How Ethical Supply Chains Transform the Lives of Smallholder Coffee Farmers

If you drank coffee this morning, there’s a good chance your coffee beans were grown by smallholder farmers. In fact, 25 million smallholder coffee farmers produce the majority of the world’s coffee. These farmers are part of a larger community of 500 million smallholder farmers that produce 70 percent of the world’s staple food crops.

By producing such a significant percentage of our crops, these farmers are a crucial part of our global food supply. Supporting and sustaining them will ultimately improve our global food security.

The coffee community — as a united, thriving industry — can help by building traceable, transparent, and impactful supply chains while improving farmers’ access to training, resources, and markets. If these supply chains sustain smallholder coffee farmers, they can be modified to support farmers of other crops.

We caught up with leaders from two of Solve’s members — Konrad Brits, CEO of Falcon Coffees, and Brian Lovejoy, Coffee General Manager at Califia Farms — who work together to build a better agricultural system and a more equitable world.

Read on to learn what they’ve done so far and how you can get involved.

Tell us a little about what you’ve done with your coffee producers so far.

Rwanda Trading Company (RTC), Falcon’s sister company, operates as a coffee export company based in Kigali, Rwanda. RTC designed and deployed an Agronomy Training Program for smallholder farmers, focused on agronomy training and financial literacy. The results of this program are impressive. Coffee yields are up 211 percent across 15,000 households and income from coffee increased by 82 percent.

Leveraging this success, we won a $2.5 million grant from MasterCard to provide similar training to 50,000 farmers in Uganda. These farmers make up one of Califia’s supply chains. We expect to see an increase in production, quality, and household income over the next three years.

We’ve heard about your joint projects between Falcon and Califia. How did that relationship start?

The owner of Califia’s coffee roasting partner worked and lived in East Africa, where he managed a $47 million coffee program funded by the Bill and Melinda Gates Foundation. This program sought to double the income of smallholder coffee farmers. Falcon helped by standing as financial guarantor for 113,000 farmers in Ethiopia, enabling them to access working capital credit for the first time. The project was enormously successful.

It seemed natural that we leverage that success across a broader range of countries and communities. Uganda is the genesis of our partnership aimed at building intelligent supply chains.

What technology have you used successfully?

Our partner in Uganda is Great Lakes Coffee Company. They built an Android app that captures the data of farmers in the Ruwenzori Mountains, a border region between eastern Democratic Republic of Congo and western Uganda.

It’s one of the most remote coffee regions, straddling a conflict zone and home to some of the most marginalized smallholder farmers in the world. The app captures the GPS location, farm, and farmer profile of each farmer in a given supply chain. For the first time, these farmers have a profile and voice through our collaboration.

Falcon already successfully works in three countries. What comes next?

We want to apply this formula to every one of the 18 origin countries in which we work. In doing so, we will raise living standards in hundreds of thousands of households, create environmental awareness through Good Agricultural Practices, and fundamentally change the way agricultural commodities are sourced and traded. We are changing the supply chain culture from competitive to collaborative, from predatory to nurturing.

Consumers, companies, and governments demand greater details about the provenance, ethics, and sustainability of supply chains. Today, first generation models of sustainability place cost burdens on farmers through audit fees and on roasters and retailers through royalty fees.

We challenge the notion that ethical sourcing carries a premium price tag. As technologies evolve and merge, the ability to capture data in greater granularity and sophistication will increase, while becoming cheaper.

To this end, Falcon is building The Blueprint Project, a service platform comprising digital traceability, economic transparency, and credible socio-environmental impact.

What technologies are needed?

Coffee supply chains are inefficient, opaque, and analog in terms of how transactional data is captured, if at all. We need guidance and assistance from the tech community to help us understand what technology is available for us to deploy in supply chains for mutual benefit and improved stewardship of natural resources.

We need affordable technology that allows every farmer in every supply chain to be traceable, both as a person and as an economic participant. Califia wants to connect the smallholder farmer to the end consumer enjoying the fruits of their labor. Many would show their appreciation via a direct loyalty connection.   

Your focus has been on agriculture. How does this impact broader markets?

Smallholder farmers are often profiled as marginalized communities in impoverished countries. Within the sustainability movement, this socio-economic label has led to a culture in which buyers adopt the mantle of donors through price premiums, casting farmers as aid recipients. This is not sustainable on any level.  

We need to recognize these communities as vibrant places of economic opportunity. Farmers know what they need to do to overcome the challenges they face. They simply lack access to resources such as credit, training, and markets.

We believe that by building a digital platform offering credible traceability and economic transparency, we can convert our supply chains into marketplaces where these communities can access products and services previously unavailable to them. This is turn creates efficiency and drives down costs, while increasing revenue to farming households. If we can do this in the coffee industry, the Blueprint platform will be transferable to all agricultural crops.  

How can other organizations get involved?

By working with Solve, we hope our supply chains will inspire tech communities to test and deploy new innovations that could help other remote, rural communities. We also hope to attract innovative companies that see our networks and contract infrastructure as business opportunities — a means to build and access new markets. We plan to invite participants in other agricultural commodities and Solver class members to join our network and collaborate with us via their technologies.

Solve is eager to connect more groups — and Solver class members like TruTrade and Ignitia — working on supply chain sustainability. If you’re interested in joining the effort, please contact me at alexander.dale@solve.mit.edu.

Workers with the Women and Technology Solver TruTrade weigh produce from their crops. (Photo courtesy of TruTrade)