CACAONICA is a private, agroforestry development project in Nicaragua that RITTER SPORT has supported since 1990. Its goal is to improve the local people’s living conditions and protect the natural resources as a means of basic livelihood.

Between the Caribbean and the Pacific

Nicaragua is the second-biggest country in Central America (130,000 sq.km) after Mexico. To the north, it borders Honduras and to the south Costa Rica. To the east, the country has a 450km-long border through the Caribbean, and to the east it opens onto the broad expanse of the Pacific. Incidentally, Nicaragua also has the largest inland lake in Central America (Lake Nicaragua) with 8264 sq.km, whose southern shore partly borders Costa Rica. Nicaragua is a “young country” when its inhabitants are used as a measuring stick. Almost half of the population is younger than 18 years old.

Since 1970, the population of 2 million has been consistently rising. It has an annual growth of about 3%. Nevertheless, wide tracts of the country are scarcely populated. The majority of the population lives in the west, in regions close to the Pacific and in large cities. Nicaragua currently has approx. 5.2 million inhabitants. Far more than one million of these people live in the capital city of Managua, which lies on the southern shore of a lake bearing the same name. Another two important cities, Leon and Granada, lie to the north and south of the capital city. Their beautiful old buildings, streets and squares reveal a long history of colonisation that dates back to the 16th century. The vast majority of the population (70%) are termed as Mestizos and are the mixed descendants of the aboriginal Indians and the invading Spaniards. Some Indian tribes (Misquitos, Mayangnas and Ramas) still live in the eastern part of the country. Most of the country (the central highlands and Caribbean region) is formed by the humid tropics. Nevertheless, the tropical forest in Nicaragua is also diminishing. Rainforest still covers about 26% of the country.

Since 1990, the country has had a democratically elected government. After the downfall of the decades-long Somoza dictatorship and the ensuing struggle, which exhausted and further impoverished the country, political stabilisation can be observed today. Despite efforts, the economic situation of the majority of the population continues to be critical. 50% of the population still live in poverty and unemployment is high, especially in rural areas.

Nicaragua is still largely an agriculturally-structured country. Agriculture remains the chief industry. Dependence on few export products (coffee, seafood, meat, sugar, and cocoa) makes the country particularly vulnerable to unstable world market prices. An industrial structure that could offer employment is present but remains rudimentary. Lack of loans, a deficient infrastructure and ongoing unresolved property issues impede any speedy restructurisation. The hope remains that Nicaragua can catch up to the economic, social and political situation of other comparable Latin American countries, safeguard its riches and beauty, and preserve them for a long time.

Small farmers need help

Despite sought and partly-implemented reforms, the situation of small farmers is only slowly improving. The reasons for this are recurring natural catastrophes that have afflicted the country in past years: The climate phenomenon El Niño, hurricane Mitch in 1998, a series of earthquakes and volcanic eruptions in Autumn 1999, and sustained periods of drought followed by heavy rainfalls and flooding in subsequent years, that have caused severe infrastructural damage.

Conventional farming methods can no longer adequately ensure an income for the families of small farms. Soil fertility has been heavily diminished, large areas lie fallow, revenue and profits are correspondingly low. For farmers there are few alternatives to earning an income. Aggravating factors are a poor infrastructure and a lack of organisation among small farmers for activities concerning cultivation and marketing cooperatives.

For its part, the state wants to obtain income from wood resources found in the tropical forests. The major problem in Nicaragua has been, however, the rapid expansion of livestock breeding and extensive agricultural cultivation for a continuously-growing native population.

The vicious circle of poverty, population growth and deforestation of the tropical rainforest must be halted before it’s too late. Otherwise we are threatened with the irreversible destruction of the tropical forests and their incredible biodiversity. Alongside a realistic limitation or even an absolute ban on forest clearing, effective support and development measures for small farmers and village infrastructures are urgently needed.

The forest is disappearing

At the start of the century, approximately 60% of Nicaragua’s territory was covered by forest. Since the 1950s the scale of deforestation has grown tremendously. Annual deforestation of 247,105 acres, with a starkly rising trend, meant that only one half of the forest still stood in 1992. The annual reforestation is only approx. 12,355 acres.

The main reason for the decline of the tropical rainforest is the expansion of agriculturally-cultivated land. Because of the rapid depletion of the earth’s fertility, often attributable to one-sided, unsuitable cultivation of the land, and the constant succession of stock farmers, small farmers are often left with no choice but to constantly clear new farmland from the rainforest.‏‏‏‎ In addition, there is a growing population and a very substantial need for firewood. 60% of the population is solely dependent on this source of energy.

The destruction of large areas of forest has already gravely upset the ecological balance and has resulted in the devastating natural catastrophes of the past years: droughts, heavy rains and subsequent floods, and increasing soil erosion in Nicaragua’s rainforest areas in the eastern half of the country.

