GEF CONCEPT PAPER
SUBMISSION FOR PIPELINE ENTRY
Countries:
Project Name:
Requesting Agency:
Project Implementer:
GEF Focal Area:
GEF Operational Program:
Strategic Priority:
Project Duration:
Mexico, Colombia, Guatemala, Honduras, and El Salvador
Mainstreaming of Biodiversity Conservation into Coffee
Production and Sales through Private Sector Sourcing Partnerships
United Nations Development Programme
Rainforest Alliance and Sustainable Agriculture Network members
Biodiversity
Forest Ecosystems, Mountain Ecosystems
2 (Biodiversity in Productive Landscapes)
5-7 years
1. Project Summary
The overall goal of this demand-driven GEF project is to transform the way that the participating
coffee companies source coffee, establishing new, environmentally and socially responsible
ways of doing business that the companies can internalize and replicate after the completion of
the GEF project. Specifically, the project will promote the following practices: (i) more direct
and transparent purchases by traders and roasters from producers, (ii) the payment of higher
prices for sustainable coffee that meets buyers’ quality needs, (iii) the use of long-term contracts,
and the provision of finance and in-kind investments and/or donations to help coffee farmers
meet certification requirements that protect ecosystems, and (iv) improve the quality of life in
their communities.
This project will work with selected coffee companies to scale-up sales of certified sustainable
coffee into mainstream and niche markets, providing a stream of economic benefits to coffee
farmers and workers on all sizes of farms and promoting biodiversity conservation. The project
will work with major coffee roasters, traders, and specialty coffee importers to increase the
volumes of Rainforest Alliance (RA)-certified coffee sourced from the identified countries in
Latin America. At the end of the project period, it is anticipated that the participating companies
will purchase 1-5 % of their total coffee supplies from RA-certified producers; this would
represent at least triple the volume of current RA-certified coffee and a very significant increase
in the total global volume of all certified coffee.
The project will guide and reward continual improvements on coffee farms, linking sustainable
farm management with product quality, and connecting responsible producers and traders with
responsible buyers and better markets. The activities will be focused outside of protected areas,
in productive landscapes selected based on industry demand for certified coffee and the global
significance of the biodiversity they contain. RA certification monitors the protection of
ecosystems, wildlife and water resources within and adjacent to participating coffee farms. In
addition the project will promote the use of landscape mapping to optimize the contributions that
sustainable coffee farm management can make to biodiversity in at the landscape level and to
protected areas through the creation and/or expansion of biological corridors, riparian
reforestation and other certification requirements and recommendations.
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The project will support capacity building for certification and the development of demonstration
sites to showcase the benefits of certification to coffee producers, with the expectation that, over
time, certification costs will be paid for by the coffee producers themselves and/or by
participating coffee companies. During the PDF B preparation phase, RA and its partners will
assess coffee farmers’ needs for financial assistance to help cover initial certification costs. If it
is determined that there is a need to support the initial certification costs for small producers, this
requirement will be built into the project and corresponding funds requested for this purpose.
In an innovative approach to the problems and opportunities in the coffee sector, the project is
structured to embrace the entire supply chain instead of narrowly focusing on project sites and
niche markets. Coffee is a commodity, and any program that aims to make significant changes
in such a huge, far-flung business has to have the participation of the entire supply chain. This
project will build on the Rainforest Alliance’s partnerships with farmers, traders and roasters.
In order to engage the dominant players in the coffee sector, the project must equally include the
larger coffee producing countries in Latin America. Some activities will be replicated in the
Central American countries whose coffees are of greater interest to specialty coffee companies.
While the PDF-B preparatory phase of the project would confirm country participation, the
larger coffee producing countries are expected to include Mexico and Colombia and potentially
Brazil. Collectively these three countries provide 40% of the world’s coffee. Participating
Central American countries are expected to be Guatemala, Honduras and El Salvador.
At the end of the project, it is expected that at least seven of the twelve coffee companies
currently committed to collaborating with the RA in this initiative will have implemented these
new commercial relationships with coffee farmers, and be able to replicate the models with their
own resources in other regions and sites. During the PDF-B phase, the specific details of the
replication strategy will be developed, including the identification of replication areas and sites.
Initial consultations with the World Bank and the international conservation community indicate
that there are no other similar projects that aim to support the greening of coffee in such a
thematic, regional and systematic way. This project provides significant value-added to the
existing work in this area due to its emphasis on both biodiversity conservation and the
improvement of livelihoods, the uniqueness of the strong public-private partnerships represented
by the project, and the mainstreaming of sustainable coffee in the marketplace that will occur as
a result of the combination of supply-side and demand-side activities. RA certification is
distinctive from other coffee certification systems in that it incorporates ecosystem and wildlife
conservation standards and indicators, in addition to socio-economic criteria. The RA believes
that this project is well positioned to support local level coffee sector initiatives of the World
Bank and other donors and can be complementary to such activities.
The project will also consult widely with relevant coffee and conservation projects during the
PDF B planning and preparation phase in order to build on lessons learned and best practices.
The synergies and complementarities with ongoing related programs (IDB, USAID, World
Bank, etc.) will be highlighted as part of the ensuing dialogue with government and donor
counterparts to further distill the added value of this regional initiative. As part of the PDF B
preparation phase, RA and its partners will undertake the required analysis to demonstrate the
incrementality of project activities and develop a matrix describing the other coffee and
conservation programs in the region thereby illustrating the added value this project provides to
past and current related activities. We will also explore mechanisms to bring the various coffee
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initiatives in the region together to not only share lessons learned, but also to unify efforts to
reform coffee and establish systems or structures for facilitating market linkages for sustainable
coffee region-wide, including Colombia and Mexico. Specific coordination agreements with the
partners mentioned above will be further detailed at the time of PDF B submission.
Given the strong commercial linkages of this project, it is likely that World Bank and other
donor supported coffee projects would benefit from experiences on how the RA engages the
expertise of the private sector in helping to promote sustainable practices. In turn, the RA and its
corporate partners will benefit from sharing lessons learned by other coffee projects regarding
how to increase the associated environmental and socio-economic impacts.
The RA and its SAN partners have undertaken the required negotiations with relevant coffee
farmers’ organizations, coffee industry associations/federations, technical assistance NGOs and
government agencies in the countries proposed for selection. These organizations have expressed
keen interest in RA certification and welcome this initiative. UNDP country programs are also
supportive of this initiative and will become increasingly involved during the PDF B
development phase of the project.
2. Project Rationale
2.1 Biodiversity Benefits
Coffee is the second largest globally traded commodity, and the coffee industry generates annual
revenues of $10 billion and employs 25 million people worldwide. Many coffee farms are
located in the world’s tropical biodiversity hotspots. Coffee occupies 27 million acres of land,
and most coffee growing regions have significant overlap with the world’s most species-rich
areas. A conservation strategy for the world’s biodiverse regions must take into consideration
the abundance of coffee farms within these regions. If coffee farmers become allies in
conservation, the GEF will achieve very positive outcomes in conserving biodiversity.
