For this edition of Q&A, we had two very special guests: Félix Camposeco, Manager of ACODIHUE, a cooperative in Huehuetenango, Guatemala, and Gabriel Boscana, or Gabe, as many know him, from Bellwether, a company of electric roasters seeking to revolutionize how roasted coffee is bought and sold. One way is with the Living Income project.
A few years ago, in 2021, Bellwether started a Living Income project in Colombia with ASOPEP, a coffee organization and one of our suppliers. In 2022, they decided to expand this project, taking it to Guatemala with ACODIHUE, a cooperative in Huehuetenango.
Here, we had the opportunity to speak with Gabe and Felix so they could help us explore the topic of Living Income and and hear their perspectives and the impact they've seen firsthand!
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Sustainable Harvest (SH): First, we want Gabe to tell us a little about how the Living Income project came about!
Gabe Boscana (GB): Honestly, the idea has been on my mind for a long time, and it's a way for Bellwether to share risk with producers and understand that the C Market doesn't justify the prices or production costs for producers. We thought about how Bellwether could help and have a positive impact, not just by giving more money but also by understanding the production process for producers and cooperatives and their needs. We saw how prices fluctuate every year, and we wanted to establish something that would provide a base that would allow them to cover production costs and have better profit margins.
For me, it's about being closely tied to the producer; that relationship is where everything starts. We can only have a business by understanding the challenges of a producer and how we can help. We believe that if a producer, a cooperative, or a group is producing good coffee, there's no reason they should suffer economically. If they have a buyer and a good product who understands all the costs, why not pay a price that gives them a little more freedom to take care of their family or provide education to their children, or why not support projects like the one we did with ACODIHUE with women and dental care.
This was a very easy idea for us because we wanted to ask questions, understand, and know if we were paying too little. I think most of the time, we buyers pay too little for good coffee, and we wanted to understand that whole process. That's why we decided to start the project with ASOPEP in Colombia, then in Guatemala with ACODIHUE and Félix, and now also in Peru at Finca Churumpampa. We aim to have products certified as Living Income products for Bellwether by around the end of 2025 for the approximately 26 different producers we work with.
SH: Excellent, thank you for explaining that part! Now, Félix, tell us a little bit about how ACODIHUE got involved in this study and the Living Income project.
Félix Camposeco (FC): Well, first of all, thank you very much for putting yourselves in our shoes, on this side, in the field, and on the side of coffee producers.
Let me give some context: ACODIHUE was founded in 1996, but we started trading coffee more actively around 2000. In 2012, there was a significant shift because many young people—at that time, I was young, right? (laughs)—took more responsibilities. I became the commercial manager and started advocating fiercely for small coffee producers to receive fair compensation for their products.
Many times, the money from their coffee stayed in other hands, in the hands of people who led the producer groups, in the hands of intermediaries. The idea was that all producers would have their income transferred to their accounts through a check or a transfer. Transfers came a little later, but at least through a check, so there wouldn't be cash handling within the business.
It was a substantial achievement because the associates began to realize that there was a total income from their coffee. If someone delivered 10 pounds of coffee, we would pay those 10 pounds—we wouldn't pay 8 or 11, but the 10 pounds. But we realized that the price always varied too much and did not cover the needs.
So we had some first visits with Bellwether, and when we started negotiations, we told them about our experience changing the smiles of small producers through dental work, and they supported us in that project. Believe me, as Gabriel said, it's something so simple, but for a woman who has dental problems, because she had 4 or 6 children and the loss of calcium was extreme and she had to lose her teeth, to come and offer her a new smile with a bit of help, that gave us very strong joy; both for them and us. So we started talking about living income and said we were available to do the study to find out how to achieve fair payment or dignified income for small coffee producers.
SH: How beautiful! It's something that we sometimes take for granted, right? The impact a roaster can have in the lives of coffee growers, for example, these women, is incredible! And tell us, Gabriel, how did you define the price, how did you start this project, how did you start the studies, and what factors did you take into account to start the project and to define the price as it is?
