Farmers in Northern Peru Get in on Crowd-funding

In Blog, Fair Trade // on May 5th, 2014 // by // No comment

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If you’ve followed Heine Brothers’ Coffee for any length of time you know how highly we value the Fair Trade system that we use to purchase coffee.  Along with our friends and partners in Cooperative Coffees, we’re always looking for ways to strengthen the Fair Trade model, and make a real, positive impact on the lives of our producer partners.  A perennial concern of coffee farmers is their ability to secure financing to reinvest in their farms, and pay for the harvesting, processing, and shipping of their crop.

Anywhere in the world, banks are hard-pressed to lend to small business owners.  When those business owners are farmers living high in the mountains off a dirt road, with no electricity or running water, and their only collateral is 5 – 10 bags of unroasted coffee, purse-strings get pretty tight.

Enter NGOs and not-for-profit lenders like Grow Ahead.  Grow Ahead began in 2012 as a partnership between Heine Brothers’ importing partner Cooperative Coffees and Progreso, a lending agency who serves an “under banked” demographic of Hispanics in the US.  The Grow Ahead lending approach is unique in the way it connects farmers in developing countries with the end users of their crops.  Coffee drinkers become the lenders by contributing to Grow Ahead for a specific producer group during a specific harvest cycle.

Similar to any other crowd-funding campaign, there is a specified time period in which Grow Ahead collects funds for the producer group.  Funds are disbursed prior to the harvest season.  Coffee is picked, processed, purchased, and shipped according to the usual schedule.  When the coffee lands in the US warehouse the producer group repays the Grow Ahead loan.  The Grow Ahead lender (aka coffee drinker) is then given the choice to: leave their money in the Grow Ahead system to pre-finance the next container of coffee, donate the funds back to the farmers to be used for special projects, or get the money back.

We’re really excited about this partnership between Grow Ahead and CENFORCAFE, one of our producer partners in northern Peru, because it’s the first opportunity we’ve had to share this consumer-producer lending model with you.  We hope the first container of washed AA from CENFROCAFE that lands in September or October will be fully financed by coffee lovers who want a stronger connection to coffee farmers.  We’re looking forward to taking this step in progressive coffee trade with Grow Ahead, Coop Coffees, CENFROCAFE, and you.

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