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Our 2023 Mexico Pre-Harvest Plan builds on last year’s explorations into lesser-known producing regions of Mexico while doubling down on our historical work with supply chains in Chiapas, Oaxaca and Veracruz. For the first time, we are introducing a quality-incentivized transparent pricing program across the country to encourage early and repeat delivery of parchment from top producers and break out of traditional aggregation models which restrict many producers’ access to the specialty export market.
We first started working in Mexico back in 2013, focusing our efforts in lower-lying areas in Central Mexico along the Pacific coast like Colima and Guerrero—places relatively unknown to specialty buyers in the U.S. Back then, we brought in beautiful dry processed coffees (uncommon in Mexico) from a cooperative called Leyva Mancilla in Guerrero and washed coffees in one of the first lots ever exported from Colima. From there, we began exploring the upper ranges and outer environs of Oaxaca, where the ties of community and operational complexity are as palpable as the potential for quality.
Based on its proximity, it would be easy to assume that of everywhere we work, Mexico should be the easiest. Yet, despite sharing a border and deep connections to the U.S., Mexico remains one of the most complex places we work.
First introduced by Spanish colonizers in the 18th century, coffee in Mexico initially grew on large plantations owned by Europeans and worked by Mexican laborers. Following Mexican independence, wealthy landowners wielded “modernization” as a rationale to abolish communal and corporate land rights, stripping indigenous communities of their lands to form large estates. Agrarian land reforms following the Mexican Revolution began a process of redistribution of land from those larger private estates back to smallholders through the ejido system, which established communal land areas dedicated to agricultural production.
In 1973, to promote coffee production on these newly created lands, the Mexican government established The Mexican Coffee Institute (Instituto Mexicano del Café, or INMECAFE), providing technical assistance, equipment, transportation and credit so that coffee producers could deliver their coffee to the international market. By the end of INMECAFE’s first decade, coffee was the largest agricultural export in Mexico, accounting for 35% of all agricultural exports.
As part of his neoliberal policies, President Carlos Salinas de Gortari abolished INMECAFE in 1989, the same year that the International Coffee Agreement collapsed—exposing smallholders to price volatility and leaving them without access to credit or government assistance—and in 1991 ended ejido land reform policies, again forcing smallholders to abandon lands they’d farmed, dispersing many into remote or mountainous areas.
After the ICA collapsed, so too did prices for coffee; the Coordination of Coffee Grower Organizations estimates that as a result of the ensuing coffee crisis, Mexican coffee growers would have lost 65% of their potential revenues since the start of the crisis. As a result, 71% of coffee growers stopped using fertilizers, 40% reduced pruning, and 75% stopped investing in control of pests, leading to lower qualities, yields and resiliency ahead of the coffee leaf rust outbreak in Latin America in 2012.
In response, many of the coffee growers in Mexico—who today number more than 500,000, 85% of whom are indigenous and with 95% growing coffee on fewer than 3 hectares of land—organized into informal cooperatives or otherwise collaborated to mitigate their risk and attempt to access the best price for their coffee.
Mexico offers unique opportunities for quality with many of its farms planted with decades-old root stock of lower-yielding traditional varieties like Bourbon and Typica and an increased interest domestically in specialty coffee, leading to experimentation and innovation in coffee processing and the planting of exotic cultivars. Today, Mexico is the seventh largest coffee exporter in the world—and the largest exporter of organic coffee.
We don’t operate like coffee hunters or coyotes, picking through warehouses, or buying the best cups that come up on coyote-curated blinded tables in Oaxaca City. To overcome our greatest challenges working in Mexico—aggregation of coffee into lots of exportable size and qualities—we remain committed to working through communities, allowing us to build mutual relationships and networks of trust. This is only possible by overcoming communications challenges—linguistic and topographic—returning year after year to re-engage communities, addressing logistics within and between communities, and cultivating quality through training, idea sharing, proactive communication, and incentive programs.
For the 2023 harvest and import from Mexico, we anticipate that:
Cold and wet conditions across Mexico have delayed harvest and drying by as much as a month compared to previous years, also leading to lower than expected production. However, we have implemented stricter purchasing deadlines to ensure lots are milled and exported earlier in 2023, which will result in earlier and on-time arrivals to the U.S. We will be traveling to Mexico three times prior to the end of harvest and anticipate that booking will be wrapped up by early May.
We introduced a new program that we’re calling Good Coffee Program, designed to create access to and and a pipeline for top lots by appealing to farmers and their communities directly through transparent pricing, immediate payment, and long-term contracts. This farmer-facing program is overseen by our new support team in Mexico, and will deliver higher quality separations and smaller microlots than in previous years.
