In a bid to harness the power of entrepreneurship to disrupt poverty in Africa, Acumen, a global social investment firm, has invested in Lizard Earth, a producer and aggregator of high-quality organic cocoa beans in Sierra Leone.
The New York-based organization invested USD 550,000 as convertible debt in Lizard Earth’s seed round. Acumen’s funding will be complemented by grant funding already committed from development partners operating in Sierra Leone. The capital raised will be used to strengthen the company’s team, provide working capital, and expand its sourcing platform to 5,000 smallholder farmers.
According to Andrew Tarazid-Tarawali, Acumen’s Associate Director of Portfolio for West Africa, its interest in Lizard Earth came from the company’s strong impact potential” and its “ability to provide insights into models that improve the lives of smallholder farmers. Farmer training and replacing aging trees could be transformative for thousands of farmers and their families ( a potential reach of 40,000 lives) and potentially move 5,000 farmers from earning less than USD 1.90 a day to close to USD 3.00 a day,” Andrew said.
Cocoa farmers in Sierra Leone record one of the lowest yields for cocoa in the world (100kg-140kg per hectare), far below even their peers in neighboring Ghana and Cote d’Ivoire (450kg-500 kg per hectare). This is due to a combination of low-yielding planting materials, low plant densities, aging trees, and poor farming practices (poor maintenance). The cocoa sector in the country is also highly fragmented; national exporters mainly source cocoa through largely informal supply chain channels run by super agents, sub-agents, and micro buyers who serve thousands of smallholder farmers This results in agents taking advantage of farmers either by not being transparent on the market price or employing even dishonest buying practices. To address these challenges and others that farmers face in the country, Lizard Earth provides essential year-round farm-level services to smallholder producers, operates community-level drying centers that buy directly from farmers, and facilitates organic certification of farmers which allows farmers to earn premium prices.
The business adds value to its farmers by transferring knowledge gains on best production and management practices from its own Agro-forestry Cocoa Gardens to members of its smallholder network. Furthermore, by buying only wet beans Lizard Earth ensures consistently that only high-quality beans are sold to buyers within the global niche market for ethical, premium cocoa with whom they can establish long-term contacts at higher fixed annual prices that in turn can be passed on to farmers.
Daniel Scholler, Founder and Managing Director of Lizard Earth say: “Acumen’s investment enables us to drive the transformation of Sierra Leone’s cocoa sector towards being more responsible, collaborative, and quality-focused. We will put Sierra Leone on the map as a country of origin of organically-grown and ethically-traded cocoa of the highest quality for buyers, chocolate makers, and manufacturers across the world.”
According to agronomists Acumen spoke to during its due diligence, if farmers adopt the best practices shared by Lizard Earth and rejuvenate their gardens by replacing aged cocoa trees with younger plants, producers should see a yield increase by 100 percent to 200 percent within the next five years.
Acumen’s work in Sierra Leone is supported by Invest Salone – a private sector development initiative funded by the UK Government’s Foreign, Commonwealth, and Development Office.
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