For decades, smallholder farmers who produce the world’s supply of quality coffee in developing countries have barely earned enough to stay in business. Many have gone under. Millions of those still producing live in poverty and go hungry. Now climate change is threatening their livelihoods as well. The main problem is a supply chain stuffed with so many middlemen, each taking their cut, that only a fraction of the proceeds from pricey specialty-grade beans gets to the grower.
That was the picture in Nicaragua until Rob Terenzi, Noushin Ketabi, and Will DeLuca started Vega Coffee in 2013. On the face of it, their solution seemed simple: Enable the growers to process and ship roasted coffee directly to consumers in the US—thereby cutting out up to a dozen middlemen and retaining the earnings for themselves. It’s not that others hadn’t understood the problem before, but no one else had figured out how to solve it at scale. This episode follows Vega’s story, covering:
- Rob’s initial discovery of the coffee growers’ dilemma (0:36);
- the structural inequities of the global coffee trading system (4:37);
- why Fair Trade and other “certified” designations fail to pull growers out of poverty (6:46);
- Vega’s early challenges with roasting ovens (11:31) and transporting fresh beans to the US (13:08);
- tapping Nicaraguan growers’ skills (16:13) and prioritizing women to promote gender equity (18:22);
- growing the US customer base (22:05);
- expansion to Colombia through a partnership with Mercy Corps (26:35);
- and the promise of Vega’s model to rectify other broken supply chains of commodities around the world (28:52).
Additional Resources:
Source articles for this episode include:
- The Problem With Fair Trade Coffee explains why the certification isn’t enough to bring coffee farmers out of poverty, from Stanford Social Innovation Review
- The Coffee Crisis Is Coming, a Vox.com video on the trouble brewing on coffee plantations
- A Supply Chain Overhaul, some of the early press that brought visibility to Vega Coffee from Forbes.com
- ‘There’s No Law’: Political Crisis Sends Nicaraguans Fleeing, a New York Times article about the political chaos that sparked three years of economic decline
The full transcript of the episode is below.
* * *
Rob Terenzi 00:09
There's no roads, no bridges, no electricity, no internet, no cell service and just one bus a day. But once you get up there, you are suddenly at this incredible elevation in a totally green, beautiful nature preserve.
Jonathan Levine 00:26
Fifteen years ago, a young man named Rob traveled to Nicaragua on a cultural exchange program and met a couple of coffee farmers named Marlon and Mayra. They invited him in.
Rob Terenzi 00:36
And they started roasting coffee on this big open fire in their kitchen. And the aromas of the coffee roasting started filling the kitchen, and the crack of the beans went from green to roasted and finished. We drink the coffee right after they roasted it. It was so wonderful. It's really, really incredible coffee, you know, organic Fairtrade, raised from heirloom varietals, just beautiful coffee. And I was like, wow, you know, this coffee is incredible. How much do you get paid for this? Because I had come from Boston. You know, we were paying $15 to $18 a pound for coffee. And Mayra said they usually get about 65 to 70 cents a pound. I was just completely blown away by that. That comes out to like a penny a cup. So, you know, I kind of started digging in and asking them where does the rest of this money go?
Jonathan Levine 01:30
He began investigating and found the supply chain was stuffed with middlemen, brokers, importers, exporters. Everyone taking their cut. The biggest cut goes to the roasters.
Rob Terenzi 01:42
So we kind of had this thought that, what if you guys roast the coffee? I mean, you're doing it right now.
Jonathan Levine 01:52
From the Stanford Social Innovation Review at Stanford University, this is Uncharted Ground, stories about the people at the forefront of global development and their journeys in social innovation. I'm Jonathan Levine. Today's episode is about a little company that tackled a really big problem: a global trading system that allows poor farmers to produce valuable crops, and everyone but them to profit
Rob Terenzi 02:20
And it's broken. I mean, farmers are not going to keep farming if they can't make a living doing so.
Jonathan Levine 02:27
Today, Rob Terenzi is co-founder and CEO of Vega Coffee.