Domestic prices in Mexico remain high; pricing indicators, particularly across Oaxaca, remain inflated from last year’s peak even though market prices have begun to fall due to competition from commercial buyers. We are maintaining a pricing calculator that we will update every two weeks to transparently translate offer prices from export-ready ‘oro’ in USD / LB, FOB export, to Mexican Pesos / KG in ‘pergamino’ to the farmer. This tool will assist with education and accountability, but most of all, in engaging farmers in a conversation about prices and quality. At the start of harvest, the U.S. Dollar is the weakest it’s been since 2017 against the Mexican Peso, which will buffer export prices even as the market softens; this, along with incentives paid for quality and smaller lot sizes will result in landed prices that are approximately the same or somewhat higher than previous years.
| Harvest | Milling | Export | Arrival |
| Feb–Apr | May–Jun | Jun–Jul | Jul–Aug |
We received the final landings of our 2022 imports late into the year, giving them less time to shine before the next crop comes in. These late arrivals resulted from disruptions within Mexico’s export market related to quality, price, and lot aggregation.
Historically, aggregation of coffees has been our greatest challenge in Mexico, with quality and high prices—or more specifically, a mismatch between quality and price—coming close behind.
Over our time working in Mexico, we’ve developed year-over-year supply chains by working with strong, engaged collaborators who have their own relationship and connection to communities of coffee growers. By working through them, we’re able to gain access to communities—most often indigenous, and always of smallholders—who otherwise would not have access to the specialty market. One challenge, however, is that these informal cooperatives are traditional in their structure and outlook; a central collection point for parchment services the entire community with pricing negotiated on an ongoing basis based on market conditions, and without training or support for agronomy or processing, quality is highly variable.
Without collectors and a way to make inroads with these communities of smallholders, the coffee they grow would likely be destined for sale in the domestic or commercial markets by coyotes, or bought by “Coyote Qs” who buy coffee at low prices from farmers by grading it down at the farm and up at the lab in Oaxaca. Domestic prices in Mexico for specialty quality lots are higher than in other producing countries, and with yields also substantially lower, supply pressures force FOB costs higher and logistical challenges increase.
Last year, for our 2022 import, we hired a partner from our early work in Guerrero as a producer-in-residence to motivate producers to engage in the specialty market by providing processing training and experimentation support. Our short-term aim was to create diversified products through existing partnerships and by paying a premium for these lots, ensure they’d make it to export. In conjunction, we established a “diploma” program inclusive of cupping feedback rewarding producers for going through this training. The coffees were produced, but in the end, they never made it to market: with market prices as high as they were, and with the slow payment cycle of exported coffee—up to 6 weeks from delivery of parchment—many producers ended up selling the coffee they’d produced through the Barista in Residence program to the local market, using the diploma we’d given, for faster payment.
OAXACA: La Canada, Mazoteca C2C Agent is making frequent visits to check on training / lot separation. Communities are invited to participate in GCP microlot program for 3rd party feedback. OAXACA: OAXACA: Support smaller lot separation through Joaquin’s house (which acts as the group’s bodega) through to the mill in Oaxaca. Special processing experimentation. Mazoteca (Puebla, Sierra Negra)
Supply Chain
Strategy or Qualities
Updates
La Refleja y Red 5 de Diciembre
Utilize the agronomy extension team (Red 5) to train community partners on quality control and lot separation upon initial collections. Explore separations from other high-altitude, hard to reach member groups in Sierra Norte.
La Reflecja (cooperative) hired a new cupper.
Terra Coffeas Mexico
Mixteca (Caballo Rucio)
Mazoteca (San Mateo Yoloxochitlan)
La Pluma (Juquila)
Build small 20-family community groups within indigenous communities who can focus on producing for specialty. Pair these groups with field workers to provide support through the harvest, a top of the line mill / cupping team to recreate the cooperative model from the ground up.
‘22 was the start of this project, ‘23 is building on that success with more individual farmer separations and overall improvements on community-level processing made possible by good prices and advance contracts.
Ramon Ruiz / Joaquin Santana
La Pluma (Chateno)
Support community leaders (in this case, Joaquin Santana) who devote their houses, hearts and time to hold together informal cooperatives composed of indigenous (mostly non-spanish speaking) households who have delivered their coffee to Joaquin for generations.
Continue to reinvest a portion of premiums into supplies (shade nets, drying beds).
Pride of Puebla
Participate in a grassroots-organized quality auction (‘22) to identify the most motivated producers in an off-the-path part of Puebla so that they can have more access to specialty markets in ‘23.
Send a C2C agent to work between NGOS (like Heifer Intl), local agronomists, and community leaders to communicate a clear plan for pricing, quality premiums, and quick cupping feedback through the Good Coffee Program (GCP).
For 2023, we’re taking a different approach to our Mexico sourcing strategy based on the lessons we learned from our work over the last few harvests. This year’s strategy focuses on quality discovery, and appeals directly to producers by providing an impartial lab to provide quick feedback while educating producers on their cup score. This exists on top of our normal purchasing strategy, which aims at economic stability through long-term contracts, and building trust and accountability through adoption of a transparent, widely-communicated pricing model for all of our buying in Mexico.
We brought on staff two local agents, Israel Paz and his wife Joz Cortes, both of whom are skilled, calibrated cuppers with deep connections to producer communities in Mexico. Israel and Joz will work together not only to evaluate quality and turn around feedback more rapidly at their own Arc roaster outfitted lab in Puebla, but also help with discovery of new producer relationships through their networks. Israel will oversee our new quality incentive and transparent pricing program, which we’re calling, aptly, Good Coffee Program (GCP). Good Coffee Program runs during harvest, from March 1st to April 26, 2023.
