What if the most valuable contribution smallholder farmers make isn’t just the coffee you sip, the cocoa you crave, or the grains that fill your plate — but the land they preserve, the biodiversity they sustain, and the carbon they quietly sequester? 

Yet, despite these critical environmental services, most smallholder farmers are paid mostly for their harvests. The ecosystems they nurture remain invisible in our economic models — and fairly uncompensated. 

At the Fairtrade Access Fund, we’ve always believed in financing farmers differently. In 2024, we’ve taken that commitment further by embracing Payments for Ecosystem Services (PES) through partnering under the CompensACTION initiative. This approach ensures farmers aren’t just rewarded for what they grow, but for the natural wealth they protect. 

The problem we overlook 

Smallholder farmers manage over 500 million farms globally and produce one-third of the world’s food, often on plots smaller than two hectares. Yet, many of these farmers live on less than USD 1.25 a day. 

Their environmental contributions go far beyond harvests. These farmers sustain carbon sinks, reforestation, biodiversity habitats, restored soils, and water sources — foundations of global climate stability and food security. But because markets typically only value tangible outputs like crops or livestock, these farmers have rarely been compensated for their critical role in sustaining the planet’s health. 

This is a profound disconnect in global finance: while 82% of smallholder farmers we work with cultivate on less than 5 hectares, their lands could be linchpins in addressing the climate crisis — if only that value was recognized. 

CompensACTION & PES: The way forward 

To bridge this gap, the CompensACTION initiative, led by the German Federal Ministry for Economic Cooperation and Development (BMZ) and supported by KfW Development Bank, is set to redefine farmer compensation models. The Fairtrade Access Fund is proud to be an active participant. 

At its core, Payments for Ecosystem Services (PES) offers a practical framework: rewarding farmers for the environmental value they generate — from carbon sequestration to soil regeneration, biodiversity protection to water conservation. 

In 2024: 

• KfW committed EUR 10 million through BMZ to amplify ecosystem service projects within the Fund’s portfolio. 

• An additional EUR 5 million in technical assistance was pledged by BMZ via KfW to develop tools that properly measure and reward these services. 

This isn’t charity. It’s a recalibration of value — acknowledging that farmers are frontline agents of regeneration, not just food producers. They preserve ecosystems. What’s missing is the financial recognition for these services — a gap that initiatives like CompensACTION are designed to fill. 

The road ahead 

Despite this progress, much work remains. PES schemes need broader policy support, scalable and modular measurement tools, adequate incentives and partnerships that can scale financing beyond traditional loans and premiums. 

At the Fairtrade Access Fund, we see PES as not just an add-on, but a necessary evolution of impact finance. Our ambition is clear: to champion financial mechanisms that reward farmers for the full scope of their contributions — economic, social, and environmental. 

For more insights, explore the full 2024 Fairtrade Access Fund Impact Report.  

Incofin just  launched the second module of its e-learning series for agricultural clients. This module on financial management is part of a trainings series to  strengthen producer organizations and SMEs which brings a fairer and more sustainable agriculture another step closer.

The digital training brings participants from all over the world together on a digital platform where they can share experiences and learn from each other. In addition, the program offers as well personalized coaching sessions to address individual needs of the participating organizations.

All of FAF’s francophone clients in Africa have successfully enrolled this second module (16 participants) on financial management with the aim to improve their profitability and sustaining investments. Clients learn how to develop a budget and operating plan, manage capital expenditures, deal with cash flow and foreign exchange risks.

The program is composed of 3 more modules: the first one was on good corporate governance and the next ones will focus on digital technology and on strategic planning. The e-learning series is developed through the Technical Assistance Facility of the Fair Trade Access Fund (TAF), and funded by KFW, BIO and FMO.

