A Locally Based Model Goes Global
A Development Marketplace winner, the Pachamama Coffee Cooperative (PCC), was featured in the New York Times not too long ago. Its newest initiative CoffeeCSA.org found its roots in humble beginnings. Springing from the Community Supported Agriculture (CSA) movement which began in the 1960’s in Switzerland, consumers receive their produce directly from the farmer through a household subscription paid for in advance. Then on a weekly or bi-weekly basis, the consumer cum subscriber receives a portion of the overall harvest.
CoffeeCSA.org is a platform that allows consumers to pay in advance for a coffee subscription ranging from one month to one year. There consumers have a direct link to farmers who grew their coffee in Ethiopia, Mexico, Nicaragua, Peru, or Guatemala. And the advance subscription provides a more stable income to farmers. It’s a great adaptation of an old model for coffee farmers who often live on only $2 per day.
So what does participation in CoffeeCSA.org really mean for a farmer’s income? Let’s look at the data. According to the Intercontinental Exchange, “coffee on the conventional market averaged $1.64 a pound in 2010. And fair-trade-certified beans fetched an average of $2.18 a pound.” To be clear, this is the market price. There are typically many intermediaries between the farmer and the market, and farmers usually only pocket pennies on the dollar.
In comparison, Thaleon Tremain, chief executive of Pachamama and CoffeeCSA.org said that in their scheme, farmers receive a much larger share. “In 2010 farmers participating in the PCC could fetch $7.44 per pound. By April 2011 farmers were averaging more than $8.20 per pound. Now when selling through CoffeeCSA.org a farmer is able to capture the full retail price of $13.00 per pound, on average.” This is a staggering 790 percent increase in the price point a farmer can capture through traditional channels.
PCC currently represents more than 140,000 small-scale farmers in five countries. Tremain describes the challenge to connect with a “similar number of end-consumers through the community of CoffeeCSA.org. We have created a simple and scalable way for people to join our network, hopefully they will do it. We are off to a good start with subscribers all over the United States.” Now the challenge is to see if the origin of subscribers can go global as well.