Photo credit: World Cocoa Foundation
The Asian Development Bank (ADB) and ECOM Agroindustrial Corp. Limited (ECOM) signed a loan of up to $60 million to help sustain the livelihoods of smallholder farmers amid the coronavirus disease (COVID-19) pandemic and improve their ability to withstand the impacts of climate change.
The loan will support ECOM’s continued operations in India, Indonesia, Papua New Guinea (PNG), and Viet Nam by financing inventories of coffee and cacao procured from more than 27,800 smallholder farmers. It will also fund advance payments and extension services to farmers to provide liquidity and support to these farmers and reduce the impacts on their business from the disruptions to agricultural value chains caused by the pandemic. Extension services provided by ECOM focus on improving farmers’ capacity to adapt to climate change by introducing sustainable farming techniques, data solutions, and financial literacy.
“Climate change and the ongoing pandemic are intensifying the pressure on smallholder farmers in Asia and the Pacific. COVID-19 has reduced their incomes and made it more difficult for them to invest in climate-resilient measures,” said ADB Agribusiness Investment Unit Head Martin Lemoine. “Commercial banks are reducing their exposure to commodity players. ADB’s support for agricultural merchants like ECOM will help bridge this funding gap and ensure reliable income to farmers, enabling them to take steps to adapt to climate change.”
An accompanying technical assistance grant will provide capacity building in climate-smart cocoa and coffee farming best practices and financial literacy in Indonesia and PNG, further supporting farmers’ recovery from the pandemic. The technical assistance will benefit about 4,000 farmers and also promote gender-inclusive practices. The grant comprises $205,000 from ADB’s Technical Assistance Special Fund for COVID recovery and $425,000 from the Strategic Climate Fund, administered by ADB.
The borrowers are ECOM Agroindustrial Corp. Limited (EACL), ECOM’s ultimate holding company incorporated in Switzerland, and ECOM Agroindustrial Asia Pte. Limited, a wholly owned subsidiary of EACL, incorporated in Singapore.
ECOM is the world's largest coffee miller and one of the world's top merchants of coffee, cocoa, and cotton. It works with over 800,000 farmers in 40 countries. As an integrated commodity originator, processor, and merchandiser, ECOM focuses on partnering with smallholder farmers to provide traceable and certified products to branded product manufacturers.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
Article courtesy of ADB