Work of a long haul: promoting female leadership in DRC fair trade coffee

Making real progress on gender equality on the ground is more than simply counting the number of female clients. It is about changing a mindset. Since gender norms are deeply embedded in society and the local cultural context, a deeper field expertise is indispensable. Technical assistance is a valuable way to clear the path. Although changing mindsets is a work of a long haul, Incofin’s partner organization SOPACDI, a coffee cooperative in DRC, is willing to go the extra mile to promote female leadership in a male-dominant cultural context.   

SOPACDI (Solidarité pour la Promotion des Actions Café et le Développement Intégral) is a coffee processing and exporting cooperative located in North Kivu, DRC. Founded in 2006, the institution is recognized as the first and most longstanding Fairtrade certified cooperative in the country. Its outreach is quite significant as it gathers 11.768 producers including 30% of women, all of whom are Fairtrade and Organic certified.  

SOPACDI and Incofin joined forces and launched a year ago a project to work on more gender inclusivity among coffee producers. That is why Incofin invited an expert in this area into the project: Trias is a Belgian NGO with successful experiences with similar projects in Africa. Both SOPACDI and the Fairtrade Access Fund TA Facility allocated the necessary budget for this Technical Assistance project.

“SOPACDI wanted to organize these trainings to help its members, both men and women, understand that gender should not be an obstacle for women to play the same roles in social life as men, because there was always this tendency to believe that women would be inferior to men because of their skills.” – Masumbuko Maheshe Neema, Vice President of the Board of SOPACDI

46 producers, including 27 women, participated in workshops on female leadership. After the trainers of TRIAS introduced some basic concepts about gender equality, the floor was open to the farmers.  

“The main objective is to stimulate women’s leadership. We encouraged women to take up responsibility and to encourage other women as well. We noticed a recovery of women’s self-confidence and they started to express themselves freely.” – Lavilé Zoumanigui, Program Coordinator TRIAS

The women raised their concerns and grievances around the poor distribution of family income, which is appropriated by men; how men generally hold women responsible if the children are poorly educated; the fact that women do not receive the same income as men in the premium distributions in the coffee buying committees.  

“We learned what gender differences used to mean compared to nowadays. In a company, for example, there is no function or job only for men and women, all can do the same job if they are capable. This is different to how it was in the past, especially within our families, where there was food for men that women were not allowed to eat, housework just for girls for example, within the religion, women could not preach in a church, which is not the case today. Some men still cultivate a toxic masculinity and hide the fear for more gender balance behind religion and societal customs.”  – Celine Nsimire Mweze

Many men in the room felt that the notion of gender encourages women to rebel and disobey and can cause problems within the family, and even within the cooperative. TRIAS showed them through examples that women willing to take on more leadership responsibilities was not against them could rather work in their favor. Although sometimes difficult, these sessions led both men and women to dare to question traditional ideas. By starting the conversation, men began to feel less threatened by women stepping up and voicing their concerns and started to understand the obstacles that keep women from reaching their full potential.  

“These teachings helped us to understand that the difference is only biological and that socially and professionally, men and women can assume the same functions at any level. My personal perception has completely changed.” – Shamavu Ngushu Manasseh

Currently, SOPACDI has included some articles in its statutes that clarify that members are equal regardless of gender and have the same rights and obligations within the cooperative. It is a first step towards more gender equality, but the process for real change does not end there.  

“At Incofin, we are thrilled by the opportunity to support our clients in their actions towards gender equality. We realize this is work of a long haul and we will follow up the progress in the SOPACDI communities.” – Samuel Kariuki, Investment Manager for Incofin

Incofin just launched an e-learning series open for the agricultural clients of the FAF. The trainings in key areas like good governance and digitalization, will  strengthen producer organizations and SMEs which brings a fairer and more sustainable agriculture another step closer.

The very first module – on Good Corporate Governance – has just been completed and participants are calling it a success. The digital training brings participants from all over the world together on a digital platform where they can share experiences and learn from each other. In addition, the program offers as well personalized coaching sessions to address individual needs of the participating organizations.

