee.
  7. Farm-gate pricesactually paidto producers;
  8. Coffee producershave incomeon a permanent basis.
  9. Coffee growingbecame anothersource of employment forthe youth;
  10. Role of womenin strengthened coffee industry;
  11. Producer organisationseffective and well managed;
  12. Adoption by producersof agricultural practicesfor certified coffees.
  13. Coffeehas again become amajor export cropin CAR andCameroon.
  14. Expansion ofcoffee processing activities tosupply the local market.
/
  • Selection of at least16,000producersin Cameroon and9000 in CAR.
  • Data managementsoftwaredesigned;
  • Yieldincreasesof100 kg /ha;
  • Development ofrooted cuttings
  • Yield of 1t /haandproducers' incomeshave increased.
  • Youth and womeninvolved incoffee industry;
  1. Producer organizationscan have access to bank loans;
  2. Foodsecurity situationin CARimproved.
  3. Value-added activitieshave increased;
  4. Certified coffeeexports;
  5. All the ground coffee saleswomenidentifiedand mentoredin CAR.
/
  1. Project Impact Studies
  2. Surveysof producers
  3. Agricultural Statistics
  4. Trade Statistics;
  5. Reportsof regulatory bodiesof the sector;
/
  1. World coffee pricesare keptat remunerative levels;
  2. Regulatory structuresof the sectorcontinue tosupport the project;
  3. Relatively goodinfrastructureforcollectingproducts;
  4. Local coffee processorshave the processing capacitytomeet local demand.
  5. Young peopleand women haveaccess to land;
  6. Young people findattractive employment option in agriculture.

Outcomes: Activities and Resources
  1. Baseline surveyon the current situationof producers andproduction areasselected;
  2. Rehabilitation ofexistingorchard by maintenanceand coppicing;
  3. Rejuvenationof the orchardwith the involvement ofyouth and women;
  4. Traincoffee farmersin good agricultural practices.
  5. Improvingcoffee quality;
  6. Buildingthe capacity ofproducers forcertification and verification;
  7. Building the capacityof producer organizationsininternal marketing;
  8. Expanding accessto credit forfarmers and their organizations;
  9. Building the capacityforlocal processing;
  10. Developingdomestic consumption;
  11. Coordination, supervision, evaluation and dissemination ofprojectresults
/ Effort level/Expenditure
Component: 1 533 400US $
Component2: 640 000
Component3:1 124 600
Component4: 766 700
Component5: 1 245 150
Total:5 309 850US $
FCPB: 4 713 900
Donation: 2 411 900
Loan: 2 302 000
Cameroon:3 249 900US $
CAR:2 059 950US $
Cofunding:to be determined
  • Cameroon:
  • CAR:
Counterpart:
  • Cameroon:334 200US $
  • CAR: 261 750 US $
/
  1. Progress reportsof the project by the ProjectExecution Agency;
  2. Annual Audit Reports.
  3. Monitoring andother periodical reports.
  4. Participation of the Steering Committee;
  5. Intermediate Evaluationsandfinal Report.
  6. ICOand CFC Supervision Reports
/
  1. All fundsare providedin due coursein accordance with theschedule of activities andworkplans;
  2. Goodcoordinationof activities bythe Executing Agencyand collaborating institutions;
  3. Bothcountries remaininvolved in the project

ACRONYMS AND ABBREVIATIONS:

