2014

Cooperative Programs

Columbian Coffee Federation  Luis Samper

Today’s mild arabica coffee farmers face market volatility, exchange rate fluctuations, climate variability and the increased prevalence of plant blight and harmful insects that accompany climate change. They tend to have small coffee plantations, of around 4 acres in size, and their children do not want to continue with farming. At the same time, consumers and the industry expect farmers to use sustainable methods, meet stricter environmental standards and continue producing exceptional quality coffees at high altitudes.

For mild arabica coffee to continue being an option for the 21st century consumer, the commonly increasing challenges that growers face also imply collective action. In order to accomplish change in the scale required we need common objectives, articulated strategies and, more importantly, the capacity to implement them.

While there are many challenges, in this article I will concentrate on three: the need to achieve consensus to initiate bold plans, the challenge of coffee leaf rust, and the need to make sure that the market works for small farmers.

Institutional framework
Colombia has a strong institutional framework to help overcome today’s challenges. Since 1927, the Colombian Coffee Growers Federation (FNC) has been part of that story, helping to establish and preserve the legacy of our nation’s signature export. Perhaps the biggest FNC asset is its ability to provide a process for growers to agree on common objectives. Thanks to the legitimacy and democratic character of the FNC, growers can voice their needs and participate in joint decision making.

Being able to represent and make decisions on behalf of growers is crucial. Their mandate is renovated every 4 years through coffee grower elections; the last took place this past September. These elections are the biggest of any agricultural institution in the world. Selecting their legitimate FNC local, provincial, and national leaders for the next four years is the first step toward arriving at common objectives.

Thus, democracy underpins the ability to develop common policies, sustainability projects or promotional campaigns. The creation of the well-known Juan Valdez brand would not have been possible without this system of developing collective action. This framework also facilitates the development of collaboration agreements with a number of clients, NGOs, international cooperation agencies, and governments. It also provides the legitimacy to defend coffee growers’ interests in international sustainability discussions or even domestic political economy struggles with other industry stakeholders. In sum, we believe that without a strong institution to accomplish projects to overcome common challenges, mild arabica coffee farming will not be viable in the long run.

Combating Leaf Rust through Institutional Models
Between 2009 and 2011, Colombia had to face one of its most difficult sustainability challenges. Up until that point, no single certification protocol had suggested a strategy against the coffee leaf rust (Roya). Production was impacted throughout the region, with the average Colombian farmer experiencing a 30% reduction in yields during that period.1

While Colombia and the FNC’s Research & Development Center, Cenicafé, were ready for the crisis in terms of providing new varieties, one aspect is to have the seeds and yet another very different is to have growers adopt it and overcome industry skepticism. It is thanks to the FNC institutional framework that we were able to renovate nearly 3.2 billion trees since 2009, making two thirds of the country´s plantations rust resistant. Over the last five years, more than 420,000 coffee growers renewed their plantations, investing over $1.5 billion. Thanks to the ambitious renewal of coffee plantations and production reconversion developed by the FNC, Colombia made an impressive leap in production and farm modernization. Average productivity has reached 15.2 60-kilo bags of green coffee per hectare, the third highest of the past 14 years.

Purchase Guarantee
One of the biggest problems small plantation owners have is the ability to sell their crop at transparent market prices that reflect the international value of their crop. In addition, they need to sell their harvest as it matures, with the liquidity of a cash payment. Colombia´s system to ensure that coffee growers receive the highest possible proportion of international prices for their beans is possible thanks to the Purchase Guarantee Policy (PGP).

The main focus of this program is to provide the conditions for producers to sell small quantities of coffee at transparent market prices 365 days a year at more than 500 purchasing points across the country, in cash, close to their farms. This provides market access to small producers, which allows them to capture a higher value in spite of transaction volume, which is often very limited. Since we are dealing with small plantations that are harvested throughout the year, the average transaction volume when a grower goes to market is of less than 60 kilos of green coffee. If it were not for this system, the market would cease to operate, to the detriment of coffee growers, whose negotiating power is very reduced in their local communities.
Of course, there are a number of additional challenges that need scaled up solutions and that can only be overcome with a strong associativity and institutional models. The ability to develop Geographical Indications, minimum quality requirements that enhance the origins’ equity and positioning, or wide scale sustainability efforts are just a few of them. The lesson is clear: united we can do more. All too often, consumers view coffee as a simple commodity that they take for granted; many traders want to see it as an interchangeable good that is just to be traded. Colombian growers, however, take a different view. It is their pride and the result of individual and collaborative efforts. When you have a chance, please stop and smell the beans and become aware of the challenges that hundreds of thousands of coffee growers currently face and their ability to overcome them.

1 If interested on how this was accomplished please watch FNC’s lessons on sustainability. Oxford, CABI, 2013. https://www.youtube.com/watch?v=kjfA8L10RBw

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