The alternative - agroforestry farming

A concept named Agroforestry Enterprise is being developed to stem extensive land cultivation and the migratory movements of farmers, while providing a real chance for reforestation and the preservation of the rainforest with its incomparable biodiversity. It combines agricultural and forestry farming methods. The employment of different environmentally-appropriate ‘useful plants’ like bananas, cocoa, beans – i.e. “nurse crops” – in tree plantations, guarantees a multi-levelled canopy that can starkly reduce the danger of erosion and, at the same time, better protect the soil from drying out and losing nutrients.

This yields significant advantages for the small farmer: The continued use of cultivated land can achieve higher incomes. Productivity thus increases and so does the farmer’s income – a better diet and increased economic stability lead to an improvement in living conditions. At the same time, the soil’s fertility is ensured for the long-term. For the farmers, this offers an incentive to remain settled; the constant expansion of cultivated land and associated deforestation of the rainforest can effectively be stemmed.

By and large, agroforestry farming contributes to the improvement of the living conditions of people, as well as to the protection and sustainable conservation of the natural resources that provide their livelihoods.

The implementation of project CACAONICA

The private development project CACAONICA emerged from the agroforestry approach in 1990. It offers traditional farmers the support to initially cultivate a part of their land using agroforestry methods and to adopt them as an economically and ecologically sensible alternative to conventional farming methods.

Project CACAONICA’s goal is, therefore, the ideal and realistic demonstration of a sustainable agricultural model that protects the existing forest, incentivises reforestation and ensures soil fertility through natural means insofar as possible. At the same time, farmers’ incomes are consequently improved, their economic situations strengthened, and the rural exodus countered.

The conditions of the tropics make the cocoa plant particularly suitable for agroforestry cultivation. It can be advantageous for the cocoa plant to be planted in crop combinations with bananas, different varieties of vegetables, maize, or also peppers. High shady trees are favourable for cocoa plants. Furthermore, permanent shade reduces the growth of weeds, promotes the development of organic nutrients and makes the use of chemical fertilisers unnecessary. In this way it is possible to combine cocoa farming with an environmentally-friendly approach to the existing forest, while also making its reforestation worthwhile and productive.

CACAONICA has set the goal to promote, above all, the cultivation, production and marketing of environmentally-friendly cocoa (cocoa produced from organic farming). Organic farming methods create beneficial labour conditions for farming families by spreading cultivation and harvesting work throughout the year. Sales revenues are achievable through the export of organically-farmed cocoa, and currently lie considerably above national levels for conventional cocoa and above the current world market price. Through the development and improvement of corresponding marketing competences, the enterprises should become able to operate independently and self-sufficiently at the market, through the marketing cooperative.

RITTER SPORT promotes organic cocoa farming and reforestation

CACAONICA is a private development project that has been supported by RITTER SPORT, since the beginning of 1990 with over 2.5 million euros. The project is supported by aid and development agency Pro Mundo Humano e.V. in Bonn. Between 2002-2004 the project was additionally supported and overseen by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ GmbH) (German Technical Cooperation) within the framework of Public Private Partnerships (PPP). A major part of these additional funds went into the advising and training of farmers in matters of organisation and management, farming methods, as well as matters of quality and marketing.

The project is located in Waslala. With approx. 1800 cocoa farmers, “Municipio de Waslala“ is the most important cocoa farming area in Nicaragua. Waslala is a part of the Bosawas Biosphere Reserve. The area covers around 20,000 km². At its centre, one of the largest continuous and still intact tropical lowland rainforests of Central America can be found.

Founded by presidential decree in 1991, the “Bosawas Natural Resources Nature Reserve” was declared by UNESCO as a “Biosphere Reserve and World Heritage” in 1997. Special measures regarding soil preservation, appropriate land cultivation, and reforestation are strictly required there.

Company proprietor Alfred Ritter and Marli Hoppe-Ritter explain their commitment as follows: “Cocoa is a main component of our products that is derived from third world countries. Therefore, we have a particular responsibility toward these countries. It’s clear that the protection of the tropical forests requires the involvement of industrialised countries. To that end, we want to do our part. But we are also interested in products that are produced with organically-farmed cocoa. Aside from that, we expect to gain important basic knowledge of cocoa farming and different varieties of cocoa through the cooperation with cocoa farmers.

Rainforest project - helping people to help themselves.

The project began in 1990, working together with 170 farmers. At present it assists 700 farmers. Some of the campesinos who have been with the project since the beginning, and who are particularly committed, have come to support the project team as so-called promotores. The project has experienced wide support in Nicaragua. Both the government authorities and the Nicaraguan Christian Church are integrated into the project.

The farmers receive seeds and plants, e.g. banana trees, shade trees, cocoa plants and timber trees, as well as the necessary tools. The constant advice and guidance from an expert team are equally important as the material support. Under expert guidance, cultivation methods and cocoa processing are constantly monitored and improved to ensure consistently high-quality standards.

