A dynamic cost model to measure the costs of a sustainable cocoa production

Situation
In 2016 the Pricing Unit of Fairtrade International will carry out a review of the Fairtrade prices for cocoa to be able to determine the Fairtrade Minimum Price (FMP) and/or Fairtrade Premium (FP). As part of this price review for cocoa, Fairtrade International wished to look into the sustainable costs of production of Fairtrade cocoa (COSP).

Assignment
Fairtrade International asked NewForesight to help prepare the COSP-study and provide a detailed insight into the cost items related to Fairtrade production of cocoa. Part of the assignment is to provide advice on the data collection approach for each of these cost items.

Work delivered
To enhance understanding of the different cost items, and contribute to insight in the relevance of those cost items under different circumstances NewForesight is developing a dynamic cost model. The model can be described as a comprehensive and flexible cost framework that enables data collection under different scenarios. An extensive list of fixed and variable cost items is included in the model, as well as different conditions under which cocoa production takes place.

Using this model Fairtrade International can collect data on costs of sustainable cocoa production in different Fairtrade regions. This input will help determine the Fairtrade Minimum Price (FMP) and/or Fairtrade Premium (FP).

VECO Strategic Learning Assesment in Latin America and Indonesia

October 8th, 2015

Just last week, consultant Hilde van Duijn travelled to Indonesia, whilst her colleague Sharon Hesp is currently still visiting Nicaragua and Ecuador. Both are working on an assignment for Belgian NGO Vredeseilanden. Earlier this year NewForsight completed a Strategic Learning Assessment (SLA) of the Vredeseilanden Country Offices (VECOs) in Africa, the end result of which was a report with insights and recommendations regarding strategy and structure of Vredeseilanden and its African regional offices and their programs.

The report stated how the organization could further develop the programs and projects on the African continent as to have more impact on the livelihood of the farmer. Vredeseilanden focuses on improving the farmer’s livelihood through strengthening their position in agricultural value chains. Sharon and Hilde are at present talking to the VECO teams in Latin America and Indonesia to assess what could be a next step towards more impact for these regional offices.

Karen Janssens, regional representative for VECO Latin America, noted that ‘Sharon Hesp (NewForesight) and Alfredo Umaña were able to capture thoughts from all levels in the organization. In their feedback-session to the team they created a shared understanding of where we stand as VECO Meso America. This was a highly participatory process with some clear feedback that was challenging yet not judging. We are looking forward to receive the complete report which we will use to keep improving our team dynamics and our growth as part of the network organization.’

A central topic in this Strategic Learning Assessment is the organization’s transition towards a network organization. Vredeseilanden is looking to become more decentralized, and in this new structure the VECOs will take on a different role to the ones they have currently. How this transition will be organized and what the new roles and responsibilities will be, is an important part of the conversation in the Nicaragua, Ecuador and Indonesia.

The final report of this SLA is expected in November.

Setting the future direction for the 4C Association: Strategy Framework 2016-2020 and adapted Business Model(s)

Situation
The 4C Association is the leading multi-stakeholder sustainable coffee platform, guiding the mainstream sector toward more sustainable production in a non-competitive arena where all relevant stakeholders are enabled to participate. In the last decade the 4CA has achieved great successes: significant growth in terms of membership and the volumes of 4C Compliant Coffee produced and traded, and their baseline standard enjoys wide recognition in today’s market.

Looking towards the future, the 4C Association is determined to stay ahead of the game and continue leading coffee sector sustainability for many years to come. 4CA’s future success requires a strategy that serves the needs of their broad membership today and tomorrow while anticipating trends in the coffee market and sustainability landscape. With that in mind, the governance of the 4C Association created an Internal Strategy Task Force earlier this year to deliver a high-level Strategy Framework 2016-2020 and a viable transition plan to move the 4C Association from its current position to a sustainable future.

