Promoting Sustainable Economic Growth in Coffee Growing ... · many of us, from farmers to drinkers, from baristas to coffee shop owners, from the countless men, women and youth involved

Promoting Sustainable Economic Growth in Coffee Growing Regions of Honduras and Guatemala

This brochure was elaborated with the financial support of the Government of Canada provided through Global Affairs Canada.

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Promoting Sustainable Economic Growth in Coffee Growing Regions of Honduras and GuatemalaCoffee means so much to our world. It creates livelihoods, yields profit, and brings daily joy to so many of us, from farmers to drinkers, from baristas to coffee shop owners, from the countless men, women and youth involved in the coffee supply chain to the governments that rely on coffee as a source of prosperity and stability in their respective countries. Coffee is particularly vital to the Guatemalan and Honduran economies. Annually they export more than 3 million and 7 million 60 kg bags, respectively, and more than 245,000 families rely on income from coffee production in the two countries. Though governments throughout Central America have been working to diversify local economies in recent years, coffee will inevitably be a major source of jobs and income in the region for the foreseeable future. Contrary to popular belief, the majority of coffee producers are smallholders. In 2017, small- and medium-sized producers accounted for 86% of Honduras’s total coffee production, and small producers accounted for 90% of the coffee workforce in Guatemala in the same year. In Guatemala, smallholders makes up 80% of the 125,000 total coffee farmers, but produce 60% of the total crop. These smallholders operate on the thinnest of margins, often unable to invest in new technology, take the risk of experimenting with new techniques, or negotiate for higher prices when selling their beans. Their operations are often inefficient and highly susceptible to changing conditions. In light of this, ensuring that coffee continues to contribute to smallholder prosperity is no small task. In the face of rapidly changing climate patterns, labor markets, and expectations about the role of women and youth in our world, urgent action is needed to preserve coffee’s continued viability. Through a public-private partnership, Promoting Sustainable Economic Growth in Coffee Growing Regions of Honduras and Guatemala, Tim Hortons and Global Affairs Canada (GAC) invested more than CAD $5.61 million between April 2014 and July 2018, and partnered with Trade Facilitation Office (TFO) Canada, Hanns R. Neumann Stiftung (HRNS), and TechnoServe to implement the work.

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This holistic approach of simultaneously addressing multiple interlocking barriers has yielded dramatic results, which include:

• More than 11,000 male and female farmers took part in trainings and workshops focused on agricultural techniques and business skills.

• Over 700 youth, nearly half of them female, took part in workshops designed to help them set meaningful career paths in coffee.

• Through the project more than 280 farmer groups and organizations were formed or strengthened, giving farmers a vehicle to pool their knowledge and resources, as well as increased power in the market. A majority of these groups and organizations have at least 20% female leadership.

• Organizations run by farmers sold nearly CAD $30 million in coffee throughout the project. The increased prices they secured put an average of CAD $1,820 additional into the pockets of participating farmers.

• More than 10,000 hectares of farmland are now being managed using advanced sustainability techniques.

• Local and international stakeholders have leveraged nearly CAD $2.2 million of their own funds to multiply the impact of GAC and Tim Hortons’ investments.

We are proud to share the positive impact achieved through the project, and to provide our vision for a sustainable and equitable coffee sector that creates opportunity for smallholder farming families.

The project contributed to combat poverty and enhancing livelihoods of farming families in key regions of Guatemala and Honduras. Through the project, more than 30,000 male and female farmers and members of farming families across 6,500 farms in Trifinio1, El Paraiso, Chimaltenango, and El Progreso regions of Honduras and Guatemala were empowered to increase their yields and profitability, improve their resilience in the face of adverse climate conditions, and develop their power in the supply chain through farmer organizations. Because equitable communities are successful communities, the project also helped women and youth gain new skills, enabling them to make a greater contribution to and benefit more from their involvement in the coffee sector.

1 Trifinio is a coffee-growing region that spans the borders between Guatemala, Honduras and El Salvador

280+farmer groups

and organizations were formed or strengthened.

$30 millionin coffee sold, adding

an average of $1,820

into the pockets of participating farmers.

10,000hectares of farmland now managed with

advanced sustainability techniques.

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All data is preliminary as of September 2018, and subject to further updating.