GCP is built on a few foundational principles:
By improving the speed of payment and incentivizing quality, we hope to build collections of high-quality coffees. Taking a page out of our strategy from last year, we will run radio broadcasts to communicate pricing in order to overcome the communication challenges posted by Mexico’s topography. The pricing model is fully transparent with premiums assessed based on quality—and a base price that is recalculated every two weeks corresponding to movement in the local market.
While the coffee trade in Mexico operates with a lack of national structure and is often opaque due to difficulty accessing communities of producers directly, GCP aims to create an environment where smallholders are able to receive feedback on their coffee, receive a transparent offer above the local market, and get paid quickly.
GCP will be utilized across all of our supply chains in Mexico; we anticipate that this will result in smaller, high quality lots and don’t anticipate any lots larger than 50 bags.
One of our longest-standing supply chain partners in Mexico, Ramon Ruiz, and the networks of producers he helps us access through Joaquin Santana in Sierre del Sur and Lachao are one area of focus. The lot separation strategies we’ve implemented in the past have shown some success, and our initial trials of using radio broadcasts to promulgate pricing helped to expedite delivery of coffees from these remote regions. In neighboring La Cañada and Eloxochitlán, we’re eager to engage Coro Cooperative and Red 5 de Diciembre and solicit their participation in GCP. The Red 5 de Diciembre network has been a partner of Crop to Cup since 2020 and is the largest organization of producers in the La Cañada—itself made up by 13 first-level organizations to represent 1,300 small indigenous producers. Over the past six years this group has been working to improve selective harvesting, specialty processing, and marketing of these higher value lots while growing membership.
We will be expanding our work with one of our newer supply-chains in Oaxaca—Terra Coffeas—with whom we worked in 2022. The team at Terra Coffeas includes engineers, agronomists, biologists, chemists, cuppers, artists, and coffee lovers united for the common cause of “agroecológico”—loosely translated to mean “the intentional purposing of international standards for quality, productivity and traceability, towards the advancement of local cultural practices, environmental resources, and economic outcomes”. The field team at Terra Coffeas is young, ethics- and quality-calibrated with Crop to Cup. Rather than relying on conventional cooperatives, Terra Coffeas operates by organizing smallholder coffee producers into informal cooperatives of 25-30 families to aggregate lots into exportable volumes, create market access, cultivate quality, and deliver premiums based on that quality.
In Puebla, where Israel Paz and Joz have their lab, we’ll be returning for 2023 after being the only international buyer to participate in 2022’s Pride of Puebla competition and auction. The coffees from this region remain relatively unknown to specialty buyers outside, and we believe that Puebla holds massive potential for quality as well as producers who will be motivated and positioned well to take advantage of the GCP program.
We we will be actively cupping throughout the season and expect to have samples available by May. To get involved or for more information, contact your trader.
We we will be actively cupping throughout the season and expect to have samples available by May.
The best hotel in Iganga – smudging the line between mishap and miracle
The best hotel has holes in the floors, holes around the fixtures and an unexpected hole in the sink. There are holes in the bed covers, around outlets and in the ceiling where the light should be. The window itself is actually just a hole with a frame stuck somewhat inside of it – you don’t open this window, no, you simply remove the frame from its hole as instructed when sitting in an airplane exit row.
But a hole in a wall is still most of a wall between you and the town of Iganga, which doesn’t even get credit for being on my top ten least favorite places to be. In fact, while I lived there at one time, it’s a city I rarely talk about and would never recommend – to anyone really – ever except for the six unfortunates who I brought with me to sample the city’s finest.
The last 18 hours had taken a toll on us all, and we needed the day to stop –the only reason Iganga counted as a good idea. In the end the tally included five cars, our luggage, a birthday, some vacay, and over a decade of goodwill.
But in exchange we got a few flavorful vignettes, drank champagne coffee with new friends, hosted an impromptu dance party at a street-side squeeze, ignored a kayak competition and learned a few lessons we’ll not easily forget.
If the devil is in the details then maybe we should be looking for miracles in the cracks. It’s what happened here anyways.
At Crop to Cup Coffee Importers we subscribe to the mantra of ‘trust, and verify’. These are the two legs on which relationships stand. And any good partnership needs two legs to get off the ground, to stand up to the winds of change, and to move forward year over year.
With trust, verification becomes an easy ritual. Without it, verification becomes an adversarial audit. With verification, trust is built step by step. But without checks there can be no balance.
This is a story of our oldest relationship – with a group called Bulaago in Mt. Elgon. A place where trust runs deep like the rudder of a tall ship, allowing us to ignore the holes in this old sail.
Looking back, I should not have been so surprised that the boat capsized.
Bulaago Coffee Farmers Association – Jan 2019
“The rains are coming, and we have to go now”. It was true, that rain was threatening, but that wasn’t the real reason we cut the meeting short. It is January of 2019 and I’m up visiting the Bulaago Coffee Farmers Association (BUCOFA) in Mt. Elgon, Uganda.
