CFC supports the revival of small family owned coffee farms in Ecuador
The Common Fund for Commodities (CFC) recently participated in a workshop which reviewed and disseminated results obtained for the project entitled “Reconversion of small coffee farms into self-sustaining agricultural family units in Ecuador.” The project was developed against the background of a steady decline in coffee prices between 2000 and 2005 resulting in reduced income for farmers. Reduced income led to migration to cities or to other countries leaving farms abandoned with higher rates of rural poverty and rural degradation.
The National Coffee Board of Ecuador (COFENAC) in collaboration with the National Association of Coffee Exporters (ANACAFE) developed the project in response to the crisis experienced at that time in the coffee sector, consulted the International Coffee Organisation (ICO) and submitted it to CFC .
The project, at an estimated cost of USD 3.20M was approved by the Common Fund in the form of a grant of USD 1.12 million with co-financing from COFENAC and the USDA Pl-480 programme of USD 860,000 and counterpart contributions of USD1.22 million from national institutions.
The overall objective of the project was to alleviate poverty of coffee-growing families through the introduction, on coffee farms, of new profitable agricultural activities that guarantee higher income levels, greater food security and preservation of natural resources. This objective was to be realized through reconversion of coffee farms into self-sustaining agricultural units through diversification of their agricultural production systems based on the fundamental principles of . income security, food security and natural resources conservation. The project also promoted processing of primary commodities and the development of co-operative marketing channels for the local market. The project was implemented from October 2007 to September 2011.
The project was a model for sustainable development motivating organizations to get involved in social development. The introduction of new production techniques on farms, agro-industry and co-operative marketing, contributed to enhanced household incomes and overall food security and poverty alleviation in the project area.
Some specific results achieved during implementation of the project were:
Organizational strengthening
It should be emphasized that this project has a dual nature, as it had a direct beneficiary/producer focus as well as a focus on institutional strengthening. The latter aspect was reflected in the importance of creating the institutional capacity within producer organizations to operate effectively as well as within COFENAC, the Project Executing Agency, to develop effective strategies which can be replicated elsewhere. Thanks to the project investment channeled through COFENAC a substantial income increase for some 1,250 producer families was obtained. The project has resulted in a more than three-fold income increase for these families.
Organizationl strengthening activities involved the direct participation of 1,244 small coffee family units (including 101 female heads of households), organized into 31 producer organizations in the provinces of Manabí (10) El Oro (6) and Loja (15). The training focused on technical management of sustainable farms, leadership and general management and served to strengthen the social, administrative and legal capacities of the producer organizations involved. The collection of funds of approximately USD 3,8 million allowed for the implementation of complementary sub projects further contributing to local development and organizational strengthening. An internal Control System (ICS) was established within the farmers’ organisations, which constantly monitored the achievements against targets and served as a decision making tool for deployment of resources to areas of need. A revolving Fund was established to provide micro finance loans to meet the urgent needs of producer families. The Revolving Fund was created with ‘seed capital’ (a sum of US$132,434) obtained from recovering a proportion of the value of goods supplied by the project and from voluntary savings by members. Some 1,200 micro-loans averaging US$100 each, were disbursed under the project.
Diversification of agricultural production on farms
The main diversification activities carried out for the reconversion of coffee farms were:
• Training for coffee producers on technical aspects of agricultural and livestock production through on-farm demonstration. During the course of project implementation 9,593 training workshops were held on agricultural production and 4,884 on livestock rearing, with an emphasis on practical demonstrations, lectures by experts from local universities and institutions, field trips and technical tours.
• Diversification initiatives also included replacement of 2,122 hectares of old or damaged coffee trees affected by El Niño with new improved varieties. It is worth noting that the goal of the project was 1,200 hectares, so the results exceeded the target by 76%. Improvements in farming practices included use of fertilizers, pest control, diseases and weeds, pruning and regulation of shade.
• Quality improvement of coffee for export included the establishment of coffee processing units (the construction of 643 tub tanks for fermentation and washing and 659 solar driers) in the provinces of El Oro and Loja to meet requirements for improving the standard of wet processing on 53% of the participating farms. In Manabí, improvements were made to the 10 communal centres used by the 400 participating farms to process 85% of the wet-processed coffee produced.
• Development of family farms and agricultural production has improved food availability for the 1,200 participating family units, with the establishment of 973 family farms growing short-cycle crops (1,485 hectares/year), annual crops (565 hectares) and perennial crops (renovation of 1,231 hectares including coffee).
• Promotion of husbandry production to increase, at family level, the availability of protein sources for domestic consumption and additional sources of income from the sale of surpluses. Reports indicate that the project directly contributed to the production of 156,596 birds for poultry production (including laying hens, broiler chickens, turkeys and quails), 509 beehives, 3,876 pigs, 600 guinea pigs and 112,500 kilo of fish.
• Reforestation for environmental maintenance and commercial purposes: This activity contributed to the environmental and economic sustainability of farms in the medium and long term by providing for reforestation using native plant species. During the period of project implementation around 606,000 trees were planted in various agroforestry systems, exceeding the target goal of 200,000 trees by almost three times. The successful reforestation has also contributed to the conservation of endangered native flora and fauna in the project areas involved, protecting the habitats of native animal species.
Agro-industrial development and co-operative marketing
The project promoted processing of primary products and joint marketing as a strategic means of improving the use of agricultural and livestock surpluses while adding value to primary production. Organizations for this component were formally established and are well organized. Beneficiaries all confirm their satisfaction with the support provided through the project and the possibilities that this had opened for them to sustainably increase/secure their income. The organizations started to commercialize (inter alia) their own processed coffee, making effective use of the processing equipment provided by the project. Actual operations are, however, still blocked by the fact that the production environment did not meet formal governmental standards, preventing them from obtaining the required license for commercial operations. Re–modification of the agro-industrial building required, however, substantive investment for which a loan was being sought from the local bank. In spite of the substantive assets collected by the project which could be used as a collateral and the regular financial reporting by the organization, the bank loan was still pending.
The 31 producer organizations involved in the project participated in the following activities:
• Processing of primary products: Six units for processing compound animal feed were established to provide added value for maize by producing poultry and pig feed, twice as much of the three units planned. Two processing units planned for roasted and ground coffee were established (in Manabí and Loja) and improvements were made to the processing unit for roasted and ground coffee belonging to the ACOLL organization in El Oro. Agro-industrial activities were extended with the addition of 24 centrifugal honey extractors.
• Joint marketing: During the period of project implementation 38,012 quintals of green coffee were sold through joint marketing; certified organic coffee accounted for 19,561 quintals of the total. The aim was to reduce intermediation in the commercial process. Coffee farmers’ organizations provided communal storage for small volumes produced by their members to enable them to market more attractive quantities of homogeneous quality and obtain better profits. Joint coffee marketing, provided the basis for consolidating producer organizations.
Dissemination of results
There is a substantial potential for expansion/replication of the project to other coffee producing regions in Ecuador as well as abroad. In that regard it is anticipated that COFENAC would also prepare a “knowledge document“ in which the experiences gained in this project would be usefully laid down, as a basis for new projects/initiatives for COFENAC/ANACAFE. An ex-post evaluation of the project will possibly be undertaken in a near future to make a final assessment of the overall benefit and success of the project including a better “cost-benefit” review of the overall funding of the project. In keeping with the norm for the Common Fund’s concept of multi-county sharing of project results, the project has been widely disseminated to interest groups within and outside of Ecuador through reader friendly publications in hard copy and electronic formats and several workshops involving local and overseas participants.