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Annual Report 2021

Foreword: a message from Managing Director

Alongside the undoubted challenges of 2021, we have a number of inspiring outcomes to celebrate. The COVID-19 pandemic made life harder for many of the businesses we invest in, but it also opened the door to new ideas and opportunities to create transformative resilience-building changes.

We are proud of our achievements this year. 2021 saw the highest amount of funding disbursed since the organisation was reformed in 2012. 11 new investments were approved by the CFC’s Executive Board, another new high. This involved an outlay of USD 114.3 million, including USD 18.9 million of CFC contribution. These investments targeted a number of Sustainable Development Goals (SDGs): SDG 1 (No Poverty), SDG 2 (Zero Hunger), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), SDG 10 (Reduced Inequalities), SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action). Together, these new partnerships will benefit 228,165 smallholders by improving their market access and boosting their productivity. This will lead to a net additional income for each smallholder of USD 263 per year. In total, it is expected that 80,658 hectares of additional land will be cultivated due to the interventions financed by the CFC. We have also made great strides on SDG 5, with women making up 63% of those benefitting from our 2021 investments, compared to 31% in previous years. Alongside these steps, we have also begun the process of launching our Commodity Impact Investment Facility (CIIF), a new fund that will scale up our good work globally.

Each year we keep striving to do more, because our work is just as important now as it was when the CFC was established. At UNCTAD’s first session in 1964, the impact of commodity price volatility was at the top of the agenda, and a discussion on creating a common fund began. Fifty-eight years later and the economies of many developing countries are still driven primarily by commodities. This kind of commodity dependence makes them vulnerable to economic shocks. It is a trap that UNCTAD rightfully warns these countries will not escape from in the foreseeable future unless they go through ‘a process of technology-enabled structural transformation’.

We act as a bridge between the developing and developed world, transferring technology and innovations from our base in the Netherlands. We lean on the innovation around us with a number of our projects enriched by Dutch entrepreneurs and businesses, benefitting both them and agripreneurs in the developing world.

Although countries in the developing world face significant technological challenges, their access to scientific and technical knowledge has grown. At the CFC we work to bring together innovation and local knowledge to develop solutions that make a difference on the ground.

To get a better idea of how we are helping smallholders benefit from value chain innovation, read about the impact some of our investments are having on: Shalem (page 69), Olivado (page 51), Kennemer (page 71), COOPAC (page 42), Mercon (page 73).

Our purpose is to advance sustainable business models, primarily involving smallholders or small and medium-sized enterprises (SMEs). We want to empower them to grow and develop so that local banks and other financial institutions feel confident enough to lend to them. Here are some ways we’re putting that purpose into practice.

Supporting smallholders by adding value in Kenya

Shalem, a female owned and led agri-business in rural Kenya, approached the CFC for financing in 2017 after they had been turned down by local banks. The CFC and its co-financier, the Dutch Trust Fund, agreed a loan of USD 610,000 with Shalem. Working in partnership with us from 2017 to 2022, Shalem transitioned from a grain aggregator to an added-value manufacturer, supporting the least privileged people in the surrounding communities. Their products, fortified with minerals and vitamins, have built food security in the region and boosted the nutritional intake of its most vulnerable people at a time, during the pandemic, when it was most needed.

Of course, there were challenges. As COVID-19 restrictions were introduced, bars and restaurants closed. In turn breweries reduced production and the demand for shorgum plummeted, leaving Shalem with hunderds of tonnes of the grain and no one to sell it to. The CFC stepped in with an additional loan, under its COVID-19 Emergency Liquidity Facility, to help Shalem wheater the storm and continue paying its smallholder suppliers. This loan stabilized Shalem and enabled it to bounce back quickly. Today it no longer needs our fund, having grown into a strong business local banks want to invest in. And when we are no longer needed, that is a cause for celebration!

Alleviating poverty with organic coffee e-Commerce in the DRC and Rwanda

We are always looking to support the most vulnerable in the least developed countries, the LDCs, LLDCs, SIDs and the likes. Our investment in COOPAC has helped us do this in one of the most challenging geo-political tracts of land, between the Democratic Republic of Congo (DRC) and Rwanda. The venture was based on innovative coffee cultivation and gender equality, using an e-Commerce sales platform to expand its market access. This brought much-needed income and positive social impacts to an otherwise impoverished community.

