Semi-Annual Report: Safe Processing in Cooperative Enterprises (SPICE) Project

The project aims to establish a spice facility capable of processing SOFA members' crops and exporting FSMA-compliant, ready to eat spices to Frontier and other independent buyers. This initiative is supported by USAID's Cooperative Development Program (CDP) award. The project context is characterized by the Sri Lankan spice industry's lack of workforce knowledge and infrastructure to meet the new food safety and quality requirements of US buyers, as mandated by the Food Safety Modernization Act (FSMA). As a result, Sri Lanka is witnessing a decline in the value-add portion of the spice processing industry, with other origins taking advantage of Sri Lanka's high-quality primary processed spices. The US spice trade imports from Sri Lanka are reducing, and Sri Lanka is losing market share to US buyers. The SPICE project will support the training of farmers, processing facility staff, and SOFA management, as well as provide the secondary processing equipment, which will facilitate the export of value-added, food-safe, ready-to-eat spices. The project will also target youth, women, and disabled persons from SOFA membership families for recruitment and training, creating inclusive opportunities for disadvantaged rural demographic groups and off-farm income opportunities for SOFA's farming families. The CDP Project Theory of Change anticipates that if cooperative performance is improved, if the enabling environment is improved to support cooperatives with access to key resources and appropriate legal frameworks and services, and if donor-funded cooperative programs are improved through collaboration and learning, then cooperative systems, members, and communities will work to address the root causes of poverty and instability through increased social and economic value. The SPICE Project Theory of Change is based on the assumption that if SOFA and Frontier Co-op foster understanding of US regulatory food safety requirements, establish an in-country secondary processing facility, and provide training and equipment to farmers and processing facility staff, then SOFA members will be able to capture additional value, stabilize incomes, and increase household livelihoods. The project will focus on three key areas: (1) training and capacity building, (2) infrastructure development, and (3) market linkage facilitation. The training and capacity building component will focus on providing farmers, processing facility staff, and SOFA management with the knowledge and skills necessary to meet the new food safety and quality requirements of US buyers. The infrastructure development component will involve the establishment of a secondary processing facility, which will provide the necessary equipment and infrastructure for the processing and packaging of spices. The market linkage facilitation component will involve the establishment of relationships with US buyers and the facilitation of the export of value-added, food-safe, ready-to-eat spices. The project will also focus on creating inclusive opportunities for disadvantaged rural demographic groups, including youth, women, and disabled persons from SOFA membership families. This will involve the recruitment and training of staff for the processing facility, as well as the provision of off-farm income opportunities for SOFA's farming families. Overall, the SPICE project aims to improve the competitiveness of the Sri Lankan spice industry, increase the income and livelihoods of SOFA members, and contribute to the economic and social development of communities in Sri Lanka.