Thousands of small-scale coffee farmers in Central America’s poorest countries are making more money through sustainable agricultural practices developed with IFC’s financing and business advice. They are increasing the quality of their coffee, improving their growing methods, and satisfying a demanding buyer: Nestlé, the world’s largest food and beverage company.
The farmers must first get independent approvals from several sources, including global commodities firm ECOM and Nestlé’s certification partner the Rainforest Alliance, a respected NGO focused on sustainable agriculture. When they do, the farmers benefit not only from efficiency gains that help them command a higher price, but also through the likelihood of a long-term business relationship with Nestlé.
This project taps into IFC’s market-building expertise, linking producers, roasters, exporters, and consumers. It benefits all sides by helping develop a higher-quality, more socially and environmentally friendly product.
IFC offers both financial support and high-quality advisory services. The financial support comes through a $25 million loan to ECOM that is channeled into microcredit for the coffee producers. The advisory services, which could raise farmers’ yields and productivity up to 40 percent, takes the form of IFC/Nestlé–funded training helping farmers in Honduras and Nicaragua plant new hybrid varieties that can distinguish their coffee in a crowded marketplace and improve their growing and harvesting methods. The end result: increased productivity, leading to more money for the farmers and more jobs for the workers they hire.
The project addresses one of the key Millennium Development Goals—cutting poverty and hunger in half by 2015. This can be done, the World Bank’s 2007 World Development Report says, only by harnessing the power of agriculture. Today’s global economy presents exceptional opportunities to do so through investments in agriculture as new markets for high-value products expand rapidly, the report explains.