Forested coffee farms are quickly being lost. Whereas thirty years ago the majority of coffee
was grown in traditional agro-forest systems, the approximate percentage of coffee now grown
under full sun, or minimal shade, “technified” conditions in the countries selected for this project
is as follows: 10% in Honduras, 20% in Mexico and Guatemala, 35% in Honduras, and 70% in
Colombia (and even higher in Brazil).
The mass of scientific literature on this topic suggests that a forested coffee farm contains the
vast majority of its native bird species, and most of the microorganisms, insects, and mammals
that are present on a hectare of pristine rainforest nearby. Bird surveys on traditional coffee
farms in Chiapas, Mexico, found more than 150 species on the farms, a number exceeded only
by undisturbed tropical forests. Ecologists in Costa Rica have found that levels of insect
diversity, principally in beetles and ants, on a per-tree basis in shade coffee farms rival the
diversity of undisturbed forests. RA certification ensures that coffee farms are kept in traditional
agro-forest systems, thereby maintaining this diverse habitat. The conversion from “shadegrown” to “sun-grown” management always means a dramatic decline in biodiversity. For
example, one study showed that beetle diversity dropped from 126 species to 29 as farms were
technified. Ant diversity declined from 30 to 8 species. In El Salvador, a country with only 5%
of its native forest remaining, a RA certified coffee cooperative was found to host 103 tree
species. Most sun-coffee farms have between 0 and 3 tree species.
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The RA and its partners in the Sustainable Agriculture Network (SAN), a coalition of
independent, nonprofit, locally-based conservation groups1 of which the RA is both a member
and the International Secretariat, have demonstrated the value of certified-sustainable coffee
farms as buffer zones around parks and biological corridors between forest patches. Properly
managed coffee farms can “soften the edge” between parks and pasture and form a highly
diverse working landscape. The RA and its partners have also demonstrated that it is possible
for technified farms to convert back to more diverse, agro-forest systems by incorporating
reforestation programs as part of their efforts to obtain RA certification.
2.2 Threats and Underlying Causes to the Loss of Sustainable Coffee
While coffee has been for decades an engine of rural development in Latin America, it is now a
trap for many farmers and dependent workers because of the historically low prices paid to
farmers. More than 600,000 coffee farm workers have lost their jobs in Central America alone,
while in the past two years the region has suffered a drop in coffee export earnings of $1 billion.
Yet, with 44% of Latin America’s permanent cropland in coffee, there is no crop more important
to conservation and rural development in the region.
The global coffee market has always been volatile, but is particularly acute now, with prices at a
30-year low. When the market was strong, a quintal of coffee, or 100 pounds, sold for $120.
Today, a quintal fetches about $50. With farm-gate prices below the cost of production, millions
of small producers are leaving their farms, migrating to cities and to the North. Traditional,
stable, forested and diverse coffee farms are being converted to pasture, intensely managed fullsun or minimal shade monocultures, or urban sprawl. The causes of the current crisis are
complicated, but according to a study done by Oxfam, the main reasons are new technologies
that result in higher-yielding coffee plants, and greater output by countries such as Vietnam,
where production increased by almost 400% over the past decade.
Yet, coffee is one of the few crops that can be produced with minimal social and environmental
costs. Until the 1970s, nearly all coffee in Latin America was grown in harmony with
biodiversity-rich tropical ecosystems, and was a dependable, traditional livelihood for rural
people. Properly managed coffee farms can still offer tremendous opportunities for conservation
and rural development.
2.3 Baseline
The social and environmental crisis in coffee producing areas has generated significant public
outcry, and many companies, agencies and NGOs have redoubled existing programs in response.
There are also a number of promising, multi-sector (producers, NGOs, companies, government
agencies) dialogues underway. GTZ and the German Coffee Association are managing a project
called the “Common Codes for the Coffee Community.” UNCTAD is supporting the Sustainable
Commodities Initiative and the International Institute for Sustainable Development in another
global dialogue about the coffee crisis. Some of the world’s main food companies, including
Kraft, Unilever and Nestle, have formed the Sustainable Agriculture Initiative, which has a
newly active coffee subgroup. The RA is participating actively in these and other initiatives.
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SAN members include: Pronatura in Mexico, Fundación Interamericana de Investigación Tropical in Guatemala,
SalvaNATURA in El Salvador, Instituto para la Cooperación y Autodesarrollo in Honduras, Fundación Natura in
Colombia, IMAFLORA in Brazil, and the Toledo Institute for Development and the Environment in Belize.
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All of the major and many of the minor coffee roasters and traders support projects to deal with
the crisis. Some have been doing so for years; others have been motivated by recent public
opinion. Companies that are fierce competitors on the store shelves agree that the problems on
coffee farms are pre-competitive, in the sense that issues of reduced coffee quality and
dependability of supply from traditional sources negatively affect their individual coffee
purchasing activities, and they are, therefore, increasingly proposing that solutions to improve
the sustainability of coffee production should be addressed as collaboratively as possible.
European supermarkets are writing standards for coffee production under the European Retailers
Good Agriculture Practices (EurepGap) certification program, although this has more to do with
risk management for stores than benefits for farmers. Oxfam is leading a global campaign to call
attention to the profits of roasters and the plight of farmers. Equal Exchange and other groups
are campaigning to force roasters to purchase fair-trade-certified coffee. (See Annex A for a
summary table of major coffee efforts worldwide, as well as relevant coffee-related projects)
Most industry experts agree that the response to the coffee crisis is inadequate because the
solutions offered are not comprehensive or efficient enough to deal with the scale of the problem.
In addition, most of the responses to the coffee crisis ignore two important sectors: workers and
wildlife. And, most of the conventional responses do not alleviate poverty for large numbers of
farmers.
The value-added of this GEF project is that it will address some of the major areas that are
lacking in the current response to the crisis, including poverty alleviation for producers on all
sizes of coffee farms and coffee workers, environmental and social sustainability on coffee
farms, and comprehensive market linkages. It will also promote changes in existing business
practices by coffee companies on a significant scale to ensure replicability by the companies
involved beyond the life of the project. The project will bring farms into compliance with
internationally accepted norms covering social, environmental, conservation, production and
economic issues. It will work through a market-driven approach that relies on conventional
coffee business systems. And it will provide direct and sustainable economic incentives for
farmers to change practices. These activities and their impact will extend beyond the end-date of
the project through our concurrent development of systems for long-term support to the farmers,
especially in the areas of sustainable farm extension services in best management practices,
business, finance and marketing; ongoing auditor training; and the possible development of
micro-credit facilities for sustainable coffee farmers.
2.4 Past and Current GEF and other Donor-supported Coffee Projects
Coffee production has long been a target of philanthropic and development investment. Donor
agencies such as the U.S. Agency for International Development (USAID) and multilateral
lending institutions supported the “technification” of coffee farms during the 1970s and 1980s,
believing that helping farmers increase production would lead to rural development and poverty
alleviation. While coffee yields did increase, it has become increasingly evident that the
techniques are not sustainable, at least without ever increasing application of various
agrochemical inputs, which is beyond the reach of most farmers.
