Coffee and Cocoa in Junin, Peru [COMPLETED]

The average age of farmers worldwide is 60, a figure which is expected to continue rising. Rural areas are being depopulated as young people flee to big cities in search of educational and professional opportunities – often in vain.

To protect future food production, we must facilitate the incorporation of young professionals (under 35) into the agricultural sector. Often, younger farmers are more open to new technologies and environmental-friendly techniques, which are necessary to tackle climate change.

Coffee is Peru’s main export commodity. However, the crop is affected by climate change which reduces the cultivation areas and facilitates the spread of diseases. In the light of these challenges, farmers have two parallel strategies: they can diversify their production by adding new crops such as cocoa or vegetables, and invest in organic agriculture which protects the environment and generates higher prices. The latter strategy has made Peru the world’s number one producer of organic coffee.

Two cooperatives which are pursuing the above strategies are CAC Satipo and CAC Pangoa. Satipo, established in 1965, has 633 active members ( 22% women and 78% men), and Pangoa, established in 1977, has 650 members. Both are based in different parts of the province of Junin, the largest coffee-producing region in Peru.

VECO wants to strengthen their high quality coffee and cocoa production by targeting young professionals in the region. The pilot project involves a group of 160 participants aged under 35, who are divided into three categories: producers, quality technicians and entrepreneurs. By helping the younger generation, VECO will improve the livelihoods of entire families, as agriculture in Junin is a family business. Each farm is tended by 5 family members on average. Nearly all the families’ income comes from agriculture. Coffee is the main crop, with cocoa or honey as a secondary product, and a small amount of livestock farming is carried out, although this does not generate significant revenue.

• The younger generation lacks educational and professional opportunities on the farms and leaves for the cities.
• The productivity of the fields is declining due to ageing trees (60% are over 20 years old) and a lack of Good Agricultural Practices.
• The post-harvest facilities are badly equipped which impedes quality production and makes it difficult to process good quality cocoa beans.
• Pangoa’s profits from selling top quality coffee are put into to a communal savings fund without any surplus being given to the farmers providing the product. There is thus no incentive for producers to go the extra mile.
• The quality controls of both cooperatives are too sluggish to detect extra high-quality Special Coffees. These coffees should be identified at the beginning of the growing cycle, so that they can be sold in micro-batches for a much higher price.
• Both organisations cover large territories but their regional branches are inactive which makes management more difficult.
• CAC Satipo’s sales team is weak, with no effective control committee.
• Pangoa has no standardised information system to inform the different actors about the cooperative’s up-to-date situation, which causes transparency issues. In Satipo, such a system exists but is not frequently used as most people are either unaware of its existence or do not know how to use it.

• There are three programmes for integrating young farmers into the chain:
  Young producers and landowners receive administrative and financial support to improve their fields and use Good Agricultural Practices.
  Young people interested in becoming technicians are offered courses designed to facilitate their involvement in different key processes in the chain. Examples are cupping courses, production support or sales.
  Entrepreneurs who have set up service provider companies (fertilizers, garden nursery, waste management etc.) are supported and made preferential suppliers of the organisation.
• We create or improve post-harvest facilities so that the cooperatives can sell a high–quality, processed product.
• We encourage courses in cupping so that farmers themselves can identify high-quality Specialty Coffees.
• We encourage policies that reward the production of high quality coffees and analyse farms to identify which plantations have the potential to produce exceptional harvests.
• We facilitate contact between the two cooperatives so that they can share experiences and results.
• Satipo has an information system that can be extended to Pangoa. Both cooperatives need to have employees trained in its use so that important information is updated regularly.
• To improve the organisation of the cooperatives, we restore their regional committees as participatory controlling bodies.
• We organise a marketing campaign that includes participating in events to promote the cooperatives nationally and internationally.

• The young coffee growers’ incomes have increased by 20% since the start of the project.

• Youngster’s participation in decision charges at business and board level show an increase of 19% comparing to last year.

• Through the implementation of the information system, a business plan formulation, branding, quality improvement of their products, and participation in fairs; the commercial area of CAC Pangoa has been strengthened. CAC Pangoa reached attractive business deals for their specialty coffee and fine flavor cocoa.

• 5 youngsters were trained and certified as professional coffee cuppers: Q-grader. In addition, there have been constant quality trainings in labs to provide a better positioning towards their customers, appreciating high quality coffee.

• 127 young people and 284 adults were trained as quality technicians in either cocoa or coffee.

• 6 youngsters and and 1 adult were trained in business plan formulation and barismo, they all started their business implementation and can count with specialized monitoring.

• Information software is being implemented with 30 members trained in its use.

• 85 farms have been pre-selected as potential producers of extra high-quality coffee and are implementing tailor-made business plans to ensure their success.

• A new internal policy ensures that the cooperatives have at least one manager who is under 35.

• CAC Satipo carried out an analysis of their business model to identify its weak points.

• CAC Satipo has a new coffee client, Freeman Trading Limited, which is prepared to pay extra for exceptionally high quality coffee.

• As a result of its participation in national fairs and international events, CAC Pangoa secured two new cocoa clients, East Van Roasters and Guittard Chocolate.