How Trust-Based Lending is Transforming Fair-Trade Supply Chains

Many of us rely on a cup of coffee to kickstart our day. Few realize that our ritual is endangered: the plant producing the beans for our morning pick-me-up is under threat. Coffee experts describe the fight against “la roya,” or leaf rust, as a war. Who’s fighting on the front line? Small-scale coffee farmers and their families, who typically don’t have the financial reserves to deal with the hit on production and income caused by this vicious disease.

Coffee leaf rust is a fungus that creates rustlike patches on coffee plant leaves. The patches turn black, the plant’s nutrient supply is cut off, and eventually the plant may die. Farmers facing the highly contagious disease must replant their land. However, it takes three years before a coffee plant is mature enough to produce a large crop of beans, so farmers face the triple impact of a reduced income, the cost of replanting, and a three-year wait for a salable crop. Despite growing demand for coffee, farmers struggle to get access to credit to build their resilience against this disease.

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Kate is senior director of social enterprise lending and integrated capital.

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