Many projects have sought to help farmers improve quality or otherwise add value to their
product, including through certification of origin or green seals of approval. For example, the
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GEF-supported project in Uganda that intended to link organic coffee production with protection
of Kibale National Park taught valuable lessons about the incentives needed to permanently
change farming practices and about the difficulty of creating "cause-oriented" markets as the
project struggled to develop significant or lasting market demand and linkages between farmers
and buyers. More specifically, there appears to have been relatively little attention given to
assessing market demand for the coffee and identifying specific potential buyers, with more
attention being given to efforts to increase coffee supplies in the area.
The GEF-supported project in El Salvador demonstrated that properly managed farms could
produce quality coffee while also serving as buffer zones around parks, biological corridors
between wildlands, and as highly diverse watersheds. While much of the Salvadoran coffee,
certified by the RA, sold at a profit, this project, like the Uganda experiment, was a limited
success in the marketplace, as the less-well managed farms tended to produce inferior quality
coffee, for which there was little demand, despite the farms being certified.2
Regarding current coffee projects, the Rainforest Alliance and its partners are currently
communicating and coordinating with the Western Altiplano project in Guatemala, the
Mesoamerican Biological Corridor (MBC) Project in Mexico, and the Consejo Mexicano de
Café. Our partner organization in Guatemala, Fundación Interamericana de Investigación
Tropical, is focusing on working with ACODIHUE, a large coffee cooperative in the area. Our
partner in Mexico, Pronatura Chiapas, is a founder of the Consejo Mexicano de Café, and is
partnering with The Nature Conservancy, World Wildlife Fund and Conservation International in
the Mesoamerican Biological Corridor project. We are also currently exploring the potential for
collaboration with TechnoServe/TechnoNicaragua in their MIF-funded coffee work in Central
America.
During the PDF B preparation phase, the Rainforest Alliance will work to define mechanisms for
coordinating with these projects and the participating organizations, and also review and interact
with other regional coffee initiatives, including those supported by the Japan Social
Development Fund, the Interamerican Development Bank, USAID, GEF Andes, the Maya
Corridor Project, and GTZ, including the local NGOs that these programs are supporting, to
determine how to optimize coordination of efforts among all stakeholders. The coordination
plans and strategies will be detailed in the PDF document. In addition, the RFA will also explore
mechanisms to bring the various coffee initiatives in the region together to not only share lessons
learned, but also to unify efforts to reform coffee and establish systems or structures for
facilitating market linkages for sustainable coffee region-wide, including Colombia and Mexico.
Conservation coffee specialists now agree that neither quality, cause-based campaigns, nor
certifications are by themselves enough to change land-use practices, stabilize prices or lift a
coffee-producing area out of poverty. These elements have to be combined and, importantly,
embraced by mainstream coffee traders, roasters and retailers. This project proposes to do
precisely that, thereby generating new ideas and lessons, and adding value to the current
knowledge base of previous and ongoing related activities.
This project will take advantage of a significant opinion shift that is beginning to occur within
the dozen or so companies that direct the global coffee industry. They are seeking to address the
2
Despite the marketing challenges in the El Salvador project, several producers in the country have recently decided
to form an association of RA-certified coffee producers. This development will facilitate meeting the volume and
quality demands of mainstream coffee buyers in the future.
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interconnected problems of capricious pricing, uncertain future supplies, growing poverty among
farmers, and negative public opinion. More specifically, several of these companies have
recently agreed to purchase small, but increasing volumes of RA-certified coffee (beginning with
0.5-2% of their total coffee purchases) that meet their quality requirements. While these
volumes are small for the various companies, they represent major increases in the total volume
of certified coffee. The RA now has a portal of opportunity to move beyond the narrow and
isolated projects that operate according to the rules of NGOs and donor agencies to a place at the
boardroom conference table, where we can collaboratively design and instigate institutional,
systemic shifts in the way the coffee industry works.
2.5 Role of Certification in Promoting Biodiversity Conservation, Poverty Reduction and
Influencing Markets
Rainforest Alliance certification links coffee production and quality with conservation of
biodiversity and natural resources, pollution abatement, worker health and safety and other
elements of sustainability. In terms of ecosystem and biodiversity conservation, for example,
RA certification prohibits the felling of forest habitat for coffee production or other reasons, and
also bans the hunting of threatened or endangered species. It also encourages the creation of
biological corridors to link natural habitats and promotes planting trees in and around certified
coffee farms, in part, to provide habitat extensions for birds and other species. Improvements
must be monitored and verified through third-party certification, giving buyers assurance that
risks are minimized and progress is being made. The same, rigorous certification standards must
apply regardless of the size or type of farm seeking certification. The principles forming the
foundation of a certification program must cover the three pillars of sustainability: economy,
ecology and ethics. For these reasons, RA-certification is being increasingly recognized by
farmers and the major actors in the coffee industry, and will be used as the certification scheme
for this GEF project.
The nine principles of the RA standards are:
 Ecosystem conservation
 Wildlife conservation
 Water resource conservation
 Soil conservation
 Integrated crop management
 Complete, integrated waste management
 Fair treatment and good conditions for workers
 Community relations, and
 Social and environmental monitoring
Currently, over 16,000 acres of coffee farms in high biodiversity areas of Latin America have
been conserved by RA certification. Since most coffee farms are small – less than five acres –
and many are in cooperatives, this is a significant accomplishment. Even so, the cost of
obtaining certification remains a challenge for many small-scale producers. The RA is therefore
planning to introduce group certification protocols to help lower these costs, and increase the
number of small-scale producers that can benefit from the process, and, as mentioned previously,
during the PDF-B planning phase will also determine the need for financial assistance by coffee
farmers to help cover initial certification costs, if necessary.
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RA and its partners are working to link sustainable farm management practices with quality.
Farmers and coffee buyers agree that there is a causal relationship -- better managed farms
produce better quality -- but the buyers’ demands and willingness to pay for quality vary
significantly. In general, we will seek to create as direct communication as possible between
coffee roasters (typically via designated coffee traders/importers) and coffee farmers so that the
farmers can understand and respond to the buyers’ needs.
But while the quality of coffee is very important for certain gourmet coffee buyers, not all buyers
are seeking high quality coffee and not all farmers are going to be able to access niche markets
where quality counts. The vast majority of coffee beans are sold as commodities into mainstream
markets where quality is secondary to price. Roasters have also learned how to extract good
coffee taste from poor quality beans. Most farmers now have to compete on price. Efficiency is
more important than quality, and consistency in coffee quality is more important to the larger
buyers who blend coffees based on different characteristics. In fact, several of the larger coffee
companies that are participating in this project have clearly stated that they are not interested in
high quality coffee, but rather in decent quality “regular” coffees from various origins.
This project presents a diversified strategy. In those areas or on those farms that can compete on
quality, the certification gives farmers extra leverage to access premium markets. In those areas
(the majority) where farmers must compete on price, the program helps farmers gain efficiencies
– in part by enlisting nature as an ally on the farm -- to produce coffee with more consistent
characteristics.