It started well, with greetings and introductions, gifts exchanged of passion fruit for branded bags that proudly printed “Bulaago coffee”. So far so good – with 14 years under our belt, this visit was meant to be routine, a repeat of our annual to bi-annual visit. But then the storm came.
“You are lost”, started one farmer. Not surprising – this is a common way of saying ‘we missed you’. But then “you have been gone now for over two years, why haven’t you bought our coffee?” This bristled, as I pointed to the sales report which showed what we bought, how much more we’d need, and what we’d done to market their coffee over the past year. I pointed to the guest book that showed my last visit in November of 2017, complete with signature and the comment ‘your coffee is as sweet as your hospitality – thank you for sharing both’. This wasn’t what I expected – things were getting interesting. I moved closer, curious as to where this would go next.
Straight down was where. “Our store has been empty now for two years. We have been on our own, and while we are glad that (Mr. X) brought you here, we only found out yesterday you were coming, and I wonder – why are you here?”
Mr. X was the son of the village elder, a muzee (respected man), and a long-time friend. He had known about our visit for months, but apparently had not told anyone until the day before.
Just earlier that day we had paid Mr. X to rent chairs and a tent, for food and for a truck to bring all of this up-mountain. And then another payment for another truck when that first one failed. But on arrival, it was clear that there were no chairs, no tent, no food, and no truck. This money had been eaten.
So how did such a good thing go so wrong?
Looking back the reasons are clear, and I know better. So, the blame is on me.
First, I’d accidentally chosen to visit on a market day, a day when the average farmer moves down mountain to sell non-coffee goods. This left only politicians and board members to attend our meeting.
Secondly, I’d been lax, negligent. I’d not seen any meeting minutes from BUCOFA in over a year and hadn’t asked for them. Yet minutes were the only way we knew that messages got down to the farmer.
You see there is no cell reception up here, and no one with a smartphone either. So, WhatsApp conversations and emails got printed down mountain in the town of Mbale, and brought up to be read during the group’s meetings. While there were elected positions for treasurer, secretary, and chairmen, effectively the power went through those who could afford to move between the mountain and Mbale. And, as it turned out, this was really just one individual. You guessed it, Mr. X.
Thirdly, I’d failed to adjust to some seemingly unconnected changes. For example, X’s father had fallen ill the year prior; when he moved down mountain, his son stepped into the role of village elder giving him influence without oversight and an invitation to take advantage if times ever got tough for him.
Zooming out to the macro, another change is that – for the first time – cherry prices beat parchment prices on the mountain. This was due to competition amongst washing stations that started sending trucks through Bulaago with cash in hand.
Versus the BUCOFA store, which could only pay once a week. Once a week our purchasing partner would bring a truck up to collect from the stores with cash to payout. Weekly can’t compete with cash on delivery. Even if second and third payments made selling to BUCOFA more profitable, these payments are delayed. The result was that BUCOFA could not compete for volumes from its own members.
So, three seasons ago, BUCOFA decided to close their store and mobilize coffee to one of four collection points set up by our purchasing partner. All Bulaago coffee was kept separate, and for two years we enjoyed unprecedented quality and traceability. Volumes and quality were up – we had come to celebrate, and to encourage even more participation.
But this also meant that BUCOFA, as an organization, was no longer relevant. They no longer needed to meet as regularly, or at all, and so went the way of all other Ugandan cooperatives …
Farmers in Uganda, even members of Coops, can sell to anyone, and they often do. Some coffee goes to pay school fees, to help out a relative or to cover debts from the offseason. Some go to that nice buyer you met last week in the market, and some to your brother’s wife’s father just to keep him happy. Sometimes buyers can approach a cooperative and pay a finder fee to buy from their primary societies. Then the next year they’ll cut out the coop as an unnecessary middle-man.
And the cooperative model – which pays less upfront and more of a profit share on the back –fails to compete. It’s a system that was brought by the British, but which had not worked since liberalization in ‘96. In this way coops and associations across Uganda have weakened and failed year over year, leaving places like Mt. Elgon a mountain of individual farmers, and not groups.
BUCOFA was set up as a primary society along the traditional cooperative model. So, it seems, we had been hanging on to an old way of doing things. Coops and primary societies are officially dead – and so was BUCOFA they day they closed their store.
Two years passed, and I found myself meeting with a corpse of a cooperative.
“The rain is coming, and I need to get your customers down to safety”. This was how I ended our meeting, trying to save some face, and to buy some time while I worked all of this through.
As we piled into the van I encouraged BUCOFA to meet as a group, to talk, and decide what they wanted to do. In a typical zombie move, showing that they truly did not get it, they approached some of the roasters to ask if they could sell their coffee to them directly. Which would have been fine, if it was possible, but it was not possible, and in this context it was not fine.
On our drive down mountain I ran this through my mind, struggling to the conclusion that BUCOFA was no more. This had been our oldest relationship in coffee – the first group for whom we had bought drying trays and moisture meters, helped to open a bank account and maintain a truck. It was difficult to say goodbye, and impossible to give up. There are still so many good farmers, and so much good coffee, that it wasn’t fair for a few committee members to ruin over a decade’s worth of efforts.
