Red Associations help farmer groups achieve their self-identified goal :
To achieve stable and sustainable prices for community coffee lots through improved quality control, shared knowledge, and a connection to the specialty coffee market. Red in Spanish means network, representing the producers and roasters working together to create a sustainable value chain.
At present, hundreds of families in the association sell their washed coffees in wet form to drying station intermediaries. In the past they would dry their own coffee and sell it on the commodity market; not for a high or predictable price, but at least capturing that valuable step of the process. Wet selling is a new situation, brought about by climate change which has exacerbated an already challenging situation for farmers. Rainy seasons continue far longer than before, rendering traditional farmer-owned drying facilities unsuitable.
Modernised drying solutions are required, however, the cost puts this out of reach for most. This is where drying businesses have popped up as a temporary solution, buying small amounts of wet coffee for very low prices from farmers, and transforming them into large lots of dry parchment. The drying station operators, in turn, sell parchment coffee to dry mills. The price of this parchment coffee changes daily, dictated by the commodity market and physical characteristics of the coffee.
The unpredictable sale price forces drying station operators to offer extremely low prices to farmers.
Together through Red Associations, we are building the required infrastructure to re-enable drying by producers, then progressing further as a team to include steps traditionally downstream of producers: sample analysis, roasting, QC, and separation of lots by value based on quality. These steps result in the average income per household through coffee increasing by 2.5 times.
Facilitating funding and construction of joint infrastructure, so farmers can recapture the recently lost value-adding steps of production (drying and parchment selection).
Providing facilities for processing, QC, and preparation of coffee specifically for the specialty market, all managed by Red Association members.
Delivering production and farm management system training, focussing on improving coffee quality while also controlling costs.
Guaranteeing the purchase of coffee for a stable and sustainable price, through the network and connection with roasters. This system gives farmers transparent understanding of the value chain and costs.
Connecting producers and roasters through internships and workshops, allowing the flow of market information in both directions.
Through this model, producers have a sustainable reason to invest in quality.
Prices & Cost of Production in Colombia
PRICE AND COSTS OF PRODUCTION IN COLOMBIA
The cost of production vs sales price graph above is in Colombian pesos (COP) per carga, the currency and unit used to trade coffee in parchment form in the country. From the farmer's point of view, it shows the cost to produce the parchment coffee, and the price it could then be sold for across the last 10 years. On the right, is the proposed future scenario for Red Associations members.
As a producer member of Red Associations (note: you can also be a roaster member) the price for parchment is stabilised. The orange arrows depict a range of prices above the minimum for microlots, based both on final quality and on a member's demonstrated committment to the community's best production practices (this is a team effort, and individual effort is valued).
Note, we have accounted for an increase in the cost of production corresponding with joining the Red Associations supply chain. This anticipated increase in the cost of production takes form through investment in farming practices: improved wages for those who pick cherry, shade trees, and other practices that increase the quality of production. This way, the increased costs are more than accounted for through the simultaneous increase in sale price.
Funding & Support
With the new infrastructure in place, we can ensure high quality is achieved, and predict the resulting cup profile throughout the season. Controlling processes to ensure that the resulting flavour surpasses the roaster member's quality threshold, is to also know the minimum price the green coffee will be sold for. This knowledge lowers the need for buffers and allows for a predictable, high parchment price to be received by producers.
For producer members, these systematic changes result in 2.5x the profit generated through coffee, compared with the average income over the past 5 years.
These commitments from roasters are a vital part of the transition from low-value wet-selling, to successfully producing for the specialty market.
Farms that excel, grow rare varieties, and take on new processing techniques, will keep their microlots separate from the community blend. As a show of appreciation, producer members have chosen to offer these coffees first to roaster members before they are made available to other Raw Material customers.
Internships & Workshops
Each harvest season an internship opportunity will be offered to founding roasters in the cupping labs within the Red Associations. The interns will help with QC and lab management, all whilst improving their Spanish, and understanding of coffee. These internships serve to maintain a vital connection between farmers and roasters.
Alongside this, Raw Material provides ongoing QC and management training for the lab managers and Red Associations members. Agronomy workshops for specialty production will be provided by both the RM team and guest consultants.
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