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© Root Capital

COCAFELOL

The outbreak of coffee leaf rust a few years ago hit Honduran coffee farmers especially hard, destroying a large percentage of trees and leading the government to declare a state of emergency in January 2013. After seeing their parents grapple with this challenge, many young people chose to leave rural communities behind and migrate to cities in Honduras or onward to the United States.

Leaders of COCAFELOL—a 338-member coffee cooperative in Ocotepeque, Honduras—recognized that this trend threatened the strength of their community and the long-term sustainability of their business. They began offering vocational training to their producers’ teenage children, in everything from soil health to quality control. When young people complete their training, they can find jobs in different aspects of the business that interest them: not just farming, but also agronomy, cupping, or financial management. The training provides rural youth with decent work opportunities that offer an alternative to migration, while COCAFELOL builds a steady pipeline of young talent that will help the enterprise grow. To run such a strong educational program, COCAFELOL needed a strong business foundation. CSAF member Oikocredit began financing the cooperative in 2013 and the enterprise also participates in Oikocredit’s Price Risk Management program (described in more detail on the following page), implementing measures to reduce price risk and improve efficiency and profitability. COCAFELOL receives additional financing from CSAF members Alterfin, Incofin, and Root Capital, who lend side-by-side as the cooperative’s credit needs exceed the concentration limits of any one lender. The latter has also conducted extensive on-site training to help the enterprise improve its accounting, financial management, and agronomic systems.

Access to credit and capacity building has helped COCAFELOL increase its annual sales more than six-fold in just five years. With a thriving business, the cooperative is able to invest in other services for its suppliers, such as an organic fertilizer production facility and environmental management initiatives aimed at protecting water basins and forests. These services for farmers, coupled with the cooperative’s commitment to creating opportunities for youth in the community, represent the virtuous cycle that is possible when a farmer enterprise can invest human and financial capital in its future.

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