ECOTIERRA: A Holistic Approach to Face the Challenges of Coffee Production

Stakeholders at every level of the coffee production chain are suggesting solutions to meet the challenges they are facing. For a few years now, ECOTIERRA has been committed to finding a holistic solution to meet all the needs of the producers. Guillaume Nadeau, Deputy CEO Canada, said "we define our approach as holistic because instead of considering elements of the chain of production individually, we consider it as a whole." The projects developed by ECOTIERRA help small producers by addressing several issues: the value chain (traceability), the direct work with farmers, product quality and certifications, the environmental impact of deforestation and land degradation as well as issues that impact smaller producers when it comes to successors, work conditions and the acknowledgment of their hard work. The issues at origin are numerous and these initiatives can have an impact on social and environmental problems in an industry that must challenge itself to do better. 

Even though coffee consumption is in constant growth around the world, production is facing overwhelming challenges. The crisis resulting from the significant decline in coffee prices on the C Market in 2019 is indicative of farmers' reality. This has forced farmers to sell their crops below production costs and has had important consequences in the field, one of the most important being a loss of expertise. According to Guillaume, it is becoming increasingly important to convince young people to remain involved in coffee, and this is beside the fact that often, farmers encourage their kids not to take over the business. In the worst of cases, the lack of revenue forces farmers to abandon their plantations or completely replace the cultures. In low altitudes, coffee growing is often replaced by corn, legumes and fruit, such as bananas or papayas, while in high altitudes, it is often replaced by cattle farming. Although we are not yet witnessing the complete abandonment of coffee production, the current conditions favour habits with increasingly harmful consequences. To obtain a modest profit, certain farmers have turned to unsustainable land use, leading to land degradation. This practice results in deforestation around the plantations to create space for new cultures, and increased pesticide use.

In other words, these methods may seem like solutions, but they are only effective in the short term. As a result, a significant majority of producers are stuck in a vicious cycle: their lack of investment capacity makes it impossible for them to improve the quality of their production and their productivity, which impedes their revenue from increasing.

On top of these economic hardships, farmers have to face the challenges of climate change. Coffee trees are fragile plants and are particularly vulnerable to meteorological changes. Increase in temperature and humidity favours the proliferation of fungal diseases. Coffee leaf rust is a striking example of this new reality. In 2008, this fungus named Hemileia vastatrix has developed at an alarming rate throughout Colombia. Although this pathogen was considered to be under control following significant chemical control, in 2013, its spread became apparent in northern South America and in the majority of Central America. To this day, farmers still have to wrestle with this disease that has a significant impact on their production. 

Thankfully, many players of the industry have come together to finance the necessary research to tackle the problem, such as the introduction of rust-resistant crops. The redefinition of production methods also bodes well for the future.

When ECOTIERRA was created in 2011, it initially worked in collaboration with NGOs, governments, and enterprises to develop projects related to agroforestry, carbon financing, and reinforcing support to cooperatives. Guillaume explained that "our partners didn't allow us to establish the sustainability-based holistic approach that we wanted to develop in its entirety to maximize the impact for small producers. We then had the crazy idea to create the Urapi Sustainable Land Use Fund, which ECOTIERRA founded. This fund is dedicated to the financing of our projects." Therefore, in 2016, the fund was created and officially launched at the 2017 COP (UN Climate Change Conference) in Bonn, Germany. Thanks to this tool - financed by financial institutions outside of the coffee value-chain fighting against soil degradation - paired with revenues from mandates and operation contracts for third parties, the social enterprise launched its first project in Northern regions of Peru, the Café Selva Norte project. Peru is one of the world's important coffee producers where the industry generates revenue for more than 223,000 Peruvians and represents nearly 25% of the export market. According to the International Coffee Organization, 4.26 million 60kg-bags were exported in 2018, with a total value of $700 million. 

Rather than opting for donations, ECOTIERRA develops business partnerships directly with the farmers and their cooperatives so that they can take charge of their production. Unlike with non-profit organizations, each component of the project generates revenue that can be directly reinvested. This model is based on the research of economist Muhammad Yunus, who was awarded the Nobel Peace Prize in 2006 and earned the nickname "banker to the poor". According to him, microcredit is an effective way of pulling people out of poverty. By authorizing to issue a loan to an individual who doesn't have access to another form of financing, we allow them to improve their business's productivity, and therefore, we encourage their self-sufficiency. With the implementation of a partnership, the project team must be responsive to the producers to develop projects that meet their needs.

Traditionally, coffee trees are shade-loving plants that grow on the edges of the forest, under trees that protect them from the sun. Although farmers have tried to maintain this environment in domesticating coffee trees, full-sun plantations have become generalized a few decades ago. This type of culture has the advantage of slightly increasing crop volume. This technique may seem like an ideal choice in the short-term, but it comes at an environmental cost that cannot be ignored. Since coffee trees are highly sensitive to disease and drastic changes in temperature, they struggle to support the long-term impacts of direct sunlight. Climate change, which causes drastic changes in temperature and favours the spread of insects and disease, is even more damageable to trees already made vulnerable by full-sun culture. Furthermore, monoculture can drain the land after a few years. The impoverished land then becomes difficult to cultivate and is abandoned for newly deforested land.

Under the Café Selva Norte project, ECOTIERRA tackles this problem by providing its partners with agroforestry models that prevent the spread of disease while increasing plant resilience to climate change. These models are essentially based on organic farming, to evolve over the years towards permaculture principles. Guillaume reminds us of the importance of "moving at the pace of the small producers with whom we work and to offer them options that aren't too far from what they know, or what their neighbors or the other members of the cooperative are doing." The goal is to work and progress alongside the farmers and to share these positive experiences to further evolve the models and farming techniques. Therefore, new agroforestry systems are developed on degraded lands to avoid deforestation and allow them to regain their fertility.

