Annual Plan

2014

<NAME REC>
Purpose: Clarification of strategic direction per commodity, organisational
development, and network deliverables per REC for 2014.

Deadline for submission: September 15th 2013 by e-mail to Nico Roozen and cc to Monique v/d
Vijver.

Process: The Annual Plan is developed by the REC Director in cooperation with
the REC team (e.g. programme managers, advisers, PME staff and
financial manager).

Sources of information: MASP, Annual Programme Reviews, REC programme evaluation 2013,
IP Reference Documents, result chains, national policy documents,
national statistics, donor strategies, programme evaluations, stakeholder
feedback; context/scoping analyses, research.

Table of Contents:

1 SITUATION ANALYSIS (MAX 2 PAGES) 3

2 INTERVENTION STRATEGY PER COMMODITY 4

3 ORGANISATIONAL DEVELOPMENT (MAX 3 PAGES) 5

4 NETWORK DELIVERABLES & GOVERNANCE (MAX 2 PAGES) 7

5 FUNDRAISING (MAX 1 PAGE) 8

For financial planning, please refer to the budget template (attached).

If you have any questions or suggestions for improvement, please contact Saskia Nijhof for the
narrative plan (saskia.nijhof@solidaridadnetwork.org) or Erna Wegman for the financial plan
(erna.wegman@solidaridadnetwork.org).

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1 Situation Analysis (max 2 pages)
Coffee is one of the most representative agricultural products of Colombia. Coffee provides livelihoods
for more than 500,000 coffee growers, and over 2 million jobs are linked to some stage of coffee
production. Colombia is the fourth exporter in volume in international markets after Brazil, Vietnam and
Indonesia. In 2011/12 about 60% of total coffee exports were delivered to three countries: the USA
(40.7%), Japan (10.9%) and Canada (7.2%). Total coffee production in 2011/12 totalized 7.1 million
bags (60 kilos/bag). Close to 93% of this volume was exported as green coffee. The main coffee
-growing areas are located in the central part of Colombia, from south to north, along the high valleys
and on the slopes of the mountains in Antioquia, Caldas, Cundinamarca, Huila, Magdalena, Norte de
Santander, Santander, Quindío, Risaralda and Valle del Cauca. Harvest is concentrated from March to
May, and August to December. Harvested coffee is properly stored, which allows green coffee to be
exported year-round. About 500.000 small-scale farms (less than 5 hectares each) are responsible for
nearly 80% of the coffee harvest, as they constitute nearly 90% of all coffee farms. Thus the social and
economic importance of small-scale farming in the coffee sector is significant, as well as the
magnitude of the challenge to work with such number of producers all over the Colombian mountains.
Quality is an important issue that depends on many factors from farm to storehouse, in particular the
preparation of the bean size. Lately differentiation by regional origin is becoming more important,
especially for the Japanese market.

The overall strategy includes supporting coffee supply chains in order to make them truly sustainable
(by helping relevant players to achieve the target standards and sustainable programs) and
mainstreaming sales of sustainable coffee in international markets. The overall objective is to
strengthen the livelihoods of coffee growers and labourers, thus contributing to lasting impacts in their
lives.

In 2010, Solidaridad started a dialogue with the Dutch Embassy in Colombia in order to support a
Sustainability Initiative actively promoted by the Embassy. Solidaridad is now leading this initiative,
called the Sustainable Trade Platform. The objective of this platform is to promote sustainability in
commodity sectors of trade importance between Colombia and The Netherlands. Coffee, banana,
flower and palm oil have been prioritized. Good agricultural practices, sustainable trade, climate-smart
agriculture and the bio-based economy are the issues to be developed in every commodity sector.
Solidaridad leads the Technical Secretariat that is responsible for facilitating multi-stakeholder
platforms for pro-sustainable commodities.

1.1 External Analysis

Mainstream industry and brands have accepted certification as a way to improve the coffee sector
towards sustainability. As coffee prices increase and the best farmers have been certified, the
availability of certified (and specialty) coffee is under pressure. At the same time we see limited impact
of certified producers in productivity and cost-efficiency; many farms show yields and quality far below
potential. This is partly due to certification programs being structured and focusing more on
compliance of social and environmental issues than on continuous improvement of the whole aspect
of farming. Standard bodies, traders, industry and producing countries already start to feel that the
current model of certification and related farmer support is no longer appropriate for the new reality.

Over the last 3 years alone productivity in Colombia has been reduced by up to 30% due to changing
rain patterns affecting flowering, fruit development and disease infestation. As many of these
challenges remain, it seems that the cause of the problem has not been effectively addressed. The
underlying cause is the lack of motivation, understanding and capacity of farmers to deal with the
problems they face.

In the coffee sector, certification has been a crucial instrument to guide transformation of farmers, as
well as market parties. However, currently both certified farmers as well as “new” farmers are less
motivated to enter and remain in certification and sustainable programs in general. While certified
farmers claim the standards have helped them to be more organized and understand several
processes better, they feel that the benefits don’t outweigh the costs to maintain certification. The

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premium of certification often is limited or even zero. Additionally the improvement in yield, quality and
other areas that improve their income is limited and more a secondary result of certification rather than
the main focus.

