Do you love coffee? Do you buy products from farms sustainable farms that give great wages and health care to farmers? Are you looking for a new investment opportunity? How about investing in a coffee farm?
The recently founded Cima Coffee Farms is allowing investors to own part of a coffee farm in Colombia. For $11,000 you can get a half-acre of working coffee property, and the confidence of knowing that the coffee produced is high quality, and the farmers are receiving a fair wage for their efforts.
James Cummiskey, an American entrepreneur, was living in Colombia and looking for his next adventure. In the process of seeking out that adventure, he became interested in coffee, learning much about this important industry, including its inefficiencies.
“In a business that is as mature as coffee, you’d expect it to be efficient,” he explained. “But that isn’t the case. It is the most broken industry I have ever seen. And the farmer is the one who takes the brunt of it all.”
He believes that one of the problems in the world of coffee is that farmers are growing the wrong product – commercial coffee. “They should be growing specialty coffee. But, if the farmer is barely making ends meet, they find it harder to make the change to growing specialty coffee.”
He added, “If a farmer can’t pay for his farming inputs and make a profit, he will simply exit the business. This is resulting in a crisis in coffee – However, by paying more for coffee, we can give them the incentive to do so.”
For this reason, Cummiskey saw the reason to educate coffee drinkers about the plight of the farmers. “To me, there is a huge injustice in the world, with 3 billion coffee drinkers, and most of them don’t know how broken the system is.”
Cummiskey studied the coffee market around the world, looking at the average costs of inputs for each coffee region, finding that the cost to grow coffee varied from country to county, and from region to region. “This disparity didn’t make sense to me, as fair trade systems gave one global price, despite the differences from country to country.”
To help with this disparity, Cummiskey set up a system “in which we work with farmers and set prices for coffee based on the direct cost of inputs, plus a minimum of 20% .”In the case of Colombia for example, $1.92 is the least I will pay for the coffee. Our aim is to reward farmers for their efforts, and allow them to make a living wage.”
By offering parcels of land to investors, Cummiskey believes he can take sustainable farming to a new level. He calls his idea, virtual direct trade, where you could interact with, or see (via cameras or web chats), the farmers who are growing your coffee. Each quarter, Cima divides up 80% of the total profits among the investors, while giving the other 20% to the farmers.
As Cima’s program looks to support farmers, Cummiskey projects that by the fifth year into it, investors will be making a 19% average rate of return, all while also helping Colombian farmers get into the specialty coffee industry, be paid better wages, get health benefits, and learn how to increase the yields of their crops. “They get a real estate investment, diversity their portfolio, and support a lot of cool people as they help build a more sustainable system.”
Over 100 persons have already invested and have received checks. Most of the parcels of land are located in some of the largest coffee-growing regions of Colombia, the Department of Antioquia, in the Medellin area. There are plans to expand into other countries in South America, Central Africa, Africa and the Caribbean.
The company has had an amazing response to the investment opportunity, and Cummiskey believes it is because of the way the program is set up. With a goal to differentiate themselves, Cummiskey explains how Cima Coffee will also provide roasters with a unique ability to connect with a farm. “Most roasters don’t have the ability to get on a plane and travel to coffee producing countries to seek out quality producers with whom they can create a direct relationship. Cima offers a unique opportunity for roasters who are looking to differentiate themselves. We offer an extension of the supply chain,” he explains. “We are virtual supply chain representative for them and they can have a coffee that nobody else has.”
He added, “Just as what E-bay did for the garage sale, we are using technology to connect farmers with consumers.”
As an added bonus, through its sister company, Tierra Cafetera, Cima is also supporting worthwhile Colombian charities, including La Casita de Nicolas, which was establish more than 25 years ago by a group of local women who recognized a need for an orphanage. Tierra Cafetera is donating 5% of its profits to charities, and this past May, Cummiskey presented the orfanage with 10 million Colombian pesos.
James Cummiskey is the Managing Director of Cima Coffee Farms, and Tierra Cafetera, operating divisions of Logistics LatinAmerica.
Roger Roland is the COO of the investment firm Logistics LatinAmerica, S.A. (a Belize International Business Company). Logistics LatinAmerica (LLA) is a venture capital firm, investment broker and incubator for Latin America businesses. Roger is also the COO for Tierra Cafetera, Cima Coffee Farms, and Coffee LatinAmerica (CLA), all headquartered in Colombia.
Rocky Rhodes has been active in the specialty coffee business for over 15 years. He is currently the CEO of Coffee LatinAmerica, as well as an educator and member of the Roasters Guild, certified instructor of the Q-Grader and R-Grader certification programs and the founder of International Coffee Consulting. Coffee LatinAmerica (CLA) – a sister company of Cima Coffee Farms – is headquartered in Colombia, but operates out of Los Angeles.
For more information, visit Cima Coffee Farms.