Special Partnership Issue

Newsletter 1 | April 2012

Common Fund for Commodities

THE HAGUE – At its 23rd Annual Meeting, the Governing Council of the Common Fund for Commodities, endorsed the recommendations of the Executive Board and urged the open-ended reform committee to proceed with the necessary work on the mandate and institutional reforms of the Fund with a report expected by July 2012.

The 23rd meeting, held in December 7-8 at the Steigenberger Kurhaus, was opened by the acting Chairperson, Ms. Giuseppina Zarra (Italy). The welcoming statement by the host government was delivered by Mr. Martin de la Beij, Director, Depart-ment of Sustainable Development Cooperation, the Netherlands Ministry of Foreign Affairs, on behalf of Mr. Ben Knapen, the Minister for European Affairs and International Cooperation.

In the welcoming remarks, Mr. de la Beij, said the Common Fund can still play its

role in the international global discussions on commodities and sustainable develop-ment cooperation, as new actors enter the field and influence by national governments is reduced.

“I would encourage the Common Fund to embrace emerging opportunities to engage with the private sector, intensify policy coordination and communications with other international agencies as well as NGOs and research organizations in order to deliver effective solutions for develop-ment cooperation among all its members,” said Mr. de la Beij.

Amb. Mchumo in his formal statement to the Council outlined the major highlights of the Secretariat’s work plan in 2011. He noted that the Fund’s active commodity development advocacy initiatives were especially relevant in the new reality of the global financial challenges, and particularly

Committee to present an interim report at the Executive Board Meeting in April

Open-Ended Reform Committee’s Work Underway by Member-States

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Host government representative, Mr. de la Beij, acting chairperson

Ms. Zarra (Italy), and Amb. Mchumo at the opening session of the 23rd annual meeting

of the Governing Council in The Hague.

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Content

Ms. Hadja Zenab Diallo (Guinea)

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1-2 23rd Governing Council3 Reassess Commodities Strategy

4-5 Bamboo Charcoal Provides Income Opportunities

6-9 GC-23 National Statements 10-11 2nd African Coffee

Sustainability Forum12-14 Q & A Terry Townsend (ICAC)

15 CFC-ICAC Cotton Publication 16 49th Consultative Committee

17 Spotlight on Price Volatility20 Dairy Sector

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He recapped that Fund’s contribution in 2011 to commodity dependence and market volatility discussions and outcomes of the Brussels Conference, the Global Commodities Forum, UN LDC-IV’s Istanbul Programme of Action, and the 66th session of the Second Committee of the UN General Assembly.

“The G-20 in its recently concluded meeting in Cannes presented an agenda to restore confidence in the global economy through its commitment to reinvigorate growth, create jobs, ensure financial stabil-ity, and make globalization more sustain-able and inclusive,” Amb. Mchumo said.

“It is our ardent wish and desire that concerted international action coupled with policy coherence will lead to improved economic prospects and spur growth of global economy.”

Among decisions by the Council in December, was that all steps required to launch the formal procedure to appoint a new Managing Director shall be initiated

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the impact of commodity price volatility and fluctuations on the economies of commodity-dependent developing countries.

On the reform process, being the main issue for the Council’s agenda deliberations this year, Amb. Mchumo indicated that the Secretariat had provided the necessary ground work and the adopted Agreed Conclusions contain the principles of agreement, the rationale for reform and the implementation plan for reforming the mandate and institutional structure of the Common Fund.

“The reform process is member-countries driven and I would reiterate that providing the political and philosophical rationale for and guidance on the Fund’s future is the task of member-countries,” he said. “We therefore expect and call on the member-ship to put forward all ideas regarding their vision of the Fund and its future role and mandate, as they see and envisage it.”

Mr. Thomopoulos (Greece) and Ms. Grohmann (Germany) during the 23rd meeting.

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in accordance with the decision on the reform of the CFC. A list of candidates for the position of the Managing Director shall be presented for consideration at the 24th Annual Meeting of the Governing Council. Mr. Parvindar Singh, Chief, Policy, Programme and Evaluation Unit, would serve as acting Managing Director on an interim basis with effect from 1st September 2012 for the duration up to the 24th Annual Meeting of the Governing Council, when the term of Amb. Mchumo concludes on 31 August 2012.

H.E. Amb. Sirajuddin Hamid Yousif (Sudan) was elected Chairman of the 2012 Annual Meeting of the Governing Council. The Vice-Chairpersons are: H.E. Mr. Karim Ben Becher (Tunisia/Africa Group); Ms. Giuseppina Zarra (Italy/OECD Group); Mr. Wu Mingxin (China); H.E Haifa Aissami Madah (Venezuela/ Latin American Group); H.E. Mr. Buddhi Athauda (Sri Lanka/Asian Group) Names to be communicated- The Russian Federation. •

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NEW YORK – The reform process being undertaken by the Common Fund to consolidate a more focussed mandate, greater efficiency in its operations and governance, should be a lightning-rod opportunity for the institution to continue helping commodity-dependent countries take advantage of the economic growth availed by the rapidly expanding global commodity markets.

The Managing Director, Amb. Mchumo offered this view in his address in New York, during the 66th Meeting of the United Nations General Assembly’s Second Committee, which deliberates on macroeconomic policy issues related to commodities and development.

In his statement, Amb. Mchumo called on the Second Committee, “to articulate the need for an open and flexible strategy for the new role of commodities, which could guide the development community to be wise about commodities, as a pillar of sustainable global growth and develop-ment.”

Amb. Mchumo recalled that the inter-national consensus required for global commodities supply management had not fully materialized in over 20 years of CFC operations, and that it was a clear indication that theoretical and political underpinnings for collective action in this respect, still fell short of Member Countries’ expectations.

Amb. Mchumo in a broad overview during his remarks noted that commodity-dependent countries need not wait to take advantage of the lucrative opportunities that are emerging in commodity markets.He said, “The opportunities are there and should be developed further by taking the

sector’s activities and operations, as close as possible to primary producers, while keeping the door open for the private sector and financial investors to come in at the earliest stage.”

“Finding new ways to take Member Countries out of the cycle of commodity dependency will require practical innovation and replication much like the successes, which have been documented and dissemi-nated by the Common Fund across many commodity sectors,” said Amb. Mchumo.

“Some areas still require urgent attention-raising agricultural productivity through technology and applied R&D knowledge;

Reassess Commodities Strategy to Spur Growth in Producing Countries

effective use of productive resources and water; improved market linkages; and direct measures to transfer and mitigate risk to reduce vulnerability of producers,” he said.

