Features
Guatemalan Coffee Farmers Brewing Profits
Latin America semester class develops plan to help independent coffee farmers increase their income by expanding into decaffeinated market
BY REBECCA KENDALL
Fair trade versus decaffeinated. It's a daily choice made by countless North Americans who understand the benefits of drinking decaffeinated coffee but still want to support farmers by buying fair trade.
Fair-trade brands of decaffeinated coffee are few and far between, says Prof. Kurt Annen, Economics, who accompanied a group of students to Guatemala on the 2009 Latin America semester.
"For poor farmers, it's hard to get into the market," he says. In Guatemala, for example, "there's a huge inequality."
It was that inequality that led a group of students on the Latin America semester to help some independent coffee farmers increase their income by buying a handmade machine that decaffeinates coffee.
The students came up with the idea as part of a course co-taught by Annen on the role and function of non-governmental organizations (NGOs). Divided into three groups, they were asked to research NGOs in Guatemala and find a way to make a positive difference in the lives of the people there by providing microfinance investment funding.
After each group presented a proposal outlining funding ideas and strategies for implementation, all the students voted on where the project funding should go. They decided to partner with As Green as It Gets (AGG), a non-profit microfinance organization that fosters entrepreneurship and environmentally sustainable agriculture.
One of the products AGG supplies to the U.S. market is coffee. After learning that decaffeinated coffee represents a mere 10 per cent of the American market and that much of Guatemala's decaffeinated coffee is imported, the students developed a proposal to generate money for a small group of coffee farmers. They gave the farmers a loan of $6,720 — funded partly through their class fees and partly from alumni donations — to buy a decaf machine.
"These farmers have very little land, but they work together," says Annen, "and now they have this machine that helps them angle into the local market in Antigua, which is dominated by the large coffee fincas, and to export."
According to the students' plan, the farmers will repay the loan within three years, says Annen. This money will then be recycled back into additional development projects in the community.
The students suggested the farmers pay interest on the loan in fruit and vegetables, which could be donated to a charity. AGG liked this idea so much that it now offers this option to all its clients who donate money in the form of microcredits.
"My involvement with AGG has provided an unmatched learning experience," says fourth-year arts and sciences student Dima Saab. "Designing the loan program proved to be challenging, but it taught me about the intricacies of microcredit organizations. It was also rewarding to be able to contribute to the community."
Saab, who hopes to pursue a career in international health, says studying and travelling in Guatemala exposed her to the complexities of development problems.
"Although it's easy to be critical of the great inequalities seen in Guatemalan society, my travels throughout the country confirmed that the path to development is plagued with obstacles," she says.
"For example, how can a government offer a cohesive and unified health-care system in a country where more than 20 languages are spoken and where inadequate infrastructure leaves many rural communities completely isolated? This experience has certainly been a great asset and has strengthened my resolve to continue my career aspirations."