Cooperatives serve a great purpose in rural Latin America. Historically, small-scale coffee growers had a hard time accessing markets by themselves because they were located remotely, so they decided to get together with neighbors and join efforts to access better opportunities. Consolidating the resources and purchasing power of small-scale producers can provide access to technical training, reduce input costs and most importantly, access to market. A well-run cooperative has the best interests of its members at the heart of every decision. Some of Caravela’s longest relationships are agreements with cooperatives, relationships that are strong and will remain so, long into the future.
For example, the Occicafe cooperative in La Plata, Huila, Colombia. For over a decade, Caravela has had a purchasing station set up inside the coop’s facilities. If a member of the cooperative is delivering coffee and believes that a lot is specialty grade, it is passed on to Caravela. The Quality Analyst will go through the physical grading process and if the sample passes, it will be roasted and cupped. We will deliver the results to the producer via text message and pay a quality premium based on the quality grade of the lot within a few days. The difference is that we pay that premium to the cooperative and the distribution to the producer is handled internally. However, there is always perfect transparency to the grower, mainly throughout the text message that they receive. If the lot does not meet our purchasing criteria, the parchment simply passes over to the cooperative, which buys it at the market price for that day. It is a very efficient process and it’s a win-win-win.
This arrangement works because there is mutual trust. The trust exists because both parties are working in the best interests of the producer, the building block of specialty coffee. The cooperative and the members see value in their relationship with Caravela through the access to market, the quality premiums paid, and the agronomic and educational assistance of the PECA technicians. This is the relationship that we have with many other cooperatives around Colombia and Latin America.
When we begin a dialogue with a cooperative about a potential business relationship, the very first thing we ask for is a membership list. The fundamental principles of Caravela are transparency and traceability and without those, engagement is a non-starter. If leadership of a cooperative doesn’t want to provide a list of members because they are afraid that someone will “steal their farmers”, then that is a red flag.
Caravela PECA technicians visit producers to work with them and improve the quality of their coffee. In a group setting, they will program ECAs (Farmer Field Schools) to teach groups of coffee growers at once, where they all share their experiences and do follow up work. The PECA team leverages the work that we are doing in multiple origins to teach current best practices, with no cost to the producers or to the cooperative. Sometimes, when we see resistance from the coop to offer assistance from our PECA team, this might also be a red flag.
Organic certificates are often owned at the cooperative level. Because of the sheer number of small farmers, these certificates are issued based on formulas and random samples. Yes, the coffee is organically certified, but the small producer is beholden to the cooperative that holds the cert which limits their mobility to maximize their income. The organic premium paid by the roaster is received by the coop. This is one of the reasons why traceability and transparency are so important to us.
As both an exporter and an importer, we have the obligation to establish relationships between producers and groups of producers with roasters throughout the world. If everyone does their job well, then this can be a long-term relationship that reduces risks and maximizes gains for all parties.
Our priority is always to make coffee better for everyone involved. For this reason, before deciding whether to partner with a local cooperative or to open a purchasing station on our own, we first look at how coffee growers are being treated. The most important thing is that producers are being rewarded for their hard work. If a farmer is happy with their relationship with the cooperative and finds value, that is fantastic. First and foremost, there should be transparency. Additionally, it is important for coffee growers to be fully paid for the coffee that they delivered on time, money is crucial for the cash flow and viability of a small business.
We treat each producer as a business partner, and we recognize each of them for their contribution, not hidden inside an anonymous community lot. We reward the producer with a price relative to the quality of the product, and pay them promptly, so their small business has the cash flow required to reinvest into the venture. We provide technical assistance based on current best practices to help the producer continue to improve. We establish a commercial channel between the producer, the roaster, and even the end consumer, with the intent of creating a long-term supply agreement that will reduce the risk for all parties and encourage investment in infrastructure.
Our vision is often shared by leaders of cooperatives, and that creates the basis of a wonderful working relationship. When it works, it works well. When it doesn’t, we won’t let that stop us from investing in the coffee community to provide opportunity. In the end, Caravela has two customers: the roaster and the producer. We will do everything we can to provide the most value to each one.
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