COOPCAB,
a Haitian coffee co-op that now includes 5,000 members, markets its products
internationally while investing money in local reforestation efforts.
By Daniel Jensen
February 1, 2013
On the third anniversary of the
quake that killed nearly 300,000, a growing coffee co-op is writing its own
success story with loans and homegrown management.
Haiti can seem like a place
where relief efforts lead only to more disasters, especially in the
agricultural sector. Though 70 percent of Haitians are farmers, 60 to 70
percent of the country’s food is imported due to reduced tariffs designed
to lower food prices. Meanwhile, further natural disasters have hindered
recovery efforts and the Clinton Bush Haiti Fund has announced that
it is winding down operations, removing an important source of funding.
At the same time, American lawmakers
recently extended farm
legislation, including subsidies that allow U.S. agricultural imports to undercut
the prices of local Haitian products, which are often produced using
centuries-old farming techniques.
This is why agricultural lender Root
Capital is providing loans and consulting expertise to COOPCAB, a
Haitian coffee co-op that markets its products internationally while investing
money in local reforestation efforts that improve its own production. The
cooperative, which has expanded six-fold under Root Capital’s guidance, now
includes 5,000 members and has attracted the attention of dignitaries such as
Paul Altidor, U.S. ambassador to Haiti.
Managing COOPCAB comes with its own
set of challenges. Meeting them requires a model that creates local business
leaders rather than simply employing foreign relief workers. Root Capital’s
Willy Foote explains:
"COOPCAB ... is managed by
local Haitian farmers with little formal training in financial management and
accounting. ... As a consequence, we’ve had to innovate and hone our business
model in Haiti, slowing our lending in the short term while accelerating and
deepening our financial advisory services program."
Perhaps it is this emphasis on training that has made COOPCAB
more successful than similar efforts. Critics complain that Haitian farmers
focus too heavily on short-term projects, preventing long-term success. They
point to the Federation des Associations Cafetieres Natives, a coffee co-op
that received $10 million in investment but failed to produce sustainable
profits. The brand now exists on paper only.
Government
bureaucracy and outdated farming methods also stand between Haitians and their
success. There is the story of Steeve Khawly, a rice importer who
tried to bring commercial rice milling to Haiti. Because Haitian farming is
less efficient than modern practices in developed countries, local farms did
not produce enough local rice to make Khawly's effort profitable, so he packed
up his mill and sent it back to Guyana.
He
still believes that rice production in Haiti could exceed 160,000 tons per
season if agricultural practices were modernized, but this would require large
inflows of capital and the strengthening of supply chains. However, when
commercial producers Riceland
Foods tried to move production to
Haiti, they ran up against impenetrable red tape, foreign policy reports, and
eventually gave up.
There
are signs of hope, however. Soon, Haitian entrepreneurs may find new
opportunities to replicate COOPCAB’s model, as Ambassador Altidor has asked
Foote to help advise formal policy decisions. Haitian minister of agriculture
Thomas Jacques also plans to create a rice commission focused on increasing
domestic production through the creation of "technology packages” for
farmers.
Without
further access to capital and a government that simplifies the investment
process, agriculture in Haiti can’t succeed. However, to transform Haiti from
an aid-dependent economy to a market-driven one, startups also need to have
good business sense. COOPCAB’s emphasis on training producers to be businessmen
and letting local Haitians take the lead points to a model that other startups
and social enterprises could emulate.
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Learn more about COOPCAB at its website.
This article originally appeared at Global Envision, a blog
published by Mercy Corps on January 22, 2013.