In most coffee producing countries, you’re hard pressed to find anything better than Sanka at a restaurant or hotel. Ironically enough, the good stuff all gets exported. Rwanda has made it a point to eliminate this stereotype by serving excellent local coffee at any opportunity and promoting Rwandan coffee through official and private means.
James Dargen is director of procurement and sales for Rwanda Trading Company, a year (or so) old coffee producer in Kigali who are now responsible for more than 15 percent of the country’s coffee exports. The company came into existence by buying out a failing state-owned export firm and rebuilding it into what has become a fast growing ambassador for Rwandan beans. James sat down with us last week to talk a little bit about how coffee is improving lives beyond just waking up in the morning.
According, to James, RTC recognized a number of problems in the coffee market. In addition to a general lack of awareness about the high quality of Rwandan coffee, there were too few reliable suppliers for major buyers (think Starbucks) to get the volume they needed. To make matters worse, the actual farmers were getting the short end of the deal – scraping by on low quality, low cost coffee whose potential for real profit was lost to middlemen and bad yields. The primary reason? Lack of education in terms of cultivation techniques and poor basic business skills. A Rwandan farmer’s expected sale price is around 1/3 of a Guatemalan farmer’s price. This means a casual farmer could expect to get less than $100 for 200 trees worth of coffee in a year.
Besides wanting to make great coffee, RTC has had a social mission in mind: to create value for their customers by creating value for their producers. To learn how this value could be created, the company teamed up with Technoserve, a non-profit development group whose aim is to find “business solutions to poverty.” Technoserve’s regional director for coffee, Paul Stewart, shared the ways they have helped RTC and other coffee producers work more closely with local farmers.
Firstly, coffee farmers get some basic lessons from Technoserve in quality control and washing techniques. If coffee is harvested correctly and washed properly in what are known as washing stations, it can be classified as “specialty coffee” which earns significantly more than haphazardly collected beans dried in the sun. Secondly, correct application of fertilizer can triple yields in a matter of 3 or 4 seasons. The Rwandan government offers subsidized fertilizer but Technoserve steps in to demonstrate to farmers how best to use it. This is a time consuming process as results are not typically visible for years.
Technoserve and RTC also provide loans to coffee cooperatives to construct “wet mills” – higher quality washing stations where farmers take their beans to be prepared. More basic financing for day-to-day expenses while farmers are waiting for crops to be ready to harvest is also available. Additionally, RTC ensures an impressive degree of price transparency to farmers and buyers alike by allowing farmers to track the ultimate destination of their beans and monitor the end-price to give them some idea of whether they are dealing with a fair buyer. This type of tracking goes both ways, though to date, has not resulted in significantly higher prices paid by buyers interested in demonstrating their transparency to customers, according to James. However, it does wonders for farmers who had previously very little experience with even basic accounting.
All in all, the economic impact of Technoserve and RTC directly employs or benefits thousands of farmers and employees, doubling or even tripling the income of many. With rapid growth in the Rwandan market, coupled with a generous demand for coffee abroad (and even locally) the economic benefits are obvious. The social side, however, may even be more impressive with farmers being able to afford school supplies for their children, better nutrition, and taking the first step on the ladder out of bare bones poverty.