Brazil Launches $176 Million Fund to Support Small Cocoa Producers

A new initiative aiming to support Brazil’s small cocoa farmers was launched by a coalition of four Brazilian organizations, targeting to raise 1 billion reais ($176 million) by 2030. The Kawa Fund, spearheaded by the philanthropic Arapyau Institute, investment platform Violet, advocacy group Toboa, and impact investor MOV Investments, seeks to provide essential financing to small-scale cocoa producers primarily located in the states of Bahia and Para.

Initially, the fund plans to distribute around 30 million reais to 1,200 small cocoa farmers, who have historically faced significant challenges in accessing credit and technical assistance to enhance productivity. These producers account for approximately 80% of Brazil’s total cocoa production, but their limited financial access has hindered investment in vital inputs such as fertilizers, irrigation systems, and modern equipment.

The initiative arrives at a pivotal moment for the global cocoa industry, which has been grappling with rising prices caused by production setbacks in leading cocoa-producing nations, notably Ivory Coast and Ghana. Brazilian cocoa production itself declined nearly 20% last year, further underlining the urgency of addressing financial accessibility to stimulate local productivity and economic sustainability within the sector.

Farmers receiving loans from the Kawa Fund will have three years to repay, with an average six-month grace period and an annual interest rate of 12%. This structure is intended to provide growers with the financial flexibility necessary to invest in productivity-enhancing tools and technologies, creating long-term stability and improved incomes for rural communities.

As the global cocoa market faces continued volatility, initiatives like the Kawa Fund could play a significant role in stabilizing supply chains and empowering small farmers who represent the backbone of cocoa production in Brazil.