Encouraging thriving ecosystems with carbon credits in The Philippines

After phenomenal success in their cocoa value chain, Kennemer is now using our fund to venture into the carbon credits market. After two years of research and evaluation, Kennemer launched MinTrees, a reforestation programme designed with 2,000 smallholders from rural Philippines. Through the programme, which is now in the final stages of verification with an external auditing company, Kennemer will soon be able to issue carbon credits.

Lifting the coffee value chain in Nicaragua, Honduras, Guatemala, Brazil and Vietnam

Taking a detour from our usual SME-sized businesses, the CFC invested in the Mercon Coffee Group to develop an innovative coffee value chain that provides smallholders with a com­prehensive support package of knowledge and finance. Built around three key pillars – no child labor, no discrimination and fair and equitable payment – the program, known as LIFT, involves 4,200 farmers from Nicaragua, Honduras, Guatemala, Brazil and Vietnam. The potential impacts are life changing for many. For example, we expect LIFT farmers from Nicaragua to receive an average annual coffee income of USD 6,706.80, compared to non-LIFT farmers who earn USD 1,474.00. We are keen to replicate this innovation in other coffee value chains. 


Going green with avocados in Kenya

Olivado runs organic training programs for its smallholder suppli­ers, enrolling 800 in 2020 alone. It has a rigorous farm-to-market traceability system in place, including teams of field officers who regularly visit farms to offer support and advice on how to meet organic certification requirements. Olivado is also on track to hit zero carbon emissions through its investment in biogas plants that run off organic waste, including from its own avocados.

Growing agroforestry in Africa and Latin America

The Moringa Agroforestry Fund, which the CFC supports both as an investor and as its Technical Assistance Fund Manager, invests in businesses that work with smallholders who are farming forests sustainably, by combining trees with agricultural crops and animal husbandry. During the CFC’s investment period, Moringa’s work benefited 12,684 smallholders who sustainably manage 14,984 ha of land.

Demand is higher than ever, supply needs to rise to the challenge

As the world deals with a pandemic and the destabilising impact of conflict, it is no surprise demand for the CFC’s services has increased across the globe. Given the enormity of the challenges facing us, we need to step out of our comfort zones to find innovative solutions.


In 1983 Indian economist and philosopher Amartya Sen noted that “starvation statements are about the relationship of persons to the commodity of food, rather than about the food supply per se”. In other words, we have enough raw commodities but we must do a much better job producing, processing, marketing and con­suming them, to prevent hunger and build fairer societies.


This is our core purpose. We are small, effective, and impactful. But to do more we need larger partners such as the World Bank, IMF, IFC, GCF, EU and the wider UN ecosystem, to de-risk our investments. 


With their support we can increase the innovative programmes that are still so rare in developing regions and address some of the most pressing issues of our age. For instance, let’s find a way to put the Multilateral Investment Guarantee Agency (MIGA) or the Green Climate Fund (GCF) within reach of small­holders and SMEs, enabling them to become more climate resilient through better training and equipment. 


Beyond our work, we need global solutions in the commod­ity sector that solve rather than relocate issues. Tax practices across the world are one example of an area that needs a uni­fied approach to ensure fairness and social justice everywhere. After all, inefficient and unfair taxation affects everyone from the grandma in Manchester to the mother in Mali. 


Take the Democratic Republic of Congo. It has enormous min­eral wealth, particularly in cobalt, copper and diamonds. Yet it has some of the world’s worst malnutrition and child mortality, as well as millions of children who are not at school. A more just distribution of this wealth would empower progress that releases millions trapped in poverty. Governments must reflect on how to do this, rather than pinning all the blame on the ‘resource curse’.  


I am deeply thankful to our member countries and the institutions that support us. I also continue to be inspired by the commitment and dedication of the smallholders and SMEs we work with; despite the challenges they face. And of course, I want to thank our team at the CFC for making all our achieve­ments possible. 


As we look ahead, I am optimistic that we can expand our impact and contribute even further to the UN SDGs by providing targeted financial support, scaling up sustainable and inclusive economic growth through our CIIF fund, and working to deliver on the Doha Programme of Action.


I look forward to continuing our journey with you.

H.E. Sheikh Mohammed Belal


CFC Highlights

Expected Impact (current loan portfolio)

The designations employed and the presentation of material on this map do not imply the expression of any opinion whatsoever on the part of the Secretariat of the Common Fund for Commodities and/or on the part of the countries mentioned on it, concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The information shown is this map is for information purposes only and should not be considered as any form of endorsement by the Common Fund for Commodities and does not create any legal rights or obligations for any Member State.

