Understanding impact: how Rabo Foundation and Huatusco centered farmer voices to increase profits
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In the world of coffee production, the relationship between financial institutions and farmers is crucial for sustainable growth and development. Ensuring access to affordable credit, agricultural expertise, and favorable market connections can help farming communities. One leading social impact investor, Rabo Foundation, and Huatusco, a cooperative of coffee farmers based in Veracruz, Mexico, worked together to forge a partnership that has transformed the lives of Huatusco’s members and created a ripple effect in their community. Measuring Huatusco’s impact on the lives of their 900+ active partner farmers helped improve Huastuco’s performance and financial independence, opening the doors for further investment and viability for years to come.
Rabobank’s (Foundation & Rural Fund) relationship with Huatusco dates back several years. In 2020, Rabo Rural Fund transferred management responsibility to Rabo Foundation, known for handling higher risk portfolios. Together, Rabo Foundation and Huatusco created a shared goal: reduce Huatusco’s dependency on Rabo’s funding by strengthening the cooperative’s value added to farmers.
With the hope of establishing a shared understanding of the strengths and areas for growth, 60 Decibels conducted a survey to gain a deeper understanding of Huatusco’s impact and their member’s experiences. The survey became a turning point, shedding light on the contributions Huatusco made to the coffee farmers’ lives. Many Huatusco members are among the thousands of agricultural workers with low incomes, and their partners found value in the additional services offered, such as vaccination support for children and technical assistance.
Findings from the survey
The 60dB survey shed light on several important aspects.
- Huatusco boasts a loyal farmer base. The cooperative primarily engages with older male farmers, averaging 18 years of cooperative membership. A staggering 90% of the coffee producers had utilized one or more of Huatusco’s services in the past year, illustrating the cooperative’s deep involvement in the lives of its members.
- For the farmers, price and trust emerged as the key criteria for selecting a coffee buyer, highlighting the importance of fair pricing and establishing strong relationships. All current producers expressed their intention to continue working in coffee farming, with three out of five envisioning their children joining the coffee cultivation industry in the future.
- While the survey indicated overall satisfaction among the producers, it also highlighted areas for improvement. More than one-third of the farmers had experienced challenges with Huatusco, prompting the cooperative to reflect on these issues and devise strategies for enhancement.
As the Rabo-Huatusco partnership evolved, key questions emerged: How could they differentiate themselves from competitors? How could they engage and empower women and motivate young farmers to participate actively? The average age of farmers involved in coffee production was considerably high (59), raising concerns about future sustainability. To ensure continuity in their operations over the next 15 years, these questions demanded thoughtful consideration and action.
Adapting and creating change
The survey results acted as a catalyst for change within Huatusco. The cooperative acknowledged the surprising age distribution among its members, emphasizing the need to engage and motivate younger farmers to ensure the organization’s long-term continuity. As a start they shared the survey results with younger farmers, involving them in training programs that equipt young farmers with the necessary skills and knowledge to navigate the evolving market landscape.
Through the survey results, Huatusco recognized the benefits of wrap-around programming that supports the overall well-being of its members and their families, offering additional services beyond coffee purchasing. Recently, Huatusco provided vaccination assistance for children and technical guidance, demonstrating a commitment to holistic development.
The survey also unveiled the competitive edge that Huatusco possessed against larger corporations. The evaluation of their internal processes allowed Huatusco to better allocate resources, plan for the future, and ensure continued growth. Rabobank approved a small loan for them to buy a coffee dryer to make the processing more efficient.
Strengthening the relationship with Rabo Foundation benefited everyone
At the end of the day, Rabo Foundation is working towards lowering Huatusco’s level of dependency on Rabo; Huatusco paid off an outstanding loan, greatly improving their credit standing in the community, and opening the door to other potential financial partners. Acting as an incubator, Rabo Foundation aimed to facilitate connections with standard commercial lenders, enabling Huatusco to diversify its funding sources and continue its upward trajectory.
Rabo Foundation has played a pivotal role in supporting Huatusco, providing financial assistance and opportunities for constant improvement. As part of their collaboration, Rabo Foundation and Huatusco focused on promoting inclusivity by involving women and young farmers in the cooperative’s governance and activities. Out of the total 1,349 registered farmers, 380 are women, and efforts are being made to create more inclusive job opportunities within the coffee industry.
Recognizing the importance of sustainable practices, Huatusco and Rabo Foundation embarked on initiatives to reduce their environmental footprint. They introduced an eco-friendly oven that operates without fossil fuels, and the installation of solar panels is underway to decrease electricity costs. By reducing expenses and providing training, the cooperative strives to enhance competitiveness in the international market.
The 60 Decibels impact measurement survey sparked new partnerships and strengthened existing ones. Through embracing the power of collaboration, data-driven evaluation, and continuous improvement, Huatusco lowered their level of dependency on Rabo Foundation and are able to establish relationships with local lenders, paving the way for future diversification and sustainability. The story of Rabo Foundation and Huatusco is a testament to the importance of investing in relationships.
Interested in learning more about how social impact assessment can unlock the potential of your investments? You can get more information about 60 Decibels, our work measuring the impact with farmers and our new Farmer Thriving Index here!