Luis F. Samper
MAKING A DIFFERENCE IN THE LIFE OF THE CAFETERO National Federation of Coffee Growers of Colombia Washington, June 26, 2002
Agenda 1. Background of Colombia s coffee industry 2. Coffee producers and their Federation 3. Colombian Federation services to the coffee communities 4. Two Projects and Examples 4.1: Rural Workshop Program 4.2: Specialty Coffee Program
Background of Colombia s coffee industry!coffee: an industry vital for the Colombian economy "Country s Economic Growth "Industry s Development "Urban Center Development "Communications "Financial Sector "International Trade
Coffee Related Indicators - 1998 Coffee - Growing Towns: 559 towns Country s total: 1.071 Permanent Population: 4 million 10% of the population Coffee - Growing Farms: 551,000 Coffee Growing Area : Farm s Average Size: 3.6 million hectares = 9 million acres (3% of the territory ) 6.5 hectares = 16.25 acres Plantation s Average Size: 1.5 hectares = 3.75 acres
Coffee Related Indicators - 1998 Production (60 Kg bags): Exports (60 Kg bags): 10-12 million (12% of world s total) 10 million (14% of world s total) Exports Value: US$ 0.8-2.26 billion (14-18% of world s export value) Agricultural Employment: 800.000 people (35% of total agricultural employment) Total Employment: 1 million people (8% of country s total)
Coffee is an essential part of our history!generates employment.!improves income distribution!promotes regional development!supported by strong institutions: "National Federation Of Coffee Growers of Colombia "National Coffee Fund.
Coffee producers and their Federation National Federation of Coffee Growers of Colombia!Founded in June 27, 1927!Is a private, non-profit organization, established by growers - NGO!Its mission is to improve the standard of living of the more than 500,000 Colombian coffee growers.
Coffee producers and their Federation Organizational Structure National Committee 10 Provincial Committees 180 Local Committees 4.236 Participating Coffee Growers 308.373
Coffee producers and their Federation Commitments of elected representatives!to defend and represent the interests of the coffee growers.!to maintain a dialogue with coffee growers and communicate their concerns!to coordinate actions dealing with the industry.!to design and implement services and programs that benefit the coffee regions.
Colombian Federation services to coffee communities The Federation as an NGO! Target population: "Growers and their families "Grower community "Coffee region! Decentralized decision making: "Priorities dictated by local community! Funded by: "Grower contributions, donations, international, government
Federation s services to coffee communities! Economic and Agronomic: "Research and development "Direct technical support to growers "Environmental programs "Product diversification! Social: "Education "Infrastructure "Employment & supplemental income "Health "Social security
Infrastructure Investment: Coffee Committees 1998 Infrastructure Investments. Improvement Quality of Life 10% Aquaducts & River basins 20% Housing & Ecological 8% Other 11% Rural Electrification 14% Aprox US$ 10-40 Million Roads & Bridges 37%
Infrastructure Projects financed by the Federation:!Policy: to work in association with government entities.!communities also contribute providing labor or other resources.!the Federation does not profit directly for the operation or investment on infraestructure.!the project is administrated directly by the local community.
