Work carried out by the US Agency for International Development (USAID) in countries that produce soft commodities such as coffee could be threatened by a huge reduction in its budget that has been proposed by the Trump administration.
The new US administration is proposing to make cuts of up to 30 per cent or more to USAID’s budget. If that happens, it will undoubtedly require dramatic restructuring and staffing cuts. USAID’s work on coffee spans three continents, and also includes numerous US companies and institutions. Helping smallholder coffee producers around the world supports thousands of American jobs that rely on a strong global supply chain for coffee.
Readers will remember that USAID was principle provider of technical assistance, training, and targeted financial support to the nascent specialty coffee sector in Rwanda after the genocide there, through programme implementers such as ACDI-VOCA; the ADAR project, implemented by Chemonics; and the PEARL project, executed by Michigan State and Texas A&M Universities.
Through agency investments in technical assistance, training, and direct financial support through grants and a loan guarantee programme, 40-50 coffee washing stations were constructed and many hundreds of Rwandans trained in coffee production, coffee processing, washing station management and marketing. USAID’s support was largely responsible for the sector’s early success. Indeed, its coffee programme is widely regarded by industry players, the government of Rwanda, and other donor agencies as being a reference for agribusiness development programmes.
The changes are not yet a ‘done deal’ yet – indeed the recently released proposals are for the fiscal year beginning on 1 October and are only the first shots in a battle with Congress, which controls the government’s purse strings – but is far from clear how the situation will play out. Congress is controlled by the Republicans, but may reject some or a good proportion of the proposed cuts to USAID.
Rwanda is just one example of numerous programmes in coffee and other agricommodities that USAID has funded. More recently, it also provided significant funding for World Coffee Research’s work to combat coffee leaf rust in Central American countries, and has been involved in dozens of other major projects. The Nestlé/Technoserve project to return coffee to South Sudan is a more recent example.
More often than not the work that it does has potential benefits in the US, not just the countries in which programmes takes place, where it often reduces dependence on illegal crops. As an organization, USAID is known for being careful about where public dollars are used to accelerate or enable work that is difficult for the private sector to accomplish, but its future is now unclear.
In Burma the Value Chains for Rural Development project is modernizing smallholder agriculture. USAID is also helping Burmese coffee farmers enter international markets, including the US.
In Burundi USAID supports the Burundi Coffee Alliance, a public-private partnership that harnesses investment from two of Burundi’s biggest coffee exporters. It also promotes better agricultural practices among smallholder farmers, strengthens infrastructure, and improves farmers’ market access.
In Colombia USAID’s integrated approach to supporting the coffee sector includes a public-private partnership that provides technical support, technology, and market opportunities to over 17,000 smallholder farmers.
USAID assists the Democratic Republic of Congo modernizing its coffee industry by strengthening coffee cooperatives in South Kivu, enhancing the quantity and quality of specialty coffee production, and building direct market connections with international coffee traders.
USAID helps farmers improve productivity in Ethiopia. Its private sector partnership is establishing a traceability system. Feed the Future Ethiopia Value Chain provides technical assistance to improve farm productivity, financial and non-financial support systems for businesses, public-private dialogues and public service-related improvements.
In Guatemala the Rural Value Chains Project promotes sustainable market-led growth in rural areas (including the coffee sector) to reduce rural poverty and chronic malnutrition. Additionally, the MIPFuturo helps growers use biological products to combat coffee rust disease while the Farm Force Programme uses mobile technology to make traceability and compliance an integral part of smallholder production.
USAID’s technical assistance to over 15,000 farmers in Honduras is increasing coffee production, productivity and quality as part of a larger program to increase household incomes and improve nutrition. USAID partners with buyers/exporters to increase farmer access to markets. USAID recently led a comprehensive effort to successfully combat the coffee rust outbreak.
USAID is helping 3,500+ coffee producers in Peru transition from growing illicit coca by facilitating commercial relationships with coffee exporters/cooperatives. Through a public-private partnership, USAID helps small-scale coffee farmers increase their productivity.
In Rwanda the Feed the Future African Great Lakes Region Coffee Support Programme is combatting an antestia beetle outbreak while helping growers increase yields through a combination of research, capacity building, outreach and policy engagement. This will boost the sustainability of the region’s coffee production.
In Uganda USAID supports the AgriBusiness Initiative Trust, which aids farmers/entrepreneurs involved in the coffee value chain. The Feed the Future Enabling Environment for Agriculture program helps policy and regulatory framework. USAID also provides direct support to growers to expand crop volume and quality.
The Better Harvest Programme, a public-private partnership, provides training and technical assistance to 6,000 smallholder farmers in Nicaragua and in El Salvador and has led to a 25 per cent productivity increase.