Project Results By Region

GUATEMALA

Chimaltenango

TrifinioEl Progreso

El Paraiso(Region 1)El Paraiso(Region 2)

HONDURAS

Percentage Uptake of New Agricultural Practices

Hectares Under Sustainable Management

Male/Female Youth Engaged

# of Local Partners Committing Resources to Support Farmers

% of women participating in farmer groups and organizations



Male/Female Youth Engaged















79%

1124

11

46%

100%

703

228/168

12

46%

89%

1472

24

27%

79%

5007

24

18%

89%

2513

89/69

12

21%

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Partnership Structure

Global Affairs Canada (GAC) manages Canada’s diplomatic and consular relations, to encourage the country’s international trade and to lead Canada’s international development and humanitarian assistance. Through GAC, the government of Canada provided 60% of project investment (CAD $3.36 million) through TFO Canada, and also delivered valuable project oversight.

Trade Facilitation Office Canada (TFO Canada) is a Canadian NGO that confronts the challenge of global poverty by promoting sustainable economic development through export information, advice and contact. The organization improves lives through the creation of sustainable trade partnerships for exporters from developing countries with Canadian and foreign buyers. TFO Canada used its expertise to manage project implementation for results, contribute to gender and youth strategies and engage project stakeholders.

Tim Hortons is Canada’s largest coffee restaurant chain, with more than 4,700 restaurants located in Canada, the United States and around the world. As such, it is a major coffee importer. In 2005, Tim Hortons established its Coffee Partnership program to improve the businesses and lives of smallholder coffee farmers in the regions where Tim Hortons sources its coffee. As of 2017, Coffee Partnership initiatives have reached more than 12,300 farmers and as a result brought 28,000 hectares of land under sustainable management in communities in Brazil, Colombia, Guatemala, and Honduras. Tim Hortons contributed 40% (CAD $2.24 million) of the project’s total costs.

Hanns R. Neumann Stiftung (HRNS) is a German NGO working in coffee and cocoa, supporting smallholder farmers on their path to becoming economically self-sufficient and enabling them to become strong and competitive business people. HRNS’s founder has been driving sustainability efforts in coffee communities for more than 25 years, and today the organization is working with more than 100,000 coffee farming families across 18 countries. HRNS implemented the project in key communities across Honduras and Guatemala, including Chimaltenango, El Paraíso, and Trifinio.

TechnoServe is an American NGO that has worked with enterprising people in the developing world to build competitive farms, businesses, and industries for 50 years. Partnering with many of the leading actors in this work, including the Bill & Melinda Gates Foundation, Inter-American Development Bank, USAID, Ford Foundation, and dozens of Fortune 500 companies, the organization’s work benefits millions of people annually across 29 countries. TechnoServe implemented the project in El Progreso community in Guatemala.

Local private, public and civil society partners provided additional resources and guidance to the project. These include Instituto Hondureño del Café (IHCAFE), Asociación Nacional del Café (Anacafé), Beneficio de Café Montecristo (BECAMO), Inter-American Institute for Cooperation on Agriculture (IICA), Plan Trifinio, the Regional Cooperative Program for the Technological Development and Modernization of Coffee Cultivation (PROMECAFE), Asociación Hondureña de Productores de Café (AHPROCAFE), Unión de Cooperativas de Servicios Agropecuaria (UNIOCOOP), Limitada, the Secretary of Social Work of the President’s Wife (SOSEP), Banrural, Jóvenes Católicos Llano Largo, Telesecundaria El Chorro, Telesecundaria Los Planes, Instituto San Antonio, Grupo Mujeres Moritas, Grupo Mujeres Llano Largo, Grupo de Mujeres El Chorro, and Grupo de Los Planes.

Through this innovative partnership, we leveraged the experience and expertise of farmers themselves, as well as organizations from across the public, private, and NGO sectors. Together, Global Affairs Canada, Trade Facilitation Office Canada, Tim Hortons, Hanns R. Neumann Stiftung, TechnoServe, and a host of local partners have delivered impact that none of them could have achieved individually.

