The impacts of climate change hit close to home on Colombia's small, independent coffee farms. For the farm families who grow coffee high up on the mist-shrouded slopes of the Andes in the Caldas province, increasingly erratic and extreme weather conditions, such as excess rainfall and more frequent droughts, are threatening a way of life generations in the making. Drought can damage bean development inside ripening fruit, resulting in beans that are twisted, undersized, or otherwise not fully formed. Meanwhile, too much rain during the delicate flowering stage can harm the flowers and keep fruit from developing at all—no flowers means no coffee cherries.
"When there are adverse climatic events it affects the quality and quantity of the coffee," says Caldas coffee farmer Edilma Garzón Gutierrez. "Sometimes we have to look for another kind of income because the coffee will not suffice."
To help Doña Edilma and other smallholder coffee farmers in Caldas protect their livelihood, Nespresso, in partnership with Blue Marble Microinsurance, launched a pilot weather-index insurance program in 2018 that provides custom coverage for crop losses due to climatic shocks. Farmers have already started to receive a payback from this insurance in 2019.
"The crop insurance project is great," says Doña Edilam. "When we pick less coffee, or the coffee is bad quality because of the weather, we have help to confront difficult times."
Doña Edilma is among the nearly 2,000 farmer-members of the Aguadas and Norte de Caldas cooperatives in Caldas enrolled in the pilot harvest insurance plan, run by Colombian insurance company Seguros Bolivar and supported through the Nespresso AAA Sustainable Quality™ Program. Launched in 2003, the AAA program works to create long-term, sustainable coffee quality by building direct relationships with local growers.
The Nespresso-Blue Marble insurance provides coverage based on a climate index, called CaféSeguro. The index uses satellite technology to automatically activate payments to participating farmers if drought or excess rainfall is detected.
"A single event of excess rainfall or drought can potentially reverse many years of hard work," says Nespresso AAA program agronomist Sandra Rodriguez. "Now, when there is a climate alteration the coffee grower can go directly to the bank to claim the payment for losses from the incident."
"Having an insurance solution that protects our members from the devastating effects of climate change is critical for the cooperatives," says Cesar Julio Díaz, who is head of the Aguadas and Norte de Caldas cooperatives, which help Nespresso identify farmers who could benefit from the insurance. "It allows coffee growers access to economic resources in the form of insurance payouts that will help them re-establish their crops, making them productive and able to continue with their agronomic activity."
The innovative harvest insurance is another way Nespresso is helping Caldas coffee grower Mario Davila safeguard his family's most valuable asset, and his children's inheritance. Thanks to Nespresso’s AAA program, Don Mario says, he’s been able to expand the coffee farm that he will pass on to his children. "Coffee has given me everything,” he says.