In addition, without certification there is no direct linkage between quality and sustainability.
Many farms producing high quality beans have poor social conditions and environmental
practices, and conversely, farms with good social and environmental practices do not necessarily
produce high quality coffee.
Several pilot projects or ongoing dialogues with key institutions and companies are underway
with regard to RA certification, including the Colombian Coffee Federation, Nestlé/Nespresso,
Sara Lee, Kraft, Procter and Gamble, Itochu (a large Japanese roaster that already offers a
number of sustainable-certified coffees in Japan), Neumann Kaffee Gruppe, Volcafe and Ecom
(together, these last three companies broker about a third of the world’s coffee trade).
RA certification has also achieved considerable success with niche players. Ben & Jerry’s just
launched a new ice cream flavor called “Coffee for a Change,” featuring RA-certified coffee
extract from southern Mexico. The RA is working with Green Mountain Coffee Roasters to
conduct certification audits of their farm-direct suppliers, and is also certifying coffee purchased
by Boyds, Dietrich’s, Royal Cup, and many other smaller companies. A number of other
specialty coffee roasters are also in discussions with the RA about sourcing relationships.
To interact with an array of the specialty companies in critical regional markets, the RA has
chosen to work with three strategically positioned specialty coffee importers: Volcafe Specialty
Coffee for the U.S. Pacific and Western states, Balzac Brothers for the East Coast, and D.R.
Wakefield for the U.K.
In addition, the RA has recently signed memoranda of understanding with the following
companies which varying levels of commitment to collaborate in developing and promoting RAcertified sustainable coffee: Boyd’s Coffee, Balzac Brothers, Citigroup, DR Wakefield, ECOM,
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Java City, Kraft Foods, Inc., Neumann Kaffee Gruppe, Nespresso, and Volcafe. (Copies of these
memoranda are available upon request.)
While the nature and extent of involvement of each of these companies varies, and the specific
support they can provide to individual coffee operations will need to be more fully defined
during the PDF-B phase, the common elements are: the provision of technical support to
producers (typically to improve coffee quality), various forms of financial or “in’kind” support to
improve coffee productivity and/or socio-economic conditions of coffee farmers and workers,
underwriting certification costs, advertising and other promotion of sustainable coffee and, in
most cases, payment of a price differential for sustainable coffee, that meets their quality and
other commercial specifications.
Below are some examples of the private partner relationships at various levels of vertical
integration that this project anticipates:

Kraft Foods, the global leader in coffee sales has made a historic commitment to buy 5.3
million pounds (2,400 metric tons) of certified sustainable coffee this harvest season
(2003/04) from the target countries of this GEF project. Kraft will increase this volume
to 20 million pounds (9,000 MT) annually over the next three to four years. Kraft will
seek to pay a “sustainability” differential and require transparent payment records for the
RA-certified coffee that it purchases.

Proctor & Gamble has also recently launched a new website marketing program,
featuring RA-certified coffee, and has expressed willingness to expand its purchasing,
including for traditional brands, if the initial experience is positive.

Neumann Kaffee Gruppe (NKG) – The RA is already in advanced discussions with
various companies that form the Neumann Group regarding support for certification and
farm improvements for coffee farms that would supply the large coffee roasters in all of
the countries to be included in the project. In addition, the RA and NKG have compared
sustainability criteria, as first step in expanding collaboration, by conducting joint, farmlevel inspections on a large NKG-owned farm in Puebla, Mexico .

Volcafe is also actively promoting RA-certified coffee and is interested in working with
the RA to certify large numbers of small-scale farms that it currently sources from in
southern Colombia. In addition, the company is keen to explore similar arrangements in
Honduras and Mexico. Volcafe Specialty Coffee is also interested in the RA certifying a
number of coffee farms that its various clients source from in Central America.

ECOM, the third largest trading company in the world, has also signed an MOU with the
RA and is actively marketing certified coffee and supporting farm assessments in Mexico
and Central America.

Nespresso, a subsidiary of Nestle, is negotiating with the Rainforest Alliance on a project
that would better define the links between sustainable farm management practices and
coffee quality. This program is expected to launch this year in Colombia, Costa Rica and
Brazil. Nespresso will begin integrating certified sustainable coffee into its supply chain.
This negotiation is still confidential as of October 31, 2003.
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The RA has signed a memorandum of understanding with each of these companies.
The market for mainstream, sustainable, certified coffee is now growing at significant rates. In
addition to the companies mentioned above, the RA is also engaged in ongoing discussions with
several other large coffee roasters. In this regard, it is worth noting that according to the
coordinator of the coffee program for the Sustainable Agriculture Initiative – an industry
platform – the “announcement of the Kraft commitment will force all other mainstream
companies to follow suit.”
While the proposed activities will result in a significant increase in the supply of certified
sustainable coffee, the total volumes will still constitute a very small percentage of the total
coffee that the mainstream companies purchase. Even with dramatic growth for the next 5 to 10
years, the volumes of sustainable coffee will still remain small compared to the total supply. The
majority of the increased volume is likely to be blended into existing coffee brands, at increasing
levels over time, while smaller amounts will be used to develop new sustainable coffee products.
Thus there will be a ready initial market for the coffee. In addition, most of the coffee roasters
involved in this initiative are committed to developing marketing campaigns to help create
awareness and increase demand for sustainable coffee. They are also willing to pay a premium
to farmers for improved coffee quality and adopting sustainable practices, and to enter into longterm contracts with the producers. For these various reasons, the increased supply of coffee is
not likely to have negative effects in the medium- to long-term on the prices paid to farmers for
certified sustainable coffee.
2.6 Benefits of Conducting Activities in the Various Countries at a Regional Level
A successful project aimed at bringing more equity to the coffee trade must be designed to deal
with coffee primarily as a commodity, and this means looking at the producing areas through the
eyes of commodity traders. Commodities are by definition fluid and fungible in the markets.
Large coffee companies cannot restrict their purchases to any given country; they cannot even
predetermine their sources at the country level. So the successful sustainability intervention
must follow the supply chain of both niche and mainstream players.
There are several reasons why it is important for this project to be a regional initiative.
First and foremost, the participating mainstream coffee companies need to source large volumes
of coffee from a variety of coffee growing countries and regions to meet their current and future
coffee blending needs. They also need multiple sources to achieve the necessary economies of
scale, and to have confidence in their ability to launch both new traditional and specialty coffee
products. This need is further driven by the potential uncertainty of supply from any given farm
or region due to climatic conditions and other variables.
Second, the ecosystems and coffee growing practices vary significantly from country to country
and between regions within countries, and it is important to determine how best to promote
improved conservation and farm management practices and to implement RA certification under
these varying conditions. For example, the conditions in Colombia are quite distinct from
Mexico and Central America, just as the conditions in the Guatemalan highlands are very
different from lower level coffee farms in El Salvador and Honduras.
