Starbucks Coffee Company just increased its commitment to Verde Ventures by $2 million. This nearly doubles Starbucks' financing of the Verde Ventures fund to $4.5 million from $2.5 million. That is very good news for coffee and cocoa farmers and the tropical forests that surround and support them.
The additional funding builds upon the partnership between Starbucks and Conservation International to help farmers improve their livelihoods while implementing sustainable production practices in coffee-growing regions. In addition, Verde Ventures loans provide incentives for farmers to address climate change through best practices. Deforestation in the humid tropical regions where coffee and cocoa crops thrive is a major contributor to climate change. About 16 percent of all carbon dioxide emissions come from the burning and clearing of forests – more than from all of the world's cars, trucks, trains and planes combined.
Coffee and cocoa growers are natural partners in keeping the remaining tropical forests standing, healing degraded landscapes and managing resources in sustainable ways that benefit both nature and the coffee and cocoa communities.
To date, Verde Ventures has used Starbucks' financing to provide pre- and post-harvest loans and capital improvement financing to 19 partners located near key biodiversity areas in Mexico, El Salvador, Guatemala, Peru and Indonesia. The investments directly benefit nearly 48,500 acres (19,600 hectares) of land and more than 7,600 people.
In terms of financing power, the initial $2 million from Starbucks actually translated into much more than $2 million worth of loans. As the loans are repaid, the money becomes available for new loans. Adding it all up, a total of $4.5 million worth of loans have been issued to coffee growers to date.
The bigger pool of money means more loan capacity and this is wonderful news for the coffee and cocoa communities. Verde Ventures is getting ready to finance a number of projects in Mexico and Central America. Plans are also under way to expand geographically into other important coffee-growing regions, many of which are located in biodiversity hotspots.