Turning Palm Oil to Profits in Honduras

December 25, 2011

Central America Honduras Latin America and the Caribbean

Oil palm farmers in Honduras more than doubled the amount of oil they can collect thanks to a partnership between TechnoServe and the U.S. Department of Agriculture’s Food for Progress program. These small-scale farmers now own an oil processing plant, enabling them to generate income and jobs for their families and their community.

The fruit of the oil palm, a tropical palm tree, is a key agricultural product in Honduras. Before this project, the 154 farming families that now make up the Aguan Valley Palm Producers Association (APROVA) earned little for their crops, which they sold individually to dealers. The farmers had no scales to weigh their crops, leaving them vulnerable to unscrupulous buyers. And because they sold in small quantities, they were in an unfavorable position to negotiate the best price.

TechnoServe advisors began working with APROVA in 2007 to strengthen its organization, finance, administration, marketing and oil-processing systems. TechnoServe’s support helped APROVA double its fruit-collection capacity. TechnoServe also helped the cooperative implement a quality-control system that decreased its fruit rejection rate from six percent to just 1.5 percent. The improvement in the quality of APROVA’s fruit allowed farmers to command higher prices, boosting incomes and encouraging new investments in their farms.

With TechnoServe’s assistance, the producers developed a clear business plan and implemented accounting and auditing systems. The producers also adopted democratic decision-making by the board and general assembly.

By 2008, TechnoServe’s assistance had contributed to a doubling of farmer profits and enabled them to create an education fund to ensure future growth and sustainability. The education fund will provide training for members and develop future leaders within the company.

APROVA opened its first oil processing plant in April 2009, thanks to funding from the USDA. With a plant capacity of 5.5 tons per day, farmers now process and refine their own palm oil, increasing their profits.
APROVA’s membership increases every year, and the cooperative’s progress has raised its profile in the national palm oil industry. Still, APROVA president Osman Duarte believes much hard work remains before his vision for the company can be fully realized.

“To improve our competitiveness, we have to improve productivity on our farms, increase collection capacity and begin to explore new opportunities in the refined oil market,” he says.

Osman is convinced that ultimately his dreams and those of APROVA’s members will be fulfilled thanks to the support of TechnoServe and Food for Progress. The cooperative’s members and their families already have begun to view their futures with new hope. For APROVA and its members, every day is now an opportunity to do business and improve their lives.