We couldn’t be prouder to share that on International Coffee Day, Neumann Kaffee Gruppe (NKG), our parent company, introduced NKG BLOOM, a global sustainable-sourcing initiative with a goal of reaching 300,000 coffee-farming families by 2030 and empowering them to run their farms at full potential and meaningfully improve their livelihoods.
It’s a long-term initiative that will initially involve establishing Farmer Services Units (FSUs) at participating NKG export companies—teams that will work directly with producers to create tailored strategies for success—and ultimately, eventually, will result in fully traceable NKG BLOOM coffees.
The coffee is still a long way off, but the needs of farmers are immediate, and early efforts are already underway.
“NKG BLOOM is not a marketing strategy, it is not a philanthropic endeavor or a feel-good project. It’s about the way we want to do business in the long term. It will cost us a lot of money and effort, but it is simply the right thing to do,” said David M. Neumann, Neumann Gruppe’s Group CEO.
“Lending to smallholder farmers in some of the poorest places in the world is a risky proposition, but it’s critical to unlocking the potential that these farmers hold for global agriculture and development in their own countries and communities,” Mr. Neumann continued.
That lending comes thanks to a revolving $25 million Coffee Smallholder Livelihoods Facility—an innovative financial solution that was signed into existence by leading European banks ABN AMRO, Rabobank and BNP Paribbas and further backed by the U.S. Agency for International Development (USAID) and IDH: the Sustainable Trade Initiative.
In short, the participants in the Facility share the financial risk and make possible this most essential aspect of NKG BLOOM.
“Ultimately, the Smallholder Livelihoods Facility enables us to bring the power of the global financial markets—long the missing piece—to smallholder coffee farmers,” says Catalina Eikenberg, who heads NKG Sustainable Business Unit in Hamburg. “We’ve set ourselves an ambitious goal, and we’re excited to make it happen.”
NKG BLOOM in Uganda
Around the world, farming has become a high-tech enterprise. But in Uganda, it hasn’t changed much in centuries.
Four years in, NKG BLOOM has expanded its agricultural trainings to farmers, added advances for tarpaulins for coffee drying and is launching larger investment advances – longer-term loans for farmers to further invest in their coffee farms. It’s also helping to reactivate and strengthen village coffee organizations and offering farmer groups digitized receipts and working-capital loans that are also repaid with coffee.
Further disproving old stereotypes against lending to farmers, Ibero Uganda, NKG’s local exporter, has seen borrowing increase in September and April, when school fees are due, and repayment rates have exceeded 99 percent.
In the video below you can find the latest update from Uganda, showing the improvement, NKG BLOOM has brought so far.