ACDACentral AfricanAgencyfor Agricultural Development

AEP/PEAProject Executing Agency

AGAAnnual General Assembly

PMEOProject Monitoring and Evaluation Officer

USAIDUnited StatesAgencyfor International Development

RAADRegional Agricultural DevelopmentAgency

ADBAfrican Development Bank

PEOProject Extension Office

WTCWorld Trade Center

ICCCCocoaand CoffeeInterprofessional Council

CAEMCCentral African Economic and Monetary Community

CFACurrency for the FinancialCommunity ofCentral Africa

ICHInformation Clearing House

PAProject Accountant

CMRCameroon

NSCNational Steering Committee

UNCTD UnitedNations Conferenceon Tradeand Development

CSPPRCACAR Stabilization andProducts Fiscal EqualizationFund

STCScientific and Technical Committee

VTAVillage Technical Advisors

VSCVirtualScreeningCommittee

DMPDeputyProgramme Manager

MDManaging Director

US $ American Dollar

PDProgram Director

O&MOperation and Maintenance

EDFEuropean Development Fund

ADF African Development Fund

FAOFood and Agriculture Organisationof the United Nations

CCFCocoa and Coffee Fund

CFCCommon Fund for Commodity

FFSFarmer Field School

IMFInternational Monetary Fund

FODECCDevelopment FundforCocoa and CoffeeSectors

HaHectare

ICCOInternational Cocoa Organisation

ICRACentral African Agricultural ResearchInstitute

IRADAgricultural ResearchInstituteforDevelopment

MAMinistryof Agriculture

MCIMinistryof Commerce Industries

SBSupervisory Body

MDOMillenniumDevelopment Objectives

IACOInterAfricanCoffee Organisation

ICOInternationalCoffeeOrganisation

PIBProduct International Body

ONCCNationalCocoa and Coffee Boardof Cameroon

NGOsNon Governmental Organisations

ORCCPACrop Marketing and Storage Regulation Office of CAR

MoUMemorandum of Understanding

WFPWorld Food Programme

PDRSCSouth-CentralRegionDevelopment Programme

GDPGross Domestic Product

GNPGross National Product

CCSPCocoaandCoffee Seedsprogram

CARCentral African Republic

ACRNAfrican Coffee Research Network

UCCAOCentral Union ofWestern Agricultural CooperativeCorporations

UEEuropean Union

SUMMARY OF THE PROJECT

Project Title : / Promotion ofsustainable coffee industry by improvingproductivitywith a particular emphasison the involvement ofyouth and womeninthe value chainin Cameroon andCentral African Republic.
Duration : / Five years
Location : / Cameroon andCentral African Republic
Nature of the project : / Promotingsustainable coffeeby improvingproductivity andproduct quality,as well as theincreased participationof youth andwomen inthe value chain.
ProjectDescription : / The objective of thisproject is to supportthe efforts made bythe governments of Cameroonandthe Central African Republicto revive andrehabilitate theirdeclining coffee sectorto boostthe rural economy,generate income forfarming communities andreducecoffee producers’ poverty.The revivalin the coffee sectorwill take into accountthe involvementof youth andwomen inthe activities of thevalue chainin both countries. To achieve this,the project will becomposed of fourmain components, including production,marketing, processinganddomestic consumption.Specifically,theproject will include thefollowing:
iImproving productivityand qualityof coffee;
iiCapacity building ofproducers forcoffee verification and certification;
iiiSupport for marketing;
ivDevelopment ofadded value throughthe promotion of coffeelocal processing anddomestic consumption.
Project Total estimated cost: / 5 309 850US $
–Cameroon : 3 249 900US $
–Central African Republic: 2 059 950US $
Fundingfrom the Common Fund(CFC) : / –Donation: 2 411 900US $
–Loan: 2 302 000US $
–Total CFC: 4 713 900US $
Loan from CFC: / –Cameroon: Loan: 1 591 000US $
–Central African Republic: Loan: 711 000US $
Counterpart Contribution: / –Cameroon : 334 200US $
–Central African Republic: 261 750US $
Project Executing Agency (PEA) / InterAfrican Coffee Organisation (IACO)
Supervisory Body / International Coffee Organisation (ICO)
Estimated Project Starting Date : / October2013

ObjectivesandProject Rationale

The objective of thisproject is to supportefforts by bothcountriesto revive andrehabilitate the decliningcoffee sectorto boostrural economies,generate income forcoffeefarming communitiesand reducepoverty amongcoffee producers.Objectives are setforthe concerned project implementation. This includes:

i)Increase productivity ofcoffee farmersto 1 tone perhectare.

ii)Improvecoffee qualityand thereby increasethefarmgate priceby endthe project.

iii)Encourage, motivate andbringinitiallyyoung men and womenin Cameroonand CARdirectly in the productionof coffeeon a morepermanent /sustainable.

iv)Rehabilitate potentially productiveold orchards.

v)Create newplantations onfallowsorin replacement ofold orchards.

vi)Encouragedomestic marketingbyproducer organizations.

vii)Encourage local processingandincrease domestic consumption.

