Accra, Dec. 18, GNA- The British High Commission on Thursday announced that the Department for International Development (DFID) has issued a guarantee loan of 400,000 pounds to be made by the National Westminster Bank Plc to the Day Chocolate Company (DCC).

The guarantee period will be for January 2004 till September 2006. A statement by the Commission issued in Accra on Thursday said between 1992 and 1997, DFID provided technical and financial support to Twin Trading to facilitate the establishment of Kuapa Kokoo Limited, a cocoa farmers co-operative in Ghana.

This support led to the establishment of a viable cocoa farmers association, which today represents over 45,000 members.

The association acts as an active lobby group for its members as well as enhancing the livelihood opportunities for cocoa-farming communities through the provision of education and health facilities.

The statement said in September 1999 the Secretary of State approved a loan guarantee agreement of 400,000 pounds in respect of a loan made by Natwest Bank to DCC, which facilitated the development of the Day Chocolate Company (with the Kuapa Kokoo Union, Twin Trading, the body shop and a few private individuals as shareholders) marketing Ghanaian smallholders cocoa in the UK under the brand name, Divine. It was envisaged that the establishment of DCC would enable the effective demonstration of the potential for mainstreaming fair trade chocolate products in the UK as well as bringing direct economic benefits to Ghanaian cocoa farmers.

Fair trade chocolate products will have direct benefits for farmers by allowing them to earn premium on cocoa sales and to generate competition in the mainstream fair trade market for chocolate.

The statement said, "the DCC is a partnership between small-scale cocoa farmers in Ghana and organisations in the UK which support fair trade.

The provision of the guarantee to enable small-scale agricultural producers to own share is 33 per cent in a UK company is innovative and the only one of its type in the DFID portfolio". It offers an opportunity to test the viability of small-scale farmers owning strategic shares, through co-operative structures, in a company engaged in their core market.

Despite the challenges faced in capturing a significant market share in the fiercely competitive UK confectionery market, DCC have succeeded in bringing fair trade products into new outlets and to the attention of new consumers.

Using highly innovative marketing techniques DCC, over the past four years, had made significant in-roads into the UK confectionery market.

The DCC range now includes six flavours of Divine in two formats, a range of seasonal products, Divine drinking chocolate and cocoa powder and the Dubble bar.

The statement said in November 2002, the Co-operative Group converted all its own label chocolate bars to Fair-trade and DCC secured the contact. Furthermore it supplies Starbucks own label chocolate. The cocoa for all these chocolate products are sourced from Kuapa Kokoo members and purchased at a fairtrade price, the volumes have increased from 140 tonnes in 2002 to 500 tonnes in 2003.

In April-September 2003, saw a turnover of 1,800,000 pounds with a profit of 80,000 pounds, the turnover has doubled over the last year and is on forecast to do the same again this year.

Although the income benefits through bonus payments to Kuapa Kokoo (KK) farmers in Ghana, at this early stage is low, KK Union shareholding have brought to members: funds for community based products, increased self-esteem, and deeper understanding of the market for chocolate in developed countries.

However it is envisaged that over time, the continued expansion of the fair trade chocolate market will provide increased income to cocoa farmers through increased cocoa sale and divided payments from DCC. The re-issuing of the loan will enable DCC to effectively implement its new 2003-2006 strategic plan, funding its rapid growth by lowering loan repayment, the statement added.