Infrastructure Projects Summary AQUEDUCTS ELECTRIFIC. EDUCATION NUMBER NUMBER WASTE PIPE COMMITTEE INFRAEST. BENEFIC. HOUSING CLASSRO. TEACHERS SYSTEMS ANTIOQUIA 1.525 132.783 13.845 4.195 1.265 713 BOYACA 65 4.950 1.741 97 28 38 CALDAS 326 225.915 28.756 1.376 189 275 CAQUETA 17 529 0 110 71 88 CASANARE 2 330 0 20 6 28 CAUCA 460 99.622 3.228 492 391 340 CESAR 32 16.466 1.256 243 31 77 CUNDINAMARCA 365 117.879 21.805 771 345 634 HUILA 224 68.307 11.126 741 387 482 MAGDALENA 27 13.303 753 128 53 59 META 33 2.410 1.261 208 106 88 NARIÑO 135 56.421 7.371 516 104 312 NTE. SANTANDER 124 27.952 3.825 562 322 409 QUINDIO 41 175.604 8.469 962 140 290 RISARALDA 243 105.595 26.889 756 302 382 SANTANDER 562 93.117 9.064 948 403 622 TOLIMA 469 114.984 16.682 1.922 534 598 VALLE 482 264.552 7.987 1.393 645 722 TOTAL 5.132 1.695.257 164.058 15.44 5.322 12.574 Source: Regional Committees of Coffee Growers Production and Social Development Division
Infrastructure Projects (cont) Coffee Committee Road investment (km) Bridges Built Built Improved Vehicles Pedestrians ANTIOQUIA 1.341 2.111 213 169 BOYACA 474 1.073 15 16 CALDAS 1.372 272 50 27 CAQUETA 0 208 10 69 CASANARE 51 154 3 2 CAUCA 234 245 38 85 CESAR 404 4.882 19 6 CUNDINAMARCA 1.127 2.186 388 99 HUILA 1.308 1.592 127 47 MAGDALENA 512 5.631 18 14 META 38 670 74 17 NARIÑO 874 842 5 0 NTE. SANTANDER 296 243 21 338 QUINDIO 219 3.355 41 12 RISARALDA 96 9.894 87 28 SANTANDER 1.041 2.117 119 44 TOLIMA 2.449 17.504 165 146 VALLE 1.71 3.095 87 12 TOTAL 13.546 56.074 1.480 1.131 FUENTE: Comités Departamentales de Cafeteros División de Producción y Desarrollo Social
Diversification Efforts: Rural Workshop Program!Prime example: Industrias Integradas company: "Created in 1974 "Diversifies and stabilizes coffee grower / household income "Produces clothing, footwear and lingerie.
Dagua Venecia CALI Versalles La Tulia El Villar Argelia Ulloa Caicedonia Salonica San Antonio La Ma rina Potrerillo Rural Workshop Program El Villar Argelia Ulloa Versalles La Tulia Venecia Caicedonia Salonica San Antonio Dagua La Marina Potrerillo CALI 12 plants in rural areas of Valle province
Rural Workshop Program! Prime example: Industrias Integradas company (continued): "Achievements: # 850 associates, mostly women, who have a worthy job that is permanently compensated # 12 workshops located at the rural zones # Average compensation: minimum wage plus all social security benefits. # Own lingerie line. # Sales to domestic and international markets
Rural Workshop Program! Industrias Integradas US$ Sales Year Assembling Own Lines Total Sales Services 1.998 3.437.168 331.017 3.768.185 1.999 2.707.531 292.179 2.999.710 2.000 2.758.072 528.663 3.286.735 2.001 2.661.561 895.501 3.557.061
Rural Workshop Program! Industrias Integradas Scaling up bottle necks # Market Access, Market Access, Market Access 2000: CBTPA (Caribbean Basin Trade Preference Act). Result: US Customers cut prices in up to 24% for our services. 2001: ATPA (Andean Trade Preference Act). Similar to CBI treaty. Not approved yet by US Congress 2005: China s access to the WTO and the elimination of their quotas is the biggest challenge ahead. # To Scale Up: Maintain and enhance Quality Standards and Productivity. Growing own lines overcoming distribution and branding challenges and reduce dependency on few customers.
Rural Workshop Program! Industrias Integradas Challenges Ahead # Maintain and enhance Quality Standards and Productivity. Growing own lines overcoming distribution and branding challenges and reduce dependency on few customers. # Colombian Conflict. It has kept international customers from coming. The company is a social company and has never had problems with armed groups, but Colombia s image complicates doing business. # New Markets. Opening new export markets is a crucial challenge, particularly for owned brand (Symphony)
Coffee Income Generation: Specialty Coffee Program! Prime example: La Vereda company: "Community organized in1995 "Brand created in 1996 "Success : Quality, but also on Marketing "Bundles Coffee and Information. "FOCUS: Capture and maintain Value Added to Growers Certification marks and Trademarks
Specialty Coffee Program! Scaling up bottle necks - # Marketing Funds to build brand identity Access # Trademark Protection Easy to Register, Difficult to Protect # Market Size Much smaller than it appears # Roasters and Importers not in favor of Grower Empowerment Love Blends # Vast Majority of Specialty Roasters not really committed to pay higher prices # Vast Majority of Specialty consumers not interested?