In Rancho Grande, Nicaragua, 221 kilometres from the capital, you find not only natural reserves, but also an innovative business model that has generated a cup of coffee with positive environmental, economic, and social impacts on the families of coffee producers thanks to the win-win relationship promoted by Rikolto and the company Exportadora Atlantic S. A. (Expasa).
A sustainable cup of coffee is changing lives in Nicaragua
The young coffee farmer Óscar Siles (28 years old) is now a role model in the buffer zone of the Kuskawas Reserve, around Finca La Castilla. Four years ago, Siles' 2.11-hectare plot had only maize and beans; now he has Marseillaise coffee combined with 400 hardwood trees, such as coyote (platymiscium pinnatum).
With Expasa's support, he and 18 small-scale coffee-growing families went from having deforested plots of land with pasture or subsistence crops (maize and beans) to having a profitable agroforestry system consisting of coffee of the Marseillaise variety.
The company provides the entire technological package for the establishment and management of plantations, fertilisers, technical assistance and training to increase the quality and productivity on their coffee plantations. All cultural work is carried out and the income from the harvest is divided 50-50 between the producer and the company.
This business has provided a better income due to diversification and improved crop yields. Therefore Oscar now considers himself a partner of Expasa. He calculated the projections and told us, "I plant maize and beans the investment is high, between C$10,000 (U$285) to C$12,000 (U$342), and it generates an income of C$20,000 (U$571), leaving a profit of 8,000 córdobas (U$288). Meanwhile, with the project, if I make C$80,000 (US$2,285), everything is profitable because Expasa pays for all the investments and I am not investing any of my own money. I have a fixed market for my coffee and the day I work on my plot I even get paid for it."
How is a triple impact achieved for the benefit of families like Óscar's? How are inclusive businesses promoted by Rikolto and Expasa? What is the added value of Rikolto's alliance with the company? We tell you about it below.
A business model that is good for everyone
Siles' leadership as a coffee farmer appears to be natural, though it has been the result of the support, learning and strengthening of his capacities through partnership work. Expasa, with the support of Rikolto, implements an Inclusive Business Model, considering the coffee value chain approach from an "anchor farm" which is La Castilla.
This case is a model for working on different innovations on neighbouring producers' farms, guaranteeing the provision of plant material, inputs for establishment and maintenance to producers.
We generated evidence and lessons on models of agroforestry systems and inclusive businesses in plots of 80 owners of degraded land, located in La Castilla and Kuskawas.
The producers taking part in this initiative with Expasa and the roaster have entered a differentiated market cluster, in which they receive a premium over the price at which the market closes in New York and have an additional 70 dollars.
Molina explains that the case is a practical example of how, in dialogue, a company can make a difference and achieve a triple impact. With these results, in the second phase Rikolto contributes to the analysis of the business model to improve it.
Alpízar pointed out that the model ensures that actions developed jointly between La Castilla and the farmers' small farms will better amortise investments and direct expenses (transport of inputs and harvesting, external certification and joint wet processing, among others). They also have an impact on the landscape and generate environmental resilience in the project's area of influence.
From carbon sequestration to landscape improvement
"The partnership with Expasa intends to manage more resilient production systems. Working with agroforestry systems allows us to move towards carbon-neutral production and resilient production landscapes, a commitment we have in the continent," explains Mariela Wismann, director of Rikolto's coffee programme in Latin America. Through its social arm the Nicafrance Foundation, Expasa is annually monitoring the carbon sequestration of shade trees associated with coffee plantations with agroforestry systems.
Evidence of joint FFS in Nicaragua
In Nicaragua, Rikolto and Expasa have been working together since 2019 to implement pilot cocoa plots under agroforestry systems (AFS). The company provides technical assistance and training in cocoa management and Rikolto keeps records and evidence of good results in productivity and income in resilient and sustainable cocoa, in order to share knowledge so that these technologies and good experiences can be replicated.
To date, Expasa's role has been fundamental in broadening the impact from economic to social and environmental. Families like the Siles family have changed their attitude towards the forest thanks to the programme promoted by Expasa's Nicafrance Foundation: "My 9-year-old boy participates in the project's activities. He goes to the countryside to watch birds. The project has been teaching him that they are the future," he says about his son's participation in the bird-coffee initiative with school children.
Inclusive business with added value
At the same time, the innovative model has improved the livelihoods of the people who live in the project's impact zone. "Cups of coffee are produced with sustainable social impacts," says Alpízar. For his part, Siles states with great conviction that the quality of life of his family has improved: "My wife and my children are happy - now the little house has a floor where before it was made of earth, there is an improved cooker, we changed the roof of the kitchen, we have a dishwasher, bathroom with a shower, a laundry machine and a filter," he adds.
Aldo Antonio Chavarría, a farmer in the second phase of the project, says that everything has improved on his little farm San Antonio. Not only did he go from having pastures to having Marseillaise coffee with precious wood, but also his wife and children are in a better environment. The sooty roof and walls are a reminder of the air pollution from the wood smoke in the house. Now the family has an improved cooker with a fireplace, and he says "the health of the family has improved."
Wismann comments that the installation of improved cookers or fireplaces prevents the felling of trees (an activity commonly associated with coffee production) and creates better living conditions for families. "Thinking about their well-being is part of the inclusive business - the home improvements are part of the added value of the relationship.”
Expasa also provides training to producers to improve the management of their farms, for certification and marketing. As part of the constant innovation and value chain approach work, evidence gathered with Rikolto's support and advice to the company allows the commercial strategy of organic plots with agroforestry systems to be aligned with a development plan for technical and commercial capacities.
The innovative and inclusive model promoted with Expasa with anchor farms, in collaboration with Rikolto, has had a spiral impact of benefiting some 300 people. The company plans to replicate this success with more non-associated producers and grow beyond Rancho Grande to the Yali area. The idea is to strengthen the model based on evidence, and to continue learning from it with companies and producers in the country and the region so that more people continue to consume cups of coffee with social and environmental impacts.