In Aguadas, Caldas, a vibrant small town nestled in the hilltops of the Andes mountains, coffee farmers would gather around the dinner table with their families and talk about who would take over their family business once they retire. But many of the children from the younger generations would resist, concerned about the lack of financial security or stability associated with coffee farming.
The truth is that before 2014, only 8% of Colombian farmers (of which the average age was 53) had a pension plan in place – leaving their farms, families and futures exposed to the economic uncertainties of the market.
INNOVATING FOR LONG-TERM SECURITY AND STABILITY
As a response, Nespresso established a pension scheme for coffee smallholders – in collaboration with Fairtrade International, the Colombian Ministry of Labour, Cafexport and the Aguadas Coffee Growers Cooperative. The first of its kind in the coffee industry, this initiative is part of the wider Nespresso AAA Program, launched in 2003.
How does it work?
- 50% of the Fairtrade Premium paid by Nespresso to the local cooperative in Aguadas, Caldas is placed into a retirement fund.
- Around 30% of the farmers that have signed up have also opted to make additional personal contributions. As a result, the Colombian
Government (through a scheme called BEPS) contributes a further 20% of the combined Nespresso / farmer contribution.
Delio Gonzalez, AAA coffee farmer
“It gives us hope to be able to reach our retirement age; we can rest and enjoy our old age quietly.”
FROM GENERATION TO GENERATION
As well as providing the security that farmers need, our vision is that the scheme will help facilitate the generational transfer of farms from parents to children, creating more attractive opportunities for young people in coffee producing regions.
Cesar Julio Diaz, Member of the Aguadas Coffee Cooperative
“The program will motivate young people to stay in the area and engage in coffee production.”
ENCOURAGING RESULTS IN CALDAS
The scheme was piloted in Caldas, Colombia and through some 40 AAA agronomists on-the-ground, we’re now extending it to encompass around 2,000 coffee farmers in the region to further assess its impact. One significant indicator of its popularity to date, is the fact that even non-AAA farmers are opting to join the cooperative.
Progress to date
USD 4.5 million
since the programme’s launch
1.552 AAA farmers
634 AAA farmers
are making additional
Dario Soto Abril, Chief Executive Officer, Fairtrade International
“With the retirement savings plan, the coffee farmers and their children can see a future.”