Keurig Green Mountain, Root Capital, Sustainable Harvest, and Unicafec discussed their use of mechanisms such as long term financing for farm renovation, extended contracting terms and technical assistance needed to build resiliency for the long term. Notes from the Panel: Benjamin Schmerler, Root Capital; Colleen Popkin, Keurig Green Mountain; Alfredo Alarcón Enciso, General Manager of the Peruvian coffee cooperative UNICAFEC (Union of Ecological Coffee Producers); Susan Aleman, Peru Programs Director, Sustainable Harvest Coffee Importers. Ben Schmerler, Root Capital: Roya – not about price anymore, it is about productivity and vulnerability/survival. Root Capital purpose is threefold: finance, educate, catalyze. Themes:
- Very volatile market combined with many other factors – climate change, disease, farmer age, drug trade – has lead to widespread vulnerability for farmers.
- Action was not taken on Roya.
- There were no effective levers to confront the issue to effectively support the producers.
- Time was spent identifying the problem – but not searching for the solution.
- Apply this to the issue of climate change and you will see the same scenario.
- Sustainability for a long time was about price, getting a better price, the new view is more holistic.
Root Capital has the desire to move beyond projects, collaboration in the end is the way that the whole industry can deliver a solution to Roya and beyond. Colleen Popkin, Keurig Green Mountain Themes: The problem of Roya was not new to Keurig Green Moutain, what was new was the scale of the problem and the pace at which it was moving. Many people were taking a wait and see approach to problem.
- Our major concerns – supply and humanitarian crisis.
- Need for collaboration: could not respond to individual requests for funding so we called supply chain partners to collaborate.
- Renovation is an important part to the solution, but coffee alone not going to solve the whole problem – need to reduce hunger and improve food security more generally. KGM has always had the desire to rebuild a better system.
- There were concerns about cooperatives taking on big debt to address the problems – having strong finance training and agronomic training in place and a plan for addressing climate change = investing responsibly.
- It is essential to have buyers involved – loans predicated on depth of buyer relationships.
- Use of innovative price per pound incentive to use as match to address technical assistance gaps.
- While not every company can provide funding, every company has a procurement department and can find ways to bring something to the project.
- Program was built on foundations that the industry had been building for many years.
- It was the long term relationships that helped to make the initative strong.
- KGM is willing to enter conversations with suppliers about long term buying commitments because of relationships.
Alfredo Alarcón Enciso, General Manager of the Peruvian coffee cooperative UNICAFEC (Union of Ecological Coffee Producers) Themes:
- Working with women,
- Avoiding intermediaries,
- Challenge to provide services to our producers – technical assistance,
- It has been hard to be in the middle, to have the scale to be the right balance to be sustainable over time,
- Issue of Roya compounded these challenges.
- Soils in poor condition compounded the problem.
- As a result of the strategic alliances we had built already we were able to face this issue.
- It has been a process to work with transparency –but the trust we have has helped us to be transparent.
- Financial education as part of organizational capacity building allowed them to be able to have a temporary exit to Roya for the renewal program of lands.
- A pilot plan – starting with just 60 ha of coffee
- Learned how to work with the market
- Direct relationships between importer and buyer facilitated by Sustainable Harvest helps to translate what the importer wants and to understand how the market works.
- Big question mark is climate change – today it is Roya – tomorrow ?? we are quite worried.
- If we do it alone it will be hard, but with strategic allies and building long term relationships we are better prepared to deal with these issues.
Susan Aleman, Peru Programs Director, Sustainable Harvest Coffee Importers. Themes:
- Creating a chain where we are working together to find solutions
- Information and transparency is needed at every step in the chain
- Direct relationship model – putting the stakeholders together
- Compensates producers with pricing – trying to transfer the additional work involved in sustainability with a better price to the producer
Discussion: Themes: Involvement of government – many times they are not part of the discussion and they are an important actor. Sustainable relationships in the supply chain are incredibly important. How do we build a sustainable relationship through the supply chain to share benefits and risks? Roya was a crisis that accelerated the need for this. Is it possible to do this before the crisis? How do we build the institutional alliances?
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