1.Introduction

1.1. Project Background

Agriculture playsa key role inthe achievement ofdevelopment objectivesto promotegrowth and reducepoverty in Africa. It provideslivelihoodtomore than 80%of the African populationandprovides employmentforabout 60% ofthe economically active populationandabout 70% of the poorest on the continent.Also, formost of the twentyfive African countriesmembers of the InterAfricanCoffee Organisation (IACO) some of whichare among the14poorest countriesof the planet, coffee is of vital importance. Themagnitude of povertyis very pronouncedin rural areas.

In Cameroon andCentral African Republic,coffee has playedand continues to playan important role inthe economy.Coffee productionbegan andwas promoted inboth countries duringthe colonial era.This is importantbecause thedevelopment efforts madeforthe coffee industryat that timeenabled theresource-poorcoffee farmersto benefit fromrelatively high levels ofincome from their activityduring theperiod of high prices.

More than 3million peopleearn their livingin Cameroon, directly or indirectly, through the coffee.Of these 3million people,it is estimated that400,000farm households, that is about 2.8million peopleare active in theproduction of primary coffee(coffee growing), most of them beingresource-poor smallholder farmers. Women representabout 50percent of thecoffee growingpopulationand areprimarily engaged inactivities such aspicking coffee, drying andintercropping food crops. Other stakeholders inthe coffee sectorin Cameroon include70,000employments inthe manufacturing sector,70,000in marketing,7000in processingand distribution,7000andin quality controland agricultural fertilizers and 7000in auxiliary servicessuch asland transportand transit.

In Central African Republicit is estimated thatsome400,000people livedfrom coffeebefore the beginning ofthe war.This numberwas reducedsince the warto about30,000households that is about 200,000 people active in the production of coffee, with an average area of​ one hectare perfarm household.The other stakeholdersin the coffee sectorareexporters, machinists, traders and processors.The coffee industryof the two countriesthus providessubstantial incometo a largenumber of people,especially womenandpoor rural populations.

However, duringthe last twelve years, the coffee sectorhas considerably weakened inthe two countries.In Camerooncoffee productionfell by 60% between 1999/2000 and2011/12.Over the same period, the production ofCARdecreased by 50%. Cameroon and theCentral African Republicareamong the victimsof decliningfortunes ofthe coffee industryin Africa.The decline of theAfrican coffeeindustryraises concernsandAfrican producersare oftenencouraged to adoptappropriate strategies toincrease their production,improve the quality oftheir coffeeand increasefarm-gate price.

It is in thisperspectivethat thisproject was submittedby the two countriesto supporteffortsby the governments ofCameroon andthe Central African Republicto boostcoffee industryon a sustainable basisthrough improvedproductivity,quality andmake small coffee producers benefit fromhigher pricesand increase their incomeas well.

1.2. General overview ofglobal coffee market

1.2.1. Evolutionof prices

Like many other agricultural raw materials, the global coffee market is characterized by cyclical evolution of prices. A short period of high prices is followed by another relatively long depression of prices. Prices which were at relatively high levels during the second half of the 1990s were at their lowest levels ever recorded in the early 2000s. The annual average of the ICO composite price fell from 138.42 U.S. cents per lb in 1995 to 85.71 cents in 1998 then fell to very fluctuating levels for several years about 45 cents a pound. From the coffee year 2004/05, prices have gradually improved since the average of the ICO composite price reached 210.39 U.S. cents per lb in 2011. In a specific way, the target price of Robusta reached 109.21 U.S. cents lb versus 27.54 cents lb in 2001. Despite the downturn over the last months, prices remain relatively high, especially for Robusta since the average of ICO composite price for the first eleven months of 2012 was 103.37 US cents lb (Figure 1).