He reassured the Committee that: “In the run-up to UNCTAD XIII in Doha, the Common Fund will do its part in attending to these issues. We therefore welcome the renewed attention by the G20 concerning greater market transparency for the benefit of food market and price stability, but much intensified action is called for in the light of the rapidly expanding knowledge of commodity market, as mirror of global capital movements.” •

Advocacy

Improved market conditions for commodity producers can sustain global food security initiatives.

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Bamboo is a fast-growing plant and produces large amounts of biomass: an ideal energy source.

DURBAN, SOUTH AFRICA – Bamboo, a plant not often associated with Africa, may be the key to com-bating soil degradation and massive deforestation on the continent as an alternative source of energy.

A partnership among African nations and communities, the International Network for Bamboo and Rattan (INBAR) and China are working to substitute bamboo charcoal and firewood for forest wood on which 80 percent of the rural population in sub-Saharan Africa depends for its fuel needs.

INBAR’s Bamboo as Sustainable Biomass Energy initiative is funded by the Common Fund for Commodities (CFC) and the European Union (EU). The initiative is driven by growing concerns about energy, health and food security, and climate change, and is the first to transfer bamboo charcoal technologies from China to

sub-Saharan Africa to produce sustainable ‘green bio-fuels’ using locally available bamboo resources.

Initial successes with bamboo charcoal in Ethiopia and Ghana, which have put bamboo biomass at the center of renew-able energy policies, are spurring interest in countries across the continent and prompting calls for greater investment in bamboo-based charcoal production as a ‘green biofuel’ that can fight deforestation and mitigate climate change.

“Bamboo, the perfect biomass grass, grows naturally across Africa and presents a viable, cleaner and sustainable alternative to wood fuel,” said Dr. J. Coosje Hoogen-doorn, Director General of INBAR at a side event at UNFCCC COP17 in Durban. “Without such an alternative, wood charcoal will remain the primary household energy source for decades to come – with disastrous consequences.”

Burning wood also has a significant impact on the climate. Scientists predict that the burning of wood fuel by African house-holds will release the equivalent of 6.7 bil-lion tonnes of greenhouse gasses into the atmosphere by 2050, resulting in further climate change through clearing of tropi-cal forests.

In terms of health, the burning of fuel wood claims the lives of an estimated 2 million people every year – mostly women and children – who inhale the smoke. Continued widespread indoor use of forest wood charcoal as a household fuel could cause 10 million premature deaths by 2030.

Saving Forests, Mitigating Climate ChangeIt takes seven to ten tons of raw wood to produce one ton of wood charcoal, making wood fuel collection an important driver of deforestation on a continent of nearly one billion people who have few alternative fuel sources.

Bamboo Charcoal Provides Income Opportunities While Saving Africa’s Forests

Advocacy

**Editor’s note: The work being finalized shortly on the proposed CFC-ICB joint communications strategy calls for coordination and shared resources. Below is a test show case output of collaboration between INBAR and CFC on a side-event hosted by INBAR at COP 17, assisted by the Nairobi-based PR firm, Burness Communications during COP 17 in Durban. The media approach and output from the event secured global media coverage and story placements and the Common Fund for Commodities was duly acknowledged as the one of the key funders of INBAR’s Bamboo as Sustainable Biomass Energy Initiative.

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The initiative is to produce sustainable ‘green bio-fuels’ using locally available bamboo resourcesin sub-Saharan Africa.

“Ensuring food security in a changing climate is one of the major challenges of our era. It is well known that the destruc-tion of forests has negative repercussions on livelihoods and sustainable agriculture as it feeds into a cycle of climate change, drought and poverty,” said Dr. Patrick Verkooijen, Head Agriculture and Climate Change of the World Bank. “Feeding people in decades to come will require ingenuity and innovation to produce more food on less land in more sustainable ways.”

Indeed, scientists believe that deforestation across the Horn of Africa has contributed to pervasive drought in the region. Years of tree-clearing, particularly in hard-hit Somalia, have eliminated fragile forests that stood as the last line of defense against the conversion of sparsely forested dry lands and pastures into useless desert, according to researchers from the Consultative Group on International Agricultural Research (CGIAR).

The International Energy Agency (IEA) predicts that if business continues as usual, by 2030 biomass energy in sub-Saharan Africa will still account for about three-quarters of total residential energy, under-scoring the urgency of coming up with a sustainable alternative biomass to replace wood.

Sub-Saharan Africa has over 2.75 million hectares of bamboo forest, equivalent to roughly 4 percent of the continent’s total forest cover.

“Rural communities need access to sustainable approaches that will keep trees in the ground and the environment safe,” said Professor Karanja M. Njoroge, Executive Director, Green Belt

Movement. “Bamboo grows naturally across Africa’s diverse landscapes, but unlike trees, it regrows after harvest and lends itself very well for energy plantations on degraded lands. We should put it to good use to provide clean energy for the continent.”

“With further investment and policy reform, community kiln technologies could be up-scaled to reach thousands of communities in Ethiopia,” said Melaku Tadesse, National Coordinator for Climate Change Unit at Ethiopia’s Ministry of Agriculture. A number of African countries are pressing for develop-ment of their own bamboo charcoal industries to provide sustainable, affordable energy for growing populations.

Harnessing the Perfect Biomass Energy SourceBamboo is one of the fastest-growing plants on the planet and produces large amounts of biomass, making it an ideal energy source. Tropical bamboos can be harvested after just three years, rather than the two to six decades needed to generate a timber forest.

The entire bamboo plant, including the stem, branch and its rhizome, can be used to produce charcoal, making it highly resource-efficient, with limited wastage. Its high heating value also makes it an efficient fuel.

Charcoal is made through the controlled burning of bamboo in kilns, whether traditional, metal, or brick. The technolo-gy is being adapted to produce larger quantities of charcoal to serve a larger number of rural and urban communities as well as to produce bamboo charcoal briquettes that are ideal for cooking because they burn longer and produce less smoke and air pollution than ‘natural’ charcoal.

