Across the world, conferences are constantly held on topics relevant to the coffee supply chain and its members. However, smallholder producers are usually missing from these discussions as they lack the time and resources to attend them. It means that they’re often left out of conversations taking place on the industry’s future, and how it could impact them.

For the past few years, Producer & Roaster Forum has bridged this gap by taking place in coffee-producing countries. In 2019, it partnered with Mayorga Organics to begin sponsoring smallholder producers, and next year’s event in Honduras will include an official Producer Sponsorship initiative. This will help over 150 qualifying smallholder producers attend the forum by covering their ticket entry costs. 

In addition to the above, a select group of producers will receive the Mayorga Scholarship. This will cover their accommodation, transportation, and food costs for the duration of the event – as well as their ticket entry costs.

Here’s why the Mayorga Scholarship and Producer Sponsorship were launched, and what will be done differently in 2020 to ensure that producers continue to benefit from it. 

Lee este artículo en español PRF 2020 Busca Ofrecer Mejores Becas Para Productores Que en 2019

Doris Escobar and Lorving Calderón, producers from Honduras Credit: Daniela Santos 

Why Was Producer & Roaster Forum’s Scholarship Program Launched?

Producers face several challenges, including barriers to market access such as export licence costs, minimum export volume requirements, and quality demands. A possible solution to overcoming these barriers is giving them direct access to international buyers through event-based networking, relationship building, and information exchange. 

Producer & Roaster Forum understands this, which is why it takes place on the doorsteps of smallholder producers – and sponsors many of them so they can attend. In 2020, its impact will be scaled significantly, with the following businesses and organisations each generously sponsoring 15 producers to attend the event.

• ARUCO
• ASOPROSAN
• CADEXSA
• CESAL
• Fundacion ETEA
• Moplaco
• Pinhalense
• Roasting House
• Tres Marias Coffee
  

As a Diamond Sponsor, Mayorga Organics will be offering 30 select producers a Mayorga Scholarship covering the entrance fees, accommodation and board costs of those attending the Producer & Roaster Forum. 

Since its inception, Mayorga Organics’ purpose has been to is to eliminate systemic poverty in Latin America through direct trade – starting with producers. According to Founder and President Martin Mayorga,  “We’re supporting Producer & Roaster Forum because this is the only event that supports the idea of roasters sitting in front of producers, which is an important step toward changing inequities in our supply chain.” 

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Mayorga’s team at the Producer & Roaster forum in Guatemala. Credit: Fernando Pocasangre

Challenges Faced by Sponsored Smallholder Producers

2020 will see Producer & Roaster Forum head into its fourth edition, and second year of sponsoring producers. Based on feedback from Martin Mayorga, Henry Wilson (Founder of Perfect Daily Grind), and sponsorship recipients, it’s apparent that certain factors impacted how much value producers received from the event. The following challenges were identified:

Event access isn’t enough – many producers had never been face-to-face with international buyers before attending Producer & Roaster Forum. It meant that they weren’t comfortable or knowledgeable enough to enter into negotiations themselves. One producer confessed to not knowing what price to sell his coffee at. He’d never been asked what price he wanted before, and would normally just accept what was offered.

Different producers have different needs – not all producers will need the same things from Producer & Roaster Forum. It will depend on where they are in the coffee supply chain. For example, producers selling cherry will have different options available to them compared to those selling green.

Focusing on price isn’t enough – last year’s Producer & Roaster Forum focused heavily on helping producers get better prices for their coffee. However, some producers could benefit from understanding their current production costs and hidden costs better. This could alert them to other opportunities that could increase their net income. 

Producers and roasters don’t speak the same language – smallholder producers had some opportunities to connect with roasters at Producer & Roaster Forum. However, many of them didn’t feel comfortable approaching roasters, due to the existing language barrier.

Too much focus on “direct trade” – Just like many roasters aren’t capable of direct producer relationships, many producers aren’t ready to enter into a direct sales relationship with international roasters. This can discourage both parties. A few suggestions on how to proceed would assist producers to find more value-add opportunities. For example, Martin suggests that producers selling cherry shouldn’t be demotivated if they can’t directly trade with a roaster. They could instead seek out a mill or exporter offering them fairer milling costs, fewer hidden expenses, and an opportunity to speak face to face with buyers and roasters. Alternatively, those producers could align with a larger producer in a sort of “outgrower” model, wherein all prices would be transparent and the smaller producer could also be part of the producer/roaster relationship.

A lack of knowledge on how to enter into transactional relationships or direct sales – During a dinner with roasters and Mayorga Scholars at last year’s Producer & Roaster Forum in Guatemala, it became apparent that producers would benefit from being briefed on what questions to ask potential clients (roasters), as well as how to lead up to a sale. They could also benefit from training and briefing on how to enter into a transactional relationship or direct sale with this group.

A key challenge facing smallholder producers is that many could benefit from support from the roasters they’re selling to. Many roasters aren’t used to face to face interactions with producers, and may not be aware of the communication challenges this can present. Some want to jump from purchasing coffees on spot, to entering into long term forward contracts, without the expertise or support from the exporters/importers they’re used to working with. 