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Our Holistic Approach: Interrelated Challenges Require Integrated SolutionsRecognizing that the barriers and incentives that farmers face interact with and reinforce each other, this project uses a holistic approach that treats the challenges of poverty, climate change, out-migration, gender inequality, and the changing coffee marketplace as deeply entwined. This approach, which acknowledges that neither industry, government, farmers nor the development sector alone can tackle the scale of these issues, has been verified across a variety of crops and regions, and produces greater, more enduring impact than addressing individual barriers independently. The approach hinges on strategic cooperation between diverse stakeholders, including the private sector, the public sector, farmers, and civil society bodies. With farmers themselves, as well as TFO Canada, Tim Hortons, HRNS, TechnoServe, and GAC each bringing deep substantive expertise to the project, we were able to work on multiple change levers simultaneously. Each stakeholder’s investment and human capital inputs are multiplied by the contributions of the others, with farmers bringing their direct experience on farms, NGOs and the private sector adding cutting-edge research and proven techniques, and government removing barriers and ensuring that gains made today will be maintained and expanded upon even after the project is completed. For example, as project implementers strengthened local farmer organizations, they placed a priority on the inclusion of female leadership, and now more than 50% of farmer organizations involved in the project have at least 20% female leadership. Because these farmer organizations become powerful forces within coffee growing communities, having female voices involved in their operations creates a platform to more comprehensively encourage gender equality. Treating farmer organization development and gender equality holistically allowed for this accomplishment.

The fact that farmers are trained in techniques that increase yield and simultaneously protect the environment is another example of integrated impact. Though the private sector, public sector, civil society, and farmers all care about both profits and the long-term health of the land, they often see these as competing priorities. Training offered through the project demonstrated that improved fertilizer usage, wastewater treatment, integrated pest management, and use of agroforestry techniques are actually good for both the environment and the bottom line, bringing stakeholders’ incentives into alignment. These are just two examples of how a holistic approach founded on a public-private partnership has amplified project impact. Though the results presented in this report focus on the most salient achievements of each project component, it is important to remember that there are positive and mutually reinforcing spillover effects achieved through this integrated approach, and these positive effects will continue to play out in communities long past the completion of this specific project. In the words of one participant, “through the program agronomists have left, we can now consult with each other and share our experiences of what to do and not do on our farms.”

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Project Impact

Building Farmer Organizations Farmers working independently are all but powerless. They are negotiating alone, learning new agronomy techniques alone, saving alone (when they can), and buying implements alone. Farmers working together, though, can leverage the power that comes from controlling the full harvest to secure higher prices, develop coordinated responses to changing conditions, and collectively invest in yield-enhancing technologies. By seeding and strengthening farmer organizations, we are helping male, female, and young farmers become entrepreneurs and building their capacity to capture a larger portion of the supply chain. These organizations are operated by farmers themselves and will endure long after the project partners scale back their involvement. Successes in strengthening farmer organizations include: • Over 100 new farmer organizations with

governance structures in place and 74 new farmer groups operating more informally were established as a result of the project. More than half of these organizations and groups have at least 20% female leadership.

• Farmer organizations, both newly formed and those strengthened by the partnership, delivered more than CAD $3.7 million in pre-financing to farmers from exporters, allowing for strategic investments in their operations. This financing was delivered at preferential rates, keeping profits in the community.

As these organizations grow, farmers’ ability to collaborate, negotiate higher prices for their beans, and invest in their communities will grow as well.

Maximizing Profitability and Resilience for Farmers Coffee trees are highly sensitive to climate, poor nutrition management, and shade. Even slight changes make a dramatic difference in yield and quality, as well as the prevalence of pests and diseases. With shifting climates and a growing global demand for the highest quality beans, farmers must adapt more quickly than ever. Industry and academia are conducting evidence-based research on how to respond to changing conditions, but often this research is slow to reach smallholders. This project worked with female, male, and young farmers to implement cutting-edge techniques focused on soil conservation, disease control, shade management, integrated pest management, coffee processing, and countless other topics. These good agricultural practices increase yield, reduce costs, protect the environment, and promote farmer safety, through a collaborative relationship, with HRNS and TechnoServe presenting the research during practical training and using demonstration plots and farmers strategizing on how best to apply these new techniques.

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The many ways in which these improved techniques are positively impacting the lives of female, male, and young farmers include:

• Farmers participating in the project increased their yield, on average, between 15% and 30% over the course of the project, with male and female farmers experiencing similar gains in most instances. When factoring in the increased bean quality made possible by new techniques, the average increase in net profit for farmers was even higher.

• Ten new facilities that are owned and operated by farmer groups were established in Trifinio and El Paraiso, with a processing capacity of more than 6,000 tons of coffee per year. Now, they are able to take coffee to market that is further along in its processing, thus keeping a higher portion of its added value. At the same time, these facilities use 90% less water than traditional processing methods, and farmers use the waste pulp as an organic fertilizer.

• Farmers are making clear with their actions that they value these cost-effective, climate-sensitive techniques. Techniques, many of which were new to farmers or were being used by a small portion of the community, have been adopted by 80-100% of farmers.

