Asia | Smallholder farmers

From farmer to bar: a fair cocoa supply chain

18 November 2020 10:00

Indonesian craft chocolate company Krakakoa is making the cocoa supply chain more appetizing for smallholder farmers: by engaging directly with farmers to increase the quantity and quality of their harvest. From “farmer-to-bar” ensures that cocoa farmers earn a better income by shortening the supply chain and processing cocoa beans locally.

Cocoafarmer Indonesia

Krakakoa works with, and for, cocoa farmers who want to earn a better, fairer price for their cocoa. Cocoa they grow with respect for the environment. They are building a better future for themselves while preserving the local natural environment. Many cocoa bean farmers do not know how to grow cocoa properly and as a result, they produce low-quality beans. On top of that, intermediaries in the cocoa supply chain often do not pay a fair price to cocoa farmers.

Krakakoa does things differently

Sabrina Mustopo used to work for the consultancy firm McKinsey, focusing on topics such as climate change and agriculture. She decided to put her knowledge and experience into practice in order to bring positive change to the way food production systems impact people and the planet, starting with cocoa. That is why she founded Krakakoa in 2013, which is now working with over 1,000 cocoa farmers. Farmers now know how to grow high-quality cocoa, combat plant diseases and dry the beans effectively to optimize their flavor.

The team at Krakakoa:

trains Indonesian farmers in sustainable farming methods in order to grow high-quality organic cocoa provides the farmers with the resources to do so, such as seedlings and pruning shears pays the farmers more than the Fairtrade Minimum price for their cocoa, increasing their earnings by up to 50%

This is what we are doing

We support Krakakoa by providing working capital tailored to the harvest seasons. This way Krakakoa is able to buy more cocoa beans from more farmers and pay them on time. A logical next step would be to finance export contracts, fueling international growth. Sabrina Mustopo: "The Rabo Foundation has been instrumental in helping us continue our operations with our farming partners as per normal in spite of the challenges from COVID-19 this year. Because of the Foundation, we have been able to continuously source from our partners without interruption."

Boost to the economy and community

Krakakoa is delivering higher incomes for smallholder cocoa farmers, enabling them to make a better living to support themselves and their families. They achieve this by eliminating intermediaries from the supply chain. The smallholder farmers receive more than double the market price for their cocoa beans. This allows for better living conditions for the farmers. It also reduces the number of young people leaving the countryside for the city, by showing them that agriculture can be a good way to make a living.

Ecological impact

Krakakoa’s cocoa beans are also environmentally friendly. Farmers grow these beans with respect for the environment. They use natural fertilizers and allow the beans to dry in the sun. In partnership with NGOs such as the World Wide Fund for Nature, Krakakoa ensures that no forests have to be cleared to grow cocoa. Krakakoa completes the circle for smallholder farmers: from growing cocoa beans to making chocolate bars, it all happens in Indonesia. From farmer-to-bar, Krakakoa brings cocoa supply and demand into balance. That makes their award-winning chocolate bars taste all the better!