CFC's COO, Axel Gruber, discusses the role of investment in improving the livelihoods of farmers with the Netherlands-African Business Council
It is not so much the commodity that makes the difference for development and wealth creation. Rather,it is the degree of value addition that can be captured in the country of origin and ways that allow for de-commodification, which means that commodities are being processed or produced for specific markets and demands.
For example, today cocoa is not only produced but processed in West Africa, which was unheard of 15 years ago. In another case, breweries require special varieties of sorghum and are prepared to enter into advance contracts and pay higher than the commodity price to local farmers. Similarly, traceable coffee with certain quality traits and taste from regularly audited cooperatives is no longer a commodity, it is a specialty product.
Value addition in in African commoditdy value chains requires dynamic entrepreneurs who have the understanding, capacity and courage to take the risk to develop a business in a challenging environment. CFC constantly seeks to improve its access to interesting, scalable projects with a high potential to improve the lives of the rural farming and non-farming communities.