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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.

ī Peace Coffee

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

Value chain

Major outcomes
1) Self-reliance of a small group of producers

2) Self-reliance of a social enterprise

3) Social/economic effect

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