The program is composed of 3 more online modules: Digitalization and Technology; Financial Management and Strategic Planning. The e-learning series is developed through the Technical Assistance Facility of the Fair Trade Access Fund (TAF), and funded by KFW, BIO and FMO.

Vanilla is one of the most popular spices in the world, but vanilla farmers usually don’t benefit much from the high prices end customers are willing to pay. This concern led Fairtrade Access Fund to provide credit, for the first time, in the vanilla sector.

Chances are high that the vanilla flavor of your ice cream comes from the Sava region in northeastern Madagascar. Responsible for 80% of the global production of Bourbon vanilla, Sava is by far the main supplier. 70,000 smallholder farmers produce on around 25,000 hectares of  land. This is also the region where Lafaza sources its vanilla beans. The Fairtrade Access Fund (FAF) recently approved a loan of USD 1.5 million to vanilla processor and exporter Lafaza Trading SARL (incorporated in Madagascar). Lafaza buys premium vanilla from smallholder farming communities at fair trade prices and then sells it for retail, wholesale and through export channels. But the company offers the more than 1,000 vanilla farmers they are working with more than an interesting price.

The vanilla farmers live in small, isolated villages, often requiring several days of travelling by canoe, hiking or overcoming difficult roads to reach them. Lafaza does not just buy the vanilla, but also provides capacity building on proper cultivation and curing techniques to enhance the quality of the vanilla and which enables the farmers to acquire organic certification.

The production process of vanilla is very labor-intensive and delicate. It takes up to four years for a new vanilla orchid vine to begin producing flowers. They are in bloom for less than 24 hours and pollination must occur at that moment when the flower bud opens.

Incofin’s investment in Lafaza reduces further the concentration risk in the FAF portfolio, both in terms of product (first investment in vanilla) as of country diversification (first deal in Madagascar).

The Fairtrade Access Fund (FAF) disburses USD 2 million to promote fairtrade quinoa. in addition, the ongoing technical assistance project is enhancing the farmers’ production and will protect them better against climate change.

Quinoa is a crop indigenous to Bolivia. You could say it is part of their cultural heritage. The Bolivians are relying on the grain as a food source for 7,000 years. Despite the rising popularity of the grain, quinoa farmers face challenges like low productivity and climate change.

SINDAN, a Bolivian processor and exporter of quinoa is boosting the organic and Fairtrade production and consumption of quinoa (and other crops like for example also of chia and amaranth). Not just any quinoa, but the organic royal quinoa, a unique variety found only in the Bolivian Altiplano, at altitudes above 3,600 meters. The particular environment of a dry and cold climate with soils rich in salt lead to a superior quality. No wonder, this variety is in high demand both nationally and internationally.

SINDAN buys the quinoa from certified Fairtrade associations, representing hundreds of smallholder farmers. In that way, SINDAN offers those small farmers a secure market and prices above the average of other local buyers, which gives them the opportunity to raise the standard of their living. On top of that SINDAN provides trainings on techniques to help the farmers increase their production in a sustainable way.

Low productivity and climate risks threaten the livelihood of communities that depend almost exclusively on quinoa production. That is the reason why Incofin is not only investing via a USD 2 million dollar loan disbursement, but also developed a technical assistance project to finetune the farmers’ production techniques. The objective is to boost quinoa yields using environmentally friendly practices, through an integral productivity training program. This program includes topics like the use of organic fertilizers, how to prevent erosion, seed management and disease controls. The project has shown encouraging results: almost 200 producers have been trained already and they have implemented innovative techniques to produce sustainable quinoa which is after a year and a half leading to higher yields.

The second goal is to implement a climate change adaptation action plan to reduce the impact of unpredictable weather patterns and extreme climate events.  Meteorological sensors have been installed in two communities. Through these sensors, farmers will get early alerts and meteorological reports on their phone, as well as technical advice on how to protect their crop better when necessary.