Villa Andina, Peru

Definition
Devising project idea, defining the aim and main components
Design
Specifying details such as time-frame, budget, target indicators, project partners and relevant steps to reach the project objectives
Open to Financing
Searching and securing funding and investment, setting up relevant financing partnerships, and discussing payment modalities
Implementation
Execution of feasibility studies, context analysis, plot design, planting and setting up facilities and starting with potential capacity-building
Maintenance
Operational phase (monitoring and evaluation, impact assessments and adjustments, execution of educational programmes and long-term capacity building)
Scaling Up
Scaling up phase is when the project it has already shown success by obtaining impact as well as economic results and it's ready to become replicable.

Villa Andina (VA) was founded in 2007 and is a leading certified organic superfood manufacturer and exporter in Peru. The company works closely with farmers and is active throughout the supply chain of cacao, dried superfoods, and Andean grains, with a total of 30+ final products sourced from 7 regions within Peru.

However, VA faces several intricately interwoven problems, including poverty, gender inequality, deforestation, and land degradation in the Ucayali, Huanuco, Pasco & Junin (UHPJ) departments of the Peruvian Amazon. They respond to these social and environmental challenges by implementing a holistic approach to working with smallholder farmers and building sustainable supply chains. With the support of reNature and DIBcoop, VA wants
to transition to diverse agroforestry-based cacao production systems and improve operations along the supply chain, in order to increase farmer income and create resilient farming systems.

This project is open to financing

support

Tackling social issues through cacao farming

The main target group consists of 2.000 smallholder cacao farmers in the UHPJ region, of which 33% are female. With the investment, VA will employ 17 new people.

In the remote areas where VA sources cacao, farmers struggle to make ends meet. Although poverty fell significantly on a national level, 40% of the population still lives below the poverty line in some regions where VA operates. Gender inequality is also a deep-rooted problem in the rural areas of Peru. Agriculture in the project regions is the largest source of income that supports rural livelihoods.

However, smallholder farmers face many challenges such as market access, high dependence on extractive middlemen and intermediaries, inconsistent and below-market prices, low and variable product quality, and limited access to capital. Additionally, land degradation and climate change present serious threats to the ecosystem and livelihoods of local farmer communities.

Meeting this challenge requires a shift towards regenerative farming systems that include better soil management, improved water retention, higher biodiversity and increased carbon sequestration through the establishment of multi-strata agroforestry systems.

With the support of reNature and DIBcoop, VA will provide training for farmers to facilitate this transition, which will ultimately help increase productivity and incomes for farmers, improving the resilience of the cacao production systems.

Farmer Field School (FFS) approach

VA is seeking to expand and improve its cacao operations in the Ucayali, Huanuco, Pasco & Junin regions. Essential in this project is the improvement of financial sustainability by enhancing social and environmental business parameters, including improved farmer capacity to ensure high-quality cacao yield, implementation of regenerative organic practices, and improved climate resilience through multi strata agroforestry. The overall project objective is to improve the livelihoods of farmers and workers and establish a climate-resilient farming system which together will improve the sustainability of VA’s regenerative organic cacao operation.

A participatory Farmer Field School (FFS) approach will be used to train farmer leaders and promote the adoption of best practices in agroforestry and bring about a local multiplier effect in farmer communities. This method aims to generate a larger sense of ownership of farmers over the project. This, in combination with increased skills and knowledge, will ensure the long-term success of the project.

Additionally, direct linkage to farmers is essential to VA’s business model, so after project closure VA will still be regularly in contact with farmers, allowing for monitoring and follow-up on project measures.

Improved ecological functioning of the farming system

The new farming system includes the development and implementation of multi-strata agroforestry systems that are designed in participation with cacao farmers and with support from DIBcoop’s FarmTree Tool (FTT) for modelling agroforestry systems.

The intervention will lead to the improved ecological functioning of the farming system, making it more resilient to the extreme effects of climate change. Also, it reduces the risks of losing crops to pests, extreme weather events, or prolonged droughts and reduces the need for chemical inputs. It safeguards farmers’ main source of income and the health and productivity of their farms.

The positive impacts associated with improved farm management and soil health will benefit farmers and future farmer generations to come.

Long-term commitments towards improving farmer capacity

VA’s long-term commercial interest is demonstrated by its proven business track record that is founded on the strength of building relationships with local smallholder farmer communities and a commitment to a fair and transparent raw material purchase process. VA sources directly from smallholder farmers and removes intermediaries from its supply chain, which ensures traceability and increases the prices paid for the raw materials.

By making long-term commitments towards improving farmer capacity and purchasing certified raw material, VA is well-positioned to expand its business model and become a stable economic driver by providing farmers access to international markets. Tree crops such as cacao require a long-lasting commercial interest. In the long term, where cacao is the economic driver, VA wants to expand its business model, products, and services and facilitate the presence of even more market options for farmers (through ginger, for example, which is known to perform well in combination with cacao).

Central to VA’s business model is the shortening of supply chains and establishing direct contact with farmers. By eliminating intermediaries VA can offer farmers a better price and contribute to their livelihood while at the same time increasing traceability and sustainability of their operation and products.

By working with VA, smallholder farmers are able to access international markets and benefit from consistent prices and reliable purchase agreements. As part of the new agroforestry system, VA will introduce ginger as a ground cover crop to help boost farmer incomes during non-harvest seasons.

Additionally, VA provides ongoing technical assistance, capacity-building workshops, financing support, and additional support related to securing and maintaining organic certifications.