Skip to Content

Case Study: Food Security & Nutrition, Market Access

Credit for Fertilizer Helps Peruvian Coffee Growers Improve Livelihoods

Farming First Farming First

Coffee-growers in Peru have been receiving a helping hand from a homegrown programme that provides credit for purchasing fertilizer. The “Family Program”, which was set up by coffee exporter Comercio & Cia in 2003, has been giving farmers interest-free credit for three consecutive years, whose crop production is then sold back to Comercio & Cia for international trade.

Low yields, low income

Beginning in 1994, Comercio & Cia was set up to help export the coffee produced by local farmers. Over the first few years, however, the company witnessed the constant decline of yields of its coffee producers. One of the main limiting factors was nutrient depletion from the fields resulting from continuous coffee production without replenishment, combined with low levels of fertilizer use. On top of low yields and the consequent poor income, secondary effects of soil mining were evident. With no fertile soil to grow on, farmers were forced to abandon their farms in search for new land, leaving environmental degradation in their path. Then in 1999, international coffee prices fell and Peruvian coffee producers found themselves in an even more severe situation. Under these conditions, yield level was more important than ever.

Commercia & Cia recognized the need to replenish soil nutrients with the use of fertilizers and to maintain the coffee crop through good management practices. Yet, the prevailing poverty in the area meant that farmers were unable to access key inputs such as fertilizers. Government intervention in the area was minimal and private banks did not provide credit to small farmers due to the high risks involved and the problems of unclear legal ownership of the land.

Filling the gap

And so the “Family Program” was launched, to make credit for fertilizer available and to train farmers in the agronomic management of crops. In return, Commercia & Cia would be the recipient of the increased yields which would be sold to the company at standard price. The success of the scheme was gradual, as farmers were nervous about changing their farming practices, but in response to the improved yields and consequent livelihood improvements, the programme quickly expanded. In the 2009-2010 cycle of production, 15,000 families were involved in covering an area of approximately 12,500 hectares. Helping farmers to adapt to the scheme, IPNI staff provided agronomic education to those participating in the programme.

A success

In the last seven years, families in the coffee growing areas of northeast Peru have benefitted from higher income, which improves the profitability of the households and promotes savings and investments. Efficient and well-managed farms also stabilize high yields, offering a safeguard from high international coffee prices. Many farmers have started to diversify their farm production, and have also made investments in better infrastructure to aid their farming practices.

On a social level, the programme has helped to the strengthen the unity of families in the area, and has served as a foundation for several other social benefits such as sanitary, infrastructure and electricity improvements on farms. Better yields also require more hand labour throughout the whole season, providing employment opportunities, and increased household income has given farmers the ability to keep their children in school to finish primary and secondary levels.

In addition, the environmental benefits of the programme include improved recycling of nutrients from the pulp residue of the fruit, which in turn helps feed the surrounding trees that create good habitat and promote biodiversity.

For more information, read the full report.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.