In March 2023, ODF disbursed its 6th impact-first seasonal working capital facility since launching our innovative impact-first supply chain finance fund in January 2022.
This $600,000, 6-month facility, is enabling an up-and-coming cashew processing and export company in Brazil to buy raw cashew nuts (RCN) from its network of certified organic farmers.
Farmers in cashew-producing countries such as Brazil earn very little from their crop. Contributing factors include barriers to accessing premium markets, such as organic, and lack of local processing capacity. This is exacerbated by the fact that production typically takes place in smallholding. Low revenues from farmgate sales disincentivise farmers from investing in their orchards, creating a vicious circle of reducing volumes and quality, and further income reductions. However, the top 46 countries producing cashews are classified as developing economies; responsibly sourced cashews have untapped potential to alleviate poverty amongst the most vulnerable farming communities.
ODF’s investment supports the production of high-quality, organic cashews, and the fair treatment of workers. Our client is a transparent and fair partner for both farmers and buyers. They have achieved multiple organic certifications, Kosher compliance with food safety and production standards, and Smeta/Sedex certification regarding labor conditions. They provide direct employment to more than 100 local workers, 60% of which are women. They source from family-owned farms and offer agronomic support services to farmers on organic production methods including covering farmers’ costs for organic conversion and certification. Over the past 3 years, they have helped transition more than 2,000ha of cashew to certified organic production, and have plans to increase this further. By investing in farmers and adding value to their production, ODF’s client is working to ensure the sustainability of an economically vital industry for Brazil and its people.