Assignment
The Internal Strategy Task Force of the 4CA asked NewForesight to support the design of the new strategy and an adapted business model. This involved gathering input from key members and external stakeholders on the trends, opportunities and risks, as well as the elaboration of scenarios and related value propositions for the different groups of 4C members. The aim of the assignment was also to come up with an external strategy process focusing on better collaboration between public & private parties for sustainable sector transformation and collective impact.

Work delivered
The proposed strategy framework and new business model designed by NewForesight has been very positively received and been approved by the General Assembly in June 2015. Robert Waggwa Nsibirwa, the re-elected Chair of the Council, said: “With the strategic direction clearly set and agreed upon, the 4C Association is now in an excellent position to lead and shape the transformation of the coffee sector together with its members and partners”.

Future steps
With the endorsement of the General Assembly, the draft Strategy Framework will be finalized with guidance from the newly elected 4C Council into a Strategic Plan for 2016-2020 as well as a concrete and actionable Business Plan(s).

Strategic Learning Assessment to further develop programs that improve livelihoods of farmers

Situation
As a learning organization, Belgian NGO Vredeseilanden continuously seeks to enhance the impact of its strategy and programs. With a value chain approach it focuses on including smallholder farmers worldwide in modern markets to increase their incomes and improve their livelihoods. Vredeseilanden has programs in East and West Africa, as well as Asia and Latin America. For the coming period, the Vredeseilanden country offices are looking to fine-tune their strategic plan, and the organization as a whole is assessing the feasibility of growing towards a network organization.

Assignment
To further develop its programs, Vredeseilanden requested NewForesight to first assess the country programs in Tanzania, Uganda, DR Congo, Burkina Faso and Senegal as part of its mid-term strategy evaluation. How relevant are the country programs in relation to the organization’s end goal: improving the livelihoods of farmers? Are they coherent with international Vredeseilanden strategy? How effective and efficient are the programs and projects? And do the results last in the long run? Further, as Vredeseilanden is moving towards becoming a network organization, part of the assignment is to look into the change-readiness of regional offices to become independent members of this network. Willingness to change and local capacity needed for change are the main indicators here.

Work delivered
Desk research was conducted, including strategic documents and work plans from headquarters as well as from the regional offices. Next, self-assessment surveys were developed that focus on five indicators: relevance, coherence, effectiveness, efficiency and sustainability. Valuable information resulted from various interviews and workshops, based on the questions of the self-assessment survey, held in the five focus countries. Both desk and field research contributed to the end results: a report and a presentation for all levels of the organization to further develop programs and projects on international and regional levels. NewForesight presented the insights and recommendations at Vredeseilanden headquarters in Leuven in September 2015.

Further steps
After delivering the findings on the African continent we were asked to perform the Strategic Learning Assessment for Latin America and Asia. Vredeseilanden offices in Nicaragua, Honduras, Ecuador, Peru and Indonesia were included in this new assignment. The final report included an extra chapter to address the challenges related to becoming a network organization. Information was provided to facilitate regional offices to take-up a leading role and guide the transition. Insights and recommendations were presented to all regional directors on the General Council meeting in December 2015.

The international and regional offices are currently including recommendations in their strategies and work for enhanced impact on the livelihood of smallholder farmers.

Vision 2020 webinars: engaging stakeholders in the biggest public-private alliance for sustainable coffee to date

Situation
In March 2015, a Memorandum of Understanding (MoU) was signed between the International Coffee Organization (ICO), the 4C Association and IDH (The Sustainable Trade Initiative), resulting in the biggest public-private alliance in the international coffee market to date. This evolved from the Vision 2020 dialogues initiated by the 4C Association in 2013 and is a significant milestone in further scaling and coordinating the efforts of industry, standards, producing countries, NGOs and donors to improve coffee farmers’ agricultural practices and livelihoods.

Vision 2020 is a campaign in development. The MoU partners want to use the feedback and input of coffee sector stakeholders to further develop the collaboration framework and involve all interested parties. Thus, two webinar sessions were organized in May 2015, to enable all stakeholders to participate. The webinar served to introduce the wider coffee community to the objectives of the Vision 2020 campaign.