In addition to charcoal, bamboo offers many new opportunities for income generation. It can be processed into a vast range of wood products, from floorboards to furniture and from charcoal to edible shoots. The world bamboo export was estimated at 1.6 USD billion in 2009, a decline of about 659 USD million from 2.2 USD billion 2008. •

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Member-country representatives delivered national statements at the 23rd Governing Council meeting in The Hague. Below are selected edited excerpts:

The delegation of Kenya at the outset indicated that they appreciated the Fund’s project activi-ties and implementation in the country and the East African region. Regarding the reform process, the delegation mentioned that while the rationale for institutional reforms was well understood and welcomed, flexibility would be essential when attempting to assess the merits of all the options that are on the table.

The delegation strongly urged and implored the member states to focus on a prudent, workable and sustainable option that would ensure the Fund’s improved efficiency, delivery and effectiveness. The delegation welcomed the opportunity to be involved in the open-ended reform committee; and urged that consultations be expedited to be able to meet the set deadlines for concluding the committee’s mandate prior to the next Executive Board meeting.

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challenges, especially in escalating food prices, supply disruptions and sustained price volatility require the Fund’s realignment to ensure rele-vance; and for the institution to be instrumental in meeting these challenges.

•••The delegation of Italy, on behalf of the OECD provided an overarching overview of the current global economic situation and pre-sented an expansive analysis of the prevailing challenges, especially in the donor member states. The delegation restated the position, as enunciated in the Final Declaration of the G20 Summit in Cannes, regarding approaches and policies being mobilized to address the economic-financial-debt crisis, while focusing on global issues such as development, food security, unemployment and economic recovery. The delegation also noted the outcomes of the 4th High-Level Forum on Aid Effectiveness, held in the Republic of South Korea, where a more inclusive development agenda was incorporated in the final document establishing the Busan Global Partnership for Effective Development Cooperation released in December 2011. These recent developments in the international community, including the MDG targets, the

The delegation of Peru, representing the Group of Latin American and Caribbean Countries (GRULAC) recalled that the results of the discussions from the last meetings of the Ad-Hoc Working Group and the Agreed Conclusions reflect the commitment of member states on the principles of international coopera-tion and their support for commodities’ role in the development agenda. Noting that CFC has had a positive impact in the social and economic development in beneficiary states, the GRULAC is fully committed to the work of the Reform Committee chaired by Ecuador, and call on all members to participate actively and to reach a consensus position on the future and mandate of the Common Fund for Commodities.

•••According to the delegation of The Philippines, the Common Fund’s interventions, steadfast support and commitment in the country is greatly appreciated. The delegation, in congratulating the Managing Director for his report, leadership and the work of his indefatigable team, stated the Common Fund is still critically important and a driving force for enhancing the development aspirations of the commodity producing member states. The delegation observed that growing

23rd Annual Meeting of the Governing Council

National Statements

Member-States Voice Strong Support for Reforming CFC’s Mandate and Role

Amb. Rono (Kenya)

Amb. Wagner Tizon (Peru) Amb. Morales (The Phillipines)

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following the reform process. Yemen had considered the recommendations of the Executive Board, the designated options and the Agreed Conclusions. The delegation point-ed out while Yemen had not benefitted greatly as a founding member of the CFC, the country remained optimistic that CFC can assist its agricultural sector, fisheries, animal wealth as well as projects to improve irrigation for food crops and rural development.

•••Following the recommendations of the Executive Board on the way forward with the reform process, the delegation of the United Republic of Tanzania stated that the country was now in a position to express its full satis-faction on the proposed course of action and the work of the reform committee. The delegation expects that the open-ended reform committee consultations should culminate in a stronger, effective institution that can address and deliver sustainable development solutions to small holder commodity producers.

The delegation said that the pace and mecha-nism now in place should ensure that CFC is supported and adequately funded to maintain its concerted focus and performance in sustain-able development.

•••According the delegation of Burkina Faso, the country’s economy has benefited greatly from commodity development investments advanced by the Common Fund. Therefore, it is imperative that the reform process take consideration of the

23rd Annual Meeting of the Governing Council

delegation stressed presented an opportunity to reflect on the mandate and future role of the Common Fund, particularly given the evolving circumstances and emerging global development cooperation architecture.

•••With the highly integrated and globalized economy, the role of the Common Fund, according the delegation of Egypt, can only be appreciated, and more so, because of the direct assistance the Fund offers to developing coun-tries in Africa, Asia and the Latin American region. Over the years, Egypt has for a long time cooperated within the framework of the Fund, believing firmly that its operations and activities constitute a remarkable contribution within the network of development cooperation and assistance to developing and least developed countries currently facing enormous economic challenges. Egypt stands in line with the reform process, options and the agreed conclusions, which should enable the Fund to effectively meet the development challenges and the economic realities that member states are facing today.

•••The delegation of Sri Lanka on behalf of the Asia Group sought to reiterate that member states were reconciled to the notion that the Common Fund has a unique and important role through its targeted interventions and financing of sustainable development of com-modity production and market project initiatives in LDCs. With declining export revenues,

domestic food security needs and volatile market pressures, many countries are now vulnerable to social dislocations. Increased vulnerability, unprecedented price fluctuations and natural challenges have had a direct impact on the economic policies and development priorities of many LDCs, the principal targets of CFC project financing. Through project interventions by the Common Fund, Sri Lanka is one of the member-states, where it is vital to move initiatives in the direction of diversification in commodity production to explore opportunities to develop niche markets and expansion of South-South cooperation in trade.

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The delegation of Sudan on behalf of the African Group praised the Managing Director and the Secretariat for the comprehensive report on institutional activities in 2011. Specifically on the point relating to the work of the reform committee, the delegation was in full support of expected deliberation of the specified options within the framework of the Agreed Conclusions, as approved by the Executive Board. As customary, the delegation reaffirmed its support of the Fund’s interventions in Sudan, stating that as a developing, commodity-dependent country, Sudan valued the positive outcomes of many projects currently being undertaken in the country.

•••According to the delegation of Yemen, CFC project interventions in LDCs should remain the priority for any new institutional structure Mr. Kumararatne (Sri Lanka)

Amb. Yousif (Sudan)

Mr. Mapunda (Tanzania)

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crisis in the international economy and the impact on poor, developing countries and LDCs.The reform consultation need not be negative, since the mandate of the CFC has noble inten-tions, the delegation said. Burkina Faso will welcome the new vision and the consideration of all the options, with the hope that CFC will continue to contribute to poverty reduction in a spirit of international solidarity.

