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Moringa | A Sustainable Agroforestry Fund
Agroforestry systems risk/revenue balance
Clément Chenost, Land & Poverty – Conference 2015
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 2
Moringa | introduction
� Agroforestry is a promising approach to dealing with the growing need
for agricultural and timber products while preserving the environment
and enhancing the livelihood of small farmers
� To be competitive and achieve greater adoption, agroforestry needs
better access to markets, patient capital and further technical
improvements. The private sector could play a key role
� The Moringa fund was developed by a partnership of public and private
institutions to upscale successful pilot projects and unlock the potential
of agroforestry
� This presentation presents key arguments developed by Moringa and a
first investment illustrating a win-win approach with the private sector in
Nicaragua
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 3
Moringa | in a nutshell
� Moringa is a sustainable agro-forestry fund with a target size of
€100m
� Geography: Latin America and Sub-Saharan Africa
Mission
Objectives
Key strengths
� Develop sound agroforestry projects providing a reasonable
commercial return to its investors
� Have a positive environmental impact
� Improve the livelihoods of farmers and local communities
� >€70m already raised (14 investors)
� Core team boosted by two complementary
partners: Edmond de Rothschild and ONF
International
� A first investment in Nicaragua
� An Agroforestry Technical Assistance Facility
associating science partners (ICRAF, CIRAD,
CATIE, etc.)
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 4
Deforestation| a land use challenge
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 5
� Agroforestry is the spatial or temporal combination of trees and crops or animals,
with biological, social and economic synergies leading to higher productivity,
reduced risks, a more stable income for local populations, and positive
environmental impacts
<+Examples of biological interactions :
� Better use of sun light
� Better use of water
� Biological regulation of pests
Global profitability
Social benefits
Environmental impacts
Agroforestry | the need to develop new and
innovative land use solutions
Coffee under shade Sylvopastoralism
Acacia intertwinned with cassava
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 6
Outgrower programs | the need to develop
innovative production schemes
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 7
Agroforestry | multiple ESG benefits …
Climate change
Mitigation
Adaptation
Biodiversity
Conservation
Corridors
Desertification
Fixation
Restauration
AGROFORESTERIE
World Agroforestry Center, 2007
Monoculture Agroforestry
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 8
Agroforestry | an investor’s point of view
Industrial
monoculture
Unimproved small
scale polyculture
Coffee
Coffee,
etc.
Pro
ject
ris
ks
Lon
g t
erm
rev
en
ue
s
Profitable & sustainable
agroforestry
Improved
coffee tech.
Other revenues.
Price premium
Payment for ES
Market
Environmental
Social
Political
Technical
Market
Environmental
Social
Political
Technical
Increased and diversifiedrevenues
Reduced risks
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 9
Positioning | the need to scale up
Small scale
pilot (~100t)
Industrial project
(~5000t)
Bridging the gap
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 10
� In January 2015, Moringa announced an
investment into Nicafrance, a Nicaraguan
agroforestry company, specialized in the
production of high quality shade-grown coffee and
timber for high-end applications
� Nicafrance is a large independent coffee farm of
over 1,000 Ha, of which 660 Ha is coffee
plantations under tree shade & 115 Ha is forest
� Moringa will finance an outgrower program
targeting small and medium scale farms in the
Matagalpa region, that have been severely affected
by rust and the effects of global warming
� The cluster aims at producing c.5,000t of specialty
coffee per year for high-end roasters
Nicafrance | an agroforestry case study
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 11
� Coffee leaf rust appeared in 1976
� The disease attacks the underside of the leaf, causing it to yellow and drop prematurely, reducing the
plant’s photosynthetic capacity and yield. It inhibits the cherry from ripening
� The process to renew coffee farms is slow: planting higher-yielding varieties that are
varieties more resistant to major diseases and pests takes time
� Although not a new phenomenon, the outbreak of coffee rust in 2012 is considered one of the worst ever
recorded
� The rust outbreak is attributable to changes in rainfall patterns, temperature, poor plant nutrition, failure
to monitor coffee rust and inadequate fungicide application
Source: International Coffee Organization.
