Cooperative Fair Trade Coffee: The U.S. Experience Ted Weihe U.S. Overseas Cooperative Development Council

Background Equal Exchange (1986) Equal Exchange (1986) TransFair USA (1998) – member of FLO TransFair USA (1998) – member of FLO U.S. is world’s largest importer of coffee U.S. is world’s largest importer of coffee Fair Trade coffee is 2% of the world market and is the fastest growing sector Fair Trade coffee is 2% of the world market and is the fastest growing sector For the last 2 years, Fair Trade coffee sales have risen by 125% For the last 2 years, Fair Trade coffee sales have risen by 125% Farmer cooperatives earn 3-5 times more Farmer cooperatives earn 3-5 times more Fair Trade coffee increased income to farmers by $34 million Fair Trade coffee increased income to farmers by $34 million

U.S. Cooperatives Cooperative Coffee – imports green coffee from 10 countries Cooperative Coffee – imports green coffee from 10 countries National Cooperative Bank – provides capital to U.S. cooperatives National Cooperative Bank – provides capital to U.S. cooperatives Eco Logic – provides loans to small environmentally minded farmer cooperatives Eco Logic – provides loans to small environmentally minded farmer cooperatives

Methodology Market Development – customer- focused and aware of market demands Market Development – customer- focused and aware of market demands Technology Transfer – hands on learning of meeting market demands Technology Transfer – hands on learning of meeting market demands

Nicaragua 2,000 families benefit from CLUSA’s small farmer project 2,000 families benefit from CLUSA’s small farmer project “Farm Direct” – roasted and packed at origin “Farm Direct” – roasted and packed at origin 1999 started producing organic coffee 1999 started producing organic coffee 2000 formed Cooperative of Organic Coffee Producers of Matagalpa 2000 formed Cooperative of Organic Coffee Producers of Matagalpa

El Salvador 16 year history 16 year history Special training in quality harvesting Special training in quality harvesting Quality Coffee Mini Labs Quality Coffee Mini Labs Technical Assistance: Technical Assistance: Plant Selection Transportation Collection Removing of leaves fermentation

Indonesia cooperatives produced and exported $5.3 million of specialty coffee cooperatives produced and exported $5.3 million of specialty coffee 27 year history: 27 year history: Over $600 million worth of goods exported Farmer’s incomes have increased 16,000 jobs created

East Timor Coffee industry ruined by Indonesian army in 1999 Coffee industry ruined by Indonesian army in 1999 Coffee production supports one-fourth of the population Coffee production supports one-fourth of the population Only independent producer of wet-milled coffee Only independent producer of wet-milled coffee Lessons Learned Lessons Learned Post Conflict Co-ops Post Conflict Co-ops Indigenous Staff Development Indigenous Staff Development Confidence building Confidence building Capital Formation Capital Formation Economic Recovery Economic Recovery

Ethiopia Ethiopia Utilize three farming systems Utilize three farming systems Forest Coffee, Small Farm, Plantation Forest Coffee, Small Farm, Plantation Coffee Farmers Cooperative Union (June 1999) Coffee Farmers Cooperative Union (June 1999) Market liaison, warehousing, transport, credit Market liaison, warehousing, transport, credit Achievements: Achievements: In 2000, exported 54 tons worth $120,000 In 2000, exported 54 tons worth $120,000 Credit line increased to 1.2 million USD with 100% loan repayment Credit line increased to 1.2 million USD with 100% loan repayment Distributed dividends totaled 479,203 USD in 2003, with sales of 0.5 million USD Distributed dividends totaled 479,203 USD in 2003, with sales of 0.5 million USD

Colombia Colombia Specialty Coffee Program (since 2002) Colombia Specialty Coffee Program (since 2002) Renovation of Coffee Plantations Improvement of Production and Processing Infrastructure Marketing Promotion and Exports FEDERACAFE FEDERACAFE provides technical training to cooperatives

Mexico Mut Vitz Cooperative Mut Vitz Cooperative Self-organized, processing for export license, and making the switch to organic Self-organized, processing for export license, and making the switch to organic Land O’ Lakes supported volunteers Land O’ Lakes supported volunteers

Rwanda After the civil war and genocide, Rwanda had severe food shortages After the civil war and genocide, Rwanda had severe food shortages Most densely populated country in Africa and 87% of population engaged in agriculture Most densely populated country in Africa and 87% of population engaged in agriculture Food Security Grant Fund Food Security Grant Fund Awards grants to cooperatives in agribusiness ACDI/VOCA prevents soil erosion through increasing the viable livelihood ACDI/VOCA prevents soil erosion through increasing the viable livelihood Fair Trade in Rwanda Fair Trade in Rwanda Union Coffee Roasters, EcoLogic, Green Mountain and the Gorilla Fund Coffee

Thank you! For more information, please visit our website: coop/OCDC/home.htm