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Third, the type of extension services provided to coffee farmers also varies significantly. For
example, in Colombia the Federación Nacional de Cafeteros (FNC) continues to play a strong
technical assistance role in many coffee growing regions and is prepared to underwrite the costs
of farmers obtaining RA-certification, provided there is clear evidence of growing market
demand. Whereas in much of Mexico and Central America government coffee extension
services are very limited and virtually nonexistent in some areas, and there is much less, if any,
potential for financial support to help farmers meet certification requirements.
Fourth, the SAN partners themselves have distinctive skills and work with different types of
coffee farms in each country. For example, while the Fundación Interamericana de Investigación
Tropical (FIIT) in Guatemala is a small organization that has extensive experience in studying
and monitoring the biodiversity of coffee farms and to date has certified mainly large-scale
private coffee plantations, the Instituto para la Cooperación y Autodesarrollo (ICADE) is a much
larger organization with multiple field offices that has much less biodiversity research capacity
but strengths in providing technical assistance to small-scale producers.
Fifth, the type of coffee company and the expertise they bring to bear and resources that they are
willing to provide also varies significantly from country to country, and can be expected to vary
over time. The specialty coffee companies are particularly interested in sourcing from southern
Mexico and Central America, whereas the major traders and roasters source from everywhere but
are most interested in purchasing larger volumes from the major coffee producing countries.
Finally, for all these reasons, it is very difficult to replicate successful activities across countries.
The presence of successful demonstration sites in each country will help to foster interest on the
part of other producers and policy makers, and greatly facilitate the rapid expansion of proposed
activities. The RA believes that by working in the five proposed countries, and possibly also
Brazil, considerably greater learning about how to scale-up sustainable coffee production, under
varying conditions and circumstances, will occur than by working in a smaller number of
countries.
As previously mentioned, the RA and its SAN partners have been in contact with relevant coffee
farmers’ organizations, coffee industry associations/federations, technical assistance NGOs and
government agencies in the countries proposed for selection. These organizations have expressed
keen interest in RA certification and welcome this initiative. UNDP country programs are also
supportive of this initiative and will become increasingly involved during the development of the
project.
In this regard, the governments of the countries in which the project proposes to work have
expressed their commitment to addressing issues of sustainable development, poverty alleviation,
and rural development through their involvement in regional and national initiatives that support,
directly and indirectly, the development of the sustainable coffee sector. Programs such as the
Centroamerican Commission of Environment and Development, the Mesoamerican Biological
Corridor, Promecafe, PROARCA, and the Central American-US Joint Accord on Sustainable
Development, and the many projects funded in Central America, Colombia and Mexico by
World Bank, GEF, USAID and IADB/MIF, have demonstrated that these countries recognize the
importance of and support the types of activities promoted by this project, especially given the
significance of coffee in these countries’ economies, and the severity of the coffee crisis. The
RA has identified programs in several of these countries that are directly supportive of the work
proposed by the project, such as the Federacion Nacional de Cafeteros in Colombia, which has a
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specialty coffee program that includes a focus on certified sustainable coffee and is currently
underwriting the costs of technical assistance provided by FNC extension personnel and
certification costs for selected coffee producers to apply for RA certification, conducted by
Fundacion Natura. Our partner in El Salvador, SalvaNATURA, works closely with government
initiatives to provide rebates, softer credit mechanisms and trade benefits to certified coffee
farmers. In addition, the RA is currently participating in a regional program for Central America
and the Dominican Republic to improve coffee quality and promote certified coffee for smalland medium-scale producers. This recent USAID-supported initiative, which is being
implemented by Chemonics as the lead organization, has been formally endorsed by the
Ministers of Agriculture in the participating countries, which include El Salvador, Honduras and
Guatemala. Throughout this project, the RA and its SAN partners will continue to identify,
analyze, build upon and establish relationships with the policy and program initiatives in each
country where this project will be conducted, to ensure full complementarity and coordination,
and to encourage and inform these governments’ efforts to address issues of environmental and
economic sustainability.
A critical component of the PDF-B process will be the assessment of whether each country
proposed here will be included in the final project, based on feasibility, efficacy, potential for
synergy and available resources. The latter will be confirmed at PDF B submission and
supported with the required endorsement letters.
2.7 Barriers and Opportunities to Scale-Up
While the total volume of RA-certified coffee is still relatively small, and in some coffee
growing areas supply still outstrips demand, there is strong evidence from several major coffee
companies that their demand for RA-certified coffee will increase dramatically during the next 13 years. This project is based largely upon this increased corporate interest and growing demand
for certified sustainable coffee.
Without GEF intervention, the various private sector partners that the RA has already identified
would test the limits of the NGO system, growing the amount of sustainable certified coffee in
the world market and motivating certification of farms up to those limits. Those constraints
include:
 a limited number of farm auditors and technical assistance providers
 limited capacity of the SAN national partners to link coffee farmers to technical
assistance providers, research the effects of farm management practices on biodiversity,
or work on agriculture policy, and
 limited resources prohibiting the RA and its partners from responding to the growing
requests for certification from farmers, government agencies, NGOs, coffee associations,
commercial coffee buyers and consumers.
Without GEF support, the NGO coalition program could continue helping farmers and
conserving wildlife habitat. It could continue making progressive changes in government
agriculture policy and building public support for certified sustainable agriculture. These
incremental changes are important and satisfying, but the GEF now has an unprecedented
opportunity to actually change the way the coffee business thinks and acts.
The companies mentioned in Section 2.5 above have committed to working with RA and its
partners to promote certified, sustainable coffee, with the associated environmental and socio12
economic benefits, that meets their price and quality needs. Their attitudes are already changing;
now GEF support for this project with help them change conventional business practices more
quickly and on a larger scale than would be possible with only their own resources. The RA
believes that the project will develop the new models needed to lead to a paradigm shift in the
industry.
At the end of the project, it is expected that at least seven of the twelve coffee companies that
have committed to working with the RA will be purchasing sustainable certified coffee, and have
direct, more transparent and longer-term sourcing contracts with selected producers.
Furthermore, it is expected that the companies will have internalized these models for doing
business, and will replicate the activities with additional supplier farms using their own
resources. They will also incorporate increasing volumes of RA-certified coffee into existing
coffee brands and develop and promote new coffee brands and products. Over time, they can be
expected to apply the same practices to other crops and products.
To date, the RA and the members of the SAN have been in contact with relevant national
government ministries, national and regional coffee federations and associations and several
local NGOs, all of whom have welcomed the proposed concepts. During the PDF-B phase, RA
and its collaborating partners will continue to interact with these organizations to solicit their
continued input and, ideally, their collaboration in working with selected farmers.
3. Project Strategy
3.1 The Overall Approach
The overall approach of the project is to transform the way that the participating coffee
companies source coffee, establishing new ways of doing business that they can replicate after
the completion of GEF-funded activities. The project’s primary focus is to ensure that the
participating companies can source increasing supplies of RA-certified coffee to meet their
growing demand, benefiting the environment and coffee farmers and employees in the process.
