Nicaragua: Inclusive Business for Small-scale Coffee Farmers, 2008

Inclusive business engages low-income communities to benefit development and create sustainability. It is closely linked to the concepts of socially responsible business and fair trade.

Removing the husk from the coffee berries.

In September 2007, the coffee export company Atlantic S.A., the Netherlands Development Organization (SNV), and the Nicaraguan Union for Corporate Social Responsibility (uniRSE) signed a cooperation agreement to develop an inclusive business initiative between Atlantic S.A. and small-scale family coffee farmers in Nicaragua. The goal of this joint effort is to promote long-term, equitable, and mutually beneficial business relations between the business partners, and provide the farmers with access to diverse coffee markets.

 In early 2008 CIET conducted a baseline study of the situation of small coffee-farming families in northern Nicaragua, in order to help develop the initiative and monitor progress towards inclusive business. The survey covered 1,273 families and 47 key informants in 31 communities from Nicaragua’s Segovias and Norte regions. Among the indicators measured, five proved significant: family economic potential; environmental care; respondents’ perceptions of social capital, respondents’ sense that were receiving fair payment for their coffee; and gender equity in terms of joint decisions about the use of family income.

The study found that 20% of families had good economic potential, 44% of families felt that they are receiving fair payment for their coffee, 30% of couples made joint decisions about the use of family income, 17% of families were taking good care of the environment (participating in reforestation, using organic fertilizer, and practicing proper disposal of waste waters) and 14% of families felt they were receiving good institutional and community support.

Interview with the wife of a coffee farmer.

The study also calculated the relative potential impact of three possible inputs likely to improve the situation for the coffee farmers, technical assistance, training, and financing. For example, technical assistance was likely to improve economic potential for 2% of farm families but could have a positive effect on environmental management among nearly 10% of them. Knowledge about the advantages of certification (such as “certified organic” or “Rainforest Alliance”) and being affiliated with a cooperative also appear to play an important role in developing inclusive business.

View a short slideshow on Inclusive Business among coffee farmers in Nicaragua.