This week consisted of traveling around the country to meet with different farmers, processors, banks, and cooperatives. Coffee cooperatives are farmer-owned organizations tasked with paying competitive prices to members for their coffee beans. This can be achieved by forming relationships with buyers, benefiting from economies of scale in the milling process, and by using futures to hedge price risk. Large cooperatives also offer services such as medical clinics, schools, and technical assistance.

We started the week by meeting with some of the country’s most successful cooperatives, and ended with a few examples of cooperatives that are struggling to overcome the current challenges facing the industry. The first few meetings were highly educational, and gave us concrete examples of procedures that can be implemented to streamline the milling process.

While a few cooperatives have managed to overcome the issues troubling the sector, the vast majority of producers are struggling to stay in business. After our meetings on Thursday and Friday, it couldn’t be clearer that small producers have been significantly impacted by the crisis. The need for assistance was evident when roughly 30 farmers showed up to our last meeting on Thursday. For over two hours, we asked questions, and listened to the farmers voice their concerns.

Anecdotal evidence brought to light the severity of the leaf rust outbreak, but also suggested that the application of fungicides won’t be sufficient to help production levels recover. Less visible issues such as a lack of access to capital, qualified labor, certified seeds, and a general insecurity in some regions will need to be addressed to ensure farmers can regain their competitiveness in the global coffee market.

The Volunteer

Scott Argyres

Associate, FBG-Fund Statistics

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