CFC - Driving sustainable development through commodities


From the bread on your table and the cotton in your shirt to the copper and lithium in your smartphone and the oil and gas that heats your home, commodities are part of the fabric of our daily lives[1]. As the World Economic Forum has recognised, they underpin humanity’s survival and progress.  


But for centuries the rewards that come from producing and trading commodities have not been shared equally. The CFC was founded to change this. Our work is driven by the principle that commodity production, processing and trade should benefit both developed and developing countries alike. In practice this means it should deliver positive economic, social and environmental outcomes to everyone, particularly vulnerable communities in commodity dependent developing countries (CDDCs).


What are commodity dependent developing countries (CDDCs)?


According to UNCTAD, a country is commodity-export dependent when more than 60% of its total merchandise exports are commodities. The organisation’s State of Commodity Dependence 2021 report, released on 8 September 2021[2], noted that the number of commodity dependent countries has increased during the past decade from 93 in 2008–2009 to 101 in 2018–2019.


Of the 101 commodity-dependent countries in 2018–2019, 38 relied on agricultural product exports, 32 on mining exports and 31 on fuels. The issue is particularly acute in Africa and Oceania, with more than three quarters of countries in both regions relying on commodity exports for more than 70% of their total merchandise export revenues.


All 12 countries in South America had a level of commodity dependence greater than 60% in 2018–2019. For three quarters of them, the share of merchandise exports that were commodities exceeded 80%.


In Asia, the subregion of Central Asia had the highest level of commodity dependence, with commodities exports accounting for more than 85% of merchandise exports on average across its five countries. All of which were considered commodity export dependent.


The report urged developing countries caught in the trap of commodity dependency, which leaves much of their populations poor and vulnerable, to diversify their economies by enhancing their technological capabilities. Unless they go through “a process of technology-enabled structural transformation”, it warned, they are unlikely to break free.


Our goal at the CFC is to reduce the vulnerability of CDDCs. We invest in businesses that support smallholders to add value and boost productivity while promoting climate resilience and gender equality. In turn this will reduce the poverty many of them experience.



The state of commodity dependence | UNCTAD

This map was prepared by UNCTAD and can be found at:

We are keenly aware of the relationship between commodities and climate change, and the pressing need for countries to reduce their dependence on the extraction and consumption of fossil fuels. We are working hard to facilitate the transition to renewable energy in developing countries by increasing our investments in businesses that are tackling climate change in line with the UN’s Climate Action SDG.

For many countries, commodities are the main source of income. Understandably producers are keen to earn more by producing more. But this frequently reduces selling prices and puts pressure on the natural resources, which compromises sustainability and development in the medium to long term. In addition, concentrating heavily on a few commodities has profound social consequences.

Take the case of commodities which require long-term invest­ment, such as coffee. While a small number of plantation owners may benefit from a growth in trade, many workers toil in tough conditions for very little reward. In countries domi­nated by this model it can lead to underperforming economies, which is known as the ‘resource curse’. The CFC was founded to rebalance this model so that the production, processing and trade of commodities benefits both producers and consumers, and the communities they live in.

Our work with the commodity sector contributes to sustainable development that benefits the social, economic and environ­mental fabric of a country. Of course, sustainable development is a broad term. There is no one-size-fits all formula, which is why we make sure our investments align with the strategies and development needs of each country and area we operate in.

The key starting point for all our investments is how will it increase food security, financial security and market access for the smallholder farmers who account for up to 80% of food production in Africa and Asia, but whose livelihoods are on a knife edge.

To address the issues they face, we provide financial support to innovative projects that will positively impact smallholder farmers and SMEs engaged in commodity production, processing, and trading in developing countries. By providing impact financing at the grassroots level we enable smallholders and SMEs to raise production, connect to markets and improve their incomes.

Our core activities

We support communities that rely on the commodities sector and are most exposed to its risks. We are based in the Netherlands from where we can harness innovation to act as a bridge between the developing and developed world.


We offer financing up to USD 2.0 million, which SMEs submit proposals for. This bottom-up approach ensures our invest­ments are targeted to their needs and those of their local communities, while preserving the environment and creating stronger value chains.


Beyond financing, the CFC manages technical assistance facili­ties for other impact investors operating in areas connected to our mission. This collaborative approach and knowledge sharing, enables us to extend our support to more SMEs and smallholder farmers in more countries.


