“This fund is a bit like a small tree: I nurture and tend it until, one day, it becomes so big that I can rest in its shade”, Colombian coffee farmer José Arias González explains, as he reflects on the benefits of a programme that is supporting him and 850 other smallholder farmers in Caldas, a region famous for producing some of the world’s best coffee.
Coffee growing is incredibly important to Colombia’s economy. However, its future has been threatened by the increasing number of farmers reaching retirement age with no successors in place because young people don’t believe it offers them a viable or sustainable livelihood. The average age of farmers in Colombia is now 53 and as a result, there is a serious challenge to the future of the Colombian coffee industry.
Many farmers have to work well into their later years with no financial safety net. In fact, only 7% of farmers save for their retirement because the majority of small coffee producers like Jose cannot afford to. “The state pension is reserved for those who are better off. The only people who are entitled to claim a pension are those who have been able to contribute at least 190’000 pesos (£42) a month for 25 years. I can’t fulfil the requirement of the state scheme. Although I love my work, there will come a time when I’m not able to go out to the plantation any longer. At that point I will be dependent on family,” says Jose.
Since Nespresso began we have always taken a partnership approach to working with our coffee farmers. So to improve the lives of coffee farmers like Jose, and to make growing coffee a more attractive choice of career for the young in 2014 we partnered with Fairtrade International and the Colombian government to implement an innovative pilot scheme that has since established the first such retirement savings plan for local coffee farmers.
Planning for the future
Recognising the social issues caused by a lack of long-term savings, Nespresso, the Colombian ministry of labour, the Fairtrade-certified Aguadas Coffee Growers Cooperative in Caldas, Expocafé and Fairtrade International entered into a public-private partnership to establish the Farmer Future Program. The initiative, which is supported by the Colombian Coffee Growers Federation and is part of the wider Nespresso AAA Sustainable Quality Program, has brought farmers from Nespresso’s farmer network into the government’s established Beneficios Económicos Periódicos retirement savings scheme that helps Colombian workers who are not already covered by a traditional pension system.
This scheme is particularly beneficial for farmers because the Colombian government has committed to matching up to 20% of savings. “This guarantee of welfare for the elderly is part of the profound social transformation this government is driving and comes with support from the private sector. We are delighted to enter into this partnership with Nespresso, which will allow us to leverage the relationships they have built with farmers in Aguadas over the last 10years,” said Colombia’s labour minister, Rafael Pardo.
To date, 850 farmers have signed up and seized the opportunity to save for themselves, both individually and collectively. Through the Aguadas cooperative they chose to invest part of the Fairtrade Premium paid by Nespresso towards the pension fund. As well as benefitting current farmers, we hope that this scheme will play a significant role in safeguarding the Colombian coffee industry for future generations. Jose says this is already having an impact in his community: “Amongst my circle of friends, there are still young people who want to take over their parents’ business. The establishment of the pension fund will, of course, make coffee growing more attractive to the young people, too.”
Working together towards a long-term solution
It is through partnerships like these that Nespresso is best able to serve the communities where we work - by ensuring that coffee farming is a long term viable career - and provide the highest quality coffee our customers enjoy.
Jose highlights the many ways he has benefitted from support from Nespresso and Fairtrade, enabling him to do business more effectively and ultimately improve the quality of his crops. “The collaboration with partners such as Nespresso has revolutionised coffee growing. This support has enabled us producers to increase our yields and improve the quality of our coffee. I have also learnt to record my production-related activities in writing, which allows me to keep track of my activities and know exactly where I am in terms of income and expenditure,” says Jose.
Michael Gidney, CEO Fairtrade Foundation, said: “At Fairtrade, we are committed to investing in building farmers’ skills so they are in a position to run a profitable business. This scheme developed with Nespresso is truly innovative, because it offers young coffee farmers in Colombia the opportunity to preserve their heritage, whilst being secure in the knowledge that their own and their family’s future is protected.”
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