Description financing model: Integrated Supply-Chain (Filière)
The Integrated Supply-Chain (Filière) is a financing approach that channels capital across an entire food & agri supply chain, rather than just to one corporate. A food & agri corporate facilitates access to financing for all value chain participants, allowing financiers to scale lending efficiently while gaining greater transparency into underlying risks
Applicability: Applicable to fully integrated, well-structured supply chains with formal offtake agreements
Considerations: This one-to-many approach is enabled by the corporate’s coordination and credit strength
Description of de-risking tool(s):
Price premium: Value chain actors pay higher prices for sustainably produced goods. These premiums monetize sustainability and serve as an additional revenue stream
Third party insurance premium coverage: Third party support to cover the cost of insurance (e.g., for climate or yield risks), enabling access to risk protection tools that would otherwise be unaffordable
Case study description:
Pilot in Caldas, Colombia (expanded to Indonesia, Kenya, Zimbabwe, Guatemala, Honduras and Peru). Insurance provision for remote small holder coffee farmers in case of excess rainfall or drought periods
- Blue Marble, backed by a consortium of 5 insurance organizations, designs weather insurance product based on satellite data
- Seguros Bolivar underwrites the insurance
- Nespresso provides access to the smallholder farmers, often through cooperatives
- Fairtrade International establishes fairtrade standards for the farmers, including a fair price and a Fairtrade Premium (to be invested by the farmers in community projects/education/other initiatives)
- Nespresso pays Fairtrade Premium to the farmers and Fairtrade licence fee to use FT mark on products
- Farmers collectively agree to use the Fairtrade Premium and government grants to pay the weather insurance fees
- Automated payouts from insurer directly to registered farmers based on satellite weather data
- Reinsurers ensure financial backup to cover large claims
Global program protected ~118k beneficiaries in 2024 & farmers have received $7M in cumulative payouts to-date