 In addition, a tree-planting program has been implemented to reforest the surrounding land and to create diversity. These reforestation models generally include "two to three coffee tree varieties, as well as five to six tree species organized according to the terrain and altitude." The goal is to renovate coffee plantations into agroforestry systems. By doing so, ECOTIERRA tries to convince farmers to transform their productions in plantation models that are better suited to emerging climatic realities. These changes bring significant benefits, such as better resistance to rainfall variation as well as the propagation of trees that help preserve soil nutrients. Of course, this is developed entirely in organic farming, from the fertilizer to the phytosanitary treatments. Not only does the enterprise support its partners throughout coffee production, but it also supports them throughout the transformation and commercialization stages.

The coffee fruit transformation is a crucial step in coffee added-value creation. In Peru, the washing and drying of coffee fruit and grains generally occur directly on the plantation. It is common to see one wet mill per family or neighborhood as it allows them to gather a few productions at one installation, which helps them avoid the four to six-hour drive to the closest wet mill. Once the coffee is dried up, it is redirected to the cooperatives, who then sort the grains, control their moisture content and mill mechanically the grains to go from parchment coffee (pergamino) to green coffee (oro). In the last step of this transformation, the coffee beans are milled to remove the seed coat, known as the silverskin layer. The problem with the installations already in place is that they make it very difficult to guarantee which lot will come out of the mill. This leads to two consequences. First, the lots get mixed and are difficult to identify, which makes traceability an issue. Secondly, the quality of the coffee may be affected as it risks being mixed with low-quality grains among which rocks can sometimes be found. Once we understand the importance of well identifying a high-quality lot to get the maximum amount of benefits out of it, it is easy to understand the negative impacts that mixing productions can have on farmers' revenue.

That's why building infrastructures is the second objective of the Café Selva Norte project. Thanks to the financing of Urapi, the producers are now able to acquire the necessary equipment to install their mill, regrouping the partners of the cooperative in the project, which goes a long way to support their work. 

This also allows for better traceability and guarantees the quality of every lot. Moreover, the effective technology of the equipment provides safer working conditions for all employees. Besides, the cooperatives are part owners of the mill from the beginning. 

The support offered to farmers doesn't stop there and comes in many forms: experts are at the farmers' disposal to facilitate the sale of their products, with a team dedicated to showcase the partners' products and ECOTIERRA guarantees the producers a presence in trade fairs. The social enterprise provides a sales team that sells the coffee - as well as carbon credits - all the while exposing the socio-economic and environmental impacts of the project. The value creation for the products is done through their trademark, ElevaFinca. The creation of a distribution brand that acts as a "facilitator" allows producers and cooperatives to sign contracts directly with the importers and coffee merchants all the while allowing the buyers to gain access to coffee from origin projects financed by dedicated funds. In other words, ElevaFinca provides a link that helps communication between the producers at origin and the green coffee bean buyers, with the idea of building alliances and partnerships. This makes it possible for ECOTIERRA to cover the entire production chain and ensure its cohesion.

Thanks to agroforestry models and major reforestation efforts, the social enterprise is qualified to acquire carbon credits. ECOTIERRA's carbon project is VCS certified (Verified Carbon Standard, first validated by Ecocert, then certified by Verra), which generates carbon offset credits. The revenue generated is then directly reinvested in other components of the project, allowing easier access to technical support for the coffee producers. To calculate a carbon credit, Guillaume explains that " we need to consider the additionality principle, meaning that the project needs to stimulate change, and it is the change that is calculated. Therefore, in our projects, we generate carbon credits by planting trees and by conserving the forests." When it comes to conservation, carbon credits are calculated as the difference between the deforestation rate in project areas before and the reality after the implementation of the project. These credits are subsequently sold by the ECOTIERRA team and are redirected to the partner producers, and are ultimately re-injected in other components of the project. Furthermore, the additional GHG emitted by the necessary transport for green coffee bean exports are fully compensated by ElevaFinca's carbon credits.

The specialists at ECOTIERRA also support the producers in implementing more eco-friendly measures through technical assistance and training on methods that improve the efficiency of their culture as well as the production of a higher quality coffee. Therefore, a virtuous circle comes into place, where the development of an eco-friendly model generates money that can be reinvested directly into the improvement of said model. Developing a coffee chain that respects the farmers and the environment is at the core of ECOTIERRA's priorities. It is the reason why they created the Minka database to map the activities in the field; every plantation is georeferenced to facilitate real-time access to revenues, productivity, and performance. Paired with quality control in laboratory, it is now possible to target the specific needs of each producer. 

In its approach, this project is profitable for the farmers who are supported from the production to the sale of green coffee, which broadens their ability to earn a more stable income. Moreover, the additional financing made possible by the carbon credits enables the producers to adopt an eco-friendly culture, and at the same time, a more sustainable model. The goal of the project is to make the partner producers completely independent after 15 years. "The cooperatives will slowly be able to buy back the coffee dry mill and, if they wish, will be able to continue the microcredit with the revenue they will have generated with the project," Guillaume said.

Local needs being the central concern for ECOTIERRA, the methods vary according to the regions where the interventions take place. For example, the needs of the producers of their next project, which is taking place in the Sierra Nevada, in northern Colombia, are slightly different from those of the producers of northern Peru. For instance, the financing of equipment for honey production is a need identified by the producers that will be added to the microcredit. 

 This approach truly gives the voice to the producers and knowing how effective this team's answer to the challenges of coffee production has been, the number of projects will only increase with the years to come. Similar projects are currently being developed in Honduras, Nicaragua, and central Peru, all in the hopes of helping this agri-food industry become greener and more sustainable.