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New report illustrates how smallholders can thrive as international businesses

Twin has published a report demonstrating how smallholder producer organisations (SPOs) can flourish on the international coffee market.

The United Kingdom based non-government organisation says smallholders produce around 80 per cent of the world’s coffee, and for brands whose business is dependent on their continued ability to sell a consistent high-quality product, having a reliable supplier is essential.

The report surveyed 31 SPOs across East Africa and Latin America, with membership ranging from 400 to over 200,000. All the respondents were Fairtrade certified and 85 per cent had at least one other certification.

Key findings included that:

  • The common attributes for SPOs to succeed are no different from any other business: strong leadership, clear objectives, focus on quality, customer service and a vision for the future.
  • Buyers should consider establishing multi-season contracts with suppliers to enable them to better plan and invest in their businesses and farms. This can also support SPOs to access finance.
  • Developing a long-term memorandum of understanding based on values and vision will lay the foundations of successful relationships between buyers and producers.
  • Buyers that engage in regular, direct communication with SPOs will establish good working relationships and gain a better understanding of complex challenges on the ground.
  • Transparency is vital in the supply chain: buyers should share as much information about their business as they expect from SPOs.
  • SPOs should consider crop and business diversification to spread risk, especially in light of a changing climate.

“At Twin we believe that connecting coffee producers with buyers will benefit everyone. It’s fantastic to be able to share producers’ perspectives and highlight to buyers how they can build solid working relationships,” Twin Managing Director Richard Anstead says.

“I hope that the recommendations in this report will provide value and lay the foundations of many responsible supply chains.”

The survey revealed that no matter the size or location of the organisation, there are some common benefits for producers working together in an organised union. For example, 74 per cent felt there are more opportunities to access international markets as an organised group of producers, rather than individual smallholders.

However, SPOs still face huge challenges, with 75 per cent of respondents saying their biggest challenge is access to finance and pre-finance. Other threats included changing climate, a volatile market and challenging social and political conditions.

Twin says the sector cannot function without smallholder farmers and SPOs, and buyers need reliable suppliers that produce high-quality coffee.

“When you buy from a cooperative you get the personal touch; you are in contact with them directly and you know where the coffee is coming from.” Finlays’ Tom Blackwell says in the report.

The report concludes with practical recommendations for both ends of the supply chain to adopt and build relationships that are beneficial to everyone.

For more information, visit www.twin.org.uk

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