Social Enterprise Supports Nicaraguan Farmers

By Annie McGrew Staff Writer

A new Goizueta Business School social enterprise is trying to bridge the ever-growing gap between coffee consumers and coffee farmers by ensuring fair pay to coffee farmers.

Farmers to 40 provides excellent coffee to consumers while returning 40 percent of the retail price of a bag of coffee directly to their partner farmers in Nicaragua, according to Peter Roberts, co-founder of Farmers to 40, B-School professor of Organization & Management and academic director of Social Enterprise @ Goizueta, a program focused on utilizing business skills to achieve meaningful and enduring social impacts. Jon Thompson, who invested in one of the farms that works with Farmers to 40 is the other co-founder of the enterprise.

Farmers to 40's high level of return is rare in the specialty coffee market, according to Roberts.

Roberts said that other coffee companies such as Counter Culture Coffee and Bird Rock Coffee Roasters offer transparency reports and indicate on their coffee what percentage of their price goes to farmers. However, Counter Culture only gives their farmers 20 percent of the value of the coffee, half as much as the 40 percent that Farmers to 40 guarantees to its farmers, according to Roberts.

The mission of Farmers to 40 is to "encourage economic development within coffee-growing communities by adequately and transparently compensating farmers for the time, skill and effort required to grow coffee beans of the highest quality," according to the Farmers to 40 website.

With multiple locations in Atlanta and Alabama, local coffee shop Octane Coffee is the exclusive roaster of Farmers to 40 coffees. The coffee can also be purchased online through their website.

Roberts said that he has always been interested in specialty coffee markets and how they work, and he began taking regular trips to Nicaragua to visit coffee farmers about five years ago, before Farmers to 40 was officially started in October 2013.

Farmers to 40 is now working with three local farms in Nicaragua: Finca El Petén, Finca Los Pinos and Finca Los Maderos.

When the enterprise was working with two farms, both were run by male farmers. After the first visit to the farms, some visitors asked why they weren't representing any female coffee farmers.

"Our answer was that we just hadn't met one yet." Roberts said. Farmers to 40 then assured that their third farm, Finca Los Maderos, was run by a woman. Roberts added that Farmers to 40 will never own a farm but instead seeks to help local coffee farmers who are too often underpaid for their services.

Two important objectives for Farmers to 40 are sustainability and transparency, according to Roberts.

Roberts noted that Farmers to 40 ensures that its farmers use sustainable practices, such as using fertilizers instead of chemicals.

"[We work with farms who] are growing coffee the right way" Roberts said. "So you don't have this thing where, in order to grow coffee, you're cutting trees down, you're applying pesticides, you're making the value of your land temporary. That's not going to help the folks in Nicaragua long term. [We want to create farms that are an] ecologically sound engine that will keep growing coffee, in essence forever."

Roberts said that transparency is one of the most significant factors in the enterprise.

"I'm a believer that markets work when everybody that contributes gets paid appropriately." Roberts said. "There's so much talk that goes around about what coffee consumers should want from coffee growers and the relationship that roasters have with growers, but there's so little transparency in terms of what coffee growers are actually getting paid."

Robert's hope is that by putting information about how much farmers are paid into the market in a very accessible way, the market itself will decide what's the appropriate share. According to Roberts, Farmers to 40 would like to normalize fair pay for farmers, forcing consumers to question why certain coffee roasters pay some farmers less than others.

"It's this kind of pressure, we hope, that will ultimately kind of allow all farmers to at least have better leverage." Roberts said.

B-School Bachelor of Business Administration (BBA) student Aamil Sarfani wrote in an email to the Wheel that Farmers to 40's commitment to transparency allows the consumer to connect with their purchase in a way that they couldn't before.

"Knowing exactly how much of one's purchase goes to the farmer gives the consumer a tangible impact that can be measured and forces the consumer to question what the current prices are that are being paid to farmers." Sarfani wrote. "This farmer-centric strategy is the reason why I believe in their social endeavor."

Kaili Delp, a B-School MBA student and a second-year student in the Rollins School of Public Health, wrote in an email to the Wheel that her favorite part of being involved in Farmers to 40 was learning about where coffee comes from and all of the steps that go into making a cup of coffee.

She also noted the importance of Farmers to 40 in being an example of "organic agriculture done right." She called Farmers to 40 an example of true fair trade, adding that giving 40 percent of the cost of a pound of coffee to the farmer is what they deserve.

In the future, Roberts would like to work with more farmers in Latin America and would like to see Farmers to 40 continue to sell more coffee, creating increased revenues for the farmers. He also would like there to be an improvement in the certification for fair trade coffee roasters in order to more accurately reflect the amount that farmers are paid.

– By Annie McGrew, Staff Writer

Correction 11/28 2:34 p.m.: This article was updated to correct the statement that Aamil Sarfani is a Master of Business Administration (MBA) student. In actuality, he is a Bachelor of Business Administration (BBA) student. 

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