In Focus: Our Coffee Portfolio

Dec. 2, 2007

Since its creation, Verde Ventures has sought to incorporate a triple bottom line into its investments, with biodiversity conservation, social improvement, and financial targets being met simultaneously.

Due to its diverse and highly threatened habitat, Central America has long been one of the investment areas heavily targeted by Verde Ventures. A large portion of the Verde Ventures’ investments in Central America’s biodiversity hotspots are in agroforestry, mainly with shade grown coffee.

Shade grown coffee, combined with other sustainable growing best practices, can help protect the highest priority sites and landscapes for conservation while providing valuable economic benefits for the farmers, their families, and communities.

The partners supported as part of the Verde Ventures coffee portfolio are sustainable farms in areas surrounding the El Triunfo Biosphere Reserve in the Sierra Madre of southwest Chiapas, Mexico. They help protect rain forest areas that they rely on to provide shade for their coffee crops by following environmentally sound agricultural methods that guarantee a greater diversity of tree species and protection of natural resources, soil conservation, and watershed management.

Verde Ventures has invested in a cluster of five of these shade grown coffee estates, called “Fincas” in Spanish.

Fincas Argovia, Arroyo Negro, Hamburgo, Irlanda, La Paz, and Peru Paris specialize in producing diversified shade grown coffee and foster conservation on 1,607 hectares of forest. This region contains a very high level of unique species supported by diverse ecosystems including high forests, cloud forests, and coniferous forests. It also serves as habitat to 300 species of local and migratory birds and more than 74 species of mammals.

One of the largest threats to this area is conversion of shade grown, polyculture farming to monoculture and sun-grown coffee. This has been caused primarily by a drop in coffee prices causing farmers to switch to cultivation practices that have largely negative impacts on biodiversity, forest protection, and environmental stewardship.

"The group of Fincas that we support has bucked this trend," said Jennifer Morris, Verde Ventures managing director. "By maintaining shade grown coffee and implementing environmental standards through Starbucks' C.A.F.E. Practices verification and Rainforest Alliance's Certified Eco-Label, they have shown that not only can price premiums be attained, but social and environmental benefits can also be realized."

These estates preserve remnants of intact forests in strategic sites and reforest buffer areas aiding biodiversity conservation and contributing toward watershed defense and the protection of rivers and springs that cross the farms.

Fincas Argovia, Hamburgo, Irlanda, La Paz, and Peru Paris have also been pioneers at adopting additional environmentally friendly coffee farming practices such as using integrated pest management, adopting agro-forestry technologies, starting erosion control programs, increasing reforestation, and making advances in waste management.

Finca La Paz has even taken advantage of the loan provided by Verde Ventures to invest in upgrading wet milling facilities and installing a small water treatment plant in order to further reduce water wastage and treat residual waters, which is helping address a major environmental problem faced by coffee producers.

These coffee farms also serve as research and training areas for responsible farm management and capacity-building practices; incorporating new technology and fostering knowledge transfers that have helped benefit neighboring producers and increased community environmental awareness.

In addition to enhancing conservation, and providing local income opportunities, several of these Fincas have been outstanding contributors to local social welfare and employee welfare. Finca Hamburgo, for example, supports more than 80 families who work and live on the farm permanently. These families receive housing, schooling, medical care, electricity and safe drinking water, all free of charge.

As a result of the coffee price fluctuations that have been drastic in recent years, many of these farms have become area leaders in diversification strategies; branching into areas such as agro-ecotourism projects, native fruit product production, local handicraft export, and also the harvesting of other forest products.

The involvement of Verde Ventures in these estates has helped strengthen their ability to operate as independent, profitable enterprises that promote conservation. These Fincas serve as models of best practice in sustainable shade grown coffee. Both nature and people benefit.

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