Coffee farms are a business. Just like any other business, they function in terms of revenue, costs, profit, and investment. Despite this, around the world, producers struggle with low prices, pests and diseases, and income instability (as coffee is a seasonal crop).
To combat these difficulties, producers – as business owners – are increasingly becoming involved in new projects and ventures to improve the profitability and stability of their farm. This might mean planting other crops to guarantee year-round income, or even diversifying into other areas of the supply chain.
By doing so, producers can improve their financial security, consequently increasing their standards of living and driving economic growth in their communities.
In such a tough economic environment, it is arguably more important than ever for producers to do so. However, there are still many challenges that farmers face: access to finance, poor availability of information, and regulatory issues are just a few.
So how can coffee producing communities become more entrepreneurial? And why is this important? Read on to learn more.
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Kasundi Microstation from the Coopade Cooperative in the DRC. Credit: Adelard Palata.
Entrepreneurship in coffee communities
The Cambridge Dictionary defines entrepreneurship as “a skill in starting a new business, especially when this involves seeing new opportunities”.
Today, we see this skill across coffee producing regions all around the world in a number of projects. The positive impact of these project often consequently trickles down into the community.
Esperanza Dionisio is the General Manager of CAC Pangoa, a coffee and cacao co-operative located in the Central Selva of Peru.
She tells me that the CAC Pangoa has worked on a project called “Centros de Excelencia”. This aims to identify members of the co-operative who are recognised for the quality of their work outside of coffee production.
This initiative, she says, provides these farmers with the tools to diversify and consequently increase their income. The diversification also improves the farmer’s stability to some extent, as they can become less reliant on the seasonal coffee harvest.
Esperanza says: “There is a lady that knits purses, and another partner that began rearing bees and collecting honey.
“There is another case of a member who started raising guinea pigs. She started with just three sheds, has modified her house, and built roads… the other day, [government officials] visited her.”
Esperanza Dionisio during a cupping session. Credit: Cooperative Coffees
Supporting entrepreneurship in coffee communities
Coffee producing regions are typically very rural, and often lack good or reliable infrastructure. Additionally, this far away from major cities, it can sometimes be challenging to get the right access to information or appropriate support. This means launching new projects can often be tougher than it would be anywhere else.
But despite these challenges, many coffee producing communities actively work to incentivise entrepreneurialism among their population. There are a number of ways to do so.
Training & education
To develop or hone any skill, training is essential. Esperanza says that first of all, training is important to expose younger generations to working in and around coffee, whether they’re on farms or not. She says that today, young adults typically associate coffee production with being unprofitable.
The key, Esperanza points out, is to show them the quality of a good cup of coffee, and explain how that can be linked to profitability. “You show young adults that the farms produce a good-quality, good-tasting bean,” she explains.
For instance, if young farmers start learning about cupping, they can learn about the quality of their crop and how to improve it. “From this, you get to other interests, such as opening coffee shops, improving the farm, or opening them up to tourism, just like one of our partners,” she says.
On the other hand, it’s also important for farmers to develop their business skills. By improving their knowledge in farm management and finance, they can become more invested in their business and make better financial decisions.
Chris Treter is the CEO of Higher Grounds Trading in Michigan. He says that through the company’s non-profit partner, On The Ground, they have offered financial literacy training and micro-loans to start-up businesses in the Democratic Republic of the Congo.
He tells me about a recent group of farmers who saw an opportunity for baking bread. “There was a lack of bread makers… they improved their financial literacy and then they were given a micro-loan to invest in that program,” he explains.
Adelard Palata, Coffee Project Supervisor at the Virunga National Park Coffee Program. Credit: Adelard Palata.
Co-operatives & organisations
Whether it’s theoretical or practical, sharing knowledge is key when it comes to driving entrepreneurship in coffee communities.
Esperanza explains that this is where co-operatives and other similar organisations play an important role. “We always have co-operatives, because we are in rural zones,” she says. “Through them, we are able to unify farmers, and reach them and their families. Otherwise, it would be extremely difficult.”