These results are just the beginning. As farmers continue to implement the techniques and refine them through farmer organizations, there is every reason to expect further impact.

When Mario was approached by his local farmer group, in San Jerónimo, Honduras, his 1.4 hectare farm was struggling. His lempira trees (a variety that was once prized for its resistance to the most economically damaging coffee disease) did not bear enough beans to make the farm consistently profitable and, by his own admission, many of his growing techniques were dangerous to himself and to his soil. Through the group, Mario learned a variety of techniques that boosted his yields and prepared him to adapt to changing weather patterns driven by climate change. From planting shade crops to keep direct sunlight off his trees, to using advanced soil analysis to ensure efficient fertilizer application, to improving his wastewater treatment so that polluted water did not go back into the ecosystem, he was able to bring cutting-edge techniques to his farm, increasing his yields and processing his beans so they fetched a higher price. Today, Mario’s farm is as productive as it has ever been. In 2017, he had highest net income per bag in his farm’s history, and he’s even thinking about selling the cedar wood from his cover plants when they’re mature. More than two thirds of the coffee on his farm is harvested by women now, and they are a valuable and empowered part of the business. Though 2018 was not a great harvest, Mario is optimistic; “my production costs are down, so it’s much easier to survive the occasional bad season.”

80%-100%of farmers have

adopted new techniques

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Empowering Young Farmers to Lead Their Communities If young farmers do not see any opportunity in coffee, the future of production will be bleak. Though most young farmers want to stay in the communities where their families and networks are, they need to have dignified, family-sustaining livelihoods for themselves, or they will move to urban areas where alternatives (often erroneously) seem brighter. Through regular workshops and trainings on diversified economic roles in the coffee sector, we are helping young farmers see their potential as entrepreneurs with a stake in their own communities, and helping them develop the skills to seize that potential. The youth empowerment strategy bore substantial results for hundreds of young farmers. • Nearly 400 female and 300 male young farmers

have developed career plans, preparing them to take full advantage of the opportunities available in not only coffee growing, but also related fields such as cultivating other crops, selling agricultural implements, and running bakeries and coffee shops.

• A Youth Committee was established as part of the UNIOCAFE farmer group in Trifinio. The Committee develops young farmers’ professional and leadership skills, and takes the coffee they grow to market. It has already helped young farmers sell 380 qq (17,480 kg) of speciality coffee to importers at better prices.

• In Trifinio and El Progreso, 31 different community groups and government bodies that see the great potential to work with young farmers have signed up for ongoing involvement with young farmers. These organizations will offer training, vocational, or internship opportunities to help youth build upon their newfound skills and put them into practice through real-world experiences. To go even further, the municipality of Fraternidad in Ocotepeque has established a Youth Office to coordinate ongoing support and guidance for young farmers, and nine organizations in El Progreso have built programs to accept the project’s beneficiaries in jobs or internships.

As these achievements show, with the appropriate set of skills young farmers are up to the challenge of keeping coffee-growing areas vibrant, and their communities are eager to support them.

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Working Towards Gender Equality Working towards gender equality is essential to combating poverty in coffee-growing regions. Expanding the roles that are open to women is not only a critical human rights principle, it also brings new talents to the most serious challenges facing these communities. According to the World Bank, female unemployment is at least 1.5 times higher than male unemployment in both Guatemala and Honduras, meaning that the coffee sector has a large pool of female workers to pull from as it seeks to increase output and coffee quality. Strategies to change attitudes require deep cultural sensitivity. Because of this project, men, women and young people in these regions are increasingly taking on new roles and being welcomed for their contributions.

900+families learned

how to better manage and share family

responsibilities

700+female farmers developed their leadership skills

300+men learned to

channel their self conceptions of masculinity in

productive ways

In Guatemala and Honduras in particular, traditional patriarchal hierarchies are still commonplace, with limited resources made available for women and youth. Pre-project diagnostics found that men made a significant majority of the decisions regarding the use of resources, owned far more of the land, and were more likely to take the coffee to market.

Major achievements from the project’s gender equality strategy include:

• In Trifinio, the project catalyzed the development of the Red Trinacional de Mujeres Rurales, an open space to support women’s inclusion and participation and to create new economic, political, social, and agricultural opportunities for women in the region. Recognizing the importance of this network, the Plan Trifinio (a regional body coordinating social, economic, and environmental efforts) has committed to supporting its ongoing development. In El Progreso, four women’s groups have been established to continue working to improve gender equality.

