STiR coffee and tea magazine

26 STiR coffee and tea | 2025 Quarter 3 Autumn (Sep/Oct/Nov) By Emilio Bonnet C offee is one of the most valuable traded agricultural commodities in the world, yet in many countries, those who produce it struggle to access basic financial services. While roasters argue over flavor notes and processing methods, the farmer often has to worry about whether they can pay pickers on time or replace a broken de-pulping machine. Financing is the missing flavor note in coffee's sustain- ability symphony. The Price of Waiting Fernando Patiño is the co-founder of Majestic Coffees, a green coffee export company based in La Plata, Huila, Colombia. Majestic collaborates with a select group of small and medium-sized producers across various regions, establishing direct trade relation- ships with roasters while prioritizing traceability, quality differentiation, and equitable pricing. "Sometimes we borrow money to pay producers for experimental lots before we even sell them," Fernando said, illustrating the liquidity challenges the company regularly faces. According to Patiño, the financial system has long failed small producers. "When you apply for a loan through a cooperative or a bank in Colombia, it takes one or two months, and if you get approved, you've already lost the opportunity or the need [for the loan]," he explained, referring to the time lag that undermines opportunities for producers. Even for those lucky enough to get financing, the terms are often prohibitive. "We pay interest rates that sometimes make the business unsustainable," he added, high- lighting the burden imposed by traditional financial terms. Coffee's Financial Crisis From Seed to Ship Lack of access to simple, speedy prepayments severely hinders coffee production for small-scale farmers and exporters. However, one company is reshaping coffee financing through its online platform. Photo credit: Algrano Majestic Coffees collaborates with farmers in Colombia to produce and export high-quality coffees to buyers who focus on sustainability and transparency. Photo credit: Majestic Coffees Cooperative and exporter-led mod- els have begun to emerge as a practical solution for liquidity at origin. In north- ern Peru, for example, the CoopBAM cooperative provides producers with an advance upon coffee delivery, based on estimated yield and settling balances — including Fair Trade and quality premi- ums — post-export. Additionally, many exporters, primarily specialty coffee ex- porters, pay premiums to producers after inspecting lot quality or after the lot has been sold. Algrano: A Platform as a Bank Without Being One One company, Algrano, which initially started as an online third-party platform connecting smaller producers with buy- ers, eventually discovered it could utilize its own database as a means to offer cred- it to farmers — efficiently moving money to origin and giving farmers a little more room to breathe. Algrano innovates with data-driven advances. Florian Schaffner, the CFO, head of data, and one of the architects behind Algrano, explains the company's evolution from an online marketplace to a decentralized logistics and finance net- work. "We realized producers didn't need consulting. They needed direct market access," he said.

• Cover