Many Latin American agricultural businesses don’t survive long term. But it isn’t because they’re fighting against Mother Nature or bad crops or not enough hard-working laborers. It usually boils down to a lack of financial training and little access to credit.
Now, here’s where that bee and your morning coffee come back into the picture.
Root Capital, with support from the Walmart Foundation, is helping provide credit and training to 24 agricultural businesses throughout Mexico. These enterprises play a critical role in linking small farmers to faraway global markets, resulting in more stable incomes. Over the next two years, we will work with honey, cocoa and coffee cooperatives that collectively reach 7,500 small farmers.
Since the project launched in December 2017, it has provided tailored training in financial management and accounting systems to eight Mexican honey and coffee cooperatives. We’ve also supported four of these businesses – that previously had no access to credit from commercial banks – with $1.1 million in new financing. To date, this credit and training has strengthened the livelihoods of more than 2,000 small farmers.
This project also gives us the opportunity to help farmers unlock the hidden potential of honey and cocoa. Despite growing U.S. demand for honey, most honey producers are extremely poor. And they’ve usually turned to beekeeping to supplement income from their primary activity – coffee farming. But honey offers economic opportunities to those able to invest in it: It doesn’t require much land, can be pursued in many different climates and tends to generate relatively high earnings per kilo. Plus, the benefits of beekeeping go beyond livelihoods. Healthy hives sustain diverse ecosystems by pollinating plants, including many of the crops we depend on for food.
Cocoa holds similar promise. Latin America produces 48% of the world’s sustainable cocoa and 85% of its certified organic cocoa. Demand for fine chocolate means there’s significant room for growth. Like honey, cocoa provides an alternative crop for small-scale coffee farmers threatened by climate change and food insecurity.
Thanks to support from the Walmart Foundation, Root Capital will build the capacity of early-stage honey, cocoa and coffee businesses to access stable financing. And that stability will, in turn, empower farming families in Mexico to invest in nutritious food and education for their children, better farm productivity and so much more.