1.2.2. Evolutionof global production

Global production of the campaign 2011/12 is estimated at 134.6 million bags of 60 kg including 81.3 million bags of Arabica and 53.3 million bags of Robusta. Robustas accounts for about 39.6% of global production against 60.4% for Arabicas. Production reached record levels in recent years because of performances in Asia (Vietnam, Indonesia, and India) and South America (Brazil, Peru). Except for Ethiopia and to a lesser extent Uganda, the other African countries have problems in their coffee sector (Figure 2).

Coffee productionin Africadeclinedfrom an annual averageof20 million bagsin1970and 1980 to15 million bagssince the beginning ofthe 2000s, which is a fall of25 percent.

1.2.3. Exports

Exportsof allproducing countriesinthe coffee year2011/12was107.8 millionbags of60 kgof which only10.5 millionbagsfrom Africa, or 9.8% of the total exportsof allproducing countries.At the beginning ofthe 2000s, its share was15.4%.

1.2.4. Global Consumption

The total consumption during the calendar year 2011 is estimated at 139 million bags, including 42.4 million bags for domestic consumption in exporting countries. Consumption in the traditional markets of importing countries is estimated at 96.6 million bags while that of emerging markets is around 25.8 million bags. The annual growth rate of global consumption during the period of 2000-2011 was 2.5% against 1.8% during the period of 1990 to 1999, thus indicating a strong consumption dynamics since some ten years. The way forward for coffee demand continues to be promising mainly in emerging markets and in producing countries, in addition to the expansion of niche markets. The dynamics of consumption could help to keep a sustainable balance between supply and demand as a factor for price support. Besides, its historical evolution since forty years shows a compound average growth rate of 1.6%. Figure 3 shows the way forward for consumption by 2020 according to three possible scenarios: low (1.5%), medium (2%) and high (2.5%). In all these scenarios, a relatively significant growth in consumption is planned, and that can exceed production as well. In the low case scenario, global consumption could exceed 157 million bags by the year 2020.

Figure 3:Way forward for Global Consumption (1970-2020)

Given the way forward of global demand, the decline inthe African coffeeindustrytherefore raisesconcerns andAfrican producersare oftenurged to adoptappropriate strategies toincrease production,improve the quality oftheir coffeeand increasefarmgate prices. Inother words, thesecountries are invited totake necessary measuresto ensurethe sustainability of theircoffee sector.Also,this projectgivesthe possibility to supportthe efforts made bythe governments of Cameroonand theCentral African Republic toincreasecoffee production,improve the quality and benefit fromhigher prices andincrease the incomes of coffeesmallholders.

1.3. Opportunities and challengesof the coffee economyin Cameroon andCentral African Republic

1.3.1. Place of coffeein the economyof Cameroon

Cameroon covers a total area of ​​475 442 km2 with a population estimated at 19.5 million inhabitants. With aper capita GDP of U.S. $ 1136 per head,Cameroon is the greatest economy of the 6 countries of the Economic and Monetary Community for Central Africa (CEMAC). Despite the diversification of its economy and the discovery of oil, agriculture remains the mainstay of the national economy. In fact, nearly 40 percent of the population is categorized as poor and most of that portion of the population lives in rural areas and earn their living from agriculture. The formal sector of the country can employ only 4 percent of the population. Agriculture and non-agricultural informal sector employ more than 90 percent of the population. It is also estimated that approximately 33 percent of the active population over 15 years is unemployed or underemployed.

The economy of Cameroonisheavily dependent onagriculturealthoughoil isa significant sourceof income.The agricultural sector isrelativelywell diversified.It employs more than75% of theworkforceand produces nearly25% of GDPand over 25% of export earnings.Agricultural productsin Camerooninclude wood,coffee,tea, bananas, cocoa, rubber, palm oil, pineapple and cotton.Coffee productionis split between80%Robustaand20%Arabica. The proportion ofArabicaincreased to almost35% in theseventies. Robusta coffeegrows mainlyin thecoastal, Western, South-westernand Eastern provinces. The majority of the farmsare of small sizeof less than 3hectares,with an average of0.5 hectare.Production areasof Arabicaare found mainly inthe West,South-westandNorth-westof the country.The cultivation of thesetwo types of coffeecovers an areaof almost 140000 hectaresand employs about400,000producers.