GB: Yes, of course! We defined the price based on what we can pay a producer that allows producers to afford education, clothing, an emergency fund, medical services, and a good diet. That's the base.
The questions we ask ourselves specifically are: How much land does the producer, the farm, or the cooperative have? What is the total land, and how many producers work on the farm? What is the production and production capacity? — By that, we mean how many pounds of cherry they get yearly, and how does that translate into green coffee? Production costs, fertilizer, and everything they use to produce coffee.
I think this year, we're going to try to work with Fairtrade—at least, that's the plan. We want to analyze and understand the base price of housing for a family of four people: how much coffee can be obtained from the land, how much is paid to the producer, and what is the total amount needed for a family to survive—and not just survive, but live well.
So, what do we do with all that data? Well, Grayson, who is Bellwether's sustainability manager and numbers person, analyzes and calculates all that, and, in the end, we have more or less what price the producer needs.
Let's take ASOPEP as an example. Two or three years ago, we accepted the FOB price they sent us. Still, when Grayson did the analysis, as I explained, that FOB had to increase by at least 30 cents per pound to ensure a living income price, we decided to pay those extra 30 cents because of the method and analysis we used and because our goal is to pay a fair price, and not just fair in the sense of "oh they can survive, they lack, but at least they get to the next year," it's more than that. Our goal is to pay a price that enables producers to invest in their farms and continue growing coffee rather than just providing the minimum for survival. This is crucial in addressing the current issue of farmers abandoning their farms.
Our goal is not only for Bellwether; we want all coffee buyers to follow this path and pay for coffee in the same way, which has nothing to do with the 'C' but with what it costs to produce that quality coffee.
And on the human side, for us also, as I said before, it makes no sense to pay for coffee that we can sell at profits on our side and not pay a price that gives a little profit to the producer, too. Without producers, we, I, wouldn't have a job.
All those factors I mentioned before, which are a little more complicated than what I just explained, are common factors and information the producers need to know to empower themselves and better control their business. In many circumstances, buyers have more power because they have more information. And with Bellwether, with this analysis, I think the producer gets a little more knowledge about how much their coffee costs.
SH: That's super important, Gabriel. Balancing what you believe it costs and what it actually costs to have financial information that facilitates this negotiation, right? And it's a job that takes time, requires education, and also empowers producers to truly understand how the business works beyond what they may have inherited or learned empirically from one generation to another, and start to become a little more professional, with the costs of maintaining the farm and doing business.
And Félix, you have experienced that, right? Hand in hand, you've been there in the front row, working directly with the organization. What changes have you seen, or have both the cooperative and perhaps the producers experienced since implementing this living income project?
FC: First of all, when producers, and in this specific case, the female producers, start receiving a dignified income for their coffee, the change is seen very quickly because, first of all, their effort is recognized. They are not just being recognized by congratulating and applauding them but by ensuring that their family has a slightly better income.
Everything we have achieved in the past few years has been due to our study with Bellwether. For two years, we took production costs into account, specifically discussing the price, what it could be, and what the basis for living income could be.
One of the strongest conclusions is that a family with less than one hectare of coffee— about 10,000 square meters—and an average production cannot support its family, even if it is paid a living income.
If a family has less than one hectare of coffee, then this is another problem that we, as an organization, need to address. Around 50% of our partner producers at ACODIHUE have less than 10,000 square meters of land. This is why we at ACODIHUE need to properly manage the business and allocate resources for sustainability projects to support these families who may be unable to meet their basic needs by the end of the year.
The organization has undergone many changes. There have been times when we say, "Well, we're in this project, but our production volume is much higher than the volume within this project (living income project)." Still, it's a great help because, in the end, there are producers who have a bit more volume, and while we can't cover 100% of their coffee with this living income, we can cover a percentage of their harvest.
As part of those changes, we have also generated control documents and progressed in monitoring our use of resources. We must thank Bellwether because not everyone in the industry is genuinely committed to the producer.
