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WOCCU program provides financial access to farmers
VERACRUZ, Mexico (2/10/12)--Through a coffee value chain financing program being implemented in rural Mexico with the support of World Council of Credit Unions (WOCCU), farmers gain access to new financial and agricultural tools that enable them to improve their organic coffee crop, sell it at higher prices and increase their personal financial returns.

A financing program in rural Mexico, supported by World Council of Credit Unions (WOCCU), helps farmers improve their organic coffee crop, sell it at higher prices and increase their personal financial returns. Caja Zongolica General Manager Dolores Rivera Ramírez (center) explains the workings of a coffee bean dehydrator to Barry Lennon (left) and Brian Branch (right), WOCCU's senior vice president and president and CEO, respectively. (Photo provided by World Council of Credit Unions)
The five-year Cooperative Development Program (CDP), launched in late 2010 with $4 million in funding from the U.S. Agency for International Development, focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. The resulting "toolbox" for credit unions includes a replicable and scalable methodology to meet the financial service needs of small farmers and increase their access to markets, inputs and technical assistance for production. In addition to Mexico, the CDP program also is being implemented in Guatemala.

"The CDP program applies an innovative approach that addresses both the financial needs and market barriers for rural producers in a more integrated way than methodologies used in the past," said WOCCU President/CEO Brian Branch, who this week led a delegation that visited program implementers in the rural highlands of Mexico's Veracruz state. "The result will be higher levels of personal income that will benefit both participating farmers and their communities."

Part of the strategy currently being implemented by Caja Zongolica, one of two pilot credit unions involved in the CDP program in Mexico, involves helping farmers switch to organic production methodologies that result in coffee that commands a higher market price. Certified organic products require stringent growing requirements for three years prior to certification, which increases production costs. The value chain financing supported by the credit unions provides farmers with financial stability throughout the field-to-market process to produce the organic coffee.

Currently, about 25% of the 122 farmers participating in the program who have switched to organic production also work as promotores, or internal inspectors who provide peer-to-peer technical assistance and guidance to other farmers interested in organic production. Participants see value in making the switch, which all but ensures a higher price for their crops, as well as the inherent strength in working collectively as part of the WOCCU-supported program.

Caja Zongolica, established 15 years ago to serve coffee farmers, for several years has been implementing the Semilla Cooperativa [Cooperative Seed] program, which sends credit union representatives by motorcycle and on foot to conduct credit union transactions where the farmers live and work.

Later this year, the credit union will update the personal digital assistant (PDA) mobile transaction technology developed by World Council that allows field officers to remotely conduct loan monitoring, evaluation and approval processes in real time.

The past success of Caja Zongolica technology applications was the inspiration for a similar program launched last year by California's Ventura County CU, which remotely serves farm laborers and others at their respective worksites. Both initiatives will be the focus of this year's engagement study programs sponsored by World Council's Global Women's Leadership Network.

"Participating credit unions are strengthened when farmers become part of the program, but this is also about making linkages that enable members to earn more stable and higher incomes," Branch said. "It's about supporting a move to more sustainable crop production, which means more stability for the community itself."
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