The most important goal in Colombia´s coffee program is to build, suggest and implement a strategy
for sustainability that makes sense for every farmer, organization, exporter, roaster, retailer and
consumer along the coffee chain.

1.2 Internal Analysis

The coffee sector is more advanced in sustainability compared to many other commodities that
Solidaridad is active in. Within Solidaridad it is the product with the longest history and therefore
experience.

The coffee strategy will place an important emphasis on the development, testing, adapting and
application of extension methods and tools on change management. Of particular importance will be
Solidaridad’s work in search of institutional options to embed the extension methods and tools on
change management in the existing extension systems or technical assistance programs from
exporters, cooperatives, associations, regional governments, National Coffee Board and Ministry of
Agriculture agencies.

The current farmer support model of Solidaridad can serve as a basis for other organizations to co-
develop a more practical approach towards implementation of sustainable programs that are less
costly and more valuable to farmers.

Solidaridad has moved from a Fair Trade initiator to rolling out Utz to a more generic implementer of
sustainable farming (Good Agricultural Practices) and related standards. With the experience from the
historical coffee program and Coffee Support Network, it has systemized its supporting experience into
more standardized tools and methods for farmer improvement and change management. Where in the
past Solidaridad would focus on working directly with farmer groups, we now are shifting to training
organizations, including those in the private sector, who play a key role in supporting farmers. With a
good understanding of the entire chain as well as the priorities at farmer level, we can guide others to
give an appropriate level of support to farmers.

In order to have a more practical model for implementing sustainable programs and standards, we
choose to cooperate with other leading organizations in the sector. A complete view of the issues at
hand and how to deal with them comes from more than one organization. Therefore these
organizations need to be included in the Sustainable Trade Platform and its programs.

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2 Intervention Strategy per Commodity

2.1 Overview

Coffee
The role of Solidaridad will be as facilitator and independent mediator to get these networks of leading
organizations to work together towards a co-creative, practical process to increase the adoption of
GAPs. Jointly with the development of the model, we will initiate pilots to show that mainstream
sustainability can be achieved and replicated to broader groups of farmers, while integrating the
support in the national sector of Colombia for a long-lasting effect.

Our objective is to make coffee farming more valuable, cost-efficient and finally sustainable. We
therefore focus on profitability of sustainable farming as a way to achieve our other (sub)objectives.
We choose to focus on improved Productivity & Efficiency, Farmer Organization and Access to
Premium Markets. In order to improve these three areas we need to improve the related knowledge,
skills and attitude of the farmers, technicians and trainer organizations. We tend to do this through our
Support Model, which consists of Training Tools, Methodology and Network of Farmer Support
Organizations, also called Implementers. Supportive to the main objective is the close cooperation
with leading market players and platforms.

Table 1: Overview
Commodities Projects Countries Relevant cross-cutting
(use same project list as in themes
financial plan for secured
budget)
Coffee Sustainable Trade Platform Colombia
REDD+ Mexico, Colombia, Perú Climate smart agriculture

2.2 Intervention strategy per commodity (max 2 pages per commodity)

2.2.1 [Colombian Coffee]

 Indicate which strategic pillars will be addressed in 2014:

(a) Producer and worker support

Coffee producers are facing adverse local cost scenarios, while at the same time there are relatively
low international prices for exportable coffee. This phenomenon is due in large part to local currency
appreciation against the dollar and increasing labour wages, because of a lack of labour availability in
the central coffee region. In addition, the coffee cherry borer and the leaf rust have increased and thus
reduced coffee quality and productivity.

The economic forces behind international prices, the real rate of exchange and the labour wages are
exogenous factors over which the project has no influence. Nevertheless, the project is aimed towards
improving quality through professional management, so that certified coffee can reach alternative
markets, thus making coffee farming more profitable and sustainable.

The project will train technicians from organizations that are part of the Sustainable Trade Platform to
improve their capacity building for working with coffee producers. The project will also provide e-
learning courses and produce guides for trainers and producers.

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The Colombian Coffee Growers Federation (FNC) is a main player and partner in the implementation
of the strategy. FNC represents more than 500,000 Colombian coffee growers, and in coordination
with the Government, administrates the coffee policy in the country. Among the most important
services that FNC provides for the producer are: extension services, scientific investigation, sales &
market development, social development programmes. FNC’s CENICAFE is the most advanced
research centre in coffee technology. FNC owns a freeze-dried coffee plant in Chinchiná. FNC exports
about 30% of national coffee production. In sum, FNC exerts a strong influence on the institutional and
commercial life of the coffee sector in Colombia.

The small scale coffee growers are the main focus of attention of FNC, since 70% of these farmers are
associates of the FNC.