Rob Terenzi 02:33
At Vega Coffee, our mission is to reinvent the coffee supply chain by putting farmers in charge of coffee roasting, coffee processing. And what we found is that giving them this kind of market access, they end up earning about four times more than they would through typical export channels.
Jonathan Levine 02:49
If Vega's more equitable model catches on, coffee farmers around the world may one day be compensated for the true value of their labor, and have a chance to not only survive, but thrive.
Jonathan Levine 03:07
Every day, people around the world drink more than 2 billion cups of coffee. And we're willing to pay a lot for those lattes, cappuccinos and cold brews. According to one survey, the average 25- to 34-year-old American spends more than $2,000 a year in coffee shops. Coffee is the second most important export commodity from the global south after petroleum, and nearly three-quarters of it comes from smallholder farms. Yet nearly all of these farmers earn less in a day than the price of a Starbucks Grande Latte. An estimated 20 million coffee farmers live at or below the poverty line. And nearly two-thirds of those surveyed in Mexico, Nicaragua, El Salvador and Guatemala say they sometimes go hungry.
News report 1 03:56
The situation is dire. People here are facing desperate conditions, economically as well as environmentally...
News report 2 04:03
Dozens of migrants arrested Sunday after scaling the border fence between the US and Mexico...
News report 3 04:09
It's a fraught visit for fact finding at the border for Vice President Harris, trying to do what she has said which is look into the root causes of migration to the United States.
Jonathan Levine 04:17
Many coffee farmers are among those migrants, for one simple reason.
Peter Roberts 04:21
They're leaving because they can't cover the cost of production growing coffee. And coffee is a very, very significant part of rural economies.
Jonathan Levine 04:29
Peter Roberts is a business professor at Emory University and directs the specialty coffee programs at its Business and Society Institute.
Peter Roberts 04:37
It is more lucrative for somebody to abandon their family, come to United States, work under the table, ship residual money back home, than it is to stay on your coffee farm and produce coffee that sells for $15 a pound.
Jonathan Levine 04:55
He says farmers in developing countries do 90 percent of the work to produce that coffee, but only get 10 percent of the proceeds. And the whole global system that determines the price of raw or "green" coffee puts small farmers who grow specialty-grade beans at a severe disadvantage. My colleague, Kathleen Schalch, picks up the story from here.
Kathleen Schalch 05:21
What growers get paid even for premium beans is tethered to what's called the "C" price. That's whatever global commodity traders are paying for coffee that's mass-produced cheaply on mechanized farms in countries like Brazil and Vietnam. By contrast, Rob Terenzi says, farmers in Nicaragua do everything by hand and turn out a higher-quality product.
Rob Terenzi 05:43
It's very artisan and it's very like craft. They'll pick the beans by hand, make several passes through the beans just to make sure they only pick the ripest, reddest beans. So harvest can last for months until each bean is totally ripe. But the price of that product is absolutely contingent upon the C price.
Kathleen Schalch 06:02
That price fluctuates wildly, and when it drops small farmers suffer. Climate change is making things worse. In Nicaragua, the rains are now coming at the wrong times and leaving coffee plants more susceptible to disease. Some climate models predict that by 2050, the areas suitable for growing coffee will shrink by half. Already areas that were once ideal no longer are. Peter Roberts says to stay viable, coffee farmers may have to move their farms or cultivate different, more resilient plants.
Peter Roberts 06:33
So you need some sort of mobility—move your farm somewhere or invest in adaptation. But every verb that you would use would require a coffee farmer to have resources and opportunity.
Kathleen Schalch 06:46
But they can't afford to adapt if they're barely breaking even. Prodded by consumers, companies, NGOs and donors have tried to build a system that's more just and sustainable. Fairtrade and other organizations offer coffee that's "ethically sourced"—better for the climate, the environment, the workers and coffee-growing communities. Decades ago, they began helping growers form cooperatives, sell in bulk to big companies, negotiate on price, and buy machines to prepare coffee for export. Farmers earn more selling Fairtrade and other specialty coffees, at least 30 or 40 cents above the C price. And coffee retailers advertise those benefits.