Another important role is played by WASLALA RADIO. The local radio station broadcasts a daily programme to the entire project area, providing information and training programmes as well as the current price for raw cocoa. This ensures that, even in the remotest cocoa plantations, cultivation and processing are done under the same quality criteria.

The response of farmers in the project area has been huge from the beginning. The reforestation measures have also created a gratifyingly high amount of interest. In addition, each farmer who was involved in the project from the beginning is now the owner of a nursery of 600 trees of various types. Many farmers have created new cocoa fields and have been able to significantly improve their income. The fight against moniliasis is a major task in the cultivation of cocoa. This is a fungal disease that affects the fruit of the cocoa, ravaging it. Only the timely removal of infected fruit can prevent further damage. The project has already developed, together with over 1000 campesinos, care measures to combat this cocoa-afflicting disease. The project’s work is devoted to improving the long-term earning capacity of farmland. That is how the construction of acequias was started in 1995: approx. 35 cm deep trenches that run at the same level on the hillside and which reduce water-generated soil erosion during the rainy season. Another focus of work in recent years has been instructing campesinos on how to work in an environmentally-minded fashion. This training is absolutely necessary because, despite rapid soil erosion in the cultivated areas, the population in the project region is still of the mindset that they have unlimited resources at their disposal. At the end of 1996, about 50 tons of cocoa beans were harvested from the project farms for the first time. In 2002 this number grew to 200 tonnes.

In Waslala, CACAONICA took over a large cocoa drying facility that was built with EU funds and a storage depot. In addition, 4 cocoa-buying centres were set up in the project area. Initially the marketing of cocoa took place mainly in Nicaragua and Honduras. Since the middle of 2000, a system of small cooperatives, with a central cooperative in Waslala, has taken over central processing – in their own facility – and the sale of raw cocoa produced in the project area. This allows farmers to be independent from the local traders and assures them direct access to large customers in commerce and industry.

There are currently about 350 member farmers in “Cooperativa CACAONICA”. The cooperative has a large warehouse in Waslala. The farmers deliver their fermented cocoa to this location and – after a quality control has been carried out – immediately receive the purchase price in payment. There is a cocoa drying facility very close to the warehouse. Afterwards, it is stored. The transport of cocoa from here to the customer or, in the case of export requests, to the harbour, takes place by lorry. Since the project began, courses have been offered on the promotion of cooperatives. The farmers also receive instruction on the drying and fermentation of cocoa beans, with the goal of achieving high, uniform-quality standards. When success is achieved, the quality of cocoa from the Waslala region is significantly better than that of other regions, and farmers with well-fermented cocoa beans obtain much higher prices.

A project is bearing fruit - from developmental aid project to trading partnership.

For the past 17 years, small farmers in the project area have been supported with advice and encouragement, especially in the manufacturing and marketing of organically-farmed cocoa as well as in matters of organisational structuralisation. In May 2000, an initial group of 82 campesinos was certified by a local, EU-recognized board of control. At present, over 350 small farmers work under this certificate for organic farming – attesting that their entire yield has been produced under organic conditions.

Since the beginning of the support measures, RITTER SPORT’s commercial interests in the project region have been focused in the long term on the purchase of high-quality, organically-produced raw cocoa. To generate cost-effective quantities of high-quality cocoa at reasonable prices, the present system of advice and consultation is being reinforced and expanded. This is meant to introduce many more small farmers to certified organic farming, and to attract them into the cooperative after they have been certified. Additionally, Bosawas Biosphere Reserve’s principles should be consistently implemented in all participating enterprises.

In 2002, two containers of organically-grown cocoa (“Cacao Orgánico de Waslala”) were finally exported from the project to Germany. As a result, a long-term contract between RITTER SPORT and the CACAONICA cooperative was signed in March 2003. In this contract, the supply of at least 50 tonnes of organic cocoa over a period of several years was agreed upon.

In addition to receiving the world market price for organically-produced cocoa, the cooperative also receives a supplementary premium based on fair trade prices. This premium should be used within the cooperative to expand and optimise its infrastructure. The contract offers cooperative farmers long-term security and better costing options. The marketing of cocoa from organic farming is, however, not solely bound to RITTER SPORT, meaning that other marketing channels remain open to the cooperative.

CACAONICA is also now registered with the Fair trade Labeling Organization (FLO) as its own label. For the time being, cocoa produced by the project and purchased by RITTER SPORT is used in production as an admixture. In the medium-term, RITTER SPORT is striving to bring to the market its own line of chocolate produced from organic cocoa. However, a continuous supply of sufficient quantities of premium-quality organic cocoa will be necessary.

The journey from development aid project to contractually-assured partnership has been a remarkable success for the CACAONICA project, for the small farmers in Nicaragua and for RITTER SPORT, and a milestone in the economic development of the project region.