Assignment
NewForesight was asked to help prepare and facilitate the Vision 2020 consultation rounds in a manner that allows stakeholders to understand and provide feedback and creates the energy to contribute or engage with the common agenda and work streams. A report on results and recommendations coming from the participating stakeholders was another deliverable.

Work delivered
NewForesight summarized the content and process of the Vision 2020 campaign to date into one concise and visual Webinar presentation. The presentation was developed in close collaboration with the V2020 Task Force. We facilitated the two webinar sessions on May 11 that were a big success with over one hundred registrations from a diverse spectrum of coffee stakeholders. As a result, V2020 received extremely valuable feedback and proposals for next steps. All of this is reflected in the Webinar Report that NewForesight also made. The report presents an overview of both webinar sessions and includes a current status of Vision 2020, testimonials of key stakeholders, questions and answers, and what comes next.

Transforming small-holder dominated agricultural sectors towards sustainability

Situation
Agriculture has performed well over the last 50 years, not only keeping pace with rapid population growth, but also delivering food at progressively lower prices. Unfortunately this growth has led to overuse of natural resources and the release of greenhouse gases and other pollutants. In social terms, moreover, many agricultural producers continue to live at or below the poverty line, and agricultural workers may be subject to unacceptable working conditions. Achieving sustainability in the production of agricultural commodities is necessary to ensure food security, a healthy natural resource base and human wellbeing.

Assignment 
Addressing sustainability issues in agro commodity sectors is challenging, especially in those sectors that are dominated by smallholders. In these sectors systemic change has proven to be elusive and current transformation models, whether public or market driven, have only realized it to a limited extent.

Therefore Aidenvironment, NewForesight and IIED have developed a groundbreaking new holistic Sustainable Sector Transformation Model commissioned by the IFC, the Dutch Ministry of Affairs, SECO and IDH the sustainable trade initiative.

Work delivered
The Sustainable Sector Transformation Model for sustainable sector transformation for smallholder-dominated agricultural sectors which consists of five building blocks: sector alignment & accountability, strengthening of market demand, public sector governance, organization of the production base and organization of the service sector. Each of these building blocks are a condition for realizing farm and sector quality.

CocoaAction strategy fueled by industry leaders’ desire to accelerate sustainability in the cocoa sector

Situation
Despite significant investments by the public, private, and non-profit sectors in initiatives aimed at sustainability in the cocoa sector, cocoa farming continues to face significant challenges. Ageing trees, depleted soils, child labor, lack of good agricultural practices, and increased competition for other cash crops are leading to suboptimal production. Too many farmers are trapped in a cycle of economic and social decline, and cocoa farming is losing its appeal as a viable livelihood among younger generations.

Recognizing that a different approach is required to tackle the issues in the cocoa sector, industry leaders voluntarily committed to collaborate in order to increase impact and accelerate sustainability in the cocoa sector. This ultimately led to CocoaAction, the strategy of the World Cocoa Foundation (WCF) that coordinates and aligns the cocoa sustainability efforts of ten of the world’s leading cocoa and chocolate companies, increasing their impact towards a rejuvenated and economically viable cocoa sector.

Assignment
Due to our experience in initiating, shaping, and driving industry-led multi-stakeholder initiatives, as well in-depth knowledge of sustainable market transformation in tropical commodities (including cocoa), NewForesight was asked by WCF to support the development of CocoaAction on both technical and strategic levels.

Work delivered
Since West African countries are responsible for more than half of the world cocoa supply, the main cocoa producing countries in Ghana and Côte d’Ivoire were selected as a starting point for CocoaAction. By identifying Productivity and Community Development as the main regional priorities, CocoaAction companies have agreed upon a set of interventions for smallholder farmers and their communities that will lead to the vision of a rejuvenated and economically viable cocoa sector in these countries.

