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Starbucks invests US$2m in loans for Colombian farmers

Coffee beans in hand

Starbucks has announced that it will increase its investments in agronomy and technology training to support the next generation of Colombian coffee farmers.

Through a new smallholder farmer loan initiative with the Inter-American Developmental Bank (IDB) directed toward a women-led coffee cooperative, and an expanded partnership with the United States Agency for International Development (USAID) aimed at helping young coffee farmers in post-conflict zones build greater resiliency and expertise, Starbucks aims to help create opportunities in some of Colombia’s most vulnerable coffee growing communities.

Both of these partnerships are designed to advance the work of the Starbucks Farmer Support Center in Manizales, which the company opened in 2012 to help connect farmers with trained agronomists and technical assistance, and expand its C.A.F.E. Practices program, which is Starbucks third-party verified sustainability program developed with Conservation International more than 15 years ago.

Each of these initiatives are part of the company’s comprehensive approach to ethical sourcing, an open-sourced program supporting industry efforts to make coffee the world’s first sustainable agricultural product and improve the lives of millions of coffee farmers, families and workers around the world.  

“While we have always worked with the Colombian coffee community to ensure access to the right tools and information they need to maintain and grow successful businesses, there is a significant opportunity to support the next generation of coffee farmers in new ways,” said Kelly Goodejohn, Director for Starbucks’ ethical sourcing programs. “By partnering with organisations like USAID and IDB, as well the Colombian government and the FNC, we can be even more intentional about ensuring that young men and women get more advanced technology and financial assistance to create a future for their families for generations to come.”

Coffee farmers in Colombia faced challenges maintaining their crops during the country’s 50-year civil conflict, and the Colombian government, its people and the international community are working together to provide more opportunities to communities impacted the most, and help farmers focus on coffee quality.

Starbucks and USAID, through the US Embassy in Colombia, have a common goal to bring economic stability to those coffee growing communities.

Since forming a public-private partnership with USAID in 2013 with a $1.5 million investment, Starbucks has helped positively impact 20,000 farmers and expanded the collaborative program to the Tolima, Cauca, Valle and Antioquia growing regions to benefit up to 10,000 more coffee farmers. In Colombia’s North Cauca region, agronomists at the Farmer Support Center have expanded C.A.F.E. Practices to more than 1,200 indigenous coffee growers.

By extending this USAID Global Development Alliance (GDA) grant by an additional $519,000 for one more year, Starbucks will focus its support on:

  • Engaging 1,000 young coffee farmers in the country’s post-conflict zones across Cauca and Tolima
  • Offering technical assistance, agricultural training, and access to improved technologies such as laptops to help run their businesses.
  • The development of three native tree nurseries, benefiting at least 150 coffee farmers and indirectly about 1,000 people in communities across Caldas, Huila, and Cauca, through reforestation and climate resiliency programs

Starbucks is also working with the Inter-American Development Bank (IDB) to contribute to the economic and social empowerment of 2,000 women-led smallholder coffee growers in the Colombian departments (states) of Antioquia and Chocó.

This $4 million farmer loan project will include a contribution of $2 million from Starbucks Global Farmer Loan Fund (which has a commitment to distribute $50 million in farmer loans worldwide by 2020), and up to $2 million from IDB through its Multilateral Investment Fund (MIF).

This program will establish:

  • A system for the members of the Cooperandes co-op, most whom are women, to access financing needed to enhance coffee yields and quality among member producers.
  • An opportunity to provide short and long term assistance through a unique financing model that provides low-risk loans to farmers for renovation, with complementary technical assistance being provided.
  • This innovative approach to financing brings together multiple actors within the supply chain from the supplier (COEX), the cooperative (Cooperandes) and Starbucks, who not only provides counterpart financing for the loan, but will also guarantee market access for the loan recipients, through its C.A.F.E. Practices methodology.
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