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Coffee farmers generally earn relatively little but bear considerable risks, especially with the increasingly unpredictable and severe weather due to climate change. In other words, farmers face an unfavorable risk-reward balance. Additionally, we have noticed that farming communities rarely have access to the global equity market, which historically offers great financial returns.
To address this, we decided to develop a Financial Participation Program. This program involves issuing and donating a financial derivative that represents the value of a ViCOLLECTIVE AG (ViCAFE and Vivi Kola) share. Our goal is to create financial resilience among coffee farmers by bridging the equity gap between farmers and the coffee roaster/coffee shop company. After a three-year holding period, farmers are allowed to sell the derivative back to the foundation using a simple valuation formula (1*revenue of ViCOLLECTIVE AG). The payout is unconditional. Currently, only family-owned farms can participate. Farmers receive financial training and an annual report on the financial performance of ViCOLLECTIVE AG.
Last year, we initiated a pilot program in Colombia. While launching the pilot, we encountered various legal challenges, which significantly increased transaction costs.
Colombia
2024 onwards
USD 4’000
Oscar is one of ViCAFE’s longstanding coffee partners. At his Finca Los Nogales in Huila, Southern Colombia, he and his family are dedicated to advancing sustainable agricultural practices and push the boundaries of post harvest coffee processing. Oscar initiated the idea to establish a local composting facility on his property. This initiative has inspired neighboring farmers to either utilize the Los Nogales composting facility for their organic waste disposal or establish their own facilities. Additionally, Oscar conducts workshops on composting for the local farming community.
The ViFOUNDATION is providing financial assistance to Oscar for setting up this facility. The objective is to reduce dependence on synthetic fertilizers at Oscar’s farm and others in the region, thereby enhancing soil quality. The facility aims to produce approximately 30 tonnes of compost per year.
Finca Los Nogales, Huila, Colombia
2022 – 2023
USD 13’501
Monocultures typically increase the vulnerabilities of ecosystems towards climate change. Forests, on the other hand, increase biodiversity, create microclimates with reduced temperatures and protect soil from erosion. Therefore, we started an afforestation project on the ViCAFE’s partner farm in Tanzania, Mondul Coffee Estate. The employees of the farm will also intercrop coffee with other fruits and vegetables, making them economically more resilient towards droughts and market changes. By the end of 2023, there will be 46 acres of newly planted indigenous forest on the beautiful hills of the Monduli Mountains with about 100 more acres to be transformed into a diverse and drought resistant forest in the coming years.
Mondul Coffee Estate Monduli, Tanzania
2022 – ongoing
USD 58.122