8 April 2020, Amsterdam. The CFC is supporting Olivado EPZ Limited (‘Olivado’) to expand the production and export of organic avocado oil. Olivado is among the world’s leading producers of organic avocado oil, directly sourcing the avocados from 2,200 smallholder farmers. From its processing facility in Kenya, it operates an integrated farmer-to-market model. The avocado oil is sold for export to traders and retailers in over 30 countries. The CFC has extended a USD 500,000 trade finance loan to accommodate the increasing international demand for certified organic avocado oil.
Benefiting from Kenya’s great climate conditions for growing avocados, Olivado created an inclusive business model, sourcing from small farmers based on a fair trade and organic out-grower scheme. By buying the avocados directly from small, biodiverse farms at a premium price, Olivado can
reliably trace the quality and origin of the avocados, as well as guarantee farmers a regular income.
The loan will be used to buy more avocados from the existing farmers and to integrate some 160 new smallholders into Olivado’s value chain each year. Olivado provides cash advances to the farmers at the beginning of the harvest season and guarantees to buy at least 95% of each farmer’s annual avocado crop. Every farmer who sells avocados to Olivado joins the certified organic and fair trade program, gaining access to extensive agronomic training programs and rigorous farm monitoring procedures and tools.
Olivado’s team of field officers work closely with the farmers year-round via farmer groups, providing education in farm management, organic fertilizing, and pruning. In order to ensure complete traceability from farm to bottle, Olivado uses its own picking teams. All farmer details, such as the estimated number of avocados per tree, are mapped and assessed using traceability software. The fruit is weighed on location and delivered directly to Olivado’s factory in Murang’a county. There, avocado oil is made using the traditional cold-pressed method, which extracts the natural oil from the fruit, retaining its quality and nutritional value. Alongside its primary activity of avocado oil production, Olivado installed a biogas plant in 2019 to produce biogas and fertilizer from the avocado waste generated from the oil processing.
With the goal of scaling avocado production up to 3,000 farmers, Olivado hopes to improve smallholders’ yield and net income by 200% over the next five years. By growing the permanent staff to over 100 employees, including at least 44% women, the project is also expected to create much-needed jobs in the region.
An organization dedicated to poverty alleviation and sustainable development through impact investing, the Common Fund for Commodities (CFC) is looking forward to the time when all small holder farmers are far better off then what they are now. As this project is tailored to gender mainstreaming as well, in addition to greener choice of production method, the CFC remains committed to work for a sustainable, ecofriendly, and equitable world.
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The Common Fund for Commodities (CFC) is an autonomous intergovernmental financial institution, dedicated to impact investing, established within the framework of the United Nations. It was founded on the principles of equitable distribution of economic, social and environmental benefits from commodity production, processing and trade, serving the long-term interests of both Developed and Developing countries. Towards this goal, the Fund provides financial support for innovative projects with high impact promoting the interests of the small holder farmers and small and medium enterprises (SMEs) engaged in commodity production, processing and trading in Developing Countries.
Mission: “To contribute to poverty alleviation by strengthening the income-generating capacity of commodity producers and mitigating vulnerability to their economic well being”.
Vision: “To strengthen and diversify the commodity sector in developing countries and transform it to be a major contributor to poverty alleviation and sustained economic growth and development”.