•••The Algeria delegation called on the Council to take stock on the future of the Common Fund, based on the fact that in less than five years, the international community has to answer on the progress and accomplishments of the MDG targets. This was vital, since there is synergy between the mission and mandate of the Fund and the millennium targets, especially in regards to poverty reduction, the central role of commodities in economic development and growth in member states. The delegation

reiterated its support for the reform process and urged the open-ended reform committee to maintain focus on integrating the Fund’s future mandate and mission with commodity development priorities to enhance trade, market access and poverty reduction.

•••The delegation of Malaysia reaffirmed its steadfast commitment to the Common Fund, with reference to the very successful project inter-ventions in a range of diverse commodity sectors like rubber, palm oil, and organic aquaculture. At the center of the country’s National Commodity Policy 2011-2020, catalytic proj-ects such as those financed by CFC will be invaluable in enhancing the competitiveness and sustainability of many sectors, especially palm oil. The delegation reported that the national development agenda is anchored by a broad commodity sector that utilizes good practices and pursues effective approaches for resource manage-ment to ensure environmental sustainability and economic viability.

•••The delegation of Thailand commended the activities of the Common Fund for the past 20 years and indicated that the country appreciated all the projects implemented there, including the most recent on smallholder dairy development launched in March 2011, which will enhance productivity and promote market access for dairy products. Regarding the future role and man-date of CFC, the delegation emphasized that, due to the current reality of limited financial

resources, the Fund could streamline its opera-tions with a focus on food production and food security. Thailand will support the reform com-mittee consultations to ensure the Fund remains in a position to fulfil its mandate at the fullest level.

•••The Zimbabwe delegation observed that it is important for the Common Fund to continue executing its mandate. The success of the orga-nization’s work in commodity development has

had a positive impact on the livelihoods the marginalized poor in many member countries. The delegation rued the protracted nature of the two-year deliberations had put on hold many worthy project initiatives, that could have had a meaningful impact on poor farmers. The delegation acknowledged that the Fund must readily embrace some fundamental reforms, just as many international institutions are undertaking to reposition themselves to the evolving global environment and limited resources.

•••The delegation of Pakistan extended its appreciation of the Managing Director’s leader-ship and that able work of the Secretariat. The delegation also supported the work of the Ad Hoc Working Group and the outcomes, which will guide the reform process. The delegation noted that the work of the reform committee should move forward in the spirit of internation-al cooperation, so that CFC can become a stronger, efficient institution. The Fund’s

23rd Annual Meeting of the Governing Council

Ms. Some (Burkina Fasso)

Ms. Bechikhi (Algeria) Ms. Poosiripinyo (Thailand)

Amb. Muchada (Zimbabwe)

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•••The delegation of China provided an overview of the global economic situation noting that slow growth, sovereign debt crises and rising protec-tionism had generally had a negative impact, particularly, commodity-dependent developing countries and LDCs. For this reason, China welcomed the reform process, which should an opportunity to strengthen CFC’s unique identity, project implementation activities and its key role in reducing poverty in developing countries. On the reform process, China offered some proposals including comprehensive reforms in the management structure and mechanism; reinforcing partnerships – more extensive part-nerships with private sector and with other orga-nizations and increased capacity for advocacy to enhance CFC’s international reputation.

•••The delegation of the Cote d Ívoire reported that the country was very appreciative of the support and solidarity on account of the prevail-ing situation in the country. The economy con-tinues to recover and the delegation indicated that the Fund’s intervention would be essential to the recovery. Regarding the reform process, the delegation implored the Council to move forward with haste as discussion had take too long.

•••The delegation o the Federal Republic of Nigeria acknowledged that the Common Fund is at crossroad, in terms of the future role, mandate and financial sustainability. Nigeria

operations and performance should also address the matter of member-countries that are under-represented in terms of CFC project interven-tions and activities.

•••The delegation of Mexico outlined the coun-try’s activities in the international fora with regard to development cooperation, particularly around the G-20 programme. The delegation told the Council that Government of Mexico welcomed the G-20 Agriculture Ministers Action Plan, as well as the outcome of the Cannes Summit. According to the delegation, Mexico will continue to support international

efforts to improve conditions, especially in com-modity dependent countries in LAC region. The delegation said Mexico was fully commit-ted to the reform process of the Fund to bring the institution in line with the new context in global development cooperation.

23rd Annual Meeting of the Governing Council

Amb. Chaudhry (Pakistan)

Mr. Parada (Mexico)

believes that if these challenges are astutely addressed, the Fund’s governance, effec-tiveness and accountability will improve thereby preserving its unique identity and commodity-specific institutional expertise. The delegation urged members to have a united position that will ensure a positive outcome for the reform process and decisions, which will allow the CFC to continue delivering high impact results through its commodity based interventions.

•••The delegation of Indonesia in reference to the Fund’s overarching mandate, called on Member States to continue support for the organization, given the enormous challenges many poor coun-tries are facing. Food prices continue to skyrock-et and the impact of climate change, unstable commodity markets, population growth, slow pace on both MDG targets and Doha Round,

are factors in the dire situation that commodity-dependent developing countries are in. Within the reform process and mechanism, the delega-tion indicated that alternative funding should be sought and a review of the First Account may be contemplated.

•••The representative of the delegation of Guinea extended the country’s appreciation of CFC financing for a range of commodities sectors that are vital to economy of the country. The delega-tion recounted that the Fund’s intervention in three sectors, had a positive impact, even though activities in the other participating countries had been hampered for the past few years. •

Mr. Wu (China)

Mr. Adriyanto (Indonesia)

ADDIS ABABA – The Common Fund was one of several key sponsors of EAFCA’s 2nd African Coffee Sustainability Forum held recently in Ethiopia.

The Forum’s whose theme focused on “Creating market access through sustain-able practices”, also hosted the 7th African Coffee Scientific Workshop on: “Leveraging scientific research for improved productivity and sustainability of African coffees.”

Many leading coffee organizations, indus-try representatives and CFC’s international partners took part in the Forum, including

the International Coffee Organization (ICO), IITA, CABI, the European Union and others.In press statement, EAFCA’s executive director, Samuel N. Kamau, said, “It was inspiring to see all these people sharing their knowledge and putting their ideas together to build a more sustainable African coffee sector. Issues such as climate change or quality and productivity cannot be addressed by only a few companies or organizations.”

“Increasingly, there is an increasing understanding that cooperation among all the actors is needed to find long-lasting solutions to these problems,” he said.

Among the 130 participants were repre-sentatives from producer organizations, members of trade and industry, academia, sustainability standards, NGOs, financial institutions, public sector entities and development cooperation agencies.