• In all trainings and workshops offered by the project, more than 45% of participants were women. Coffee farming has long been male-dominated, particularly in Guatemala and Honduras, so these figures bode well for future gender equality.

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Looking Forward

Because of this project, coffee growing communities in Honduras and Guatemala are increasingly prosperous, equitable, and resilient in the face of a changing environment. The skills, techniques, organizations, and relationships they have developed will contribute to continued success, even after project technicians leave the regions. Young farmers and female farmers in particular have new opportunities and see pathways to success within the coffee sector.

These achievements, though, do not mean that the work is done. Only 20-25% of smallholder farmers in Central America are part of a farmer organization that can connect them to financing, markets, and cutting-edge technical knowledge, and the model develop in this project could be used to increase that number substantially. Each of the partners remains committed to working on these challenges, and Tim Hortons specifically has plans in place to reach an additional 3,000 farmers by 2022.

For the coffee sector to have a broader impact on reducing poverty:

• Young farmers need diversified economic opportunities so that they can establish multiple lines of revenue and better survive lean seasons, because farmers should not expect to survive on coffee growing alone. Economic diversification should be further emphasized with young farmers across the globe.

• Awareness of viable opportunities in the coffee sector, should start early on, so youth can choose a future for themselves based on a more complete understanding of the sector before they develop the idea that coffee is not viable. Many young people will choose to leave farming, which is their prerogative, but we can ensure that they have adequate information to make an informed choice. Additionally, their parents can be engaged in the early stages to reinforce these lessons.

• Micro-financing is a highly impactful strategy for helping meet household and farm needs, and farmer organizations are best positioned to ensure timely payback and reach a large number of producers. Local groups should be the implementers, because they are much better positioned to use social pressure to ensure repayment.

• The leadership with farmer organizations and groups have widely varying skills and experiences, and tasks within an organization require different types of skills. Leadership schools for participants can ensure uniform development of the skills that leaders need to make their groups successful.

• Future projects will prioritize stronger communication between stakeholders, to increase knowledge sharing and strategic alignment among local, national, and international partners.

To ensure a sustainable future for coffee producing families in the region: • Farmers must prepare even more proactively for

decreased rainfall and more erratic climate patterns. Participants in El Progreso, where droughts have been particularly severe, have identified a need for trainings for farmers to develop and implement strategies around better capturing existing rainfall and otherwise improving agroforestry systems. These trainings will have applicability in drought-stricken coffee communities throughout the region.

• Because of how deeply ingrained certain cultural norms are in the region, many women farmers feel uncomfortable speaking up or that they are not heard in mixed gender settings, even following training and sensitization about gender equality. Further network development and training just for women farmers can reinforce and multiply the initial gender equality results achieved so far. To go even further, strategies to encourage female ownership or joint ownership of land will enable them to have more control of productive resources.

• Project beneficiaries cited developing effective marketing strategies as among the most valuable elements delivered through farmer organizations, and an area where they would like to see more work.

This brochure was elaborated with the financial support of the Government of Canada provided through Global Affairs Canada.

All data is preliminary as of September 2018, and subject to further updating.

Family life is changing in coffee-growing communities, and Rosalia and Edwin are emblematic of these changes. Living in Octoepeque, Honduras with their two young children, they co-manage a small store and three coffee farms totaling roughly six acres. Though Rosalia and Edwin have always been a strong team, they began to think differently about their business after they took part in a gender awareness training led by their local farmer organization in 2016. They attended the training separately, with Rosalia’s section focusing on leadership and Edwin’s section focusing on masculinity. The combination of those two themes prepared Rosalia to take a bigger role in their business, and helped Edwin welcome her into it. According to Edwin, “the workshops were very good….men think that women cannot help in different activities and responsibilities. But today, she [Rosalia] participates in everything. We talk more and we have better communication.” Rosalia and Edwin continue to incorporate what they have learned in their day-to-day lives, dividing their household responsibilities. He takes care of their coffee farms and she manages the store, although Rosalia is quick to mention that she could participate more in the farm if she wanted to, but that right now she wants to dedicate her time to the store. Decisions related to the household and family business are made together. Befitting these changing responsibilities, Rosalia now has more control over the family finances as well.

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Promoting Sustainable Economic Growth in Coffee Growing ... · many of us, from farmers to drinkers, from baristas to coffee shop owners, from the countless men, women and youth involved