This article was originally published in the iMPACT Magazine Jan-Mar Issue and can be viewed/ downloaded from their website.
Globally, the face of sustainably produced or sourced cocoa tends to be more of an environmental concern. Historically, cacao production is linked to deforestation, biodiversity loss, and soil degradation in major cacao-producing countries. However, taking the fundamental elements of market systems approach, sustainability transcends environmental considerations. In MEDA’s integrated market systems approach, sustainability does not only entail environmental aspects, but economic, social, and governance factors as well.
In MEDA’s Resilience and Inclusion through Investment for Sustainable Agrikultura (RIISA) Project, a five-year initiative funded by the Global Affairs Canada, cacao sustainability is being addressed by:
- Mobilizing Environment, Social, and Governance (ESG)- focused investment for cacao sector small and medium enterprises (SMEs) and financial intermediaries (FIs)
- Strengthening the capacity of cacao cooperatives and smallholder farmers (SHFs) in environmentally sustainable and inclusive farming and business practices
- Improving key enabling environment actors’ awareness of ESG practices in the cacao market system
- Strengthening the capacity, including Gender Equality and Social Inclusion (GESI), human rights (HR), and Environment and Climate Change (ECC), of local Financial Institutions and business service providers (BSPs) to deliver better services and products to cacao SMEs and cooperatives
In the two-day National Congress held in Davao City last November, MEDA had the opportunity to share with key stakeholders how the RIISA project will contribute to cacao sustainability in Mindanao and the entire cacao industry development in the Philippines. MEDA’s side meeting featured RIISA staff describing its integrated market system approach and the gendered Environmental, Social and Governance approach and explaining how the technical assistance and gender lens investing will work. MEDA believes that cacao sustainability lies in the hands of small-scale producers as they supply 90% of the requirement of the country. Ensuring they have sufficient financial incentives such as premium price for their sustainably produced cacao, and the financing support to de-risk cacao farming enterprise will encourage and scale-up the practice of environmentally sustainable agriculture that also results in biodiversity conservation. This will prevent farmers from cutting down their cacao trees in favor of crops that give them more income but are detrimental to the environment.
Equally important to MEDA in sustainable cacao production is having the women, the youth, and indigenous people participate and benefit in the cacao value chain. From the result of RIISA’s Integrated Market Systems Analysis (IMSA), gender equality and inclusion of marginalized sector impossible if women and men, the youth and Indigenous People have equal opportunity to decide; have equitable access to information, capacity building trainings, and technologies designed to meet their needs and priorities. And lastly, indispensable for cacao sustainability is the governance factor as it cuts across environment, economics, and social factors. To this end, RIISA collaborates with cooperatives, SMEs, business service providers, and cacao industry development councils to influence and facilitate change in structure, systems, policies, and mindset that will benefit the environment, the business operations of relevant and strategic market system actors and stakeholders, and, ultimately, women, men, youth, and Indigeneous People who are small-scale producers.
MEDA believes that business solutions are a key to cacao sustainability. However, these solutions must integrate gendered environmental, social, and governance considerations in the market systems to enable the women, men, youth, and Indigenous people who are small-scale producers to have an equal opportunity and life chances in making a decent living. With RIISA, we hope that the face of cacao sustainability we put forward becomes the face of the cacao market system in the Philippines.
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