Advertisement 07:25
They've created a new way to buy that coffee. One that is sustainable, transparent, and good for people and the planet.
Kathleen Schalch 07:34
But there's a downside. Farmers need more and more certifications to qualify for those premium prices.
Rob Terenzi 07:41
They have to be shade-grown, bird-friendly, Rainforest Alliance, organic, Fairtrade—all these kinds of added certifications that all cost them money to get, and the consumer's paying for it. But not all that goes to the farmer. While US-based consumers are paying more for coffee, the price that the farmers are receiving, or the cut of that, has been going down. I don't know, being a coffee farmer is an incredibly hard thing to do. And it's why you see fewer and fewer people doing it. And that's something that I don't think the industry has totally understood yet—is just how in jeopardy the world's supply of great coffee actually is.
Kathleen Schalch 08:29
Fifteen years ago, Rob Terenzi had no idea he was going to take all this on. He just wanted to find a way to help his new friends. And he saw an opportunity. He stayed on in Nicaragua working as a tour guide and bartender. Tourists were beginning to come. They were staying in hotels and being served instant coffee imported from somewhere else. It tasted bitter, acrid, just terrible, according to Rob. So one day he visited a coffee farm and brought a couple of bags of coffee to a friend who ran a hostel.
Rob Terenzi 08:59
And he was like, this coffee is fantastic! Can you get it for my hostel? That basically was the moment where it went from just a souvenir from a farm to a business. That was kind of the birth of Vega 1.0.
Kathleen Schalch 09:12
For two and a half years, Rob worked with a cooperative of 23 women growers, helping them roast their coffee and sell it domestically to hotels and restaurants in tourist cities.
Rob Terenzi 09:22
And they went from making 65 to 70 cents to five to $6 a pound on that coffee.
Kathleen Schalch 09:27
Rob eventually returned to the US. He earned degrees in law and economics and married a classmate named Noushin Ketabi. He joined a high-profile Silicon Valley law firm. Noushin became an energy policy analyst. Then in 2013, Rob took Noushin and his best friend from college, Will DeLuca, on a trip to Nicaragua. He wanted them to see the places and meet the people he had grown to love. What greeted them was devastation. A fungus called coffee rust had spread across the region. Once lush fields were empty. Whole farms were ruined.
Rob Terenzi 10:08
They were losing all of their plants. It was a catalyst for us starting this company again.
Kathleen Schalch 10:17
They all quit their jobs. Rob and Noushin moved to Nicaragua. Will stayed in New York to handle marketing and logistics.
Rob Terenzi 10:25
The way we looked at it, we were going to take a year sabbatical and kind of see if we could get this to work. And if we couldn't, it was only a year and we were going to be okay. That was now seven years ago.
Kathleen Schalch 10:38
Their plan was to roast and package the coffee there in Nicaragua, and ship it directly to customers in the US, who would order it over a new Vega website. That meant cutting out a lot of middlemen in a very long chain.
Rob Terenzi 10:51
The chain starts with the farmer...
Noushin Ketabi - Rob Terenzi 10:53
...then the cooperative. Then the second-level cooperative...central export and collector...shipper...importer...certification agency...another certification agency...and another certification agency...commodity traders and hedgers...the roaster...labeler...distributor...then on to the coffee shop or grocery store...
Kathleen Schalch 11:02
And they got rid of all of it. Rob says roasting at origin was key. The process takes only 15 minutes, but that's where the money is—where the price per pound can jump ten-fold.
Rob Terenzi 11:18
And so if we can extend the farmer's relationship with their product through the end of it, they should be able to make more.
Kathleen Schalch 11:29
There were swerves and false starts.
Rob Terenzi 11:31
We made a ton of mistakes along the way. Our original idea was to put these small woodburning ovens essentially on farms all over the Nicaraguan countryside and have each farmer kind of do it on their own. That was a nightmare for a variety of reasons, including food safety, consistency, product integrity—all those things.
Kathleen Schalch 11:53
Rob and Noushin built one of the first small ovens on Mayra Velázquez's farm.
Mayra Velázquez 12:02
Well, we wanted to make an open roaster in the field. But it didn't really work for us. All of us, Rob, Noushin and I, we all burned our hands.
