When producing coffee from Brazil, being organized is key for smallholder coffee farmers. But setting up efficient and member-driven farmer organizations is everything but an easy task. So, it is a good reason to celebrate 15 years of growth, community, and exceptional coffee with the Association of Agricultural Families from Santo Antônio do Amparo AFASACAFÉ (former AFASA). This is a welcome occasion to reflect on the development of the association, its performance, its achievements, and the development of its strong status in the region in the production of coffee from Brazil.
Celebrating 15 years of work with smallholder families producing coffee from Brazil
In October 2023, a group of 94 coffee farmers, farmer organizations, and local leaders came together to celebrate AFASCAFÉ's first 15 years of work, their associations’ achievements, and those of the farmer families who are shaping this success. Situated in the heart of the coffee region in the Brazilian federal state of Minas Gerais, AFASACAFÉ flourished with the support of Hanns R. Neumann Stiftung do Brazil (HRNS) and committed partners including Tim Hortons and International Coffee Partners (ICP). HRNS helped to create joint structure that have brought farmers together, facilitated their collaboration, bolstered production, and enhanced their market access.
Michael Opitz, Managing Director of Hanns R. Neumann Stiftung in Hamburg, recalls that the project always developed within generic processes where HRNS worked directly with smallholder farmers and gave them the opportunity to improve. During the early stages, the project relied on formats such as Farmer Field Schools.
After enhancing production, focusing on market access for coffee from Brazil was the next logical step to take. Challenges and opportunities were weighed and a fitting organizational structure was created. “Producers in the neighbourhood were already organized, but were highly frustrated because the cooperatives they had joined were not well managed”, Opitz recollects. There were even cases where money had been embezzled, and cooperatives in general enjoyed little credibility. Therefore the farmers of Santo Antônio do Amparo wanted to set up their own structure. “However, it takes a lot of effort to set up a cooperative, so we approached the matter via an association, being a much simpler format”, Opitz explains.
From Coffee Growing to Processing and Marketing
Once AFASACAFÉ (then AFASA) was founded, it needed to be structured: With the support of HRNS, statutes were adopted, defining the objectives and tasks of the association, and their governance structure. During the whole process, the farmers paid a lot of attention to transparency and traceability. “One example is that management positions were rotated regularly, a procedure that requires a very transparent approach”, Opitz states.
Two events turned out to be especially important for the development of AFASACAFÉ. The first was to jointly capitalize the new organization. Through production improvements, the farming families had generated a higher coffee output than usually. This surplus provided liquidity, and every member was able to contribute to the financing of the organization. The start-up-funding provided enough capital for AFASACAFÉ to start their business and was repaid later.
A second important turning point was a project that was carried out in cooperation with Dr. Sára Maria Chalfoun from the Agricultural Research Company of Minas Gerais (Empresa de Pesquisa Agropecuária de Minas Gerais, EPAMIG). Initially, EPAMIG was asked to help AFASACAFÉ drawing up a business plan. However, on this occasion, Dr. Chalfoun became one of the co-founders of AFASACAFÉ and supported the association by helping to design a project that granted it access to materials and even machinery for quality processing of the coffee harvests.
This enabled the farming families to process their own coffee, hull it within their own organization, and turn it into green coffee. A quality laboratory was also part of the equipment. “AFASACAFÉ's ability to take this step increased the organization's credibility among its members immensely”, Opitz weighs in. “In contrast, producers are often taken advantage of if they have to give the processing of the beans away.”
Gaining Control Over the Value Creation Chain for coffee from Brazil
To ensure that AFASACAFÉ’s huller did not stand in the open, a warehouse was financed, too. “This storage capacity is extremely important, because in Brazil the coffee is usually sold where it gets stored”, Opitz explains. The fact that the producers can now store the coffee themselves and no longer rely on third-party suppliers gives them the freedom to decide where they want to market the coffee they produce in Brazil afterwards. They now offer a storable, high-quality product, and they know about its characteristics. This gives AFASACAFÉ farmers a much better negotiating position and it even enables them to market directly to exporters.
During the most recent steps, HRNS provided additional training to the farmers to be aware of the steps and process involved in coffee exports allowing them to now hire such services from third parties and exporting tehmselves. The actual value creation and the subsequent market positioning were largely shifted to AFASACAFÉ.
