Colombia-based Company will receive $1.15 Million USD to Help Raise the Incomes of Cacao Farmers in Conflict Affected Areas
Acumen and the U.S. Agency for International Development (USAID) in Colombia announced today the first investment in a joint $4 million initiative aimed at generating rural economic growth in Colombia through private-sector investments. Called the Investing for Peace Fund, or Invirtiendo Para la Paz, the fund will direct capital and debt investments through Acumen into early-stage companies that demonstrate the capacity to have widespread impact on the country’s marginalized, poor rural populations. The first investment of the initiative, in the amount of $1.15 million, will be made in Cacao de Colombia, a producer and marketer of premium chocolate and cocoa grains that sources cacao—the raw material for chocolate—from smallholder farmers affected by Colombia’s long history of armed conflict, drug trafficking and particularly high rates of poverty.
Cacao de Colombia provides technical assistance and training in sustainable farming practices to smallholder farmers to improve the quality and output of their land and ensure a fair market price for their crop. The company purchases cocoa grains directly from local growers at premium prices before selling them to international chocolatiers, transferring the profits back to the farmers. “Colombia has the potential to transform its cacao industry into one that can compete in international markets while at the same time transform the lives of thousands of cacao-growing families along the way. With the support of Acumen and USAID, innovative companies in the agricultural sector like ours can play a key role in helping achieve sustainable peace and prosperity in our country,” said Cacao de Colombia’s Founder and CEO, Carlos Velasco. Cacao de Colombia will use the funds from the investment to strengthen its operating capacity and extend much-needed market access to as many as 1,200 smallholder farmers across the departments (which are equivalent to a state in the U.S.) of Tumaco and Arauca, as well as the Sierra Nevada in the department of Magdalena.
“We are particularly excited about the investment in Cacao de Colombia because the company is not only helping to rebuild trust and increase profits for poor farmers in post-conflict regions. This is an example of how we can connect vulnerable communities with private investments to improve their economic opportunities and to help them establish solid foundations to build peace from the local level up.” said USAID/Colombia Mission Director Peter Natiello.
While Colombia has made considerable strides over the past decade in reducing urban poverty, as well as extreme poverty, there remains a persistent gap in income equality between the country’s urban and rural areas. As recently as 2015, census research has demonstrated that more than 45 percent of Colombians in rural areas are still living in poverty, with the extreme poverty rate in rural areas nearly four times that of urban areas. Deepening the gap is the country’s long-standing armed conflict—the violence has not only forced more than six million people off their land, but it has also created a significant hindrance when it comes to attracting private investment in these areas.
“Without a vibrant private sector that can provide income generation, income stability and employment opportunities in the rural Colombia, there will not be a viable path out of poverty for rural populations. Through the Investing for Peace Fund which will channel funding from Acumen and USAID, we can turn our attention to raising rural incomes—one of the country’s most pressing problems,” said Acumen’s Latin America Director, Virgilio Barco.
The U.S. Agency for International Development (USAID) is the lead U.S. Government agency that works to end extreme global poverty and enable resilient, democratic societies to realize their potential. In Colombia, USAID supports government and citizens efforts to implement a sustainable and inclusive peace.