Kathleen Schalch 12:12
There were moments when Rob felt maybe what they were doing was a little crazy. Like when he and Noushin were out in the field shoveling horse manure to mix with cement to build the ovens. The farmer surprised them by demanding payment for the poop.
Rob Terenzi 12:26
And so I remember saying like, wow, like I left a job where I was getting paid pretty well. And I'm now paying people to clean up their horse fields. Like, this is a real mind-shift!
Kathleen Schalch 12:43
They gave up on individual roasting ovens, and instead built one central plant and imported a state-of-the-art roaster. That helped with quality control. But the whole idea of roasting at origin and then exporting was still fraught with risk.
Peter Roberts 12:59
I heard about these folks that were roasting at origin. And I literally turned to my students and go, 'That's an example of what you don't do.' I said, 'You can't roast at origin.'
Kathleen Schalch 13:08
Coffee expert Peter Roberts says there was a reason no one was doing it: freshness. While green coffee beans can sit around for months in warehouses and ships without going stale, roasted coffee cannot. Noushin Ketabi remembers one big challenge was getting the export license and other paperwork they needed to move the coffee out fast. Nicaraguan authorities were not particularly concerned about roasted coffee's short shelf life.
Noushin Ketabi 13:35
The system was set up to work for a certain type of product like raw coffee. And now we wanted to kind of challenge the system to like, get coffee out quick. Let's get a quality product out the door. How is that going to work?
Kathleen Schalch 13:49
Day after day, Rob, Noushin and their lawyers drove two and a half hours to the capital, Managua, to meet with bureaucrats who could grant them an export license. Again and again, they returned empty-handed. Finally, they decided just not to leave. Night fell and the guards were locking the doors, when the boss emerged and finally granted their request. But even when the paperwork was done, the first shipment still took three to four weeks to reach customers in the US—far too long. So they improvised.
Noushin Ketabi 14:21
We decided well, for now, we can just hand-carry it in our suitcases to the United States. Rob would get a cheap flight to Houston. And we'd just bring suitcases with bags of our packaged coffee, like ready to take to the post office once we landed. And it was just so silly. We'd roll up to the airport, it would just smell like coffee with lots of questions around what we might have in there. Meanwhile, we figured out how to really do it in a way that was sustainable and actually export with cargo planes, versus us carrying things ourselves. But it was one of those moments. It's like, okay, a year ago I was at a desk in San Francisco, working as a policy analyst and an attorney, and now I'm bringing in bags of coffee in my suitcases.
Kathleen Schalch 15:12
It helped that from the beginning, all the growers were on board, eager to learn everything there was to know about roasting, tasting, packaging and shipping coffee. And Noushin, Rob and Will were learning right alongside them. Noushin became one of only 400 Americans to earn a license as a Q grader. Like sommeliers who grade wine, Q graders are expert cuppers trained to taste and judge coffee, and score its attributes...
Noushin Ketabi 15:39
...from taste, aftertaste, acidity, aroma, fragrance—a whole gamut of sensory aspects of a cup of coffee. I personally love it because I love coffee, and I just love nerding out on it. But it also helps us ensure that we're really getting the top-notch quality of coffee to our customers. And it's not just me. I mean, I have the official Q grader license, sure. But the members of my team that we've trained—our farmer-roaster teams—they all have incredible expertise in cupping.
Kathleen Schalch 16:13
Noushin says some of the local coffee farmers had other knowledge and skills that astonished her. She remembers importing some very expensive new machines, including one for measuring the raw beans' moisture level.
Noushin Ketabi 16:25
So we had this little machine. We were trying to get it to work. And next thing I know one of our partners, a grower named Marlin, he's like, this is how we always have done it. And he just bit into the bean. He predicted that there was about 12 to 13 percent humidity in the bean. And 'yeah, I think this would be ready for roasting.' And sure enough, when I got the machine ready to go, it was at 12 percent.
Kathleen Schalch 16:53
They kept quizzing him, and he always got it right.
