When sourcing cacao, it is interesting to know who is involved in the production, as it tells you more about the impact you are making on the field. At Silva we select our cacao suppliers because they bring something extra for Flavour, Forests, Farmers and the Future.

Three sources of cacao

Our cacao is sourced from three different types of producers: plantations (family farms), cacao cooperatives or social enterprises. We want to dive deeper into cooperatives and social enterprises, but first a little more about plantation cacao.

Plantation cacao is produced on one single farm: growing, harvesting, fermentation, drying, picking and selecting, and packing is done on this farm. It is also called single estate cacao, but this sounds a bit to posh, just like plantation. You might think there is a big manor with the estate owner sitting on the veranda, smoking his (or her!) pipe. In reality, these are family-run cacao farms, with mum, dad and the (grown-up) kids working hard to make a living.  When we select a plantation cacao, it is because the farm adds something extra: interesting ecological impact, a model farm for neighbouring farmers, conservation of rare cacao varieties, … And of course always, we select family farms because they supply cacao with a beautiful flavour profile. Examples of plantation cacao are Ecuador Finca Garyth, Brazil Fazenda Camboa, Guatemala Paso Crocodillo and Finca Ana Maria, and Mava from Madagascar.

Impact on the lives of smallholder farmers can be achieved when sourcing cacao from a cooperative or social enterprise that buys wet beans from farmers for central post-harvesting. Proper fermentation and drying according to pre-defined protocols has a high impact on the quality of the cacao, making the cacao a contender on the market for specialty cacao with higher prices.

Similarities between Cooperatives and Social Enterprises:

Cooperatives and social enterprises have a lot in common in terms of mission, vision and objectives. For example, in Silva’s cacao world both a cooperative and a social enterprise focus on production of specialty cacao, contributing to the livelihood of participating cacao farmers, protecting and/or restoring the natural environment and biodiversity. Social well-being of their members (cooperative) or stakeholders (social enterprise) is at the heart of both organisations. And they both deliver services to the farmers, like technical assistance, access to (premium) markets, possibly also access to finance, certification, legal matters, et cetera.

And the Differences between Cooperatives and Social Enterprises:

While cooperatives and social enterprises have a lot in common, there are also differences:

• Governance: cooperatives are democratically run and members are in control, while social enterprises have a boss or a board running the organisation with shareholders having control over which direction the organisation takes.
• Ownership: members are the owners of a cooperative, while shareholders are the owners of a social enterprise.
• Capital and financial costs: members contribute to the capital of a cooperative, and with these pooled resources operational costs are shared; the capital of a social enterprise is funded by its shareholders, and all costs and financial risks are carried by the enterprise.
• Financial gains: financial returns of a cooperative are distributed to its members and re-invested according to the purpose of the cooperative; business partners of a social enterprise are valorised for their work and financial contribution, and financial returns are re-invested according to the social purpose of the organisation.

Key Question: Which organisation is Best for Maximum Impact?

Difficult to say – impact depends on so many factors that we can’t answer this question straigt away. Still, let’s make an effort.

Theoretically, cooperatives have the biggest economic impact on their members. This can be positive (higher income), but the members also carry the financial risks, which can work out negatively on their income. Environmental and social impact depends on the organisation: both a cooperative and a social enterprise can focus on environmentally friendly and social responsible operations and outcomes. On the other hand it is also possible that these organisation don’t pay any attention to either.

At Silva we like to work with cooperatives because they are self-governing, are locally owned and value creation is local, they have member engagement and shared responsibilities. However, cooperatives often lack capital and access to finance, decision-making can be slow, and marketing is often generic instead of unique. That’s where we fill the gaps and bring value.

This being said, we also like to work with social enterprises. Generally, these organisations are faster in decision-making, they have better access to capital and finance, they bring and share international knowledge and skills to the field and have a global perspective, and they are also able to open channels to international sales markets. An advantage for farmers: they run less financial risks.

From our experience the values, ethics and level of professionalism in the organisation are of key importance. Incompetence, corruption, bad management, missing checks and balances and other organisational malfunctioning will all lead to negative financial, social and environmental impact, while value-driven organisations can create a great positive impact. When visiting the field, we are always interested in finding out all about the cacao, its genetics, fermentation and the like. But the strength of the organisation – be it a cooperative or a social enterprise (or a family farm) – also counts on our full attention to generate continuity, stability and positive impact on the long run.

All in all, we cannot answer which organisational form is best for impact. We can share what we know (and we know a lot ;-)) about our cacao origins. And we invite you to be curious and do your own research, investigate your suppliers and their sources, and find out which cacao origins fit your values, needs and objectives.

Silva’s Partners:

At Silva we aim to build meaningful, long-lasting partnership that bring value to the supply chain and create stability for all stakeholders. We favor like-minded and value-driven partners, whether they are cooperatives or social enterprise.

We are grateful to team up with GoGround in India, Kokoa Kamili in Tanzania, Auro in the Philippines and Zorzal in the Dominican Republic. These social enterprises are doing a great job in the field by sharing knowledge and techniques, investing in quality, opening channels to the international market of specialty cacao, organising certification…. these partners of Silva create a real and substantial added value for the farmers they work with.

We are also very happy to work with solid cacao cooperatives that supply Silva with fantastic cacao beans. To name a few: Kekeli in Togo, Flor de Pancasan, Cacaonica and Coodeprosa in Nicaragua, SCOOPS in Cameroon, Tsarafandray and Mivoatra in Madagascar, CASFA in Mexico, Cacao Okapi in Congo et cetera. For Silva it is a pleasure to partner with these wonderful cooperatives where farmers are in the driving seat.