Investing in the Future of Coffee: Financing for Farm Rejuvenation
Since 2010, Root Capital, an agricultural impact investor, has been working with the Peruvian coffee cooperative Chirinos to promote farmer adoption of climate-smart practices. With the help of several multi-year loans from Root Capital, Chirinos has invested in new services to improve the productivity and, ultimately, the long-term resilience of its members’ coffee farms, while sustaining climate-smart agroforestry production systems.
First, in 2010, Chirinos built a state-of-the-art fertilizer plant. The cooperative uses the facility to transform farmer members’ waste coffee pulp into fertilizer, which it then distributes at an affordable price. Called Pachakushi, a Quechua word meaning “happy soil,” the fertilizer facility helps farmers build soil health, resulting in short-term yield increases of up to 60% and likely longer-term benefits of increased resilience to extreme weather events.
“We’ve increased our productivity with this fertilizer,” comments Nilter García Chimbo, a Chirinos Agronomist. “[It] is better than what we had before, when our farmers maybe produced 10-15 quintales of coffee per hectare, and now we’re averaging 23 quintales per hectare in the area of Chirinos.”
More recently, Root Capital provided Chirinos with a multi-year loan to finance the rejuvenation of its members’ agroforestry coffee farms. By pruning or grafting old or diseased coffee trees, farmers can significantly increase their productivity and improve their bottom line. In the process, Chirinos and Root Capital sustain agroforestry production systems that can increase farmer resilience to climate change, while serving as important biodiversity corridors and carbon sinks in a region with significant, ongoing forest loss.
Root Capital believes that “right-sized” finance for climate-smart investments, like fertilizer facilities or farm replanting, will be critical to ensuring that climate-smart, agroforestry systems like coffee remain viable for smallholder farmers.
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