Noushin Ketabi 16:57
That to me was a shining example of the fact that there's so much expertise with these growers and that our supply chain has sort of been ignoring that in a lot of ways.
Kathleen Schalch 17:09
Vega Coffee's founders wanted to turn that talent into value and profit and return it to the community.
Rob Terenzi 17:16
We structured our supply chain and our operations and everything with the goal of radically transforming the economic situations in coffee-growing communities around the world. And everything from that North Star trickles down and affects the other decisions that we make.
Kathleen Schalch 17:39
Vega 2.0 began buying coffee from the same two dozen growers Rob had worked with years before. Now it sources from around 6,000 smallholder farms. Vega pays roughly double whatever the C price is—and more on top of that, depending on quality and certifications. In addition, farmers or family members earn salaries working in the roasting plant. Vega provides more benefits including money for education. Some employees have gone back to school and earned degrees in English, agronomy, or accounting. Together these benefits enable Vega growers and their families to bring home an average of four times as much as they would selling coffee through traditional supply chains.
Kathleen Schalch 18:22
The roasting plant in Esteli, Nicaragua, is run by local women coffee growers. In the front hall they sort and package coffee. Toward the back they pour raw beans into a state-of-the-art roaster, a large drum heated to 400 degrees. Eight minutes in, as the beans turn from pale green to brown, they begin to crack like popcorn. Finally, long metal arms scoop the beans in circles to cool them as they come out of the oven. Nordia Acuña Villareyna is the plant's general manager.
Nordia Acuña Villareyna 19:12
I learned every step, every step of the production. And I keep learning more every day. The most important thing is that nobody can take away my knowledge and the experience that I have gained here. And the same is true of the other women who work here with me.
Kathleen Schalch 19:30
Three-quarters of the farmers and employees Vega works with are women. Noushin says that's entirely by design. Women do much of the work it takes to grow coffee but they have traditionally faced discrimination and been paid less than men.
Noushin Ketabi 19:44
One of our goals at Vega is to work towards gender equity in the supply chain. There are times in cooperatives where women are not allowed membership. There have been many cases where women might not have a chance to be a part of the coffee contracting on their farm or get access to capital and resources in the same way that male counterparts do. And for us, we wanted to create Vega as a way to bring women into the fold—making sure that they're getting that proper opportunity and recognition for it.
Kathleen Schalch 20:17
Nordia says it's working.
Nordia Acuña Villareyna 20:19
Here in Nicaragua, machismo really takes hold when a woman depends on a man. Working at Vega, we don't depend on a man. On the contrary, we earn more than they do.
Kathleen Schalch 20:39
And something else is different. Nordia says many people in her region of Miraflor had abandoned coffee farming. Now that's happening less and less.
Nordia Acuña Villareyna 20:51
With Vega Coffee, we have seen a change, because producers are more motivated, and they are even making new coffee plantations.
Kathleen Schalch 21:00
And they're more hopeful about the future. That's certainly true of Mayra Velásquez, the coffee farmer who once treated Rob to his first cup of home-roasted coffee. She's earning two and a half times more per pound of coffee than she used to. And her kids make additional money working at Vega's roasting plant. She says people in the community are able to pay for health care and education for their children.
Mayra Velázquez 21:29
Some of the women who belong to my cooperative and work with Vega are fixing up their homes and are able to send their children even to university. The ones working in the plant pay for childcare, and that generates income for others. We take a lot of pride in being the ones who grow this coffee and processing it ourselves. Also, my cooperative is using the earnings from selling our coffee to Vega to buy enough land for two new coffee plantations.
Jonathan Levine 22:05
To earn the money they could churn back into the community, Vega needed to build a customer base from scratch. After all, they had cut out all the retailers and coffee shops. Vega had raised about $40,000 through crowdfunding and convinced those early investors to sign up for regular shipments of coffee through Vega's online subscription service. They formally launched the company at a social impact conference in San Francisco, and pulled in media coverage from Forbes, the Huffington Post, and CNN. Will DeLuca, Vega's third founding partner, built the website. And he looked for ways to cut costs and expand sales. He'd been a computer geek since high school and had worked on everything from peer-to-peer file sharing to e-commerce. Making Vega profitable, though, was a challenge, especially in the beginning. But as sales climbed, unit costs dropped. Will says the big breakthrough came when Vega tapped into a new market: colleges and universities that wanted sustainably grown coffee with a story they could be proud of.