SH: And Félix, how do you think the impact of living income will be in terms of sustainability in the long term? In terms of the economic stability of the producers and the producers you work with. What do you see in the future with this project?
FC: From 2012 onward, we began considering how producers could enhance their living conditions, and we have positively impacted and improved the living conditions of people who previously lived in very poor circumstances.
ACODIHUE carried out many of the issues by not giving the money from the harvest profit in cash; instead, we worked with the families to understand their needs, such as whether they needed a new bathroom or toilet because there were no proper toilets in many houses.
Many families have experienced positive changes. Now, many of them have access to improved kitchens with proper flooring and wood stoves. This enables them to prepare food with appropriate hygienic measures, reducing the risk of contamination for their families. We have also done projects to promote the use of eco filters, help families consume safe water, and more!
We're not being paternalistic because they know that the money used to buy these things is generated from the coffee they sell.
I genuinely think that through the living income project, we will achieve for associates of ACODIHUE to have better living conditions, improved health, and opportunities for children to go to school.
SH: Thanks Félix, it's exciting to see the impact and vision! We are entering the final part of the interview, and we were hoping you could give us your reflection or perspective. We'll start with you, Gabe.
From your perspective as a manufacturer of new technology and a leader in buying coffee via a living income model, what does it mean for you and Bellwether to contribute to this movement for producers and the industry?
GB: Ah, it means everything! Because we believe this is a good model and example of being fair to both sides of the coffee purchase formula. For us, it's everything, and we also think that it's vital to empower the producer and have that relationship based on trust with them, as with Félix! Where we are in constant communication. Through that communication, we understand his initiatives and ideas for the project much better.
When you commit to paying a fair price, trust in the relationship begins. As I mentioned earlier, this is a tremendous model. We hope we are not the only ones buying coffee this way, and at Bellwether, we hope to keep working with this model!
SH: Thank you very much! And for you, Félix, how would you like to close? What does dignified income mean to you and the producers?
FC: Well, last year, at Let's Talk Coffee in Honduras, I had the opportunity to say this, and I believe there's an English saying that goes, "Put your money where your mouth is," but not every industry wants to do that. Not every industry seeks to align their actions with their words to contribute to what is being promoted. But Bellwether does it. They are doing it, and I think this is a perfect opportunity we won't miss. We are committed to maintaining our quality because they are recognizing something in us at the end of the day, and we must respond.
I remember having some conversations, starting from 2012 onwards, where women still "sold their sadness." Saying, "We are indigenous women, we are very poor, we are widows because of the war," and they sold their coffee through those stories.
Now, through our work to empower women, they say, "We are empowered women who sell high-quality products. We sell coffee produced by women and managed by women, which can compete internationally."
So, we are happy and grateful to have decided to get involved in this project.
We have to analyze the costs again every year after the harvest and provide feedback. Gabriel mentioned something fundamental: trust and friendship. I mean, I can pick up the phone and talk to Gabriel, speak to the Bellwether team wherever they are, call them and chat, tell them what's going on here in Guatemala, and inform them of what we are going through and what we are working on, just like the relationship we have with Sustainable Harvest.
SH: Thank you, Félix! Is there anything you'd like to close the interview with?
FC: Well, thank you for the opportunity you have given me to speak and see you all again. I want to leave a reflection: this project is a relationship that we must maintain, and the three companies must be responsible. We must communicate and tell each other what we need for this to be truly sustainable. Thank you very much!
SH: And Gabriel, any reflections or something you'd like to send everyone home with?
GB: Yes, it has been an honor to meet Félix and ACODIHUE and work with Sustainable Harvest. Honestly, I can tell you that this project wouldn't be possible without you. You had confidence in our program three years ago, and here we are. So, it's an honor and a pleasure, and thank you very much!
SH: Thank you both for your time and for sharing all this, which is very valuable to us and our audience! Ultimately, we all share that sustainable relationships, with impact, are fundamental for all of us and will help us have a more dignified coffee industry for everyone.
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