Status update — November 12, 2019

Kiva and Federación Campesina del Cauca (FCC) have agreed to end their partnership after 6 years and more than $36,000 in loans raised. This partner has repaid its outstanding balance to Kiva in full, and these funds have been distributed to lenders. We thank FCC for the years of collaboration and wish them success in their future endeavors.

Kiva conducts regular, ongoing monitoring of all Lending Partners, but only posts status updates here in response to relevant, major changes at the partner.

Partner Description:

The Federacion Campesina del Cauca (FCC) is a non-profit federation of coffee associations in Colombia that helps farmers improve the quality of the coffee they grow. Founded in 1971, it groups six coffee grower associations based in small rural towns outside the city of Popayan.

With the help of national and international organizations and governments, FCC created a development plan and received training on how to produce higher quality coffee for markets in the U.S. and Europe. It was first licensed by the Fairtrade Labeling Organization (FLO) in 2004, and today is certified to produce conventional and organic coffee.    

Fair Trade guarantees farmers a minimum price, and links farmers directly with importers, creating long-term sustainability. Through Fair Trade, farmers earn better incomes, enabling them to hold on to their land and invest in crop quality.

The majority of FCC’s coffee growers are poor subsistence coffee farmers who possess on average 1.2 hectares of land (less than 0.005 square miles). Around 80% to 90% of these coffee growers are among the poorest segments of Colombian society, as measured by the national “estratos” system.

Today, out of 689 coffee growers, only 44 have adopted organic techniques. The conversion process requires time and significant financial resources that the Federation is currently lacking. Farmers cite high costs as the main barrier to converting to organic production.

Kiva lenders’ funds are used to help coffee growers convert their conventional coffee crops into organic coffee. With Kiva loans, they have a great opportunity to use sustainable practices that help the environment and limit the impact of climate change in their regions. Given the length of the conversion process, farmers have the option to utilize loans that have three-year terms.

A unique lending approach:

Becoming Fair Trade Certified has impacted coffee producers greatly by offering them access to markets in the United States and Europe. Working together, they have strengthened the vision of the federation, focusing on its social and environmental values. The Fair Trade model has generated increased self esteem because the federation members have direct contact with their clients. They now are very focused on quality and consistency and are much more responsible with how they regulate themselves.

The organic conversion process takes time and requires initial income losses. Nonetheless, the long-term return on investment is rewarding both from a financial and an environmental perspective. Kiva loans will enable farmers to conduct three types of activities that lead to the organic conversion of their crops including a) purchasing and planting of new organic crops, b) maintenance that involves the purchase of fertilizers, machines to grind collected waste, etc. and c) wet and dry coffee processing methods.