So, I wondered, if not a primary society then what would come next? How can we communicate with and coordinate the efforts of nearly 400 farmers if they are not organized?
The answers didn’t come that day, but neither did the rains. We got down mountain starving, but safe. Our luggage, however, had moved on to Iganga. It looks like this long odd day was about to get a little longer.
You see, before Bulaago, on our way up mountain we had all three of our vans overheat. It was hot, but all three, at once – come on! We ferried some folk up mountain using a pick-up, and others stayed behind to hitch.
I was one of those left behind to hitch. It was in this crack in our schedule that we found our first little miracle. While we sat around a group of kids came up to talk. While we were talking the shyest one started rubbing my friend’s arm. Now my friend has a hairy arm, so I motioned for him to pull down the neck of his shirt to show the kid what chest hair looked like.
He did, and the effect was as expected. Tremendous. Never had these kids seen so much body hair! Next, one of the bolder kids asked my friend to remove his sunglasses. Which he did, revealing green eyes to equally tremendous effect. The kid then said something simple that simply stuck with me.
“You are not simple’. No, my friend, he is not simple. And neither is coffee.
I have a brother who invokes the word ‘sonder’ as a reminder that everyone’s life is as complex as your own. It’s a nice reminder, and an interesting word*, but in this place and time I was thinking that some days are more complex than others.
This day, for example, was one that I couldn’t quite write off. For every bad turn we found something good. Being without cars in Kapchorwa let us spend all morning with a group called Zukuka Bora. While we didn’t get to set up shop in Bulaago we had all the equipment to help Zukuka Bora host their first cupping, which came to be a high point of the trip. They’re experimenting; we didn’t love the honey process, but were pleasantly confused by the coffee fermented using Champaign yeast.
Then, later that day, we got a private tour of Uganda’s largest washing station. Yes, we had to rent a mutatu to get there, ours having broken down, and yes we were held at the gate by an irate guard, angry at us for showing up after hours. And yes, the car did refuse to start – at first – when we were trying to leave. But in the cracks we got to know Deus, their washing station manager, including an interesting discussion about scaling up drying for natural and honey-processed lots.
Yes, we missed lunch with farmers in Bulaago. But were able to reconnect with an impressive young farmerpreneur named Dison. And yes, I just made a frakenword of ‘farmer’ and ‘entrepreneur’**. Expect a separate blog on him, but I like seeing young independents like Zukuka and Dison as a growing alternative to the large mills, and our best chance at getting truly top lot coffees from this mountain.
Leaving Bulaago we chased our luggage to the greatest hotel in Iganga; and even this haul had a hidden gem in store.
This is where we introduce Clare, the heroine of our story and a true delight to have in the world of coffee. Her job is quality and promotions for the Uganda Coffee Development Authority – she’s the one behind Uganda’s Barista competitions, and who coordinates their participation in AFCA’s Taste of Harvest auction. She’s a Q-grader, R-cupper and trainer extraordinaire.
More, she was the one responsible for getting us out of the day’s car mess and past the angry guard. She coordinated the reconnect with Dison, and felt the brunt of the Bulaago fail. And today was her birthday.
So the plan was to spring for a nice hotel and a bottle of red wine for her once we got to Jinja.
However, with the day so delayed it was already night, and us chasing our luggage to Iganga, this plan was no longer a possibility. So, instead, we stopped by a roadside cellphone shop turned bar. These juke joints are called Kafundas, which means ‘the squeeze’ because of how tightly they pack in people, DJs, and a pool table.
Buying beer for the group I looked up and to the far left of the bar. On the back of the top shelf sat a forgotten bottle, covered in dust. It was either sherry, or port oh, maybe – and tis would be a rarity – red wine. Red wine is all that Clare takes (no beer for her), and despite a few fancy hotels we hadn’t found a sip so far this trip. But here it was, hidden in the back of this loud-ass can be Kafunda, a dusty little miracle.
A miracle that blossomed as we navigated price (there was none so we had to make one up), glass (okay, I could buy a glass no problem – okay, this can be included in the price) and then – how to open the bottle without a corkscrew. And which climaxed with three grown men competing to see who could pull the cork using a nail – most attempts to pull the cork out using a nail led to smacking your own face. Which got them angry enough to try harder, leading to a harder smack, which got them angry enough to try faster. Until the next person stepped in to take over.
I ended up pushing the cork in, of course, and passing it around while dancing outside the Kafunda. So, in the end, Clare has something nice by which to remember her birthday.
A nice stop, but the day continued. We boarded back into the cars for the final leg to Iganga.
I heard a wilderness survival instruction say ‘all bleeding will stop. The question is what you are doing when it does’. I’ve applied this my life – ‘meetings will end, the question is how,’ or if I’m going through something unpleasant ‘It’s not when or if, but how I get through this’. For me the phrase ‘all bleeding stops’ is a reminder of ‘lets make the most’ with ‘manage against the curve’ and ‘this too shall change’.
I bring it up here as a way to skip over my night at the best hotel in Iganga. We got through the night, and on to Jinja the next morning.
