Something About Coffee Cooperative
In many countries, coffee is grown, processed, and sold to cooperatives.
But what is a cooperative? How does it work? And how do producers work together to produce single coffee with traceable sources?
Minasul cooperative in Brazil has 6000 members, covering four of the six production areas in Minas Gerais Province, Brazil, which is the largest cooperative in the world. In fact, the output of coffee here is even higher than that of Vietnam, and Vietnam is among the top countries in the world in terms of output, which is not small.
In this paper, let's see how the cooperative operates and how to adapt to the supply chain operation mode of fine coffee.
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What Is A Coffee Cooperative?
As its name suggests, the coffee cooperative is a cooperative group composed of many coffee farmers to obtain better resources, such as better marketing resources, business opportunities, and personnel training resources.
All members of the cooperative need to pay the social fee, and then use the money to invest in the local community. The money raised will be more effective than the money used alone. In addition, many large-scale cooperatives have full-time employees, whose work covers management, marketing, personnel education, and research.
The cooperative is a non-profit organization, and all people participate voluntarily. Our job is to make it easier for members to obtain resources when producing or supplying coffee.
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The supply chain is not only about fertilizing and spraying pesticides, but also includes cash flow, information integration, and the use of technology. We must provide producers with resources and knowledge so that they can sell coffee.
What Does The Cooperative Give To The Producers?
Let's see how providing production information can help coffee producers. Andreia Nogueira Foresti has been a member of the cooperative for 35 years and is also the owner of fazenda do Lobo farm in Brazil, which is about medium-sized.
He said: "The purpose of this cooperative is to bring its members' services and products to market, which is more advantageous than selling them ourselves. They also provide services for us. For example, the cooperative has a technical department, an agricultural department, and an agricultural product preservation team composed of teams. A bank provides us with better credit rates so that we can raise money to grow coffee. Here we have received comprehensive support."
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In fact, the cooperative may have a wide range of business, including but not limited to the following items:
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Different Farms Have Different Needs
Cooperatives may find that different producer members have different production modes, and cooperatives must incorporate this part into the planning of producers.
Jos é Marcos said: "the cooperative hopes to work closely with the producers and understand their expectations. Through research, we will make them small-scale, and all the way to medium and large-scale. Everyone is very important but has different needs, so we try to meet each demand."
Large producers may need us $300000 harvesting machines, while small producers may only need us $300 m ã ozinha harvesting equipment (a hand-held device that shakes the loose and mature fruits on the branches of coffee trees). This is the responsibility of the cooperative to ensure that everyone's needs can be met.
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However, it is not only the size of the farm but also the different needs of the producers due to the climate of the farm. Producers may need to do a series of education and training for coffee harvesting and management, or educate their children. And these demands are very many and very different.
Why Not Work Independently?
Of course, coffee producers do not necessarily need to join cooperatives. They can also operate independently, negotiate with traders and exporters, and conduct certification independently. However, there are many operational processes, such as sales, intermediaries, and direct trade with buyers. So, what details do coffee producers need to worry about?
First of all, not all producers have the ability and resources to operate independently, and small-scale producers may not have enough output to directly connect with exporters or bean roasters, leading them to be forced to sell high-quality coffee to the futures market. There may also be a lack of marketing and community publicity resources, not to mention spending time negotiating business with potential customers or attending coffee exhibitions abroad.
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On the other hand, producers may wish to differentiate themselves from other producers in terms of characteristics or develop a set of direct trade cooperative relations. It is particularly important to note that there is a gap in the processing capacity of each cooperative for this part. For the minasul cooperative interviewed in this article, they will connect the producers with high-quality roasters, so that they can conduct direct trade and present coffee with good technology. In this way, the traceability of coffee can be preserved. However, in smaller cooperatives, the coffee produced by the producers may be processed and sold together. Such cooperatives focus on the needs of groups rather than individuals.
Another point to note is the marginal effect. As mentioned above, the cooperative is a non-profit organization. It pays attention to the individual producers and attaches importance to the development of producers. This means that if the cooperative wants to operate well, it must return to the work of producers.
This is also why cooperatives often sell fertilizers to producers so that they can reduce costs and provide low interest rate credit. Cooperatives can also purchase and sell large quantities of agricultural products, but in this way, producers will only be caught in the situation of paying debts rather than making profits.
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However, other organizations may have stakeholders such as shareholders to share profits. Since independent producers are often smaller than cooperatives, the cost of planting by these producers will be higher. Because the cost burden is not only material expenditure (gross profit rate) but also includes management and marketing expenses.
Of course, not all cooperatives are so good to their members, but generally speaking, coffee cooperatives are what their name implies: producers working together to improve the quality of their coffee and strengthen their dominant position in the coffee supply chain.
Coffee planting is a very challenging industry. With the global warming and the fluctuation of coffee prices, it has never been easy. The cooperative is committed to providing member assistance, overcoming difficulties, building infrastructure, education, training, and financial planning, and forming a direct trade line with exporters and bean roasters.
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