STiR coffee and tea magazine

26 STiR coffee and tea | 2023 Issue 1 (February / March) Viable farming Overcoming the challenges that beset producers — pricing, input costs, farm produc- tivity, access to credit, etc. — can help ensure that coffee farming becomes a more prof- itable livelihood, so that coffee has a good future. That's the thinking behind NKG's programs for farmers, which include value-added services and financing. NKG Bloom is a sourcing initiative that operates through dedicated NKG teams based in coffee regions, helping farmers and cooperatives access training, good agricul- tural practices, farm inputs, resilient seedlings, markets, and credit. It covers more than 81,000 smallholder farms in Uganda, Mexico, Honduras, and Kenya. The company claims that in places like Kenya, the program has helped farmers increase their yields as much as tenfold through pruning and fertilizer use. An outside certifier report- edly found that Ugandan farmers increased their incomes as much as 189% under the NKG Bloom program. Related to this is a sustainability financing program called the Smallholder Liveli- hoods Facility, a $25 million credit line operated jointly with four organizations: the Eu- ropean banks Rabobank and BNP Paribas; DFC, the U.S. International Development Finance Corporation; and IDH, a sustainable trade initiative. The program helps farmers and coops that lack collateral and other qualifications to get access to short-term loans to buy inputs. It also arranges long-term credit for renovations and expansion. Greenhouse gas emissions are emerging as a coffee industry concern, and NKG has started to measure its carbon footprint. Setting up 2021 as a baseline year for col- lecting data, it found that 99% of the 3.5 million tons of carbon emissions in its value chain come from indirect emissions outside its own operations, mainly from produc- tion at farms it does not itself own. This underscores the reality that coffee's decarbon- ization must be a cooperative effort throughout the industry and its suppliers. The company's own robusta and arabica farms, which cover 5,100 hectares in Mex- ico, Brazil and Uganda, scrutinize all the factors discussed above. In addition, they operate their own rural development services to expand access to education, training, housing, sanitation, transport, and health care. On the corporate side, NKG monitors its corporate governance, risk management, and equitable and inclusive practices as expected of a contemporary multinational business. Given the coffee industry's origins and legacy, concern over its sustainability is justified, and consumers, shareholders, media, and regulators should remain vigilant. If companies publish quality data and reports on their sustainability performance, they will not only earn greater trust but also help support information-sharing, discussion, and joint efforts that could lead the sector toward better practices. Traceability and Transparency A program called "NKG Verified" is the company's branded approach to certifying the sustainability of its coffees across four broad categories: ECONOMIC • Record keeping • Production & processing practices • Inclusion and equity* • Sustainability set-up • Access to grievance mechanism • Regulatory requirements • Ethical conduct • Traceability • Pricing • Services SOCIAL • No discrimination • No harassment • Freedom of association • Collective bargaining • Minimum wage • Working hours • Labor contracts • Adequate housing • Drinking water • Access to facilities • Occupational health and safety ENVIRONMENTAL • Genetically modified organism (GMO) • Farm mapping • Flora and fauna • Soil conservation • Pesticide use • Integrated pest management • Water sources and use • Water pollution • Energy use* • Waste management • Hazardous waste • Climate change* CRITICAL • Continuous improvement • No worst forms of child labor • No child labor • School attendance • No forced labor • Forests and ecosystems • Prohibited pesticides * Starts in 2023/24 NKG helps farmers improve productivity by providing access to new methods, better seedlings, and credit.

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