Jinja, the source of the Nile, and where we’d intended to spend the night before. We arrived too late to get on the water, but sat as sun set, looking over it, ignoring the kayak competition that was going on below, and toasting to the last 24 hours.
As the kayakers came up to the bar the band began to play, and I retreated to my tent for a little decompression. Just me and the monkeys, a beautiful view and a pint of beer. That’s where it came to me, the last little miracle of the day – a new way of looking at our work in Bulaago.
Bulaago Coffee Farmers Association (BUCOFA) was modeled after a Primary Society in a Cooperative. Primary Societies are one way, the old way, of centralizing a large coffee catch-basin. But if a centralized committee was no longer the way of the mountain, what would a decentralized model look like?
And was where an old memory brings back VSLAs to save the day.
Village Saving and Loan Associations (VSLA) to Address Bulaago Challenges
VSLAs (Village Saving and Loan Associations) are pretty unique to Uganda. Picture a lock-box with three keys, each given to members who live on far sides of the community. They can include 8 to 40 farmers who pool their incomes to lend out to members at an interest rate of around 10% (exceptional – especially when compared to traditional bank loans at 24% – 36%). They are like SACCOs or savings groups found in other countries, but without external regulation. Plus, Uganda has a long tradition of these community-level savings groups who have flourished far from the banking grid.
There are VSLAs in place throughout Bulaago, and they already serve as a nexus for some types of training. The idea I had was that perhaps they could also serve as a means of mobilizing coffee, organizing community lots and facilitating communication without needing a central body. I checked this idea out by a few friends in the area who agreed VSLAs are strong, they meet monthly with full participation – including many women – and that they could be engaged to get more active in coffee.
The next miracle was waiting on the other end of one of these phone calls. I learned that USAID-funded nonprofits are actively supporting community savings groups through training and capacity building – allowing us to piggy-back on these efforts to strengthen VSLAs in Bulaago. In fact, plans for this are already in motion and we expect meetings to begin by end of March 2019.
I’m still sitting at my tent overlooking the Nile when the next Tetris piece drops into place. VSLAs can be combined with an idea imported from other parts – Youth Teams. Youth Teams are trained groups of unemployed men and women, 18 – 24 years old, who provide services to their community at a fee. If you can connect Youth Teams to VSLAs you now have a means of organizing coffee, improving quality, administering premiums and financing it all.
And so this is the 2019 – 2020 plan for Bulaago. We are free from the baggage of BUCOFA, and up one significantly ally in Clare who has agreed to help us in setting this program up. First step is a survey of VSLAs in Bulaago. With this we will have an entirely new way of communicating with and mobilizing coffee from farmers we’ve known now for over years.
I once read a t-shirt that said ‘never a bad day’. Feels hokey to me. But if you change it to read ‘never a bad day, only complex ones’ I’ll consider it.
I expect Clare’s survey and the VSLA program in Bulaago to progress day by day, with some days being more complex than others. I expect there to be more complex days for me as well, as we explore this new way of working. I’ll be in more direct touch with more farmers, for example, with a lot more that we could do in terms of mobile money, reinvested premiums, lot separation and quality improvement. But while I’m glad for what came out of the day described here, I don’t ever again expect to spend another night in Iganga. If I do then that means I’ve messed up again.
But if you so happen to find yourself in Iganga please let me know – I can recommend the very best hotel.
*The word Sonder doesn’t appear in English dictionaries, but seems to be a Saxon word that traveled through German (set apart) and French (to probe). The Saxon roots are interesting (to me at least) and can be found in the first response to the quora inquiry here. Today its use is tied to the Dictionary of Obscure Shadows which states:
Sonder n. the realization that each random passerby is living a life as vivid and complex as your own—populated with their own ambitions, friends, routines, worries, and inherited craziness—an epic story that continues invisibly around you like an anthill sprawling deep underground, with elaborate passageways to thousands of other lives that you’ll never know existed, in which you might appear only once, as an extra sipping coffee in the background, as a blur of traffic passing on the highway, as a lighted window at dusk. – Dictionary of Obscure Shadows
**or is that a portmanteau?
View our current offers here to keep an eye on this coffee coming out of Bulaago.
It took three people and a bull mastiff two hours and nine calls to find the spot. The dead-end responses ranged from an honest – ‘huh’ – to the confused – ‘you’re crazy’, with a few lazier warnings of ‘it’s too dangerous’ in there as well. But we finally found one who didn’t hang up – the call just dropped. So we sent a text and told them we were on our way.
At the gate we were asked for money before entering – they didn’t think we were serious. We were asked if we knew what we were doing, if we were sure we wanted to go through with this. Then we were asked what we wanted for dinner.
Spooky. But the spot was perfect, and worth the effort. An exposed hilltop from where we could see the lights of Nairobi in one direction, and the silhouette of Kilimanjaro in the other. The line of sight was so good, I was told, that back in the World War the Brits set up pillboxes here – three AA guns to shoot down Italian planes coming in from Ethiopia.
