In this serie of FairChain Harvest blogs, we’ll now show you how we discovered that we actually pay a FairChain Premium three times.
1. Twenty percent
We thought we paid 20% more than other coffee buyers in Limu region. Instead of 11 bir (€ 0,34) per kilo of coffee cherry, we pay 13,2 birr (€ 0,41). We also thought that 11 birr is a generic market price for everybody in this region, established by the local authorities. Read our Dutch blog post on the negotiations.
2. Four birr extra
A couple of days later however, Joost and Mark got some inside information from Mesfin, head of the washing station: “local traders purchase coffee for 7 or 8 birr. The market price of 11 birr is only relevant to washing stations like ourselves”. So there’s the second premium: 11 birr instead of 7 or 8!
3. Cashier difference
And then it’s payday. Since we cannot use a mobile payment system yet, it’s all cash, bags full of birr notes. All counted by the FairChain team and handed over to the farmers, who will check the amount. And guess what: sometimes the amount is too low due to a counting error, and farmers will show up to collect the right amount. But what if we made an error in the advantage of the farmer? Turns out not one farmer reports this. On a total of 260 payments yesterday, we paid an excess amount of 1.400 birr, that’s another 0,5% ‘premium by accident’.
From 7 birr we now nearing 14 birr. No wonder we are having trouble to restrict our program to only the farmers participating in the FairChain training program. Many smart farmers are privately collecting coffee from their neighbors, hence increasing the quantity they sell as FairChain coffee. Today we will have a conversation with the boards of representatives to have a renewed explanation of the FairChain rules… will keep you posted!
