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The Honduran economy continues to face the challenges of poor diversification, inequality, and widespread poverty. In the current post-pandemic context and global inflation, commodity markets have seen a high level of volatility. Coffee remains Honduras’ top export product, but the reality for Honduran coffee farmers is filled with high production costs, heightened challenges due to climate change, difficulty finding workers due to growing migration in the field of production, and increased requirements to access international markets. In addition, many farmer organisations have limited access to markets and have not had the opportunity to build direct long-term trade relations.
In many cases, the international market recognises a price premium for sustainably produced coffee. However, sustainable coffee farmers in Honduras have not always benefited from a higher income for their coffee. In many cases, their coffee cooperatives or producer associations lack the knowledge and connections that are necessary to sell sustainably produced coffee to interested buyers. Consequently, they are selling certified coffee or coffee that would meet sustainability requirements at conventional prices.
The project seeks to address this disconnect by strengthening the trade promotion capacities of Honduran business support organisations so that they become able to provide services to export-ready companies that are themselves committed to sustainable and responsible production. The main objective of the project is to create resilient livelihoods for smallholder sustainable coffee farmers, foster economic growth – particularly for women in the coffee sector – and participation in global value chains, as well as contribute to a healthier environment.
As the first project to apply Swisscontact’s innovative Inclusive Trade Promotion methodology, this project will seek to influence two market systems simultaneously: the inclusive export promotion system (last mile) and the inclusive import promotion system (first mile) in the destination markets. This double approach allows for the strengthening or creation of inclusive global value chains, which generate value for both seller and buyer, promote economic growth and reduce wealth inequality in Honduras.
Direct partners of the project will be nine local business support organisations. These business support organisations provide capacity-building services to sustainable coffee cooperatives, producer associations and SMEs that allow them to identify their export capacity, design an export marketing plan, obtain market intelligence and find out about specific market access requirements. Once they are ready to access export markets, the organisations support them with go-to-market services, such as facilitating participation in trade shows and other matchmaking events, which will help them establish sustained relationships with potential buyers in Europe and other prioritised regions.
Lastly, the project will facilitate the creation of a multi-stakeholder Alliance for Inclusive and Competitive Trade Promotion to strengthen the currently weak and underdeveloped trade promotion environment in Honduras. Made up of champions from both the public and the private sector, this alliance is envisioned to create the framework conditions conducive to inclusive economic growth and resilience for Honduran sustainable coffee companies.
Smallholder sustainable coffee farmers who are part of sustainable coffee companies (cooperatives, producer associations and SMEs) are able to successfully negotiate directly with sustainable importers, generating increased sales of sustainable coffee and in this manner make their livelihoods more resilient.
This project is part of the Swisscontact Development Programme, which is co-financed by the Swiss Agency for Development and Cooperation (SDC), Federal Department of Foreign Affairs FDFA.