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Origin   Programme

Concept of the Coffee Fund

-      Coffee Manufacturers from the coffee consuming countries contribute to the Coffee Fund US$ 1.- per 60kg bag of green coffee processed.  

-     The Coffee Fund invests 50% of the contributions for projects in the coffee producing countries for enhanced environmental and social sustainability (agricultural coaching, business management practices for coffee farmers, water & soil management, renewable energies among other aspects) and measurements to increase quality of coffee beans. This part is treated under the “Origin Programme”.  

-    The Coffee Fund uses 50 % of the contributions for promotion of coffee consumption. This “Marketing Programme” targets a renewed coffee culture through education of the public and professionals in the catering sector, tasting opportunities, dissemination of information about health related issues (in co-ordination with Positively Coffee) and about sustainability in the producing countries as well as advertising, where required. Promotion can apply to traditional and non-traditional coffee consuming countries or to coffee producing countries.
 

Objective of the Origin Programme:

To support the ongoing process of

 ·         Quality improvement

·         Environmental sustainability

·          Economic viability of producers and processing enterprises

Strategy:

In collaboration with coffee organizations, we
-          Support projects already started,
-          Undertake new activities and
-          Complement projects

Under coffee organizations we understand

Wherever this documents states “The Coffee Fund” or “we”, it refers to all these organizations and the Coffee Fund management, which participate at a given project.

Approach: 

The activities will be divided into 4 global areas:

Asia  -  Africa  -  South America  -  Central America/Mexico/Caribbean

Within each area, projects are implemented along the goals of the Coffee Fund. The ideal type of a project is

-          practical, i.e. it yields some clear defined advances in planting, processing or commercializing coffee, achieved with simple, comprehensible tools and measures

-          executed at the farmer or co-operative level, there where the value is added to the product coffee. Only when the value is added in the origin countries, they also can retain it locally and strengthen the sustainable social structure

-          implemented by a mixture of coffee people from the country where the project is based and international experts; contributing to fomenting and sharing the best practices

Definition of goals:

Following are the individual disciplines in which we will try to achieve the highest standards possible:

Quality aspects:
-          Harvesting methods (only ripe beans)
-          Clean drying patios
-          Proper storing & transportation methods
-          Cupping skills

Agricultural practices / environmental sustainability:
-          Coffee plant, growing and caring
-          Fertilizing techniques, with a strong inclination towards organic fertilizers
-          Pest management
-          Soil management
-          Post-harvesting processes

o         Water and waste management

o         Renewable energy for drying process

o         Drying practices (e.g. to avoid OTA)

-          Alternative crops

-          Reforestation

-          Agricultural administration

Administrative practices (mostly on producer organizations level):

-          Co-ordination for transportation and storage of crop

-          Process management

-          Sales distribution channels

-          Alternative income sources for the farmers

-          Financing:

o         Auto-financing (creating reserves for following harvest)

o         Search and mediation for external financing

-          Investment practices

-          Cost structure (e.g. purchase management, capital utilization, sales activities)

-          Accounting practices, including foreign exchange mechanisms

-          Goal setting with cooperatives, measurements and evaluation of results

-          Information systems to producers about coffee prices, planting process, etc

Selection of projects:

With a team of experts and authorities responsible for a particular area, the needs are analysed and specific projects selected. An initial survey documents the actual situation and subsequent surveys the progress. The latter also provide an opportunity to re-evaluate the work done and re-focus further activities, if needed.

We differentiate among three types of projects.

a.       Urgent necessity

b.      Long-term development

c.       Supporting / complementing projects

Urgent necessity

Under Objectives of this Origin Programme (above), we mentioned three principles:

-          Quality improvement

-          Environmental sustainability

-          Economic viability of producers and processing facilities

When the initial analysis of a farm, cooperative or country shows that any of these three principles is in severe disadvantage compared to the neighbouring entities, then this farm, cooperative or country will be classified under urgent necessity.

This type of project will receive primary attention, time and monetary-wise. Measurements to relieve the disadvantages will be sought for fast implementation.

Long-term development

Coffee farmers, co-operatives, coffee boards, research centres and NGOs can submit project proposals. Using the analysis of requirements in each country, the experts/authorities/Coffee Fund jointly select the most appropriate projects.

The main advantage of this approach is that the action plan is elaborated from the entity (farm, co-operative) itself, thus we apply a bottom-up process. This allows involvement from the stakeholders and guarantees a long-term effect since it is their own idea. The project management provides know-how, materials, infrastructure and partial financing.

Long-term development also includes projects already started that are managed by national coffee boards/co-operatives/NGO’s/research centres that fit into the objectives set by this origin programme. The Coffee Fund supports these projects further.

A critical success factor of the long-term approach is the gradual expansion of agricultural and business practices within a region or a country. As one area attains self-sustainability, a neighbouring area is assigned to a project. Using this approach, we gradually increase the coverage of sustainable coffee producing areas.

