CENTER FOR INTERNATIONAL DEVELOPMENT COOPERATION

Development Projects

Establishing a Poverty Reduction Model through Self-Supporting Fair Trade Coffee in East Timor: An Integrated Approach to Youth Participation, Social Enterprise and Community Organizing

(July 2012 - December 2014)

East Timor has experienced rapid economic growth that saw a jump in the governmental budget (GDP growth was 8.6% in 2012), but the system for allocating the profit has been lacking, which has led to half of the nation's population living under the poverty line. Most of the population works in agriculture, with 90% of its exports, excluding petroleum-related items, being agricultural products. Coffee, in particular, is a major export product. Rural areas, where 72% of the population reside, suffer from low agricultural productivity, high population growth, and a lack of social services and basic infrastructure. The capital, Dili, has seen a rise in youth unemployment and a lack of social infrastructure, despite the urbanization that is taking place.

Project overview

The CIDEC and the Korean National Council of YMCAs implemented an international development cooperation project in East Timor from 2013 to 2014, including projects that address fair trade of coffee, resident organization movements and social enterprise. The social enterprise "Peace Coffee" established a value chain from production to export to domestic consumption of coffee to help boost the household income of farmers and create jobs for the vulnerable. Meanwhile, small producer groups were organized in the Same region, where coffee is produced to help improve the quality of the coffee and lay the foundation for local residents to become agents of development. In the capital city of Dili, export businesses exporting fair trade coffee, green bean plants and cafes helped create profit and secured sustainable development capabilities.

Category	Details
Project name	Establishing a poverty reduction model through self-supporting fair trade coffee in East Timor: An integrated approach to youth participation, social enterprise and community organizing
Project areas	Dili and Same region, East Timor
Period	December, 2012 - December, 2014 (*YMCA's own project was implemented starting 2006)
Budget (Unit: 1000 Won)	Category	Total budget	KOICA subsidies	Internal funds
	1st. year	553,284	499,996	53,288
	2nd. year	437,386	386,986	50,400
	Total	990,670	886,982	103,688
Execution agency	CIDEC, the Korean National Council of YMCAs
Donor agency	KOICA
Goal/ outputs	1) To establish a basis for producers' cooperation to become financially independent through the support for small groups of producers 2) To form a social economy model through the operation of Peace Coffee, a social corporation 3) To operate a green bean plant 4) To tap into the domestic market and to contribute to cultural development through the operation of Cafe Timor

Project details

1) Organizing resident groups

	Organizing participants into small groups: A briefing session was held for residents to explain the objective of the projects and what they entailed. After resident meetings and reception of applications to form small groups, a review committee selected a total of nine small groups to be established.

	Construction and operation of a small group processing plant: The site for the processing plant was selected and preparation steps were taken to open a small group processing plant handling coffee parchment processing. The entire process, excluding the supply of materials, was handled by the members of the small group. A democratic decision-making process and voluntary participation led to internal competence-building among residents.

2) Reinforcement of resident capabilities and boosting of income

Training: A total of 270 residents underwent training on cooperative, organizational management and coffee farming. Active participation of the small group members allowed them to quickly learn democratic decision-making processes and income distribution, which in turn led to better capabilities that will eventually help them become independent of overseas aid. Moreover, training on how to farm coffee raised the awareness of the need to adopt new farming methods to improve crop quality.

3) Social enterprise

	Green bean processing plant: The coffee parchment that underwent the first stage processing at the processing plant of Rotutu was processed for the second time into green beans, to be exported.

	Peace Coffee Cafe: A training site and a program for baristas were established. After completing the program, the graduates of the training program operate the Peace Coffee Cafe.

Value chain

Major outcomes

1) Self-reliance of a small group of producers

2) Self-reliance of a social enterprise

3) Social/economic effect

26 Kyungheedae-ro, Kyung Hee University Neo-Renaissance Hall Suite 305, Dongdaemun-gu, Seoul, Republic of Korea
Tel: +82 2 961-0590, 0618 Fax: +82 2 967-6931 E-mail: cidec@khu.ac.kr