Will DeLuca 23:11
That became our next biggest base just because one university was the equivalent of several thousand subscribers.
Jonathan Levine 23:20
And then came an even bigger customer: Daily Harvest, a company that delivers frozen meals using Vega's coffee to flavor smoothies and ice cream. Within three years, Vega was turning a profit. In 2016, the company shipped around 5,000 pounds of coffee. This year, Vega expects the volume to soar to 200,000 pounds. That's a whopping 60 percent over just a year ago. Will says one advantage Vega Coffee enjoys is low overhead—space, salaries, everything costs less than Nicaragua. Shipping costs could have been prohibitive since roasted coffee has to travel by plane, and mailing small packages can cost a fortune. But it turns out, there's an app for that!
Will DeLuca 24:07
The thing that has made the direct-to-consumer side of our business possible is the emergence of shipping apps that pool their customers together to create effectively a large business of shippers to get rates that companies like Amazon, and Walmart, and the big shippers—what they would pay on a per-pound basis. So that made that side of our business possible.
Jonathan Levine 24:33
New technology also made it possible to monitor the roasting process remotely from anywhere in the world. Vega's founders now do this from the US.
Will DeLuca 24:41
They're connected through Bluetooth. To be able to troubleshoot and fix is critical. And that's another great piece of the technology stack that didn't exist a few years ago and now does, and it makes a lot of things possible that weren't.
Jonathan Levine 24:56
Technology also helps track exactly where every dollar is going.
Will DeLuca 25:01
A game-changer for us is our ability to demonstrate, directly with the data, just how much of an impact our customers are having, which is especially important for our larger partners like colleges and universities who have, you know, specific sustainability goals. Right now we're working towards a real-time basis where for every pound of coffee they consume, they can know exactly how many dollars go directly back to origin, and even qualitatively, what that impact looks like for the communities that they specifically sourced from.
Jonathan Levine 25:38
All of this—from collapsing the supply chain to the technology that makes it all possible—now means growers are earning what they need to thrive. And they're hopeful about their future. It's what Rob, Will, and Noushin have been working seven years to achieve. And they've done it during a wildly turbulent time in Nicaragua. Over the last three years, the country has endured massive anti-government protests, and an economy in free-fall, with a loss of hundreds of thousands of jobs. COVID-19 has compounded the damage.
Rob Terenzi 26:13
In that same time period, we have hired more people. We have purchased more coffee consistently every year. And so to be against the trend of divesting from Nicaragua is something that's very important to me. Because while these other factories are shutting down or laying people off or missing paychecks, we're keeping people employed.
Jonathan Levine 26:39
In 2018, the company set up a second operation in Colombia, partnering with Mercy Corps, the global humanitarian and development organization. Mercy Corps had been working with Cafe Cauca, a collective of 1,800 women farmers to help them grow and sell more green coffee. And they turned to Vega to help them roast their coffee and sell it at much higher prices to customers in the US. Vega brought in the machines, trained the women to use them, and provided the branding and marketing channels they needed.
Rob Terenzi 27:11
When we started talking with Cafe Cauca in Colombia, they were like, you know, 'we've always wanted to do this and we just never knew how.'
Jonathan Levine 27:16
In addition to collaborating with Vega on the ground, Mercy Corps invested in the company through its social venture fund. Since 2014, Mercy Corps Ventures has searched 40 countries for groundbreaking social entrepreneurs with potential to solve entrenched problems. So far, they've picked fewer than 30, and one is Vega Coffee. The fund's managing partner, Tim Rann, says he was impressed by Vega's deep commitment to Nicaraguan coffee farmers.
Timothy Rann 27:45
The love—the mutual partnership with these farmers in Nicaragua—we really felt that they knew the context. Anytime we look at expat founders, if you're not from that place, then we want to really make sure that you're not an extractive entrepreneur, that you're committed to empowering and bettering the communities you're going to be working with.
