Agribusiness company Olam International is introducing an inclusive business approach to coffee farming in Timor-Leste, as farmers are supported to achieve an end-to-end sustainable supply chain.
Olam International was one of the finalists of the first ASEAN Inclusive Business Awards, which was held in 2017.
The Asian Development Bank, through its Inclusive Business Support Project, is helping governments and the private sector put in place policies, programs, and incentives for inclusive businesses across Asia and the Pacific.
Pahata, Liquica District, Timor-Leste - Coffee is an integral part of Timor-Leste’s culture and economy.
It is the country’s largest non-oil commodity and one-fourth of the population relies on coffee for a living.
But coffee production is also fragmented, and plantations need rehabilitation after decades of neglect.
Agribusiness company Olam International is now introducing an inclusive business approach to coffee farming, as farmers are supported to achieve an end-to-end sustainable supply chain.
We used to process coffee ourselves. We picked it, we dried it, and then we brought it to town to sell it,” says Marcelo Albino, a coffee cooperative leader from Pahata.
“Over the last two years, Olam has been helping us. We process the coffee together, and we sell all our coffee to them.”
Olam International provides financial support to acquire technology, fertilizer, and seedlings.
Farmers who choose to sell their produce to Olam are paid fairly and receive premium prices for quality produce.
“We have a business model where we like to get really close to the farm gate, really close to the farmer, so that we can understand exactly how products are being produced,” explains Moray McLeish, Vice President for Corporate Responsibility and Sustainability in Asia at Olam International.
“We can help to influence and control quality and quantity, and we can buy at that first point from the farmer so that we can control the quality, and sell it on to our customer.”
Olam International will also train farmers in gender inclusion, elimination of child labor, and financial literacy.
Good agricultural practices are disseminated to renew coffee plantations as environmentally sustainable coffee is improving the livelihood of local farmers.
“We receive training on how to grow coffee seedlings, which we then plant,” says Serafina Do Ceu, a coffee farmer from Pahata.
“Then, after harvesting we prepare the coffee and sell it to the company.”
Development of the coffee sector is now a priority for the government of Timor-Leste.
“Timor-Leste’s coffee is regarded as one of the best. For me, it’s the best coffee in the world,” says Estanislau Aleixo Da Silva, Timor-Leste’s Senior Minister of Agriculture and Fisheries.
“That’s why we have a plan to develop it. We are working to support the farmers and the private sector to rehabilitate the coffee plantations.
“We have supported the creation of a coffee association so that the commercialization of coffee can be done in a more orderly way.”
The Asian Development Bank (ADB) is working with the government and the private sector to increase coffee productivity, quality, and partnerships.
“What I see is that over five to ten years time, we’ll be able to address some of the challenges in productivity at the country level and then also systematically improve the quality of the coffee that Timor-Leste produces,” explains David Freedman, ADB Timor-Leste Resident Mission.
“The first key step with government, the private sector businesses, and the coffee association is to finalize the coffee sector development plan, and then to move into implementation.”
“But there is also a need for investment, so from the ADB side, in addition to private sector financing being provided to Olam, we are also looking at whether we can mobilize some grant funds, which will be provided to the government to implement training and other support programs in partnership with businesses operating in the value chain.”
After years of neglect of this valuable crop, Timor-Leste is on the cusp of a coffee renaissance.