Access to co-investment fund is providing the leg up coffee co-ops in El Salvador need

A nursery at Los Pinos Cooperative, where a new co-investment fund will help build an organic production facility on site.A nursery at Los Pinos Cooperative, where a new co-investment fund will help build an organic production facility on site.A nursery at Los Pinos Cooperative, where a new co-investment fund will help build an organic production facility on site.Rebuilding El Salvador’s iconic coffee industry doesn’t come at a low cost. When coffee rust started distressing the crop in 2013—slashing production levels and wiping out entire farms’ worth of coffee plants—the industry was at a loss for cost-effective solutions to deal with the impending economic crisis. In the process of rebuilding a coffee farm, it can take anywhere from three to five years for the new plants to reach peak production, and many farmers find the cost prohibitively expensive at $4-5,000 per hectare. With the livelihoods of thousands of rural families dependent on the coffee sector, the industry was desperate to find ways to recover the ailing harvest.

In response to the dire situation facing the country, the U.S. Department of Agriculture (USDA) launched the El Salvador Coffee Rehabilitation and Agricultural Diversification Project in 2014. Managed by the NCBA CLUSA, the sustainable coffee program combines new agricultural techniques and technologies with access to a co-investment fund worth $1.4 million. The program not only introduces sustainable, cost-effective practices to the farmers, but also to makes the implementation of these practices financially feasible for small-scale producers and cooperatives.

The program focuses on sustainable agriculture techniques that reduce environmental impact and increase productivity such as building nurseries, producing organic pesticides and fertilizers and crop diversification. At the close of 2016, approximately $420,000 worth of funding had been approved for projects including 40 nurseries capable of producing over 4.2 million seedlings and 39 facilities for organic pesticide and fertilizer production to replace agro-chemical based methods.

With the co-investment fund, co-ops put up 20 percent of the cost of their proposed projects, receiving the rest from the co-investment fund. This ensures the co-op’s investment and commitment, allowing the rebuilding to be a partnership and supporting the sustainability of the co-op in the longterm.

At Los Pinos Cooperative—a unique property nestled in the hillside overlooking a picturesque crater lake—the coffee farmers see the co-investment fund as a win-win opportunity. Not only do they acquire the funding to help them build an organic production facility on site, the new sustainable farming methods will decrease the agro-chemical runoff that has conventionally flowed downstream from their cooperative into the lake below, contaminating the waterway’s fragile ecosystem.


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At the Jabali Cooperative, the farmers faced a different challenge. Although they had received a donation of 30,000 coffee plants from the Salvadoran government to rebuild, the farmers knew that they could not afford to plant and maintain them all, putting the future of the coffee seedlings in jeopardy. With support from NCBA CLUSA and the co-investment fund, the Jabali farmers developed a business plan to introduce mechanized farming equipment to their operation, including chainsaws, motorized sprayers, tree trimmers and electric augers to make planting and farm maintenance more efficient. As a result, the cooperative was able to decrease labor costs, increase their productivity by 60% and carry out the farm maintenance necessary to begin rebuilding the cooperative.

“If it hadn’t been for the expertise of the NCBA CLUSA coffee specialists and the co-investment fund, we wouldn’t have had the courage or resources to rebuild from scratch,” said Miguel Angel Mercado, president of Jabali Cooperative. “The coffee rust wiped out 100 percent of our production and we already had past debt to deal with. With help from the program, we are also starting to build nurseries and experiment with alternative crops such as tomatoes, cucumbers and cocoa to diversify our harvest. We are very pleased with all the support the program is giving us.”

Douglas Barcenas, NCBA CLUSA Director of Finance, Administration and Grants Management, said that the co-op investment fund has been very beneficial to their co-op clients. "The co-investment fund has been critical to the rehabilitation program in their efforts to rebuild El Salvador’s coffee industry.”

By the end of the project in 2018, The El Salvador Coffee Rehabilitation and Agricultural Diversification Project aims to support over 5,800 specialty coffee producers. By the last quarter of 2016, some 3,800 farmers had received financial backing from the co-investment fund.

While El Salvador’s coffee industry has experienced periods of instability over the decades, coffee leaf rust, climate change-related impacts and market volatility have devastated the national coffee economy in recent years. The El Salvador Coffee Rehabilitation and Agricultural Diversification Project began to work with producers in 2014 to transition the affected farmland to coffee rust-resistant varieties, produce organic fertilizers and pesticides and improve marketing practices, in an integrated approach to revitalize the industry and increase its competitiveness with sustainable agriculture techniques and low-cost technology.

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