Besides those active in the African coffee sector, there was also an important pres-ence of delegates from other regions, most notably Brazil. The aim was to present experiences from other countries and regions in order to increase cross-border and inter-regional cooperation.

At the scientific workshop, a task-force of 20 African top coffee scientists discussed the challenges and opportunities of Africa’s coffee industry ahead of the main forum, and they concluded that Africa has some of the best coffees in the world, thanks to its diverse growing environments and large genetic diversity. Unfortunately, they noted, this wealth remains largely untapped, with Africa supplying less than 15 percent of the world coffee market.

This is primarily due to the low coffee yields of its smallholder producers, generally less than half of those in Asia and Latin-America.

While farmers struggle with poor soil fertility and pest and disease pressure, climate change is further threatening yield quality and quantity.

Common Fund’s sponsorshipboosts EAFCA’s forum in EthiopiaPromoting cross-border partnerships and regional cooperation

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2nd African Coffee Sustainability Forum

CFC’s interventions in quality improvement and productivity have increased the potential of smallholder producers in the coffee sector in Africa.

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According to a press statement released by EAFCA, “Despite these challenges, the future for Africa’s coffee could be very bright if the right people and the right technologies are put together. Compared to the other continents, Africa has invested very little of its coffee revenues into research, extension and infrastructure investments, but changes are on their way and some countries like Ethiopia have put coffee high on the agenda.”

The coffee scientists argue that site- specific technology packages have to be developed that lead to more affordable, efficient, profitable, and sustainable pro-duction. The current blanket recommen-dations do not cater for the large diversity of farmers, yield constraints, and market opportunities. The development of such

integrated technology packages requires strengthening and integration of research with extension, farmers, the coffee indus-try, and government bodies.

“Smartly combining the knowledge and needs of the various stakeholders can help farmers to double their yield, improve their coffee quality, adapt to progressive climate change, and making more profit. Recognizing, embracing, and using Africa’s diversity will be the key to a bright future for Africa’s smallholder coffee producers,’’ the EAFCA statement noted.

At the Forum proper, three topic areas dominated the proceedings and parallel discussions: coffee quality and productivi-ty, climate change and capacity building

and organizational development. Key expert speakers addressed these topics in plenary sessions. Besides the presentations, the delegates took part in working groups for in-depth discussions on these issues. Participants exchanged lessons learned, as well as shared best practices and jointly identified possible solutions to the challenges. •

2nd African Coffee Sustainability Forum

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18 percent of Common Fund’s project implementation involves coffee.

& Terry Townsend, Executive Director, International CottonAdvisory Committee (ICAC) Washington, D.C.

CFC-ICAC partnership sustaining cotton sector’s rising prices

Cotton, the commodity, as opposed to the sector, seem to generate intense debate, in terms of its role and place in the develop-ment strategies of many producer countries, especially in Africa and emerging economies.

How does ICAC navigate the many issues, that don’t seem to have clear-cut policy solutions?

There is a broad recognition among government officials that cotton is an engine of economic development, income generation and food security. Cotton supports jobs in agriculture and contrib-utes to industrialization through linkages to input markets and end-use processing. Cotton provides income for cash purchases, it is a drought-resistant crop providing insurance against crop failure, and cotton contributes to higher yields of food crops when grown in rotations.

The ICAC assists governments in facilitating a healthy cotton economy by providing information necessary for decision- making, by raising awareness of critical issues and by encouraging cooperation on matters of shared concern. The ICAC does not advocate for increased cotton production but instead advocates for increased opportunities for farmers to produce crops that result in the highest returns and safety, and often cotton is included in such a crop rotation system.

ICAC and CFC partnership has been very effective. What interventions are you personally proud to have been associated with?

Since the CFC became operational in the early 1990s, twenty-four cotton projects have been sponsored by ICAC and funded by CFC and the European Union. The ICAC-CFC collaboration brought additional funding to cotton research and enhanced international collaboration on cotton across coun-tries and in some cases even across continents. Developed and developing countries were able to work together on common issues. The CFC/ICAC projects brought together international experts for finding efficient and cost effective solutions. Every cotton project has been successful, but I will particularly mention two projects.

CFC/ICAC 11 – Improvement of the Marketability of Cotton Produced in the Zones Affected by Stickiness, was conducted between 1997 and 2001. Research was completed in France and Sudan in cooperation with the Sudan Cotton Company, and the results have been fantastic. Prior to this project, all cotton pro-duced in Sudan was heavily discounted due to a reputation for stickiness. Using techniques developed during the CFC/ICAC project, Sudan has been able to not only reduce the incidence of stickiness but to also reliably segregate bales exhibiting stickiness from those that do not and of course export only the bales with-out contamination. Project partners have quantified the project benefits in terms of monetary gains at US$95 million from 1997-2009.

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Mr. Terry Townsend, ICAC’s executive director.

CFC/ICAC 14 – Sustainable Control of the Cotton Bollworm Helicoverpa armigera in Small-Scale Cotton Production Systems, was conducted between 2000 and 2004 in China, India, Pakistan and the UK. The project had substantial technical achievements resulting in reduced use of pesticides and increased efficacy in the control of a major economic pest. The project played a big role in reversing the declining yield trend in China, India and Pakistan. The resulting increases in net returns to growers amount to several million dollars of economic value each year. The proj-ect demonstrated the best attributes of intergovernmental organi-zations in being able to facilitate cooperation on a topic of shared interests among partners who could not have achieved such cooperation without the assistance of the CFC and the ICAC.

As you know, the major thrust of CFC project financing places priority on out-comes that will ensure that producers can have secure and sustainable economic liveli-hoods. Does ICAC have specific examples of

projects that have achieved these objectives?

In addition to the two projects mentioned above that have been particularly noteworthy in their outcomes, all the projects sup-ported by the CFC have resulted in concrete benefits for cotton producers. CFC projects have contributed to reduced input use, increased yields, better management of diseases and insects, increased value from the use of cotton stalks for the production of

particle board, and worldwide improvement in the measurement of cotton quality leading to improvement in cotton marketing.

Applied research and marketing in particu-lar appear to be at the core of the ICAC-CFC cooperation. Can you elaborate more on how and if the private sector has con-

tributed to this? What does the private sector stand to gain from this?

The private sector has been involved in many cotton projects funded by the CFC. Such partnerships help to insure that project design is pragmatic and that results have commercial application. The private sector has been involved in a project that developed tests for the existence of biotech traits in cotton seeds, in a project that demonstrated the economic feasibility of using cotton stalks in the manufacturing of particle board, and in a project to stan-dardize instrument testing of cotton.

