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Helping Farmers Cash in on Specialty Coffee

TechnoServe assistance is helping Nicaraguan coffee farmers to boost their incomes by catering to the more lucrative and expanding specialty coffee market.

Since trading their guns for plows at the end of the Nicaraguan civil war, Modesto Reyes and his fellow coffee farmers have transformed the community of Pueblo Nuevo, with better health services and new education facilities for its children and stable livelihoods for hundreds of men and women. Reyes belongs to the Agricultural Services Cooperative for Coffee Export (COOPSAEC), a TechnoServe-created group of 20 small- and medium-scale growers.

"Every human needs a challenge," Reyes says. "You have to dream." The farmers of Pueblo Nuevo always hoped to alleviate their community's poverty. With TechnoServe's assistance, that dream has become reality and set an example for coffee farmers throughout Central America.

In 2006, COOPSAEC earned more than $600,000 and paid an estimated $179,000 in wages to 540 seasonal and full-time workers. It earmarked a portion of its profits for a community development fund, which has already provided medical supplies to a local clinic, purchased land for a new health center, and financed the construction of three new classrooms in the local school.

Such improvements seemed unimaginable a few years ago. Nicaragua's economic well-being has long been tied to coffee, with coffee workers making up more than half of the country's rural workforce. When coffee prices plunged at the start of this decade, more than 85,000 Nicaraguans lost their jobs.

TechnoServe has worked with Nicaraguan coffee farmers since 1992 to get market information, establish contacts with buyers, meet buyer commitments, improve quality and obtain financing. Since the coffee market crash in 2000, TechnoServe has used funding from U.S. Agency for International Development, the U.S. Department of Agriculture, the Inter-American Development Bank, Procter & Gamble and other donors to help coffee industry stakeholders such as COOPSAEC to adapt to the crisis and create new jobs and opportunities.

TechnoServe helped to establish COOPSAEC in 2001 and identified for its members the optimal agro-climatic conditions for high-quality coffee and their opportunities in the burgeoning global demand for specialty coffees. With TechnoServe's technical assistance, COOPSAEC raised $85,000 and renovated its central wet-mill facility, which TechnoServe business advisors helped the group learn to operate and maintain. The resulting high-quality coffee fetched a 25 percent premium in a long-term contract with an American buyer that TechnoServe facilitated.

COOPSAEC's coffee has since gained an international reputation. In 2005, one of its members ranked among 60 semifinalists in Nicaragua's Cup of Excellence© competition.

That same year, TechnoServe helped COOPSAEC introduce a bio-digester system to remove 90 percent of the contaminants from its wastewater and comply with Nicaragua's new environmental laws, the first cooperative in the country to do so.

Modesto Reyes is one of the people whose lives have been transformed. When Reyes was 17 years old, he was handed a gun and forced to go to war. After the war ended in 1990, Reyes bought a small piece of land and became a farmer, yet despite his best efforts, he lacked essential skills. Before long he was forced to sell his land. Undaunted, Reyes started over, this time with support from TechnoServe.

As a founding member and Treasurer of COOPSAEC, Reyes has personally benefited from its work with TechnoServe. His coffee yields have doubled; he has paid off his debts and installed electricity; and he has reinvested his profits in another farm. Reyes no longer considers himself merely a coffee farmer. "Before, we were producers," he says. "Now we have a vision of the market, commercialization, how to find markets, and quality."