The place looked the part, or at least, like it had played a part in some seventy-five year old history … and that maybe no one has cared for it since. We had two in our group walk past the barking dog we never saw but only heard, and into the guest quarters – then right back out and to the closest hotel. They weren’t into camping, and I don’t blame them for not staying inside. It was a beautiful plantation house cut in the classic style. Only thing is that it reeked of taxidermy, had mattresses pushed up against the wall to act as insulation, and was so completely yellowed that only the boldest of mold stains stood out.
That was inside, but outside the hilltop hid a private waterfall that cut between and then down the slopes of two tea estates. Tea, you may know, tends to glow an iridescent green with morning and evening sun, making this already majestic waterfall into something even more.
There was beer (Tusker, even though I prefer me a White Cap), food (Indian with Chapati), and a fire (with our very own Masai guard to keep us company). Plus, we were only forty minutes from our meeting that evening – while this place was far from normal, it was close to perfect.
Turns out, in Kenya, camping isn’t so normal, which is why we were the weirdos. While hunting down equipment to rent I was even asked, twice, ‘are you camping …recreationally?’.
Well, yes, of course we were camping recreationally. But I also had some business in mind. We set out from Nairobi to spend a couple of nights at two farms – meetings are more fun when they can go into the night.
One night saw a BBQ with our friends in Giakanja. In the States a BBQ may mean pork, beef or chicken depending on where you from. There BBQ is called Nyama Choma, and it’s all goat. And all of the goat. I’d asked for vegetarian options for our vegetarian friends … they got a fish.
The meeting started with feedback on Giakanja’s coffee, and introductions to their customers. It was a success story; last year saw record prices, qualities and group engagement. We reported a desire to double our purchasing, brought a contract to show our commitment, and then of course there was the goat to help us celebrate.
The inevitable question came up during the meeting – not a question, really, but an ask. No matter the price, it’s reasonable for farmers to want more money. In this case the question came up with interesting effect.
“So, you will pay a higher price this year, right”?
To start, I felt that we needed to manage down expectations. So I asked what price they’d received last year – a healthy $4.00 / pound for an AB grade – and if they were happy with this. Yes, of course they were –last year saw record prices. Good, I responded, ‘we have contracted to buy twice as much as last year, if you can match the same quality’. My colleagues thought me crazy, I told him, for saying I’d buy such an expensive coffee before even knowing what it would taste like.
Which was a good segue to recap the rules of the game. Roasters buy on quality, that when a sale is made it’s because of the effort they put into quality. So – in reality –the work a farmer does in the field does much to dictate price. In other words, the better the farming the better the quality, the better the quality the better the price. So he’s got both stake and say in the matter.
Next, I wanted to add some context. So I asked the group who knew about the International Price of coffee – not one raised a hand. Then I asked every U.S. roaster in the group ‘what is the most expensive coffee on your menu’. To a person, luckily for me, each of them said ‘my Kenyan’.
| 2018 | Avg Auction | Highest Auction |
| AA | $ 3.31 | $ 5.53 |
| AB | $ 2.54 | $ 3.99 |
| PB | $ 2.37 | $ 3.92 |
| C | $ 1.92 | $ 2.66 |
Average auction prices are drawn across three random auctions in 2018 at a time when NYBOT was avg 1.23. Auction prices are quoted converted into USD / lb, but remain FOT Nairobi. Note that highest auction prices are more indicative of direct trade prices than averages, which include lower grades.
Kenyan coffee is already at the top of the value-chain, neither prices nor quality could get much higher. Even while farmers the world round freeze in sub-dollar coffee prices, Kenyans enjoy a plump cushion from quality premiums. And despite all this, coffee in Kenya is on the decline. In fact, this is the only place we work which produces less coffee every year.
And this is why, to the farmer who asked for a higher price, I ultimately said “the best way to make more money from coffee … is to plant more coffee”. This felt like a risk, and I was surprised to see nods and soft applause.
To understand why I was surprised to find support we must first think about the mentality of working in a shrinking industry. Every year there is less coffee than the year before. That means every year other farmers you know are getting out of coffee.
Before we count it off as lazy or crazy let’s puzzle through the more interesting ‘why’. With world-class quality and top of the line prices, why are farmers getting out of coffee?
Space is one answer; coffee shares the highlands with an ever-expanding Nairobi, which turns the country’s oldest coffee estates into its newest shopping malls. With real estate prices what they are in Nairobi, and with Nairobi growing as fast as it is – you’d be crazy not to sell at some point.
But space is only part of the answer – following the rest will take us to the fourth dimension.
Money is worth more now than it is later – this idea probably referred to by Wikipedia as the ‘time value of money’. It banks on being able to invest money you have now, allowing you to earn interest, and making it worth more than money you don’t have now, which can’t be put to work.
Coffee is the king of cash crops in Kenya, but it is losing to development, to tea, to pumpkins, nuts and corn for dairy. In fact, as a crop, it is the loser – coffee hasn’t been cool in Kenya since 1986.
To start, it’s hard. It takes time, a lot more time than other crops where you can ‘scratch the earth, wait a few months, and then pick your food’. Kenyan coffee is so good because they take time to cultivate it – that’s a 12-month job! And it takes time to navigate the heavily regulated system that touches (and taxes) nearly every point of coffee production. And, most importantly, with coffee it takes time to get paid.