All CFC/ICAC projects are designed so as to ensure that repre-sentatives of the private sector participating in projects do not gain unfair competitive advantage and that the results of each project are fully transmitted to all interested parties. The private sector benefits from the increased production of cotton and improved efficiency in cotton marketing that result from project completion.

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Common Fund’s project activities in cotton quality improvement through research and development led to monetary gains of nearly USD 95 million between 1997-2009.

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May I get your views on the report dissemi-nated by the Fairtrade Foundation in November 2010, which cast a shadow on the cotton sector and industry? Further, to a certain extent also, various policy briefs released by Oxfam have maintained pressure on the sector. Is it still possible to create a

level playing field for all producers, especially smallholders in Africa?

The ICAC works with all organizations that have an interest in the improvement of the world cotton sector, including special-ized production and marketing programs such as organic, Fairtrade, Cotton made in Africa and BCI. The ICAC also cooperates with Oxfam and other NGOs on a variety of research efforts to raise awareness and provide information. The report by Fairtrade in November 2010, The Great Cotton Stitch-Up, contained criticism of subsidies paid to cotton growers in the United States and Europe. The report was valid, but somewhat out of date, since world markets for agricultural commodities, including cotton, have risen in recent years, and the impacts of subsidies on production have been greatly reduced. Likewise, Oxfam has reported extensively on the impacts of subsidies in developed countries on the world price of cotton and the incomes of smallholders. Again, fundamental shifts in market conditions since 2008 have rendered many of these criticisms moot. Nevertheless, the concerns of developing countries about subsidies are still valid because prices may decline again, and if that happens, subsidies will again affect cotton prices. The venue for the negotiation of cotton subsidies is the World Trade Organization (WTO), and the ICAC strongly supports a substan-tial outcome to the Doha Development Agenda in the WTO.

The Fairtrade report documents a conflu-ence of complex policy and legislative con-tradictions: the dormant Doha Round, CAP, EU subsidies, EPAs etc. Will the smallholder producers in the C-4 ever be

able to participate fully in the cotton trade?

Producers in the C4, including smallholders, participate fully in world cotton trade. Almost all cotton from Benin, Burkina Faso,

Chad and Mali is exported, and producers receive the full world price for cotton when adjusted for the costs of storage, transporta-tion and ginning. The objective of the Doha Round is to reduce distortions caused by government measures so that all producers are able to benefit to the extent that agronomics and economics permit efficient production.

The ICAC Recorder’s recent special edition is a useful advocacy tool for both institu-tions. I recall that you’ve been a forceful voice for increased activities to promote the

role of commodities in development. Will ICAC continue its support for the proposed

CFC-ICBs joint communications strategy?

The ICAC is highly appreciative of the role of the CFC as an advocate for commodity industries and as a voice for commodi-ties. During recent decades, commodity industries have suffered from inadequate public sector investment and lack of focus from government officials as development agendas have encouraged countries to diversify. Given the crucial role of commodities in pro-poor and pro-environment economic development policies, such inattention has been harmful. The CFC and International Commodity Bodies have a shared common interest in raising awareness of the positive roles of commodity industries and in providing information about how governments can support com-modity development. The ICAC will always be an enthusiastic partner with the CFC in a joint communications strategy.

Are there any major changes expected at ICAC in 2012? Moving forward, how can you characterize your working relationship with Common Fund and what we can do better, given the changes that are anticipated

following the institutional reform process at the Fund?

There will be no major changes in the ICAC during 2012. However, the ICAC will select a new executive director during 2013 to take office on January 1, 2014. Nevertheless, the ICAC is institutionally committed to a strong partnership with the CFC in the development of commodity industries and the communica-tion of commodity development strategies that result in increased opportunities, rising incomes and improved standards of living. The work of the CFC is important to the world cotton industry and benefits millions of producers. The CFC and ICBs can do a better job in 2012 of articulating that commodity industries are beneficial, that commodity industries are the keys to development for hundreds of millions of smallholders, and that governments have a vital role in facilitating healthy commodity industries. •

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The concerns of developing countries about subsidies are still valid and ICAC strongly supports a substantial outcome to the Doha Round.

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AMSTERDAM – The Consultative Committee meeting recently here in January reviewed project proposals over a range of commodity sectors and project interventions for financing consideration by the Common Fund.

The committee, which is chaired by Mr. Abdelatif Ahmed Mohamed Ijaimi (Sudan) worked through 11 proposal reviews and then deliberated for the Committee’s recommendations to the Executive Board.

Managing Director, Amb. Mchumo welcomed the committee and reported on developments in the Common Fund since the last meeting, including the Governing Council’s decision on the Fund’s reform process.

Amb. Mchumo also briefed the committee on the recent 66th Meeting of the UN Second Committee, where the Common Fund, raised the matter of the impact of

price volatility on the economies of com-modity dependent developing countries. The resolutions adopted by the Second Committee on commodities and market volatility, call for coordinated work by countries and international organizations to develop better practical approaches to inter-vening in commodity markets to promote their positive role in global development.Amb. Mchumo added that these discus-sions were reflected in some of the latest project proposals on the agenda of the Committee in the 49th session.

Amb. Mchumo said, “The current meet-ing of the Committee would consider 11 proposals. I recognized the diversity and considerable share of new ideas involved in the current proposals, but I’m confident the Committee will rise to the challenge and provide substantial guidance for the effective use of Common Fund resources in the interest of its member-countries.” Under the priority guidelines established by the Executive Board, the

Project Proposal Reviews by the Consultative Committee Completed

Project Briefs

Committee agreed on the following order for the regular projects recommended for approval under the Second Account: >CFC/ICCO/43 – Integrated

Management of Cocoa Pests and Pathogens in Africa: Controlling Indigenous Pests and Diseases and Preventing the Introduction of Exogenous Ones in Cameroon, Cote d’Ivoire, Ghana and Nigeria;

>CFC/FIGR/17 – East African Rice Sector Development in Tanzania and Uganda;

>CFC/IOOC/09—Economic Valorisation of Olive Genetic Resources, Creation of Pilot Demonstration Nursery Centres (Quality Enhancement through Nursery Development) in the Mediterranean Region.

As it is within the powers of the Managing Director, the committee also forwarded several fast track proposals for his approval. The proposals include: Bamboo, Access to Commodity Finance; Producer-Consumer Cooperation in Soft Commodities; and Zinc Die-Casting. •

Members of the Consultative Council reviewing projects in the January meeting.

