Can Coffee Reduce Poverty? Reflections From Haiti

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Last month I had the opportunity to join a USAID/VEGA funded Farmer-to-Farmer trip to Haiti through my role with 3rd Creek Consulting and 3rd Creek Foundation. The objective of the trip was to help build the capacity of the Haitian specialty coffee sector, or more specifically, to improve production and earnings among smallholder coffee producers. Thanks to the project organizers, Haiti Coffee, Makouti Agro Enterprise, and DG Educational Services, the program included a two-day conference followed by two days of practical workshops for 50 people representing 11 cooperatives. The cooperatives represent over 235,000 small coffee producers.

During the conference, I led two workshops, one on cost of production and the other on the marketing side of the value chain. Both financing and marketing represent two key challenges to an already challenging market.

Haiti is not typically recognized in the international market for its coffee. This is no surprise, as Haiti currently produces less than 1% of the world’s coffee. However, this was not always the case. Haiti has a long and rich history of coffee production and export, and in the late 1700s, Haiti actually supplied around half of the world’s coffee supply. In 1949, Haiti still represented the third largest coffee exporter in the world.

So how did the country go from major coffee player on the world stage to miniscule and largely unknown producer over the past 65 years?

The answer to this question is largely defined by the circumstances that trap Haiti and other “crisis” nations in crippling states of indefinite poverty. Endemic corruption. Long-lasting political instability and violence. Low levels of education. Shortage of skilled labor. Poor infrastructure including little access to electricity. Vulnerability to frequent natural disasters. Haiti is in fact one of the poorest countries in the world and ranks 145th out of 182 countries on the UNDP Human Development Index. An estimated 80% of the population lives in poverty, with 54% considered to be living in abject poverty (CIA World Factbook).

Consider the country’s circumstances with world coffee prices plummeting and a difficult US embargo in the 1990s and it is easy to understand why farmers would abandon their coffee trees in search of new ways to survive. Unfortunately this has led to an additional challenge today as farmers slowly begin to take up coffee again that most of the skills and knowledge around coffee cultivation have been lost.

 
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Given the overwhelming outlook, I was truly impressed during a few moments in my workshops where I inferred that key capacity already exists and that producers are curious and enthusiastic to get coffee right. For example, during my workshop on cost of production, I was surprised to see that participants were already able to identify all of the main costs to keep track of such as labor, fertilizer, tools, fuel, and transport. I did not expect this would be the case since the general perception across development is that small agricultural producers and businesses are poor when it comes to managing finances. I was further impressed with the answer to my question: “Why is it important to track finances?” “Lajan pase vit” which in Creole translates to “Because money goes fast.” In other words, without tracking the money, the money is as good as gone.” While I understand that the farmers in the workshop do indeed struggle with tracking expenses and revenue, I did not realize that it is due to a matter of practice and not lack of understanding. That this segment of producers understands the importance of tracking finances represents a key building block for the sector, a milestone that has already been reached, in no doubt thanks to the long term efforts of Makouti Agro Enterprise and Haiti Coffee.

Similarly, during my session on the marketing side of the value chain, I was struck by the dynamic discussion that emerged from the crowd around the issue of contracts. “How is it fair if I sell my coffee to a buyer and it is damaged in transport – then that buyer won’t pay and I lose,” asked one producer, with the crowd echoing this sentiment. This producer is of course describing a situation that many face which is indeed unfair. The discussion should impress upon relationship managers the importance of protecting smallholder interests by drafting contracts which are appropriate, precise, and fair for both parties. This is critical for seller and buyer alike – no one wants to lose, and smallholders quite honestly cannot afford to do so.

 
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Lastly, when we began the marketing session, one hand went up to ask the question: “I’m just a smallholder farmer. I sell my coffee to the cooperative and I am done. Why do I need to know about marketing my coffee?” This was followed by a lively discussion around the importance of being prepared to handle fluctuations in the coffee market, which is so volatile to begin with. This question also raised a key takeaway, and one that is transferable across developing industries, that the more you understand your entire supply chain, the more power you have to manage your business effectively. If smallholder producers can absorb this concept and apply it to the tremendous challenges they face, I believe the bottom-up agricultural endeavors such as this coffee movement in Haiti stand a fighting chance.

There is tremendous market potential for Haitian specialty coffee in the US and international markets, but capacity development and growth will take time on the production side. The current industry landscape severely lacks in terms of business systems and processes, physical infrastructure, and intellectual capital. However, if Haiti Coffee and Makouti Agro Enterprise, along with other groups such as Singing Rooster, Partners of the Americas, the International Women's Coffee Alliance, and Multinational Exchange for Sustainable Agriculture continue to invest with a grassroots approach to improving local managerial and operational capacity, quantity and quality of production, and market linkages between producers and buyers, the Haitian coffee sector could emerge as a leading industry for the country and perhaps one day reemerge as a lead coffee player in the world. Regardless of this outcome, the coffee industry does seem to represent a real opportunity to reduce poverty for many rural livelihoods in Haiti.

 
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I would like to extend special thanks to Benito Jasmin of Makouti Agro Enterprise and Myriam Kaplan-Pasternak of Haiti Coffee for their dedication to building the capacity of smallholder farmer communities in Haiti. This Farmer-to-Farmer trip represents just one small piece of their long-term commitment to reducing rural poverty through improved and inclusive economic activity in Haiti.

To learn more about the Farmer to Farmer program, click here to read a press release from James Kosalos, President of San Cristobal Coffee Importers.


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Gwen Straley is the Executive Director of 3rd Creek Foundation where she oversees the foundation's grant-making processes and ensures fiscal and regulatory compliance. An emerging markets professional, Gwen has worked for a diverse range of organizations in some of the most complex environments in the world. Prior to moving to Seattle, Gwen managed a large-scale nutrition program in Mogadishu, Somalia. She has also consulted for government, foundations, NGOs, and small businesses in Africa, the Middle East, Asia, and Latin America. Gwen holds an MBA from the Thunderbird School of Global Management and a Bachelor of Arts from Hampshire College with a concentration in Sustainable Development. She is a travel, outdoors, and coffee enthusiast.