ACPC Pichanaki, a non-profit association, representing 217 small farmers from the district of Pichanaki, province of Chanchamayo, in the region of Junín. Their main international buyer is Hacofco but in 2010 new market niches were developed such as Sustainable Harvest, Armenia Coffee Corporation, Efico, Gepa, and International Coffee Corporation.
THE PROJECT
ACPC Pichanaki is a not for profit association created to develop competitive agricultural projects through association of small farmers in a value chain concept. It was created on May 22nd 2000 by 904 small farmers from the district of Pichanaki, province of Chanchamayo in the region of Junín. The organization has 217 members of which there are 210 active members who sell coffee through the organization and participate in the business and its decision marking process. The total area under production is 1,648 hectares, of which 1,053 is certified Organic (the rest is in transition). In addition to Organic certification, ACPC Pichanaki has FairTrade and Rainforest Alliance certifications.
Although 60% of their product is Organic and 100% FairTrade, ACPC Pichanaki was experiencing trouble selling its total volume due to working capital constraints; however, with the help of VV financing, this is being alleviated. In past years, ACPC Pichanaki, as well as many other organizations offered advances against coffee delivery and used to finish payments at the end of the harvest season. Due to high competition in the market, the general Assembly modified its policy, generating three alternatives to be chosen by the producers when they deliver coffee. Coffee sales are now to be paid immediately according to market prices. Coffee is delivered against payment for 80% of market prices, with the remnant 20% and FairTrade premium to be paid at the end of the season. A group of producers may evaluate the market and decide a convenient price to fix a lot. They sign a contract agreeing to deliver the coffee to the organization even when market prices rise. The producers are the ones managing risk.
THE DEAL
In 2011, VV provided working capital to support the harvest season through affordable capital to cover pre and post harvest expenses.
THE BENEFIT
All farmers produce shade grown coffee and work under FLO Cert and Organic standards to comply with environmental and socially responsible requirements. The producers are located in buffer zones of the San Matias San Carlos Protection Forest, which is an IUCN Category VI protected area of 145,818 hectares with many endemic species present. THE ACPC Pichanaki members have developed a production system to comply with Organic, FairTrade and Rainforest Alliance certification, assuring the implementation of many practices to reduce social and environmental negative impacts. Main practices are:
• Promoting good housing conditions for members
• Improving health and security conditions
• Assuring fair prices for their products
• Guaranteeing transparency in business operation
• Avoiding agrochemicals use
• Preventing soil erosion
• Implementing water treatment systems
• Protecting natural ecosystems
The organizational structure is also a guarantee of the social benefits that this business brings to many communities in the Central Forest of Peru.