While roasters do focus on the prices being paid to producers, it would help if they also improved their understanding on price beyond FOB. This includes factors that affect a producer’s cost of production, such as interest rates, financing, cost of inputs, logistics, etc.

Lorving Calderón, producer from Honduras and Henry Wilson at the Producer & Roaster forum in Guatemala. Credit: Lorving Calderón 

What We’re Doing Differently This Year 

By interacting with and listening to producers, we’ve realised that there are gaps that must be addressed, including the challenges listed above. In response to this, we’ll be implementing the following.

Adding More Specific Selection Criteria to Producer Applications

Having more specific selection criteria and additional background information on producers will help us match-make them to roasters who understand their needs more precisely. To enable this, Martin has suggested that the following questions be added to the Mayorga Scholarship and Producer Sponsorship application forms:

• Are you currently selling to a mill? Exporter? Middleman?
• Do you grow any other crops or would you be interested in doing so? 
• If you can grow other crops, how much land could you allocate for this? 
• Is your coffee organic or does it have any other USP? 

We’ve updated the relevant application forms to include these questions going forward.

Creating Customized Guides For Producers 

Producer & Roaster Forum recognises that each producer has different needs, and could benefit from a training guide adapted to where they are on the supply chain. To facilitate this, Perfect Daily Grind will create a four guides to help producers maximise their efficiency and profitability. The first three guides will be targeted at producers selling cherry, parchment, and green – and the final guide at roasters.

These guides will be distributed to producers before the forum via WhatsApp, email, and social media. It will contain stage specific advice on how they can proceed to the next level they’d like to be in. It will also cover how they can decrease costs at their current stage of production, and identify opportunities open to them at this point.

The roaster’s guide will address what they could consider for their coffee sourcing strategy. This will include explanations of what impacts a producer’s production costs at various stages. It will also help them understand what kind of support they’ll need before they enter into forward contracts with smallholder producers.

Providing One-on-One Training Opportunities

To address the lack of direct connection between producers and sponsors prior to the event, Mayorga Organics will visit Honduras three times before the forum so that their team can meet Mayorga Scholarship recipients face to face. 

This will be a session where they communicate with producers in a casual setting, to better understand their needs and prepare them for what the event involves. It will involve asking the producers questions, such as what their biggest challenges are, as well as how they mill and sell their coffee. In turn, producers can ask the team for advice on what to ask potential clients, and how they can lead up to a direct sale or long term relationship with them.

Producers will also meet with Producer & Roaster Forum’s team and event partners before the event to go over their guides in detail, ask for expansions on the answers the Mayorga team have provided, and discuss what a negotiation process could involve. This will take place in person and via video conference.

Improving Communication Through Translators & Individual Support

To enable clear communication between producers and roasters during the forum, bilingual Perfect Daily Grind staff members will be on hand to assist with translations. In addition, we’ve partnered with a local language school to provide one on one support where it’s required.

This will help producers feel more confident and comfortable having one on one communication with international buyers – and possibly entering into negotiations with them.

A couple of this year’s scholars talking with Clari Butman and Martin Mayorga of Mayorga Organic at the Producer & Roaster Forum in Guatemala. Credit: Fernando Pocasangre

Past sponsorship and scholarship recipients have been greatly impacted by attending Producer & Roaster Forum, and all the benefits that it brings. 

Job González is a producer from Finca Los Cedros in Guatemala, who attended the event last year thanks to a sponsorship. He says it was “a great and unique opportunity to meet and interact with the people who trade our products in different consuming countries, as well as an opportunity to learn more about what they need from our coffees.” 

Cecilia Rosibel López Armas is another farmer from Finca El Mirador who also attended the event through a sponsorship. She mentions that it was interesting to hear about what roasters and buyers are looking for, their experiences in the coffee world, and the impact that direct trade has had on the relationship between producer and buyer. 

She believes that “When there’s a fair price, many families and coffee-producing communities benefit from it.” 

As sponsorships and scholarships continue to support producers through Producer & Roaster Forum, more producers be equipped with information directly benefiting them. The event will also offer them opportunities to act on this information, which means they’ll be in a better position to improve their current situation.

Alfredo Villatoro, Alexander Illescas and Urisar De León, producers from Guatemala, with Henry Wilson, founder of Perfect Daily Grind at the Producer & Roaster Forum in Guatemala.

How to Become a Sponsor

Currently, there are still many opportunities for businesses to get involved as Producer Sponsors, or to sponsor individual producers. 

Attendees wanting to sponsor a producer’s ticket can do so while purchasing their ticket for the event on Eventbrite, and selecting the relevant option at the point of purchase. 

Those who would like to become a Producer Sponsor can email prf@perfectdailygrind.com for more information.

How to Apply For Sponsorship

If you’re a smallholder producer and would like to attend Producer & Roaster Forum in Honduras next year, you can apply if you produce less than 200 quintales annually.

If you meet the above requirements, please complete this application form before 15 January 2020. You will need to answer several questions related to your operations. 

Applications will be assessed according to who would benefit the most from attending the event, and successful applicants will be informed by February 1st, 2020.

Enjoyed this? Then read Producer & Roaster Forum Announces Values & Prioritises Impact

Featured photo: Fernando Pocasangre

 Perfect Daily Grind

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