She tells me about the CAC Pangoa co-operative in Peru. She says that currently, it manages 17 committees across different territories. Altogether, it has almost 700 members who work together in cacao and coffee production.
“Through our organisation, we have trained members in what they need,” Esperanza explains. “Right now, we are training young adults, so they can go to university. We are also providing technical training to other members, with a focus on farm administration.
She adds that this training is not limited to men. Both women and men in the co-operative receive the training they need. They can also access credit to invest in their farms and seek out new opportunities for entrepreneurship.
The co-operative finances this training through its Fairtrade premiums and partnerships with non-profit organisations and coffee associations.
Similarly, Chris tells me about Saveur du Kivu, an annual coffee conference and auction that is held in the DRC every year. While hosted by the private sector, the event is also supported by the Congolese government, international NGOs, and local coffee co-operatives.
Through the event’s workshops and panel discussions, Chris says local farmers are able to meet other farmers and buyers, exchange knowledge, and talk about their opportunities.
”Having a local expo alongside that has helped highlight some of the different opportunities that exist in coffee growing communities for the growers themselves,” he says.
Microstations in the Coopade Cooperative in Virunga National Park. Credit: Adelard Palata
How does entrepreneurship benefit the wider community?
When local businesses thrive, so do their communities. Esperanza tells me the number one benefit of local entrepreneurship is that the money stays in the same place, where it can be reinvested.
For example, if a farmer grows their business and wishes to invest in a new building, construction will be required. This means additional infrastructure, new jobs, and an overall economic boost in the community.
Chris says: “There are all different kinds of components that a coffee community requires to thrive. A simple opportunity that I’ve seen is utilising the money gained by selling coffee to buy a truck and become a taxi driver in the off season.
“This way, families can [be more financially sustainable year-round]. As well as this, the local community gets the opportunity for easier transport that they might not have previously had.”
Adelard Palata is the Coffee Project Supervisor at Virunga National Park’s coffee programme. He explains that roasted coffee is very hard to find in the DRC, as their coffee sector is recovering after decades of instability. That’s why they are planning to build a roastery.
Adelard explains that this space will support Congolese farmers to learn more about the wider coffee supply chain. Additionally, he says it will help to drive Congolese coffee culture as roasted coffee becomes more widely available on the local market.
In turn, he hopes this will boost national consumption and possibly even inspire others to invest in opening roasteries and coffee shops in the DRC.
“Our focus is to begin to make coffee available for the local coffee consumer,” Adelard adds.
Selecting ripe cherries at a microstation from the Coopade Cooperative. Credit: Adelard Palata
How does entrepreneurship support the wider supply chain?
While increased entrepreneurship drives growth in coffee producing regions, it is also beneficial for the wider supply chain.
When a farmer’s business (or businesses) become more profitable, they aren’t just able to improve their quality of life and their family’s financial stability; they can also reinvest in their farms.
In turn, this investment allows farmers to increase the quality of their coffee. This higher quality coffee may then be exported, roasted, and consumed in other parts of the world, adding more value at every step.
Esperanza adds in the same vein, training and education at origin can also be constructive for the wider supply chain. For instance, she says that with trained cuppers or Q graders in the community, farmers will be more informed about which plants they should cultivate.
“From there, we are already improving quality for the industry,” she says.
A restaurant in a coffee farm located in the Central Selva of Peru. Credit: Cooperative Coffees
There’s no doubt that when a farmer or a co-operative introduces new operations into their farming system, it is complex and often challenging. However, by driving entrepreneurship and empowering producers to take more ownership of business opportunities, we can improve stability for the producer and drive sustainability across the supply chain.
In turn, the entrepreneurial spirit of farmers who identify new opportunities, invest in their farms, and open businesses will inspire other community members, including younger generations. When local businesses thrive, they support their community and as well as other stakeholders in the supply chain.
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Photo credits: Cooperative Coffees, Adelard Palata
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