In this series, you can find 3 blogposts that shortly explain our main impact pillars, economic, social, and environmental impact or Factories – Farmers – Forests.
It’s called ‘Let’s Fix the Future!’ because a lot needs to be fixed. COVID-19 raised all sorts of havoc, but maybe most of all it unveiled society’s deep social riffs and the ever-rising inequality that is leading to ever-greater poverty, deforestation, and climate change. One thing is clear: now more than ever we need better business models designed to solve these problems rather than continue to add to them.
With FairChain and Moyee, we’re building our company around Economic, Social and Environmental impact. How this is impacting us and, well, you, is in the report. We hope we can inspire you to make a difference, and please feel free to give us your feedback.
Thanks for supporting us over the years and…. Let’s Fix the Future together.
Guido & Team Moyee
We started Moyee Coffee as a social enterprise, a business whose main objective was to deliver social impact and not shareholder profit. In those early days, when we first began to champion the cause of the smallholder coffee farmer we started offering, 20% premiums on coffee beans, twice what any other fair trade or ethical endeavor was offering. We thought this was pioneering and considered ourselves serious crusaders but little did we know.
By working with 100 smallholders in rural Ethiopia to improve the quality of their beans, we soon realized that our 20% premium was not nearly enough to provide our farmers with a decent income – not by a long shot! While our premium was helping farmers increase their annual coffee revenues from €400 to €500 our work with the farmers and research into a living income helped us understand that most coffee farmers would need to double and even triple take home pay from coffee to provide for the basic needs of food, health, education, shelter and a little savings that their families would need to escape poverty. We quickly realised that rather than the ‘the world’s fairest coffee company’ a more truthful description might have been to describe ourselves as ‘the world’s least unfair coffee company.’ Put simply, we went back to the drawing board to radically update our theory of change. In close collaboration with the FairChain Foundation, we developed a program that would “bring a living income to farmers by managing profitable farms and getting involved in value adding activities in order to improve the livelihoods and communities. We pivoted thus from a 20% FairChain Premium towards a Living Income Differential.
Real impactful change, a living income for our farmers we realised will take time but we’re on a journey and season by season we are helping more and more farmers and their families to thrive while growing the finest fairchain coffee beans that are good for planet and people. Looking back over the past few years, we have continuously questioned the significance of our social impact. We are learning by doing. Our 20% FairChain premium payments have of course grown as our sales volumes have grown, which directly benefits farmers and their communities. We also know that this premium isn’t enough. Which is why we are focused on a concept we call the Living Income Differential, which gives us a much better understanding of our impact and how much we have closed the gap towards a living income. We track our progress in three clear ways:
In 2020, we paid out €78.236 in FairChain premiums for our Ethiopian and Kenyan blends. On average we paid 300% more than the Fairtrade minimum price to our Ethiopian farmers . In Kenya we pay 20% on top of the farmer coop selling price set with other buyers.
Last year, we invested €115,505 in our Living Income program. Bringing the total to €666.678 since the beginning of our program.
By 2020 we have grown the number of our FairChain farmers in Ethiopia to 568 but also introduced sustainable composting to 2,500 Kenyan coffee farmers who will soon be supplying us with a low chemical coffee to be FairChain coffee.
A living income is defined as sufficient income generated by a household to afford a decent standard of living for the household members. Elements of a decent standard of living include: a nutritious diet, water, decent housing, education, healthcare, transport, clothing and other essential needs, including a provision for unexpected events.Because the road to a living income is not straight, we invest in a wide variety of activities to increase our odds of succeeding. Higher prices are only part of the solution – higher yields, lower production and living costs are needed as well.
The investment are admittedly high in the beginning, but become less as we reap the quality, yield and price benefits of our interventions. The average income for an Ethiopian farming family of 7 is €521 annually. Our living income benchmark is €1,055, which is based on coffee and non coffee incomes earned by our farmers in Limmu, Ethiopia. Since we began researching living income in our chain we have made it the central focus of our interventions. It has not always been easy to establish benchmarks due to, among other things, a bad harvest in 2018. So we created a pool of 100 farmers in Limmu to better assess the impact of our interventions. Before our interventions, these farmers earned €267 annually from coffee. Our intervention increased their income to €598. Close to what is need for a living income, but in 2019 it dropped dramatically to go up again in 2020.
While continuing to work closely with and carefully monitor the progress of Limu 1 farmers, we have also begun a new living income intervention with 200 Ethiopian farmers (Limu 2). In 2021, we will expand our living income program to 12,000 farmers in southern Ethiopia and 2,600 farmers in Kenya. During this time, we will also unveil a campaign to reach new roasters to embrace and test our model.
The FairChain model aims to help farmers achieve living incomes not only by improving quality and yields but also by lowering production costs, invest in digitization, access to credit and healthcare. On top of that our coffee tree planting has the aim to double farmer income . We believe that the FairChain model has the potential to replace development aid in countries rich in natural resources, such as coffee.
We are very much learning by doing. This is all new territory for us as well, but we know where we are heading. By 2025, we aim to have 5,000 farmers on a credible road to a living income while also proving that all of our first wave of farmers in our program have indeed closed the poverty gap.
As we progress we plan to:
Aside from all that we actually want to encourage other coffee companies to follow our lead, adopt our open-source methodology and technology and put another 5,000 farmers on the road to a living income.