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AMSTERDAM – A new special edi-tion publication produced jointly by the Common Fund and International Cotton Advisory Committee (ICAC) has been released. The publication, “Cooperation for Development: Results and Impacts of Joint ICAC and CFC Activities” highlights the excellent cooperation and good relations between CFC and ICAC, the desig-nated international commodity body for cotton.

The special issue documents the achieve-ments and impacts that have resulted from the collaboration between ICAC and the respective project executing agencies, as facilitated by commodity development financing by the Common Fund. The pub-lication provides succinct descriptions of the overall cotton portfolio of 14 regular and 12 fast-track projects and substantive insight on the impact that the completed projects have accomplished in the different member-countries.

Cotton publication highlighting joint CFC-ICAC cooperation released

While the project outcomes may be assessed differently depending on objec-tives of the respective interventions, it is clearly evident that the project activities have resulted, directly or indirectly, in substantive benefits for the member- countries involved, especially in applied research, crop protection methods, productivity improvements with related benefit-cost increases, increased marketing perspectives and better utilization of waste and by-products.

Managing Director, Amb. Mchumo said, “As an impact document for both organizations, the publication is a very comprehensive and an essential resource that confirms the Fund’s contribution to the cotton sector and industry; and as a commodity-specific reflection of the Common Fund’s overall mandate in commodity development.” •

Small-scale producers, especially women have become competitive through efficient production; even as the subsidies debate persistsand the Doha Round objectives are stalled.

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Spotlight

PARIS – Soaring agricultural prices in 2007-2008, followed by decreasing prices in 2009/2010 then a new surge in late 2010-2011, have placed the management of agricultural price volatility at the heart of policy debates.

Many developing countries have imple-mented policies to limit agricultural price volatility and its adverse effects, without always achieving the expected results.

Analysis of recent experiences in Africa shows that in order to be effective, a policy measure must meet four conditions: it must be based on robust knowledge; it must be predictable; its funding must be secured; and its enforcement must be monitored.

Protecting the Domestic MarketFor several years, often in response to the 2007/2008 crisis, many developing countries have been stepping up their intervention to stabilize agricultural prices on their domestic markets. The policies implemented are particularly aimed at protecting domestic markets from price fluctuations on the international market, by combining border measures with domestic market measures. They reflect both the will to restore the role of the State in the regulation of agri-food mar-kets and a loss of faith in the functioning of international trade.

These policies diverge from the recom-mendations of international donors. Donors argue that trade liberalization stabilizes prices, as a price shock on a national market is absorbed by a globalised market through dilution or compensation effects. To avoid the adverse effects of

price hikes or slumps, they advocate, in the short term, private risk management mechanisms and safety nets and, in the medium and long term, programmes to increase agricultural productivity.

A broad range of policy measures are available to countries. Border measures are aimed at adjusting supply to demand in the territory, by controlling imports and exports: tariffs, import and export licenses; state imports; or export restrictions. Domestic market measures are aimed more at adjusting supply to demand over time, especially through the management of buffer stocks, which may be combined with subsidies, or taxes on the price of products or agricultural inputs.

To limit agricultural price volatility on their markets, African countries have combined border measures with domestic market measures. But how effective has this been? Despite the lack of hindsight, several lessons emerge from recent experiences. Five African countries were studied: Madagascar and Mali for rice, and Kenya, Malawi and Zambia for maize. These five countries share certain charac-teristics. Their revenue is low: gross domes-tic product per capita is less than 1,000 US dollars. Their cereal consumption is high: cereals account for over half of total calorie intake (from 50 percent in Kenya to 66 percent in Mali). Finally, these countries import less than a quarter of their cereal consumption (from 10 percent in Malawi to 25 percent in Kenya).

For each country, price volatility manage-ment policies have been described and classified by periods according to the measures undertaken. The periods laid out reveal a tradition of intervention in agricultural markets that has persisted in

East African countries, including during the period of liberalization. However, price instability management policies were abandoned in Mali and Madagascar, before being restored recently. Countries by country and period by period, local price series have been examined.

The coefficients of variation (the ratio of the standard deviation to the mean) have been calculated and compared to those on international markets. State intervention is considered effective if the coefficient of variation for agricultural prices on the domestic market is lower than the coefficient on the international market. Three situations can be distinguished:- State intervention has limited cereal

price volatility, for example in Madagascar and Zambia during the management of the 2007/2008 crisis;

- State intervention only partially

Managing Agricultural Price Volatility in Africa

Amb. Mchumo was invited as the main

panelist on the keynote session on:

Africa in the Global Context of

Commodity Markets, moderated

by the BBC, which was recently orga-

nized by Ms. Eleni Gabre-Madhin,

Chief Executive Officer, the Ethiopian

Commodity Exchange and co-convened

by UNDP in Addis Ababa. The article

below published courtesy of CIRAD, a

past partner of CFC in project imple-

mentation touches on some policy

options at the center of the convention’s

theme, agenda and discussions in

Ethiopia. In 2011, CFC contributed to

the emerging knowledge base in the poli-

cy debate on price volatility.

succeeded in limiting price volatility, for example in Mali during the 2005 and 2008 crises;

- State intervention increased price vola-tility, for example in Madagascar (2004), in Zambia (2001, 2002 and 2005), in Malawi (2005) and in Kenya (2008).

What were the factors of success or failure? Beyond the measure chosen, the conditions for implementing this measure appear to be decisive.

Choosing measures accord-ing to national specificitiesIn order to be effective, each type of measure must meet four conditions, with varying degrees of importance depending on the measure: the intervention must be based on robust knowledge; it must be predictable; its funding must be secured; and its enforcement must be monitored.

Robust knowledgeWhatever the measure, in-depth knowl-edge of the situation and of the mechanisms at work is required. In practice, access to robust expertise is a decisive condition for the effectiveness of State intervention. Technical expertise underpins decisions and guides choices. What stock volumes should be built up? At what moment in time? At what price? At what price should stocks be sold off? What volumes should be imported or exported? At what level should tariffs be set? Accurate analyses based on sound data are needed to anticipate requirements, for example through early warning systems. In Zambia in 2001, food requirements were underestimated, which delayed the government’s reaction and that of private importers; however, in 2005 they were correctly anticipated thanks to informal exchanges of information between representative of farmers and of the govern-ment. Expertise may be collective, as in Madagascar within the consultation plat-form set up in 2008.