NewForesight has been supporting WCF in the further development of the CocoaAction approach since its inception in 2013, on both strategic (e.g., shared vision, mission, Theory of Change) and technical levels (e.g., Results Framework, Community Development manual, Farmer Economic Model). Ultimately, WCF achieved commitment to a shared vision, shared KPIs, a common Results Framework, structures for effective collaboration, and a high level of alignment and enthusiasm among CocoaAction companies moving into implementation.

Future steps
At the moment the initiative is moving towards a phase of program implementation. This means on the practical side that CocoaAction companies provide farmers access to planting material, fertilizer, and knowledge on Good Agricultural Practices, in order to scale up productivity. Additionally, interventions in the area of basic education, child labor and women’s empowerment will contribute to thriving cocoa communities.

However, this period is also one of looking forward, and thinking about broadening the impact on the cocoa sector as a whole. NewForesight continues to support the World Cocoa Foundation and CocoaAction companies in further developing these strategic elements.

Transition model for scaling up sustainability in agro-commodities

Situation
IFC wanted to understand whether voluntary standards systems (VSS) are creating the environmental and social benefits and impacts as anticipated. At present the exact impact delivered by VSS is unclear, and there is broad consensus on the limitations of VSS to deliver sector sustainability single-handedly.

Assignment
NewForesight, together with Aidenvironment and IIED, undertook a study that reviewed the current state of sustainability in agriculture, with a focus on standards. Extensive desk and field research led to a model that lays out a variety of sustainability tools that enable a transition towards sustainable agriculture. The transition model includes VSS as being one of the potential tools.

Future steps
Phase two of the study is currently taking place in which the model is refined after extensive case studies on location. The study will take into consideration alignment, reorganization, new and improved business models, partnerships and other options available to maximize the effectiveness and scaling of sustainability instruments.

Credit trading system and broader traceability strategy for sustainable sugarcane

Situation
Bonsucro is a global non-profit, multi-stakeholder initiative aimed at improving the sustainability of the sugarcane production. It is the first global metric standard for sugarcane. To make the process of selling and buying Bonsucro Certified products worldwide as easy and commercially successful as possible, Bonsucro desired to develop a Credit Trading System in addition to its Mass Balance approach.

Assignment
NewForesight was first asked to develop the broader traceability strategy of Bonsucro. Next up was the design of the Credit Trading System in close contact with Bonsucro senior members throughout the sugarcane supply chain. In a working group setting, the technical details of the Credit Trading System were defined. The outcomes were translated into recommendations to Bonsucro’s Board of Directors and NewForesight was then asked to build the Central Database for the Credit Trading System, incorporating all technical rules and procedural requirements agreed upon.

Work delivered
In two assignments over the course of two years, NewForesight first designed Bonsucro’s system for credit trade in the context of a broader strategy. The credit trading system was further improved in line with members’ requests and then operationalized. Recently we delivered an updated traceability strategy of Bonsucro, defining the goals, purpose and use of segregation, mass balance and credit trade.

Framework for policy making in agriculture: ‘Sustainable intensification at scale’

Situation
The Dutch Ministry of Economic Affairs needed a policy paper on food security in the future. Sustainable intensification, producing more food, while using fewer resources, is recognized as the sustainable way forward. A new policy making framework was required to implement sustainable intensification. 

Assignment
NewForesight was asked to research the landscape of standards, Good Agricultural Practices (GAPs) and underlying mechanisms. The outcomes of the study led to a new theory that provided insight into the characteristics of different types of agricultural sectors and the forces that shape them.

Work delivered
The study shows that agricultural commodity sectors can be defined by their shape, which varies according to the degree of organization and the level of professionalism, along with productivity, efficiency, market access and bargaining power. The shape determines the absorption capacity for more sustainable practices and economic performance, and thus the success of sustainable intensification. Fine-tuning the forces that determine the shape can push for sustainable outcomes.