IFAD IMPACT ASSESSMENT - Smallholder Commercial Agriculture Project (PAPAC) and Participatory Smallholder Agriculture and Artisanal Fisheries Development Programme (PAPAFPA)

Despite the progress made over the last decades across several socio-economic indicators, poverty incidence remains persistently high in Sao Tome e Principe, with over two-thirds of the population living below the poverty line of US$3.2 (World Bank 2018). A set of constraints imposed by the country’s insularity, small market size and agroecological conditions make the country extremely vulnerable to market and climate shocks. Its economy relies heavily on imports, which are counterbalanced by a narrow set of exports, with cacao taking the lion share (approximately 70% of total exports, World Bank 2018). Agricultural production, however, has declined since the country’s independence in 1975 and productivity has remained consistently low, hindering economic wellbeing and progress of rural livelihoods, particularly of those relying on small-scale farming as a key source of income. The two projects evaluated in this report – the Participatory Smallholder Agriculture and Artisanal Fisheries Development Programme (PAPAFPA; implemented 2003-15) and, its successor, the Smallholder Commercial Agriculture Project (PAPAC; 2015-2020) – focus on this group of farmers and on three value chains: cacao, coffee and pepper. The projects interventions revolve around the promotion of certified organic farming and the creation of export-oriented cooperatives in each value chain, together with the investment in rural infrastructure. The projects’ cooperatives play a key role in the implementation of the interventions in the field, by working closely with the farmers and their associations, providing professional training, productive assets and facilitating linkages to the market. The interventions aim at increasing agricultural production in a sustainable manner via organic farming, enhancing market access and resilience to shocks, thereby promoting small farmers’ income stability and food security. Organic certification labels have been increasingly used across the world to pursue social and environmental sustainability in supply chains for agricultural products. However, there is still considerable debate surrounding their effectiveness in achieving those goals. Robust quantitative evidence of their impact on crop prices, productivity and overall welfare of rural livelihoods is scarce, and for Sao Tome e Principe inexistent. Thus, the current impact assessment fills a gap in this literature by using a mixed-methods approach to assess and quantitatively estimate the impact of a project centred around certification schemes through rigorous counterfactual-based methods. Given the fundamental role played by the value-chain cooperatives in the project, it also contributes to a growing literature on the impact of associativism and cooperativism on the economic mobility of farmers and rural households.