Tuesday, January 08, 2008


Happy New Year!

Dry Mill Filling Up
The folks at Jhai Coffee would like to wish one and all a happy 2008! We are close to collecting all of the parchment for the arabica harvest and have a few days to reflect before we begin the robusta harvest. We are happy to say that the season has progressed well, with just a few bumps, and a couple big success stories.

The customer list this year is French and New Zealand and we will ship three boxes of arabica instead of the planned four. The main reason for this change is the need to fund the new washed robusta project that starts in the next week or so. Our harvest funding partner, Rabobank, limited the JCFC to a credit line of $140,000 for the season and this can only finance four boxes.

A Rare Thing - High Elevation, Washed Robusta
The good news is that we get to start the washed robusta project - finally. NZ Aid approved the project and started funding in October. The project is being managed by the JCFC with the guidance of Bioglobal, a NZ based consulting firm. Bioglobal's team, Chris and Jenny, have loads of experience in agriculture projects and organic certification, so they are a great match for the project.

We hope to build the washed robusta production to ten boxes (a box is a 20' container, the standard shiping unit for coffee) in the next three years. The facilities are in place to handle that goal and we have our first customer this year with the trader/roaster John Burton, Ltd in Auckland. Chris completed the application for organic certification for the JCFC Co-op and expects to have a certification inspection in February. If successful, the JCFC will be able to sell organic coffee in Aus/NZ this year. Organic certification for the US and Europe will follow.

Winning this grant from NZ Aid is a big for us - and for me. It is a confirmation that we have built a sustainable cooperative with growth potential. It provides us with the resources and expertise necessary to grow, gain new certifications and new markets. And it gives the farmers what they want: improved robusta prices, since robusta makes up 80% of their plantings. It also allows me to end my role as the sole financial support for the JCFC. That is a good thing.

Real Estate Mogul
The JCFC has lots of new facilities this year: a new office in Pakse, a new dry mill in Paksong and new washing stations in every JCFC village. The office is newly painted and ready for certification inspectors and coffee buyers to pay us a visit, bottle of rice whiskey standing by. The dry mill is a beautiful old rice barn that can hold over 100 tons. We have built a processing station in front with a grading machine. Our staff is currently at the Vietnam border to pick up a new hulling machine and density separator. We now have the capacity to ship 6-8 boxes of both arabica and robusta in any season.

Great Job, Bertrand!
The French government funded project on the plateau has been the driver behind building the washing stations; they have built stations in over 30 villages including most of the JCFC villages. The genial and tireless Bertrand Sallee, the technical advisor on the French project, should be congratulated for this effort. Hours upon hours of paperwork to satisfy both French and Lao bureaucrats have resulted in empowering coffee farmers for a generation. He has also been helpful in securing the dry mill equipment for the JCFC at Wall Mart prices.

The stations are simple affairs with cement tanks for washing, pulping and fermenting the coffee cherries/beans using inexpensive Vietnamese pulpers. We have built an additional two stations in villages that were not included in the French project.

While the stations are simple to operate, there is still a lot of training that we must provide to ensure the farmers follow the quality requirements of specialty coffee. In this coming off season, we will be conducting seminars in each village to help them develop a good system for managing the flow of coffee through the station. While the farmers understand how to make specialty grade beans, they don't always understand how to create the small factory necessary to automate the process.

A Project Within a Project
The microlending project continued this year, growing from $7,000 in farmer loans to $15,000. The farmers use the money for basic essentials - school fees, food for the rainy season, repairs to the tractor. If we are successful with repayment, we expect to double agian the money for next season. We charge 1.5% per month; our funding comes from the Rabobank credit line (8% p.a.)and the balance covers non-payment (2% last year) and expenses. We hope to see other microlenders enter the market in Paksong. We would happily hand over our loan book and customer list to any qualified organization.

Crunch Time
The next few weeks will be busy. We will mill and grade three boxes of arabica, harvest and mill one box of robusta, and ship all four before the end of March. We have to have all the coffee revenues in before the Lao new year in mid April. Farmers can't throw a party without their coffee money! We will close our loan books, close up the dry mill and start working out of the Pakse office. Need to buy a beer fridge... and then head to Bali...

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