Coffee challenges | rust and climate change
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 12
Growing demand
in emerging
markets
Regional
differences in
retail coffee value
and volume
Premiumization
Product
innovation
Growing out-of-
home offering
Shift from multi-
serve to single-
serve
76% of volume growth to 2016 driven by rising incomes & middle class, premiumization and emerging
coffee cultures in key countries
� Consumers now demand convenience, variety and quality,
premium flavour both at-home and out-of-home
� Coffee moving into an era of tighter supply and higher volatility
� Sustainability a key differentiator among premium coffees
Coffee opportunities | high end market
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 13
La Cumplida is a unique example of profitable, sustainable large scale
agroforestry system
� CIRAD and ECOM have developed specific agroforestry rust tolerant varieties and
hybrids
� A whole timber industry has been created to valorize > 10 native tree species
� The farm is UTZ, Rainforest Alliance and FSC certified
� This model could be replicated in the region
La Cumplida| a flagship agroforestry plantation
Conv. varieties (Caturaï)
MarsellesaHybrid F1
H1
39 QQ/ha 43 – 45 QQ/ha 51 – 55 QQ/ha
++ ++ (acidity)++
+++ (> 1100m)
- ++ ++
- + ++
Seed Seed Clone
20 c/plant 20 c/plant 70 c/plant
Productivity
Quality
Rust tolerance
Shade synergies
Cost
Propagation
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 14
Nicafrance| outgrower scheme
� The scheme will select small and medium sized farms in need of renovations each year
� Complete restoration of the farm over 5 years (preparation of the farm, replacement by high performance rust tolerant seedlings, tree planting, revenues from the coffee sale over the first 3 years of production given the first 2 years are unproductive)
� The farmer monitors the plantation (fire, thefts, etc.), and may contribute its workforce, particularly for the harvesting period
� Renovation services to the farmer are valued at $4,000 per MZ, which is transformed into a loan, to be reimbursed by the Farmer after year 5 (the project charging no interest)
Scheme
Overview
Outgrower
s’ Schedule
Year Mz PlantedFarms
Targeted2015 2016 2017 2018 2019 2020 2021 2022 2023
1 500 A
2 500 A / B1
3 500 All
4 500 All
5 500 All
Renovation
Crops
Final crop & reimbursement
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 15
Nicafrance Coffee| targeting premium markets
By refocusing its production on higher quality varieties (such as La Marsellesa & Hybrids),
Nicafrance will be able to target quality-driven international roasters, that typically pay $0.40/lbs above traded price
EDMOND DE ROTHSCHILD | ONF INTERNATIONAL | MORINGA 16
� A global landscape / territory approach developed thanks to a dedicated TA facility program
� Agroforestry model of the project could be further developed to be spread to smaller producers of the region
� Dedicated research & training center on coffee agroforestry systems could be developed and become a
worldwide reference
� Ultimate objective would be to have a positive impact at the landscape level and preserve natural assets in
the region
� A “coffee of origin” could then be developed and attract prestigious brand (other products : cocoa, livestock +
Eco-tourism, etc.)
� Several partners already confirmed : CIRAD, CATIE, CIAT, World Coffee Research, Airbus, Fundenic,
Government of Nicaragua
� Project concept in development and could constitute a part of the engagement of Nicaragua in the 20*20
initiative
Nicafrance | potential impacts
CO2 impact objective
505 493 tCO2 Land impact objectives
0,5 MtCO2 1 700 hectares reforested
3 200 hectares sustainable land management in production
4 000 hectares natural areas impacted
Social impact objectives
6 000 Jobs
500 Farmers empowered
26 000 Individuals impacted
Thanks for your attention !
Clément Chenost: [email protected]