State intervention should be announced so that private operators can anticipate it and make informed strategy decisions. This is a key condition whatever the measure considered. For import control, private importers must be able to predict the volumes imported by the State, the date of importation and the tariff level. For internal market measures, merchants must be able to anticipate the volumes that will be sold off, the date of sale and the selling price. In the absence of this information, private operators will tend to withdraw from the market: this is known as the crowding out effect, and may increase price volatility.

For example, in Zambia in 2005 and in Kenya in 2008, some merchants, seeing domestic prices rise, asked the State to waive import tariffs. The State announced an agreement in principle, without specifying the date of implementation. In expectation of the tariff waiver, the operators delayed their imports, which accentuated price hikes. As another example, in Zambia in 2001 and 2002, in Madagascar in 2004 and in Malawi in 2005, the State decided to import cereals to offset the deficit caused by insufficient national production, without specifying the date or the volumes of such imports. Fearing state competition (especially given

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Financialization of commodity markets is seen as creating disadvantages in prices and investments for African producers.

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that State imports may be subject to lower tariffs), the private operators decided not to import. The volume of State imports was too low and the date of importation too late to limit the price hikes on domes-tic markets.

Conversely, predictable intervention may ensure effectiveness. In Madagascar during the 2008 crisis, the State decided to use imports to meet national rice consumption and to restrict soaring agricultural prices. It set up a consultation platform to anticipate requirements for rice. Private operators and public agents shared information and were able to implement appropriate strate-gies.

Secured fundingThe State must be in a position to free up funds to finance the costs linked to State intervention. Financial capacity is essential to costly measures. For example, in Mali in 2005 and 2008, the budget allocated to the operation of buffer stocks was not enough to provide these stocks with their own working capital and to therefore build up sufficient volumes to curb soaring cereal prices. On the contrary, in Zambia and Kenya, substantial financial resources were allocated to the operation of buffer stocks and to maize price subsidies. In Zambia, the public budget allocated to internal market measures represented 4 percent of the total national budget in 2007; this considerable budget was partly financed by mining revenue.

Furthermore, it is important to plan how to limit the additional costs that may arise, especially those linked to production incentives, such as producer price subsidies. In Malawi, for example, producer price and agricultural input subsidies proved particularly costly, calling into question the price instability management policy. A quota system would limit the existence of additional costs.

Monitored enforcementThe State must be able to guarantee that its intervention has been effectively implemented and carried through. This monitoring capacity is essential for border measures (imports and exports). In Mali in 2005, national production was low, leading the government to ban cereal exports. This measure proved ineffective due to difficulties monitoring borders – a condition that is even harder to meet given that the country has extensive land borders, as do many of the Sahel countries. Monitoring capacities are also necessary for intervention on domestic markets, especially for cereal consumption subsidies and the administration of producer prices. For example, in Zambia in 2001, the subsidies paid to merchants were not passed on to consumer prices; they therefore failed to limit price increases.

Measures may be circumvented by public agents (stabilization agencies not applying floor prices) or by private operators (mer-chants not passing on prices or choosing to export in an illegal manner). In any case, this behavior is motivated by the pursuit of private income, and it undermines the effectiveness of the stabilization policy. To ensure the policy it has defined is effective, the State must therefore be able to both monitor its enforcement and to penalize non-compliant behaviors.

Associating public and private stakeholdersBeyond seeking miracle remedies, govern-ments must ensure that the measures adopted will be effective in the context of their countries, failing which they may exacerbate the crisis. They must therefore choose measures according to their institu-tional, geographical, social, political and economic environment. For example, a low-income country with no specific resources, or one that is dependent on

donors for its current expenditures, will need to guarantee its financial capacity before building up public buffer stocks. A landlocked country with extensive land borders should not ban exports to halt soaring prices, but instead should favor regional policies to offset the porosity of its borders. On the other hand, an island country may choose to control its borders, as Madagascar did to good effect. The four conditions identified concern the capacity of states to define and enforce policies, and to ensure operators have faith in state intervention and will comply with it.

Some developing countries may struggle to meet these conditions because of their institutional fragility. Although the State has a key role to play, alone it will be unable to stabilize agricultural prices on domestic markets. Cooperation between public and private actors is vital to the success of price volatility management policies. Consultation platforms have demonstrated their effectiveness in Madagascar.

Public-private partnerships may also be envisaged to manage stocks: consultation on the methods for stockholding, joint funding, or contractual arrangements between the State and private actors concerning storage. This cooperation between public and private operators is still in its infancy in developing countries, and requires further research. In particular, the apparent contradiction between the need for transparency regarding stock volumes to anticipate food crises and the pursuit of private interests must be analyzed. •Authors: Élodie Maître d’Hôtel, Arlène Alpha, Raphaël Beaujeu, Françoise Gérard, & Laurent Levard / CIRAD 2011.

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Calendar 2012

• January 23-27, Amsterdam (NL) 49th Meeting of the Consultative Committee

• April 17-18, Amsterdam (NL) 53rd Meeting of the Executive Board

• May 31, Rome (I)19th Annual Meeting with ICBs

• July 2-6, Amsterdam (NL)50th Meeting of the Consultative Committee

• 12-13 Dec, The Hague (NL)24th Meeting of the Governing Council

CFC Newsletter Issue 1 / Volume XXII / April 2012

The Common Fund for Commodities is an intergovernmental financial institution establis-hed within the framework of the United Nations. The Fund currently has a membership of 105 countries, and several institutional members including the European Union (EU), the African Union (AU), East African Community, the Common Market for Eastern and Southern Africa (COMESA) and other major regional economic organisations. The secreta-riat is based in Amsterdam, The Netherlands. www.common-fund.org

The CFC Newsletter is published by the Communications Office. Editor Charles Jama Phone + 31 20 575 4956 E-mail info@common-fund.orgDesign GAW ontwerp+communicatie Printing Moderndruk, Bennekom

CFC Mission and Vision StatementMission “To contribute to poverty alle-viation by strengthening the income-generating capacity of commodity producers and mitigating vulnerability to their economic well being”.

Vision “To strengthen and diversify the commodity sector in developing coun-tries and transform it to be a major contributor to poverty alleviation and sustained economic growth and deve-lopment.”

CFC project implementation has hugely up-scaled the viability of smallholder dairy sector in Lesotho and Zambia. In Zambia, dairy farmers are supplying major commercial processors such as Parmalat.

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