Additionally the idea is to strengthen the technical human resources of coffee cooperatives, coffee
exporters like Expocafe ECOM, Carcafe, SKN, Racafe, and other organizations.

 (b) Capacity building

Colombia enjoys a wide network of organisations, institutions, companies and individual professionals
to further broaden the coverage of sustainable coffee farms and traded volume. One full-time person is
in charge of providing direction to and management over the work plan in Colombia. These
experienced local professionals, jointly with the robust FNC and connected network of organisations,
are a good foundation to expand the reach to small farmers, as well as to strengthen the quality of the
work.

 (c) Sustainable market development

The project will assure ongoing communication with the most important players in the coffee sector,
looking to facilitate access to sustainable coffee buyers. The project will also support the participation
of selected Colombian players in fairs and trade shows.

The project will implement an integrated quality system model across the entire structure of FNC and
the administration of the sustainable certified programs.

In practice participants in the coffee chain, especially exporters, know the trends and opportunities in
the market place for the diverse Colombian coffees. For this reason Colombian coffee growers overall
continue to be committed to increasing exports of high-value coffee products.

The project will actively work with the following exporters: FNC, EXPOCAFE, ECOM, RACAFE,
CARCAFE, OLAM and others.

Table 2: Overview of commodity targets per country

Countries KPI’s Targets per country 2014
(list only relevant KPIs, taken from MASP or additional KPIs)
Coffee Number of participating companies. Number of promotional 4
Colombia events and meetings pro sustainable markets implemented.
Compliance of producers and agribusiness with social and 90000
environmental standards. Number of producers assisted and
trained.
Number of hectares covered through technical assistance 146667
and training of producers.
Number of producer organisations supported in improving 20
extension systems, methods and tools.
Number of events and meetings for planning and 4
coordination, preparation, implementation and monitoring.
Number of producers assisted and trained on low carbon 4564
farming.

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3 Organisational Development (max 3 pages)
Building on the internal situation analysis in chapter 1, please indicate your organisational
development plans by using the headings below.

3.1 Human Resource Capacity

 1 full time staff
 Consultants

3.2 Growth curve REC 2014 - 2017

Scenario (€ M): Low Medium High

(highlight relevant 3–7 7 - 10 > 15

scenario)

2014 2015 2016 2017

Budget target:
€ 543.000 € 543.000 € €

Main international donors (2014-2017) Main regional donors (2014-2017)

Total budget (2014- € Total budget (2014- €
2017): 2017)
Governmental € Governmental €
- Dutch Embassy € 160.000 - [Name] €
- Norad € 383.000 - €
- € - €
- € - €

Private € Private €
- [Name] € - [Name] €
- € - €
- € - €
- € - €

NGO € NGO €
- [Name] € - [Name] €
- € - €
- € - €
- € - €

Actual (2014): Ambition (2017):

Commodity
programmes
- [Name commodity] € €
- € €

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Network deliverables: 2014 2015 2016 2017
[Name
- Hosted IPC position:
Commodity]
- Shared Head
Account
Management:

o Companies: [Name Company]

o Donors: [Name Donor]

3.3 Systems & Standards

 Plans related to the implementation of PROMIS, Catalyst and possibly other systems
 Plans related to the implementation/consolidation of Results Based Management
 Plans related to quality management (e.g. ISO certification, performance management)
 Other…

3.4 Knowledge Management

The viability of generating carbon credits to be sold separately from the commodity will be tested in
projects using different methodologies (VSC, Gold Standard, CCBA, etc.) to be able to make tailored
recommendations and develop guides on how to obtain the required documents and measurements.
We also aim to understand what the threshold volumes are for these agricultural systems, which
practices can be accredited in which region, different transaction costs, and how methodologies could
be developed and adapted to accommodate the needs of the sector.

3.5 Budget for Organisational Development

Item Budget

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4 Network deliverables & governance (max 1 page)
This section should explain the plans related to the 2 budget lines “2% coverage for deliveries to the
Solidaridad network” and “Governance costs” in the financial plan.

4.1 Participation in international commodity teams

 Includes capacity to deliver an IPC (for which commodity/who)

4.2 Plans for inter-regional cooperation

4.3 Planning of activities related to external communication

 Includes update of REC webpages (static content)

4.4 Budget for network deliverables & governance

Budget line Item Budget

(refer to financial plan, sheet “Total”)
2% coverage for deliveries to the e.g. IPC for tea e.g. €50,000
Solidaridad network
Governance costs e.g. Participation in sugar commodity team e.g. €3,000
meeting
e.g. Costs for CSBs and ISBs e.g. €5,000

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5 Fundraising (max 1 page)
This section should describe relevant fundraising approaches for the coming year and list leads
identified and/or in progress in the table under 5.2 below.

5.1 Fundraising strategy and capacity

 Includes names of key account managers

5.2 New leads (prospects)

(Use list from financial plan, sheet “Pipeline”)

Commodity Donor (and fund) name Amount (Euro) Country/ies

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