Investing to make a difference

The Fund supports and invests in commodity value chains, in partnership with the public and private sector, development institutions and civil society. In particular, we harness the potential of commodity production, processing, manufacturing and trade, for the benefit of the poor.

We invest in organisations and activities that:

  1. are innovative and target new opportunities in commodity markets that lead to commodity-based growth, create employment, increase household incomes, reduce poverty and enhance food security;

  2. are scalable, replicable and financially sustainable;

  3. have the potential to positively and measurably impact the socio-economic and environmental situation of the people and places involved in commodity value chains;

  4. develop stronger connections with existing markets or create new markets along the value chain;

  5. increase the financial, and other, services available to commodity producers and commodity-based businesses;

  6. enhance knowledge generation and information sharing;

  7. build effective and cost-efficient collaboration between producers, industry, governments, civil society organisations and other stakeholders for commodity-based development.

  8. connect the modern, digitally aware consumer with hardworking smallholders using technology. We call this ‘walking back along the value chain’ to directly benefit the smallholders who put food on our tables.


Key areas we support

We provide technical and financial support from field to fork. That means we operate all along the value chain from produc­tion to consumption and reach across local, national, regional and international markets. Here are some examples of specific areas we target:

Production, productivity and quality improvements

Processing and value addition

Product differentiation



Technology transfers, upgrades and innovation

Measures to minimise physical marketing and trading risks

Facilitation of trade finance

Risk management, such as price and weather volatility 


Investment with impact

We fund projects that are sustainable and deliver measur­able development impact within the framework of the SDGs. Our support is usually in the form of loans, including working capital, trade finance or similar financial instruments. In rare cases we will consider providing equity, quasi equity, lines of credit and guarantees. We also offer limited grants to qualifying organisations, for example, to enable specific new activities in areas of strategic interest or to support loan-based projects through activities such as capacity building and technical assistance.

Our activities are financed through voluntary contributions and capital subscriptions by member countries, as well as interest earned from our investments. The more generous member states are the more we can invest in overcoming the commod­ity dependence that exacerbates poverty, creating a fairer and healthier world for the benefit of everyone.


Partnering up to grow our impact

We can achieve more working together. We seek to build part­nerships with public and private institutions, bilateral and multi-lateral development organisations, cooperatives, producer organisations, SMEs, processing and trading companies, and local financial institutions. We look for several elements when selecting a partner, including that they:

operate in commodity value chains or provide financial and other services to small business operators, SMEs, coopera­tives or producer organisations;

have a proven track record in commodity development;

have the ability to invest in the value chain to reduce trans­action costs or increase revenues of producers, processors, storage or marketing;

have a clear plan focusing on developing and/or diversifying their production or services;

have a clear plan to expand their markets at local, national, regional and international level;

have the technical, managerial and financial capacity to ef­fectively and efficiently implement their activities;

include social, economic and environmental aspects in their scope of work;

share the CFC’s values, including internationally recognised principles concerning human rights, labour standards, the environment and anti-corruption;

will collaborate with the CFC to extend their core activities and create additional opportunities for everyone in the com­modity value chain.

Connecting consumers with producers in the digital era

Enabling sustained growth in agricultural productivity, has a key role to play in fighting poverty and is central to our mission. But this one is part of a complex puzzle – smallholders still need help to profit from their work.

Value chains are influenced by a range of forces on a national, regional and global level. Many of which are beyond our reach. With this in mind we’re seeking support from member states and the UN ecosystem to tackle the non-competitive behaviour of multinationals and brands in dominant positions in local markets.

Inevitably smallholders suffer in this context, struggling to attract a fair price for their produce. It also leaves them exposed to price shocks from events outside their control, such as COVID-19. Where there is a dominant player, they are forced to take the price on offer, no matter how low it is. And these prices tend to fall faster in tough times, than they rise in better times. To redress this power imbalance, the bargaining capabilities of smallholders need to be enhanced. This will take collective politi­cal will and the adoption of digital technologies, including block­chain and the Internet of Things, that directly connect producers and consumers. This kind of connectivity could open the door to a more sustainable system, in which smallholders earn a fairer income and we all appreciate where our food has come from.

The CFC will continue to search for innovative ways to deliver on its promise to make commodities work for everyone in the coming years.

© 2022 - Common Fund for Commodities

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Anita Simons, symsign