Supporting / Complementing Projects

Many projects have already been implemented and obtained very positive results. There may however be a need to expand, continue or complement it with one or the other aspects mentioned under definition of goals above.  

For instance, self-sustaining production in an economic and quality sense have been achieved, but environmental aspects like reforestation, for example, have not been considered. Or, in a different situation, environmental and quality aspects are at its best, but economic viability of the coffee farm has not been reached. In these two cases, the Coffee Fund supports a project to alleviate the deficiency in the missing aspect.  

We believe this work to be fundamental, because without a good level on all three goals (quality, environmental, economic) the deficient one will trigger the other two to return to insufficiency. This can be best shown in above example where economic viability is not reached. In this case, the coffee farmer will start to reduce attention to its plantation, hence reducing quality and environmental aspects.  

Project partners:

The Coffee Fund recognizes the many excellent efforts undertaken so far. We further support these efforts and extend them, where required and possible. All our projects are implemented with partner organizations already active in the field, thus taking advantage of the existing know-how. As most relevant partners we look at co-operatives, coffee boards, NGO’s, industrial partners, governments and research centres.

In this international existing network of coffee experts, the function of the Coffee Fund is multifunctional. Among the most relevant can be named:

-          provision of funding for the projects

-          embedding the activities into a long-term international strategy of the coffee business

-          liaison role between coffee origin and consumption areas

-          co-ordinating and consulting function in the actual project development and execution

-          function as a global, neutral and transparent organization that is trustworthy in the perception of coffee consumers and producers

Approval of projects:

Each project selected is submitted to the Coffee Fund Board (Consisting of one delegate each from North American Partners, European Partners and ICO). Each individual board member has the right to veto a given project within four weeks of notice. This process guarantees an effective supervision from the international coffee community whilst being highly efficient.

Approach to project management: 

Successful project management requires a clear definition of the goals. The process of defining the goals should include all participants of the project as it provides the bases for the commitment and, at the same time, functions as an initial role distribution.

The goals have to include measurable items, be time bound and base on an accurate budgeting. Throughout the project implementation, assessments have to be made to measure the advances, compare them with the goals set and, if differences appear, make necessary adjustments to the project implementation or re-evaluate the goal settings. Such assessments will base on a common scheme to allow evaluation among the projects and draw important learning lessons for the Coffee Fund management.

On all projects, we will motivate women to participate in an attempt to contribute to gender equality. We will explicitly ensure that women are given the opportunity to participate and to be represented in leading roles of the project management.

Teaching and coaching:

Essentially there are excellent business practices already applied to running operations. Passing on these practices to those who don’t have them constitutes a fundamental layer of the project management. This know-how may be available on a national or international level, co-ordinating the transfer of it is part of the activities of the Coffee Fund.

Teaching means to pass on knowledge from one person to another or a group of people. Coaching is the activity of accompanying the coffee farmers and co-operatives in their daily activities and guiding them through the elaboration of the new processes jointly between the farmer and the trainer/coach.

Financing:

A critical role in business management for the coffee farmers is generally the cash management.

Through the project management, the Coffee Fund provides partial funding, where required, of the investments in the plantation or the infrastructure (e.g. processing or storing facilities) of the same project, to be combined with the local labour input.

For financing the harvest the Coffee Fund supports administrative and organizational matters, but is not in a position to grant bridging credit on its own. It is however one of the goals of the Coffee Fund to find international institutions willing to provide small credits or microfinance to the coffee farmers. Such operations would have to be connected with a system that can guarantee the pay back in order to keep the interest rate low.

Position of Coffee Fund activities in today’s business structure:

The Worldwide Sustainable Coffee Fund does not issue certifications that allow producers / exporters to attain a specific customer market. Our philosophy bases on the fact that best business practices can be achieved through involvement of all people concerned and the efficiency of the Coffee Fund (that is financial and project management). This will eventually allow a solid structure in the mainstream business that in turn complements the efforts of the speciality and fair-trade segments.  

If a coffee grower decides to apply for a certification in the fair-trade segment after having gone through the project funded/managed by the Coffee Fund, he will be free to do so.

We hand out certificates of participation or of achievement to farmers and businesses involved in the projects. These certificates however are only for recognition and reference purposes.

Outstanding characteristics of the origin programme

a.       It has a long-term effect on social and environmental sustainability because the programme does not stop after the implementation of one project unit. It is based on a continuous concept that provides knowledge and practical coaching as new techniques develop around the world. Due to this approach, the know-how is rooted in the farmers’ practices and transmitted to the upcoming generation.

b.      National coffee associations are involved in the programme for the co-ordination of activities and the communication to all coffee farmers and updated about the progresses made.

c.       Through using national experts for local training, we assure that they communicate in the same language and can interpret correctly cultural behaviours.

d.      The structure available allows responding very fast to new threats, such as regulatory (OTA), environmental (tropical storms, land-slides), pests.

The Worldwide Sustainable Coffee Fund

Meggen, March 2005

Stand: 16. Dezember 2005