• Agricultural expansion in Colombia’s fertile and biodiversity-rich Orinoquia region has led the government to form innovative partnerships with businesses at local, sectoral and national levels to scale up sustainable agriculture.
• With support from three World Bank Group initiatives, Colombia is targeting high-impact commodities and working closely with the private sector to pilot pioneering approaches to adopt sustainable supply chains.
• This work is leading Orinoquia’s transition to low-carbon development, and positioning the region as a model for how to effectively engage the private sector to accelerate climate-smart agriculture.

Agricultural land in Colombia’s fertile and biodiversity-rich Orinoquia region has expanded rapidly in recent years, with more than one million hectares of forest cleared between 1990 and 2015. To address this, the Government of Colombia is partnering with the World Bank and the private sector at the local, sectoral and national level to scale up green supply chains. This work is happening across a wide range of agricultural sectors in Orinoquia, including rice, cocoa, palm oil, livestock, coffee, cashew, and non-timber forest products, as well as commercial forestry and agroforestry systems.

At the local level, the World Bank Group’s International Finance Corporation (IFC) is supporting agribusinesses in Orinoquia to pilot sustainable production models. At the sector level, the Bank’s Agricultural Global Practice and Advisory Services and Analytics (ASA) teams are advancing knowledge sharing and helping to leverage synergies from public-private investments. And at the national level, the Bank’s Environment Global Practice team is working with the government to promote policy dialogue.

All of this work is being supported by Colombia’s jurisdictional emission reductions program with the World Bank’s BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL). This emission reductions program opens the door to up to $50 million in payments for verified emission reductions in the Orinoquia region.

“The World Bank Group is partnering with the rapidly expanding private sector in Orinoquía to help businesses become more environmentally sustainable while improving their profitability,” says Maria Soledad Requejo, IFC Operations Officer. “The goal of these activities is to generate a robust knowledge base and identify the supporting investments needed to protect the environment, conserve biodiversity, and improve the livelihoods of local communities,” she adds.

The World Bank’s “Private Sector Theory of Change”

Engaging the private sector in sustainable land use is critical, but there is a lack of clarity and competing views on how best to achieve growth while protecting the environment. The ISFL has developed a private sector theory-of-change approach that defines three levels of interrelated engagements (ie. with firms; within and across sectors; and with national governments) that are needed to achieve significant and long-term emission reductions from land use.

Roy Parizat, ISFL Fund Manager, explains: “The purpose of the private sector theory of change is to provide a way of considering the critical pieces required to adopt sustainability in agricultural development of a jurisdiction, where the adoption of sustainable practices is enticing for farmers, traders and agribusinesses. This requires a joined-up approach where all critical parties work collectively to make sustainability the best path forward.”

The World Bank’s support to the Government of Colombia and sub-national governments and departments aims to support a three-tiered, multi-team approach to private sector engagement. This work is already starting to produce strong best-practices examples of ISFL’s private sector theory-of-change approach – most notably in the cocoa and livestock sectors.

The ISFL’s private sector theory of change shows the different but interrelated levels of engagement required to ensure the development of sustainable practices, and their subsequent adoption at scale.[CR1] 

Greening the cocoa value chain

While cocoa has long been cultivated in Colombia and consumed domestically, the country captures only 1 percent of the global market. According to estimates by Colombia’s Unit for Rural Agricultural Planning, more than one million hectares of land in the Orinoquia region are well suited for cocoa cultivation, but barriers stand in the way of expanding production, including high upfront costs and an overall lack of experience with cocoa cultivation.

With ISFL support, the IFC has been working closely with Colombian cocoa company Andean Cacao to overcome these barriers and build more efficient, reliable, and traceable cocoa supply chains. The project provides support to farmers in testing and evaluating new production methods and technologies to improve efficiency, quality, and sustainability while facilitating access to higher-value international markets.

The project also supports the rehabilitation of previously cleared land and increases household income by enabling farmers to cultivate cocoa, helping to curb deforestation, and incentivize climate-smart practices. The goals of this five-year engagement are to bring 3,000 hectares under sustainable land management practices, increase productivity by 25 percent, and boost cocoa producers’ revenues from sales.

This cocoa program in Orinoquia is just the beginning in the region. The ISFL intends to apply the lessons learned from it to encourage adoption across the sector, collaborating with sectoral initiatives and industry bodies to share the learning with as many cocoa sector firms as possible to inspire them to improve their practices.

Boosting sustainable cattle ranching

The World Bank’s ongoing partnership with Hacienda San José, a leading agribusiness operating in Orinoquia, has been key to addressing cattle ranching as a leading driver of deforestation, ecosystem degradation, and related carbon emissions. Hacienda San José has collaborated with the IFC, with financial support from the ISFL since 2019, working to build a more sustainable, deforestation-free beef supply chain at scale.

Insights derived from this work have laid the groundwork for helping Hacienda San José and, eventually, other firms to make a transition to a climate-smart livestock supply chain and better production standards, while also helping the region realize its conservation potential.

In February 2022, Hacienda San José became the first company in Colombia to be added to environmental impact fund &Green’s global portfolio of investments in deforestation-free agricultural production. With &Green’s $7.5 million investment, Hacienda San José intends to expand its sustainable cattle farming operations to over 180,000 hectares in the Orinoquia region, and has committed to the protection and restoration of up to 27,000 hectares of tropical forest.

“With support from the World Bank Group, Colombia’s private sector work is a paradigm for putting its private sector theory of change into practice,” says Dieter Fischer, IFC Senior Operations Officer. “Ultimately, what is exciting about this work in Orinoquia is that it is offering a long-term, sustainable growth pathway that can be replicated in business and sectors across the world.”

More on Colombia’s private sector engagement on land use:

ISFL’s 2022 Annual Report

Colombia's ISFL Program

Compendium on Sustainable Cattle Ranching in Colombia

ISFL report on cacao in Orinoquia

VIDEO: Sweet, Sustainable and Smart - The Future of Colombian Cocoa

Blog: The future of Colombian cocoa is sustainable, climate-smart, and oh so sweet

Feature story: Sustainable Cattle Ranching in Colombia Gets Boost From Global Investment Fund