PARTNERSHIPS FOR PRO-POOR GROWTH
Specialty Timorese coffee gains confidence of high-end buyers through first-of-its-kind testing facilities
Economic Constraint Coffee has been grown in Timor-Leste for centuries and is one of the countries only export products. But there are only a few large and medium scale coffee buyers, processors and exporters who cater to commodity markets for coffee, which rely more on volume rather than quality of coffee supplied. While Timorese coffee is held in high regard and is often organic, none of the companies invest heavily in quality management at the farm level. This leads to lower overall grades of coffee which can’t be sold to the higher end, premium markets and farmers are not given good prices for their coffee. Additionally, most of the processing and grading takes place out of reach of coffee farmers and few farmers are aware of what high quality coffee means. With falling volumes and quality as a result of poor plantation management, the quantity of coffee will not be large enough in the medium term to be competitive against other exporting countries. Therefore pursuing a smaller scale, but higher quality coffee processing model will enable supply to high end markets and fetch higher prices. Women are largely involved in different roles in coffee production, primarily, harvesting and drying. The latter two functions add value to the beans and earns more per kilo compared to green beans. Models that support procurement of dried parchment contribute more to women’s involvement and farm income. Additionally, as boutique coffee markets are growing globally, high quality Timorese coffee, with its organic nature and overall improved quality, would do better than in commodity markets.
Partnership Solution MDF invested in a partnership with Café Brisa Serena, a coffee buyer and exporter based in Letefoho, Ermera to institutionalise quality consciousness and quality management practices across all levels of the business, beginning from sourcing to processing, grading and exporting. This leads to more consistency in the quality of coffee harvested and processed, giving more confidence to high-end buyers about the product quality. This is leading to new high-end buyers making larger orders, which eventually translates to more income for farmers as Café Brisa Serena purchases more coffee from farmers to satisfy growing demand. MDF shared the costs with the business in the following activities: •
Establishment of a quality management system, supporting the cost of experienced coffee quality and supply chain management consultants to build the skills of café Brisa Serena management and staff about quality control.
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Establishment of a cupping laboratory, which will help test large numbers of coffee batches, with higher degrees of consistency and traceability. This also included support to the business in purchasing a vehicle for regularly collecting and transporting coffee samples. Such a facility and the ability to test and archive the test results of large batches of coffee allows the business to trace problems with quality as they arise and address it effectively, all the way down to specific plantations.
Early Signs of Pro-Poor Results The new cupping laboratory is installed and is fully functional. The lab has enabled Café Brisa Serena to taste and grade coffee in a consistent manner adhering to international standards. This improved confidence of existing clients and attracted new buyers is allowing Cafe Brisa Serena to trade larger volumes of coffee. Last season, they were able to sell approximately 100 metric tons of coffee, out of which 41 tons was sold solely because of buyers’ confidence through the new laboratory facility. These additional sales resulted in increased net income of USD 185 per farmer earned by approximately 540 farmers (half of which are women). Improvements at the farm level and grading/standardisation of coffee quality at the trader level is becoming increasingly important. The private sector along with relevant government agencies and development partners are discussing the formation of a national coffee board that aspires to bring key players in the coffee industry together to address critical issues around coffee production and export. Café Brisa Serena and MDF are playing a central role in collaboration with other stakeholders to realise this vision.