16 • ICO Report • C&CI May 2012


Cost-reduction plan will help re-direct funds to farmers


the importance of achieving both objec- tives. The deal, or Memorandum of Understanding, which he signed with the Brazilian government, specifically the country’s agency for cooperation (ABC), opens the way to the "the promotion of triangular technical co-operation in cof- fee producing countries." The agreement, he told Coffee &


I


Cocoa International, meant that the Brazilian agency and the ICO would be able to work together with producer bod- ies and governments in other countries, especially the least developed, to find new sources of financial and technical assistance for their coffee development schemes. This was "extremely important," he said, because of the current uncer- tainty about the continuation of the Common Fund for Commodities’ ability to provide such help.


CFC’s future in doubt


Over the years, the ICO has been the greatest beneficiary of financial help from the CFC, which supports commodity development projects proposed by recognised international commodity bod- ies through grants or loans. So far, 35 ICO-sponsored projects totalling around US$104 million have been funded mainly by the CFC (US$55 million), with the bal- ance provided through bilateral and mul- tilateral donor institutions in the form of co-financing (US$29 million) and from the beneficiary countries as counterpart contributions (US$20 million). The CFC’s future role and long-term


financial sustainability have been under consideration by its member govern- ments since 2008 and a decision is expected by the end of this year. Resources would have to be replenished to allow it to go on doing the job it does now on the same scale from 2013 and this is widely seen as unrealistic. The four proposals under discussion would


Andrea Illy now heads up the ICO’s promotion and market development committee


all reduce the CFC’s funding role, or even possibly end it, which would cer- tainly be the result of another option not formally on the table: closing the Amsterdam-based body. But, for the moment, things go on as


normal. The ICO council in March approved four new projects for submis- sion to the CFC for funding, three of which seek to advance sustainable pro- duction – one in Kenya, Tanzania and Uganda and anther in Colombia and Honduras, while the third is a scheme to develop a "financial literacy toolbox" to facilitate access to finance for small and medium-sized producers of sustainable coffee. The fourth project is concerned with


furthering the use of animal manure in coffee production. Approval was also given for two other projects to be devel- oped fully – one to improve coffee pro- ductivity in Yemen and the other to boost


the competitiveness of Costa Rican coffee.


Memorandum of Understanding


The MOU between the ICO and Brazil’s ABC has been developed to help advance work in those areas designated as priori- ties for the agency. These include enhanc- ing co-operation and communication on coffee policies among producing countries and encouraging greater technology trans- fer and technical collaboration so as to boost producers’ earnings and alleviate poverty. The ABC has a good track record for providing technical cooperation and capacity-building to developing countries, through the transfer and exchange of knowledge, skills and expertise available at Brazilian institutions and organisations.


n his successful election campaign last year for the job of ICO Executive Director Mr Oliveira Silva had stressed


At their March meeting, International Coffee Organization


member governments backed Robério Oliveira Silva’s plans for cutting running costs at the agency. As Robin Stainer reports, they also gave the green light to a deal he has


negotiated to give producing countries greater access to technical and financial help for the coffee sector


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