Starbucks Supports Calvert in Sustaining Fairtrade Coffee Farmers

Starbucks Coffee Company (Nasdaq: SBUX) recently invested $1 million in Calvert Community Investments, making affordable credit available to over 10,000 small-scale coffee farmers and their families.

One of major challenges small coffee farmers face is having enough capital to cover expenses to harvest their crops. Often their only choice is to turn to local money lenders who charge exorbitant interest rates, putting farmers further in debt and forcing the farmer to sell the coffee to a middleman at very low prices. By making available credit to coffee cooperatives on flexible and attractive terms, small farmers are able to lock in a fair price of $1.26 per pound for their beans, regardless of market fluctuations.

One of Calvert Community Investments’ goals this year is to increase its lending to the Fair Trade coffee sector. Comments Shari Berenbach, Executive Director, “Fair Trade Coffee had been high on our list as a new impact sector for Calvert Foundation – one that is very consistent with our mission. Fair trade financing reaches small family farmers typically outside the economic mainstream and bolsters community-controlled cooperative organizations. The investment from Starbucks allowed us to diversify to this important and growing fair-trade movement.”

The capital provided by Starbucks have been distributed to three Fair Trade coffee cooperatives in Costa Rica, Mexico and Nicaragua, and to Ecologic Enterprise Ventures, a nonprofit organization that provides affordable crop financing to smallholder coffee producer cooperatives in Latin America. Starbucks will earn a 2% return on its investment, with the principal returned in February 2007.

Examples from the Calvert Community Investment portfolio that support the fair trade coffee sector:

EcoLogic Enterprise Ventures (EEV) ($250,000) is a “green” loan fund that provides affordable financing to eco-enterprises located in environmentally sensitive areas of Latin America. Targeting the rural credit market, EEV provides small business loans to support coffee cooperatives and other businesses that foster biodiversity conservation and grassroots economic development. EEV has made 47 loans worth $4.8 million to rural enterprises engaged in organic and fair-trade agriculture, sustainable fishing and ecotourism.

Huatusco – Huatusco ($250,000) is a coffee growing region of Mexico that was in dire need of financial support in the mid-1990s due to a serious economic depression. In 1997, Coffee Kids launched the second microcredit program in Mexico in Huatusco. There are now 32 groups serving some 862 families in Huatusco.

Prodecoop ($200,000) – Founded in 1991, The Promoter of Cooperative Development in the Segovias (PRODECOOP) provides credit assistance and training programs to small farmer cooperatives in Central and South America. 71 co-ops comprise PRODECOOP, which sells high-quality organic coffee to countries around the world. PRODECOOP was pivotal in providing disaster relief to Nicaragua after Hurricane Mitch in 1998 so that coffee farmers could maintain their income.

Starbucks and Calvert have worked together domestically for the past three years. In 2001, Starbucks provided $150,000 to help finance affordable housing and non-profit/small-business facilities in low-income communities across North America. Starbucks investments through Calvert have helped support The Low Income Housing Fund in San Francisco, the Corporation for Open Land in Illinois, and ACCION New York, Inc.

Calvert Community Investments is a pooled investment note offering from Calvert Foundation that channels low-interest fixed rate capital from 1,850 individual and institutional investors to 183 community development and social enterprises globally. The fair trade coffee sector joins Calvert Foundation’s traditional target areas of affordable housing, small business development, microcredit, community facilities and social enterprise.

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http://www.calvertfoundation.org