Social and ethical issues have always been at the forefront of what we do here at DOMA. We are running a business so profits do matter, but the ethical and fair treatment of our producing partners has never taken a back seat to profit in our 13 year history. We have accomplished this in the past through membership in the Fair Trade Federation which is focused on the nine principles of Fair Trade, transparency through the use of FairTradeProof.org and by being a member of Cooperative Coffees, a green-bean buying coop that is focused on Fairly Traded, Organic coffee with an emphasis on social justice.
This past August, our very own Rebecca and Jim traveled to Minneapolis for our Annual General Meeting for Cooperative Coffees. On that trip they met Joe Newhouse who works with an organization called Grow Ahead. They came back and Rebecca could hardly contain her excitement and a partnership was born.
:: The Problem ::
Most of the world’s coffee is grown by farmers on small plots of land. The average farmer produces very little coffee; around 1,000-3,000 lbs. of exportable, unroasted coffee. While this seems like a very small-scale operation, coffee is traded globally in huge shipping containers that contain hundreds of bags. Many of these small farmers have banded together and formed fair trade cooperatives, where their coffee gets grouped together and exported in those large shipping containers. One of the biggest struggles for small farmers is the acquisition of financing for their crop, year to year. These expensive conventional loans can decimate the small profit margins and in turn, force farmers to choose between feeding their families and investing profits in farm improvements.
:: The Solution ::
There is a definite trend in consumers being more aware of the products they buy, and a desire to be an active part of the supply chain. Grow Ahead allows the consumer to become an active part in the chain that puts food on their table and coffee in their mugs. Just like the coffee that is grown buy a myriad of small-scale producers, Grow Ahead collects small loans from coffee drinkers. This provides a way for coffee drinkers and farmers to do business together and it has helped provide a more sustainable financial model for farmers. Whether you make a small or large loan, Grow Ahead will aggregate your funds towards a container of coffee from a small farmer organization. Right now, the co-op that Grow Ahead is working with is APECAFORM in Guatemala. This will be the third container that Grow Ahead has funded.
:: How It Works ::
The whole process starts when you sign up and lend some money. The money that you lend will be used to pre-finance a container of coffee from APECAFORM. Your money will be transferred to APECAFORM, which will allow them to purchase coffee from the farmers who are members of their Co-op. To help cover operating expenses, Grow Ahead will charge APECAFORM a fee for the money loaned. This fee is different for every producer, and is negotiated every lending cycle. The reason why these fees are charged is to create a sustainable financial model: not only do they help with Grow Ahead’s operating expenses, but they prevent Grow Ahead’s loans from being unfairly competitive and disrupting local financial markets.
Once you have created an account and lent money, you can log in anytime to see your personalized timeline page. Updates on the status of your loans will appear on this page and once the container has been purchased from farmers, quality controlled, and shipped; you will see that GrowAhead has been repaid for the funds loaned. Once this has happened you will be presented with a number of options. You can withdraw your money, re-lend it to finance another container of coffee or donate it to support development projects for farmers. These loans do not earn interest, and the amount that you will be refunded will be equal to the funds that you have loaned minus any possible transaction expenses.
Here at DOMA we are really excited about this partnership with Grow Ahead. The minimum loan amount is $25. If you have the ability to make a loan, and would like to be more involved at the farm level of your daily cup of coffee, you can create an account and make a loan here.