Nestlé Nespresso, the Colombian Ministry of Labour, the Aguadas Coffee Growers Cooperative and Fairtrade International have entered into a groundbreaking public-private partnership to establish a retirement fund for coffee farmers in the Nespresso AAA Sustainable Quality Program.
This pilot initiative, supported by the Colombian Coffee Growers Federation (FNC), will be realized within the framework of the Beneficios Económicos Periódicos (BEPS), a flexible, government subsidized retirement savings scheme aimed at Colombian workers who are not covered by a traditional pension system.
Innovative retirement program for AAA farmers
The unique partnership will allow the Colombian government to widen the reach of this new retirement savings scheme by tapping into the extensive farmer network Nespresso has created through its AAA Program.
The government will invest funds based on the level of the farmers’ contributions. A pilot program will be launched in the Caldas region with the Aguadas Coffee Growers’ Cooperative, which is Fairtrade certified, and coffee supplier Expocafé/Cafexport.
Working with some 40 AAA agronomists on the ground, Nespresso will extend the scheme to about 1,200 coffee farmers who take part in the AAA Program in Caldas.
In the future, the program may be expanded to include the more than 40,000 AAA coffee farmers throughout Colombia.
“This guarantee of welfare for the elderly is part of the profound social transformation this government is driving and comes with support from the private sector.
We are delighted to enter into this partnership with Nespresso, which will allow us to leverage the relationships they have built with farmers in Aguadas over the last ten years,” said Colombia’s Labour Minister Rafael Pardo.
“We are proud to be part of this initiative, which fits within our long-term approach to secure farmer welfare and provide social benefits to farmers,” said Jean-Marc Duvoisin, CEO of Nestlé Nespresso SA.
“We also believe it will encourage younger generations to continue farming and preserve this essential part of the Colombian economy and heritage.”
Empowering farmers to plan for retirement
While the Colombian government will match 20% of what farmers invest, Fairtrade International will work closely with the local coffee farmers cooperative, who will determine how to best invest their earnings in the scheme.
Empowering farmers to actively plan for their retirement will further strengthen the social dimension of the AAA Program at a community level.
“The farmers have clearly identified their lack of a pension as a key concern. With the average of coffee famers in Colombia hitting 53, they are unable to retire with dignity because they have no pension.
This innovative public-private partnership will start to address this urgent need and could be a really exciting step forward,” said Harriet Lamb, CEO of Fairtrade International.
“What is being implemented today in Aguadas is being watched with interest in all coffee growing regions in Colombia and perhaps in other countries,” said Luis G. Muñoz, CEO of the Colombian Coffee Growers Federation.
“Being able to secure a decent standard of living for agricultural farmers is a challenge many countries have and this innovative scheme may very well be the most significant step to achieve this objective.”
Strengthening the socio-economic fabric in Colombia
First of its kind in the coffee industry, this initiative to secure a pension for coffee farmers in Colombia is part of the Nespresso AAA Farmer Future Program launched in July 2013.
This larger collaboration between Nespresso and Fairtrade International aims to mitigate risks contributing to instability in the coffee growing sector by introducing social welfare provisions that benefit farmers and their families.