Nearly everything else a farmer can do in Kenya pays at least monthly. Monthly is good, it’s regular. You can see it, eat it, use it. Kenya is developing so fast that you need money now to afford your house tomorrow.
Coffee, however, is annual, and difficult to plan around. Sure, coffee money is good money, but discounted by doubts on ‘how much are we talking about’ and ‘when will I get paid’. Questions I’d ask myself if I was being asked to do more work.
Turns out that these questions do have answers – we found some clues on our other overnight visit – an attempt to stay at the famous combined Yara Estate and Windrush Farms. Well, we failed, bringing us to the creepy beautiful hilltop that started this story. But it did allow our meeting to continue late into the night, where we failed to get what we wanted out of their farm manager Edward … but still ended up with a more than we expected.
By that I mean that we failed to get any commitment to lot separation or processing improvement – and that was one of my goals for the meeting. Kenyan farmers are conservative, preferring the way their parents processed coffee.
With the quality they’re putting out I’m not one to argue … but I would really love to taste the difference between of Yara’s 12 blocks. Or to see what percent would be floated out if they tried floated before pulping. Or maybe just take a quick measure of the heat in the drum used to skin dry fresh parchment. Or, you know, buy this massive enterprise a moisture meter so that they know when coffee was done on the drying bed.
That said, they are averaging 15 days of drying, and producing primo coffees, so maybe sticking to best practices allows you to cut a few corners here and there.
If it’s not broken don’t fix it, so says Edward, who balked at any change to S.O.P.
So we didn’t get much out of him in terms of experimentation, separation or special preparation – but we are still discussing, and hope to come to some bite-sized compromise soon.
As additional consolidation, we also got from him the story of Gatatha Farmers Cooperative, including the secret to their success.
The Gatatha Farmers Cooperative annual board meeting is in February. Four years ago the discussion was about coffee. Production was down, currencies were crazy. Maybe it was time to get out.
Gatatha is a fifty-year old union with over three thousand members. All it takes is one vocal member to suggest that they sell roadside land for development, that they convert one field of coffee to tea, or to sell-back their shares – and the entire coop can start to crumble away from coffee.
That’s what’s happened to most of Kenya’s larger cooperatives. Market volatility, local and national political, pressure from members for fast money – these claim coop after coop, leaving few coffee-focused shops standing.
But Gatatha is standing strong, growing even. Their secret lies in the fourth dimension.
Sure, they say, coffee is annual. And our members want regular monthly income. Easy enough – all you got to do is put your long money towards investments that pay fast money. That’s to say that annual coffee profits are invested into industries which pay regular monthly dividends to members.
This portfolio approach actually keeps the focus on the farms; the more profit, the more that can be invested (including in budgets, bonuses and staff). The more that’s invested, the more you can expect in monthly dividends. So coffee is the core of the portfolio, and the one sure earner.
This is the argument that was likely made that fateful day in February, when Gatatha decided to double down in coffee. Investments go up and down, they must have said, but coffee allows us to make more investments overall, meaning our downs will less low, and our ups will go a lot higher.
So, the decision was made. Edward was brought in as the turn-around man. Since, he’s invested in pruning, mulching, feeding and soil care. Much of Windrush Farms is already organic; his goal is to get to 100% in the next five years. Production is up, and quality seems to be too. The state of the core is strong.
Their 2019 board meeting happened right after we left, and I’m not sure what was discussed. But I do know that our 2018 sales report was presented to members of the board, and this makes me proud. It has a full physical and sensorial analysis of their coffee, a record of past and planned purchases, a map of where their samples we sent, and a list of their top customers. But more, Edward told me, this was the first feedback they’ve received from customers of their coffee – and consequentially – the first time that quality was expressed in anyway other than outturn at the mill or price at auction.
If good graces hold then maybe, just maybe we can get them to at least separate lots by block. They’d learn a lot, maximize earnings, build new brands and still always have the option to blend it all back together like they do now.
With all they have to gain and how little it’d cost to do – they’d be crazy not to. But when I’d made this argument before Edward had responded ‘if it’s not broken I’d be crazy to fix it’.
Hey, sometimes crazy has its reasons.
Some farmers think it’s crazy to get out of coffee, some think it’s crazy to stay in. The former are finding ways of navigating the new economics, owning more of the value-chain and earning top dollar. The latter leave because of how hard it is to do coffee correctly. This leaves behind only the most far-sighted and serious of farmers in coffee. So, while volumes are going down across the board, the reasons for this are reasonable. And there’s also reason to expect that qualities from quality areas will to continue to increase as volumes shift to new areas outside of the central highlands.
So it’s reasonable to say that what’s crazy to some, can be incredible to others. Like going to sleep on spooky hill, and waking up to an intensely cold waterfall.
The nice part about meeting over dinner is that I was able to find the farmer who asked the question on price. It was a good discussion, but a side-bar to this narrative. Phrases to highlight include “roasters are not in it for the money” and “your business is in your farm, mine is in my suitcase”. The latter was an attempt to explain how I could afford to travel to visit him, when he could not afford to visit me.
If you would like more than 8 samples, please contact a trader directly.