At the end of the project, the selected companies will be expected to purchase between 1-5 % of
their total coffee supplies from RA-certified sources. Those purchases would represent at least
triple the current volume of RA-certified coffee and major increase in the current total volume of
all types of certified coffee.
A central aspect of the approach will be to address the barriers that currently exist within the
participating coffee companies to purchase and promote sustainable coffee, ranging from efforts
to increase awareness about the issues within the companies to pricing and cost considerations
along the supply chain.
The RA is confident that this project will encourage large coffee companies globally to pay a
premium to RA-certified coffee farmers and also provide other beneficial services, thus helping
to alleviate poverty in this sector. The project will expand certification and sourcing partnerships
on a larger scale and more rapidly than would otherwise be possible without GEF support,
developing sufficient supplies of certified sustainable coffee to create a “push” in the market and,
at the same time, work with the participating companies to promote and create a steadily
growing, predictable demand for such coffee.
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The project will also involve other NGO, government and donor partners to add important
complementary services that the private sector is unlikely to support alone, such as agroeconomic research, technical assistance, and trade policy analysis.
This GEF-supported project will also enable the RA and its partners to streamline certification
systems, reducing the cost burden and increasing the benefits to poor farmers; implement new
program services, such as “group certification,” to further extend the benefits to smallholders.
During the PDF B phase of this project, the RA and its partners will assess the need to support
certification costs for small-scale farmers. The project aims to have certification costs covered,
at least in part, by the private sector, creating a new paradigm wherein coffee roasters and
retailers will help to underwrite the costs of certification because of the competitive edge that
RA-certified coffee gives them in the marketplace. Even so, the RA believes it is important for
farmers to pay some of the certification costs so that they value the program and demonstrate a
commitment to adhere to certification standards. The amount they can realistically pay initially
needs to be determined on a case-by-case basis. If we determine that there is a need to support
the initial certification costs for small producers, we will build this need into the project and
request funds for this purpose.
The RA and its partners will also work to ensure that the terms of any contracts negotiated
between producers (especially smallholders) and the purchasing companies are clear and
mutually agreed to by the various partners in an open and transparent manner.
GEF intervention would allow the project to engage specialized expertise, such as in
commodities market modeling, supply chain economics and the new bio-terrorism laws, which
will affect coffee trade. With GEF support, the project will involve greater numbers of NGOs
and companies in developing new models for assisting coffee producers than would be possible
without additional funding.
This project will also support the development of a comprehensive monitoring and evaluation
system to measure the immediate economic, social and ecological effects during the project and
the longer-term impacts of ongoing operations after the project ends.
During the PDF-B planning phase, the project will select and develop demonstration sites in each
country where technical assistance and certification activities with farmers will be modeled and
then linked to niche and mainstream coffee companies through sourcing relationships and direct
contracts.
The sites will be selected based on the following environmental and biodiversity criteria:
 Proximity to national forest and mountain ecosystem conservation priority areas,
containing globally significant biodiversity, and to “hot spots” and other priority
conservation areas of major international conservation organizations
 The area, extent and quality of remaining forest cover
 The presence of critical wildlife habitat and the populations of resident and/or migratory
endangered species
 The proximity to national parks, biological corridors and critical watersheds; the potential
to buffer these areas and to connect them with nearby forest remnants, private forest
reserves, and municipal forests through various reforestation and rehabilitation initiatives
The sites will be also selected based on the following commercial criteria:
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The expressed demand by the participating coffee companies for the type and
characteristics of the coffee produced in the site, and the related commitment of the
companies to invest in the sites and/or to promote the coffee grown there
The potential for expansion to include additional producers in and adjacent to the areas in
order to obtain significant volumes of certified coffee over time
The interest and capacity of the coffee producers in adopting sustainable coffee practices
and meeting the RA certification requirements
In addition, if the above factors are similar, preference will be given to sites that enable RA and
other SAN members to work in a variety of coffee growing habitats and with a range of coffee
producers, from small-scale producers to large estates, in order to generate as much learning as
possible about what will be required to scale-up sustainable practices under various conditions
and circumstances.
Based on the above criteria, it is highly probable that the following areas could be the initial
focal points for the proposed activities in each country. In Mexico, the project could focus
initially on farms that are outside the El Triunfo Biosphere Reserve in Chiapas; there are a
number of conservation-coffee programs inside the reserve, but nothing in the surrounding areas.
In Colombia, the project could begin with demonstration sites located around the Santuario de
Flora y Fauna Gaunenta Alto Rio Fonce and the Reserva Biologica Cahcalu in the Santender
region. The second area is managed by SAN partner group Fundación Natura. Pending further
consultations, if Brazil were to be included as a third large coffee producer, a potential SAN
partner could be IMAFLORA as they work in the cerrado (shrubland) and Atlantic Forest
habitats, and could provide examples of how coffee grown outside of forest ecosystems and in
connection with efforts to regenerate degraded landscapes can be equally valuable for
biodiversity conservation.
In terms of the specialized coffee producers, in El Salvador, the national SAN partner,
SalvaNATURA, has already demonstrated the value of certified coffee farms as buffer zones
around parks and is now using coffee farms to develop a biological corridor between protected
areas, notably El Imposible and Los Volcanes national parks. With GEF funding, these
successful practices would be expanded to other coffee growing and protected areas. In
Guatemala, the model product would illustrate the potential of coffee farms to host private forest
reserves and to preserve indigenous cultures. And in Honduras, the demonstration would be
designed to show how large numbers of smallholders could be brought together in “group
certification” to aggregate their improved quality coffee and thus command higher prices.
The information provided from the sites will feed into the marketing activities as the companies
seek to reposition existing coffee brands and/or to launch new sustainable coffee brands. The
costs of creating and increasing consumer awareness and demand for sustainable coffee products
is very significant, amounting to millions of dollars per large coffee company, and represent a
major level of co-financing for the project, in addition to the other investments that the
companies are willing to make in certification and producer-level activities.
The participating large coffee companies will seek to blend RA-certified coffees into existing
mainstream and niche specialty products, and also to develop new brands featuring RA-certified
coffees for both these markets. The smaller, specialty coffee companies will focus on
incorporating RA-certified coffee into existing and new products for the gourmet and other niche
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markets. The pricing and quality demands of niche versus mainstream coffees are quite distinct,
as are the considerations for blended versus 100% RA-certified products. These various
considerations need to be carefully factored into the selection of the project demonstration sites.
3.2 Overall Objective, Indicators and Outcomes
The overall objective of the project is to increase the supply and scale-up the sales of sustainable
coffee in niche and mainstream markets, in a manner that manner that promotes both immediate
and longer-term biodiversity benefits. Consequently, the RA has focused its proposed work on
coffee producing areas in eco-regions characterized by their global biodiversity significance that
are of interest to both mainstream and niche coffee companies.
A monitoring and evaluation system will measure key market indicators and some specific
biodiversity and socio-economic indicators. By analyzing the “pre-conditions” during an initial
farm scoping for coffee farms, the project will measure the biodiversity and socio-economic
impacts of a given farm implementing RA certification standards.
