The JCFC's traceable & transparent trade system which tracks payments from Cherry-to-parchment-to-green Coffee is what sets it apart as unique in the world of coffee cooperatives worldwide.
Traceable & Transparent Coffee Trade
The goal of the JCFC’s traceable and transparent payment system is to allow all members the ability to capture the full value of their exported green beans, which nearly triples farmer income when compared to the prevailing trade options.
In the 2016/17 season, farmer income increased by an average of 270%. For importers and roasters, the traceability and transparency program allows deeper and more meaningful relationships between coffee producers and coffee drinkers.
Additionally, it addresses many of the rising concerns and shortcomings of current certification and alternative trade models; the main concern being whether or not the price you pay is actually translated back to the individual farmer family. In the case of the JCFC, it's far beyond current models. If it matters for you to have a personal relationship with your coffee, the JCFC's systems allow you to know the exact family who produced it and how much they received from your purchase.
How does Traditional coffee trade work in Laos?
Historically, Lao coffee farmers are unable to sell the final, clean green beans which importers and roasters buy. Instead, large companies buy the raw coffee cherry or dried parchment (i.e. coffee that’s undergone pulping, fermenting, washing, and drying). This buyer-seller relationship leaves farmers receiving extremely low prices for their harvest and does not reward farmers for picking ripe coffee cherry nor reward coffees which are particularly high in quality.
Additionally, since coffee historically has not been a suitable income for small scale coffee producers, and since coffee growing only pays one time a year, many farmers find themselves having to take on predatory loans to make ends meet. In this case, many farmers owe their coffee as the repayment of debt to loan sharks. The loan sharks are the buyers and collectors of their coffee. If the farmer has these loans, it means that their coffee is worth even less; calculated by the market price of raw coffee cherry minus the interest charged by the loan shark.
Most farmers have never tasted pure coffee. They have little to no concept what is good or bad according to what specialty coffee means as it is understood by the market. These concepts are often tightly held by the big companies and they hesitate to teach farmers what this means as the more the farmer knows, the less bargaining power they have to secure a better price for their better coffee. As such, farmers not working within the JCFC earn 70-75% less of the value they should receive for their coffee.
Think of it like this: it is as if you were selling your house but rather than selling your beautiful home in all its glory, you were forced to sell your house at a price calculated only by the number of nails, concrete, and lumber used to build it. This is not sustainable.
the JCFC system is different
Every time raw product changes hands from one family up the processing chain, a receipt system traces the payment and both buyer (chief) and seller (farmer) keep receipts. It doesn’t matter whether the farmer sells cherry or parchment to the village chief. At the point of transfer, the family name, weight in kilos and price is recorded. The system allows the farmers the right to the full value of the exported green bean minus a small percentage of the final price which is paid to the chief (family) for attending JCFC meetings, training members, processing, drying and managing parchment.
When parchment is dried and bagged, every family member’s name is written on the outside of the bag. Once moisture levels are at 10.5-11.5%, the chiefs transport the entire villages’ lot to the JCFC warehouse for full lot curing and at this time the JCFC management, Jhai Coffee House and Filanthrope record the moisture %, water activity, and date received by labeling each 30 kilo parchment bags and input the information into a custom database.
Due to the fact that each village does not blend family members into village micro-lots, Jhai Coffee House and Filanthrope are able to take samples at the family level, which is what we call nano-lots. This takes an incredible amount of time and energy to peel, screen size, weigh defects, roast and cup each family separately, but in doing so we can assess each nano-lot independently.
By cupping with the JCFC during pre-season, mid-season and post-season, Filanthrope can give farmers real time cup quality and feedback, and consequently schedules farm visits to identify and correct mid-harvest issues. This system also allows Filanthrope and Jhai Coffee House to locate exceptional coffees at the farm level to ensure quality control is maintained with special care.
After each parchment bag is cured and poked individually, (yes, every single bag), nano-lot samples are hulled, hand-selected and shipped from Laos around the world to importers and roasters in America and Europe to cup and offers are made. Jhai Coffee House and Filanthrope then present these offers to the JCFC. Due to fact that both Jhai Coffee House and Filanthrope are both (501-c3) non-profits, neither organization buys or sells (trades) the coffee, which means that importers do direct trade buying with the JCFC.
Once the coffee is contracted to be sold into the export market, secondary processing begins. Village chiefs bring their members to the JCFC warehouse where they begin secondary processing and hand selecting defects for specialty prep. Great insight and visibility into the quality of the green beans is accessible to the families during this stage. It also gives Jhai and Filanthrope access to the actual farmer families who own the coffee and train them on SCA defects, which in turn helps them to pick better in the upcoming season. Families can understand that by picking better, they spend less time cleaning defects later on in the process. Villages retain the rights to their defect coffee, which they sell into the local market and earn significant income from these defects which are normally lost in other buy/sell/process relationships.
Once the coffee contract is executed and the full transaction is received within the cooperative bank account, 10% is set aside into a cooperative development fund. This fund is voted upon by all village chiefs on how to use for the betterment of all members of the cooperative. In 2015/16 the JCFC elected to purchase a computer, printer, two fork lifts, and built an extension for the coffee warehouse to provide rain-protection for the loading area.
At this time, Filanthrope works with the JCFC to take the remaining 90% and calculate it into individual nano-lot prices based upon cup scores, defects, and village farmer receipts. Then over the course of several days, villages come into Jhai Coffee House where village chiefs issue green bean premium payments and coffee/village/individual farmer information summaries directly to the 298 families who participated in the JCFC program. Information summaries include the complete tracking from cherry to green bean, defect loss, screen size, types of defects, comparison to previous years, cup score, complete cherry to green bean price breakdown, and recommendations for the next harvest.
After all payments are completed, a JCFC pot-latch and celebration occurs at the warehouse where all the member families attend and at which point the winning villages are awarded their prize money from the cup competition and get to make heartfelt speeches to the community!
*Contact Filanthrope / Jhai Coffee House directly for a more in depth look at this program.*