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Team Europe Initiative on Deforestation-free Value Chains

Strengthening Cocoa Production with the Private Sector for Climate-Resilient Agroforestry Systems in Ecuador and Peru

Can cocoa farming simultaneously protect forests, improve rural livelihoods, and comply with international market regulations? In Ecuador and Peru, an innovative public-private partnership is proving that this is possible.

Cocoa production in Latin America faces complex challenges. Producers must respond to the growing demand for high-quality cocoa while adapting to stricter international standards, including the EU Deforestation Regulation (EUDR) and the EU Organic Regulation. These requirements call for greater traceability, deforestation-free supply chains, and robust environmental and social safeguards.

The develoPPP programme, an initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ), is designed precisely for such opportunities — where private sector engagement and development cooperation can deliver mutual benefits. Within this framework, the Swiss chocolate company HALBA and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) through the Sustainable Agriculture for Forest Ecosystems (SAFE) project in Ecuador, on behalf of BMZ, have partnered with local producer organisations to promote a transition towards dynamic agroforestry systems in cocoa production.

Dynamic Agroforestry: A Sustainable Approach

Dynamic agroforestry offers a practical solution to many of the sector’s challenges. By cultivating cocoa alongside complementary crops such as plantain, banana, and shade trees, farmers enhance soil fertility, improve biodiversity, and increase resilience to climate change. This approach allows for sustainable efficiency of production while also improving household food security and diversifying income sources.

The objective of the project is the implementation of dynamic agroforestry as a sustainable solution to improve cocoa production, ensure compliance with international regulations, and empower producers through training, digitisation processes, and organisational strengthening.

Since its launch in 2020, the partnership has worked closely with the UNOCACE cooperative in Ecuador – with approximately 2,000 to 2,500 farmers – and the ACOPAGRO cooperative in Peru – with approximately 2,000 to 2,100 farmers. The current project phase (April 2024 – March 2027) builds upon previous achievements and is structured into six key workstreams:

  1. Boosting cocoa efficiency with dynamic agroforestry (DAF)

Planting and replanting DAF plots, grafting higher-yield cocoa, and diversifying value chains to improve productivity, soil health, and farmers’ incomes.

  1. Scaling up agroforestry through partnerships and training

Expanding DAF via stakeholder engagement, model plots, training, and research to drive wider adoption.

  1. Strengthening UNOCACE and member cooperatives

Improving governance, business models, and capacity to build resilient, sustainable, competitive producer organisations.

  1. Ensuring EUDR compliance for cocoa exports

Supporting traceability and control systems so producer organisations can meet European and international market requirements.

  1. Empowering youth and women in cocoa

Promoting inclusion, training, entrepreneurship, and access to resources through innovative financing tools, inspired by the Fairtrade Premium Fund.

  1. Linking agroforestry to climate finance

Measuring carbon benefits of DAF, simplifying monitoring, and connecting projects to climate finance opportunities.

SAFE: Strengthening Market Access for Deforestation-Free Value Chains

This collaboration is also a key result of the GIZ-SAFE project, which works to support Ecuador’s transition to sustainable and deforestation-free value chains. SAFE provides the necessary tools and approaches to prepare value chain actors – from public institutions to private sector companies – for this transition. Through partnerships with international buyers, like this partnership with HALBA, small producers are connected to European markets. These alliances not only facilitate trade but also ensure that supply chains meet deforestation-free criteria, strengthening Ecuador’s position as a reliable partner for sustainable production.

Local Action, Global Impact

This collaboration is more than a technical project. It is a model for inclusive and climate-smart value chain development. By connecting small-scale producers to international markets and strengthening their organisational capacities, the project contributes to the creation of resilient, deforestation-free cocoa supply chains. So far, around 260 farmers with UNOCACE and ACOPAGRO have already implemented agroforestry systems.  

The project strengthens cocoa production through sustainable practices, improving producers' competitiveness in international markets and ensuring the sector's long-term economic, social and environmental viability. 

 Ultimately, this partnership shows that compliance with international regulations can drive innovation rather than act as a barrier. For producers, it improves livelihoods, protects ecosystems, and opens access to global markets while creating additional income and empowering women and youth in key value chain roles. For consumers, it means every bar of chocolate supports a more sustainable and inclusive future.

