Throughout the developing world, millions of smallholder farmers struggle to increase their incomes and improve their livelihoods. Among these smallholders are coffee producers, who face considerable obstacles both in maximizing their yield and in capturing its full value in the marketplace.
To address these challenges, LWR uses an agricultural value chain approach to promote sustainable development in the communities of smallholder farmers. LWR defines the agricultural value chain as a set of interventions designed to increase the proportion of the benefits of agricultural production that reaches farmers.
Ground Up: The LWR Coffee and Cocoa Initiative
The global coffee and cocoa markets are worth more than $175 billion per year combined. But smallholder producers capture just a fraction of that value. With expertise developed over decades, LWR brings a unique perspective and skill set to improve producers’ lives, from the ground up. Read more about Ground Up: The LWR coffee and cocoa initiative.
Access to Inputs
LWR helps smallholder coffee producers purchase crucial inputs by expanding their access to credit. In Africa, LWR helps coffee producers secure access to financial services through a model that links producers to local financial institutions and supports local Savings and Credit Cooperatives (SACCOs). Globally, LWR also works to help larger coffee cooperatives and federations to increase and sustain access to pre-harvest financing through established national and international credit providers.
Access to inputs can also be improved through participation in producer cooperatives because smallholder coffee producers have greater purchasing power when they work together. LWR works with cooperatives to expand their scale and improve their financial and management capacity so they are able to make collective procurements. By leveraging their assets together, producers can also invest in new technologies for post-harvest processing such as wet mills and drying facilities.
Building Farmer Technical Capacity
Critical to a farmer’s success in the specialty coffee market is an extremely high quality product. LWR provides producers with training and technical assistance for quality improvement and promotes improved processing technology. LWR also builds coffee producers’ capacity in organic farming, which includes crop diversification, soil and water conservation and, often, rejuvenation of land and coffee trees. The emphasis on shade-grown coffee production, in which coffee trees grow under the canopy of larger trees, improves coffee quality and the health of the soil, and creates favorable conditions for bird and animal life.
LWR promotes the local production of organic fertilizer and bio-pest controls as low-cost methods of quality improvement that also promote the health of the coffee growing environment. LWR and its partners encourage the intercropping of coffee trees to supplement the coffee producing family’s food supply.
Increasing Access to Markets
Smallholder producers must have reliable access to markets in which to sell their coffee. One way LWR promotes market access is through the strengthening of producer cooperatives. Creating economies of scale by organizing many producers where individual smallholder producers once acted alone, cooperatives provide producers with greater market access through improved information and transport as well as increased bargaining power with coffee buyers. LWR works with coffee producer cooperatives in several countries to better engage in the agricultural export market by obtaining organic or Fair Trade certification. Coffee drinkers around the world are willing to pay a premium for these specialty coffees, creating an opportunity for smallholder farmers to capture a higher price per pound of coffee.
In Uganda, LWR, along with US-based coffee companies Equal Exchange and Thanksgiving Coffee, works with Gumutindo Coffee Cooperative Enterprise to improve processing and quality control. LWR’s work with Arabica coffee producers to establish savings and credit cooperatives has improved farmers’ access to necessary inputs while encouraging a culture of saving money. Within a three-year time frame, Gumutindo’s quality improved so dramatically that Equal Exchange now offers single source origin Organic Gumutindo for sale as part of the LWR Coffee Project, which sells Fair Trade coffees to Lutherans in the United States.
Coffee Farmers’ Future
In order to expand into the specialty coffee market, smallholder farmers must focus on quality, while simultaneously reducing on-farm costs and streamlining processes. LWR and our partners work to address these issues today, but we continue to explore new approaches to cutting costs while maintaining quality, such as the local production of organic fertilizer and bio-pest control, as well as the introduction of on-farm pre-drying facilities and other alternative technologies. Through improved natural resource management, increased access to inputs and financing, strengthening farmers’ technical, organizational and managerial capacities, increasing access to markets and promoting collective action, LWR will continue to look for public-private partnerships to build upon the number of smallholder farmers that can effectively participate in the coffee value chain.