During the jubilee function, Dr. Sára Maria Chalfoun, therefore, grasped the opportunity to expound on the relevance of collaboration: “It is becoming increasingly necessary to cooperate in order to compete in markets dominated by large companies. In this context, it is imperative for small businesses to join forces around common objectives. By joining forces, pooling resources, and integrating skills, small businesses will gain bargaining power, better access to services, and greater representation. Cooperation is a synergistic process, where the result of collective work is greater than the sum of individual work.”
Jaime Pacheco Duarte Neto, President of AFASACAFÉ concluded that “the result of collective work is always greater than the sum of individual work. AFASACAFÉ’s success story is irrefutable proof of this fact. Joint operations from the formation of batches of coffee that are homogeneous in terms of quality through the Good Practices Programs during production, harvest, and post-harvest phases have even made it possible to conquer foreign markets.”
Over time, AFASACAFÉ gained more and more members. The association started with around 50 members and today they are about 150. Smallholder families that produce coffee in Brazil. It is a success story that continues. In some cases, members entered quality competitions for coffee from Brazil. Some AFASACAFÉ coffees won prizes. Thus, HRNS helped to increase the visibility of the smallholders’ coffee. “However, the concept on which we have built is an entrepreneurial one”, Opitz concludes. “There is nothing for free and you have to make a certain commitment in order to position yourself favourably.”
Entrepreneurial approach to smallholder coffee farming
Accordingly, Michael R. Neumann, Founder of Hanns R. Neumann Stiftung, delved into the entrepreneurial aspects of setting up a coffee business at AFASACAFÉs jubilee function: “A vital condition is the people in this area. I have found that tradition and perseverance as well as diligence and inquisitiveness are often found in these municipalities - a great condition to meet the long-term nature and the great challenges of coffee cultivation. Another central prerequisite is a sustainable and resilient but also flexible and adaptable structure. This can be a cleverly conceived company, a foundation or even a cooperative or association. However, it must do justice to the people who run it and deliver objective and fair results.”
Today, AFASACAFÉ operates independently, firmly established in the region, and embraced by local farming communities. The organization is strong enough to seek further support from the Brazilian support system i.e. universities, business advisers and public authorities. AFASACAFÉ is actively approaching bodies that can help them move forward.
“HRNS stays committed to supporting smallholders in Minas Gerais and wants to use these successes as a blueprint for similar processes in the region”, Opitz looks ahead. “We want to process the experiences within HRNS and initiate comparable initiatives in neighbouring municipalities. Thus, AFASACAFÉ will become a role model.”
This predestines new avenues of cooperation between HRNS and AFASACAFÉ: “It is my firm conviction that we have a central new responsibility in these areas. The cooperative structure should be explored as it is predestined to deal with this constructively and even offer solutions. For a successful AFASACAFÉ, I see challenging tasks for the next 15 years at least”, Neumann predicts. “Properly positioned, public and private funding and partnerships should also be available for such an orientation. AFASACAFÉ's involvement in new farmer-owned structures in other areas of the Campo das Vertentes therefore seems to me to be an excellent task that we would like to organize and support.”
Cultural and social factors of the family farm determine success of coffee farming
Dr. Chalfoun is convinced that AFASACAFÉ is more than just an association. “It is a family of dedicated family farmers who share a commitment to the land and the cultivation of coffee. Their careful hands harvest the ripe beans, with the same attention that their families devote to the preservation of coffee traditions.” Thus, she concludes “sustainability is a fundamental pillar of AFASACAFÉ. Its farmers adopt responsible agricultural practices, take care of the soil and preserve biodiversity.”
AFASACAFÉ is increasingly working on environmental issues. The association has been active in a project dealing with circular economy and is now planning to process the coffee husks from the hulling process into compost. The method is called bokashi and the resulting compost will be made available to the members as an alternative fertilizer. This makes their coffee from Brazil more sustainable.
Michael R. Neumann embarks from this perspective to sketch out a holistic outlook for AFASACAFÉ: “In order to remain successful as a company, farm or coop, we must take the cultural and social factors of the family farm very seriously. I firmly believe that this includes the promotion of women in society and in business, the creation of opportunities for the farmers of tomorrow, our children, but also a growing commitment to nature and the environment.”