Sustainable certification is a nearly ideal monitoring and evaluation system, since the standards
were set through a transparent, multi-stakeholder process and evaluation is done by specially
trained, independent auditors from national partner NGOs.
The indicators of success for the project will be defined during the PDF-B planning phase, with
quantifiable targets and implementation timeframes being agreed by local stakeholders. These
indicators are likely to include:
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The number and total area of coffee farms certified or in the certification process
The number and total area of coffee farms certified or in the certification process adjacent
to parks and wildlife corridors
The number of people trained in RA certification and in the selected countries
The total volume of RA-certified sustainable coffee produced
The total volume of RA-certified sustainable coffee purchases by the participating
companies
Sourcing partnerships established between farms and brokers/wholesalers/retailers
The stated willingness of participating companies to replicate sourcing partnerships
beyond the project sites and in the future3
The change in prices paid to coffee producers during the life of the project
The number and percentage of applicant farmers who obtain RA-certification in each
demonstration site and the number that maintain RA-certification during the project
period
Measured improvements in working conditions; the number of workers who benefit from
these improvements
Measured improvements in reforestation, soil, water, waste and agrochemical
management practices (compared to measured pre-conditions)
3
RA certification and its replicability have been successfully tested in bananas with industry leader Chiquita, which has gone
from purchasing small initial volumes of RA-certified bananas to beyond 100% certification of their owned farms to provide
assistance for their independent supplier farms to become certified by the RA as well, thereby helping additional farmers obtain
vital premiums and new markets in Europe.
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Conservation of existing forests and forest remnants within and adjacent to coffee farms
and a significant increase in biological corridors connecting these area both within and
adjacent to coffee farms; increases in the prevalence and incidence of key indicator native
species, based on data collection on selected, representative sample farms
Financial resources and technical assistance leveraged from the private sector, and the
indication that these resources and assistance will continue for farmers beyond the life of
the project
Models created for sustainable coffee production in high biodiversity areas, so that these
models can be replicated in additional areas of global biodiversity significance
Supply side outcomes will include:
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an increased number and total area of certified farms
improved local capacity to change production practices and certify farms
improved enabling policy environments for the promotion of certified coffee
improvements in coffee quality related to better management practices and access to
improved post harvest technologies
replication mechanisms in place in demonstration sites and with local partners
improved, streamlined certification processes that will be more accessible for producers,
particularly small-scale farmers
landscape-level conservation management plans developed and used to improve the
linkages between sustainable coffee practices and natural habitat conservation efforts
Demand side outcomes will include:
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significant increases in the sales of RA-certified coffee
development of long-term trade sourcing partnerships between farmers and buyers
information systems providing buyers with data on production sites
the percentage of certified coffee receiving price premiums and the level of the premium
(compared to baseline conditions)
the number of exiting coffee products that are repositioned to highlight the sustainability
of the coffee and the number of new sustainable coffee products launched by
participating companies; the level and extent of corporate advertising to promote
sustainable coffee products
a clear demonstration by the participating companies and RA to wholesale and retail food
companies that there is a strong and growing demand for RA-certified coffee, based on
increased sales in other food companies already selling RA-certified coffee products
3.2 Activities
This proposal requests funds from GEF to support activities that will:
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Bring coffee farms into sustainable management, through technical assistance; training
in best management practices, business, finance, marketing and other skills; capacity
building through the training of farm auditors and coffee cooperatives and associations;
the identification of methods for streamlining certification for small farms; and the
certification of coffee farms.
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Bring financial stability and self-sufficiency to coffee farmers by fostering long-term
relationships and market linkages between farmers and buyers; improving
communications and information flow among coffee farmers, industry players,
conservation projects and organizations, and corporate and donor sectors; working to
improve the enabling environment and policy framework for sustainable coffee in site
countries; and connecting coffee farmers to investment and financing opportunities.
Ensure biodiversity conservation and the improvement of livelihoods by developing
appropriate monitoring and evaluation systems to measure the environmental, social and
economic impacts of the project.
These activities will be further developed and confirmed as part of PDF B preparation work,
including a corresponding assessment of their incrementality and the required co-financing for
baseline related activities. It is expected that the proposed activities' impact will however extend
beyond the end-date of the project through the concurrent development of systems for long-term
support to the farmers, especially in the areas of sustainable farm extension services in best
management practices, business, finance and marketing; ongoing auditor training; and the
possible development of micro-credit facilities for sustainable coffee farmers.
Full-scale project activities - to be corroborated via PDF B preparation work - will include the
following detailed below. Activities to be co-financed by private sector partners are indicated in
parentheses, others will be analyzed under the GEF incrementality principle to determine their
elegibility for GEF financing, and the corresponding need, as appropriate, to mobilize additional
co-financing for their implementation:
Supply-Side Activities
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Certify farms in each country that meet social and environmental standards (some
companies will help to underwrite these costs, either fully or partially)
Facilitate technical assistance, helping make farms environmentally and socially
responsible while producing good quality, certified sustainable coffee (some companies
will provide direct support, probably in kind, to improve coffee quality)
Build the capacity of coffee cooperatives and associations to promote certified
sustainable coffee production
Develop training materials in sustainable coffee production for technical assistance
providers and farm auditors
Significantly increase the number of trained farm auditors in each country
Implement protocols for certifying groups of small farms, reducing paperwork and costs
so that more smallholders can enjoy the benefits of certified production and sales
Improve the flow of market and quality information to farmers, closing the information
gap and instilling more equity in the supply chain (several companies will provide market
and coffee quality information to the participating farmers, as an in kind contribution)
Review and support processing opportunities that add value to the coffee produced
(private sector companies will provide in-kind contributions of staff time and expenses in
promoting processing activities)
Quantify the level of investment, harvest finance and other support provided by the
private sector to help coffee producers meet RA-certification requirements and
commercialize their produce
Work with government agencies and policy-setting bodies to improve the enabling
environment and policy framework for sustainable coffee in the selected countries
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Develop dissemination and replication mechanisms to transfer practices from
demonstration sites to other coffee growing regions
Coordinate and collaborate with other national and regional coffee and relevant
conservation projects and programs, such as the Meso-American Biological Corridor
Project, for example, to share experiences and lessons learned
Develop appropriate monitoring and evaluation systems and landscape mapping
activities that can measure the various impacts of the project and link farm-level activities
to landscape level results
Facilitate the provision of credit and other resources from the corporate and donor sectors
to participating producers for farm improvements and other coffee-related investments
(private companies will provide harvest finance and other credit to the participating
farmers from whom they purchase certified coffee)
Demonstrate the economic viability of sustainable coffee production systems
Provide thousands of metric tons of certified sustainable coffee to specialty and
mainstream markets
Demand-Side Activities
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Interact with coffee roasters and traders to identify coffee growing regions and farms that
respond to their commercial interests while also meeting certification standards
(companies will contribute their staff time, communication costs, and other related
expenses)
Promote direct and long-term trade sourcing relationships between farmers and buyers
(companies will contribute their staff time, communication costs, and other related
expenses)
Seek higher prices from buyers for certified coffee reflecting both improved coffee
quality and a price differential for adopting sustainable practices (companies will cover
the higher prices)
Provide companies with social and environmental information from their source
countries, helping them manage risks, and to communicate with their customers,
shareholders and other constituencies
Work with coffee roasters to develop marketing messages, materials and events to help
increase demand for sustainable-certified coffee (companies will provide associated staff
time and expenses and also cover the costs of marketing work and
advertising/promotional costs)
Review branding vis-à-vis organic and fair trade and other types of certified coffee
(companies will provide staff time and other expenses related to the development and
implementation of branding around certified coffee)
Work with the coffee roasters to determine current and future projected volumes of
coffee to be purchased both for blended and 100% RA-certified products, in the
mainstream and niche markets in various consumer markets (companies will provide staff
time and associated expenses)
Work with selected coffee companies to examine the internal barriers to their adoption of
sustainable coffees on a broader scale or at a faster pace; explore the potential for visits
by company staff to coffee farms so they can better understand the challenges and
opportunities of sustainable coffee production; develop cost-benefit analyses with these
companies regarding potential new ways of working with coffee producers to help make
the case for change (companies will provide staff time and associated expenses)
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Hold supply chain workshops to examine and clarify issues such as chain of custody
certification, transparency and traceability of coffee payment and the movement of
product, etc. (companies will contribute staff time and expenses, and possibly meeting
expenses)
Document and communicate the level of co-financing provided by the private sector to
promote consumer awareness and demand for RA-certified coffee
Activities to be Explored During the PDF-B Planning Phase
The RA and its partners will explore several activities during the PDF B planning phase for
possible inclusion in the full size project. These include:
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A synthesis of findings and lessons learned from current and past coffee projects in Latin
America and the development of a coordination mechanism between ongoing ones and
this GEF project.