Commissioning Party

German Federal Ministry for Economic Cooperation and Development (BMZ)

Partner

HALBA/COOP

Duration

April 2024 – March 2027

Funding

BMZ, HABLBA and develoPPP GIZ

Budget

2.009.150 EUR – 1.110.150 EUR from HALBA and 899.000 from GIZ

Region

Ecuador and Peru

Programme Manager

Ute Sonntag, SAFE Ecuador

Contacts

ute.sonntag@giz.de  and  Petra.Heid@halba.ch  
Region:

Luwero, Nakaseke, Kassanda, Mubende, Bukomansimbi, Kyotera, Omoro, and Nwoya

Target group:

Smallholder farmers, traders, state and non state actors, and processors

Key activities:
  • Capacity building of smallholder coffee farmers in production practices and sustainable land use management.
  • Establishing traceability system and facilitating access to sustainable financing 
  • Facilitate inclusive business partnerships between producer organizations and supply chain actors​ 
  • Promote multi-stakeholder cooperation​ 
Commodities:
SAFE_commodities_graphics_Green_Coffee
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Region:

Huánuco, Ucayali, Pasco and Junín

Target group:

Public and private stakeholders, especially exporting companies, cooperatives and smallholder producers

Key activities:
  • Strengthen the supply chains to meet EUDR requirements 
  • Facilitate access to sustainable finance and knowledge exchange
  • Training of smallholders to sustainable manage their production systems 
Commodities:
SAFE_commodities_graphics_Green_Coffee
SAFE_commodities_graphics_Green_Cocoa
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Region:

Ngozi and Kayanza 

Target group:

Smallholders

Key activities:
  • Training on the use of traceability tools and support on collection of geolocation data for EUDR compliance 
  • Support the development of a national coffee sector dashboard for traceability and transparency
  • Capacity building of smallholder coffee farmers in production practices and sustainable land use management.​ 
Commodities:
SAFE_commodities_graphics_Green_Coffee
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Region:

Centre, South West, Littoral, South, East and West regions

Target group:

Smallholder farmers, women, youth, and indigenous peoples

Key activities:
  • Develop inclusive business partnerships with the private sector 
  • Facilitate access to finance for sustainable business models 
  • Support and train farmers in open-source traceability systems 
  • Promote multistakeholder dialogues to improve legal and regulatory provisions 
Commodities:
SAFE_commodities_graphics_Green_Cocoa.svg
SAFE_commodities_graphics_Green_Coffee
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Region:

(Lower) Kafue Catchment Ecosystem

Target group:

Farmers and community forest management groups

Key activities:
  • Support community forest management groups in the
    sustainable management of natural resources and livelihood creation
  • Support farmers to produce soy in line with the EUDR and increase productivity, and implement transparency and traceability pilots
Commodities:
SAFE_commodities_graphics_Green_Wood.svg
SAFE_commodities_graphics_Green_Soy.svg
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Region:

Lampung, West Kalimantan, and Central Sulawesi

Target group:

Smallholder farmers, private sector, and civil society organizations along the value chains

Key activities:
  • Empowering Smallholder Farmers and Farmer Organizations by facilitating traceability and legality, building capacity on Good Agriculture Practices (GAP), and strengthening farmer organizations, ensuring inclusive support for both men and women farmers.
  • Promoting sustainable practices and collaboration by supporting village HCV/HCS conservation efforts, testing and strengthening the National Dashboard for traceability and legality, and fostering national and regional exchanges.
Commodities:
SAFE_commodities_graphics_Green_Cocoa.svg
SAFE_commodities_graphics_Green_PalmOil.svg
SAFE_commodities_graphics_Green_NaturalRubber.svg
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Region:

Son La, Gia Lai ​​

Target group:

Smallholder farmers and marginalized groups

Key activities:
  • Support coffee value chain actors
  • Foster deforestation-free, sustainable, and legal supply chains
Commodities:
SAFE_commodities_graphics_Green_Coffee
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Region:

Yangambi Biosphere Reserve, Salonga National Park North, Salonga National Park South, Virunga National Park, Kahuzi-Biéga National Park​

Target group:

Public and private sector

Key activities:
  • Promote sustainable agricultural practices
  • Minimize forest degradation
  • Prevent deforestation
Commodities:
SAFE_commodities_graphics_Green_NaturalRubber
SAFE_commodities_graphics_Green_Cocoa.svg
SAFE_commodities_graphics_Green_Coffee
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Region:

Provinces of Orellana and Sucumbíos

Target group:

Smallholder farmers, women, indigenous people and youth

Key activities:
  • Promoting Multi Stakeholder Dialogues
  • Improving traceabilty systems
Commodities:
SAFE_commodities_graphics_Green_Cocoa.svg
SAFE_commodities_graphics_Green_Coffee.svg
SAFE_commodities_graphics_Green_PalmOil.svg
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Region:

Xingu territory, State of Pará

Target group:

Family farmers

Key activities:
  • Improve market access, value creation, and access to sustainable finance
  • Integrate farmers into traceability systems
Commodities:
SAFE_commodities_graphics_Green_Beef.svg
SAFE_commodities_graphics_Green_Cocoa.svg
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Global activities
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