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From Penelope

In Mexico, our work is based in Oaxaca and Chiapas. From afar, Mexico is a growing economic force, ranked 64th globally in GDP per capita. However, the coffee-producing states in southern Mexico face a very different economic reality. Oaxaca and Chiapas are the two poorest states in Mexico with poverty rates of 60-80% and extreme poverty rates of 20-40% Production yields have become dangerously low in these regions. Over the last ten years coffee leaf rust disease and the lack of financial or agricultural means to tackle it has reduced production by up to 90% in some regions. The average yield in Oaxaca is now just 100kg of parchment per hectare. For context, in Colombia, the average yield is 2,400kg per hectare. The vast majority of Mexico’s 500,000 coffee producers are smallholder farmers and have one hectare or less of land under coffee. This makes the average annual production for many producers just 100kg, making coffee farming more and more unsustainable. This is fuelling widespread migration to urban centres in Mexico and the United States. In short, coffee production is disappearing. Raw Material works with several producer groups in Oaxaca These partnerships help improve the overall profitability and viability of coffee production for producers in Oaxaca. Our long term focus is on improving yields and building stable demand at a stable price by connecting roasters with producers. We aim to achieve this in ways that are low-cost, easily replicated, and that ensure the first-order upsides are captured directly by those most marginalised. To achieve these goals we've focused first on building trust and setting a baseline for coffee pricing and pre-financing. Currently, the most common outlet for producers in Oaxaca is to sell their parchment to local intermediaries at a market-set price.