Combatting forced migration through enterprise

We are excited to introduce our first borrower in El Salvador. Cafetalera del Norte (Cafenor) is a family-owned company that processes and sells premium green coffee beans sustainably grown by 74 smallholder farmers in Santa Ana department.

El Salvador is the smallest country in Central America, yet used to be the world’s fifth-largest producer of coffee in the 70s. Today, it has declined to 16th place according to the International Coffee Organization. A fierce attack of rust (a coffee plant disease) in 2012-2013 decimated production by more than half and the industry has still not fully recovered.

Coffee is not the only industry that has declined – agriculture as a whole today contributes half of what it used to towards the country’s GDP. Deforestation, soil degradation, water pollution, and pesticide use have played a role in reduced agricultural productivity. This has made rural communities, which make up 40% of the population, even more vulnerable as over 60% still live in poverty, driving increasing migration to urban areas and abroad in search of better economic opportunities.

Recognizing the link between farmer poverty and environmental degradation, especially through the family’s four generations of experience as farmers, Cafenor is bringing sustainability into the coffee production process and promoting organic and quality production. With the use of bio-agricultural inputs, the company has enabled 96% of its farmers to use fewer chemicals on their crops. The company also provides technical assistance, specialty seedlings bred for quality, and access to fertilizers and pesticides on credit to overall increase the quality and consistency of coffee grown. Post-harvest, Cafenor mills the coffee to exacting standards at its solar-powered factory near Metapan, in the north of the country.

Cafenor’s coffee scores between 83 to 88 points on the 100-point Specialty Coffee Association scale, which garners the status of “specialty coffee” considering flavor, acidity, balance, and uniformity as some of the scoring criteria. This has enabled them to command a 60% premium over conventional coffee prices, translating to more income for farmers.

“Cafenor has the best and most consistent quality of coffee I’ve encountered in the last 13 years that I’ve been buying coffee. I’ve worked with Alejandro Valiente for 12 years in various capacities; once he started Cafenor, I began to see his vision solidify and the quality of the coffee consistently improve. I value many things about Cafenor – from their focus on environmental sustainability, ingenuity, coffee quality, and social impact.” – A major customer (in an interview with Beneficial Returns)

Cafenor used its loan from Beneficial Returns to purchase new equipment to increase efficiency and quality in its coffee cleaning and selection process, which was previously done by hand. This new equipment eliminates a major bottleneck and will allow the business to grow and ultimately process five times more coffee than before. This means higher incomes for more farmers and a healthier El Salvador too.

If you would like to support social enterprises like Cafenor, contact us.