Mechanisms to bring the various coffee initiatives in the region together to not only share
lessons learned, but also to unify the efforts to reform coffee and establish systems or
structures for facilitating market linkages for sustainable coffee region-wide, including
Colombia and Mexico.
Additional demonstration sites, or removal of one or more countries/sites based on
criteria mentioned in preceding sections.
Marketing campaigns and consumer awareness.
Providing access to marketing for coffee farmers.
Exploration of other technical issues and possibilities raised by the GEF Secretariat, such
as: moving coffee farmers up the value chain from raw coffee; providing access to credit
for sustainable coffee farmers; biodiversity labeling and corresponding premiums; issues
with certification of small farmers in El Salvador; management of volume fluctuations
and stability of supply; the use of mixed cropping to offset coffee price fluctuations and
possibly provide shade; and financial mechanisms for insulating coffee farmers from
price fluctuations.
The project will also consult widely with relevant coffee and conservation projects during the
planning phase in order to build on lessons learned and best practices. The full detailing of PDF
B preparation work will be provided at the time of PDF B submission.
4. Arrangements for PDF B Implementation
The specific execution and implementation modalities for the PDF B will be discussed with
government counterparts, the RA, relevant participating NGOs, and UNDP, and will be detailed
in the forthcoming PDF B submission.
It is however envisaged that implementation partners for the PDF B phase will include a
consortium of local NGOs led by the RA in close association with leading companies in the
coffee industry. The RA is a leader in developing best management practices for sustainable
land use, and offers third-party certification and eco-labeling services to farms and forests that
are managed in ways that reduce environmental impacts and increase social benefits.
In all five countries RA will implement the proposed activities through and in conjunction with
its local conservation and development partners in the Sustainable Agriculture Network (SAN).
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The SAN members in the five participating countries are: Pronatura Chiapas in Mexico,
Fundación Interamericana de Investigación (FIIT) in Guatemala, SalvaNATURA in El Salvador,
Instituto Para La Cooperación y Autodesarrollo (ICADE) in Honduras, and Fundación Natura in
Colombia.
These organizations are already in close contact with a range of coffee producers, processors,
traders and exporters; relevant government agricultural research and extension institutions;
environmental and economic development agencies and donors; and local and international
conservation and development NGOs. During the course of the PDFB, the SAN members will
work with RA staff to deepen these relationships as they pertain to the coffee sector in each
country, and to explore the scope for collaboration with existing and planned coffee-related
activities, while seeking to avoid any duplication of effort. The RA will systematically share the
results of PDF B planning activities with relevant actors in each country, drawing on UNDP's
convening skills to facilitate such exchanges.
While the SAN partners will seek to collaborate with a number of other nonprofit partners in
implementing this GEF project in each country, RA also intends to work with several
international NGOs. Some of these partners include: TechnoServe, that will collaborate with RA
in providing technical assistance to selected coffee producers; Ecologic Enterprise Ventures, that
will provide access to harvest finance to selected smaller-scale coffee producers, ideally in
combination with the major traders and specialty coffee importers; and Foundations of Success,
that will work with the RA and various private and public sector partners in developing
landscape-level adaptive management plans to conserve biodiversity while also monitoring
relevant indicators to demonstrate the socio-economic and biodiversity impact of improved
agricultural and natural resource management practices.
The RA and SAN partners have good communications with governments in the target countries
and will work with the relevant national agencies to help create an enabling environment for the
program. The RA and SAN also plan to work with a number of governmental or quasigovernmental coffee research and extension agencies in the identified countries. In addition, the
Project will work closely with the World Bank offices in the various countries and will be
implemented in close coordination with relevant World Bank, regional and national coffee
projects.
4.1 Role of UNDP
This project fits with UNDP’s core mandate to halve severe poverty by 2015. Economic growth
is integral for poverty alleviation and this project’s strategies to certify farmers engaging in
sustainable practices, help them access markets, and obtain premiums for their product all can
contribute to the UNDP goal. UNDP is uniquely suited for a new GEF project in coffee, since
UNDP's core areas of expertise are capacity development at both the community/farmer and
government level, and the project’s activities reflect this first area of expertise. UNDP can help
to build the capacity of coffee producers associations, SAN national partners, and other partner
organizations that will promote the sustainability concepts and provide associated technical
assistance. UNDP provides support for bringing together communities, government and private
sector, across multiple countries.
UNDP's access to governments will be useful for helping the project improve enabling
environments and in generating opportunities for the coffee industry to interface with the
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governments. The project will also seek the involvement of UNDP Country Offices in each
target country to help with in-country logistics of implementation.
5. Budget and Counterpart Funding
As alluded in this Concept document the project anticipates applying for PDF-B preparation
funds (approximately $350,000) that would be matched 1:1 by private sector investment, and
additional grants. Project costs for the resulting full-scale project would be approximately USD
11-12 million, with a corresponding request to the GEF of USD 4-5 million and counterpart
funding of $7-8 million. Counterpart funding would include a number of sources of investment,
particularly by the private sector partners through the sourcing relationships developed and
premiums paid to coffee farmers, as well as private sector investments in their supplier farms’
improvements to reach RA certification.
The PDF-B preparation phase will assess and define the required level of funding, based on an
analysis of the final set of activities, their corresponding incrementality, and the final
participating countries and sites.
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