To Consider: What's a Fair Price to Pay a Farmer for his or her Coffee?

As I write this, we are on our way back from Peru.

This year Robbyn, Banks and I were excited to visit with our producer friends at CAC Pangoa. After seeing glimpses of this season's harvest, we then sat down to speak with the co-op's General Managers about an idea.

We proposed to the General Managers that one of Salt Spring Coffee’s seasonal containers of coffee come specifically from San Juan de Pueblo Libre, a small area in the San Martin de Pangoa region that's home to just 18 coffee farmers.

Over the course of a year, we want to work with these 18 farmers to define the real, day-to-day cost of coffee production in the area. Our goal is to help the coffee farmers define what the price of their coffee should be per pound.

When we asked about a farmer's cost to produce coffee in the Pangoa region the co-op’s answer was: production costs are rarely calculated. This comes as no surprise. Over the years we’ve learned that most coffee farmers do not know their seasonal production costs for things like organic fertilizer and compost, labour and processing. So when it comes time to sell their seasonal harvest, most coffee farmers do not know if they’ve turned a profit or if they’ve lost money.

Why do this?

After years of visiting coffee farms and co-ops we know income security is a constant challenge and that access to credit is limited without sustainable income. If co-ops and farmers have a better understanding of what their income should be, our hope is that they will become less reliant on the coffee commodities market and be better able to forecast and plan for the future.

If the project works in San Juan de Pueblo Libreour hope is that CAC Pangoa will adopt the financial management program on a wider scale, extending it to hundreds of coffee farmers outside of San Juan de Pueblo Libre.

In the long-term, we want to establish a sustainable pricing model that we can adapt to other origins where Fair to Farmer Direct operates, like Nicaragua.