Quarterly Report April– June 2013: Peru Cocoa Alliance

The program has engaged directly with producers and organizations, validating interest among those previously identified, training producers and organizations, and formalizing technical, financial, and commercial arrangements. The quarter witnessed the first delivery and installation of cocoa plant material produced with PCA support, supporting producers with grafting activities in the region of Ucayali. Demand for Alliance services continues to be high, with 38 new letters of intention received from various organizations, bringing the cumulative total to 91. Associated projections indicate over 35,000 hectares of new cocoa will be planted by 2016, with almost 18,000 producers intending to plant by 2016. Already, some 2,700 producers have received over S./10.6 million in credit from PCA-allied financial institutions. Three more financial institutions formalized their participation in the PCA this quarter, with a total of seven now offering services in conjunction with the program. Current buyer partners have moved fast to respond to the high demand for direct commercial relations, signing initial sales contracts with producer groups, and helping to better organize and train them. New buyers and manufacturers of cocoa and short cycle crops have expressed keen interest in joining PCA, with representatives of Ferrero visiting PCA field operations in San Martín, and other major players expressing interest in the context of recent national and international trade fairs and conferences. Initial concerns about the PCA model have all but disappeared, but new concerns have emerged on the supply side of the program. Delays in the production of plant material have been experienced, with slippage in the schedule associated with the production of plant material. There have been delays in the set-up of large-scale nurseries and clonal gardens, and demonstration parcel preparation also fell behind schedule. The production side had difficulties meeting the requests for initial delivery of bud wood sticks for grafting fine-flavored cocoa, with shortages of certain universal clones experienced, as well as initial problems with quality. However, these initial "glitches" were identified and resolved at an early stage. On the extension and training side, the team has done well in reaching out to farmers and providing the first two training modules to a significant number of producers and organizations. However, the quantity and quality of training materials are still insufficient, and challenges have been experienced in balancing the needs of data collection with actual extension services. The PCA has prioritized strengthening these areas, mobilizing additional team members and increasing collaboration between communications staff and contractors, and the technical team. The Peru Cocoa Alliance has made significant progress in consolidating the Alliance as a Service Platform, with a primary emphasis on strengthening management structures and systems. Alliance development activities continued, including active participation in promotional events and trade fairs, and engagement with new potential partners. However, the bulk of time and effort was spent on adjusting management and reporting structures, including certain levels of reorganization, and increased levels of cooperation and support between Carana, Source Trust, and Casa Luker. In the realm of communications, this quarter marked important progress at two levels. Field-based communications focused on the development of key materials and supporting various events aimed at promoting PCA among producers and other key players. Strategic communications aimed at improving relations with key partners, especially at the national and regional government levels, also made progress. PCA leadership began reaching out more proactively to certain stakeholders, attempting to better understand their needs and concerns related to the program, and identifying areas where coordination and cooperation could be enhanced.