Jonathan Levine 28:02
Plus, Vega Coffee was actually proving that roasting at origin could work. No one else had done that. And Tim saw something else: huge pent-up demand for what Vega was selling from major brands.
Timothy Rann 28:16
These brands, which we think are the next wave of ethical companies that are growing really robustly, valued at billions of dollars, are specifically choosing to work with Vega, and saying, 'Vega can give us the ingredients we need, not just the quality, but we need their story. We need their traceability, we need their ethics.' There's brands working with Vega, who've in the past said, 'you know, we found out that our coffee supplier couldn't even tell us where they're getting their coffee. We're having all sorts of labor rights issues within supply chain.' That's a huge risk to them—an economic risk—and their shareholders won't stand for it.
Jonathan Levine 28:52
Tim Rann believes Vega Coffee could expand into other parts of the world by replicating partnerships like the one they built with Mercy Corps in Colombia. Development organizations can help farmers improve yields or cope with climate change. But marketing and branding is another matter.
Timothy Rann 29:08
That is the missing piece, I think, for a lot of development organizations. They get the technical assistance—productivity, quality, climate-smart agriculture, helping the farmer. But that connection in the market is something that, in my opinion, generally is best left to the private sector and a company like Vega, which has those sales relationships and knows how to bridge that gap.
Jonathan Levine 29:26
Tim and Rob both think this model—of processing commodities in communities where they're grown—could work in other regions like Africa and Asia. And not just for coffee. Crops like nuts and cacao, too. Peter Roberts of Emory University says Vega's inclusive model of globalization would be fundamentally different from what prevails today: a lopsided system that typically leaves hardworking rural people poor, but kicks in development aid as a kind of consolation prize.
Peter Roberts 29:50
We sort of take commerce and we translate it into charity. Like, oh, you know, given how much we've extracted, we at least owe people the money for their schools, or we at least should help them, you know, build latrines. And that's a very, very different kind of income than actually is earned income. And going back to Vega, with more effective participation, I get to find out exactly what my effort is worth, and I get paid in accordance with what my effort is worth.
Jonathan Levine 30:29
That would be a big change. But all the tools are in place to make it possible. The new global infrastructure—for transportation, communication and data sharing—is knocking down the barriers that have kept farmers in poor countries cut off from the wealth their labor creates. Rob Terenzi, for one, hopes other coffee companies, including the major brands, will follow his lead.
Rob Terenzi 30:54
We're still a very small player, but the more the big players in coffee can see our model working, the more they will invest in processing in coffee-growing communities.
Jonathan Levine 31:05
Fixing a broken global trading system doesn't happen overnight. But sometimes, it takes a little company from the outside to get things started.
Jonathan Levine 31:27
Glad you could come along today on our journey to Nicaragua with Vega Coffee. If you enjoyed this story, please give us a review or rating on your favorite podcast app, and tell your friends. And if you have a comment or a question for the team at Vega Coffee, let us hear from you. Just go to ssir.org/UnchartedGround, click on this episode—"A Fair Deal for Coffee Growers"—and find the comment link near the top of the page... In our next episode, Nigeria can be an inhospitable place for smallholder agriculture. But it may be the best bet to create enough jobs for the exploding population of unemployed youth.
Kola Masha 32:13
We make smallholder farmers richer, and in turn, an economic buffer that would halt the spread of violence and insurgencies.
Jonathan Levine 32:24
Stemming the tide of violence in Africa's most populous nation by making farming more profitable for young people. That's next time on Uncharted Ground... This episode was reported and written by Kathleen Schalch and produced by me. Jennifer Goren edited the story, Tina Tobey provided sound editing and design, and Alejandra Reina helped with translation. Our thanks to Rob Terenzi, Noushin Ketabi, and Will DeLuca, and their entire team at Vega Coffee. Uncharted Ground is produced and distributed in partnership with the Stanford Social Innovation Review at Stanford University, and online at ssir.org. I'm Jonathan Levine, and you've been on Uncharted Ground.